Draft AQC Meeting Summary_10May2023

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ENVIRONMENTAL MANAGEMENT COMMISSION
AIR QUALITY COMMITTEE MEETING SUMMARY May 10, 2023 Archdale Building-Ground Floor Hearing Room 9:00 A.M. – 10:30 A.M.

AQC MEMBERS IN ATTENDANCE
Ms. Margaret (Maggie) C. Monast, AQC Chair Mr. Charlie S. Carter
Mr. Christopher Duggan, AQC Vice-Chair Ms. Donna Davis
Ms. Yvonne Bailey Dr. H. Kim Lyerly

OTHERS IN ATTENDANCE
Ms. Robin Smith, EMC Chair Mr. Mike Abraczinskas, DAQ Director
Ms. Patricia Harris, EMC DEQ Staff
Ms. Elizabeth (Jill) Weese, EMC Members of the public
Mr. Phillip Reynolds, EMC Counsel
PRELIMINARY MATTERS Agenda Item I-1, Call to Order and the State Government Ethics Act, N.C.G.S. §138A-15 AQC Chair Monast called the meeting to order and inquired, per General Statute §138A-15, as to whether any member knows of any known conflict of interest or appearance of conflict with respect to
matters before the EMC’s AQC. None stated. Agenda Item I-2, Review and Approval of the March 8, 2023 Meeting Minutes Chair Monast requested approval of the March 8, 2023 Meeting Minutes. Commissioner Bailey made the motion and Commissioner Lyerly seconded the motion. The minutes were approved unanimously by roll-call vote without discussion.
MEETING BRIEF
During the meeting on May 10, 2023, the Air Quality Committee (AQC) of the Environmental Management
Commission (EMC) heard:
• Concept: Revisions to Rule 02Q .0802, Gasoline Service Stations and Dispensing Facilities
• Action Item: None
• Informational Item: Startup, Shutdown, and Malfunction (SSM) SIP-Call Update

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RULEMAKING CONCEPTS
Agenda Item II-1, Revisions to 15A NCAC 02Q .0802, Gasoline Service Stations and Dispensing Facilities (560) (Katherine Quinlan, Division of Air Quality (DAQ))
Ms. Katherine Quinlan, DAQ, presented a concept for upcoming rule revisions to 15A NCAC 02Q .0802,
Gasoline Service Stations and Dispensing Facilities. The rules in Subchapter 02Q, Section .0800, titled Exclusionary Rules, provide limits for certain industry types under which these facilities can remain a minor source for Title V and hazardous air pollutants (HAPs). Rule 02D .0802 currently provides that gasoline service stations and dispensing facilities may remain a minor source if their annual throughput remains below 15 million gallons, which was established in 1995. Additionally, incremental reporting is required annually when the facility throughput exceeds 10 million gallons and semiannually when the facility throughput exceeds 13 million gallons.
Since 1994, the phased implementation of EPA standards for installation of onboard refueling vapor
recovery (ORVR) technology in new light duty vehicles (LDVs) and light duty trucks (LDTs) has increased the percentage of the on-road vehicle fleet with ORVR. This technology reduces the emissions that result from vehicle refueling at service stations; thus, as non-ORVR vehicles in the fleet continue to
be replaced with ORVR vehicles, the maximum amount of gasoline these facilities can dispense while keeping actual emissions below major sources thresholds increases. Therefore, the DAQ is considering proposal of a revised annual throughput limit in Rule 02Q .0802 to incorporate the increased presence of
this technology in the State’s vehicle fleet. Recent vehicle registration inventories indicate that about 85% of the LDV and LDT fleet in North Carolina would be equipped with ORVR, and preliminary analysis indicates a recalculated threshold of 43 million gallons for Rule 02Q .0802. The DAQ plans to bring the draft rules and fiscal note for this rulemaking to the AQC in September 2023, holding a public comment period from December 2023 through February 2024, and leading to a projected effective date of May 2024.
Discussion:
Chair Monast asked what motivated the DAQ to make this change, and if it was requested by the regulated community. Ms. Quinlan confirmed that a request from the regulated community did prompt the DAQ to identify this update and the increased presence of the technology. Some synthetic minor permits have been issued using the 43 million gallon threshold, but the rule still only allows 15 million gallons.
Chair Monast asked if DAQ is aware of any other states that have made this change. Ms. Quinlan was unaware of any other states that had been identified as making this change but stated that DAQ has corresponded with EPA and received some preliminary feedback.
Chair Monast asked for any other questions from Commissioners. None were raised.
ACTION ITEMS
No action items were presented during this AQC meeting. INFORMATIONAL ITEMS
Agenda Item V-1, Startup, Shutdown, Malfunction (SSM) SIP Call Update (Joelle Burleson, DAQ)
Mrs. Joelle Burleson, Senior Regulatory Advisor with the DAQ Planning Section, presented an update on status of the EPA’s SSM State Implementation Plan (SIP) Call. Mrs. Burleson provided a brief recap of
the history of the SSM SIP Call issued in 2015 for several states, including North Carolina, and challenged in the D.C. Circuit by multiple parties. In 2016, to address the SIP Call, the EMC amended

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and adopted rules with applicability language dependent on the outcome of federal action for which the state rule effective date was later amended to a future effective date contingent on approval of the rules
into the SIP by EPA. Briefings in the case were completed in October of 2016 and then the case was held in abeyance through January of 2022. A decision from the Court is still pending. However, EPA withdrew the SIP call for Texas, North Carolina, and Iowa in 2020 and in October of 2020 withdrew its 2015 SSM policy. Several environmental groups filed suit challenging the withdrawals of the SIP Call for the three states. In September of 2021 EPA reinstated the SIP Call and the Court granted EPA’s request for voluntary remand. The Sierra Club filed suit against EPA to compel the agency to make findings of failure to submit and take action on SIP submittals. In January 2022 EPA published a finding of failure to submit SIPs in response to the SIP Call for several states and although Texas, North Carolina, and Iowa were not included in that finding, EPA did note that they would be reconsidering the withdrawal of the SIP Call for those states. Given the withdrawal by EPA of the SIP Call for North Carolina, the state withdrew its 2016 SIP submittal and coordinated with the Office of Administrative Hearings on cleanup
and updating of the rule history note reflecting the SIP Call related activity over time. After reconsidering the 2020 withdrawal, in February 2023, EPA proposed to reinstate the 2015 SIP Call for North Carolina. Revised rules, if needed, would be due to EPA 18 months after the EPA takes final action on the proposed
reinstatement.
The DAQ submitted comments on the proposal that: the EPA didn’t consider the SIP as a whole and didn’t account for evidence that North Carolina’s implementation regarding SSM hasn’t impeded achievement of the National Ambient Air Quality Standards (NAAQS) in all areas of the state; North Carolina disagreed with EPA’s determination that North Carolina’s SIP is substantially inadequate and that North Carolina’s SSM provisions are inconsistent with the Clean Air Act; the EPA has erroneously
determined that implementation of North Carolina’s “director’s discretion provision” involves the unlawful modification of North Carolina’s SIP when it simply establishes a framework for when and how the Director determines whether an SSM event constitutes a violation of the appliable rule; and that EPA
is incorrect that the subject SIP provisions are inconsistent with the text of the Clean Air Act, which accords discretion to the States to determine “whatever mix” of requirements are “necessary or
appropriate” to attain and maintain the NAAQS. The DAQ also commented in support of excluding 15A NCAC 02D .0535(c) and (g) and .1423(g) from the SIP as EPA has approved for several other states as a potential path forward and allowing the maximum time allowed under the Clean Air Act of 18 months for
submittal of revised rules by states if needed. Mrs. Burleson noted that SSM events are infrequent, North Carolina’s SSM rule only applies to a subset of sources, and not those sources subject to New Source Performance Standards (NSPS), Maximum Achievable Control Technology (MACT), or National Emission Standards for Hazardous Air Pollutants (NESHAPs), and North Carolina’s SSM rule establishes concrete factors the Division must consider when determining if excess emissions are the result of a malfunction, or start-up or shut-down conditions.
The next steps would be for DAQ to submit a request for EPA approval of current Rule 02D .0535 readopted November 1, 2020, except paragraphs (c) and (g), and approval of Rule 02D .1423, except paragraph (g). The impact of .0535(c) and (g) and .1423(g) not being approved would be that violations
caused by SSM events would be subject to federal enforcement and third-party citizen suits. In addition, DAQ will continue to follow Court and EPA activity, consider potential options should the SSM SIP Call be reinstated for North Carolina, and provide periodic updates to the AQC as related activity evolves.
Discussion: Commissioner Bailey asked two questions: 1) If MACT, NSPS, and NESHAP sources are not covered, who or what companies are covered by this rule; and 2) what guidance does the Director use to decide whether or not it is a violation, and whether it meets the SSM rule? Mrs. Burleson said it would be any of the sources that are not subject to NSPS, NESHAP or MACT standards, such as sources at a facility, and any kind of industry or company that has a specific source that isn’t covered explicitly by a MACT or
NESHAP throughout the state. It covers a broad range of industries.

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Commissioner Bailey said she was looking for more examples because so many industries are Title V and they are subject to MACT, NSPS MACTs, or NESHAP, and asked if it is smaller sources or Title V.
She asked for confirmation that it would not be Duke Energy. Mrs. Burleson replied that it could be any of those sources. Sources like Duke Energy also have specific provisions for their utilities. It could be sources within the facility that have specific requirements under the state rules but do not necessarily get covered under MACT or NESHAP sources. So really it could be any industry. It’s just sources not covered by those specific provisions of rules.
Commissioner Bailey asked for clarification that a Title V permit has several sources, or can have 20
different sources on a manufacturing site, so some of them might be subject to MACT or NESHAP and some aren’t, so even in one Title V permit this rule could apply to a certain number of sources in one
manufacturing site. It is a really broad-based rule that affects a lot of industries. She again asked the second question about the criteria the Director uses to decide if a violation is excused. Mrs. Burleson clarified that to qualify as a malfunction, for instance, the excess emissions would have to last for more
than four hours and result from a malfunction, a breakdown of process or control equipment, or any other abnormal conditions. To determine if excess emissions are the result of a malfunction the Director considers the 7 items listed in Rule 02D .0535(c): whether the air cleaning device, process equipment, or process has been maintained and operated, to the maximum extent practicable, consistent with good practice for minimizing emissions; repairs have been made expeditiously when the emission limits have been exceeded; the amount and duration of the excess emissions, including any bypass, have been minimized to the maximum extent practicable; all practical steps have been taken to minimize the impact of the excess emissions on ambient air quality; the excess emissions are not part of a recurring pattern indicative of inadequate design, operation, or maintenance; the requirements of Paragraph (f) of
the Rule have been met; and if the source is required to have a malfunction abatement plan, it has followed that plan and all malfunctions shall be repaired as expeditiously as practicable. Commissioner Bailey noted that sounds pretty detailed and asked what is so insufficient about that from
the environmental groups or EPA’s view. Mrs. Burleson said that the DAQ did not agree that it is insufficient. Director Abraczinskas noted that DAQ views the factors read off from the rule to be very clear on what we can consider, is excited that there appears to be a path forward to resolve this with EPA and is hopeful to have an approved submittal prior to a final SIP call. The Division has only approved three of these types of cases over the last three years, as they are infrequent and the rule as it stands is
serving us well.
EMC Chair Smith noted that it clearly doesn’t apply to HAPs regulated- under NESHAPs and asked if there are other SSM instances that could have localized impacts that don’t affect overall compliance with the Clean Air Act, and if part of the concern is that there may be localized impacts. Director Abraczinskas noted that there is a good bit of expert judgment needed in these cases, each unique to site specific facts. If DAQ’s judgment led us to believe there are localized impacts, it’s important for us to consider that and
whether to treat it under this rule or as a violation.
EMC Chair Smith noted the status of litigation, stating that it is confusing that there have been two cases. The first was the original Sierra Club challenge on the way EPA was responding to States SSM
provisions, which was held in abeyance for several years and argued last spring but is still awaiting decision. Then there was allowed a separate case from Sierra Club to compel EPA to take steps to bring States into compliance with the 2015 SIP Call. EMC Chair Smith noted that it is confusing that there is both the broader case and the separate case, and asked if DAQ could explain where this could go since EPA is currently taking steps to deal with states, but in the background there is the broader original case, and if there is potential for EMC to act and then have to reverse action based on how these two legal
proceedings go forward.
Director Abraczinskas said the key case is the one in the D.C. Circuit and whether the 2015 SSM federal
policy will be upheld or not and if it is, then the action to bring North Carolina back into the SIP Call is

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most certainly relevant and we will need to take some sort of action. If the case goes the other direction, then we’re going to have to pause and reassess and it is possible we may need to take no actions. But in
either case, we are unsure if official rulemaking actions will be necessary, given the pathways EPA has laid before us given our existing Rule 02D .0535 on the books today, and the potential path forward if the 2015 policy is upheld by the D.C. Circuit would be to simply resubmit that existing rule text to EPA for review and approval into the SIP except for two paragraphs that EPA believes are inconsistent with the policy. To do that, DAQ does not believe the AQC or EMC would need to take any actions, but DAQ would certainly consult with the AQC or EMC either way.
EMC Chair Smith said she would need to spend some time looking at whether the rule is written in a way that allows for that kind of partial enforcement, noting it is a little unusual to have a situation where
we would say to EPA that we’re resubmitting this rule, but pay no attention to two paragraphs, which will remain in the rule and presumably continue to be enforceable. That may require a little more thought as things move along about how that rule is currently written and whether it works or not. Director
Abraczinskas said DAQ would keep everyone posted as these things evolve and believes the recent approach described that EPA has taken in other states and some local programs is already on the books as a solution. One key piece on the last slide is that the impact of not including paragraphs with a rule into the SIP is that any violations that result from an SSM event would be subject to federal enforcement or third-party suits. That is the practical effect of that approach.
Agenda Item V-2, Director’s Remarks (Mike Abraczinskas, DAQ)
Director Abraczinskas first noted some items expected from EPA this week. The EPA is expected to release their NSPS for GHG emissions for new, modified, and reconstructed fossil-fuel fired electric generating units (EGUs), Emission Guidelines (EGs) for GHGs from existing fossil-fuel fired EGUs, and simultaneously repeal the Affordable Clean Energy (ACE) Rule. These are the Clean Air Act Section 111(b) Standards and Section 111(d) Guidelines for GHG emissions from the electric generating sector. The first rendition of this package was called the Clean Power Plan (CPP), and the second rendition was the ACE Rule, so this proposal would be the third version of this rule/guideline package. DAQ expects to start an intense period of review to evaluate and comment on this rule package from EPA.
Secondly, Director Abraczinskas noted an item that was in the news last week, coming out of the U.S. Attorney’s Office. The owner or operator of an auto repair shop in Charlotte that fraudulently coded over
15,000 vehicles that would have otherwise failed their emissions inspection was sentence to 12 months and 1 day in prison and ordered to pay over $1.2 million in fines and $82,000 in restitution to the State. The results of this case were announced last week by the U.S. Districts Attorney’s Office and the Court records alleged that this shop owner executed a scheme of swapping the county of registration in the system for many of the failing vehicles, changing the county from one where emissions testing is required to one where emissions testing is not required. He also changed the characterization of some light duty trucks, which are subject to the program, to heavy-duty trucks, which are not subject to the program. He also allegedly charged drivers between $80 to $150 to pass them with this scheme. The article also alleges that he only paid the State $0.85 per safety inspection instead of the required $6.35 charge he would have paid for that inspection. This was a joint effort between U.S. EPA’s Office of Inspector General, Criminal Investigation Division, and the North Carolina Department of Transportation License and Theft Bureau and the Division of Motor Vehicles working with the U.S. Attorney’s Office on the case. There are
probably greater details and a press release from the U.S. Attorney’s Office online.
CLOSING REMARKS AND MEETING ADJOURNMENT Chair Monast asked if there were any other comments or questions. Commissioner Carter asked if a date had been selected for a Special AQC Meeting in June, and about the status of the Advanced Clean

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Trucks (ACT) Rules and fiscal note. Chair Monast stated that no date has been selected for a possible June meeting. Director Abraczinskas stated that the ACT fiscal note is not quite ready, so that is why a
June meeting is being considered to present the fiscal note, rule text, and environmental justice slides. Commissioner Carter noted that the materials would be needed well in advance of a meeting in order to provide enough time for review. Chair Monast and Director Abraczinskas acknowledged, and the meeting was adjourned.