Comments Due August 15 on EPA Proposal to Remove Emergency Defense from Title V Operating Permit Regulations
On June 14, 2016, EPA proposed to remove the affirmative defense for emergency conditions from the Title V operating permit program regulations. Comments on this proposed rule are due by August 15, 2016.
The Title V operating permit program regulations for both state and federal programs contain an affirmative defense for noncompliance with technology-based emissions limits under emergency conditions. EPA included the affirmative defense in response to comments, stating that “EPA believes it is appropriate, consistent with the emphasis in the part 70 regulations on providing sources with adequate operational flexibility, to include such a provision in the final rule.” EPA modeled it after the NPDES permit upset provision in 40 CFR 122.41 and cited several Clean Water Act cases. See 57 Fed. Reg. 32250, 279 (July 21, 1992). This defense was included in the initial Title V program regulations without subsequent change. As a result, this defense has been written into many state Title V permit regulations, and into hundreds of Title V permits throughout the nation.
EPA proposes to eliminate this provision based on the D.C. Circuit's decision in NRDC v. EPA, 749 F.3d 1055 (D.C. Cir. 2014), which vacated the affirmative defense for startup, shutdown and malfunction (SSM) events in certain National Emission Standards for Hazardous Air Pollutants (e.g., for Portland cement plants) as outside the EPA's statutory authority. According to the court, under the structure of the Clean Air Act, EPA's role is to set administrative penalties and the court's role is to determine civil penalties. Because the SSM defense purported to impede the court's authority to make determinations as to what civil penalty is appropriate in any particular case, the court found it beyond EPA's authority.
Based on the reasoning of the NRDC v. EPA decision, EPA determined that the state implementation plans (SIPs) containing similar affirmative defense provisions were inconsistent with the Clean Air Act, as described in a supplement to a previously proposed SIP call. See 79 Fed. Reg. 55919 (Sept. 17, 2014). In finalizing the SIP call, EPA rejected arguments that its action was inconsistent with the Fifth Circuit’s decision in Luminant Generation Co. v. EPA, 714 F.3d 841 (5th Cir. 2013) that upheld the EPA’s authority to approve a SIP containing an affirmative defense for unplanned SSM events. EPA stated, “The Fifth Circuit did not determine that the EPA’s interpretation … was the only or even the best permissible interpretation. It is clearly within EPA’s legal authority to now revise its interpretation to a different, but still permissible, interpretation of the statute.” See 80 Fed. Reg. 33851, 856 (June 12, 2015).
The June 14 proposed rule extends the reasoning of NRDC v. EPA to the Title V regulatory provisions authorizing an affirmative defense. As stated in the proposal, EPA has determined that this provision is likewise beyond its authority under the reasoning of the court, and now seeks to remove it from the regulations.
Once the affirmative defense provision is removed from its regulations, EPA expects states that have the affirmative defense in their Title V permit programs to remove it and submit these program revisions to EPA for approval. EPA is expecting this to occur within 12 months for most states. Once that occurs, EPA expects that new, renewed or modified Title V permits issued after the revision date would not include the affirmative defense provision. Of course, any state as a matter of state law could include a similar provision that applies to state-enforceable provisions of a permit.
If this proposal is finalized as proposed and the affirmative defense is removed from Title V permits, sources will no longer be able to demand the application of the defense when its conditions are met, but instead must plead for enforcement discretion. On the upside, this will enable sources to more vigorously seek enforcement discretion in circumstances that do not exactly fit the affirmative defense. On the downside, sources are left to the mercy of the agency to exercise its enforcement discretion, which may not be exercised in the manner that the source would like and is not reviewable on appeal.