Texas Audit Program Option For Flexible Permit Holders

U.S. Environmental Protection Agency (EPA) has released its voluntary Audit Program to help companies in Texas with Flexible Permits obtain air quality permits that meet state and federal requirements and the protections of the Clean Air Act (CAA). The TCEQ's Flexible Permits program was never approved by EPA into the state implementation plan (SIP).

The Audit Program will offer a covenant from civil enforcement by the federal government, for instances where companies with Flexible Permits operated outside of federal requirements provided that companies agree to and complete the proposed audit program. In addition, companies who enter the audit will no longer be subject to EPA's use of Title V tools for permits issued that do not contain all CAA requirements.

The Audit Program is available for 90 days after publication in the Federal Register. Participants who sign up in the first 45 days can take advantage of a reduced penalty incentive for potential violations.

Under the program, a third-party auditor will conduct an independent review of operations, modifications, and permitting activities that occurred since the issuance of the flexible permit, so that the federally-applicable requirements can be identified for a new permit. These independent findings would be directly transmitted to the company and EPA and used to establish new limits in state-issued permits. EPA anticipates the audit process to take about one year.

The Audit Program requires participants to obtain federally-approved state permits from the TCEQ. A company would enter into a Consent Agreement and Final Order with EPA based on the findings of the third-party audit. This audit program and CAFO would resolve any New Source Review non-compliance issues that occurred while operating with the Flexible Permit provided that the companies complete the audit program.

The federal audit program is one of two paths available for companies to transition their flexible permits to a permit that meets federal and state requirements. EPA is also inviting companies to contact the EPA Region 6 Compliance Assurance and Enforcement Division if they are interested in more direct negotiations with EPA that would result in federally-enforceable permits and resolution of non-compliance and Title V uncertainty.

Caltha LLP provides specialized expertise to clients nationwide in the evaluation environmental rules, developing EH&S compliance procedures, and EH&S compliance auditing programs.

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