Department of Natural Resources and Environmental Control

Division of Air Quality

GENERAL NOTICE

Secretary’s Order No.: 2013-A-0006

Approving Final Revision to Delaware’s State Implementation Plan (SIP) for the Implementation, Maintenance and Enforcement of the 2008 8-Hour Ozone National Ambient Air Quality Standard (NAAQS), Pursuant to the Requirements of Section 110(a)(2)(A)-(M) of the Federal Clean Air Act (CAA)

Date of Issuance: March 7, 2013

Effective Date of the Amendment: April 11, 2013

Under the authority vested in the Secretary of the Department of Natural Resources and Environmental Control (“Department” or “DNREC”) the following findings, reasons and conclusions are entered as an Order of the Secretary in the above-referenced rulemaking proceeding.

Background and Procedural History

This Order considers the proposed revision to the Delaware State Implementation Plan (SIP) that addresses the requirements of Section 110(a)(2)(A)-(M) of the federal Clean Air Act (CAA) for the 2008 8-Hour Ozone National Ambient Air Quality Standard (NAAQS). On March 12, 2008, the U.S. Environmental Protection Agency (EPA) revised the NAAQS for the pollutant ozone, at that time reducing the NAAQS from 0.08 parts per million (ppm) to 0.075 ppm. The federal CAA requires each State to submit to the EPA a SIP that provides for the implementation, maintenance, and enforcement of a newly promulgated or revised NAAQS.

The Department published its initial proposed revision to the aforementioned Delaware SIP in the July 1, 2012 Delaware Register of Regulations, and held a public hearing on August 2, 2012. Written comments on the proposed SIP were submitted to the public record by both the EPA and the State of New Jersey on August 2, 2012. The Department’s Division of Air Quality (DAQ) responded fully to those written comments from EPA by adding some additional clarifying language to its initial proposed revision. DAQ provided the Hearing Officer with its Technical Response Document concerning its responses to EPA’s comments, as well as providing the reasoning for the same, on January 22, 2013. Proper notice of the hearing was provided as required by law.

A SIP is a state plan that identifies how that state will attain and maintain air quality that conforms to each primary and secondary NAAQS. The SIP is a complex, fluid document containing regulations, source-specific requirements, and non-regulatory items such as plans and emission inventories. Delaware’s initial SIP was approved by the EPA on May 31, 1972. Since that initial approval, the Delaware SIP has been revised numerous times to address air quality non-attainment and maintenance issues. This was done by updating plans and inventories, and by adding new and revised regulatory control requirements. Delaware’s SIP is compiled in the code of Federal Regulations at 40 C.F.R. Part 52, Subpart 1.

This EPA action is the revision of a NAAQS that has been in existence for many years. Because of this, Delaware’s SIP already addresses the requirements of CAA, Section 110(a)(2) relative to ozone. In addition, Delaware has repeatedly regulated its sources under the non-attainment provision of the CAA, and they are now well controlled. It is the Department’s position that all of the CAA 100 requirements are already clearly addressed in Delaware’s SIP.

The Department’s presiding hearing officer, Lisa A. Vest, prepared a Hearing Officer’s Report dated February 11, 2013 (Report). The Report recommends certain findings and the adoption of the proposed revision to Delaware’s State Implementation Plan, which addresses the requirements of Section 110(a)(2)(A)-(M) of the federal Clean Air Act (CAA) for the 2008 8-Hour Ozone National Ambient Air Quality Standard (NAAQS), as attached to the Report as Appendix A.

Findings and Discussion

I find that the proposed revision to Delaware’s aforementioned SIP is well-supported by the record developed by the Department, and I adopt the Report to the extent it is consistent with this Order. The Department’s experts developed the record and drafted the proposed SIP revision.

I find that the Department’s experts in the Division of Air Quality fully developed the record to support adoption of the proposed revision to the Delaware State Implementation Plan (SIP) that addresses the requirements of Section 110(a)(2)(A)-(M) of the federal Clean Air Act (CAA) for the 2008 8-Hour Ozone National Ambient Air Quality Standard (NAAQS). With the adoption of this Order, Delaware will once again demonstrate that the contingency requirements of the Clean Air Act (CAA) are met.

In conclusion, the following findings and conclusions are entered:

1.) The Department has jurisdiction under its statutory authority to issue an Order adopting this proposed SIP revision as final;

2.) The Department provided adequate public notice of the proposed SIP revision, and provided the public with an adequate opportunity to comment on the proposed SIP revision, including at the public hearing held on August 2, 2012;

3.) The Department held a public hearing on August 2, 2012, in order to consider public comment before making any final decision;

4.) The Department’s Hearing Officer’s Report, including its recommended record and the recommended SIP revision, as set forth in Appendix A, is adopted to provide additional reasons and findings for this Order;

5.) The recommended revision to Delaware’s State Implementation Plan (SIP) which addresses the requirements of Section 110(a)(2)(A)-(M) of the federal Clean Air Act (CAA) for the 2008 8-Hour National Ambient Air Quality Standard (NAAQS) should be adopted as final, thereby enabling Delaware to (1) demonstrate that the contingency requirements of the Clean Air Act (CAA) are met; and (2) because the revision is well supported by documents in the record;

6.) The Department shall submit this Order approving the final revision to Delaware’s State Implementation Plan (SIP) that addresses the requirements of Section 110(a)(2)(A)-(M) of the federal Clean Air Act (CAA) for the 2008 8-Hour Ozone National Ambient Air Quality Standard (NAAQS) to the Delaware Register of Regulations for publication in its next available issue, and provide such other notice as the law and regulation require and the Department determines is appropriate.

Collin P. O’Mara, Secretary

Implementation, Maintenance, And Enforcement of National Ambient Air Quality Standards

Revision to State Implementation Plan for Ozone January 22, 2013

Delaware Department of Natural Resources and Environmental Control, Division of Air Quality Final Plan

A State Implementation Plan (“SIP”) is a state plan that identifies how that state will attain and maintain air quality that conforms to each primary and secondary National Ambient Air Quality Standard (”NAAQS”). The SIP is a complex, fluid document containing regulations, source-specific requirements, and non-regulatory items such as plans and emission inventories.

Delaware’s initial SIP was approved by the US Environmental Protection Agency (EPA) on May 31, 1972. Since this initial approval the Delaware SIP has been revised numerous times to address air quality non-attainment and maintenance issues. The revisions consisted of updated plans and inventories, and new and revised regulatory control requirements. Delaware’s SIP is compiled at 40 C.F.R. Part 52 Subpart I.

Clean Air Act (CAA) § 110(a)(1) and (2) requires states to submit to the EPA SIP revisions that provide for the implementation, maintenance, and enforcement of any new or revised NAAQS within three years following the promulgation of such NAAQS. On March 27, 2008, EPA promulgated a new NAAQS for the pollutant ozone. The level of the NAAQS was lowered from 0.08 parts per million (ppm) to 0.075 ppm, based on 8-hour average concentrations.¹

On January 17, 2012 Delaware submitted to the EPA a letter which constituted Delaware’s determination and justification that it has complied with the requirements of § 110 (a)(2) of the CAA with respect to the 0.075 ppm ozone NAAQS. This letter is incorporated here as Attachment A. This letter indicted that:

“Delaware has reviewed its SIP and determined that all elements required in CAA §110(a)(2) for the 0.075 ppm ozone NAAQS have been met through earlier SIP submissions in connection with previous ozone standards. Discussion of each CAA § 110(a)(2) element was specifically addressed in formal submittals to the EPA dated December 13, 2007, and September 16, 2009. These prior submittals addressed the § 110(a)(2) requirements for the 1997 8-hour ozone NAAQS, and Delaware believes that no changes are needed for Delaware to implement and enforce the revised 2008 ozone NAAQS. This letter confirms and certifies that Delaware’s current SIP is adequate to address all applicable CAA§ 110(a)(2) requirements for the 0.075 ppm ozone NAAQS.”

This January 17, 2012 letter was based on an October 2, 2007 EPA document, “Guidance on SIP Elements Required Under Sections 110(a)(1) and (2) for the 1997 8-hour Ozone and PM2.5 National Ambient Air Quality Standards.” On March 29, 2012 the EPA returned Delaware’s January 17, 2012 letter as incomplete for two reasons. First, EPA noted that Delaware’s submittal did not include documentation to show that it had gone through the notice and hearing requirements of 40 CFR Part 51, Appendix V.² Second, EPA indicated that the submittal was incomplete regarding a “negative declaration”³ related to 110(a)(2)(D)(i)(I) because “EPA would expect a demonstration that contains information supporting a claim that a state does not significantly contribute or interfere with maintenance of the 2008 ozone NAAQS in other states.” This letter is incorporated here as Attachment B.

This document is a revision to Delaware’s SIP. The purpose of this SIP revision is to address the two EPA comments identified above: 1) that Delaware must provide for public notice pursuant to 40 CFR Part 51, Appendix V, and 2) that EPA would expect a demonstration that contains information supporting a claim that a state does not significantly contribute or interfere with maintenance of the 2008 ozone NAAQS in other states.

Delaware is making this submission in absence of any published EPA guidance and is therefore relying on existing guidance and past practices as well as what Delaware believes to be a rational approach. Delaware encourages EPA to use this document as a template when formulating its guidance and require other states to submit similar analysis.

Delaware has reviewed its SIP and determined that, except as noted below, all elements required in CAA §110(a)(2) for the 0.075 ppm ozone NAAQS have been met through earlier SIP submissions in connection with previous ozone standards. Discussion of each CAA § 110(a)(2) element was specifically addressed in formal submittals to the EPA dated December 13, 2007, and September 16, 2009. These prior submittals addressed the § 110(a)(2) requirements for the 1997 8-hour ozone NAAQS, and Delaware believes that, except as noted below, no changes are needed for Delaware to implement and enforce the revised 2008 ozone NAAQS. Those documents are incorporated here again and submitted as attachments C and D. This SIP revision confirms and certifies that Delaware’s current SIP is adequate to address all applicable CAA§ 110(a)(2) requirements for the 0.075 ppm ozone NAAQS.

Delaware has been non-attainment for the pollutant ozone since a standard was first established in 1971. Over the past 40 years Delaware has learned that transport is very significant relative to ozone, and that the only way to reduce ozone concentrations is to reduce the volatile organic compound (VOC) and nitrogen oxides (NOx) emissions that are causing them. Over the last twenty years Delaware has adopted and implemented SIP provisions that cover all VOC and NOx emitting sources and source categories, and all such emissions in Delaware are now well controlled. These SIP provisions have eliminated Delaware’s significant contribution to both its own unhealthy air quality, and the air quality of all downwind areas.⁴

CAA § 110(a)(2)(D) requires Delaware’s SIP to “Contain adequate provisions – (i) prohibiting, consistent  with the  provisions of  this title, any source or other type of emissions activity within the State  from emitting any air pollutant  in amounts which will -  (I) contribute significantly to non-attainment  in, or  interfere  with maintenance  by, any  other State  with respect to any such  national  primary  or  secondary ambient air quality standard, or (II) interfere  with measures required to be included in the  applicable  implementation plan  for any  other State under part C to prevent significant deterioration  of air quality or to protect visibility, (ii) insuring compliance with the applicable requirements of sections 126 and 115 (relating to interstate and international pollution abatement).”

Based on EPA’s Cross State Air Pollution Rule (CSAPR) modeling,⁵ the provisions in Delaware’s SIP were demonstrated by the EPA to be adequate provisions that satisfy CAA § 110(a)(2)(D)(i)(I) relative to the 0.08ppm ozone NAAQS.  This SIP revision demonstrates that these same provisions in Delaware’s SIP also satisfy CAA § 110(a)(2)(D)(i)(I) for the 0.075 ppm ozone NAAQS. This demonstration was specifically requested by the EPA in its March 29, 2012 letter.

3.1 Delaware’s SIP includes measures that cover its entire emissions inventory

A periodic emissions inventory (PEI) is a comprehensive emissions inventory that quantifies the VOC and NOx emission from every source or other type emitting activity within a State. PEIs are developed every three years, and 2008 is the year of Delaware’s most current (PEI). Delaware’s PEI encompasses all emissions that could violate CAA §110(a)(2)(D)(i)(I) with respect to the ozone NAAQS.

Year 2008 NOx emissions and VOC emissions were sorted from highest to lowest, and are summarized in Chart 1 and Chart 2. any of Delaware’s VOC and NOx control measures were not fully in effect in 2008. In order to demonstrate the effectiveness of Delaware’s control measures Chart 1 and Chart 2 also include corresponding 2014 projected NOx and VOC emissions from EPAs Cross State Air Pollution Rule (CSAPR) 2014 base case modeling inventory.⁶

Table 3-1 below details VOC and NOx emissions from Delaware’s 2008 PEI and EPA’s 2014 base case CSAPR inventory. Included in Table 3-1 is every Delaware stationary source/source category that emitted equal to or greater than 25 tons per year (TPY) of either VOC or NOx, and that made up the top 99% of Delaware’s VOC and NOx inventory. Table 3-1 is generally sorted from the largest Delaware source/source category, to the smallest, based on the 2008 PEI. For each source or source category in Table 3-1 the current applicable Delaware control measures are discussed, along with any identified additional measures that could be adopted into Delaware’s SIP.

Chart 3-1: Delaware 2008 PEI vs CSAPR 2014 NOx Emissions

Chart 3-2: Delaware 2008 PEI vs CSAPR 2014 VOC Emissions

Table 3-1

The information in the Table 3-1 above demonstrates that Delaware’s SIP includes measures that cover all non-trivial NOx and VOC sources in the State.

3.2 Implementation of the measures in Delaware’s SIP have been effective, and have resulted in significant emissions reductions.

Delaware’s adjusted⁷ 1990 base year SIP inventory emissions totaled 82,718 TPY, and 95,203 TPY for VOC and NOx, respectively. Delaware’s 2005 PEI demonstrates that emissions were reduced to 30,626 TPY, and 45,250 TPY for VOC and NOx, respectively⁸. This reduction (i.e., a 63% reduction in VOC and 52% reduction in NOx) was largely attributable to Delaware’s implementation of 7 DE Admin. Code 1125 (NSR), 7 DE Admin. Code 1112 (NOx RACT), and 7 DE Admin. Code 1124 (VOC RACT), 7 DE Admin. Code 1126 and 1136 (vehicle I/M) control measures.

Table 3-2

While Delaware attained compliance with the 1-hour ozone NAAQS in 2005, it remained non-attainment for the 1997 8-hour ozone NAAQS. Between 2005 and 2009 Delaware adopted stringent control requirements applicable to its largest sources (e.g., EGUs, large ICI boilers, lightering).These control requirements generally incorporated phased-in compliance dates: a 2009 date to aid in attainment of the 1997 8-hour ozone NAAQS by the statutory deadline, and a later date, generally 2012/13, which was 1) looking forward to EPA finalization of a new 8-hour ozone NAAQS that was protective of public health⁹, and 2) that resulted in each source/source category being well controlled. During this time period Delaware also updated its VOC RACT requirements and adopted regional measures to reduce emission from large area source categories (e.g., AIM, Consumer Products, etc.).

EPA’s CSAPR projections give an indication of the effectiveness of Delaware’s current SIP measures once fully implemented (i.e., after 2013). EPA developed base case projection inventories for 2012 and 2014 as part of the CSAPR. The 2014 CSAPR inventory is detailed in Table 3-1,and both 2012 and 2014 ¹⁰ CSAPR inventories are summarized in Table 3-3 below.

Table 3-3

For 2014 EPA projects Delaware’s overall emissions to be 26,591 TPY and 31,729 TPY for VOC and NOx, respectively. This represents a 13% reduction in state-wide VOC emissions, and a 30% reduction in state-wide NOx emissions since 2005; and a 68% reduction in VOC and a 67% reduction in NOx emission levels since 1990.

This inventory analysis is summarized in Chart 3-3 below.

Chart 3-3

This data clearly demonstrates that Delaware’s current SIP measures are very effective at reducing emissions that contribute to ozone formation. By extension, Delaware’s SIP measurers have reduced the impact of Delaware emissions on the attainment and maintenance of air quality standards in both Delaware and downwind states.

3.3 Cost Effectiveness of the measures in Delaware’s SIP

The large emission reductions discussed in Section 3.2 above have required a correspondingly large economic investment by Delaware.¹¹ Table 3-4 below provides estimates of the cost to achieve the significant emission reductions discussed above:

Table 3-4

Delaware evaluated EPA’s final report “Direct Cost Estimates for the Clean Air Act Second Section 812 Prospective Analysis,” dated February 2011. This report estimates costs of “local controls” by each U.S. State. Delaware adjusted this cost data to account for state size by dividing by population from the 2010 census. Table 3-5 below compares the 2010 per capita cost invested in local controls by Delaware to the CSAPR covered states.

Table 3-5

This indicates that Delaware has incurred a local control cost beyond most of the CSAPR covered states to comply with the CAA.

3.4 Measures in Delaware’s SIP that cover EGUs

The EPA has defined emissions that contribute significantly under CAA § 110(a)(2)(D)(i)(I) in various ways, all of which have substantially limited such emissions to EGUs. In the NOx SIP Call and CAIR EPA’s methodology defined significant contribution as those emissions that could be removed with the use of ‘‘highly cost effective’’ EGU controls. Under CSAPR, EPA determined that the emissions contributing significantly to nonattainment or interfere with maintenance were those that could be removed with $500/ton cost on EGUs, based on an analysis that accounted for both cost and air quality improvement. Under any definition, EGU’s in Delaware are well controlled, and looking solely at EGUs Delaware has satisfied 110(a)(2)(D)(i)(I).

Delaware has measures in its SIP that control each of its EGUs (i.e., 7 DE Admin Code 1112, 1146, and 1148). Pertinent characteristics of these measures are that they apply on a stack-by-stack basis (i.e., trading is not allowed), they require compliance on a short-term basis (i.e., generally a 24-hour or shorter rolling average), and they require controls on all EGUs, including those with high daily emissions despite having small annual mass emissions (e.g., peaking units). In addition, Delaware has measures in its SIP to prevent smaller stationary reciprocating engine driven generators from operating as EGUs without controls (i.e., 7 DE Admin. Code 1144). Additional detail on Delaware’s current EGU control measures is presented in the SIP revisions associated with the adoption of 7 DE Admin. Code 1112, 1144, 1146 and 1148.

Table 3-1 and the inventory analysis in Section 3.2 above summarize the current level of control on Delaware EGUs. EPA’s CSAPR base case inventories and CAIR budgets also demonstrate the effectiveness of the EGU measures in Delaware’s SIP.

Table 3-1 indicates that Delaware could achieve, in the aggregate, an additional estimated 549 TPY reduction in NOx from installing additional EGU controls.

This high cost of additional EGU control is consistent with the EPA CSAPR analysis. Under CSAPR EPA determined that no additional EGU reductions would be achieved in Delaware for cost up to $2,500/ton. In CSAPR the EPA evaluated ozone season and annual EGU NOx emissions at pollution control marginal costs per ton of reductions ranging from $0 to $2,500/ton, for 2012 and 2014 scenarios. In all cases Delaware NOx emissions increased with cost. This indicates that controls are being added to EGUs outside of Delaware as cost increases, which would increase the capacity factor of Delaware units by making them more competitive. Additional reductions will not be realized from Delaware EGU’s until the control cost exceeds about $8,800/ton, at which time gas fired combined cycle units in Delaware would install SCR.

Delaware concludes that because the cost is very high, the potential air quality benefit is low (i.e., the potential to further reduce significant mass emissions from Delaware’s EGUs is low), and because each of Delaware’s EGUs are already well controlled, these additional reductions beyond Delaware’s current SIP measures are not feasible in the context of this SIP, and are not required under 110(a)(2)(D)(i)(I).

3.5 Measures in Delaware’s SIP that cover non-EGUs

CAA § 110(a)(2)(D)(i)(I) covers a scope broader than EGUs. CAA § 110(a)(2)(D)(i)(I) requires a SIP to “Contain adequate provisions prohibiting…any source or other type of emissions activity…from emitting any air pollutant  in amounts which will contribute significantly…” Ozone and ozone precursors are transported and can contribute to ozone concentrations in downwind areas regardless of their source. To satisfy 110(a)(2)(D) a SIP must contain provisions that cover VOC and NOx emissions from any source or other type of activity within the state. A state has not satisfied 110(a)(2)(D) until 1) the total emissions from the state no longer impact any other nonattainment/maintenance area by more than 1% of the NAAQS, or 2) there are adequate provisions in the SIP that cover all sources or other type of activities in the State. If there are any sources not regulated, then 110(a)(2)(D) has not been satisfied.

Section 3.1 above demonstrates that Delaware has measures in its SIP that cover all non-trivial VOC and NOx emitting activities. Section 3.2 above demonstrates that these measures are effective. In Table 3-1 Delaware has identified non-EGU measures that could achieve, in the aggregate, an additional estimated 1,125 TPY reduction in NOx and a 655 TPY reduction in VOC. These establish the level of control currently in effect in Delaware.

The analysis in Section 3.2 above shows that DE has reduced emissions by 56,127 TPY VOC and 63,474 TPY NOx between 1990 and 2014. These potential additional reductions make up about 1% of the VOC reductions, and less than 2% of the NOx reductions already made by Delaware’s SIP measures. Delaware concludes that because the cost is very high, the potential air quality benefit is low (i.e., the potential to reduce significant mass emission is low), and because each of these sources/source categories are already well-controlled, these additional reductions beyond Delaware’s current SIP measures are not feasible in the context of this SIP, and are not required under 110(a)(20(D)(i)(I).

This SIP revision demonstrates 1) that the Delaware SIP contains measures that cover every non-trivial VOC and NOx emitting source and source category in the State, and 2) that implementation of these measures has resulted in significant emission reductions in Delaware. Delaware concludes that the Delaware emissions that would significantly contribute to nonattainment and maintenance in downwind areas are those VOC and NOx emissions that are reduced by the following adequate measures in Delaware’s SIP:

Additional opportunities for controlling emissions are either outside of our regulatory authority, impractical as a Delaware only initiative or carry an additional incremental cost in excess of $5,000 per ton. We are recommending this cost threshold to the EPA as criteria for evaluating all transport SIPs. Additional control measures from Delaware are not required under CAA §110(a)(2)(D)(i)(I).

In the unlikely event that nonattainment or maintenance problems remain in downwind states impacted by Delaware once all states comply with CAA §110(a)(2)(D)(i)(I), then the EPA should respond at that time with a SIP call under CAA §110(k).

This and prior SIP revisions demonstrate that Delaware’s SIP adequately addresses the requirements of CAA §110(a)(2) for the 2008 ozone NAAQS.