A. Increased emissions by a major source or major modification subject to this article shall be offset by reductions in the emissions of each pollutant for which the area has been designated as nonattainment and for which the source or modification is classified as major. Such offset may be obtained by reductions in emissions from the source or modification, or from any other source in existence within the allowable offset area, on the startup date of the new major source or major modification.
1. Credit for an emissions offset can be used only if it has not been relied upon in demonstrating attainment or reasonable further progress, and if it has not been relied upon previously in issuing a permit or permit revision under this article pursuant to Sections 17.16.550 and 17.16.560 or not otherwise required under this chapter or under any provision of the SIP.
B. An offset shall not be sufficient unless reductions of total emissions for the particular pollutant for which the offset is required will be:
1. Obtained from sources within the allowable offset area;
2. Contemporary with the operation of the new major source or major modification;
3. Less than the baseline of the total emissions for that pollutant, except in ozone nonattainment areas classified as moderate, serious or severe; and
4. Sufficient to demonstrate that emissions from the new major source or major modification, together with the offset, will result in reasonable further progress for that pollutant.
C. In ozone nonattainment areas classified as marginal, total emissions of VOC and oxides of nitrogen from other sources shall offset those proposed or permitted from the major source or major modification by a ratio of at least 1.10 to 1. In ozone nonattainment areas classified as moderate, total emissions of VOC and oxides of nitrogen from other sources shall offset those proposed or permitted from the major source or major modification by a ratio of at least 1.15 to 1. New major sources and major modifications in serious and severe ozone nonattainment areas shall conform to the requirements of this section and Section 17.16.580.
D. Only intrapollutant emission offsets shall be allowed. Intrapollutant emission offsets for precursors of ozone shall include offset reductions in emissions of volatile organic compounds. Intrapollutant emission offsets for precursors of nitrogen dioxide shall include offset reductions in emissions of oxides of nitrogen.
E. For purposes of this section, "reasonable further progress" means compliance with the schedule of annual incremental reductions in emissions of the applicable air pollutant prescribed by the control officer based on air quality modeling under Section 17.16.620, to provide for attainment of the applicable air quality standards by the deadlines set under Part D of Title I of the Act, or in an applicable implementation plan.
F. For purposes of this section, "net air quality benefit" shall mean that during similar time periods either 1 or 2 below, is applicable:
1. A reduction in the number of violations of the applicable Arizona ambient air quality standard within the allowable offset area has occurred and the following mathematical expression is satisfied:
C = The applicable Arizona ambient air quality standard.
x i = The concentration level of the violation at the i th receptor for such pollutant after offsets.
N = The number of violations for such pollutant after offsets (N < K).
xj = The concentration level of the violation at the j th receptor from such pollutant before offsets.
K = The number of violations for such pollutant before offsets.
2. The average of the ambient concentrations within the allowable offset area following the implementation of the contemplated offsets will be less than the average of the ambient concentrations within the allowable offset area without the offsets.
G. Baseline Further Defined:
1. For the purpose of this section, the baseline of total emissions from any sources in existence or sources which have obtained a permit or permit revision under this article (regardless of whether or not such sources are in actual operation at the time of filing of the permit or permit revision) shall be the total emissions allowed by the regulatory emission limitations in effect at the time the application is filed. In addition, the baseline of total emissions shall consist of all emission limitations included as conditions on federally enforceable permits except that the offset baseline shall be the actual emissions of the source from which offset credit is obtained where:
a. No emission limitations are applicable to a source from which offsets are being sought; or
b. The demonstration of reasonable further progress and attainment of ambient air quality standards is based upon the actual emissions of sources located within a designated nonattainment area.
2. Where the emission limitations for a particular pollutant allow greater emissions than the actual emission rate of the source for that pollutant, the baseline shall be the actual emission rate at the time the permit or permit revision application under this article is filed and emissions offset credit shall be allowed only for control below the actual emission rate.
H. For an existing fuel combustion source, offset credit shall be based on the allowable emissions under the regulations or permit conditions applicable to the source for the type of fuel being burned at the time the permit or permit revision application under this article is filed. If an existing source commits to switch to a cleaner fuel at some future date, emissions offset credit based on the actual emissions for the fuels involved shall not be acceptable unless:
1. The permit or permit revision under this article for the source specifically requires the use of a specified alternative control measure which would achieve the same degree of emissions reduction should the source switch back to a dirtier fuel at some later date; and
2. The source demonstrates to the satisfaction of the control officer that it has secured an adequate long-term supply of the cleaner fuel.
I. Offsets shall be made on either a pounds-per-hour, pounds-per-day, or tons-per-year basis, whichever is applicable, when all facilities involved in the emission offset calculations are operating at their maximum expected or allowed production rate and, except as otherwise provided in subsection H of this section, utilizing the type of fuel burned at the time the permit or permit revision application under this article is filed. A tons-per-year basis shall not be used if the new or modified source or the source offsets is not expected to operate throughout the entire year. No emissions credit may be allowed for replacing one VOC with another VOC of lesser reactivity.
J. Emissions reductions achieved by shutting down an existing source or permanently curtailing production or operating hours below baseline levels may be credited, provided that the work force to be affected has been notified of the proposed shutdown or curtailment. No offset credit for shutdowns or curtailments shall be provided for emissions reductions that are necessary to bring a source into compliance with RACT or any other standard under an applicable implementation plan. Source shutdowns and curtailments in production or operating hours occurring prior to the date the new major source or major modification application is filed generally may not be used for emissions offset credit except as follows: where an applicant can establish that it shut down or curtailed production after August 7, 1977, or less than one year prior to the date of application for the permit or permit revision under this article, whichever is earlier, and the proposed new major source or major modification is a replacement for the shutdown or curtailment, credit for such shutdown or curtailment may be applied to offset emissions from the new source or modification.
K. The allowable offset area shall refer to the geographical area in which the sources whose emissions are being sought for purposes of offsetting emissions from a new major source or major modification are located. For the pollutants sulfur dioxide, particulate matter and carbon monoxide, the allowable offset area shall be determined by atmospheric dispersion modeling. If the emission offsets are obtained from a source on the same premises or in the immediate vicinity of the new major source or major modification, and the pollutants disperse from substantially the same effective stack height, atmospheric dispersion modeling shall not be required. The allowable offset area for all other pollutants shall be the nonattainment areas for those pollutants within which the new major source or major modification is to be located.
L. An emission reduction may only be used to offset emissions if the reduced level of emissions will continue for the life of the new source or modification and if the reduced level of emissions is federally and legally enforceable. It shall be considered legally enforceable if the following conditions are met by the time such source or modification commences operation:
1. The emission reduction is included as a condition in the permit of the source relied upon to offset the emissions from the new major source or major modification, or in the case of reductions from sources controlled by the applicant, is included as a condition of the permit or permit revision under this article for the new major source or major modification, or is adopted as a part of these rules or comparable rules and regulations of any other governmental entity or is contractually enforceable by the Department.
2. The permit conditions, regulations, or contractual conditions containing, governing or otherwise describing the emission reduction have been approved by the administrator for inclusion in the State Implementation Plan adopted pursuant to Section 110 of the Act (Implementation Plans).
(Ord. 1994-83 § 64, 1994: Ord. 1993-128 § 4 (part), 1993)