Pennsylvania's New TITLE V 'Permitting' Puts Pressure on Small and Medium-Size Companies

Recently, Pennsylvania took another step toward cleaner air in a way that will dramatically affect smaller and medium-size businesses here. Last November, the Commonwealth of Pennsylvania issued its Operating Permit Program under Title V of the Federal Clean Air Act.

This means that most stationary sources of air pollution here will have to obtain a source operating permit, and will be required to submit Title V facility permit applications by May 1995 or November 1995 at the latest.

Some managers may mistakenly see this permitting process as an environmental matter, plain and simple, and not tie their reporting to anticipated business projections. Yet accuracy or inaccuracy on this score can affect facility operations and the ability to operate competitively.

For example, facilities that inaccurately project future pollution levels will be prohibited from increasing production to meet rising demand, if this leads to higher levels of air pollution. And lacking an approved facility operating permit, facilities will not be permitted to operate legally without exposure to corporate and personal liability.

In addition to Title V, the source-specific operating program now requires emission sources previously grandfathered as exempt to obtain operating permits no later than November 1996.

Until now, the emission fees that regulated facilities paid out did not amount to much. Now under Title V, they will pay a geographically uniform annual emission fee of $37 per ton of each regulated pollutant.

The permit application also mandates a compliance certification that attests to facility compliance and certifies that information is as true and complete as company officials can make it with reasonable inquiry. This will require reasonable procedures to identify violations and incorporate this data into the information on compliance review.

In the past, the majority of facilities did not have to automatically submit compliance information unless the DER ordered them to do so. Now the Title V permit will require them to submit and certify compliance information with the Title V permit application and every six months after. It is important to note that generally, this information may be disclosed to the public.

Regarding Title V, many companies that file a Title V permit application commit their facilities to the expensive and burdensome Title V program, when they may not have to. For instance, a facility could have a potential to emit 120 tons a year of particulate matter and 60 tons a year of volatile organic compounds. Yet, this same facility may actually emit 60 tons of particulate matter and 30 tons per year of volatile organic compounds.

But the Title V threshold is 100 tons a year for particulate matter and 50 tons per year for volatile organic compounds. Thus,the facility may be able to restrict allowable emissions to 90 tons a year for particulate matter and 45 tons a year for volatile organic compounds.

Following U.S. EPA approval of Pennsylvania's existing state operating program, facilities that use this approach may avoid Title V requirements with a synthetic minor permit. This will permit them to limit facility emissions through federally enforceable conditions, if emissions allowable under the synthetic minor permit amount to less than the applicable major source thresholds for Title V applicability.

If the U.S. EPA fails to approve Pennsylvania's program before the date on which facilities must submit a Title V application, they will be forced to submit the Title V application or to obtain a synthetic minor permit by submitting a specific amendment to the State Implementation Plan.

Most smaller and medium-size manufacturers are unaware of Pennsylvania's new requirements for Title V permitting or how much time and effort the application process will require.

The reporting process for a Title V permit is more involved and complex than they previously experienced, or are now equipped to handle. And the application process can take six months to a year to finish. As a result, they may jeopardize their businesses by proceeding more slowly than they should. Similarly, most manufacturers with grandfathered sources are unaware that they must also obtain separate operating permits for these sources.

Most important, the process will require in-depth strategic decisions. In preparing the compliance review for the Title V application, facilities will have to consider many areas that range from alternate operating scenarios, operational flexibility and emission caps to data quality review, confidentiality, enhanced monitoring protocol and compliance issues.

Poor analysis of these conditions may expose executives to a major risk of obtaining operating permits that severely restrict operations and a company's ability to compete favorably.