EPA "No Action Assurance" for Step 2 PSD Permit GHG Conditions
On December 19, 2014, EPA issued two important guidance documents on post-Utility Air Regulatory Group greenhouse gas regulation. In one of those documents, "No Action Assurance Regarding EPA-Issued Step 2 Prevention of Significant Deterioration Permits and Related Title V Requirements Following Utility Air Regulatory Group v. Environmental Protection Agency," issued by Cynthia Giles, EPA's Assistant Administrator for Enforcement and Compliance Assurance, set forth EPA's response to how it would handle PSD permits to sources not otherwise subject to PSD "but for" exceeding the 75,000 ton/year CO2e greenhouse gas threshold.
Background. In Utility Air Regulatory Group v. EPA, the U.S. Supreme Court held that EPA's greenhouse gas (GHG) "Tailoring" Rule, which set GHG "major source" thresholds for PSD at 100,000 tons CO2e/year and the PSD "significant" threshold for modifications at 75,000 tons CO2e/year, violated the Clean Air Act as applied to sources that "only" triggered PSD for GHGs, but upheld PSD regulation of GHG regulation in PSD permits issued to sources that "otherwise" triggered PSD because they were major sources of non-GHG regulated pollutants or had exceeded a non-GHG "significant" trigger. Prior to UARG, EPA had issued a number of PSD permits to sources that "only" triggered PSD because they exceeded the 100,000 tons or 75,000 tons triggers, the so-called "Step 2" sources. These sources now had PSD permits, or potentially terms in Title V permits incorporating PSD permits, that were invalidated by UARG.
EPA Action. EPA states "This No Action Assurance establishes that the EPA will exercise its enforcement discretion not to pursue enforcement of the terms and conditions relating to GHGs in a source's EPA-issued Step 2 PSD permit, and for related GHG terms and conditions that are contained in the source's title V permit, if any." EPA defined an "EPA-issued Step 2 PSD permit" as either a Regionally-issued Step 2 permit or a delegated state issued permit. However, EPA limited the no action assurance in several significant ways:
State-issued Step 2 PSD permits are not covered.
The no action assurance extends only to the GHG requirements in an EPA-issued Step 2 PSD permit.
If a violation of a GHG condition also violates another provision, then EPA will continue to take enforcement action.
The No Action Assurance does not protect a source against GHG requirements also authorized by another statute or regulation.
On the Title V side, EPA stated it would not require a Step 2 PSD source (1) "to obtain a title V permit solely because it has an EPA-issued Step 2 PSD permit," (2) require incorporation of EPA-issued Step 2 PSD permit conditions in a new title V permit that a source is obtaining for other reasons, and (3) to amend an existing title V permit to incorporate EPA-issued Step 2 PSD permit conditions. EPA also made it clear that title V permits must continue to address state-issued Step 2 PSD permits.
The "no action assurance" formally extended until 11:59 PM EDT, September 30, 2016.
EPA's no action assurance is welcome relief for sources with Step 2 PSD permits. It is troubling, however, that EPA limited relief to just GHG provisions, while purporting to retain the right to enforce non-GHG provisions in a permit that would not exist but for the invalidated Step 2 provisions. Step 2 PSD sources thus need to continue to consider non-GHG provisions as fully enforceable until such time as the Step 2 PSD permit is rescinded.