Message-ID: <13686578.1075851910571.JavaMail.evans@thyme> Date: Fri, 24 Aug 2001 01:44:00 -0700 (PDT) From: marc.phillips@enron.com To: kyle.purvis@enron.com, rick.loveless@enron.com, larry.campbell@enron.com, marilyn.june@enron.com, david.nutt@enron.com, louis.soldano@enron.com, john.shafer@enron.com Subject: TNRCC Grandfather Meetings Cc: henry.van@enron.com, charles.child@enron.com, leo.nichols@enron.com, michael.terraso@enron.com, mike.riedel@enron.com, ruth.jensen@enron.com, william.kendrick@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: henry.van@enron.com, charles.child@enron.com, leo.nichols@enron.com, michael.terraso@enron.com, mike.riedel@enron.com, ruth.jensen@enron.com, william.kendrick@enron.com X-From: Marc Phillips X-To: Kyle Purvis, Rick Loveless, Larry Campbell, Marilyn June, David Nutt, Louis Soldano, John Shafer X-cc: Henry Van, Charles Child, Leo Nichols, Michael Terraso, Mike Riedel, Ruth Jensen, William Kendrick X-bcc: X-Folder: \Larry_Campbell_Nov2001_1\Notes Folders\Marc phillips X-Origin: CAMPBELL-L X-FileName: lcampbe.nsf I attended a meeting on July 30 with the Texas Intrastate Pipeline Association where TNRCC personnel made a presentation on the implementation of the grandfather legislation and Charlie Child attended a meeting on August 7 where TNRCC also made a presentation on the grandfather legislation. The following existing authorization options are available for grandfathered sources: old Standard Exemptions, Voluntary Emission Reduction Permits (VERP), regular permits or Permits By Rule. The grandfather legislation, which is still in the rulemaking process, is for permitting grandfathered sources that have not been authorized by the existing options. These programs are discussed below. Old Standard Exemptions As you know, ETS has implemented a program to authorize grandfathered emission sources under old Standard Exemptions (now Permits by Rule) wherever possible so they would not be subject to the grandfather regulations. TNRCC indicated at the meeting that you would have until the deadlines for submitting applications (9/1/03 in east Texas and 9/1/04 in West Texas) to authorize the sources under old St. Ex. Keep in mind that this program is not part of the TNRCC regulations-it is being implemented under a verbal agreement with the TNRCC and could change at any moment. TNRCC recommended that PI-7 forms be submitted for all locations that are included on their 1997 list of emission sources (Note: the list is based on TNRCC's listing of 1997 emissions inventories and Ruth has distributed this list to the appropriate DESs). For locations not on this list, internal records would be sufficient and nothing needs to be submitted to TNRCC (unless required under the conditions of the St.Ex.). One thing to keep in mind is that TNRCC is revising the rules governing Permits by Rule/St. Ex. with increased recordkeeping requirements so that any emission sources authorized by St.Ex. will be subject to the new recordkeeping rules (scheduled to be finalized on 9/26/01). It is recommended that the Standard Exemption submittals be received by the TNRCC as soon as possible. In addition to engines, old Standard Exemptions or existing Permits By Rule should be used for the remaining grandfathered sources (tanks, heaters, etc.). Grandfather Legislation The grandfather legislation includes a specific permit for reciprocating engines. Other grandfather sources must obtain an "Existing Facility Permit" under the legislation. Unlike the Voluntary Emission Reduction Permits (VERP) program, there is no amnesty granted for modifications uncovered during the permitting process. Discovery of a modification may result in enforcement action. In addition, the source is no longer eligible for a grandfather permit and must obtain a regular permit or Permit By Rule and be subject to BACT (~2 g/bhp-hr). In order to take advantage of the VERP program amnesty provision, TNRCC is urging industry to submit VERP applications by the August 31, 2001 deadline. Under the grandfather legislation, grandfathered reciprocating engines in East Texas are subject to 50% reductions of NOx and may be subject to 50% reductions of VOC. Recips in West Texas are subject to up to 20% reductions of NOx and VOC. The reductions will be determined on a case-by case basis by the permit engineer reviewing the application. Although previously there was hope that no reductions would be required in West Texas, at the August 7 meeting TNRCC indicated that they would require at least 1% reductions in West Texas. TNRCC has not decided how to deal with VOC reductions but one TNRCC staff member did mention he was aware that oxidation catalysts could reduce VOC emissions on engines. In the August 7 meeting, TNRCC indicated that the reductions for recips will be calculated from a baseline of the average actual emissions in 1997-9. This was not the intent of the legislation and the legislators will be contacted by our industry organizations to attempt to change this. My thinking is that the reductions will likely be based on a "before" hourly grams/hp-hr rate from stack testing (or maybe AP-42) and an "after" hourly emissions rate based on stack testing. The reductions required from recips can be averaged across a pipeline, but reductions mandated by a regulation cannot be included. Reductions from a shutdown of an emission source can be included in the average, and it was suggested that reductions since 1997 could be included, but this has not been determined. It is highly unlikely that that TNRCC will allow reductions in East Texas to be averaged with reductions in West Texas. Grandfathered emission sources other than recips are subject to 10-year old BACT. When discussing whether there would be any relief for smaller emission sources such as grandfathered valves or flanges, the TNRCC attorney indicated that there is no lower threshold and that all emissions sources must be authorized either by the existing authorizations or grandfather permits by the deadlines in this legislation. See the notes above about the locations that TNRCC expects paperwork to be submitted for St. Ex. The control/reduction deadlines for reducing emissions from all grandfathered emission sources is 3/1/07 in East Texas and 3/1/08 in West Texas. However TNRCC indicated that controls will likely be required prior to these dates. When you receive your permit for grandfathered sources, they anticipate that you will have 18 months to install controls. Since the applications are due on 9/1/03 and 9/1/04, and TNRCC has one year to process applications (but it could be less), you should anticipate being required to install controls in 2005-2007. The application fee may be $450. The grandfather rule will be proposed on October 24, 2001 and should be finalized in March 2002. If you have any questions contact me or Ruth Jensen (402-398-7716) Marc N. Phillips Director, Regulatory Technical Analysis 713-646-7646 (cell 713-594-6919) marc.phillips@enron.com