The Business Council has urged the state Department of Environmental Conservation (DEC) not to seek delays in implementation of a critical federal environmental reform that would encourage the state's manufacturers and utilities to invest in plant improvements.

The regulation promulgated last December by the Environmental Protection Agency (EPA) is a major reform to the "prevention of significant deterioration" (PSD) program. The program, which was created by the federal Clean Air Act, regulates how businesses can modify their plants when the modifications would affect air emissions.

The PSD program's requirements imposed cumbersome, time-consuming, and costly bureaucratic burdens on businesses seeking to upgrade their facilities, said Ken Pokalsky, The Council's director of environmental and economic development programs.

"We urge you to appreciate the significant impediment that PSD can impose on facility upgrades that are essential to keeping New York State business competitive," Pokalsky said in an August 11 letter to DEC. These regulatory impediments "often provide little in the way of real air quality improvements, but that can force facilities to chose between a time-consuming and costly regulatory process or significant restrictions on operational flexibility - or simply foregoing process improvements all together."

New York and 11 other states implement the federal PSD rule with EPA oversight. The other 38 states have their own rules that are recognized and accepted by the EPA.

In its rule proposal last December, the EPA required New York and 11 other states that implement the federal rule to be in full compliance with the federal reform by March 2003. The other states were given three additional years to modify their rules to comply with the federal reform.

The DEC had asked the EPA for the same three-year period to implement the reform, in part because DEC believed that the new federal rule gave it too little oversight and enforcement power, Pokalsky noted.

The PSD program requires pre-construction review in so-called "attainment areas"—that is, regions where federal environmental standards are met. Upstate New York is an attainment area for all major pollutants, Pokalsky said.

The PSD review process has historically been time-consuming, expensive, and uncertain, Pokalsky noted.

The EPA reforms will:

• Exempt projects from review if they would create no net increase in emissions based on projected actual future emissions. The previous, more stringent approved compared current emissions to future potential emissions—which often grossly overstates the likely impact of a project, Pokalsky noted.
  
  
• Exempt projects from review if they are pollution-control upgrades or the installation of a "clean" unit.
  
  
• Permit companies to go back as much as 10 years to identify a 24-month "baseline" period for purpose of calculating emission increases. The previous standard was the previous two-year period, which had the effect of distorting actual experience if, for example, a company was experiencing a relatively slow two-year period.

"Allowing in-state business to consider projected actual future emissions, and to implement inherently cleaner technologies and process improvements that control or reduce emissions, without the time and expense of PSD, will produce a rare 'win-win' for New York State's economy and environment," Pokalsky's letter said.

Pokalsky said The Council agrees with DEC that New York should draft its own rule, and said that The Council will work with DEC to draft a new rule that addresses the department's concerns.