EPA issued a final rule this week intended to further clarify its policy on the scope of New Source Review (“NSR”), the program that requires a pre-construction permit for new plants or “major modifications” of existing plants. The EPA policy, known as “aggregation,” refers to the grouping of two projects into one for purposes of determining whether the combined effect of the two activities will result in a significant emissions increase that triggers the permitting requirements of NSR. In the past, EPA’s aggregation policy had been used to prevent sources from dividing a single project into many parts in order to claim that none of the parts had sufficient emissions impacts to warrant a permit.
EPA first announced its desire to clarify the “aggregation” policy in 2006, as part of a proposal that also addressed two other NSR policies as well. On Monday, EPA published a “final action” in the federal register explaining that activities should be aggregated for purposes of NSR “where there is a substantial relationship between activities, either from a technical or an economic standpoint.” The publication also establishes a rebuttable presumption that projects undertaken more than three years apart should be analyzed as separate projects and should not be aggregated for purposes of NSR applicability. However, EPA chose not to amend the text of the NSR regulations to reflect its aggregation policy and also decided to withdraw or take no action on the other two policies initially addressed in its 2006 proposal, known as “debottlenecking” and “project netting.”