May 1, 2003

Prevention of Significant Deterioration (PSD) and Non-attainment New Source Review (NSR): Routine Maintenance, Repair, and Replacement

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Prevention of Significant Deterioration (PSD) and Non-attainment New Source Review (NSR): Routine Maintenance, Repair, and Replacement 

Stated Purpose:

To revise "the regulations governing the NSR programs mandated under the Clean Air Act . . . to provide greater regulatory certainty without sacrificing the current level of environmental protection and benefit derived from the program."

Summary of RSP Comment:

EPA’s proposed rule seeks to create regulatory certainty over what activities fall under the "routine maintenance, repair and replacement" (RMRR) exclusion to the New Source Review (NSR) provision of the Clean Air Act (CAA). It also seeks to ensure that, as intended by Congress when it enacted the CAA, the RMRR exclusion is not applied so narrowly as to discourage needed routine upkeep.

Specifically, the proposed rule creates a clear, objective definition of RMRR by devising two new determinations based on cost thresholds. One sets an industry-specific cost threshold below which annual maintenance, repair or replacement activities would be excluded from review as new sources. The other would allow a facility to replace existing equipment with equipment that serves the same function or purpose as long as the replacement meets certain objective criteria.

While the proposed rule does not address overall problems with the NSR program, primarily the regulatory bias in the treatment of old versus new plants, which discourages the construction of new plants, it would provide much needed regulatory certainty over the definition of RMRR activities. Furthermore, it would ensure the RMRR exclusion is not interpreted too narrowly while clarifying what activities would be considered "major modifications" subject to the NSR permit process.

The one flaw in the proposed rule is the heavy reliance on a "case by case" analysis for activities that fall outside of the allowance or the cost-threshold guidelines. Since the EPA correctly recognizes the problems with this subjective approach, EPA should adopt a different method for determining activities falling outside the new cost-threshold guidelines. Aside from these changes, the proposed rule should be codified.

See also: The Mercatus Comment on "EPA's National Primary Drinking Water Regulations; Arsenic and Clarifications to Compliance and New Source Contaminants Monitoring"