Pennsylvania’s Reasonably Available Control Technology (RACT) III Rule is Now Final and the Compliance Deadline is Just Weeks Away
On November 12, 2022, the Pennsylvania Department of Environmental Protection (Department) took the long-awaited final step in promulgating the latest iteration of the state’s Reasonably Available Control Technology (RACT) standards. The final rulemaking is known as Additional RACT Requirements for Major Sources of NOx and VOC for the 2015 Ozone NAAQS or “RACT III”. See final publication in the Pennsylvania Bulletin here.
The “III” denotes the regulation as Pennsylvania’s third RACT rule. The rule took effect upon publication and the compliance demonstration deadline is January 1, 2023. RACT III targets emissions of oxides of nitrogen (NOx) and volatile organic compounds (VOC) which combine in the presence of sunlight to form ozone. Ozone can be harmful to people and the environment at ground level, which is why the United States Environmental Protection Agency (EPA) started regulating concentrations of ozone in the ambient air in 1990 by directing Pennsylvania and other states to develop RACT regulations as a means of demonstrating attainment with the ambient ozone standards. EPA is obligated to revisit the standards every five years to ensure they remain sufficiently protective of human health and the environment. Accordingly, Pennsylvania issued its first RACT rule in 1994 and its second one, RACT II, in 2016. RACT III is the regulation du jour, but it will likely be superseded by RACT IV in a matter of years.
As its name suggests, RACT standards are technology-based with the objective of driving the application of reasonably available air pollution control technology to achieve emission reductions from existing sources. But unlike some other technology-based air regulatory programs, the notion of “reasonably available” in the RACT context takes into account both technological feasibility and economic feasibility. RACT III specifically applies to sources of NOx or VOC emissions were in existence on or before August 3, 2018, and are located at facilities whose total potential or actual emissions of NOx or VOC exceed applicable major source thresholds – i.e., 100 tons per year of NOx and 50 tons per year of VOC. Every facility that is “major” for NOx or VOC is required to submit to the Department an initial RACT III notification by December 31, 2022, even if the facility is already complying with RACT II. The initial notification must designate each source at the facility as either subject to RACT III or qualifying for a regulatory exemption. For non-exempt sources, the initial notification must also indicate how the source will demonstrate compliance with the regulation: i.e., by meeting the applicable presumptive standards or seeking a source-specific determination of what constitutes RACT commonly known as a case-by-case RACT proposal.
On November 21, 2022, the Department emailed to certain major-emitting facilities a form that the Department indicated may be used for the RACT III initial notification. As of the time of publication of this Special Alert, the relevant form does not appear to be available otherwise through the Department’s electronic resources. We will continue to watch for any updates that may assist facilities with the RACT III compliance process.
RACT III establishes presumptive RACT requirements and emission limits for various source categories, including combustion units, municipal solid waste landfills, municipal waste combustors, process heaters, turbines, stationary internal combustion engines, cement kilns, glass melting furnaces, lime kilns, and direct-fired heaters, furnaces or ovens. Importantly, RACT III contains a larger number of presumptive RACT categories than RACT II. Therefore, it is possible that a source previously subject to a case-by-case determination under RACT II may now be subject to presumptive requirements under RACT III. Also note that in some cases, facilities can rely on facility- or system-wide averaging to meet applicable presumptive standards for NOx. Facilities wishing to do so must make a relevant submittal to the Department by December 31, 2022.
If none of the presumptive standards apply to a subject source, or if they apply but the facility-owner takes the position that such standards do not satisfy RACT on the basis the necessary means of demonstrating compliance is not both technologically and economically feasible, then the facility owner must submit to the Department for review and approval a case-by-case RACT proposal for the relevant source or sources. On its face, RACT III requires case-by-case proposals to be submitted by December 31, 2022, but since the compliance demonstration deadline for all affected sources is just one day later on January 1, 2023, some facilities could find themselves facing the difficult circumstance of having timely submitted a case-by-case proposal by the end of the year, but not having received the Department’s response thereto before January 1. It is not clear what these facilities should do. RACT III builds in a petition process for seeking additional time to come into compliance, but only if the source determines RACT requires the installation of an air pollution control device. In all other cases, the January 1, 2023 deadline governs. See below for a discussion of a streamlined “screening” case-by-case proposal approval process available to facilities currently operating under an approved RACT II case-by-case determination.
For anyone who hasn’t been tracking RACT III closely over the past couple of years, the mere seven weeks between promulgation of the final regulation and the compliance demonstration deadline is borderline unbelievable. But the Department has stated that affected facilities should not be surprised by the compressed schedule, because the Department has been engaged “outreach” regarding the rule for many months. In September 2022, for example, the Department sent a form email to Title V permit-holders in the Commonwealth flagging the initial notification requirements for major sources of NOx or VOC. Prior to that, the Department and local air pollution control agencies advised that in cases where no air pollution controls are being installed (and hence there is no allowance for a petition for extension of time) the submission of a case-by-case proposal does not by itself provide any relief from the January 1, 2023 compliance deadline for the RACT III requirements. And yet, the Department has been clear that it cannot guarantee that action will be taken on any case-by-case RACT III proposals prior to January 1, 2023. Absent some clearer direction from the Department, in order to provide the fullest opportunity for review of case-by-case proposals prior to January 1, 2023, the Department and local air pollution control agencies recommend that affected-facility owners submit case-by-case RACT proposals as soon as possible following promulgation of the final rule. In any event, meeting the rule’s impending compliance deadline is likely to be challenging for certain facilities and, at this point, the Department hasn’t clearly signaled its willingness to exercise its enforcement discretion for delayed compliance. We should know more about the Department’s intended approach to RACT III enforcement by early to mid-2023.
For additional details about RACT III’s presumptive standards, case-by-case proposals, and facility-wide/system-wide averaging option for NOx emissions, please see below.
Presumptive RACT Standards
As stated above, RACT III establishes presumptive requirements and emission limitations for certain source categories of major NOx-emitting or VOC-emitting facilities. For example, combustion units (i.e., boilers) rated between 20 and 50 MMBtu/hour heat input would have to meet enhanced tune-up requirements consistent with the Maximum Achievable Control Technology (MACT) rule for boilers. For larger combustion units rated at 50 MMBtu/hour or greater, the Department included presumptive NOx RACT requirements of 0.10 lb/MMBtu for propane and liquid petroleum gas-fired combustion units and 0.12 lb/MMBtu for large distillate-fired combustion units, respectively. For simple cycle turbines rated between 1,000 and 4,100 brake horsepower and firing natural gas, the Department lowered the NOx limit to 120 ppmdv @ 15 percent oxygen, down from 150 ppmdv in RACT II.
Several other source-specific RACT limitations are included, for direct-fired ovens/furnaces, internal combustion engines, and cement kilns, among others. Finally, for source categories, such as fugitive VOC air contamination sources at natural gas compression and transmission facilities that have the potential to emit less than 2.7 TPY of VOC, the Department has determined that RACT requires these sources install, maintain, and operate the sources in accordance with the manufacturer’s specifications and with good air pollution control practices.
Case-by-case RACT proposals are appropriate where a particular source does not have a corresponding presumptive standard, or where a facility owner determines that it is technologically and/or economically infeasible to meet the new presumptive RACT III emission standards. If this option is pursued, RACT III provides for the submission of an alternative, case-by-case RACT proposal to the Department or local air pollution control agency by December 31, 2022.
Notably with respect to case-by-case proposals, EPA’s comments on the previously proposed RACT III rulemaking clarified that prior case-by-case determinations issued under RACT II cannot be used alone to satisfy the case-by-case requirements for RACT III without additional review and approval. In order to address EPA’s concerns, the Department’s final RACT III rule includes an option for facilities that previously received a case-by-case determination pursuant to RACT II to satisfy RACT III by simply updating their prior technical and economic feasibility “screening” analysis conducted under the prior RACT II in lieu of a full case-by-case analysis under RACT III. This case-by-case analysis must follow the procedures laid out in the final RACT III regulation to submit the required information demonstrating that there is no new pollutant specific air cleaning device, air pollution control technology, or technique available at the time of submittal of the analysis. Then as a second step, for each technically feasible air cleaning device, air pollution control technology, or technique evaluated for the case-by-case analysis, the owner or operator must demonstrate that the technology has a cost effectiveness equal to or greater than $7,500 per ton of NOx emissions reduced or $12,000 per ton of VOC emissions reduced. These cost effectiveness values are to be used as ‘‘screening level values’’ to determine the amount of analysis and due diligence that the owner or operator should perform if there is no new pollutant specific air cleaning device, air pollution control technology or technique available at the time of submittal of the analysis.
Facility-Wide System-Wide Averaging
RACT incorporates operational flexibility, including the option to request approval to use facility-wide or system-wide NOx emissions averaging, a source-specific NOx or VOC emission limitation, or a source-specific NOx RACT or VOC RACT requirement as alternative methods of compliance. Facility-wide or system-wide averaging establishes an alternative approach for demonstrating compliance when a major NOx emitting facility that includes at least one air contamination source is unable to meet the applicable presumptive RACT III emission limitation. In this scenario, facilities may average NOx emissions on either a facility-wide or system-wide basis, with system-wide emissions averaging limited to sources under common control of the same owner or operator within the same ozone nonattainment area in Pennsylvania.
Alternative Compliance Schedules
If an owner or operator is proposing to install an air cleaning device to meet a presumptive RACT emission limitation or RACT emission limitation determined on a case-by-case basis, the owner or operator may petition the Department or local air pollution control agency for an alternative compliance schedule that goes beyond the January 1, 2023 compliance deadline. However, the RACT III rule requires that the petition for an alternative compliance schedule or alternative RACT requirement (established on a case-by-case basis) be submitted to the Department or local agency by December 31, 2022. Any petition approved by Department must be incorporated in an applicable operating permit or plan approval. The Department will then submit each approved petition for an alternative compliance schedule to the EPA for approval as a revision to the Commonwealth's State Implementation Plan (SIP). As stated above, the Department has advised major facilities to submit any alternative compliance schedule requests as soon as possible due to lack of guarantees that Department or local agencies will take action on the requests prior to January 1, 2023.
Source Testing Waivers
RACT III requires stack testing for certain sources by January 1, 2023. However, a facility may request a waiver of this requirement in order to use a previously Department-approved stack test performed on or after one year prior to the publication of the RACT III rule in the Pennsylvania Bulletin (i.e., November 12, 2021). RACT III provides that any such waiver must be requested by December 31, 2022. Similar to above, the Department and local agencies are recommending that affected owners and operators submit any necessary stack test waiver requests as soon as possible, in order to provide the maximum time and opportunity for the Department to act prior to January 1, 2023, if they are able to act at all.
For more information, listen to our Manko Gold "Plugged In" podcast entitled: Change is in the Air in PA: RACT III Finalized and Impending Deadlines.