Overview

The proposed changes will result in simplification and streamlining, updating and alignment with state and federal requirements, while maintaining equivalent environmental protection and stringency. Rule simplification and streamlining will likely result in efficiencies and avoidance of additional permitting costs for small sources. See Attachment A for a more complete summary of proposed changes, and attachment B for proposed language.

EPA determined that there would be no significant impact on small businesses when it exempted HFE-7300 from the definition of Volatile Organic Compounds. LRAPA’s adoption of this exemption would likely benefit businesses by reducing regulatory burden and allowing expanded use of a commercially valuable compound.

General public

LRAPA’s public notice procedures are being changed by these proposed rule revisions so major new sources and major modifications to existing sources may require a preliminary informational meeting before the permit is drafted. This will increase the up-front time required for the public, to prepare for and participate in a public meeting. An expected benefit from this procedure is better permits that require less time for review and comment since issues were raised and addressed before permit drafting. However, since the proposed public notice procedures increase public involvement for sources that are potentially environmentally significant, public involvement for permitting smaller facilities and changes to existing facilities that are not environmentally significant will be reduced.

An example of decreased workload is the proposal to increase General Permits, which require one public notice for a General Permit source category of approximately ten or more sources. Comments from the public on one General Permit would then have the affect of commenting on all of the individual permits that would be issued if a General Permit was not issued to sources in that category. Overall, this tiered public involvement process should result in time savings for the public, as well as, business and LRAPA.

Small Business

(50 or fewer employees –ORS183.310(10))

a) Estimated number and types of businesses impacted

LRAPA does not anticipate any negative fiscal or economic impacts from this proposed rulemaking on small businesses. LRAPA estimates that 50 to 70 small manufacturers and service businesses could be affected by air quality programs.

b) Additional reporting requirements

The proposed changes do not add new reporting requirements for small businesses. Although LRAPA cannot currently document the fiscal and economic benefits of these rule revisions, they will reduce the complexity of current regulations, resulting in a more efficient permitting and compliance process for small businesses in Lane County.

c) Additional equipment and administration requirements

The proposed changes do not add new equipment or administrative requirements for small businesses.

d) Describe how businesses were involved in development of this rulemaking

Small businesses were not extensively involved in this rulemaking, but LRAPA anticipates some fiscal benefits to small businesses. They will have an opportunity to comment through the public notice process.

Many small businesses will be switching from either Minimal Source or Regular Air Contaminant Discharge Permits (ACDPs) to General or Simple ACDPs under the proposed rules. This switch will affect applicable fees associated with permitting. Fees and other anticipated impacts relating to the rules changes are briefly described below.

Fees: Under the proposed fee and applicability structure, most small businesses subject to permitting will qualify for either a Basic Source Permit ($360 /yr), a General ACDP ($720 to $1872/yr) or a Simple ACDP ($1920 to 3840/yr). Under the existing rules, these same businesses are subject to fees ranging from about $400 to $7000 per year. While some small businesses will be charged more for a permit under the proposed rules, most will be charged about the same or less. Many small businesses will be moved from their current Regular or Minimal ACDPs to General ACDPs. Overall, LRAPA anticipates these proposed fee changes to be revenue neutral.

Other Impacts: Some of the impacts and benefits listed under Large Business may also pertain to some small businesses that have high emissions or are located in sensitive airsheds.

The proposal to exempt HFE-7300 from the definition of Volatile Organic Compounds will reduce the regulatory burden of tracking and limiting use of this chemical. Small businesses could also benefit from the opportunity to substitute HFE-7300 for substances that deplete the earth’s protective ozone layer and substances with high global warming potentials. In adopting this exemption, EPA determined the change would not negatively impact small businesses.

Facilities could benefit from revisions to the Kraft Pulp Mill Rules. Creating Basic Permit categories may allow small businesses to avoid additional permitting costs. The remaining proposals have either no fiscal impact or slightly reduce regulatory burdens.

Large Business

LRAPA anticipates that elimination of redundant requirements and clarification of rule language may have beneficial fiscal effects on large businesses. The proposed revisions would result in fewer permit conditions for kraft pulp mills in cases where multiple permit conditions set similar limits for the same emission sources and pollutants.

A fiscal impact this proposed rulemaking may have on large businesses is requiring submittal of excess emission reports within fifteen days of their occurrence rather than semi-annually. This requirement could impose a slight additional cost to large facilities with air permits if they experience excess emissions. However, LRAPA expects the fiscal impact to be negligible because excess emissions reported within the required 15 days would no longer need to be included on semi-annual reports.

Many large businesses will require Standard ACDPs. However, since the type of permit required is based on the amount of emissions and not the number of employees, some large businesses may be subject to General and Simple ACDPs as outlined for small business.

Fees: Most large businesses will continue to be subject to either the Title V permit program (Title V fees are not affected by the proposed changes) or Standard ACDPs. Standard ACDP holders will be charged $7,680/year instead of the range of fees in the existing rules (approximately $1000 to $21,000/year). Other ACDP fees include Initial Permitting and Special Activity fees. Special Activity fees are currently charged for such things as permit modification and review of modeling analysis. These proposed Special Activity fees are similar in magnitude and nature as the existing rules. Overall LRAPA anticipates these proposed fee changes will be revenue neutral, although individual businesses may pay more or less then current fees.

Reduced Time: The proposed changes will reduce the amount of time required and the cost to maintain a permit by reducing the time it takes to issue and renew permits and the need for permit modifications. This is primarily due to the use of generic Plant Site Emission Limits (PSELs) in place of source-specific ones, and the use of general permits for many source categories. Changing the trigger level for Prevention of Significant Deterioration (PSD) from the Significant Emission Rate (SER) to 100 or 250 tons per year will reduce the time consumed by triggering PSD when modeling indicates that no standards will be violated. An air quality analysis for increases in the PSEL above the SER will still require an air quality analysis even if PSD is not triggered. Reduced permit processing time will enable businesses to better meet market-timing needs.

Triggering Applicable Requirements: The proposed changes could cause some sources to trigger or avoid triggering various applicable requirements. For example changes to unassigned emissions could cause a few sources to trigger New Source Review sooner, as compared to the current rules. Also, the proposed process to assess impacts due to ozone precursors potentially could require sources between 30 and 100 kilometers from a nonattainment or maintenance area to evaluate their impact on the area and mitigate the impact if it is significant (there are currently no ozone nonattainment or maintenance areas in Lane County). Procedures for combining and splitting sources could cause some sources to trigger or avoid triggering Title V or New Source Review rules.

Monitoring and Reporting Costs: The proposed changes could increase or decrease monitoring and reporting costs. For example the rolling 12 month PSEL limit in the permits will make it necessary to report compliance for 12 numbers in annual reports in place of one number for the calendar year. However, elimination of the short term PSEL (hourly or daily) will reduce the burden of monitoring and reporting compliance with these short term limits.

Emission Reduction Credits: The proposed changes could increase the value of certain emission reduction credits. For example emission reductions from shutdowns are proposed to be used just like over control reductions to offset emission increases for sources going through New Source Review. Banking can be used to extend the life of a shutdown credit just the same as other actual emission reductions. Under the current rules, emission reductions due to shutdowns may only be used as offsets during the two years following the reduction and may not be banked.

Local Government

Local governments that hold air quality permits may be affected by the rule revisions in the same manner as small or large businesses. Under the proposed public participation procedures, proposed major source permits will be subject to a public involvement period before LRAPA begins processing the permit. LRAPA expects the public may raise land use issues at this point. Such issues will be referred to the local planning jurisdiction for resolution, which may increase the burden on the local government entity.

Another fiscal impact this proposed rulemaking may have on local government is requiring submittal of excess emission reports within fifteen days of their occurrence rather than semi-annually. This requirement could impose a slight additional cost to county or local government facilities with air permits if they experience excess emissions. However, LRAPA expects this impact to be negligible because excess emissions reported within the required 15 days would no longer need to be included on semi-annual reports. Potentially affected facilities could include county –owned cogeneration facilities and school boilers.

State Agencies

A fiscal impact this proposed rulemaking may have on state agencies is requiring submittal of excess emission reports within fifteen days of their occurrence rather than semi-annually. This requirement could impose a slight additional cost to state-owned facilities with air permits if they experience excess emissions. However, LRAPA expects this impact to be negligible because excess emissions reported within the required 15 days would no longer need to be included on semi-annual reports. Potentially affected facilities could include university power generators.

Part of the rule changes allow for portable sources to obtain one permit to operate in all areas of the state including Lane County. The agency (LRAPA or ODEQ) responsible for writing the permit and collecting the fees for these sources will be the agency where the portable source’s headquarters are located. This will likely reduce the fees collected by both LRAPA and ODEQ.

LRAPA

Most of the standards affected by the proposed revisions are implemented through the Air Contaminant Discharge Permit Program. The proposed rules will streamline the permitting process and reduce personnel time, resulting in long term cost savings. LRAPA expects a large portion of these savings to come from the expanded use of General Permits. This proposal will allow LRAPA to issue one permit for many similar businesses, which will reduce the permit drafting and processing time required for individually permitted sources. LRAPA does not expect to realize the full effect of savings for several years i.e., after a complete five year permitting cycle. See also the discussion under “State Agencies” above.

Other agencies

LRAPA anticipates that other agencies will experience mostly beneficial direct and indirect fiscal and economic impacts from this proposed rulemaking.

EPA – LRAPA will request expedited review of the proposed State Implementation Plan (SIP) modifications affected by the proposed rule revisions. The EPA has been involved in this rulemaking project from the start and is committed to helping make it work. There are no expected fiscal impacts to the EPA as a result of the accelerated SIP approval process.

Economic and Community Development Department - Some of the rule changes, for example “alternatives to preconstruction monitoring,” may help promote economic development by speeding up the permitting process. Clarifying and removing redundant requirements from the rules should result in consistent interpretation and implementation, which in turn reduces workload.

Housing Costs

LRAPA and ODEQ have determined that this proposed rulemaking will have no effect on the cost of development of a 6,000 square foot parcel and the construction of a 1,200 square foot detached single family dwelling on that parcel.

Administrative Rule Advisory Committee

The LRAPA Advisory Committee was used for this rulemaking because of the extensive revisions and updates. Since approximately 1994, there have been very few changes to the LRAPA ACDP rules.

Assumptions

LRAPA expects that approximately 50 of the existing 200 ACDP sources will become eligible and switch to General Permits upon availability in January, 2009.

Table 1 below is an outline of the existing and proposed fee structure and was used as the basis for setting the proposed fee amounts listed in this rulemaking proposal.

Permit Type

Fee type

Existing fee

Proposed fee

Standard ACDP

Filing fee

Initial permitting

Application processing

Annual compliance

$129 /5 yrs.

$3400 to $17,000

$525 to $52,000 /5yrs

$800 to $27,000

NA

$12,000 to $42,000

NA

$7680

Minimal ACDP

Same as Standard but annual compliance is paid every 5 years and application processing paid every 10 years

NA

General ACDP

Filing fee

Initial permitting

Application processing

Annual compliance

NA

NA

$1200

NA

$720 to $1872

Short term activity

Initial permitting

NA

$3,000

Basic ACDP

Initial permitting

Annual compliance

NA

$120

$360

Construction

Initial permitting

Same as Standard

$9,600

Simple

Initial permitting

Annual compliance

NA

$6,000

$1,920 to 3,840