Written by Dave Krochko, Senior Project Manager, Environmental Services; and Robert Tyler, Senior Technical Manager, Environmental Services
Anyone who has been involved with a large project subject to New Source Review (NSR) permitting has dealt with some level of stress and uncertainty related to the prohibition on commencing construction prior to receiving a final NSR permit and its impact to project schedule.
Currently, EPA considers almost any physical on-site construction activity that is of a permanent nature to constitute the beginning of “actual construction,” even where that activity does not involve construction of an “emissions unit.” This interpretation tends to preclude source owners/operators from engaging in a wide range of preparatory activities they might otherwise desire to undertake before a final NSR permit is issued. Many industry stakeholders have asserted that, due to this interpretation, their projects have been delayed and efforts to engage in construction pursuant to staged schedules (e.g., which seek to take account of seasonal conditions in cold-weather areas) have been made overly difficult.
Some relief may be coming. As outlined in a draft guidance memorandum issued for review and comment on March 25, 2020, EPA is proposing to adopt a revised interpretation of “begin actual construction” that is more consistent with federal regulatory language. Under this revised interpretation, a source owner or operator may, prior to obtaining an NSR permit, undertake physical on-site activities – including activities that may be costly, that may significantly alter the site, and/or are permanent in nature – provided that those activities do not constitute physical construction of an “emissions unit.” Additionally, this revised interpretation asserts that “installation necessary to accommodate” an emissions unit is not considered part of that emissions unit, and construction activities that may involve such “accommodating installations” may be undertaken in advance of the source owner or operator obtaining an NSR permit.
In the draft guidance memorandum, EPA acknowledged that the interpretation at issue has been a long-standing one and that they did not take decision to revise it lightly. Accordingly, the guidance includes a thorough review of the statutory and regulatory background, along with the history of EPA’s application of its prior interpretation. The guidance also sets forth EPA’s revised interpretation, explains why the revised interpretation is consistent with the regulatory text, and states the Agency’s reasons for adopting it.
Once finalized, this guidance may benefit owners/operators that desire to undertake certain construction activities prior to obtaining an NSR permit to move projects forward in an expedient manner. However, owners/operators choosing to proceed with construction in advance should be aware of the risk of having to suspend or cancel projects if unable to obtain a permit with acceptable conditions.
The draft guidance specifically applies to EPA’s major NSR permitting regulations but notes that state and local permitting authorities that incorporate EPA’s definition of “begin actual construction” for their minor NSR programs may also apply this guidance to their minor sources at their discretion.
EPA is providing an opportunity for interested stakeholders to review and comment on the draft guidance titled, “Interpretation of ‘Begin Actual Construction’ Under the New Source Review Preconstruction Permitting Regulations,” which can be found at the link below. Note the link includes a text box form for entering comments directly, as well as an email address for which to send electronic files. Comments will be accepted through May 11, 2020.