Introduction -

Of particular concern to electric utilities and other major sources operating under Title V permits, on February 12, 2013, the U.S. Environmental Protection Agency (“EPA”) initiated steps under the Clean Air Act (“CAA”) to eliminate exemptions in 36 State Implementation Plans (“SIPs”) that excuse in various ways exceedances of emission limitations during periods of startup, shutdown and malfunction (“SSM”). In the proposed rule, EPA declared such exemptions are not permissible under the CAA and seeks to compel 36 different states to revise their air quality regulations to eliminate them. The action comes in response to a Petition from the Sierra Club, which argued the CAA requires all emission sources to comply with emission limits on a continuous basis and that regulations permitting sources to exceed emissions limits during periods of SSM violate the CAA. In demonstrating compliance with the CAA’s air quality standards, most SIPs presume the quantitative (modeled) air quality benefits of continuous compliance. This presumption then becomes an integral part of the State’s demonstration of its attainment and/or maintenance of federal ambient air quality standards. In addition, significant exceedances during periods of SSM by a major source may violate short term ambient standards. Sierra Club argued the aggregate air quality impact of emissions during periods of SSM is significant, but the Petition does not attempt to quantify them. EPA defends its inability to quantify the adverse effects of SSM-related emissions because sources generally do not record those emissions.

The Sierra Club requested that EPA institute a sweeping revision to its SSM policy and invalidate a host of SIP provisions relating to SSM events. EPA’s proposed rule grants certain parts of Sierra Club’s Petition but denies others. If the rule becomes final, the affected states will have 18 months to revise their SIPs. The elimination of exemptions from emission limitations during periods of SSM means such exceedances would become violations, exposing sources to increased liability to enforcement actions by EPA, States, and third-parties. While this proposed rule may adversely affect any emissions source, the rule most severely impacts peaking units and institutional, commercial, and industrial boilers and other sources that operate on an as-needed or intermittent rather than continual basis. The more a unit starts up and shuts down, the greater liability it could face under this proposed rule.