At Risk of Losing State Air Pollution Permitting Program to Feds, Industries Support Fee Increase

February 7, 2023

Some of the state’s largest polluting industries are backing a bill that would raise fees for the state’s underfunded air pollution permitting program after the federal government warned that it would take back control from the state if the underfunding continued.

Trade associations for electric and gas utilities, manufacturers and other industries testified in favor of Senate Bill 155, which would allow the Environmental Rules Board to potentially increase fees and adjust the timeframe in which those fees are paid for Title V operating permits.

The permits regulate the amount of air pollution major stationary sources, like power plants and manufacturing centers, are allowed to emit under the federal Clean Air Act.

The Indiana Department of Environmental Management has operated the state’s Title V permitting program since 1995. The program is mainly funded through annual fees charged to the facilities seeking permits and other fees, including a fee on the amount of emissions per year a facility emits, called actual emissions fees.

State lawmakers allowed IDEM to increase fees by 27% in 2019, which the U.S. Environmental Protection Agency said would be enough to meet Title V program expenditures in the short term due to other cost cutting measures taking place concurrently at IDEM, including a reduction in staff.

But, in a letter sent to IDEM in October, the EPA said an updated review found that the fees would not be sufficient and would lead to a multi-million-dollar deficit in its Title V funds by fiscal year 2024.

“If IDEM is not able to secure sufficient funding for the Indiana Title V program, EPA has an obligation to address the funding deficit, utilizing [Clean Air Act] authorities up to and including the issuing of a notice of deficiency under Section 502(i) of the CAA and the corresponding Part 70 rules,” EPA Region 5 administrator Debra Shore wrote to IDEM commissioner Brian Rockensuess.

“Other potential remedies include: a stringent performance plan with extensive EPA oversight; increased EPA-led enforcement at Title V sources; and EPA assuming permitting responsibilities for a portion of the Title V sources in Indiana.”

SB155 seeks to avoid a potential EPA takeover by giving the Environmental Rules Board the authority to amend fees to pay the cost of the Title V permit program.

Regulated industries said they would gladly pay more fees to help the state keep control of the permitting program, with certain guardrails in place to prevent regular rate increases.

“As it stands, the Indiana Manufacturers Association understands and supports the agency’s ask for a fee increase for the Title V program,” said IMA director of governmental affairs Andrianna Moehle. “We are not normally the organization who gets up here and advocates for increases in fees in our members, but we know it's imperative to fund the program sufficiently enough so that we ensure it stays with IDEM rather than potentially being taken over by the EPA.”

The bill is also supported by the Indiana Energy Association, the Hoosier Environmental Council, National Waste and Recycling Association and the Northwest Indiana Forum.

The Senate Committee on Environmental Affairs will vote on SB 155 at its next hearing.

At Risk of Losing State Air Pollution Permitting Program to Feds, Industries Support Fee Increase