Illinois is taking the final steps toward adopting an authorized state program for direct administration of the Prevention of Significant Deterioration (PSD) permitting program under proposed state regulations, taking responsibility for federal Clean Air Act (CAA) requirements previously administered under delegated authority from the U.S. Environmental Protection Agency (EPA).

State PSD regulations, which will be added as Part 204 of the Illinois air quality pollution rules, 35 Ill. Adm. Code Part 204, have been in development and subject to hearings and public comment since 2017. The Illinois Pollution Control Board issued its second-notice opinion and order on June 18, 2020. The rule is expected to be finalized following review by the Joint Committee on Administrative Rules and will go into effect following approval by the EPA as part of the State Implementation Plan (SIP). When it does, Illinois will join 46 other states that have elected to administer the PSD program directly.

New Source Review (NSR) under the CAA requires geographic areas within states to be designated as in attainment or nonattainment based on National Ambient Air Quality Standards (NAAQS), which are based on air quality, on a pollutant-by-pollutant basis, for the criteria pollutants: ozone, carbon monoxide, sulfur dioxide, particulate matter (PM₁₀ and PM_2.5), lead, and nitrogen dioxide. The PSD program applies in all areas in which one or more of these criteria pollutants are within attainment levels.

A new major source of air pollution in an area that meets NAAQS must obtain a PSD permit. An existing major source is also required to obtain a PSD permit when a physical or operational change results in significant new emissions. Smaller sources and non-major modifications at major sources may be required to obtain PSD permits under certain circumstances, as specified by state regulations.

Previously, the Illinois Environmental Protection Agency (IEPA) implemented PSD permits through authority delegated by the EPA based on federal programmatic requirements. After the change to state regulations, IEPA will have direct enforcement authority.

The most significant differences between the proposed State PSD requirements and EPA regulations relates to appeals. Permit appeals will no longer be reviewed by the federal Environmental Appeals Board. Once Illinois’ PSD program goes into effect, IEPA determinations regarding PSD permit applicability and compliance will be reviewed by the Illinois Pollution Control Board under state regulations.

No economic analysis was conducted for the change in PSD implementation, presumably because absent any substantive regulatory change, it is unlikely that a shift in administration alone will impose any significant new costs. The IEPA has argued that the proposed state regulations will benefit regulated entities. Going forward, all construction requirements, including PSD compliance requirements, will be consolidated into in a single construction permit application and addressed in a single state-issued permit.

Despite close consistency with existing federal regulations, the IEPA may initiate rulemaking to make changes in the future. States implementing the PSD program have the authority to develop tailored requirements and procedures so long as they are at least as stringent as EPA’s requirements.

Troutman Pepper will be providing regular updates and alerts on Illinois air quality regulations, including the pending state-implemented PSD program. For more information, please contact Kevin Desharnais or Louise Dyble.