2. NETTING Rick Goertz, P.E. Air Permits Division Texas Commission on Environmental Quality Environmental Trade Fair 2013 NETTING

3. NETTING!

5. Why Do Netting? How do you know if a modification is a major modification triggering major NSR? You conduct a netting exercise.

6. About Netting Applies to existing major sources only. Ensures smaller projects do not add up to be a major modification. An evaluation of : The current project, plus Increases and decreases within the contemporaneous period (netting window).

7. Contemporaneous Period Netting Window Five years before start of construction Proposed start of operation

8. Netting Contemporaneous Period

9. Netting Window Modifications identified within the contemporaneous period may be based on: The date the modification was authorized, or The date the change is operated. Must be used consistently. Indicate which method is used.

10. Creditable Emissions Occurs during the contemporaneous period. Cannot have been relied upon in issuing a major NSR permit for the source. Sources/activities authorized by the major NSR permit are not in operation when the current increase is authorized. Rely on Emissions Inventory.

11. Creditable Increases The new level of emissions exceeds the baseline actual emission rate. (PTE – Baseline = Increase) Does not include emission increases at facilities under a plant-wide applicability limit (PAL).

12. Creditable Decreases The baseline actual emission rate exceeds the new level of emissions. Enforceable at and after the time that project modification begins to operate. (Must be enforceable and real before the unit starts operation).

13. Creditable Emissions Contd Identify increases and decreases in TCEQ Table 3F. The project number that authorized the modification Provide an explanation if a project is not included in the evaluation. Each creditable decrease should be accompanied by TCEQ Table 4F.

14. Determining Increases and Decreases Increases and decreases for each project within the contemporaneous period are determined based on a comparison of the following: Baseline actual emission rate, and The PTE of that project (projected actuals are not used in this step except for the current project).

15. Baseline Actual Emission Rate Emissions, in tons/year, actually emitted during a consecutive 24-month period out of the previous 10 years (previous 5 years for electric utilities) from the date the project is authorized or modifications are operated.

16. Using an Allowable to Allowable Comparison Situation #1: the baseline actual > current PTE Situation #2: a new facility is within 2 years of its initial start-up date

17. Netting Window Example

18. Net Emissions Increase Project increase +Non-project source-wide creditable contemporaneous emission increases -Source-wide creditable contemporaneous emission decreases The amount that exceeds zero

19. Triggering Major NSR Compare the net increases to the appropriate significant emission rate. If the increase is greater than or equal to the significant emission rate for the pollutant, major NSR is required.

20. Time for some examples!

21. Example 1 Company is a named major source, in a serious nonattainment area. Current PTE = 50 Tons/year NO X Proposed PTE = 60 Tons/year NO X Baseline Actual = 47 Tons/year NO X Project Increase = 13 Tons/year NO X (Proposed PTE – Baseline Actual) Current PTE= 50 Tons/year NO X Proposed PTE= 60 Tons/year NO X Baseline Actual= 47 Tons/year NO X Project Increase= 13 Tons/year NO X ( Proposed PTE-Baseline Actual) Current PTE= 50 Tons/year NO X Proposed PTE= 60 Tons/year NO X Baseline Actual= 47 Tons/year NO X Project Increase= 13 Tons/year NO X ( Proposed PTE-Baseline Actual)

22. Example 1 Contd Major Source, Serious Nonattainment, Current PTE = 50, Proposed PTE = 60, Baseline Actual = 47, Project Increase = 13 Emission increase exceeds the netting significance level of 5 Tons/year. Netting is required!

23. Example 1 Table 3F NO x

24. Example 1 Finding Total Increase Current Project 13 Tons/year increase 11/2010 Project 5 Tons/year increase 10/2011 Project 0.25 Tons/year increase - 4.25 Tons/year decrease Total Increase: 14 Tons/year Current Project 13 Tons/year increase 11/2010 Project 5 Tons/year increase 10/2011 Project 0.25 Tons/year increase - 4.25 Tons/year decrease Total Increase: 14 Tons/year Current Project 13 Tons/year increase 11/2010 Project 5 Tons/year increase 10/2011 Project 0.25 Tons/year increase - 4.25 Tons/year decrease Total Increase: 14 Tons/year

25. Example 1 Nonattainment? The major modification significant emission rate for a severe nonattainment area is 25 Tons/year. Net project increase is 14 Tons/year. The project is not a major modification and major NSR (nonattainment review) is not required.

26. Check Your Calculations!

27. Example 2 Company is a named major source located in a serious nonattainment area. Company has four steam boilers operating under a cap. Boiler 1: 25 Tons/year NO X Boiler 2: 25 Tons/year NO X Boiler 3: 25 Tons/year NO X Boiler 4: 25 Tons/year NO X Current PTE: 100 Tons/year NO X

28. Example 2 Contd Company request : Increase firing rate of one boiler, its NO X emissions increase by 3 Tons/year. New contribution of one boiler is now 28 Tons/year NO X.

29. Example 2 More Data Current PTE = 100 Tons/year NO X Proposed PTE = 103 Tons/year NO X Baseline Actual = 90 Tons/year NO X Current PTE = 100 Tons/year NO X Proposed PTE = 103 Tons/year NO X Baseline Actual = 90 Tons/year NO X

30. Example 2 Is Netting Required? Is the project increase significant such that netting is required? Company proposes: 28 Tons/year – 25 Tons/year = 3 Tons/year NO X increase Is this a valid approach?

31. Example 2 Answer NNNooooooooooo ! Its not a valid approach... Should we ask why ?

32. Example 2 Explanation The cap is increased from 100 Tons/year to 103 Tons/year. The cap is being increased for all boilers. Increasing the cap means relaxing a federally enforceable emission limit. All units under the increased cap are modified.

33. Example 2 Is Netting Required? Is the project increase significant? 103 Tons/year (Proposed PTE) – 90 Tons/year (Baseline actual) 13 Tons/year NO X increase The project increase is significant (increase > 5 Tons/year) so... Netting is required!

34. Example 2 An Alternate Approach Set a separate enforceable limit for the affected boiler. Project increases are determined based on the individual boiler rather than for all the boilers. Netting may be avoided.

35. Example 3 A small tank farm with three emission points has three projects (modifications) within the contemporaneous period, including the current project.

36. Using the traditional method, the total increase would be 35 tpy (8+17+10). Of that 35 tpy, 28 tpy (8+10+10) are attributable to EPN1.

37. Example 3 Contd The increase is greater than the final allowable emission rate (26 tpy) indicating that portions of the increase have been counted more than once. Increases in emissions can be better reflected by using the endpoints method for EPN 1.

38. Increase or Decrease Increase = Final PTE – Baseline actuals from earliest project. Net increase is 16 tpy (26 tpy – 10 tpy). Method can only be used when determining net emissions increase. Baseline always used to determine project increase.

39. Example 3 Endpoints Netting Using endpoints netting: The contribution of EPN 1 = 16 tpy The total project net increase = 23 tpy

41. Now you are ready to go out into the world and NET! Disclaimer: The presenter does not guarantee the hearing of sound effects during the performance of actual netting exercises.

42. THE END Thank You, Thank You Very Much.

43. Contacts JOHNNY VERMILLION (512) 239-1292 Or Rick Goertz (512)239-5606