New Source Review Reform Termination

September 1, 2005

The state's Environmental Protection Commission will be asked by the DNR to terminate a Notice of Intended Action concerning New Source Review reform at the next commission meeting on September 19.

On December 31, 2002, the U.S. Environmental Protection Agency promulgated revisions to the major New Source Review rules, commonly called NSR Reform, which required states to adopt changes by January 6, 2006.

Beginning in March 2004, the DNR convened a technical workgroup, facilitated by the Department of Economic Development, to review the federal revisions. Workgroup recommendations were used by the DNR to draft the Notice of Intended Action (NOIA) which proposed to adopt the NSR Reform rules.

In May and June 2005, the DNR and EPA Region VII met to discuss EPA's comments on the NOIA. The DNR was in the process of resolving comments with EPA when the U.S. Appeals Court, District of Columbia, issued a ruling on June 24 on petitions filed against the federal NSR reform rules by a variety of groups.

The court upheld many of the NSR reforms, but also vacated and remanded back to EPA significant components. The court upheld the Plant-wide Applicability Limits (PALs) provisions, the Baseline Actual Emissions (BAE) test, and the Projected Actual Emissions (PAE) tests. The court vacated the Clean Unit provisions and the Pollution Control Project (PCP) provisions. The court remanded certain recordkeeping provisions for sources.

The court ruling has serious implications for Iowa's NSR reform rulemaking. On August 8, 2005, EPA formally requested that the court reconsider its ruling. However, according to EPA Region VII, the regional offices have not received any guidance from EPA headquarters on how to proceed with NSR reform.

The DNR asked EPA Region VII to provide directions and guidance as soon as possible. The DNR is committed to adopting final NSR Reform rules that will be acceptable to EPA, and ultimately approved into Iowa's SIP. However, this does not appear to be possible at this time.

The DNR must either issue a final rule or terminate the NOIA by September 23, 2005. In light of recent developments, the DNR is terminating the NOIA. Given this procedural deadline, and the current absence of EPA guidance, this is the most logical course of action at this time. The DNR will continue to implement current NSR rules contained in rules 22.4 and 22.5.

The DNR is resolute in building on the momentum from the NSR Reform workgroups considerable efforts and recommendations. As such, the DNR will work on a new NOIA as soon as EPA guidance is available.

For more information, contact the DNR's Christine Paulson at 515-242-5154.