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Correspondence



July 28, 1998

Dennis Drake, Chief
Air Quality Division
Michigan Department of Environmental Quality
P.O. Box 30260
Lansing, Michigan 48909-7760
Dear Mr. Drake:

The purpose of this letter is to inform you of the United States Environmental Protection Agency’s (USEPA) concerns regarding the incorporation of “supersession” language in Title V permits and underlying regulations. The topic of supersession has developed into a national issue over the possible legal consequences of incorporating such language into regulations and permits. The specific concerns with Michigan’s permit program are outlined below.

A Title V permit incorporates into one document and provides for the implementation of all applicable requirements of the Clean Air Act that apply to a Title V source. Under 40 C.F.R. 70.2, the definition of “applicable requirement” includes: "(2) Any term or condition of any preconstruction permits issued pursuant to regulations approved or promulgated through rulemaking under Title I, including parts C or D, of the Act". Similarly, Michigan Rule 336.1101 defines “applicable requirement” to include, among other things, “(iii) A term or condition of any permit issued pursuant to the Act or regulations approved or promulgated through rulemaking under Title I, including parts C or D of the Clean Air Act.”

The Michigan Department of Environmental Quality (MDEQ) is issuing Title V operating permits with a supersession condition under Appendix 6 of section G, entitled, “Voided Permits,” which states in part, “... the permits to install and permits to operate listed below shall be void as of the effective date of this renewable operating permit.” USEPA understands that the inclusion of the supersession condition of Appendix 6 is premised upon Michigan’s Rules 336.1201(6) and 326.1214(7). These rules, which have not been approved into the Michigan State Implementation Plan, provide that preconstruction permits become void upon the issuance of a renewable operating permit. Pursuant to Rules 336.1201(6) and 326.1214(7) and the condition of Appendix 6, the Title V permit automatically supersedes any previously issued construction permit and/or operating permit.

USEPA is concerned that the voiding of an underlying preconstruction permit, either by the terms of Title V permit or through operation of Rules 336.1201(6) and 326.1214(7), could result in the nullification of the terms of the preconstruction permit as “applicable requirements” which must be incorporated into future Title V permits. Once a Title V permit supersedes a previous preconstruction permit, the applicable requirement may no longer exist outside the Title V permit, and there may be no legal basis for incorporating them into future Title V permits. Neither Title V of the Clean Air Act nor its implementing regulations provide the authority, in and of themselves, to create applicable requirements through the Title V permitting process. Therefore, it appears that, in order to preserve the terms of the preconstruction permits as “applicable requirements,” preconstruction permits’ terms and conditions must not be superseded.

Region 5 is actively pursuing discussion and resolution of this issue at the national level and will continue to seek Michigan's input and comments. In the interim, however, we strongly encourage Michigan not to include supersession or voiding language in Title V permits, despite Michigan’s regulatory supersession of underlying permits to construct. This will lessen any future need to reopen Title V permits to remove the objectionable language once this issue is resolved.

In the long term, the national policy on this matter may require revisions to Michigan’s rules to ensure that all applicable requirements are incorporated into future Title V permits. My staff is available to assist you in exploring options to address these underlying concerns, and will continue to keep MDEQ appraised of our national efforts.

If you have any questions concerning this issue, please call Laura Gerleman, USEPA Permit Engineer, at (312) 353-5703 or Jane Woolums of the Office of Regional Counsel at (312) 886-6720.

Sincerely yours,

/s/

Cheryl Newton, Acting Chief
Air Programs Branch

cc: Greg Edwards
Michigan Department of Environmental Quality

Dave Yanochko
Michigan Department of Environmental Quality

Jerry Avery
Michigan Department of Environmental Quality