Kentucky Startups, Shutdowns, and Malfunctions Rulemaking Update
The Environmental Protection Agency found in June of last year that the State Implementation Plans (SIPs) of 36 states were substantially inadequate due to their regulatory treatment of excess emissions associated with startups, shutdowns and malfunctions at regulated facilities. The agency issued a SIP Call to each of those states to correct the deficiencies. For Kentucky, the SIP Call was directed at Section 1 of 401 KAR 50:055. Kentucky submitted its formal response to EPA on November 17, 2016, meeting its November 22, 2016 deadline. A copy is available on the DAQ website.
Kentucky had reportedly evaluated a number of options to address the SIP Call, including no action. However, Kentucky ultimately chose to resolve the SIP Call by removing Section 1(1) and (4) of 401 KAR 50:055 from the SIP. Section 1(1) provides as follows: “Emissions which, due to shut down or malfunctions, temporarily exceed the standard set forth by the cabinet shall be deemed in violation of such standards unless the requirements of this section are satisfied and the determinations specified in subsection (4) of this section are made.” Subsection (4) addresses the demonstration the source must make in order for the Director of the Division for Air Quality to find that the source should be relieved from compliance with the standards. The source must show that (a) the malfunction or shutdown and ensuing start-up did not result from failure to operate and maintain properly the equipment; (b) all reasonable steps were taken to correct, as expeditiously as practicable, the conditions causing the emissions to exceed the standards; (c) all reasonable steps were taken to minimize the emissions and their effect on air quality; (d) the excess emissions are not part of a recurring pattern indicative of inadequate design, operation, or maintenance; and (e) the malfunction or shutdown and ensuing start-up was not caused entirely or in part by poor maintenance, careless operation or any other preventable upset conditions or equipment breakdown. The regulation also requires the Director to notify the source of his determination 60 days after the submittal.
A public hearing on the proposed approach was held on September 14, 2016. EPA Region 4 had an opportunity to review and comment on Kentucky’s proposed approach and had no comments. Therefore, it is anticipated that this proposed resolution of the SIP Call will be approved. However, the change to the SIP is not effective until EPA formally approves the revision. The timing of EPA approval is uncertain, particularly due the change in administrations. It is not unusual for EPA to take months (or years) to act on proposed SIP revisions.
Even after an approval of the SIP revision, it is important to remember that Section 1(1) and (4) are still in effect as a matter of state law. Although the acceptance of a source demonstration under Section 1(4) by the DAQ Director will not bar federal enforcement or a citizen suit under the Clean Air Act, the granting of a request for relief would preclude state enforcement. The state’s determination should also merit consideration in the event EPA or a third party pursues an action over the same event.