Proposed Increase in Title V Air Quality Fees
The federal Clean Air Act of 1990 required the development of a national permit program for major sources of air pollution. This permit program is called the Title V air quality operating permit program. To pay for implementing the permit program, Congress required in the Clean Air Act that air pollution sources subject to the permitting program must pay a fee to cover the reasonable direct and indirect costs associated with administering the program.
Under the Clean Air Act, all states had to develop a permit program and a fee structure to pay for implementing the program and be approved by the U.S. Environmental Protection Agency (EPA). If a state decided not to develop a permit program, the EPA would develop and implement its own program for that state and charge the maximum fee allowed under the Clean Air Act. Currently, EPA is charging $52.81 per ton of regulated pollutants emitted into the air from each source permitted.
To decrease the cost of the program and to provide better customer service to businesses and industry in South Dakota, the South Dakota Department of Environment and Natural Resources (DENR) established a Title V air quality operating permit program and a fee structure to pay for implementing the program in 1994. In lieu of the maximum fee allowed under the Clean Air Act that would have been charged under an EPA administered program, DENR set the fee at $6.10 per ton of regulated pollutants emitted from permitted sources in 1994. On June 28, 2010, the fees were revised to $7.50 per ton of regulated pollutants and then on December 5, 2017, the fees were revised to $8.10 per ton of regulated pollutants. The air emission fees are established in Administrative Rules of South Dakota Chapter 74:37:01 – Air Emission Fees.
The costs to implement the program continue to increase and the existing fee structure is not sufficient to cover the cost of the program. As a result, the EPA requires the fee structure to be revised to be in compliance with the federal Clean Air Act provision requiring the fee to cover the entire cost of the program. DENR is proposing to increase the air fees based on the Consumer Price Index for All Urban Consumers. The average consumer price index for calendar year 2018 was 2.44%.In addition, House Bill 1018 changed which Department would receive the accounts payable associated with air fees.
The following is a summary of the proposed changes.
- Annual administrative fees for sources emitting less than 50 tons per year of pollutants will increase from $135 to $138. For sources emitting more than 50 tons but less than 100 tons, the annual fee will increase from $650 to $666. For sources emitting 100 tons or more of pollution each year, the fee will increase from $1,350 to $1,383;
- The fee for the actual amount of pollution emitted from each permitted air pollution source will increase from $8.10 per ton to $8.30 per ton;
- The annual minimum fee paid by any permitted source for items number 1 and 2 above will increase from $270 from $277;
- The application fee for a construction permit for a source required to obtain a Title V air quality operating permit, a new Title V air quality operating permit, a modification to a construction or Title V air quality operating permit, and the renewal of a Title V air quality operating permit will increase from $135 to $138;
- The annual fee for rock crushers subject to the Title V air quality operating permit program will increase from $435 to $446. Rock crushers are not subject to the emissions fee in item 1 and 2 above.
- The annual fee for asphalt plants subject to the Title V air quality operating permit program will increase from $325 to $333. Asphalt plants are not subject to the emissions fee in item 1 and 2 above.
- The annual fee for the Big Stone coal-fired power plant will increase from $238,000 to $244,000. The Big Stone coal-fired power plant will not be subject to emissions fees in item 1 and 2 above.
- Fees will be payable to Department of Environment and Natural Resources as they were previously paid to the Department of Revenue.
The above proposed changes do not impact the air fees paid by ethanol plants. The entire Title V air quality operating permit program fee review proposal can be found here. Please send any comments on the proposed changes to Ashley Brakke online, by email at Ashley.Brakke@state.sd.us, or by mail at the following address by March 29, 2019.
South Dakota Department of Environment and Natural Resources
Air Quality Program
523 East CapitolPierre, SD 57501