Program Review of KDHE’s Air Permitting Programs Conducted: August 2020 U.S. EPA, Region 7 Air Permitting and Standards Branch Air and Radiation Division Kansas Bureau of Air Program Review Report Contents Contents A. INTRODUCTION .................................................................................................................. 1 B. SUMMARY of FINDINGS and CONCLUSIONS ................................................................ 2 C. CATEGORIZED COMMENTS ............................................................................................. 3 1. General ................................................................................................................................. 3 a. Staffing ......................................................................................................................... 3 b. Other General Observations ......................................................................................... 4 2. Construction Permitting ....................................................................................................... 5 a. Assuring Healthy Air Quality ...................................................................................... 5 b. Other Construction Permitting Observations ............................................................... 6 3. NSPS / NESHAP ................................................................................................................. 6 4. Operating Permits ................................................................................................................ 7 a. Title V Fees .................................................................................................................. 7 b. Other Title V Observations........................................................................................... 9 ATTACHMENT A: List of Files Reviewed ................................................................................ 11 ATTACHMENT B: Completed NSR Questionnaire .................................................................. 15 ATTACHMENT C: Completed Title V Questionnaire ............................................................. 181 ATTACHMENT D: Fee Attachment.......................................................................................... 224 ATTACHMENT E: Entrance Meeting Attendees ..................................................................... 227 ATTACHMENT F: Exit Meeting Attendees ............................................................................. 228 ATTACHMENT G: KDHE’s Response Letter Regarding the Draft Report ............................ 229 KS/KDHE AIR BUREAU AIR PERMITTING PROGRAMS PROGRAM REVIEW REPORT A. INTRODUCTION The comprehensive review of Kanas Department of Health and Environment’s (KDHE’s) air permitting programs was part of the Environmental Protection Agency (EPA) Region 7’s efforts to fulfill the EPA’s oversight responsibility to ensure adequate implementation of the Clean Air Act. The overall scope of this review included assessment of the state agency’s performance regarding: 1) Prevention of Significant Deterioration (PSD)/New Source Review (NSR) construction permitting, 2) Title V operating permitting, 3) synthetic minor permitting [construction and/or operating], 4) New Source Performance Standards (NSPS) and National Emission Standards for Hazardous Air Pollutants (NESHAP) determinations, 5) the establishment of enforceable permit conditions and 6) the use of Title V operating permit fees. The review was initiated by a letter to the department dated March 4, 2020, with a request for separate lists of construction and Class II operating permits issued over the previous two years and a request that questionnaires be completed and returned to the regional office prior to the on- site review of files. We also requested that the KDHE fill out Attachment C from the March 27, 2018 guidance “Program and Fee Evaluation Strategy and Guidance for 40 CFR Part 70.” In March, both the KDHE and the EPA employees started working from home to mitigate the spread of COVID-19. The EPA and the KDHE discussed postponing the program review. The decision was made to proceed with the program review from remote work locations. Therefore, this review was accomplished using video meetings and reviewing electronic versions of files. The program review entrance meeting was held virtually on July 28, 2020. Attachment E list the attendees of the meeting. An exit meeting was held virtually on August 12, 2020. At this meeting we discussed our initial findings and discussed the next steps for the review. Attachment F list the attendees of that meeting. The following Region 7 staff participated in the review of files: Ward Burns, Bob Cheever, Keith Johnson, David Peter, Pat Scott, and Bob Webber. A total of 92 source files were reviewed regarding the above-mentioned actions (see Appendix A). The review team appreciated the assistance of the KDHE staff in providing records and financial information, and answering questions related to the program review. 1 B. SUMMARY of FINDINGS and CONCLUSIONS On balance, the department runs adequate construction and operating permit programs. In general, we found that all the projects we reviewed completed the proper level of permitting with the only major issues being 1) spending Title V fees on non-Title V activities and 2) the lack of verifying that construction projects would not interfere with the attainment or maintenance of any ambient air quality standard. The following observations are in no particular order and most are discussed in more detail later in the report. Observations The KDHE does appear to be collecting adequate funds to operate the Title V program. However, Title V funds are being used to fund other non-Title V air program activities. No air dispersion modeling or other means is used to assure that new sources or modifications will not interfere with the attainment or maintenance of any ambient air quality standard except for when PSD applies. The KDHE staff have the technical ability to follow the requirements of 40 CFR Part 51 Appendix W. The KDHE’s electronic records systems, especially the new Kansas Environmental Information Management System (KEIMS) system, seem to work well and are extremely useful with employees teleworking. EPA was given access to KEIMS to retrieve records for the file reviews. The system seems easy to use and we had no issues accessing the records stored in the system. However, we did need to take some care to avoid accidentally downloading confidential business information. We did not observe any incorrect NSPS/NESHAP applicability/non-applicability determinations. However, the files do not contain much documentation which support NSPS/NESHAP decisions. The application forms seemed well designed to collect information needed to determine NSPS/NESHAP applicability. In some cases, the description in the permit or the chronology log provided explanations for determinations. K.A.R. 28-19-204(a) requires construction permits and Class I and Class II operating permits to have the opportunity for the public to participate in the permit development or modification process prior to issuance. The regulation appears to require public notice for all these permits. However, construction and Class II permits are being issued without public notice. The KDHE is following an internal guidance on which permits should be placed on public notice. Kansas does not publish their final Class I permits online. This is not a requirement, but they are the only state in the Region that does not post their final permits. 2 Kansas has one local agency that issues permits on behalf of the state and that agency. The KDHE stated that the KDHE reviews all documents and draft permits before issuance (except for expeditated permits and approvals). The files did not contain any record of these reviews. Most permit limits appeared to be practically enforceable. However, we did note a few cases of 12-month rolling source-wide tons per year blanket emission limits. Minor construction permits and Class II operating permits did not have a statement of basis or fact sheets. In some cases, a chronology log or the permit description did a good job documenting permit decisions. Also, Title V permits renewal’s statement of basis only address renewal issues and facility changes. The KDHE has a very low Title V backlog and issued construction permit timely. No variances are issued. The KDHE uses standardized spreadsheets they created to calculate emissions from grain elevators. This eased the review of grain elevator emission calculations. The KDHE was behind on entering Best Available Control Technology (BACT) decisions into the RBLC database. They have been working to catch up on this backlog and expect to be caught up by the end of September 2020. The KDHE does a great job with early engagement with the EPA on Prevention of Significant Deterioration (PSD) permits including providing EPA with the modeling protocols and inviting the EPA to preapplication meetings. C. CATEGORIZED COMMENTS 1. General a. Staffing The KDHE air permitting program has a total of 21 staff positions with 19 of the positions currently filled. This includes a Section Chief, three Unit Supervisors, two clerical staff and 13 permit writers and database staff. The average length of NSR permitting experience is over 5 years. In 2017, the State of Kansas implemented a market adjustment on the salary of engineers for both Engineers-In-Training and Professional