# Source Specific Federal Implementation Plan for Implementing Best Available Retrofit Technology for Four Corners Power Plant: Navajo Nation

Response to Comments for Proposal and Supplemental Proposal

U. S. Environmental Protection Agency Region 9

Air Division San Francisco, CA 94105

August 2012Page 2 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## Table of Contents

Acronyms and Abbreviations .................................................................................................... ..... 3

1.0 Introduction .................................................................................................................. ......... 7

1.1 Background .................................................................................................................... 7

1.2 The Commenters ............................................................................................................ 7

1.3 Organization of This Document ..................................................................................... 8

2.0 Oral Testimony at the Public Hearin gs and Mass Comment Campaigns ........................... 18

2.1 Oral Testimony at the Public Hearings ........................................................................ 18

2.2 Mass Comment Campaigns ......................................................................................... 26

3.0 Comments on Factor One – Cost of Controls ..................................................................... 33

3.1 Comments on the Analysis of the Cost of SCR at FCPP ............................................. 33

3.2 Comments on Top-Down Analysis Versus Incremental Cost Effectiveness ............... 46

3.3 Other Comments on Factor One .................................................................................. 49

4.0 Comments on Factor Two – Economic, Energy, and Non-Air Quality Environmental Impacts ....................................................................................................................... ......... 52

4.1 Comments on Economic Impacts ................................................................................ 52

4.1.1 General Comments on Economic Impacts ......................................................... 52

4.1.2 Comments on EPA’s Economic Analysis.......................................................... 59

4.2 Comments on Energy and Non-Air Quality Environmental Impacts .......................... 65

5.0 Comments on Factor Three – Ex isting Controls at FCPP ................................................... 76

6.0 Comments on Factor Four – Rema ining Useful Life of FCPP ........................................... 77

7.0 Comments on Factor Five – Anticip ated Visibility Improvements .................................... 82

8.0 Comments on BART Determinations ................................................................................. 98

8.1 Comments on the Proposed BART Determination for NO

x ........................................ 98

8.2 Comments on the Proposed BART Determination for PM ....................................... 124

8.3 Comments on BART for SO 2 ..................................................................................... 129

8.4 Other Comments on BART ........................................................................................ 133

9.0 Comments on APS’s Alternative Proposal and EPA’s Supplemental Proposal ............... 139

10.0 Other Comments ............................................................................................................... 151Page 3 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## Acronyms and Abbreviations

Pollutants

CO 2 Carbon dioxide

GHG Green House Gas

H 2 SO 4 Sulfuric acid

NO

x Nitrogen oxides

PM Particulate matter

PM 10 Particulate matter less than 10 micrometers

PM 2.5 Particulate matter less than 2.5 micrometers

SO 2 Sulfur dioxide

SO 3 Sulfur trioxide

Units

Btu British thermal unit

kW Kilowatt

kW-hr Kilowatt-hour

lb Pound

MMBtu Million British thermal units

MW Megawatt

MWh Megawatt hour

ppb Part per billion

TBtu Trillion British thermal units

tpy Tons per year

Acronyms and Abbreviations

ADEQ Arizona Department of Environmental Quality

ANPR Advance Notice of Proposed Rulemaking

APA Administrative Procedure Act

APS Arizona Public Service

BACT Best Availabl e Control Technology

BART Best Available Retrofit Technology

BAU Business as usualPage 4 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## Acronyms and Abbreviations

BOD Boiler Operating Day

CAA Clean Air Act (42 U.S.C. 7401 - 7671q)

CAIR Clean Air Act Interstate Rule

CAMD Clean Air Markets Division (EPA)

CBI Confidential Business Information

CCW Coal Combustion Waste

CEMS Continuous emissions monitoring system

CFR Code of Federal Regulations

CO Colorado

COMS Continuous opacity monitoring system

COPD Chronic obstructiv e pulmonary disease

COS Combustion optimization systems

CRF Capital Recovery Factor

DC Circuit Federal Court of Appeals fo r the District of Columbia Circuit

DREF Desert Rock Energy Facility

DOE Department of Energy

DOI Department of the Interior

dv Deciview

EIS Environmental Impact Statement

EGU Electric generating unit

ELGs Effluent limitation guidelines

EPA U.S. Environmental Protection Agency

EPRI Electric Power Research Institute

ESA Endangered Species Act

ESP Wet membrane electrostatic precipitator

FCPP Four Corners Power Plant

FERC Federal Energy Re gulatory Commission

FIP Federal Implementation Plan

FLM Federal Land Manager

FR Federal Register

fRH Relative humidity adjustment factorPage 5 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## Acronyms and Abbreviations

HERT High Energy Reagent Technology

IWAQM Interagency Workgroup on Air Quality Modeling

LNB Low NO

x burner

MACT Maximum Achievable Control Technology

MATS Mercury and Air Toxics Standards

MRR Mandatory Reporting Rule

NAAQS National Ambient Air Quality Standards

NEPA National Environmental Policy Act

NESHAP National Emission Standards for Hazardous Air Pollutants

NGS Navajo Generating Station

NM New Mexico

NMED New Mexico Environment Department

NNEPA Navajo Nation Environmental Protection Agency

NPDES National Pollutant Discharge Elimination System

NPS National Park Service

NREL National Renewal Energy Laboratory

NSPS New Source Performance Standard

NSR New Source Review

OAR Office of Air and Radiation (EPA)

OMB Office of Management and Budget

OFA Overfire air

PSD Prevention of Significant Deterioration

RAVI BART Reasonably Attribut able Visibility Impairment Best Available Retrofit Technology

RCRA Resource Conservation and Recovery Act

RHR Regional Haze Rule

RIA Regulatory Impact Analysis

ROFA Rotating Overfire Air

RTC Response to Comments

SCE Southern California Edison

SCR Selective catalytic reductionPage 6 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## Acronyms and Abbreviations

SIP State Implementation Plan

SJGS San Juan Generating Station

SNCR Selective non-catalytic reduction

TAG Technical Assistance Guidance

TAR Tribal Authority Rule

TIP Tribal Implementation Plan

TSD Technical Support Document

U.S.C. United States Code

UARG Utility Air Regulatory Group

U.S. United States

VOCs Volatile Organic Compounds

WRAP Western Regiona l Air PartnershipPage 7 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## 1.0

0 B 

## Introduction

1.1

1 0 B 

### Background

On October 19, 2010, the U.S. Environmental Protection Agency (EPA or “we”) proposed a source-specific Federal Implementation Plan (FIP) requiring the Four Corners Power Plant (FCPP), located on the Navajo Nation, to achieve emissions reductions required by the Clean Air Act's (CAA’s) Best Availabl e Retrofit Technol ogy (BART) provision.

0 F 1 On November 24, 2010, Arizona Public Service (APS) acting on behalf of FCPP's owners submitted a letter to EPA offering an alternative to reduce visibility-impairing pollution. The EPA supplemented the October 2010 BART proposal with its technical evaluation of APS’s alternative. In a February 25, 2011 supplemen tal proposal, we proposed to find that an alternative emissions control strategy would ach ieve more progress than EPA's BART proposal towards achieving visibility improveme nts in the surrounding Class I areas.

1 F 2



### 1.2

1 B 

### The Commenters

In the October 2010 proposal, EPA stated that public comments were to be submitted by December 20, 2010. As a result of APS’s alternat ive and our supplemental proposal, the due date for public comments was subsequently extended to May 2, 2011.

The EPA held four public hearings on the proposed BART determination and supplemental proposal in the Four Corners ar ea on March 29, 30, and 31, 2011. In all, 90 oral testimonies were presented at th e public hearings. The oral te stimony is discussed further in

Section 2.1 of this document

We received nearly 13,000 written comments. Of these, over 12,800 comments came from private citizens who submitted substantively similar comments. These comments are

discussed further in Section 2.2 of this document.

We received an additional 110 unique writ ten comments (not including duplicates, requests for extension of the public comment peri od, or requests for additional hearings). These unique comments also do not include letters unr elated to the rulemaking. The comments can be broken down by general type as follows: 78 fr om private citizens, 8 from environmental advocacy groups, 4 from the owners of FCPP, 5 from state/local government entities, 4 from public interest advocacy groups, 2 from tribes , 4 from utility industry associations, 3 from federal agencies, 1 from a U.S. Senator, and 1 from the operator of the Navajo Mine. These

comments are listed at the end of this section. Th e list of comments also includes an entry for all the written comments submitted at the public he arings, which are not included in the preceding totals. The comments are summarized by topic in Sections 3.0 through 10.0 of this document.

1 The BART determination was proposed on October 19, 2010 in the Federal Register , Volume 75, beginning on page 64,221 (75 FR 64221, October 19, 2010).

2 76 FR 10530, February 25, 2011.Page 8 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

### 1.3

1 2 B 

### Organization of This Document

After this introductory section, this docu ment includes nine additional sections as

follows:

 Section 2.0 – Oral Testimony at the Public Hearing and Mass Comment Campaigns

 Section 3.0 – Comments on Factor One – Cost of Controls

 Section 4.0 – Comments on Factor Two – Economic, Energy, and Non-Air Quality Environmental Impacts

 Section 5.0 – Comments on Factor Th ree – Existing Controls at FCPP

 Section 6.0 – Comments on Factor Four – Remaining Useful Life of FCPP

 Section 7.0 – Comments on F actor Five – Anticipated Visibility Improvements

 Section 8.0 – Comments on BART Determinations

 Section 9.0 – Comments on APS’s Altern ative Proposal and EPA’s Supplemental Proposal

 Section 10.0 – Other CommentsPage9of171August 2012 – Four Corners Power Plant Final Rulemaking – Response to CommentsLIST OF WRITTEN COMMENTSDocument Id2F3EPA-R09-OAR2010-0683-XXXX TitleType ofCommenter Notes0067 Colorado-based organizations Group ofEnvironmentalAdvocacyGroupsRequest foradditionalhearing inDurango, CO0068 Edward Z. Fox, Vice President and Chief Sustainability Officer, ArizonaPublic ServiceCo-owners ofFCPPRequest forcomment periodextension0069 Stephen B. Etsitty, Executive Director, Navajo Nation EnvironmentalProtection AgencyTribal Agency Request foradditionalhearings andworkshops0071 Richard M. Hayslip, Associate General Manager, Salt River Project Co-owners ofFCPPRequest forcomment periodextension0072 Erik Bakken, Manager, Environmental Services and Land Management,Tucson Electric Power CompanyCo-owners ofFCPPRequest forcomment periodextension0073 Wild Earth Guardians EnvironmentalAdvocacy Group0075 Edward Z. Fox, Vice President and Chief Sustainability Officer, ArizonaPublic Service CompanyCo-owners ofFCPPAlternativeproposal3Document ID identifies written comments found in Docket No. EPA-R09-OAR-2010-0683 by document number.Page10of171August 2012 – Four Corners Power Plant Final Rulemaking – Response to CommentsLIST OF WRITTEN COMMENTSDocument Id2F3EPA-R09-OAR2010-0683-XXXX TitleType ofCommenter Notes0082 Patrick Themig, Vice President, PNM Resources, Inc. Co-owners ofFCPPRequest forcomment periodextension0083 Chris Foran, Steering Committee Representative, Montezuma ClimateAction NetworkEnvironmentalAdvocacy GroupDuplicate of01460084 Annika Bergen Private Citizen0085 Charles A. Haley Private Citizen0086 Lair Carlson, Publisher Cell Door Magazine Private Citizen0087 Irene Hamilton Private Citizen0088 Ed Mosimann Private Citizen0089 Zachary Katz, Orien McGlamery,Linda P. Sency, Kathy Brown, DebCampbellPrivate Citizen0091 Martha Evers Private Citizen0092 Brian Hoffman Private Citizen0093 Phyllis Hollenbeck Private Citizen0094 Jodi Foran, Past-president; Leagueof Women Voters of MontezumaCountyPublic InterestAdvocacy Group0095 Stephanie Kodish, National Parks Conservation Association EnvironmentalAdvocacy Group0105 Michael Rendon, Mayor, City of Durango, Colorado State/LocalGovernment0106 Kellie C. Hotter, Chair, LaPlata County Board of CountyCommissionersState/LocalGovernmentPage11of171August 2012 – Four Corners Power Plant Final Rulemaking – Response to CommentsLIST OF WRITTEN COMMENTSDocument Id2F3EPA-R09-OAR2010-0683-XXXX TitleType ofCommenter Notes0107 Robert Ukeiley, Law Office of Robert Ukeiley Private Citizen0108 Wallace L. White, Commissioner, LaPlata County Board of CountyCommissionersState/LocalGovernment0112 League of Women Voters of Montezuma County Public InterestAdvocacy Group0113 Paul Tourangeau, Director, AirPollution ControlDivision, ColoradoDepartment of Public Health and EnvironmentState/LocalGovernment0116 Ravi Grover Private Citizen0117 Paul Nazaryk, Environmental Regulatory Affairs, BHP Billiton Operator ofNavajo Mine0118 Anonymous Private Citizen0119 Anonymous Private Citizen0122 Margaret Ackerman Private Citizen0123 Dan Barnes Private Citizen0124 Larry Berger Private Citizen0125 William Botsford Private Citizen0126 Linda Bunk Private Citizen0127 Laird Carlson Private Citizen0128 Bill Carver Private Citizen0129 Burt Coleman and Dell Manners Private Citizen0130 Patty Cordova, LWVCO President Private Citizen0131 Jerry and Julie Crockford Private CitizenPage12of171August 2012 – Four Corners Power Plant Final Rulemaking – Response to CommentsLIST OF WRITTEN COMMENTSDocument Id2F3EPA-R09-OAR2010-0683-XXXX TitleType ofCommenter Notes0132 Geraldine Duffy Private Citizen0133 Barbara Garlick Private Citizen0134 Bruce A. Garlick Private Citizen0135 Joe Griffith and Dianne Donovan Private Citizen0136 Ana Hale Private Citizen0137 Charles A. Haley Private Citizen0138 Irene Hamilton Private Citizen0139 Wes and Pat Hartman Private Citizen0140 Jill and Rich Hoehlein Private Citizen0141 Kristine Johnson Private Citizen0142 John Larry Private Citizen Unrelated to therulemaking.0143 Stephanie Huss, President, League of WomenVoters of La Plata County Public InterestAdvocacy Group0144 Ed and Julie Ward Lehner Private Citizen0145 Claire May Private Citizen0146 Chris Foran, Steering Committee Representative, Montezuma ClimateAction NetworkEnvironmentalAdvocacy Group0147 Ed Mosimann Private Citizen0148 Lynne Murison Private Citizen0149 Harry Riegle Private Citizen0150 Sean Babington, Office of Senator Michael Bennet U.S. SenatorPage13of171August 2012 – Four Corners Power Plant Final Rulemaking – Response to CommentsLIST OF WRITTEN COMMENTSDocument Id2F3EPA-R09-OAR2010-0683-XXXX TitleType ofCommenter Notes0151 Francis Slater Private Citizen0152 Brenda Jarrell, Air Quality Program Manager, Southern Ute Indian Tribe Tribe0153 Elaine Spence Private Citizen0154 Dan Tobin Private Citizen0155 Brian von Dedenroth Private Citizen0156 Bob Waggoner Private Citizen0157 Joe Ward Private Citizen0158 D.J. Webb Private Citizen0159 Richard E. White Private Citizen0160 Richard White Private Citizen0161 Janet Wilson Private Citizen0162 Zita Xavier Private Citizen0163 Vincent H. Yazzie Private Citizen0164 Vincent H. Yazzie Private Citizen0165 Owen M. Lopez, McCune Foundation Private Citizen0166 D. House Private Citizen0167 Christopher Lish Private Citizen0168 Arie Hoekstra, Vice President, Generation, Tucson Electric Power Co-owner ofFCPP0169 A. Gwen Eklund, Consulting Business Manager, WEST Associates Utility IndustryAssociationPage14of171August 2012 – Four Corners Power Plant Final Rulemaking – Response to CommentsLIST OF WRITTEN COMMENTSDocument Id2F3EPA-R09-OAR2010-0683-XXXX TitleType ofCommenter Notes0170 Brian Abel and Patricia Padian Private Citizen0171 Dell Manners Private Citizen0172 Montezuma-Cortez School Private Citizen0173 Ann Perkins-Parrott Private Citizen0174 Richard M. Hayslip, Associate General Manager, Salt River Project Co-owner ofFCPP0175 Corbin L. Newman, Jr., Regional Forester, USFS Federal Agency0176 Edward Z. Fox, Vice President and Chief Sustainability Officer, ArizonaPublic Service CompanyCo-owner ofFCPP0177 Edward Z. Fox, Vice President and Chief Sustainability Officer, ArizonaPublic Service CompanyCo-owner ofFCPP0178 Laura McHenry Private Citizen0179 Patrick Themig, Vice President, Generation, Public Service Company ofNew MexicoCo-owner ofFCPP0180 Brynn Johns Private Citizen0181 Michelle Reott Private Citizen0182 Mike Eisenfeld, New Mexico Energy Coordinator, San Juan CitizensAllianceEnvironmentalAdvocacy Group0183 Pamela Campos, Attorney, Environmental Defense Fund EnvironmentalAdvocacy Group0184 Jeremy Nichols, Climate and Energy Program Director, WildEarthGuardiansEnvironmentalAdvocacy GroupPage15of171August 2012 – Four Corners Power Plant Final Rulemaking – Response to CommentsLIST OF WRITTEN COMMENTSDocument Id2F3EPA-R09-OAR2010-0683-XXXX TitleType ofCommenter Notes0185 Aaron Flynn, Counsel to ArizonaPublic Service Company, CentralArizona Water Conservation District,and Salt River Project AgriculturalImprovement and Power DistrictCo-owner ofFCPP0186 Erin and Fred Bird Private Citizen0187 Aaron Flynn, Utility Air Regulatory Group Utility IndustryAssociation0188 Heidi Keshet Private Citizen0189 R. Frank (and 682 others) Private Citizen Mass Campaign0190 All Written Comments Received during March 29-31, 2011 PublicHearings and Open HousesRange ofcommenters0191 League of Women Voters of Montezuma County Public InterestAdvocacy GroupDuplicate of01120192 Kathy and Jim Merrill Private Citizen0193 Post Cards Private Citizen Mass Campaign0194 Don Hancock, Steering Committee Chairperson, Coalition for CleanAffordable Energy (CCAE)EnvironmentalAdvocacy Group0195 Lau Ackerman Private Citizen0196 Mass EPA Card Campaign Private Citizen Mass Campaign0197 Larry Berger Private Citizen0198 Jackie Candelaria Private Citizen0199 Laurie Carpino Private CitizenPage16of171August 2012 – Four Corners Power Plant Final Rulemaking – Response to CommentsLIST OF WRITTEN COMMENTSDocument Id2F3EPA-R09-OAR2010-0683-XXXX TitleType ofCommenter Notes0200 John W. Suthers, Colorado Attorney General, Colorado Department ofPublic Health and Environment (CDPHE)State/LocalGovernment0201 John Culver Private Citizen0202 Clint McKnight Private Citizen0203 Mass Email Campaign Private Citizen Mass Campaign0204 Mass Mail Campaign Private Citizen Mass Campaign0205 Mass Mail Campaign Private Citizen Mass Campaign0206 Mass Mail Campaign Private Citizen Mass Campaign0207 Mass Mail Campaign Private Citizen Mass Campaign0208 Evelyn Ramey Private Citizen0209 Dave Rich Private Citizen0210 Bruce E. and Suzzanne D. Rodman Private Citizen0211 Roxanne Rogers Private Citizen0212 Mass Email Campaign Private Citizen Mass Campaign0213 Shan and Regina Wells Private Citizen0214 Elizabeth M. Wheeler Private Citizen0215 Mass Email Campaign Private Citizen0216 Vincent H. Yazzie Private Citizen0218 Jeremy Nichols, Climate and Energy Program Director, WildEarthGuardiansEnvironmentalAdvocacy GroupAttachment to01840223 President Shelly, Navajo Nation TribePage17of171August 2012 – Four Corners Power Plant Final Rulemaking – Response to CommentsLIST OF WRITTEN COMMENTSDocument Id2F3EPA-R09-OAR2010-0683-XXXX TitleType ofCommenter Notes0224 Alletta Belin, Counselor to the DeputySecretary, U.S. Department of theInteriorFederal Agency TransmitsNational ParkService (NPS)commentsPage 18 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## 2.0

1 B 

## Oral Testimony at the Public Hearings and Mass Comment Campaigns

2.1

1 3 B 

### Oral Testimony at the Public Hearings

The EPA held four public hearings in the Four Corners area on March 29, 30, and 31, 2011. In conjunction with each hearing (general ly before the hearing), EPA conducted an information session in which EPA experts explai ned the BART proposal and better-than-BART supplemental proposal for FCPP to interested attend ees with the aid of il lustrative posters. An interpreter for speakers of Diné, the Navajo lang uage, was present for three of the information sessions and public hearings.

In all, a total of 90 oral testimonies were presented at the four hearings, although several persons spoke at more than one hearing and tw o persons gave separate testimony on behalf of two different entities at a singl e hearing. Most speakers spoke as private citi zens, but there were also representatives of the interested industr ies (the co-owners of FCPP and operator of the Navajo Mine), environmental advocacy groups, public interest advocacy groups, and local government. The location and time of each public hearing and information session are given below, along with the number and types of speakers at each hearing.



## PUBLIC HEARINGS AND INFORMATION SESSIONS

Time

Date Venue (with Transcript Docket Number) Info

Session Public Hearing Commenters

March 29 Phil L. Thomas Performing Arts

Center Shiprock, New Mexico (EPA-R09-OAR-2010-0683-0227) 3 – 6

p.m. 7 – 9

p.m. Private citizens – 16 Industry – 1

Environmental – 2

March 30 Nenahnezad Chapter House Fruitland, New Mexico (EPA-R09-OAR-2010-0683-0225) 9 a.m. – 1 p.m. (concurrent) Private citizens – 10 Industry – 1 Local government

(Chapters) – 2

March 30 San Juan College Farmington, New Mexico (EPA-R09-OAR-2010-0683-0226) 3 – 5

p.m. 6 – 9

p.m. Private citizens – 25 Industry – 3

Environmental – 2

March 31 Fort Lewis College Durango, Colorado (EPA-R09-OAR-2010-0683-0228) 3 – 5

p.m. 6 – 9

p.m. Private citizens – 21

Public interest – 2

Environmental – 4 Local government

(County) – 1Page 19 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments The comments presented in oral testimony at the public hearings are summarized below, with the exception of comments from entities that submitted written comments which duplicated their oral testimony. For example, APS and the San Juan Citizens Alliance submitted extensive written, technical comments that are summarized in the other sections of this document; their oral comments on the same topics are not included in this section. The tr anscripts from and the materials presented by EPA during these hear ings are also available in the docket.

3 F 4

Comment:

The majority of commenters favored the supplemental proposal or more stringent requirements for FCPP because the commenters consid er visibility and air quality in the Four Corners region to be generally poor. A few argued that FCPP shoul d be shut down rather than being retrofit with controls. On the other ha nd, several commenters no ted that FCPP and the Navajo Mine provide many jobs in the area and that their paymen ts to the Navajo Nation make up a large portion of the Nation’s revenues. These commenters cautioned that EPA must carefully balance the environmental benefit of any requirements for FCPP with the potential adverse impacts to the Navajo Nation and the re gion that would ensue were FCPP to close as a result of EPA regulation.

Many commenters favor stringen t controls on FCPP because they assert that emissions from FCPP represent a public health issue. Thes e commenters indicated th at these emissions are to blame for health problems in the area, such as respiratory disease and cancer, which many argue have become more prevalent in recent years. The commenters often said that the health of succeeding generations should be an important consideration. However, a few commenters questioned that FCPP’s emissions are causing such health effects. A number of commenters on both sides of this issue requested that health studies be undertaken to determine the health impacts of FCPP emissions.

Many speakers spoke in favor of stringent c ontrols on FCPP because of the haze that is very common in the area, believing that it is due to FCPP. Some comment ers indicated that the haze diminishes the beauty of the area, which is a quality of life issue for residents as well as an economic issue because of the importance of tourism to the economy of the area.

Several commenters support st ringent controls be cause they argue that emissions from FCPP are having negative impacts on the land and wa ter in the area, as we ll as the air. Some expressed fear that emissions from the plant, including mercury and other toxic compounds, are harming ecosystems in the area, including rare a nd endangered plant species, endangered fish species, pollinators, and amphibians. Some living near to the plant a ssert that it is responsible for killing native plant species that they have depended on for their livestock, and has harmed traditional dry land farming. A number of Navajo commenters stated that pollution of the air, water, and land is contrary to Navajo re ligious beliefs and cultural traditions.

A number of commenters favor stringent cont rols on FCPP as a first step in a transition away from coal-fired power plants to rene wable energy sources. Commenters enumerated many problems with coal as an energy source, including emissions of air pollutants (SO 2 , NO

x , PM,

4 See Document numbers 0109, 0111, and 0225 – 0228 in EPA-R09-OAR-2010-0683.Page 20 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments mercury and other toxic compounds, acid gases, and Green House Gases (GHGs)), use of large amounts of water for cooling, and production of la rge amounts of ash or coal combustion waste (CCW). Several noted that New Mexico and the Four Corners area are id eally suited for solar and wind energy projects. Some commenters stated that a transition to renewable energy could economically benefit the Navajo Nation.

Response:

Protection of human health and the envir onment is EPA’s mission, and forms the basis for many Agency actions, including establishi ng the National Ambient Air Quality Standards (NAAQS), and promulgation of regulations such as the New Source Performance Standards (NSPS) and the National Emission Standards fo r Hazardous Air Pollutants (NESHAP). In addition to Clean Air Act requirements to pr otect human health, in the 1977 Clean Air Act Amendments, Congress also declared as a national goal the prevention of any future, and the remedying of any existing, impairment of visib ility in mandatory class I Federal areas which impairment results from manm ade air pollution (See CAA §169A). In 1999, EPA issued the final Regional Haze Rule (RHR), which included the re quirement for facilities of a certain age to install the Best Available Retrof it Technology (BART) to reduce emi ssions of visibility impairing pollutants. Therefore, the focus of implementati on plans developed under the RHR, is to improve visibility at National Park s and Wilderness Areas. EPA agrees that visibility-impairing pollutants can impact human and ecosystem health. Emissions of hazardous air pollutants such as mercury are not visibility-impairing pollutant s, and as a result are beyond the scope of our BART analysis. EPA agrees that health studies ma y provide useful information, however, these studies are beyond the scope of a BART analys is. Emissions of haz ardous air pollutants (HAPs)from various source categories are addr essed generally through National Emission Standards for Hazardous Air Pollutants (NESHA Ps) and EPA addresses mercury emissions from power plants specifically in the final Mercury and Air Toxics (MATS) Rule which was published in the Federal Register on February 16, 2012 (77 FR 9304).

EPA is aware of the contribution of FCPP and the Navajo Mine to the economy of the Navajo Nation and the Four Corners region. At th e request of the Navajo Nation, pursuant to EPA’s customary practice of engaging in extensi ve and meaningful consultation with tribes, EPA commissioned an analysis to estim ate the potential adverse impac ts to the Navajo Nation of APS’s option to retire Units 1 – 3 and will provide the report to the Navajo Nation by letter as a follow-up to our consultation. EPA did not rely on this analysis in our final determination.

Regarding comments in favor of transitioning from coal to renewable energy, the RHR establishes a five step process EPA must fo llow when performing a case-by-case BART determination. Although EPA agrees t hat transitioning to renewabl e energy is a worthwhile goal, the BART Guidelines

4 F 5 state that under” Step 1: How do I identify all available retrofit emission control techniques?”, “[ EPA does] not consider BART as a requirement to redesign the source when considering available control al ternatives” (see specific ally 70 FR at 39164).

5 See “Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations”, 70 FR 39104, July 6, 2005, in the docket for this rulemaking.Page 21 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Comment:

Some commenters asserted the presence of FC PP and several other power plants in and around the Navajo Nation represent an enviro nmental and economic justice issue. These commenters pointed out that the electricity from FCPP goes to di stant cities, while the pollution from the plant affects the local area and many communities in the surrounding area are without electricity. They noted that many in the Nava jo Nation live in poverty and their youth have limited opportunities, while the companies that own and operate FCPP and the Navajo Mine have reaped large profits. Some expressed frustration with the l eaders of the Navajo Nation, who they asserted have not protected th e interests of the local population.

Some of these commenters stated that APS should recognize that FCPP will ultimately have to shut down and begin to transition to renewable energy sources. The commenters stated that because it has profited so mu ch from FCPP, APS has a corporat e responsibility to facilitate a just transition for the local area to a renewable energy economy.

Response:

In establishing BART requirements for FC PP in this final rulemaking, EPA will be increasing the level of environmental protec tion for all affected populations by requiring

substantial NO

x emission reductions. Thus, EPA does not expect any disproportionately high and adverse human health or environmental effect s on any population, including any minority or low-income population from our final action.

The first step of the BART determination proc ess involves identification of all available retrofit technologies. As describe d in the 2005 Regional Haze Rule, redesign of the source is not considered a requirement when examining avail able control technologies (70 FR 39104). As an example, a coal-fired unit would not be required to consider construction of a natural gas-fired turbine; while it is an inherent ly less polluting technology, it w ould require a redesign of the source. A transition of FCPP to use of renew able energy sources would require a similar redesign of the FCPP units, and as a result is outside of EPA’s authority under the RHR. The Department of Interior has contracted with the Department of Energy’s National Renewable Energy Laboratory, however, to conduct a phased study on the Navajo Generating Station (NGS). DOI intends that Phase 2 of this study will examine the potential of long-term energy production options for NGS, and may include such options as re newable sources. Although the focus of this study is NGS and not FCPP, becaus e NGS is also located on the Navajo Nation, results of this study may be relevant to the FCPP area.

Comment:

Some commenters expressed concern related to the ash generated by FCPP. Some of these indicated that the ash from the facility is unsecured and blows over the nearby area when it is dry and is washed into the San Juan River when it rains. Some of these commenters blamed the windblown ash for killing local vegetation in the area. Other commenters refuted these

claims.Page 22 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments A few speakers raised issues regarding the storage of coal combustion wastes (CCW) at FCPP. In the most extensive such comments, one environmental advocacy group commenter supported selective catalytic reducti on (SCR) controls at FCPP, but asked that EPA also work to concurrently address the CCW (fly ash, scrubber sludge and bottom ash) being generated at the facility. The commenter stated that SCR tec hnology will increase the nitrogen and ammonia content of the CCW, as well as the pH, very si gnificantly, and possibly in crease the quantity of CCW generated by FCPP, which currently stands at 1.5 million tons per year. The commenter

noted that some of this material is used and recycled as synthetic gypsum, but the majority is highly toxic and includes pollutants such as le ad, arsenic, mercury, cadmium, chromium, and

selenium.

According to the commenter, the facility has historically disposed of CCW in temporary ash ponds on site and also returned it to the Navajo Mine, where BHP used it as minefill. The commenter stated that the on-site ash ponds are on about 550 acres directly adjacent to Chaco Wash, located on the escarpment directly above the wash, which runs due north approximately

1 mile into the San Juan River. The commenter noted that by some estimates, there are tens of millions of tons of CCW, and perhaps billions of tons, stored in these ash ponds; it is perhaps the largest storage of toxic CCW in the nation. The commenter assert ed that these ash ponds pose a significant threat, as evidenced by the 2008 failure of the coal ash ponds at the Tennessee Valley Authority’s Kingston Fossil Plant, where a 40-acr e plant released over on e billion gallons of toxic CCW into two separate rive rs. Like the Tennessee Valley Au thority plant, according to the information and belief of the commenter, FC PP has no emergency preparedness plan for cleanup of the coal ponds should they breach, and th ere is no bond for decommissioning these ash ponds.

The commenter stated it is extremely importa nt for the owners of FCPP to address the liability of decommissioning of Units 1 thr ough 3 and these ash ponds as part of their decommissioning process. The commenter asked w ho is going to pay for the cleanup – APS and the ratepayers, Southern California Edison, th e Navajo Nation, or the federal taxpayers?

The commenter asked EPA to support the production of an environmental impact statement (EIS) to evaluate, among other things , the cost, methodology and liability for cleanup of these ash ponds, as well as an assessment for a bond or a surety from APS for full CCW storage needs going forward should Units 4 a nd 5 remain open under the current plan. The commenter pointed out that there is a mechanism for getting this done in that the Navajo Nation recently approved the lease renewal for FCPP, and th at lease renewal is subject to review by DOI and will be subject to NEPA, which requires an EIS. The commenter requested that EPA support production of an EIS for this, as well as act as a cooperating agency in this process.

Response:

Comments regarding the environmental issues associated with CCW are beyond the scope of the BART analysis.

On June 21, 2010, EPA proposed and solicited comments on two regulatory options for establishing national standards for management of CCW (75 FR 35127 ). Options considered inPage 23 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments this proposal include regulating CCW as a hazardous waste under Subtitle C of the Resource Conservation and Recovery Act (RCRA), or establishing new national criteria under the nonhazardous solid waste requirements in RCRA Subtitle D. In addition, under the Clean Water Act, EPA has authority to establish effluent limit ation guidelines (ELGs), which are national standards for water pollution reductions developed on an industry-by-industry basis. As part of a November 8, 2010 consent decree, EPA agreed to r evise the ELGs for Steam Electric Power

Generation to address wastewater discharges from CCW storage. Per the consent decree, these updated ELGs must be proposed by July 23, 2012 and finalized by January 31, 2014.

As noted in the Technical Support Document (TSD)

5 F 6

for our October 19, 2010 proposal, EPA determined that the impact of SCR on fly ash is smaller than th e impact of other NO

x control technologies under cons ideration (in particular low NO

x burners) on future salability of fly ash.

As the commenter notes, a lease renewal for FCPP was signed by the Navajo Nation in March 2011. This renewal is subject to DOI’s review and approval process, which will result in the publication of an EIS. EPA Region 9 will be a cooperating agency in this process.

Comment:

A commenter representing the operator of the Navajo Mine, BHP Billiton, noted that EPA’s informational posters state that the compa ny has pledged that there will be no layoffs at the mine if the supplemental proposal is implem ented. The commenter clarified that the reduced coal consumption by FCPP associated with closur e of Units 1 – 3 will necessitate a reduction in the workforce at the mine, but that the compa ny stated that this reduction can be accomplished through retirement and attrition without layoffs . The commenter projected that the employment at the mine ultimately will be reduced by 100 to 200 positions.

Response:

EPA thanks the commenter for the clarification t hat the mine will not lay off employees if Units 1 – 3 close, but that redu ced coal consumption by FCPP a ssociated with the closure of Units 1 – 3 is likely to result in a workforc e reduction through retirement and attrition.

Comment:

A few commenters stated that EPA s hould conduct a BART determination for SO 2 and

reduce these emissions from FCPP to further im prove visibility and reduce acid deposition. The commenters indicated that acid deposition dama ges ecosystems and degrades Native American

ruins in the area. One commenter asserted that EPA should carry out a BART determination for

CO 2 emissions from FCPP because this is the primary GHG.

6 “FCPP Proposal – Technical Support Document”, October 6, 2010, Document No. EPA-R09-OAR-2010-0683-

0002.Page 24 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Response:

EPA disagrees with this comment. As noted in the 2007 FIP for FCPP,

6 F 7

the SO 2 emission reductions established by the FIP are close to or the equivalent of BART for this source. Therefore, at the present time, EPA is exercising its discreti on under 40 Code of Federal Regulations (CFR) part 49.11 to find that it is neither necessary or appropriate at this time to undertake a BART determination for SO 2 for FCPP given the timing of the substantial SO 2 reductions that resulted from the 2007 FIP.

Regarding the commenter’s concern about gr een house gas (GHG) emissions, GHGs are not visibility-impairing pollutants and are not ad dressed in this action as they are beyond the scope of the BART requi rements in the RHR.

As a general matter, EPA continues to deve lop several regulatory initiatives to address these. For example, the GHG Mandatory Reporting Rule (MRR)

7 F 8 requires reporting of emissions of six GHGs from multiple industrial source categories, and the GHG Tailoring Rule,

8 F 9
establishes emission thresholds that define wh en new and existing industrial facilities must obtain permits. As part of the GHG Tailoring Rule implementation process, the initial phase will extend to those sources and projec ts that are already considered major sources for pollutants other than GHG. As a Title V major source of emissions, the Four Corners Power Plant is subject to the Title V program and has a Part 71 operating permit.

9 F 10 As a result, it will be subject to Title V requirements for GHG. EPA also entered into two proposed settlement agreements on December 23, 2010 that will include development of GHG emission standards for new and modified coal-fired power plants.

Comment:

One commenter questioned EPA’s development of baseline values using computers. The commenter stated that computer simulation t echnology is not accurate enough for many uses at

this time.

Response:

EPA disagrees with this comment. Comput er-based visibility modeling plays an important role in informing many of the policy decisions associat ed with implementation of the RHR. The ability to predict how changes in air po llutant emission rates will affect visibility at

Class I areas is critical in dete rmining the control measures that are necessary to meet national visibility goals. As described in the 1999 RHR, although the national visibility goal was established by the 1977 Clean Air Act Amendmen ts, EPA deferred action on regional haze until

7 See “Source Specific Federal Implementation Plan for th e Navajo Nation: Four Corners Power Plant”, 72 FR 25698, May 7, 2007, in the docket for this rulemaking.

8 See “Mandatory Reporting of Greenhouse Gases”, 74 FR 56260, October 30, 2009, in the docket for this rulemaking.

9 See “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule”, 75 FR 31514, June 3, 2010, in the docket for this rulemaking.

10 “TSD ref [101] FCPP Permits”, Document No. EPA-R09-OAR-2010-0683-0057.Page 25 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments monitoring techniques, modeling capabilities, and the understanding of the pollutants affecting visibility improved. In the final rule for the 1999 Regional Haze regulations

1 0 F 11 , EPA notes that the National Academy of Sciences concluded that ‘‘current scientific knowledge is adequate and control technologies are ava ilable for taking regulatory action to improve and protect visibility”. As describe d in the 2004 RHR proposal

1 F 12 and the final 2005 RHR

1 2 F 13 , determining visibility impacts on an indivi dual source-specific basis invo lves long-range transport and diffusion modeling, as well as determining the impac ts of atmospheric chemical transformations. The CALPUFF dispersion model is incorporated into 40 CFR Part 51, Appendix W “Guideline on Air Quality Models” and is the approved model th at is the best suited to address each of these challenges.

Comment:

A representative of one of the co-owners of FCPP stated that EPA’s BART determination

for FCPP should be consistent with the determinations that have been issued by states that are implementing the Regional Haze Program. The commenter indicated that states have not

determined SCR to be BART. The remainder of the issues raised in this commenter’s oral testimony were also included in the company’s written comments and are summarized in the

other sections of this document.

Response:

EPA disagrees with this comment for at least 2 reasons. BART determinations are conducted on a case-by-case basis, taking into cons ideration the statutory factors required in a BART analysis under Section 169A(g)(1) of the CAA , i.e., the costs of compliance, the energy and nonair quality environmental impacts of compliance, an y existing pollution control technology in use at the source, the remaining useful life of the sour ce, and the degree of improvement in visibility whic h may reasonably be anticipated to result from the use of such technology, as relevant to each source that is subject to BART. As such, the CAA does not require State agencies, in developing its St ate Implementation Plans (SIPs), or EPA in implementing FIPs, to ensure that its BART determinations are consistent with BART determinations issued by othe r States. EPA’s BART determination for FCPP was a case-by-case analysis that considered the statutory factors required by the CAA and as outlined in the BART Guidelines. EPA provided the analysis for ea ch factor and the rationale for our BART determination requiring an 80% reduction in plant-wide NO

x emissions from FCPP in the TSD for our October 19, 2010 proposal. Second, the comment er is not correct in its statement that no state has determined SCR to be BART. The Colorado Department of Public Health and Environment required SCR as BART on Hayden Station Units 1 and 2.

1 3 F 14

11 See “Regional Haze Regulations”, 64 FR 35714, July 1, 1999, in the docket for this rulemaking.

12 See “Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations” (proposed rule), 69 FR 25184, May 5, 2004, in the docket for this rulemaking.

13 See “Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations”, 70 FR 39104, July 6, 2005, in the docket for this rulemaking

14 See “Hayden BART Final.pdf” in the docket for this rulemaking, also available at http://www.cdphe.state.co.us/ap/regionalhaze.html.Page 26 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

### 2.2

1 4 B 

### Mass Comment Campaigns

We received many comments from priv ate citizens inspired by mass comment campaigns. Most of these commenters submitted the templates provided by the sponsoring organizations without change, but others custom ized the templates to some degree but without providing additional substance.

Comments:

Comment 0189 represents an example of 682 postcards EPA received from the organization Diné CARE at the Farmington, New Mexico public he aring, by mail, and by email. Most postcards contained persona lized hand-written comments but the comments did not provide additional substance. These postcards were not post ed to the electronic dock et, but are part of the record for this rulemaking and are retained in pa per form in the EPA’s office. The postcard reads

as follows:

I support U.S. Environmental Protection Ag ency (EPA) plan to install the Best Available Retrofit Technology (BART) ai r pollution controls on Four Corners Power Plant (FCPP). (Docket #EPA-R09-OAR-2010-0683) . FCPP’s emissions are responsible for increased heart and respiratory diseases. I want implementation of the most stringent pollu tion control technol ogically available, and transition to Renewable Energy solution.

Comment 0196 includes 115 additional postcar ds submitted by Diné CARE containing the printed text above, most with personalized ha nd-written comments but the comments did not provide additional substance. In addition, Comm ent 0193 represents an example of 46 postcards with the same printed text (most with pers onalized, non-substantive hand-written additions) received pursuant to an e ffort by the Sierra Club.

Comment 0203 represents a mass comment campaign organized by the National Parks Conservation Association, which was submitted essentially verbatim by 9,312 commenters. The

comment reads as follows:

Dear Lee,

As someone who is proud of our country's national parks, I am writing to thank you for your recent steps to reduce the air pollution from the Four Corners Power Plant--and also to urge you to do bette r. I ask that you pr otect the people and parks of the Southwest region by requiri ng the Four Corners plant to emit less pollution. Without meaningful reductions in air pollution, Four Corners Power

Plant will continue to obscure the view s that make these parks icons of the western landscape.

I support the agency's decision to propos e the retirement of units 1, 2, and 3 and the pollution control technology--Selec tive Catalytic Reduction--as a cost effective way to significantly cut down on haze pollution from the other two coalPage 27 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments units. I urge EPA to lower its proposed numeric limits on nitrogen oxides and particulate matter pollution, add limits fo r ammonia and sulfuric acid pollution, and require compliance with these limits within three years in its final decision.

These limits would mean healthier air for us all, better views of our magnificent national parks, and a stronger tourism ec onomy. Your decision will be inhaled by neighboring communities and park visito rs for the life of the plant.

Please don't miss this opportunity to prot ect our people and parks by adequately cleaning up the Four Corners Power Plant now.

Please work hard to protect one of my favorite places. We cannot let our natural treasures be compromised.

Thank you for considering my request.

Comments 0116, 0203, 0204, and 0205 include an additional 204 comments that were

submitted via the National Parks Conservation As sociation campaign, most incorporating some or all of the same points. Many of these adde d personal observations. Ho wever, of the four comments included in Comment 0204, two did not support EPA’s proposed actions, and two were unrelated to this rulemaking.

Comment 0212 represents a mass comment cam paign organized by the Sierra Club. Four different versions of the campaign letter were submitted, with some variations to address

different areas in the Four Corners region.

One of the versions of the Sierra Club campaign email was submitted largely without change by 1,218 commenters and reads as follows:

Dear EPA Administrator Blumenfeld,

I support the EPA's proposed rule on Best Available Retrofit Technology (BART) for regional haze at the Four Corner's Po wer Plant. The diverse communities of

the Four Corners deserve cleaner air and a sustainable energy future that can only be achieved by cleaning up dirty coal plan ts like the Four Corners Power Plant. Thank you for helping everyone breathe ea sier by considering the two proposals at hand, both of which will help to redu ce emissions from the plant by installing selective catalytic reduction controls.

By outlining a plan to justly transition Four Corners off coal as soon as reasonably possible, we can bring a green economi c boom to the region. I ask that these further and necessary retrofits be made to reduce dangerous pollution in the area. I am asking for the most stringent reduc tion in emissions to come out of these proposals. The haze in the National Pa rks that are within 300 kilometers (180 miles) of FCPP will see a significant improvement in visibility as a result of this BART. It is important that we prot ect these precious and irreplaceable public areas including Mesa Verde National Park ju st north of the plan t. There are alsoPage 28 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments many sacred Navajo sites in the vicinity th at need to be considered here as well. Tourism is a large economic contributor in the 4 Corners, and it is imperative that we clean up this haze in orde r to preserve this sector.

The implementation of pollution controls in the form of Selective Catalytic Reduction (SCR) will reduce Nitrous Oxide (NOx) pollution by 80-90%. NOx pollution will be reduced by 16,000 tons per year, per the 2010 New Mexico Environmental Department report. NOx po llution has been shown to have direct negative health impacts. EPA includes 13 diffe rent health effects: adult and infant premature mortality, chronic bronchitis, he art attack, acute bronchitis, upper and lower respiratory symptoms, aggravati on of existing asthmas, and hospital admissions and or emergency room visi ts for COPD, pneumonia, asthma, and

cardiovascular diseases.

A U.S. Geological Survey study found that people living in Shiprock are more than 5 times as likely to be seen at Indian Health Services for respiratory complaints as are residents of other nearby communities.

Overall, we want the best plan to reduce emissions in the area and one that also looks towards a transition to renewable energy in the near future.

Knowing the health, environmental and ec onomic benefits of clean air, I am asking for the most stringent reduction in emissions possible.

The second version of the Sierra Club campaign email was submitted essentially verbatim by 341 commenters. This version reads as follows:

Dear EPA Region 9 Administrator Blumenfeld,

I support the EPA's proposed rule on Best Available Retrofit Technology (BART) for regional haze at the Four Corner's Power Plant.

The diverse communities of the Four Corners deserve cleaner air and a sustainable energy future that can only be achieved by cleaning up dirty coal plants like the Four Corners Power Plant. Thank you for helping everyone breathe easier by considering proposals that will he lp to reduce emissions from the plant by installing air pollution controls.

I want these retrofits to be made to reduce dangerous pollution in the area. Nitrogen oxide pollution has been shown to have direct negative health impacts including adult and infant premature mort ality, chronic and ac ute bronchitis, heart attack, upper and lower respiratory symp toms, aggravation of existing asthma, increased hospital and emergency room visits, pneumonia, asthma, and

cardiovascular diseases.Page 29 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments A U.S. Geological Survey study found that people living in Shiprock, NM are more than five times as likely to be seen at Indian Health Se rvices for respiratory complaints as are residents of other nearby communities.

Lowered emissions will help lessen thes e impacts on our community health and also our natural places. Tourism is a la rge economic contributor in New Mexico, and it is imperative that we clean up this haze in order to pr eserve this sector.

The haze in the national parks that ar e within 180 miles of FCPP will see a significant improvement in visibility w ith retrofit technology implemented. It is important that we protect these preci ous and irreplaceable public areas like

Bandelier National Monument near Los Al amos, Pecos Wilderness near Santa Fe,

Wheeler Wilderness near Taos and San Pedro Parks near Cuba.

Knowing the health, environmental and ec onomic benefits of clean air, I am asking for the most stringent reduction in emissions possible.

The third version of the Sierra Club campaign email was submitted largely without change by 184 commenters and reads as follows:

Dear EPA Region 9 Administrator Blumenfeld,

I support the EPA's proposed rule on Best Available Retrofit Technology (BART) for regional haze at the Four Corners Po wer Plant. A reduction in air pollution from the Four Corners Power Plant will prot ect the health of people living in Utah and preserve the many national parks in our area.

I want these retrofits to be made to reduce dangerous pollution in the area. Nitrogen oxide pollution has been shown to have direct negative health impacts including adult and infant premature mort ality, chronic and ac ute bronchitis, heart attack, upper and lower respiratory symp toms, aggravation of existing asthma, increased hospital and emergency room visits, pneumonia, asthma, and

cardiovascular diseases.

Lowered emissions will help lessen thes e impacts on our community health and also our natural places.

The haze in the national parks that ar e within 180 miles of FCPP will see a significant improvement in visibility w ith retrofit technology implemented. It is important that we protect these precious and irreplaceable public areas like Bryce Canyon National Park, Canyonlands Nati onal Park, Monument Valley Navajo Tribal Park, and Arches National Park.

Knowing the health, environmental and ec onomic benefits of clean air, I am asking for the most stringent reduction in emissions possible.Page 30 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments The diverse communities of the Four Corners deserve cleaner air and a sustainable energy future that can only be achieved by cleaning up dirty coal plants like the Four Corners Power Plant. Thank you for helping everyone breathe easier by considering proposals that will he lp to reduce emissions from the plant by installing air pollution controls.

The fourth version of the Sierra Club campaign email was submitted essentially verbatim by 77 commenters. Version 4 reads as follows:

Dear EPA Region 9 Administrator Blumenfeld,

I support the EPA's proposed rule on Best Available Retrofit Technology (BART) for regional haze at the Four Corner's Power Plant.

Coloradans deserve cleaner air and a sust ainable energy future that can only be achieved by cleaning up dirty coal plants like the Four Corners Power Plant. Thank you for helping everyone breathe easi er by considering proposals that will help to reduce emissions from the pl ant by installing air pollution controls.

I want these retrofits to be made to re duce dangerous pollution in the area by 80- 90% of the biggest source of smog causing Nitrogen oxide in the nation. Nitrogen oxide pollution has been shown to have direct negative health impacts including adult and infant premature mortality, ch ronic and acute bronchitis, heart attack, upper and lower respiratory symptoms, aggr avation of existing asthma, increased hospital and emergency room visits, pneumonia, asthma, and cardiovascular

diseases.

Lowered emissions will help lessen thes e impacts on our community health and also our natural places. Tourism is a la rge economic contributor in Colorado, and it is imperative that we clean up this haze in order to preserve this sector.

The haze in the national parks that ar e within 180 miles of FCPP will see a significant improvement in visibility w ith retrofit technology implemented. It is important that we protect these precious and irreplaceable public areas like Mesa

Verde National Park and the Weminuche Wilderness.

Knowing the health, environmental and ec onomic benefits of clean air, I am asking for the most stringent reduction in emissions possible.

Comment 0206 includes an additional 27 comme nts that were submitted via the Sierra Club campaign, most incorporating some or all of the same points. Some of these commenters described personal experience with worsening ai r pollution in the region, and others expressed concern about negative impacts resulting from the use of coal to generate electricity.Page 31 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Comment 0215 represents a mass email ca mpaign sponsored by WildEarth Guardians, which was submitted essentially verbatim by 637 commenters. The comment reads as follows:

The Four Corners Power Plant poses signi ficant threats to public health and welfare. I urge you to do more to pr otect the Four Corners region from the harmful impacts of its air pollution.

Please use your discretion to consider al ternative air pollution control strategies that better protect the environment. Wind a nd solar are both plentiful in the Four Corners region. Importantly, these energy sources do not poison waters, create smog, or foul the air quality in our most treasured National Parks and Wilderness

Areas.

You have the discretion to do more than re quire retrofits. You have the discretion to power the Four Corners Power Plant past coal.

The opportunities for a healt hy environment are enormous in the Four Corners. Please help make this a reality. For the fu ture of our communities, our wild lands, and the Western United States, please consider alternatives to coal.

Comment 0207 includes an additional 27 comments that were submitted via the WildEarth Guardians campaign, most incorporating some or all of the same points. Several of these commenters expressed concern about the ne gative effects of using coal as an energy source, and some included personal experiences w ith air pollution in the area. However, one of the commenters expressed support for retrofit ting FCPP, indicating th at alternative energy sources cannot meet our energy needs today.

Response:

EPA agrees with commenters that SCR is BART for FCPP and we are finalizing our proposal as such. EPA also agrees with co mmenters that the proposed and final NO

x emission limit proposed will reduce haze and improve visibili ty in the Four Corners region and for the broader Colorado Plateau. EPA is also giving the owners of FCPP the option to implement the alternative emission control strategy in lieu of BART that will result in greater emission reductions of NO

x and other air pollutants.

Regarding comments on public health, EPA notes that the same pollu tants that impair visibility are a concern for human health; theref ore reducing the NOx emissions contributing to haze should also improve air qual ity generally in this area.

While many commenters expressed a desire for EPA to encourage a transition to renewable energy technologies such as wind and solar power, the ability to require such a transition is beyond the scope of this rulemaki ng. As described in a pr evious response, EPA doesPage 32 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments not consider BART as a requirement to redesi gn a source when considering available control alternatives (see sp ecifically 70 FR 39164).

1 4 F 15

15 See “Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations”, 70 FR 39104, July 6, 2005, in the docket for this rulemakingPage 33 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## 3.0

2 B 

## Comments on Factor One – Cost of Controls

3.1

1 5 B 

### Comments on the Analysis of the Cost of SCR at FCPP

Comment:

Some of the owners of FCPP (0168, 0174, 0176/0177, 0185), the Navajo Nation (0223), and a utility industry association (0187) stated that in analyzi ng the cost of SCR at FCPP, EPA improperly reworked and reduced the SCR cost estimates submitted for FCPP by eliminating

line item costs that are not explicitly included in the EPA Control Cost Manual (citing 75 FR 64227). According to the commenters, the BART rule s make clear that the cost analysis should take into account any site-specific design or other conditions that affect the cost of a particular BART technology option (often citing 70 FR 391 66). In addition, the commenters generally stated that the significance of considering site -specific cost information was emphasized in the

D.C. Circuit’s American Corn Growers decision, where the court observed that each of the statutory factors in a ny BART determination, specifically including the cost of the technology,

must be addressed “on a source-by-source basis.” Am. Corn Growers Ass’n v. EPA , 291 F.3d 1, 6 (D.C. Cir. 2002). Two of the commenters (0176/ 0177, 0187) indicated that this principle is further affirmed in the BART rules, which stat e that “one or more of the available control options may be eliminated from consideration b ecause they are demonstrat ed to be technically infeasible or to have unacceptable energy, cost , or non-air quality environmental impacts on a case-by-case (or site-specific) basis” (citing 70 FR 39164). Three of the commenters (0185, 0187, 0223) noted that the BART rules make the nonbinding nature of the EPA Control Cost

Manual clear (citing 70 FR 39127 and footnote 15).

Two of the commenters (0168, 0176/0177) defended the SCR cost estimate submitted for FCPP, noting that the estimate was prepared by B&V, an engineering firm with extensive experience with the installation and operation of pollution contro l equipment. The commenters noted that B&V performed a detailed analysis of the FCPP units and considered site-specific conditions that preclude the use of the general ratio s or other factors that can be derived from the

EPA Control Cost Manual . According to the commenters, B&V followed the EPA Control Cost

Manual to estimate annual costs, but also follo wed accepted guidelines for control technology analyses by using actual SCR retr ofit data from facilities with over 10,000 MW of generation for which B&V completed the designs. One of thes e commenters (0176/0177) indicated that the prices used in the cost analysis were based on quotes from equipment vendors that reflected current pricing.

Since issuance of the Advanced Notice of Proposed Rulemaking (ANPR) for the FCPP FIP rulemaking, one of the commenters (0176/0 177) commissioned B&V to review its cost assumptions and EPA’s cost-related comments in the ANPR, and the commenter submitted a copy of B&V’s report with its comments. Accord ing to this B&V report, the costs of SCR systems at FCPP are further escalated due to the complex constructability issue resulting from the constrained site arrangements. The report fu rther notes that extensive modifications toPage 34 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments existing ductwork and boiler steel would be requir ed and provides specific examples where the

EPA Control Cost Manual does not account for the site-s pecific costs of installing SCR.

1 5 F 16

This commenter (0176/0177) i ndicated that as a further ch eck on the cost estimates, the commenter retained the Shaw Group to conduct an independent review of the cost assumptions and EPA’s comments in the ANPR, and the comm enter also submitted this report. The Shaw Group’s report notes that the background section of the EPA Control Cost Manual states that the

Manual is not suitable for use with Electric Generating Units (EGUs) because of differences in accounting for utility sources. This report also states that the results of the EPA Control Cost

Manual are relatively generic, and th at customizing the analysis with industrial sources of information may lead to a more accurate estimate.

The commenter (0176/0177) noted that EPA st ated in the proposed FIP that it “has generally accepted the costs estimates APS subm itted,” but has “eliminated any line item costs that are not explicitly included in the EPA Control Cost Manual ” (citing 75 FR 64227). The commenter asserted that EPA provided no justif ication for excluding thes e costs, and that no justification for doing so exists.

The commenter (0176/0177) concluded that the analyses conducted by B&V and the Shaw Group are sound, and the Shaw Group’s report c onfirms that the inclus ion of these types of costs is entirely appropriate. According to th e commenter, it is improper and unlawful for EPA to eliminate consideration of these site-specific cost factors. The commenter asserted that because the proposed BART FIP rule is fundamentally inc onsistent in this respec t with EPA’s own rules and with the CAA, as construed by the D.C. Circuit in American Corn Growers , and because EPA has found the submitted cost estimates “g enerally accept[able]” (citing 75 FR 64227) without providing any sound or lawful rationale for rejecting or revising thos e estimates, there is

no basis for EPA not to use those estimates.

Another of the commenters (0185) concluded that a BART determination cannot properly be made until EPA accepts or conducts a cost anal ysis, such as the one presented by APS, that complies with the law. A third commenter (0187) c oncluded that EPA’s propos ed cost analysis is

inconsistent with the D.C. Circuit’s decision in American Corn Growers and with the governing rules and is therefore unlawful. The Navajo Nation (0223) concluded that EPA’s compliance

costs are inaccurate and flawed.

Response:

EPA disagrees with the comment that EPA improperly reworked and reduced the SCR cost estimates. EPA used a hybrid approach for our cost analysis that re lied primarily on the cost estimates provided by APS, but also followed the BART Guidelines, that state “[i]n order to maintain and improve consistency, cost estima tes should be based on the OAQPS Control Cost

16

EPA notes that this report was considered and discu ssed in the TSD for our proposed rulemaking, and was

included in our docket. The revised cost estimates submitted to EPA subsequent to our ANPR were actually lower than the cost estimates submitted prior to our ANPR.Page 35 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Manual , where possible”

1 6 F 17

, to determine whether APS included cost estimates for services or equipment associated with SCR that were e ither not needed (e.g., mitigation for increased sulfuric acid emissions or catalyst disposal), or not allowed under the EPA Control Cost Manual (e.g., owner’s costs). We note that the EPA cost estimate presented in the TSD ($718 million total for Units 1 – 5) is 18% lower than the hi ghest B&V cost estimate and less than 0.6% lower

than the most recent B&V cost estimate APS submitted to EPA in 2010.

The cost analysis we presented in the TSD

1 7 F 18 and supporting documents

1 8 F 19 for our October 2010 proposed BART determination was based on th e cost estimate updates prepared by B&V for APS dated August 19, 2008 and submitted by letter dated March 16, 2009.

1 9 F 20 In the TSD (see page 30), we explain that APS s ubmitted an additional, more refined update to the cost estimates by letter dated April 22, 2010, but that submitt al was labeled as Confidential Business Information. On September 9, 2010, APS confirmed that it did not consider this B&V report to be confidential and EPA included this updated cost analysis in our docket

2 0 F 21 and discussed it in our TSD. We noted in our TSD that the revised cost estimates for SCR submitted by APS in 2010 ($722 million total for Units 1 – 5) were lower fo r all units compared to the cost estimates submitted by APS in March 2009 ($874 million total for Units 1 – 5).

Our SCR cost analysis relied primarily on the highest cost estimates submitted by APS (dated August 19, 2008 and submitted March 16, 2009 ). EPA accepted all site-specific costs provided by APS cost categories (e.g., purchased equipment, installation) that are typically

included in a cost estimate conducted in accordance with the EPA Control Cost Manual , and only excluded line item costs that are not explicitl y included in the EPA Control Cost Manual or in a limited number of cases where EPA determined alternative costs were more appropriate or where APS did not provide sufficie nt explanation to justif y different costs (e.g., costs of catalysts, interest rates). Therefore, we di sagree with the commenters’ assert ion that our cost analysis did not take into account the site-spe cific cost information supplied by APS. We again note that the EPA cost estimate presented in the TSD ($718 million total for Units 1 – 5) is only 18% lower than the highest B&V cost estimate and less than 0.6% lower than the most recent B&V cost

estimate APS submitted to EPA in 2010.

Our detailed, line-by-line analys is was included in the docket

2 1 F 22 for this proposed rulemaking and provided an explanation for why we retained, modified, or rejected each line item in the SCR cost estimate for ea ch of the five units at FCPP.

For example, APS provided site-specific estim ates for individual components of the SCR system, while the equations in EPA Control Cost Manual yield overall system costs. In the TSD for our proposed rulemaking, we generally accep ted the component cost s estimated by B&V, including such items as costly new preheaters an d new induced draft and forced draft fans that

are not included in the EPA Control Cost Manual equations but were deemed by B&V to be

17 The OAQPS Control Cost Manual is now called the EPA C ontrol Cost Manual. The EPA Control Cost Manual is available from the following website: http://www.epa.go v/ttncatc1/products.html#cccinfo.

18 “TSD Proposal – Technical Support Document 10-6-10”, Document No. EPA-R09-OAR-2010-0683-0002.

19 “TSD ref [40] Four Corners SCR Cost Analysis ( EPA) 8-26-10”, Document No. EPA-R09-OAR-2010-0683-0033.

20 “APS Submission to EPA 3-2009 plus attachments”, Document No. EPA-R09-OAR-2010-0683-0015.

21 “TSD ref [42] NOx Compliance Study”, Document No. EPA-R09-OAR-2010-0683-0034.

22 “TSD ref [40] Four Corners SCR Cost Analysis ( EPA) 8-26-10”, Document No. EPA-R09-OAR-2010-0683-0033.Page 36 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments necessary at FCPP due to retrofit considerations. However, we did not include the costs included for variable frequency dr ives for the new fans, which ar e not required for SCR, or the costs for unspecified “miscellane ous equipment.” The cost estima te did not provide information documenting the need for these line items or otherwise justifying their inclusion.

In addition, we used the EPA Control Cost Manual equations and a catalyst cost estimate provided by a vendor of ultra low- oxidation catalysts to estimate th e cost of the initial catalyst (included under total cap ital costs) and replacement catalyst (included under total annual costs) for our revised costs. This vendor cost was subs tantially less than the cost estimated by B&V for the catalyst. In addition, typically , the vendor cost includes the di sposal of the spent catalyst; therefore, the catalyst disposal cost was not incl uded as a separate line item in our revised costs although it was included as an annual cost in the B&V cost estimate. We also applied what we

believe is a more realistic tax ra te of 6 percent, rather than the 10 percent in the B&V estimate. The state of New Mexico does not impose a sa les tax; rather, New Mexico applies a gross receipts tax on businesses and services in New Mexico.

2 F 23 New Mexico reports that this tax varies throughout the state from 5.125% to 8.6875%. EPA’s use of a 6% tax rate is generally consistent

with the tax rate the New Mexico Environm ent Department (NMED) applies in its emission control cost estimates of 6.2% to account for the gross receipts tax.

2 3 F 24

Using Units 4 and 5 (which had identical co st estimates in the 2008 B&V estimates) as examples, other notable line items in the estimat ed Total Capital Investment in the APS submittal

that we did not include in our cost analysis are “owners cost s”, “side effect mitigation”, and

“lost revenue”:

 “Owners cost” was described by the comment ers as typical expenditures that an owner will experience during an air quality control re trofit project, such as costs for project development, financing, project management, plant startup/construction support, and taxes/advisory fees/legal. The commenters calcul ated these costs at 3 percent of the Total Direct Cost for the units. As such, these es timates do not truly repr esent a site-specific consideration of such costs. The commente rs did not provide any documentation specific to FCPP or SCR. In addition, such costs are not included in the EPA Control Cost

Manual . Therefore we exclude this cost of $5.6 million in our revised cost estimate.

 “Side effect mitigation” was referred by the commenters as additional measures included to reduce emissions of SO 3 at a cost of $7 million. However, EPA calculated catalyst cost based on the use of an ultra low oxidation ca talyst, so we do not agree that such side effect mitigation me asures are needed.

 “Lost revenue” of $14.4 million was estimated by the commenters for an “extended outage.” APS did not provide sufficient in formation for EPA to determine that SCR equipment could not be installed during sche duled outages and we excluded this cost in

our revised cost estimate.

23 http://www.tax.newmexico.gov/All-Ta xes/Pages/Gross-Receipts-Tax.aspx.

24 Personal communication between Elizabeth Bisbey-Kuehn, NMED and Anita Lee, EPA Region 9. September 2, 2011. See “Memo to file 9-2-11 voicemail from NMED.docx” in the docket for this final rulemaking.Page 37 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments It should be noted that in the revised cost estimates submitted by APS in 2010, B&V no longer included side effect mitigation and signific antly reduced estimated taxes and lost revenue. For Unit 4 the total for these three cost el ements fell from about $37.8 million to only $4.3 million in the 2010 APS submittal. The updated Tota l Capital Investment es timates for Units 4 and 5 in the 2010 submittal averaged about $212.5 m illion, which is slightly lower than our revised cost estimate of $217.7 million for each unit.

2 4 F 25 The refined Total Capital Investment estimates in the 2010 submittal for Units 1-3 remained slightly higher (about 2 to 7 percent) than

our revised cost estimates based on the 2009 su bmittal. The general agreement between the 2010 B&V refined cost estimates and EPA’s cost estimates suggests t hat our BART determination would not be substantially different if we had relied instead solely on B&V’s 2010 cost estimates for FCPP because the cost effectiv eness values would be similar.

In terms of annual cost estimates, the difference between the APS submittals (2009 and 2010) and our revised cost estimates is larger . The annual costs for Units 4 and 5 in the 2009 APS submittal are nearly twice the amount of EPA’s revised cost es timate even though our revised capital cost estimate is only 18 percent less than the B&V estimate.

The large difference in annual costs results ma inly from differing assu mptions used in the “capital recovery” estimates, which account for over three fourths of the overall difference between APS and EPA estimated annual costs. Cap ital recovery reflects th e effective annual cost to the facility of borrowing the capital to pay fo r the SCR system. This element of annual cost is the product of the Total Capital Investment and the Capital R ecovery Factor (CRF). The CRF, in turn, is calculated using a formula based on th e assumed interest rate and equipment life.

In its cost estimates for APS, B&V assumed an interest rate of 15% and an equipment life of 20 years. While we also assumed an equipment life of 20 years, we based our CRF on an interest rate of 7%. The 15% inte rest rate used by APS to calculate capital recovery for the SCR installation is too high. For cost analyses re lated to government regulations, an appropriate “social” interest (discount) rate should be us ed. The latest real interest rate for cost effectiveness analyses published by the Office of Management and Budget (OMB) is 2.8% for a 20 year period (Revised January 2008). EPA calculat ed capital recoveries using 3% and 7% interest rates in determining co st effectiveness for the Regulator y Impact Analysis (RIA) for the Guidelines for BART Determinations under the Regional Haze regulations.

2 5 F 26

Therefore, we used a conservative approach to calculate the capital recovery in our revised cost analysis using an interest rate of 7% and an equipment life of 20 years.

The APS submittal provided no justification fo r what appears to be an inflated interest rate (15%) in this period of historically low ra tes, and our interest rate of 7% is appropriately conservative for this cost analysis and consistent with the most conservative interest rate used in the RIA for the BART Guidelines. The other major contributors to the difference in annual cost

25 “APS Submission to EPA 4-22-10 plus Attachments”, Document No. EPA-R09-OAR-2010-0683-0016. In the 2010 APS submittal, B&V prepared separate estimate s for Units 4 and 5 for the first time. Certain common equipment that would be shared by the two units was includ ed in the capital costs for Unit 4, with the result that Total Capital Investment was estimated at about $223.8 million and $201.3 million for Units 4 and 5, respectively.

26 Regulatory Impact Analysis for the Final Clean Air Visibility Rule or the Guidelines for Best Available Retrofit Technology (BART) Determinations Under the Regional Haze Regulations, EPA-0452/R-05-00 4, June 2005.Page 38 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments estimates between the APS 2009 submittal and our r evised cost estimate are maintenance labor and materials (8% of the difference), costs rela ted to catalyst replacement (13%), and the difference between estimates of Total Capital Investment (also a factor in determining annual capital recovery – 16%).

The difference between estimates of mainte nance labor and materials is primarily related to the method of calculation, but is also affected by the difference in capital cost estimates. In our revised cost estimate, we applied the metho dology specified in the EPA Control Cost Manual which determines this annual cost as 1.5% of the Total Capital Investm ent. In the 2009 APS submittal, this cost element is estimated as 3% of Total Direct Costs (a subset of Total Capital Investment). APS did not provide su fficient information to justif y its estimate that maintenance

labor and materials would be 3% of Total Direct Costs.

As previously discussed, we determined th e cost of initial catalyst and replacement catalyst based on the EPA Control Cost Manual methodology and a quote from a vendor for ultra low-oxidation catalyst that included spent ca talyst disposal. The cost estimate prepared by B&V for the 2009 APS submittal included a significantly higher catalyst cost, used a different methodology for determining the an nual cost of catalyst repla cement, and included a separate cost for catalyst disposal. Again, APS did not provide sufficient inform ation to justify the assumption that costs for spent catalyst dispos al would be separate fr om the catalyst cost.

As noted above, in 2010 APS submitted an updated, refined cost estimate prepared by B&V. As discussed, this submittal included estimat es of Total Capital Investment for Units 4 and 5 that were, on average, lower than our revised cost estimate for these units. Despite this fact, the average annual cost estimated by B&V fo r these two units ($41.8 million) exceeded our estimate ($28.4 million) by 45%. This difference is entirely due to the CRF used in the B&V calculations, which was again based on an assumed interest rate of 15%.

2 6 F 27

As explained previously, the interest rate that we used in our calculations (7%) is in itself conservative and is more appropriate for these calculations than the high rate used by APS/B&V.

In addition, we disagree with the commente rs’ assertion that our analysis is not

consistent with the D.C. Circuit’s American Co rn Growers decision. As noted, we incorporated site-specific cost information provided by APS where documented and justified. In addition, we

27 In the 2010 submittal for Units 4 and 5, B&V very significantly reduced the estimate for maintenance labor and materials and somewhat reduced the estimate for catalyst replacement and spent catalyst disposal. Although this

estimate included some line items not included in their earlier estimate or our cost estimate (such as yearly emissions testing and fly ash sampling and analysis), the total of all annual costs other than capital recovery was less than our estimate for this class of costs. Thus, for Units 4 and 5 the entire excess annual cost in the 2010 submittal

can be ascribed to the CRF and the interest rate used to calculate it. For Units 1-3, the estimates of annual costs submitted by APS in 2010 exceed our estimates by from 65 to 73% even though thei r Total Capital Investment estimates exceed ours by only 2 to 7%. While the CRF, with its high underlyi ng interest rate, is the predominant

cause for the differences between these annual cost estim ates, it is not the sole cause. Because Total Capital Investment is a factor in the calculation of capital recove ry, the slightly higher estimates are a small factor for Units 1-3. In addition, the non-capital recovery annual costs estim ated for these units in the 2010 submittal continue to exceed our estimates, primarily due to maintenance labor and materials and cat alyst replacement and disposal costs (which were not reduced from the 2009 submittal for thes e units). Nevertheless, the value of the CRF accounts for over three quarters of the difference between the estimate of total annual costs in the 2010 APS submittal and our

estimate.Page 39 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments do not agree that use of the EPA Control Cost Manual alone necessarily constitutes a failure to conduct a cost analysis on a source-specific basis . The costing methodology in the EPA Control

Cost Manual requires as input certain source-specific design characteristic s and, therefore, the results are a source-specifi c estimate of costs.

Regarding the Shaw Group report’s comment on the statement in the EPA Control Cost

Manual about its suitability for use with EGUs, we believe that the text of the Manual was improperly taken out of context. The rel evant text of the EPA Control Cost Manual

2 7 F 28 reads as follows:

... this Manual does not di rectly address the controls needed to control air pollution at electrical generating units (EGUs) because of the differences in accounting for utility sources. Electrical utilities generally employ the Electric Power Research Institute (EPRI) Techni cal Assistance Guidance (TAG) as the basis for their cost estimation processes. 1

1 This does not mean that this Manual is an inappropriate resource for utilities. In fact, many power plant permit applications use the Manual to develop their costs. However, comparisons between utilities and across the industry generally employ a process called “levelized costing” that is different from the methodology used

here.

Thus, the full text of the Manual indicates that it is an approp riate resource for utilities, and that many power plant pe rmit applications have used the EPA Control Cost Manual to develop their costs. In any case, we generally used equipment and labor costs provided in the APS cost estimate, except for those line items that we believed to be unjustified or unreasonable.

Comment:

One of the owners of FCPP (0174) stated that EPA’s discussion of costs associated with BART determinations for other Western power pl ants is misleading (citing page 32 of the TSD for EPA’s proposed BART determination fo r FCPP). According to the commenter, EPA provides a number of examples of cost estimate s developed by other Western power plants for installation of SCRs, but does not mention that in most of thos e cases, the permitting authorities rejected SCR and proposed combustion contro ls as BART. Furthermore, the commenter indicated that because none of those power plants have installed SCRs, the referenced estimates

are not based on actual constr uction and operating costs.

Response:

EPA disagrees with the commenter that our di scussion of estimated costs in Table 16 of our TSD was misleading. Recent BART determina tions have proposed and/or finalized SCR (San

28 “EPA Air Pollution Control Cost Manual” , Sixth Edition, Document No. EPA/452/B-02-001, January 2002. Pg. 1-3. Available at http://www.epa .gov/ttncatc1/produ cts.html#cccinfoPage 40 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Juan Generating Station Units 1 – 4, Naughton Unit 3, Jim Bridger Units 1 and 2) or selective non-catalytic reduction (SNCR ) (M.R. Young Units 1 and 2, Centralia Units 1 and 2).

2 8 F 29 EPA determined that the comparisons of these SC R costs are appropriate b ecause they are based on recent BART cost estimates submitted by the power plants.

The commenter is correct in noting that the SCR cost effectiveness estimates included in the TSD represented cost estimates rather t han actual construction and operating costs. The table was meant to compare the estimated cost e ffectiveness values for FCPP with other recent SCR BART cost estimates provided by coal-fired electric generating facilities in the Western United States, and was not intended to show th e final cost effectiv eness of actual SCR

installations. EPA notes that actual constructi on and operating costs for th ese facilities are not yet available, and will not be available until these BART determinations are finalized and facilities have completed installation of its BART controls.

Comment:

One of the owners of FCPP (0176/0177) noted th at EPA selected combustion controls as presumptive BART for EGUs like FCPP because t hose controls are “more cost effective than post-combustion controls such as SCRs” (ci ting 70 FR 39134). According to the commenter, EPA’s analysis at that time for setting presump tive BART limits found that the cost effectiveness of combustion controls averaged less than $600 per ton of NO

x removed, while SCR averaged more than $1,600 per ton.

The commenter’s (0176/0177) most recent cost analysis estimated that the average cost

effectiveness of combustion controls for the fi ve units at FCPP would range from $524 to $1,735 per ton of NO

x removed, while the average cost e ffectiveness of SCR would range from $4,215 to $5,283 per ton. The commenter also noted that EPA’s estimate of average cost effectiveness for SCR at FCPP ranged from $2,515 to $3,163 per t on. The commenter stated that, at the low end, only the estimate of the average cost effectiv eness of combustion contro ls is in line with EPA’s estimates of cost-effective controls, while the estimate of average cost effectiveness of SCR is significantly higher. Another one of FCPP ’s owners (0168) also made this last point.

The commenter (0176/0177) asserted that ther e is no basis for EPA to depart from its own rules by concluding that SCR is BART fo r FCPP when this technology is many times more expensive than the EPA-determined cost effectiv e level of controls for presumptive BART and costs far more than the levels EPA rejected as cost-ineffective for presumptive BART. The

commenter contended that EPA’s disregard for its own cost eff ectiveness determination in the BART rules renders the concept and importance of the “cost effectiveness” BART factor meaningless.

Response:

29 See 76 FR 52388, August 22, 2011; 77 FR 33022, June 4, 2012; 77 FR 20894, April 6, 2012; 77 FR 30473, May 23, 2012Page 41 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments EPA disagrees with this comment. Alt hough the commenters argue that the BART Guidelines established a threshold for co st effectiveness agains t which future BART determinations must compare, the BART Guide lines did not establish a cost effectiveness threshold for all BART determinations . In developing the presumptive NO

x limits for BART in 2005, EPA did not set the cost effe ctiveness values estimated fo r combustion controls as the threshold for determining whether a given control technology wa s or was not cost effective. If EPA had intended the cost effectiven ess values estimated in 2005 to represent a threshold for BART, it is reasonable to assume that the BART Guidelines would have included those cost effectiveness values as threshol ds in Appendix Y, and would have required future cost estimates to be presented in 2005 dollars to appropriately compare against those thresholds. The BART Guidelines do not set a numerical definition for “cost effective”, and the analysis of presumptive limits uses cost effectiveness as a means to broadly compare contro l technologies, not as threshold for rejecting controls for an individual unit or facility that exceed the average cost effectiveness of combustion controls.

Additionally, a comparison of the average cost effectiven ess estimates in the 2005 BART Guidelines against our cost effectiveness es timates for FCPP is not an “apples to apples” comparison. The technical support docu mentation for the 2005 BART Guidelines

2 9 F 30 indicate that cost effectiveness of controls was not determined based on site-specific cost estimates developed for each BART-eligible facility; rather cost es timates were determined using assumptions for capital and annual costs per kilowatt (kW)

3 0 F 31 or kilowatt-hour (kW-hr), and then scaled according to boiler size. The supporting inform ation for the 2005 BART Guidelines estimate SCR costs for Units 4 and 5 at FCPP (capital cost = $64 million, total annual cost = $11 million) that are comparable to SCR cost estimates that were generated by NPS using the EPA

Control Cost Manual (capital cost = $53 million, to tal annual cost = $10 million

3 1 F 32 ). The same commenters have previously dismissed the NPS SCR cost estimates based on the EPA Control

Cost Manual as being too low because it does not include site-specific costs.

3 2 F 33 The commenter appears to be selectively choosi ng to accept the EPA Control Cost Manual in one case (cost effectiveness of presumptive controls to serve as a bright line threshold), and reject it in another (cost effectiveness of post-combustion controls at FCPP): on one hand, th e commenter rejected

the EPA Control Cost Manual in favor of its own site-speci fic cost estimates because the EPA Control Cost Manual is unrealistically low, and on the other hand, the commenter uses the

30 The technical supporting information is included in the docket for the final rulemaking for the BART Guidelines (EPA-HQ-OAR-2002-0076) and includes several documents supporting the presumptive NO

x limits finalized in the BART Guidelines: (1) “Technical Support Document – Methodology for Developing BART NO

x Presumptive Limits” dated June 15, 2005 (document no. EPA-HQ-OAR-2002-0076-0445), and (2) “Technical Support

Document for BART NO

x limits for Electric Generating Units Excel Sp readsheet”, dated June 15, 2005 (document no. EPA-HQ-OAR-2002-0076-0446).

31 In the 2005 BART presumptive limit analysis, EPA estimated capital cost assu ming SCR cost = $100/kW.

32 See Table 9 in the October 2010 TSD for the proposed BART determination for FCPP. In its comments on the ANPR, NPS revised its cost estimates for SCR on Units 4 and 5 to $114 million (capital cost) and $18 million (total annual cost) – see Table 12 in the TSD for the proposed BART determination. Document no. EPA-R09-OAR-2010-

0683-0002.

33 In the ANPRM, in addition to reporting APS’s cost esti mates and EPA’s revisions to APS’s cost estimates, for reference, EPA also reported cost estimate analysis conducted by NPS and provided to EPA during consultations with the FLMs prior to our ANPRM. APS and other entitie s provided comments to EPA on the NPS cost estimates reported in the ANPRM, see document titled “Comments on ANPRM 09 0598 APS Comments and Exhibits”

document ID number EPA-R09-OAR-2009-0598-0195.Page 42 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments unrealistically low value from the EPA Control Cost Manualas a threshold to reject postcombustion controls because its si te-specific cost estimates are hi gher. In short, the commenter’s recommendation to use generalized cost estimates from the 2005 BART Guidelines as a bright line threshold for comparison with site-specific 2010 cost estimates is inconsistent with its own criticisms of the EPA Control Cost Manual

.

EPA notes that the average co st effectiveness of combus tion controls cited by the commenters in the development of the 2005 presumptive NO

x limits (less than $600 per ton) was calculated from nati onal total annual costs divided by the national reductions expected from

combustion controls . In the same technical documen tation for the 2005 presumptive NO

x limits, if considered unit by unit at each BART-eligible facility , the average cost effectiveness of combustion controls was estimated to be $1,790 pe r ton (nearly three times higher than average cost effectiveness calculated from to tal national annual costs and total national NO

x reductions), with a very large range of $100 per ton to $70,000 per ton, indicating that despite using combustion controls to set presumptive NO

x limits, combustion controls will not be cost effective for all facilities – high lighting the need for site -specific 5-factor analyses in determining BART.

If, in assessing our BART determination for FCPP, EPA relied strictly on the cost effectiveness values in the 2005 BART Guidelin es, as suggested by commenters, the Excel Spreadsheet provided as techni cal support to the presumptive NO

x limits suggests cost effectiveness of combustion controls on Unit 5 at FCPP to be $1,716 per ton, SCR to be just over $1,000 per ton on Units 4 and 5, and ROFA to be over $500 per ton. These estimates are strongly dependent on the assumed efficiency of the control technology, but if taken at face value, suggest that of the three options, ROFA wo uld be most cost effective at FCPP, SCR is second most cost effective, and combustion controls ar e the least cost effecti ve. It is notable that B&V, in its BART analysis conducted for FCPP, excluded ROFA for Units 4 and 5 because it has not been demonstrated on larg e units, thus leaving SCR as the most cost effective control for Unit 5 at FCPP according to the 2005 BART Guidelines.

Comment:

A number of commenters, includi ng owners of FCPP (0168, 0174, 0176/0177) and a utility association (0169), stated that EPA’s BART analysis for FCPP was inconsistent with its own regulations in that it failed to consider cont rol costs as a function of visibility improvement. These commenters (0168.1, 0169.1, 0174, 0176/0177) typically stated that EPA’s BART

determination for FCPP must cons ider the cost effectiveness of control technology options in terms of dollars per deciview-improved.

Some of the commenters (0174, 0176/0177) pointed out that the American Corn Growers decision indicates that the CAA requires the consid eration of control cost to include the degree of improvement in visibility th at would result from control. American Corn Growers , 291 F3d at 6-7. One commenter (0176/0177) adde d that the BART rules encour age the use of a dollars-perdeciview-improved metric in addition to the dollars-per-ton-reduced metric (citing 70 FR 39170).Page 43 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments This commenter (0176/0177) indicated that this is an important measure of cost

effectiveness which EPA failed to consider. The commenter stressed that before EPA proceeds further with this rulemaking, it must analyze the average and incremental cost effectiveness of the full range of control options on not only a dollar-per-ton-reduced but also a dollar-perdeciview-improved basis.

Response:

The BART Guidelines require that cost effec tiveness be calculated in terms of annualized dollars per ton of polluta nt removed, or $/ton.

3 F 34 The commenters are correct in that the BART Guidelines list the $/deciview ratio as an additi onal cost effectivene ss metric that can be employed along with $/ton for use in a BART eval uation. However, the use of this metric further implies that additional thresholds or notions of acceptability, separate from the $/ton metric, would need to be developed for BART determinat ions. We have not used this metric for BART purposes because (1) it is unnecessary in judg ing the cost effectiveness of BART, (2) it complicates the BART analysis, and (3) it is diffic ult to judge. In particu lar, the $/deciview metric has not been widely used and is not well-understood as a com parative tool. In our experience, $/deciview values tend to be very la rge because the metric is based on impacts at one Class I area on one day and does not take into account the number of affected Class I areas or the number of days of improvement that resu lt from controlling emissions. In addition, the use of the $/deciview suggests a level of preci sion in the CALPUFF model that may not be warranted. As a result, the $/deci view can be misleading. We conc lude that it is sufficient to analyze the cost effectiveness of potential BART controls usi ng $/ton, in conjunction with an assessment of the modeled visibility benefits of the BART control.

EPA considered cost of controls by discussing the total capi tal costs, annual costs, and $/ton of NO

x pollution reduced. Additionally, in respons e to comments received on our proposal, EPA included calculations and consideration of incr emental cost effectiven ess (see Section 3.2 of the Response to Comments document in the docket for this final rulemaking). EPA considered visibility impacts by discussing the deciview improvement resulti ng from controls, as well as the percent change in impr ovement. EPA determined that these metrics are sufficient in completing our five-factor analysis for FCPP.

Comment:

One environmental advocacy group (0182) who favors assessing cumulative visibility impact and benefit across multiple Class I areas (see Section 7.0) argued that it is a more accurate depiction of costs to use a dollars-per-deciview-improve d on a cumulative basis than to use a cost/ton basis standing alone. The commente r asserted that this metric provides a mechanism to ascribe meaningful value to polluti on controls that would benefit numerous Class I

areas.

Response:

34 70 FR 39167Page 44 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments EPA disagrees with the commenter that a $/dv or $/cumulative dv metric is a more accurate depiction of costs t han the $/ton metric. While a $/dv metric and a $/cumulative dv metric may provide some useful information to assess how pollution controls would benefit numerous Class I areas, as described in the resp onse to the previous comment on use of the $/dv
metric, the BART Guidelines do no t require consideration of $/dv as a mandatory metric in a BART analysis. EPA considered cost of controls by discussing the total capital costs, annual costs, $/ton, and incremental $/ton (See Secti on 3.2), and considered visibility impacts by discussing the individual and cumulative deciview improvement resulting from SCR, as well as the percent change in improvement.

Comment:

One commenter (0117), who st ated that BART must be de termined in the context of reasonable progress rather than in isolation (see Section 10.0 fo r more on the commenter’s legal arguments), stated that the cost effectiv eness metric used by EPA (i.e., $/ton of NO

x reduced) does not satisfy the statutory requi rement to consider the cost to comply with the Regional Haze program because it does not include compliance costs related to requirements for reasonable

progress.

Response:

Congress identified BART as a key measure for ensuring reasonable progress. We disagree that BART must be determined in th e context of reasonable progress. If anything, reasonable progress depends on BART. Because the Cl ass I areas affected by emissions from FCPP are not achieving the glidepath, it is im portant that states, tribes, and EPA require reasonable measures to be implem ented to ensure that progress is made towards the national visibility goal. The BART Guidelines specify that th e cost of controls be estimated by identifying the emission units being cont rolled, defining the design param eters for emission controls, and developing a cost estimate based on those de sign parameters using the EPA Control Cost

Manual while taking into account any site-specific de sign or other conditions that affect the cost of a particular BART control option. The BART Gu idelines do not require the BART costs of compliance to consider costs asso ciated with reasonable progress.

EPA disagrees that there is a statutory requirement for a BART analysis to consider the cost to comply with the Regional Haze program as a whole. In the Regional Haze provisions of the Clean Air Act (§169A – Visibility Protectio n for Federal Class I Areas), Section 169A(g) defines the determination of reasonable progress (§169A(g)(1)), separately from the determination of BART (§169A(g)(2)). In dete rmining reasonable progress, the costs of compliance for a source subject to such require ments must be considered, and in determining BART, the costs of compliance from the use of such technology mu st be considered. Because the definitions for determining reasonable progress and BART are mutually exclusive, the statute does not require a cost analysis for a BART dete rmination to include costs associated with reasonable progress.Page 45 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Comment:

The Navajo Nation (0223) stat ed that EPA should analyze th e affordability of controls under the supplemental proposal. The commente r noted that APS di d not provide cost information for its proposed alternative, and EPA did not perform a detailed cost analysis. The commenter stated that EPA should perform a deta iled analysis, rather than an approximation, of the cost of compliance for installing SCR on Un its 4 and 5, including a consideration of the impacts of closing Units 1 – 3. The commenter s uggested that line item costs should be provided for Units 4 and 5, taking into account the cha nge in business structure and the demand for construction, labor, market, and material cost s. The commenter cautioned that EPA and NPS

should not use “outdated” sour ces that may underestimate comp liance costs (see the comments above on the original cost analysis for BART) fo r this analysis or anal yses for NGS or other coal-fired plants in the region that contribute to regional economies.

Response:

EPA disagrees with the commenter that we shoul d perform a detailed cost analysis of the alternative emission control strategy, put forth in the supplemental proposal. APS did not provide any indication to EPA t hat the costs of installing SCR on only Units 4 and 5 under the

alternative emission control strate gy would significantly differ fr om the costs to install SCR on only Units 4 and 5 under BART.

EPA does not agree that the affordability (as a business decision for the owners) of the supplemental proposal for APS and other owners must be analyzed. Because APS, on behalf of all owners, suggested to EPA this BART Alternative

3 4 F 35 , EPA has no reason to believe that APS or the other owners may not be able to afford th is option. Additionally, th e affordability of installing controls is not a requi red element of a cost analysis for BART in the BART Guidelines, but may be considered in se lecting the “best” alternative if “There may be unusual circumstances that justify taki ng into consideration the conditi ons of the plant and the economic effects of requiring the use of a given control technology”.

3 5 F 36

EPA conducted an affordability analysis for our proposed BART determination to assess whether the cost to produce electricity at FCPP would remain competitive compared to th e market costs to purchase power if SCR were required on Units 1 – 5 at FCPP. The goal of this analysis wa s to determine whether our proposed BART determination would force FCPP to close entirely and thus create a significant adverse impact to the Navajo Nation. However, as stated previously, this analysis is not specifically required under the BART Guidelines.

The Navajo Nation requested that EPA prov ide an analysis of potential adverse impacts to the Navajo Nation of APS’s proposal to clos e Units 1 – 3 as an alte rnative emission control strategy to BART. EPA notes that the RHR, in assessing an alternative measure in lieu of BART (40 CFR 51.308(e)(2)) requires severa l elements in the alternative plan (e.g., demonstration that the alternative will achieve greater reasonable progress than BART, and that reductions are surplus to the baseline date of the SIP), but does not require an analysis of the cost of the alternative plan.

35 “Signed Letter from APS to EPA 11-24-10”, Document No. EPA-R09-OAR-2010-0683-0078.

36 See BART Guidelines, July 6, 2005, at 70 FR 39171.Page 46 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Although, an impact analysis of the altern ative emission contro l strategy was not required under the Regional Haze Rule, as requ ested by the Navajo Nation and as part of EPA’s customary practice of engaging in extensive and meaningful consu ltation with tribes and tribal authorities with regard to relevant Agen cy actions, EPA commissioned an analysis of the potential impact to the Navajo Nation of APS’s option to close Units 1 – 3. The report will be provided to President Shelly by letter as a follow-up to our consultation with the Navajo Nation.

EPA also disagrees with the commenter that our cost analysis relies on “outdated” sources and may underestimate comp liance costs. As discussed above, EPA has determined that the cost analysis conducted for our October 2010 BART proposal is conservative because it relies on the highest cost estimates submitte d by APS, and reasonable because it incorporates the site-specific costs estimated by B&V for APS while also considering the allowed line item

costs in the EPA Control Cost Manual . As noted above, our cost es timate is 18% lower than the highest B&V cost estimate submitted by APS in 2009, and less than 0.6% lower than the most recent cost B&V cost estimated submitted by AP S in 2010. Therefore, reliance solely on APS’s most recent cost estimate in lieu of the EPA’ s cost estimate presented in our proposed rulemaking would not result in substanti ve changes to our B ART determination.



### 3.2

1 6 B 

### Comments on Top-Down Analysis Ver sus Incremental Cost Effectiveness

Comment:

A number of commenters, includ ing owners of FCPP (0168, 0174, 0176/0177, 0179, 0185), the Navajo Nation (0223), and a utility indus try association (0187), asserted that EPA’s BART analysis was inconsistent with its own re gulations in that it us ed a top-down analytic approach and failed to conduct an incremental cost evaluation. These commenters typically noted that the BART rules establish that both average cost effectiveness and incremental cost

effectiveness are to be used in the eval uation of BART (often citing 70 FR 39127, 39167-68).

Some of these commenters (0168, 0176/0177, 0179, 0185, 0187) added that a top-down approach, which EPA uses for Best Availa ble Control Technology (BACT) analyses, is inappropriate for a BART analysis. One of the commenters (0176/0177) noted that BACT requires the maximum degree of emissions reductions from new sources and major modifications, taking into account various statutory factors esta blished for the Prevention of Significant Deterioration (PSD) pr ogram. The commenter indicated that for purposes of BACT, a top-down analysis (while not re quired by the CAA) may have so me justification because new sources may more easily accommodate stringent control options. However, because BART applies only to retrofits of exis ting sources (i.e., not to new faci lity construction), the commenter argued that the most stringent controls may not be appropriate or cost e ffective for such existing sources. Accordingly, the commenter asserted th at a top-down methodology that is designed to achieve maximum stringency and that fails to make a cost effectiveness comparison with less stringent control options cannot be appropriate in the BART setting. The commenter added that because a top-down cost assessment methodology is inconsistent with the BART rules and thePage 47 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments nature and purposes of the BART program, EPA must abandon this approach and instead apply

the incremental cost effectiveness anal ysis described in the BART rules.

Another of the commenters (0187) stated th at absent an incremental cost-effectiveness analysis, EPA has no basis for concluding that SCR is a cost-effective control or that it is BART for FCPP. A third commenter ( 0185) stated that given that EPA has failed to conduct an incremental cost-effectiveness assessment, its pr oposed BART determination must be rejected.

The Navajo Nation (0223) i ndicated that in using the to p-down analysis, EPA failed to carry out the five-factor analysis for each of th e technically feasible retrofit technologies as required by the BART Guidelines (citing 40 CFR part 51, Appendix Y, section I.F.2.c), including current combustion control technol ogy which the BART Guidelines identify as presumptive BART (citing section IV.D.5). The commenter stated that by only analyzing a single technology which it chose in advance, EPA’ s analysis was clearly arbitrary and not in compliance with its own regulations. The commenter concluded that EPA’s compliance cost analysis was fatally flawed.

Response:

EPA disagrees with these comments. In the pr eamble to the final BART Guidelines, EPA discusses two options presented in the 2001 proposal and 2004 re-pr oposal of the gu idelines for evaluating ranked control technology options (See discussion at 70 FR 39130). Under the first option, States would use a sequential proce ss for conducting the analysis, beginning with a complete evaluation of the most stringent cont rol option. The process described is a top-down approach analogous to the analysis we used in ou r proposed BART determination for FCPP. If the analysis shows no outstanding issues regar ding cost or energy and non-air quality environmental impacts, the analysis is ended and the top level of technically- feasible controls is identified as the “best system of continuous emission reduction”. The preamble describes an alternative decision-making approach that begins by evaluating the le ast stringent control technology (bottom-up approach) where the State would then consider the additional emissions reductions, costs, and other effects of successively more stringent control options. In the final guidelines, EPA decided t hat States should retain the discre tion to evaluate control options in whatever order they choose, so long as the Stat e explains its analysis of the CAA factors. Therefore, in conducting our BART determin ation for FCPP, EPA’s top-down approach for assessing the five factors was cons istent with the discretion a llowed under the BART Guidelines. EPA additionally notes that the TSD for our proposed rulemaking included analyses of the costs, non-air impacts, and visibility im provements associated with co mbustion controls at FCPP (the level of control APS determined to be BART at FCPP), but that there is no requirement for a five-factor analysis on all potentially available control options if the top down approach is used and the top level of technically-feasible controls is selected (70 FR at 39130).

Comment:

One of the owners of FCPP (0176/0177) who a lleged that the BART rules require an analysis (see above) and provided an analysis comparing the costs of combustion controls to thePage 48 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments costs of SCR. According to the commenter’s an alysis, the incremental cost effectiveness of moving from combustion controls to S CR ranges from $6,553 to $8,605 per ton of NO

x reduced

for the five units at FCPP. This commenter a nd another FCPP owner (0168) asserted that this “extraordinarily high” incremental cost highlight s the fact that combustion controls, not SCR, satisfy the cost effectiveness test applied by EPA in adopting the presumptive BART limits in

the BART rules.

Response:

EPA agrees that the BART Guidelines recommend consideration of both average and incremental cost effectiveness, however, EPA disagrees with the commenter that the incremental cost effectiveness should be a comparison be tween combustion controls and SCR for this particular facility. As discusse d at length in the TSD for our proposed BART determination for FCPP, EPA has determined that combustion cont rols (burner modifications and overfire air, including ROFA) will not be effective at signific antly reducing emissions at Four Corners due to inherent design and physical limitations of the boile rs. Therefore, in estimating incremental cost, it is inappropriate to include com bustion controls in the analysis fo r this particular facility. To respond to this comment, EPA conducted an incremen tal cost effectivenes s analysis and included it in our docket for this final rulemaking.

3 6 F 37

Based on our incremental cost analysis, EPA has

determined that the incremental cost of SCR compared to the next most stringent option is reasonable and does not support the commenter’s c onclusion that SCR is not BART for FCPP.

The BART Guidelines recommend two types of co st effectiveness calculations – average cost effectiveness and incremen tal cost effectiveness. Alt hough there are no bright line thresholds for determining the acceptability of average and incrementa l cost effectiveness estimates, average cost effectiveness is the most commonly reported cost metric when comparing controls for BART and BACT determinations. Therefore, we focused on average cost effectiveness in our October 2010 BART analysis. However, we agree with commenters that the BART Guidelines do recommend consideration of both average and incremental cost effectiveness, therefore, we calculated increm ental cost effectiveness using the methodology described in the BART Guidelines (see 70 FR 39167 – 39168), such that incremental cost effectiveness comparisons focus on the dominant alterna tives that are identified by generating a “least-cost envelope” graphical plot . The BART Guidelines describes the least-cost envelope to represent the set of options that should be dom inant in the choice of a specific option based on total annualized cost and expect ed emission reductions.

Based on the least-cost envelopes for Units 1 – 5 of the control technologies APS determined to be feasible at FCPP, the following NO

x controls are the dominant options that form the least cost envelope: combus tion optimization systems (COS), Low NO

x burner (LNB), LNB+Overfire Air (OFA), LNB+OFA plus high energy reagent technology (LNB+OFA+HERT), ROTAMIX+ROFA, and SCR on Units 1 and 2; COS, LNB+OFA, LNB+OFA+HERT, SCR on Unit 3; and COS, LNB+OFA, SNCR+LNB+OFA, SCR on Units 4 and 5. The least cost envelope methodology thus excludes from consideration the tec hnologies that fall outsi de of this least cost envelope. The incremental cost ef fectiveness for all options an d for all dominant options is shown in the “Incremental cost.xlsx” spreadshe et included in the docke t. Using the cost and

37 See “Incremental cost.xlsx”, in the docket for this final rulemaking.Page 49 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments emission reduction estimates provided by B&V for APS, the incremental cost of SCR when considering all options and only the dominant options ar e comparable and ranges from approximately $5,500/ton to $18,000/ton. Incremental cost of SCR is lower on Units 4 and 5, and highest on Units 1, 2, and 3. This methodology already e xcludes the technologies APS determined were technically infeasible (technica l feasibility was determined before the cost effectiveness determination) and also excludes tec hnologies determined inferior from the least cost envelope plot. However, as discussed at length in the TSD for our proposed BART determination for FCPP, EPA has determined that combustion controls (burner modifications and overfire air, including ROFA) will not be eff ective at Four Corners, particularly on Units 1 – 3, due to inherent design and physical limitation s of the boilers. Therefore, in estimating incremental cost, it is inappropria te to include an infeasible cont rol technology in the analysis. If we exclude the control technologies that EPA has de termined to be ineffective at FCPP, SNCR (without combustion controls) is the next most st ringent alternative afte r SCR. The incremental cost of moving from SNCR to SCR ranges fr om $3,500/ton to $5,800/ton using cost and emission reduction estimates provided by APS. If we use the EPA’s revised cost estimate for SCR and EPA’s proposed NO

x control efficiency of 80%, the increm ental cost from SNCR to SCR ranges from $2,500/ton to $3,300/ton.

Based on our incremental cost analysis, EPA has determined that the incremental cost of SCR compared to selective non-catalytic reducti on (SNCR), the next most stringent option ($2,500 per ton to $3,300 per ton), is reas onable and does not support the commenter’s conclusion that SCR is not BART for FCPP.



### 3.3

1 7 B 

### Other Comments on Factor One

Comment:

One public interest advocacy group (0112) agreed with EPA’s elimination of LNB technology from BART considerat ion based on the TSD discussion which concluded that since FCPP has had limited success in retrofitting Unit 2 with LNB technology, FCPP was unlikely to achieve significant NO

x reductions by retrofit ting any of its boilers with LNB technology.

In contrast, one of the owners of FCPP (0176/0177) asserted that EPA’s determination

that “combustion controls are not likely to be effective control technologies at FCPP” (citing 75 FR 64226) was based on superficial analys is and was mistaken. The commenter cited Exhibit J to its comments on the ANPR,

3 7 F 38 which contains a detailed an alysis of the use of LNB and OFA on FCPP’s units. According to the comment er, this analysis confirms that the use of advanced combustion controls on the five units at FCPP will reduce plant-wide NO

x emissions by 34 percent.

Response:

EPA disagrees with the commenter that Exhibit J of APS’s comments on the ANPR confirm that advanced combustion controls on all five units at FCPP will reduce plant-wide NO

x

38 This document can be found in th e docket for the ANPR, “Comments on ANPRM 09 0598 APS Comments and Exhibits”, Document No. EPA-R09-OAR-2009-0598-0195.Page 50 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments emissions by 34%. Although APS makes that stat ement in its May 2, 2011 comment letter on the 2010 BART proposal, in its separate May 2, 2011 comment letter on the 2011 Supplemental proposal, APS explains that further reductions in the NO

x emission limit for Units 4 and 5 is not appropriate for several reasons, including:

As discussed in EPA’s Supplemental Propos al, there are site-s pecific operational constraints at the Plant which will compromi se its ability to comply with a lower emissions level, such as the high ash-c ontent of the coal and the “cell-burner” configuration of the boiler . The Supplemental Proposal a cknowledges that the cellburner configuration in Units 4 and 5 is not conducive to the application of advanced combustion controls, typically employed prior to post-combustion processes such as SCR. Therefore, all the desired emission reductions must be achieved with the SCR alone,

which limits the maximum achievable NO

x reduction.

In this comment, APS contends that EPA’s conc lusion, that advanced co mbustion controls will not be effective at si gnificantly reducing NO

x emissions at FCPP, is accurate. Because of its conflicting statements, it is unclear to EPA wh ether APS believes advanced combustion controls will or will not be effective at FCPP. As ou tlined in the TSD for our 2010 BART proposal, EPA

concludes that advanced combustion controls will not be effective at significantly reducing NO

x emissions at FCPP, and therefore, our final BAR T determination requir ing an 80% reduction in

NO

x is based on the application of only SCR.

Comment:

One private citizen (0107) st ated that EPA must consider the use of supplemental steam from a concentrating solar pow er facility in determining BART for FCPP. The commenter

attached numerous articles that describe this technology, and i ndicated that these articles

establish that the technol ogy is a viable option to reduce pollution from FCPP.

Response:

EPA disagrees with this comment that suppl emental steam from a concentrating solar power facility is an appropriate t echnology to consider in order to reduce pollution from FCPP. The supplemental steam generated from a solar faci lity is intended to offs et some of the fuel required to generate electricit y. EPA does not have authority through BART to redefine a source, nor is it feasible for a solar concentrating facility to offset en ough fuel use to reduce NO

x emissions from coal combustion by 80% wit hout the use of significant land area.

In 2010, EPA issued a PSD pre-construction perm it to the City of Vi ctorville, in the desert portion of southeastern California, to construct Victorville 2: a 563 megawatt (MW) natural-gas fired combined cycle power plant with a 250 acre solar thermal array to provide 50 MW to the total electrical generatio n from the 268 MW steam turbine

3 8 F 39 . In order to offset NO

x

39 See “PSD Permit Application April - 2007” or “Ambient Air Quality Impact Report”, Document No. EPA-R09- OAR-2008-0406-0001 or EPA-R09-OAR-2008-0406-0016. In 2011, EPA issued a PSD permit to a nearly identical 563 MW (net) natural gas fired combined cycle power plant with a 251 acre concentration solar facility to provide aPage 51 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments emissions by 80% at FCPP using supplemental st eam from a concentration solar facility, we assume that the solar facility would need to provide 80% of th e power at FCPP, or nearly 1,650 MW. Using the ratio of solar field acreage to el ectricity production (acres/MW) from Victorville 2 and a similar facility in Palmdale, Californi a, we infer that approxim ately 8,250 acres (nearly 13 square miles) might be required to produ ce 1,650 MW of power. Even if EPA had authority to require FCPP to reduce emissions by implementing a concentrati ng solar facility, the land area and cost would likely prohibit subst antial contributions from solar power to the to tal electricity generation from FCPP at this time. However, because EPA’s final BART determination is an emissions limitation, rather than a technol ogy requirement, and although EPA does not have authority to require this technology, APS may cons ider this technology, or others, in developing its plan to cost-effectively comply wi th EPA’s final BART emission limit for NO

x .

Comment:

One commenter at a public hearing submitte d written material (0190) describing “fuel lean gas reburn” technology, which the commenter stated should be considered in the BART

determination for FCPP. These materials indicate that this technology reduces NO

x emissions by 30 to 45 percent. In his oral testimony, the co mmenter added that the ammonia used in SCR systems is a hazardous material, which he would not like to see introduced into the area. He also stated that the RHR allows a long period of time to meet the visibility improvement goals, and he stated the use of fuel lean gas reburn technol ogy in conjunction with co mbustion controls would be appropriate at this time.

Response:

EPA disagrees with this comment. Fuel lean gas reburn technology was discussed in the TSD for our proposed BART determination. Table 3 of the TSD included natural gas reburn as

an available NO

x control option that B&V determined to be technically infeasible because the technology has not been used in similar type or size facilities. However, even if this technology was determined to be technically feasible, it r anked as a mid-range t echnology in terms of control efficiency (65% contro l only when combined with LNB). Because EPA’s proposed BART

determination is a NO

x emission limit rather than a sp ecific technology requirement, in complying with BART, APS may consider implemen ting a combination of other technologies in lieu of SCR provided the alternative can meet the NO

x limit specified in the final FIP. In the absence of feasible control technologies that ar e capable of achieving 80 % or greater reduction

in NO

x emissions, EPA assessed the cost of controls assuming SCR would be used to comply with

the BART limit.

maximum of 50 MW to electric generation from the steam turbine to the City of Palmdale for the Palmdale Hybrid Power Project in California. See “Initial PSD Palmdale Pe rmit Application” or “Fact Sheet and Ambient Air Quality Impact Report for the Proposed PHPP PSD Permit (SE-09-01)”, Document No. EPA-R09-OAR-2011-0560-0002 or

Document No. EPA-R09-OAR-2011-0560-0004.Page 52 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## 4.0

3 B 

## Comments on Factor Two – E conomic, Energy, and Non-Air Quality Environmental Impacts

4.1

1 8 B 

### Comments on Economic Impacts

4.1.1

2 4 B 

### General Comments on Economic Impacts

Comment:

In virtually identical comments submitted prio r to the supplemental proposal, one public interest advocacy group (0094) and one enviro nmental group (0146) offered comments on both FCPP and NGS stating that EPA’s analysis of hist orical and expected cost s of electricity from FCPP neglect to include public health costs rela ted to air pollution and the negative impacts to tourism resulting from loss of visibility. The co mmenters concluded that the cost-effectiveness

metric used to determine BART at both plants must account for health costs related to poor air quality. The commenters requested that EPA c onsider economic costs on impacted communities

and Class I federal areas for not “cleaning up” both facilities.

Two private citizens who submitted written comments at a public hearing (0190) similarly indicated that environmental and hea lth costs related to FCPP should be considered along with energy costs. One private citizen (018 1) also claimed that pollution from FCPP has impacted the region’s economic health because of costs the Four Corners region has sustained.

Response:

EPA disagrees with the comment that the co st-effectiveness of BART must account for public health costs associated with poor air qualit y. Neither Section 169A of the Clean Air Act, nor the BART Guidelines, require that BART analys es include or quantify benefits to health or tourism. As discussed previously, although not required by the BART Guidelines, EPA did conduct an affordability analysis in our proposed BART determination to estimate whether the installation and operation of SCR on Units 1 – 5 at FCPP would render the cost to produce electricity at FCPP un-competiti ve compared to the cost to purchase electrici ty on the open market. Although a quantitative analysis of the health and tourism benefits is beyond the scope of what is required under BART EPA agrees with commenters that emission reductions achieved to improve visibility will also improve air quality. Improved air quality, in turn, affects public health and may enhance tourism in the area.

EPA notes that even if we had quantified the be nefits to health and tourism, such an analysis would not likely have altered th e outcome of our BART determination.

Comment:Page 53 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments The Navajo Nation (0223), one federal agen cy (0224), and two of the owners of FCPP (0168, 0176/0177) stated that EPA mu st consider the collateral economic effects on the Navajo Nation and the surrounding communities of its BA RT determination. One of these commenters (0176/0177) noted that the BART rules permit br oad economic effects to be considered in determining the appropriate control technol ogy and emissions limitations (citing 70 FR 39169

and the June 2007 Reasonable Progress Guidance , page 5-1

3 9 F 40 ). Another of the commenters (0223) stated that the BART Guidelines (cit ing 40 CFR Part 51, Appendix Y, sections IV.D.4.h.5 and IV.E.3) and EPA’s federal trust responsib ility (see related comme nts in Section 10.0) provide authority for considering the economic impacts to the Navajo Nation in the BART

determination for FCPP.

The Navajo Nation (0223) pr ovided background on the substan tial economic interest that the Navajo Nation has in the c ontinued operation of FC PP. The commenter noted that the Navajo

reservation has little economic development and that the Navajo people who live there are among the poorest in the United States, with 42 pe rcent of Navajo individuals living below the federal poverty line. The commenter indicated that FCPP is located on Navajo land pursuant to a lease agreement with the Navajo Nation, as is its coal supplier, the Navajo Mine; together these entities provide income to the Navajo Nation th at contributes substant ially to the Nation’s economic viability and its sustainabil ity as an independent sovereign:

 FCPP employs 586 people, 72 percent of whom are members of the Navajo Nation, with an annual payroll of $41 million.

 The Navajo Mine employs 357 employees, 87 percent of whom are Navajo tribal members, with salary and benefits that exceed $41 million.

 The Navajo Mine paid royalties and taxe s to the Navajo Nation of approximately $45.9 million in 2008.

 Together, those employed at FCPP and the Nava jo Mine make up about 3 percent of the total Navajo Nation employed workforce, whic h is very important on the Navajo Nation where unemployment has hovered just below 50 percent for years.

 In 2008, the combined income derived from FCPP and NGS and the mines that supply them totaled approximately $93.9 million, or about 55 percent of the Navajo Nation’s General Funds Budget.

The Navajo Nation (0223) adde d that this resource extraction- based economy is the result

of a conscious effort of the United States from the 1950s to develop the Nation’s coal resources, often for the benefit of other parties (such as the non-Navajo communities of Phoenix and Tucson in southern Arizona who directly benefit from power allocated from NGS to pump water for the Central Arizona Project). The commenter asserted that for the federal government, through any agency, to now threaten the live lihood of the Nation by destroying the resource economy it created clearly violates the federal trust responsibili ty to the Navajo Nation. The

commenter also stated that the Nation has al ready suffered the ripple effects of one EPA rulemaking that, through the imposition of financia lly untenable emissions controls, resulted in

40 See “Guidance for Setting Reasonable Progress Goals Under the Regional H aze Program”, June 1, 2007, in the docket for this rulemaking.Page 54 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments the closure of the Mohave Generating Station, an d as a consequence, the closure of the Black Mesa Mine. According to the commenter, if FCPP and the Navajo Mine were to close as the result of the imposition of cost-prohibitive emissi on controls, the resulting revenue and job losses would be cataclysmic for the Navajo Nation.

The Navajo Nation (0223) alleged that EPA ga ve virtually no consideration in its BART analysis to the potential impacts on the Nava jo Nation. According to the commenter, EPA casually dismissed a real like lihood of disastrous economic im pacts to the Navajo Nation by claiming that there is no “definitive information” that FCPP would close if SCR is made BART for FCPP and relying solely on its own economic anal ysis to conclude that FCPP “is expected to remain competitive.” The commenter asserted that as the Nation’s trustee, EPA failed to properly balance the gravity of the potential harm to th e Nation should FCPP come to a different business decision regarding the future competitivene ss of FCPP with the imposition of SCR. The commenter stated that where there is a great deal of uncertainty for FCPP because of other issues, e.g. ongoing lease renewal processes and n eeded changes in ownership structure of FCPP, EPA’s failure to weigh the impact of imposing S CR in that context is particularly troubling.

The Navajo Nation (0223) st ated that EPA should have an alyzed in detail the potential economic impacts to the Navajo Nation should EPA require the in stallation of costly control technologies that the commenter asserted exceed the requirements of the RHR. The commenter concluded that contrary to its trust responsibility, the RHR, and the BART Guidelines, EPA failed to factor into its BART analysis the tr ue potential economic impacts of imposing SCR on FCPP, and failed to appropriately defer to the Na vajo Nation's reasonable wish to phase in SCR in a more conservative and cost-effective approach.

The Navajo Nation (0223) also pointed out th at there are three coal-fired power plants located on or near the Navajo Nation (FCPP, NG S, and San Juan Generating Station (SJGS)) that are all subject to simultaneous BART rulemaking. The commenter indicated that all three power plants and the coal mines that supply them contribute to the Navajo Nation’s economy and regional economic dynamics, and that there are a dditional emissions sources (major and minor) contributing in varying percentage s to emissions in the region. Th e commenter asserted that all these sources should be considered in crafting the BART FIP for FCPP, where the tribal and regional economic impacts must be balanced with the degree of visibility improvement that would meet reasonable progress.

Another of the commenters (0176/0177) gave an overview of the Navajo Nation’s comments on the ANPR for FCPP, particularly the importance of FCPP and the associated coal mine to the economy of the Navajo Nation and the significant impact on the Navajo economy if FCPP were to close as the result of the imposition cost-prohibitive emission controls. The

commenter indicated that a BART determinati on requiring SCR at FCPP may make Units 1-3 uneconomical and force closure, and the same ma y be true for Units 4 and 5 depending on the disposition of Southern California Edison’s interest in those units.

The commenter (0176/0177) asserted that EPA must consider and respond to these potential impacts of its BART de termination; EPA cannot simply dismiss this issue because “it has received no definitive information that FCPP intends to shut down or curtail operations”Page 55 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments (citing 75 FR 64227). The commenter stated that th e economic role that FCPP plays in the region and with the Navajo Nation magnifies the importa nce of striking the right balance in a BART determination – especially given that the BART determination is about visibility and not about protecting public health.

The federal agency commenter (0224) noted that EPA’s current affordability analysis focuses primarily on increased costs to rate paye rs and the companies’ pr ofitability, and stated that the analysis needs to inco rporate the loss in revenue, jobs, and royalties resulting from the closure of Units 1-3 under the supplemental proposal. The commenter added that all key decision-making federal agencies must remain vigilant when making decisions that impact Navajo tribal trust resour ces and the economic well-bei ng of the Navajo Nation.

Two private citizens who submitted written comments at a public hearing (0190) also expressed concern that additiona l regulation of FCPP could have negative economic impacts on the Navajo community.

Response:

EPA agrees with commenters that the operation of FCPP and the Navajo Mine contribute significantly to the economy of the Navajo Nation and the Four Corners Region. However, we disagree with commenters that EPA casually dismissed the possibility of plant

closure. It is not EPA’s intenti on to cause FCPP to shut down (nor is it within our regulatory authority under the RHR to require shutdown or to redesign of the source for BART). As expressed in comments from the Navajo Nation to our Advanced Notice of Proposed Rulemaking

4 0 F 41 , EPA understands that the Navajo Nation’ s primary concern regarding the BART

determination is th e potential for FCPP closure. For this reason, EPA conducted an affordability analysis not typica lly included in a BART five-factor analysis in order to assess whether requiring SCR on all five units at FCPP w ould result in full closur e of the power plant.

The assessment compared the cost of power from FCPP if SCR were required on all five units, to the estimated cost of replacement power, assuming the owners of FCPP were to decide to close the entire plant rath er than make the SCR investment. The model was designed to answer the question as to which future alternat ive results in lower power costs: a) power produced at FCPP after installation of SCR, or b) replacing the power from FCPP with the appropriate amount of wholesale po wer purchases. If the model re sults suggested that it would be less costly for the owners to purchase repl acement power on the open market than generate power itself after installing and ope rating SCR on all five units, then EPA would have taken that result, along with subsequent impacts to the Na vajo Nation, into consid eration in our proposed rulemaking. However, as discussed in the TSD for our proposed BART determination, the model results suggested that ev en if the owners of FCPP installed a nd operated SCR on all five units, it could still produce power at a lo wer cost than the cost to purc hase replacement wholesale power on the open market.

4 1 F 42 Thus, EPA concluded in our proposed BART determination that requiring

41 Comment letter from President Joe Shirley, Jr. dated March 1, 2010 in the docket for the ANPR: EPA-R09-OAR2009-0583-0209.

42 “FCPP Proposal – Technical Support Document 10-6-10”, Document No. EPA-R09-OAR-2010-0683-0002, “TSD Appendix B: Economic Analysis (EPA) of Proposed BART Determination on FCPP Final Report”,Page 56 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments SCR as BART on all five units w ould not likely result in plant closure. EPA recognizes that market conditions for power on the wholesale ma rket are highly variable and will likely differ now, or at any time in the future, compared to conditions that existed at the time of our proposed BART determination. However, no information was provided by the commenter to change our conclusion in the analysis we conducted for the proposed rulemaking that suggests installation of SCR on all five units would not like ly result in plant closure.

EPA recognizes the importance of the power plan ts and the mines that fuel them as they relate to the economic well-being of the Navajo Nation. EPA understands the importance of quantifying potential impacts to th e Nation of closures of one or more units at FCPP. At the request of the Navajo Nation, as part of EPA’s customary practice of e ngaging in extensive and meaningful consultation with tribes and tribal authorities with regard to relevant Agency actions, EPA commissioned an analysis to estima te potential adverse im pacts on the Navajo Nation of the optional BART Altern ative. The analysis will be pr ovided to President Shelly by letter as a follow-up to our cons ultation with the Navajo Nation.

With respect to the suggestion that an EPA ru lemaking resulted in closure of the Mohave Generating Station several years ago, EPA would like to clarify t hat Mohave’s closure was not the result of an EPA rulemaking. Rather, the owne rs of Mohave Generating Station entered into

a Consent Decree with several en vironmental groups, including the Grand Canyon Trust, Sierra Club, and the National Parks Conservation Asso ciation. That Consent Decree required Mohave’s owners to install pollution controls to reduce emissions of SO 2 and PM from the facility. The Consent Decr ee required installation of the po llution controls by the end of 2005. The decision by the owners of Mohave appea rs to have been shaped by numerous complex factors. EPA was not involved in the decision- making process or the regulatory proceedings surrounding it. The Mohave Generating Station us ed coal that was mixed with water and conveyed as slurry in a pipeline. The water to make the slurry was drawn from the N aquifer from the Hopi Reservation. EPA understands that a contract to use the wa ter from the N aquifer expired in 2005 and was not renewed. The lack of a reliable source of water for the coal slurry likely contributed to the decision by the owners of the Mohave Generating Station to discontinue operations at the end of 2005. Furthermore, it is EPA’s understanding th at in 2006, Salt River Project (SRP), a co-owner of Mohave, sought to form a new ownership group to restart Mohave, including to install the new ai r pollution controls required by the Consent Decree as well as develop a new water supply system for the coal mine, however, SRP ended its efforts to restart Mohave because it could not negotiate its inte nded purchase of Southern California Edison’s share of Mohave in time to restart by 2011.

4 2 F 43 Therefore, although EPA understands that the Navajo Nation and Hopi Tribe experienced ad verse impacts from th e closure of Mohave Generating Station in 2005, the closure and th e failed efforts to re start Mohave are not attributable to, or the result of, EPA rulemakings.

Document No. EPA-R09-OAR-2010-0683-0005, “TSD ref [49] Economic Analysis of Proposed EPA Bart Determination on FCPP_09-18-10 RATES.xlsx”, Document No. EPA EPA-R09-OAR-2010-0683-0005-0040.

43 See February 6, 2007 Media Advisory from SRP: “SRP Ceases Effort to Restart Mohave Generating Station; Concludes that Timeline Delays would Render the Facility Economically Unfeasible”, and article in Power Engineering Magazine: http://www.power-eng.com/article s/print/volume-111/issue-3/departments/startup/srpdecision-seen-as-ending-mohave-re-start.htmlPage 57 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Comment:

The Navajo Nation (0223) asse rted that EPA failed to consult with the Nation prior to publishing the supplemental proposal and failed in its trust responsibility to consider the potential adverse impacts of the option to close Units 1 – 3. While conceding that the supplemental proposal is less likely to result in closure of the entire FC PP, the commenter noted that Units 1 – 3 represent 27 percent of the cap acity of the plant and closing these units will affect the Navajo Nation’s tax revenues and jobs , and will affect production at the Navajo Mine as well. According to the commenter, in public hearings held in Farmington, NM, FCPP has reported that as a result of closing Units 1 – 3, it expects 190 to 200 jobs to be lost in the next 3 to 4 years due to attrition at FCPP, an expected $5 million reduction in the possessory interest tax paid annually to the Nation, and a 30 percent re duced demand for coal at Navajo Mine. The

commenter also stated that at th e Navajo Mine, 150 to 200 jobs ar e expected to be lost over the next 3 years as a result of th e reduced demand from closure of Units 1 – 3 at FCPP, with a resulting $10 million reducti on in annual coal royaltie s to the Navajo Nation.

The commenter (0223) stated th at as the Navajo Nation’s tr ustee, and in determining a “better than BART” alternative, EPA nonethele ss retains its obligation to analyze potential adverse impacts to the Navajo Nation. The comm enter argued that EPA is violating its trust responsibility in not adequate ly assessing these impacts for a plant operating on Navajo Nation land and burning Navajo coal, especially where EPA must assume the Nation’s duties to its tribal members in making this determination in lieu of the Nation.

Response:

A timeline of correspondence and consultation with the Navajo Nation and other tribes for EPA actions on FCPP and Navajo Generating Sta tion is included in the docket for the final rulemaking.

4 3 F 44 EPA notes that the Regional Administrator of EPA Region 9 called President Joe Shirley on February 9, 2011 to inform him of EPA’s Supplemental Proposal. However, government-to-government consultation with th e Navajo Nation on FCPP did not occur until May 19, 2011, with additional consultation occu rring on June 13, 2012, prior to issuing our final rulemaking. The Navajo Nation raised con cerns about the potential ad verse impacts of the BART Alternative and requested that EPA conduc t an analysis to estimate these impacts.

Although the RHR does not require a cost analysis of a BART alternative, at the request of the Navajo Nation and as part of EPA’s cu stomary practice of engaging in extensive and meaningful consultation with tribes and tribal authorities with regard to relevant Agency actions, EPA commissioned an additional analysis to estimate potential ad verse impacts on the Navajo Nation of the BART Alternative with resp ect to coal and power plant-related revenues. The report will be will be provided to Presid ent Shelly by letter as a follow-up to our consultation with the Navajo Nation.

44 See document titled: “Timeline of all tribal consultations on BART.docx” in the docket for this final rulemaking.Page 58 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Comment:

One environmental advocacy group (0182) co mmented that in rigorously addressing visibility-related pollutants, the Navajo Na tion, New Mexico, the intermountain west, and the Colorado plateau stand to reap significant benefi ts and avoid serious consequences because such emissions have far-reaching impacts on local econo mies. The commenter noted that tourism is critical to the economy of th e Navajo Nation, New Mexico, a nd the Four Corners region, and that many national parks and landmarks are imp acted by FCPP. The commenter pointed out that visibility in such areas has been degraded, and that poor visibility aff ects park visitation and length of stays.

One public interest advocacy group (0143) similarly noted that national parks and monuments, wilderness areas, forests, and loca l culture bring tremendous economic benefit to the Four Corners region, and that residents rely on tourism and the region’s natural resources for long-term economic growth and sustainabili ty. The commenter added that oil and gas development, over-grazing, and prolonged drought combined with coal-fired power plant pollution have resulted in a continuing degradat ion of air quality and its impact on the soil and vegetation. This commenter s upported reducing pollution for FCPP through implementing the supplemental proposal.

The environmental advocacy group (0182) also stated that installation of pollution controls creates short-term construction empl oyment and permanent operations and management positions. Thus, the commenter asserted that in stallation of additional and upgraded pollution controls will result in jobs and revenu e for the Navajo Nation and its citizens.

Response:

EPA agrees that tourism is important to the economy of the Four Corners region, however, the economic benefits of tourism and the benefits of short-term construction employment associated with inst allation of air pollution controls are outside th e scope of the BART analysis. The BART Guidelines require cons ideration of the costs of compliance, and do not similarly require an analysis of the economic benefits resulting from BART controls. The model used by EPA was developed to address the fu ture comparative cost of power from FCPP with SCR against the wholesale pow er market to determine if FC PP would remain competitive if SCR were required as BART.

Comment:

One owner of FCPP (0168) stated that EPA’ s proposal to require SCR at FCPP presents significant challenges and risks and, with regard to their re source planning, handicaps their ability to cost-effectively respond to changi ng conditions. The commenter pointed out that implementation of the BART proposal would re quire the commenter to make a significant capital investment in FCPP, which could only be recovered through long-term operation of the plant. According to the commenter, this woul d have the effect of locking FCPP into the commenter’s generation portfolio for a considerable period or risk stranding those investments.Page 59 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments The commenter indicated that this loss of flexib ility would hamper the commenter’s ability to respond to future scenarios and likely preclud e it from reacting to the following possible developments:

 Changes in the economic viability of coal resources due to the increasing costs of environmental regulations, including carbon limits.

 Changes in the acceptance of coal re sources by state utility commissions.

 Low, sustained natural gas prices, which w ould favor natural gas resources over coal.

 Reduced demand for coal resources due to in creases in renewable generation capacity

and/or reductions in customer load due to energy efficiency and demand response

programs.

 Advances in emissi on control technology.

The commenter (0168) asserted th at this loss in flexibility an d the risk it represents is completely unnecessary given that the Regiona l Haze program is intended to make gradual reductions in emissions over a decades-long peri od of time. The commenter stated that EPA should therefore recognize combustion controls as BART for FCPP and evaluate further reductions, such as installation of SCR, if it is shown to be justified in subsequent planning periods. (See more on this comment in Section 10.0.)

Response:

EPA appreciates the perspectives shared in th is comment, but we dis agree that our fivefactor BART analysis should consider the potential loss of an owner’s flex ibility to respond to possible future economic or regul atory scenarios. EPA cannot give substantial consideration in our BART analysis to external fa ctors that are of uncertain magn itude and that may or may not occur. EPA further notes that the RHR allows fo r the development of BART alternatives that achieve greater reasonable progress than BART and EPA appreciates the fact that the owners of FCPP put forth an alternative that gives them mo re flexibility and result s in greater emission

reductions at FCPP.

EPA acknowledges that other potential envir onmental regulations or public policies may emerge which could also have an impact on the competitiveness of FCPP and that, should these new regulations or policies emerge, will require the plant owners to assess the economic impact to plant’s competitiveness. However , the impacts studied in this anal ysis were limited in scope to determining likely effects from the proposed BART de termination exclusively.



### 4.1.2

2 5 B 

### Comments on EPA’s Ec onomic Analysis

Comment:

One public interest advocacy group (0112) conc urred with the EPA’s analysis that the potential increase to APS rate payers as a result of SCR is expected to be less than 5 percent, as

described in the TSD. The commenter also stat ed support for EPA’s analyses related to thePage 60 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments increase in electricity genera tion costs of SCR compared to estimated costs to purchase electricity in the wholesale market. The commen ter asserted that EPA estimates are reasonable and that the average increase in the cost of generation at FCPP as a result of SCR implementation would be 22 percent, or $0.0074/kWh, as stated in the TSD.

One of the owners of FCPP (0176/0177) stated that installation of BART controls would increase its average residential customer m onthly bills by $5.10 (3.8 percent) and larger industrial customer monthly bills by $17,400 (6.4 pe rcent). (We believe that the commenter was referring to SCR, although the commenter asserted that BART should be combustion controls.)

The commenter also indicated that installi ng SCR and baghouses on Units 1–3 would increase the cost of electricity production on a $/MW h basis by more than 50 percent which, in conjunction with other market a nd regulatory uncertainties, may make the units uneconomic. The

commenter further stated that retrofitting SCR on Units 4 a nd 5 would raise the cost of generation at those units by more than 25 percent, a nd there is a reasonable possibility that such a

cost increase would threaten the economic viability of those units.

Another one of the owners of FCPP Units 4 and 5 (0168) , who also has ownership interest in NGS and SJGS, stated that if SCR we re determined to be BART for all these power plants, the commenter would be facing approxima tely $322 million in capital expenses over the next 5 years. The commenter i ndicated that such e xpenditures would increase the commenter’s rates by 4 to 6 percent, which would be significant in its ma rket area of Tucson because its economy is fragile and has endured an 8 percent rate increase (not adjusted for inflation) since

1992. The commenter stated that the Tucson ar ea is struggling th rough difficult economic circumstances, and significantly higher elect ricity rates will place an enormous economic hardship on its customers and make any r ecovery more difficult for the community.

Response:

EPA agrees with the first commenter (0112 ) that based upon our analysis the potential increase to APS rate payers as a result of SCR is expected to be less than 5 percent.

EPA cannot compare the estimated residential and industrial rate in crease claimed by the second and third commenters with our analysis because the commenters did not provide information for us to eval uate their conclusions.

However, EPA notes that the installation of baghouses on Units 1-3 is no longer relevant

because EPA has determined that it is not neces sary or appropriate at this time to set new PM limits for Units 1 – 3. This is b ecause EPA is finalizing this BART determination to allow APS to comply with either BART or the BART alternative, which involves the optional closure of Units 1 – 3, and as a backstop, if APS does not close Units 1 – 3, the MATS rule, which sets a filterable PM emission limit of 0.03 lb/MMBtu, is now final and would apply to those units.

While the commenter’s suggested increase in the cost of power from Units 4 and 5 as a result of SCR (25% increase) is reasonably consis tent with the results of the EPA analysis (22%) with respect to the power cost impact of SCR on all five FCPP units , it must be noted that the original EPA analysis did not evaluate SCR on Un its 4 and 5 exclusively. Without evaluating thePage 61 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments modeling conducted by the commenter, it is not possible to compare the commenter’s modeling results with the model from the EPA’s proposed BART determination.

In order to provide a more complete res ponse to the commenter’s point regarding costs specific to Units 4 and 5, however, EPA re-ran th e same model used in our proposed BART determination to assess the impac t of SCR for only Units 4 and 5.

4 F 45 The model assumes that Units 1-3 are closed, and as such, it produces no power and does not impact total plant economics. This iteration of the model reported a 25-year net present value incremental cost of 14% for only Units 4 and 5. The difference in th e EPA model between the 22% cost increase for all five units versus the 14% cost increase for only Units 4 and 5 is due to the fact that while the estimated capital costs and incremental ope rating costs for Units 1-3 ac count for 36 percent and 39 percent of the total modeled incremental cap ital and operating cost respectively for the entire plant, those three units account for only 27 percent of installed plant capacity. Thus, the “per

unit” cost associated with Units 1-3 is significantly higher than Units 4 and 5.

Comment:

One of the owners of FCPP (0174) noted that based on the analysis performed in support of EPA’s BART proposal for FCPP, EPA concluded th at even if SCR is determined to be BART, the cost of generating power at FCPP would be less than the cost of purchasing power on the wholesale market, and that therefore a requirement to install SCR would not lead to closure of the plant. The commenter expressed the following concerns with the analysis:

 The analysis focuses on APS and Southern California Edison, and not on the other

owners of FCPP. The use of “return on rate” based methodology would not apply to organizations of the commenter’s type (public power) because it is not an investor-owned utility.

 Each of the FCPP owners has unique costs re lated to the plant and their own generation, transmission, and distribution costs. Therefore there are a multitude of company-specific factors that would impact a gi ven owner’s decision to invest additional capital in the plant for emission controls, none of which were sp ecifically factored into the EPA analysis.

 The EPA analysis did not attempt to determin e the impact of different assumptions, such as an uncertainty with the future price of coal, on the conclu sions of the economic analysis. The “small difference” that EPA estimates between FCPP with SCR installed and cost of purchasing power to replace FCPP generation suggests that a small change in an underlying assumption (return on rate, coal price, carbon pricing, etc.) could result in

economic results that show SCR to be a higher cost option th an purchasing power.

 The EPA’s analysis did not examine different “payback periods,” but instead relied on a payback period of 25 years, which may be in appropriate because th e useful life of the plant is far from certain. The remaining usef ul life of FCPP is dependent on many other factors – both political and regulatory in nature (citing comments by Commenter 0176/0177; see Section 6). Shorter payback pe riods should have been analyzed to determine the effect of this assumption on the conclusions of the analysis because a

45 See “Analysis of UNITS 4 & 5 SCR ONLY.xlsx” in the docket for this final rulemaking.Page 62 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments reduced payback period could result in FCPP power (with SCR costs included) exceeding

wholesale market costs.

 The EPA should recognize that there is a real risk that one or more owners may decide not to invest in SCRs, which would for ce the shutdown of FCPP unless another owner could be found in a timely manner. The shutdown of FCPP would have significant adverse economic consequences on the Navajo Nation.

 If EPA were to consider these economic cha llenges and uncertainties in conjunction with the other BART statutory factors, EPA woul d conclude that combustion control should

be determined to be BART for FCPP becau se it provides a cost-effective means to achieve visibility improvement in the firs t planning period. EPA can evaluate whether

additional NO

x reductions are warranted in subs equent planning periods, which is consistent with the RHR and would provide the FCPP owners with time to address the uncertainties facing the plant before maki ng significant capital investment for SCR.

Response:

EPA provided an analysis for our BART determination to assess whether the cost to produce electricity at FCPP would remain competi tive compared to the market costs to purchase power if SCR were required on Units 1 – 5 at FCPP.

The commenter is correct that EPA calculated rate impacts for only two of the four

investor-owned utilities that own FCPP and excluded others, including an owner that operates as a publicly-owned utility. The anal ysis estimating the increase in electricity generation costs is applicable to all owners of FCPP, and the rate impact analysis provided in the model was not intended to capture the rate im pacts of all owners. APS and Southern California Edison (SCE) were selected because their combined ownership shares account for nearly 75% of the plant’s output. In addition to our expectation that the utilities with the largest ownership share in FCPP would generally experience greater ratepayer im pacts from capital expenditure projects like SCR installation, we also assume d that ratepayers of investor-o wned utilities would likely experience larger economic impacts than public power customers due to the fundamental difference between their respective approaches to setting rates. Specifically, rates for public power utilities, in contrast to investor-owned util ities, do not include recovery for a margin above cost allowed as part of a regulated rate of return. Thus, all othe r variables being equal, one would expect the same capita l investment to result in a larger rate impact for customers of investor-owned utilities than for customers of public power entit ies.Therefore, EPA continues to believe that our analysis of ratepayer impacts for only APS and SCR are appropriately

conservative to demonstrate wo rst-case impacts to ratepayers.

EPA agrees with the commenter that there are many company-specific factors and a wide range of economic assumptions th at would impact a given owner’s decision to invest in SCR. Although many of those factors were outside the focus of the mode ling because they were either

unrelated to BART or were relate d to regulatory uncerta inties in the future, Energy Strategies included a qualitative discussion in Appendix B to the TSD regarding decision variables that EPA assumed each owner must consider before making capital expenditures. Additionally, EPAPage 63 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments notes that the use of low, medium and high futu re projected prices fo r the Palo Verde Index represents a sensitivity analys is for the market comparison.

With respect to the “payback period” referenc ed by the commenter, the analysis for the proposed BART determination did not identify “payback periods.” Rather, the commenter appears to be referring to the 25-year period uti lized for the discounted cash flow calculations

within the model. EPA does not di sagree with the commenter’s stat ed concern that shorter plant life, and thus shorter discounting periods, would yield different economic results. However, EPA disagrees with commenters that a shorter useful life should be considered in the analysis unless there is an enforceable obligation on APS to cease operations on a given date.

Comment:

One private citizen commenter (0180) pr ovided comments on EPA’s economic analysis,

which are summarized below:

 The report of the economic analysis appears to be inconsistent in that in numerous places (e.g., page 5) it shows the business as usual (BAU) and LNB cases to be less expensive than all other cases, while on page 20 it stat es that the 25-year non-discounted costs for

the SCR case were lower than both the BAU and LNB/OFA cases.

 The market cases do not incorporate the im pact of removing FCPP generation from the marketplace. Specifically, the shutdown of FCPP would, first, re sult in a lack of generation capacity in the market and affect the market price and, second, as the lack of base loaded generation was ma de up by natural gas fired comb ined cycle plants that are currently run to meet peak load, the increa sed need for natural gas may strain pipeline capacity and cause the price of natural gas to rise.

 The report of the analysis states that , “although new capital expense has not been considered in the BAU case, if it were and es pecially if the additi on were to occur early

in the time horizon envisioned in the economic model, the cost of the BAU case could increase materially with respect to other cases.” This statement is invalid, as new capital deployment would be required in any case regardless of whether SCR or LNB are

installed.

 The report says on page 8, “It is reasonable to assume that the parties that rely on the continued operations of the mines and plants could be reasonably expected to make an economic decision and negotiate new leas es that allow the plant to operate economically.” The commenter states that EPA seems to be unaware of the Mohave Generating Station, which serves as a counter-example to th e statement in the report.

Response:

In the first bullet above, the commenter co rrectly identifies a discrepancy with the summary of the analysis. The impact report, included as Appendix B to the TSD

4 5 F 46

for the

46 See Document titled “TSD Appendix B: Economic Analysis (EPA) of Proposed BART Determination on FCPP_Final Report. EPA-R09-OAR-2010-0683-0005.Page 64 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments proposed rulemaking, on page 20 incorrectly states th at the incremental cost in the SCR case is lower than the LNB case, as well as all mark et cases. On page 20, under “Discussion of Modeling Results,” the final bullet should re ad, “As modeled, the SCR Case over 25-years returns a lower incremental, non-discounted cost per megawatt-hour than all market cases”. This incorrect statement in the summary of the impact report regarding incremental cost comparison between SCR and LNB was a summary st atement written by Energy Strategies but was not directly relied upon by EPA in our TSD.

The commenter correctly point s out that the analysis discu ssed in the report does not include the potential impacts, and associated Market Case costs, that could result in reaction to a shutdown of all units FCPP. The commenter suggests that a more complete approach to modeling the cost of the Market Case would in clude such variables as the cost of new base loaded gas-fired generation (in the marketplace or perhaps owned by the current FCPP owners) and the potential for such new gas generation to influence commodity natural gas pricing in the region. The result of including these additional costs in the Market Cases would be to increase the estimated cost to purchase power on the whol esale market. Thus, the Market Cases presented in the analysis that accompanied EPA’s TSD we re conservatively low, and inclusion of the market-related impacts, as suggested by the comm enter, would result in higher market values, thereby providing a larger “competitive cush ion” for the installation of SCR at FCPP.

As noted by the commenter in the third bullet above, the report incorrectly states, “although new capital expense has not been c onsidered in the BAU case, if it were and especially if the addition were to occur early in the tim e horizon envisioned in the model, the cost of the BAU case could increase materially with respect to other cases.” The statement should read, “...the cost of the BAU case could increase materially with respect to the Market Cases.” As the BAU case may or may not increase in cost due to future business as usual-related capital investment, the commenter is correct in suggest ing that all retrofit cases (LNB and SCR) would have the same relative impact due to BAU investm ents. The potential for BAU investments to alter the comparative economics in the model are thus in relation to the Market Cases. However, commenters have not provided information to suggest that new capital expenses should be modeled in the BAU case, therefore, the commenter ’s correction is well ta ken, but does not affect the validity of the modeling conducted for the TSD.

Contrary to the commenter’s statement in th e fourth bullet above, EPA is aware of the regulatory and investment deci sion history surrounding the clos ure of the Mohave Generating Station. (For a detailed di scussion related to the shutdow n of Mohave Generating Station, please see our response above in Section 4.1.1).

Comment:

Three private citizens (0119, 0128, 0201) disagreed with industry that costs are too high.

One of the commenters stated that the reform measures are both reasonable and economically feasible. Another private citizen (0140) stated that APS should be respons ible for the clean-up.

Response:Page 65 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments We agree with the commenters that SCR is a reasonable, cost effect ive control technology for reducing emissions of NO

x from FCPP.

Comment:

One private citizen (0163/0164/0216) commente d that the Navajo Nation previously stated that both the power plant and the Nava jo Mine would close if SCR is required. The commenter took issue, noting that EPA indicated that FCPP electricity co st will still be market competitive with SCR. The commenter stated th at the economic analysis (and other analyses) incorrectly used sub-bituminous coal heating values, rather than b ituminous coal values, resulting in a “flawed and incorrect way to improve the health and visibility to the Four Corners

area and Class I areas.” The commenter also conte nded that the EPA’s analysis stated that FCPP uses bituminous coal, although the APS BART analysis was based on sub-bituminous coal.

Response:

EPA disagrees with this comment. With resp ect to the modeling of incremental costs associated with those cases where FCPP opera tions continue (i.e. BAU, LNB/OFA, and SCR), the type of coal burned and associated heat content were not germane to the analysis. The underlying costs of operation, including fuel quan tity and heat content, as they flow through the summary economic statistics, are taken as-is from APS filings to the Federal Energy Regulatory Commission and were not modified with resp ect to the type of coal consumed.

This comment regarding coal classifica tion is addressed fu rther in Section 10.



### 4.2

1 9 B 

### Comments on Energy and Non-Air Quality Environmental Impacts

Comment:

One private citizen (0180) stated that no consideration was give n to the effect of removing FCPP generation from the grid. According to the commenter, the events of February 2, 2011 show there are times when gas-fired gene ration cannot replace coal-fired generation because there is not enough gas transportation capacity.

Response:

EPA disagrees with the commenter that we s hould consider the eff ect of removing FCPP generation from the grid. As stated elsewhere in this document, it is not EPA’s intention, nor is it within our regulatory authority, to require closur e or require a redefiniti on of the source, in order to comply with the BART requirement of the RHR. EPA notes that in our proposed BART determination EPA included an analysis to dete rmine whether the installation and operation of SCR would increase the cost of power from FCPP such that it would no longer be competitive to the forecasted price of power in the western w holesale market. Thus, based on this analysis, EPAPage 66 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments determined that the installation and operation of SCR on Units 1 – 5 at FCPP should not force FCPP to close, thus the comment that EPA cons ider the effect of removing FCPP generation from the grid is not relevant. Furthermore, th e owners of FCPP did not provide evidence that the installation of SCR would cause FCPP to close.

EPA also notes that APS proposed to purchas e the shares of Units 4 and 5 currently owned by Southern California Edison in order close Units 1 – 3 (of which APS is sole owner)

and install SCR on Units 4 and 5 as an alternati ve to BART. APS is currently seeking approval from the Arizona Corporation Commission, the California Public Utilities Commission, and the Federal Energy Regulatory Commission to implement its proposal

4 6 F 47 . Decisions on investing in pollution controls or shutting down units are ma de by the owners in conjunction with their oversight boards or public utility commissions.

Comment:

Thirty-seven private citi zens (0085, 0086, 0088, 0089, 0091, 0122, 0124, 0125, 0127, 0128, 0135, 0136, 0137, 0140, 0147, 0148, 0149, 0151, 0153, 0154, 0155, 0156, 0158, 0159, 0160, 0161, 0162, 0166, 0170, 0171, 0181, 0188, 0197, 0199, 0208, 0211, 0213) and two private citizens who submitted written comments at a pub lic hearing (0190) stated that FCPP causes significant threats to public hea lth due to its effects on air qual ity. Another private citizen (0186) implied the same concern, and is unwilling to tr ade a healthy environment for jobs or economic growth. In contrast, one private citizen who submitted a written comment at a public hearing (0190) questioned whether the haze contribu tes to health issues in the region.

A number of environmental and public interest advocacy groups (0143, 0182, 0183, 0190, 0194) provided comments on health and ecos ystem impacts of the pollutants emitted by

FCPP. These comments are summarized below.

One group of environmental advocacy groups (0182) stated that visibility-causing pollutants have far-reaching impacts on local ec onomies, human health, and the well-being of waterways, soils, plants, and wildlife – in othe r words, an entire population and ecosystems. The commenter asserted that decreasing these pollutants will benefit all of these important areas of concern; failing to do so will cause or conti nue adverse impacts. The commenter’s thoughts on the economic impacts of these pollutant s are summarized in Section 4.1.1 above.

Regarding health impacts, the commenter (0182) noted that the same pollutants that contribute to visibility impairment also harm pub lic health – the fine particulates that cause regional haze can cause decrea sed lung function, aggravate asth ma, and premature death in people with heart or lung diseas e. The commenter added that NO

x and volatile organic compounds (VOCs) can also be precursors to gr ound-level ozone, or smog, which is associated with respiratory diseases, asthma attacks, and decreased lung function. According to the commenter, ozone concentrations in parks in the Four Corners regi on approach the current health standards, and likely violate anti cipated lower standards. The comme nter stated that ozone levels

47 On March 22, 2012, the California Public Utilities Commission approved the sale of SCE’s share of FCPP to APS. On April 18, 2012, the Arizona Corporation Commission approved APS’s purchase of SCE’s share of FCPP.Page 67 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments in many parts of New Mexico, Colorado, and Utah are already in the range of ozone levels

deemed to be harmful to human health.

The commenter (0182) asserted that accordi ng to EPA figures, the total annual cost of implementing the RHR will range from $1.4 – 1.5 billion, but in 2015 enforcement of the RHR will provide health benefits valued at $8.4 – $9.8 billion annu ally – preventing 1,600 premature deaths, 2,200 non-fatal heart attacks, 960 hospita l admissions, and over 1 million lost school and work days every year. The commenter noted that although the RHR wa s designed to provide redress for visibility impairment , the BART Guidelines expressl y provide for the consideration of non-air quality environmental impacts, whic h includes the environmental impact on human

health.

The same commenter (0182) also contended th at consideration of non-air quality impacts extends to impacts on wildlife and habitat as well as natural and cultural heritage. According to the commenter, the same haze-causing emissions also harm terrestrial and aquatic plants and animals, soil health, and water bodies by contribut ing to acid rain, ozone formation, and nitrogen deposition. The commenter cited EPA sources that allegedly indicate that nitrogen deposition in the Rocky Mountain National Park is at twice the critic al load that the ec osystem can tolerate; that acid rain acidifies water bodies, contributes to tree damage at high altitudes, and accelerates decay of irreplaceable buildings, statues, and scul ptures that are part of our nation’s cultural heritage; and that ground- level ozone interferes w ith the ability of sensitive plants to produce and store food, damages the leaves of trees and othe r plants, and reduces forest growth and crop yields.

With these health and environmental consider ations in mind, in addi tion to visibility and

economic considerations discussed in other sect ions of this document, the commenter (0182) urged the EPA to finalize more stringent BART determinations for FCPP. The commenter’s suggestions for BART also are discussed in other sections of this document.

An environmental advocacy group (0183) made similar comments regarding health and ecosystem impacts. The commenter noted that FCPP is a very large emitter of NO

x , which contributes to ozone formation. According to th e commenter, the area around FCPP is subject to atmospheric thermal inversions in the winter months, and some counties have experiencing

ozone concentrations in excess of the EPA’s proposed range for the 8-hour ozone NAAQS. The

commenter cited the incidence of asthma and ot her respiratory diseases and noted that such sensitive populations are partic ularly susceptible to the eff ects of ozone. In addition, the commenter pointed out that ozone causes injury and damage to plants. The commenter added

that NO

x emissions contribute to nitrate deposition wh ich can disrupt natural systems. Based on these points, the commenter argued that EPA must consider reducing the NO

x limit in both the proposed BART determination and the supplemental proposal.

This commenter (0183) stated that FCPP’s PM emission rate is one of the top 10 point

sources of PM in the American West. The co mmenter contended that EPA has stated that

airborne PM is linked to serious health effects, even at concentrations currently allowed by the NAAQS.

4 7 F 48 The commenter also stated that black ca rbon (a type of PM) is the most powerful

48 citing http://www.epa.gov/nheerl/research/pm/Page 68 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments climate forcing agent known, and that it has recen tly been determined to be the second or third largest climate forcing agent. The commenter noted approvingly that the supplemental proposal would provide additional PM reductions through the retirement of Units 1 – 3.

The commenter (0183) noted that FCPP is a significant source of mercury emissions and provided information on the health and ecosyst em effects of mercury, as well as on the deposition of mercury and the levels of mercury found in the Four Corner s area. In addition, the commenter stated that FCPP emits more than 16 million tons per year (tpy) of CO 2 , and that such emissions contribute significantly to climate ch ange which is likely to result in increasing temperatures and increase drought in the Southwes t. The commenter noted with approval that the supplemental proposal would reduce emissions of both mercury and CO 2

.

One public interest advocacy group (0143) also discussed the health impacts associated

with emissions from FCPP. The commenter indi cated that the emission reductions associated with the supplemental proposal would work towa rd improving health and environmental justice for people in the Four Corners area, includi ng a large Native American population. The

commenter stated that health care costs result ing from coal-fired power plant pollution are significant for the local economy, quoting figures from a study by Abt Associates estimating the health impacts and associated costs in the area. The commenter also indicated that prevailing winds carry pollutants from FCPP to La Plata County, CO, and that early findings from a new mercury-monitoring project indicate that a significant amount of mercury arrives under dry

condition via wind at two monitors in southwes t Colorado. Although the s ources of the mercury have not been verified, the commenter noted th at coal-fired power plants are known to be a major contributor of mercury to the atmosphere and that FCPP is reported to release more than 1,400 pounds of mercury per year. The commenter st ated that known pollutants from coal-fired power plants contribute negativel y to health, vegetation, and soil impacts. The commenter also pointed out that NO

x emissions (of which FCPP is a large source) along with the Four Corners’ abundant sunshine create ground-level ozone and that if EPA lowers the ozone NAAQS, La Plata County could be in nonattainment. While praising EPA’s supplemental proposal as a good first step, the commenter urged EPA to expand the region’s reliance on lower carbon and water efficient energy sources, adding th at federal programs are available to assist tribes to evaluate and install renewable sources of energy.

Another environmental advocacy group (0194) also quoted figures from the Abt Associates study on the health impacts of emi ssions from power plants in the region. The commenter supported the proposed measures to reduce NO

x emissions, but noted that the proposal did not address GHGs. Th e commenter encouraged EPA to take timely action to help transition energy production away from fossil fuel s to clean energy sources, adding that New Mexico has abundant solar, wind, and geothermal energy resources.

One environmental advocacy group that spoke at a public hearing also submitted written material (0190) asking EPA and APS to consider what they would do if FCPP was located in their communities. The commenter supported a transi tion to renewable energy that will keep jobs in the area and clean up the air in the Four Corners region. The commenter made the following points:Page 69 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments  A formal Health Impact Assessment should be conducted by independent experts before EPA’s final decision to answer such questi ons as whether shutting down Units 1 – 3 is sufficient to protect local health, and what health impacts would result from delaying pollution controls on Units 4 and 5 until 2018.

 The acceptable limit of pollution from FCPP is no more than would be allowed in the wealthiest, most privileged communities in the United States; that is, the decision should be made considering health equity.

 The spiritual aspect of the ai r, the earth, and water of Moth er Earth must be taken into consideration because to the Navajo peopl e, clean air, water, and land are not commodities to be bargained with, but are sacred elements of life to be protected at all

costs.

Response:

EPA agrees that there are potential benefits to human health and the environment from reducing the emissions of NO

x . Quantifying health benefits is not within the scope of the BART five factor analysis required under the Clean Air Act (§169A(g)), whic h specifies that in determining BART, the State (or Administrator) “shall take into consid eration the costs of compliance, the energy and nonai r quality environmental impact s of compliance, any existing pollution control technology in us e at the source, the remaining us eful life of the source, and the degree of improvement in visibility which may re asonably be anticipated to result from the use of such technology”. The BART Guidelines prov ides additional information on how to analyze “non-air quality environmenta l impacts, and focuses on adver se environmental impacts

associated with control tec hnologies, i.e., generation of solid or hazardous wastes and discharges of polluted water, that have the potential to affect th e selection or elimination of a control alternative (see 70 FR at 39169). Thus , although the BART Guidelines do state that relative environmental impacts (bot h positive and negative) of alter natives can be compared with each other, they state that “if you propose to adop t the most stringent alte rnative, then it is not necessary to perform this analysis of environmen tal impacts for the entire list of technologies”. EPA agrees with commenters that controlling pol lutant emissions may have co-benefits for reducing ozone production and acid deposition, EPA does not interpret the BART Guidelines to require quantification of human health or en vironmental co-benefit s in determining BART, particularly if the most stringent BART option is finalized. Simila rly, EPA does not interpret the BART guidelines to require human health or environmental assessments of alternative compliance strategies as long as we have determined that the alternative strategy achieves better progress towards the na tional visibility goal.

Comment:

The Navajo Nation (0223) recognized that human exposure to environmental hazards is an important factor in assessing impacts of FC PP (and NGS and SJGS) and for framing a rule to meet the regional haze requirements of the CAA, and anticipated that within each implementation phase of the RHR there will be integration of health assessments and studies

which are interrelated to the goal of promoting a strong economy and healthy environment andPage 70 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments are vital to the sovereignty of the Navajo Na tion. The commenter encouraged EPA to pursue health studies in collaboration with the Navajo Nation to study local risks associated with exposure to criteria pollutants, indoor air pollutants, and other contributing air pollutants, from which improved public health and effective rulemakings under the CAA may be achieved.

In addition, the commenter (0223) noted that EPA has stated that BART determinations will improve public health in addition to improvi ng visibility in the region, and the commenter anticipated that EPA will take the same stance in the forthcoming NGS proposed rule. On that issue the commenter provided the following comments:

 Very little public health data is available in the Four Comers region and on the Navajo and Hopi reservations to establish a meaningful public health baseline.

 A meaningful public health base line is critical to measuring the impacts to public health for any BART option, or any other pe nding or future EPA rule making.

 The available research literature (Mor ris 1990, Robin 1995, Bunnel 2010) all conclude that poor indoor air quality is a significant risk factor impacting the public health of Navajos, especially those Navajos who h eat their homes with non-optimal heating

devices.

 The EPA should generate and collect more public health research/data that characterizes the actual public health impact s attributed to the emissions from the FCPP and NGS; and actual public health impacts attri buted to other emission sources.

Response:

Assessing human exposure and quantifying health benefits are outside the scope of the requirements of the Regional Haze Rule. EPA se ts National Ambient Air Quality Standards (NAAQS) to establish levels of air quality that are protectiv e of public health, including the health of sensitive populations, for a number of pollutants including particulate matter. These "sensitive" populations include asthmatics, children, and the elderly. At this time the Navajo Nation is not identified as out of attainment with any of the NAAQS. However, EPA recognizes that there are significant con cerns about risk and exposure to air pollutants on the Navajo

Nation and EPA will continue discussions with th e Navajo Nation and will involve other federal agencies, as appropriate, to help address these concerns.

Comment:

The Navajo Nation (0223) st ated that EPA has failed to consider the non-air impacts associated with transportation and storage of ammonia for the proposed SCR technology. The commenter alleged that EPA t ook a “safe approach” by hypothesizi ng the use of urea as the SCR reagent as proposed by APS, and c onsidered only the impacts to ai r quality from increased truck traffic in the area from transportation of urea (not the risks associated with accidental releases and spills). The commenter also noted that EPA di d not assess the potential risks associated with the transportation, storage, handling, and accident al release of anhydrous ammonia or aqueous ammonia, which are typical reagents used in SCR. The commenter asserted that becausePage 71 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments anhydrous ammonia and aqueous ammonia above 20 percent are considered acutely hazardous and accidental releases are report able to local, state, and fe deral agencies, EPA should conduct an extensive study of the risks associated with the use of these potential SCR reagents based on the size of the plant and its lo cation both by proximity to Navajo communities and residents and

to the nearest feasible rail lin e. The commenter indicated that transport and storage of anhydrous ammonia would require development of a Ri sk Management Plan and Process Safety Management plan by both the plant and the transfer facility at the rail lin e. The commenter added that trucking of ammonia would be across Na vajo land, potentially putting Navajo communities at risk, and would genera te air emissions of NO

x , CO, VOC, and PM 10 . The commenter

concluded that these risks and associated costs should have b een analyzed in EPA’s BART analysis as part of factor tw o, considering EPA’s trust respons ibility to the Navajo People.

Response:

EPA disagrees with the comment that we c hose the “safe approach” by analyzing for the use of urea instead of anhydrous ammonia. APS has consistently indicated t hat it would use urea if SCR were required as BART, prov iding estimated costs for urea as the reagent and for urea storage and handling equipment. Our approach was appropriate in light of the plans submitted by the facility. Accordingly, the study did not evaluate any risks asso ciated with spills or releases of urea because urea is not classified as a hazardous or toxic substance under any federal environmental program. Such spills or releases are not reportable incidents under emergency management requirements.

EPA further notes that the resu lts of a study to evaluate th e potential risks associated with increased emissions to transport urea to FCPP was included in the TSD for the proposed rulemaking as Appendix A and can be found in the docket for the rulemaking, Document No. EPA-R09-OAR-2010-0683-0004. This study included an analysis of the estimated increase in air pollutant emissions (both criteria pollutants and hazardous air pollutants) resulting from the increased truck traffic necessary to transport urea to FCPP for use by the SCR system. EPA also summarized these in the TSD for our proposed rulemaking.

Based on the study included as Appendix A to the TSD, EPA determin ed that the adverse impacts associated with the use of SCR at FC PP, using urea as planne d by the facility, are extremely low. This is particularly true in li ght of the very large reductions in emissions of NO

x (over 33,000 tpy) and concomitant improvements in air quality that w ould be achieved. In addition, it should be noted that unde r the supplemental proposal, NO

x emissions will be reduced by a greater amount, and less urea will have to be tr ansported to the facility due to the closure of

Units 1-3.

Although EPA has concluded, based on indications from APS that it intends to use urea for SCR, that it is most appropriate to consid er the impacts of urea and not anhydrous ammonia, we note that ammonia is one of the most used chemical commodities in the United States, with large amounts transported annually by train, truc k, and barge. Most ammonia is used as a fertilizer, including anhydrous ammonia for direct application.

4 8 F 49

49 See http://minerals.usgs.gov/minerals/pu bs/commodity/nitrogen/mcs-2011-nitro.pdf.Page 72 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments If APS instead chose to transport and st ore anhydrous ammonia rather than urea, the commenter is correct that the transport and storage of anhydrous ammonia would require development of a Risk Management Plan and Pr ocess Safety Management plan by both the power plant and the transfer faci lity at the rail line. For the transfer facility, these are normal costs of doing business and the associated costs would be incl uded in the cost of anhydrous ammonia as delivered to the facil ity. Similarly, the cost to the fa cility is a known cost of using anhydrous ammonia which must be weighed in the decision of which SCR reagent to use at any given facility. In any case, the costs of comply ing with these programs would likely be a small fraction of the total costs related to the use of SCR at a facility.

Comment:

One private citizen (0163/0164/0216) subm itted a study of coal combustion and respiratory health near Shiprock, NM which prim arily addresses the impact on indoor air of coal

combustion inside homes for warmth. The commente r cited information in the report to support

his assertion that at a site located 2 km from FCPP, the concentration of trace metals in the outdoor air was equivalent to th e concentration inside where th ere was a broken stove leaking coal exhaust. According to the commenter, people living 2 km around the power plant might have to be evacuated because outdoor air is eq uivalent to inside a home with a leaking stove.

Two private citizens (0149, 0158) expressed concern about op en storage of fly ash at FCPP, which they stated contain toxic heavy metals.

Response:

Any near-plant exposure to trace metals as part iculate matter is more likely to be a result of fugitive emissions of fly ash or coal dust from power plants than from exposure to the stack

exhaust. The stacks at FCPP release the ex haust at a high elevati on for the purpose of preventing excessive concentration of pollutants in the immediate vicinity of the plant.

4 9 F 50 Trace constituents of coal can become emitted as HAPs when the coal is com busted; therefore the dust generated from handling coal should also be exp ected to contain trace metals. In the stack exhaust, many HAPs exist as, or are associated with, particulate matter (PM). EPA has recently promulgated a final rule regulati ng HAPs from coal fired electri c generating units in the MATS rule. FCPP is required to comply with the MATS rule. The MATS rule sets emission limits for PM from units like those operating at FCPP. In general, PM and HAPs that are removed from the exhaust by a control device b ecome fly ash, thus, it is reasonabl e to expect fly ash to also contain HAPs. Many coal fired ut ilities need to upgrade their PM controls to remove the HAPs from the exhaust gas to meet th e MATS emission limits. However, it is likely that the existing baghouses on Units 4 and 5 already provide ade quate emissions control to meet the PM

concentration limit in the MA TS rule. Because the baghouse and scrubbers are removing HAPs from the exhaust gas from Units 4 and 5, we woul d anticipate that HAPs will end up in the fly

ash and scrubber waste at FCPP.

50 EPA Good Engineering Practice (GEP) http://www.epa.gov/scram001/guidance/guide/gep.pdfPage 73 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Although the windblown fly ash and coal dust from FCPP are likely to contain HAPs, EPA does not have any data regarding the specific concentrations of HAPs around FCPP. The concentration of the HAPs indoors from a leak ing coal fired stove would likely be at a significantly higher concentrati on than in any windblown ash or dust. The emissions from a leaking coal fired stove are enti rely uncontrolled while more t han 99% of the PM in FCPP stack exhaust is removed by the baghouses for Units 4 and 5. Further, the HAPs emissions from a leaking indoor stove would likely be substantially more concentr ated than the stack emissions from FCPP because the HAPS are emitted into a relatively small volume of air relative to the stack emissions from FCPP.

To address the fly ash and coal dust emissi ons at FCPP, EPA promulgated a FIP in May 2007 that required FCPP to ensure that opacity fr om its fly ash and coal dust material handling and storage operations never exceeded 20% opa city. Imposing an opacity limit and requiring a dust control plan are reasonable approaches for a ssuring adequate control of these emissions. Although EPA has the authority to impose such a requirement under the TAR as necessary or appropriate, EPA’s 2007 FIP did not provide an ade quate justification that the opacity limit was necessary or appropriate. When APS petitioned for judicial review of this opacity limit provision, EPA determined that we had not prov ided an adequate justification for the provision. Therefore, EPA requested the 10 th Circuit Court of Appeals to remand the 20% opacity limit for material handling operations to EPA for a full er explanation and justifi cation. At the time, EPA indicated that it would provide this additional basis for the regulation in a later rulemaking.

In this rule, EPA is now finalizing a requireme nt for FCPP to ensure that opacity from its material handling operations does not exceed 20%. This limitation is necessary or appropriate to limit PM emissions from fly ash and coal dust material handling and storage operations. The necessity of limiting these PM emissions is to protect the N AAQS, may also provide a surrogate for limiting HAPs. EPA’s action to protect the NAAQS by limiting PM emissions, enforceable through establishing a 20% opacity limitati on on fly ash and coal handling and storage operations, is widely supported by comments on our proposal. Moreover, such a limitation is consistent with requirements for dust-g enerating activities in neighboring Arizona.

5 0 F 51 For more details on EPA’s justification for including an op acity limit see our response in Section 10.

Comment:

One public advocacy group (0112) stated that EPA should strongly assert to the management of FCPP that they have a responsibil ity to improve on public health effects as well as visibility impacts. According to the commen ter, the operator of FCPP has been asserting at public meetings and with the media that the EPA proposals for FCPP are only about visibility and have no relationship to public health. The commenter stated that this is a misleading assertion by the company.

Response:

51 For example, see Maricopa County Air Quality Department Rule 310: Fugitive Dust from Dust-Generating Operations that sets an opacity limit of 20%. See http://www.maricopa.gov/aq/divisions/planning_analysis/AdoptedRules.aspxPage 74 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments As previously mentioned, the RHR is meant to address visibility impacts at nearby National Parks and Wilderness areas. However, reductions in NO

x and PM emissions from FCPP can also improve air quality and reduce health impacts.

Comment:

One public advocacy group (0112) disagreed wi th the statement in the TSD that impacts to water quality will not be considered because FCPP is not a zero water pollutant discharge site.

The commenter indicated that FCPP holds a 1993 NPDES Permit No. NM0000019, which is still in force based on an EPA Region 9 Administra tive Extension granted on or about April 6, 2006. The commenter asserted, therefore, that it is impera tive to consider wa ter quality impacts.

The commenter (0112) added that EPA has mi ssed an opportunity to reduce the waste of 13.3 million gallons of water per day, which is currently used by FCPP for cooling steam

condensers and not returned to the San Juan Rive r system. The commenter stated that the use of closed system dry cooling towers at FCPP woul d greatly reduce water use. According to the commenter, the withdrawal of such large quantiti es of water from tributaries of the Colorado

River has contributed to the need for large federal salt re moval expenditures costing many millions of dollars from 1976 to the present.

Response:

EPA disagrees with the commenter that it is im perative to consider water quality impacts of BART controls for NO

x . In our TSD, under Factor 3 – Energy and non-air quality environmental impacts, we explain that APS did not consider impacts to water quality in its analysis because FCPP has not been identified as a facility that is not allowed to discharge water (i.e., as stated by the commenter and in our TSD, FCPP is not a zero water pollutant discharge site). In other words, FCPP does disc harge water, as evidenced by its Clean Water Act NPDES permit that is currently under an administrative extensi on that regulates its discharges to Morgan Lake and its cooling water in take. As such, water q uality impacts related to the cooling system at FCPP is regulated by EPA under a differen t authority (Clean Water Act) than the Regional Haze and BART Requirements (C lean Air Act). The BART Guidelines cite several examples of a non-air quality environmenta l impact, e.g., water ava ilability may affect feasibility and cost of wet scrubbers , or wet scrubber (for controlling SO 2 ) may affect water quality and land use. The installation and operation of SCR would not significantly affect water quality or water discharges from FCPP.

This rule is not requiring increased water consumption associated with SO 2 control because EPA found that the SO 2 controls from the previous rulemaking in 2007 (72 FR 25698, May 7, 2007) are adequate. If EPA was requiring sc rubbers that increased water consumption it would be considered under the non-air qual ity related environmental impacts.

EPA also disagrees with the commenter that EPA has missed an opportunity to reduce water use at FCPP for its cooling system. EPA doe s not have authority under the RHR to requirePage 75 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments retrofit of its cooling water system. EPA notes that a transition from a wet cooling system to a dry cooling system requires energy, reducing the energy e fficiency of the power plant. EPA further notes that the alternati ve emission control sce nario, which allows APS the option to close Units 1 – 3 in lieu of complying with BART, wo uld reduce water use by 6,000 acre-feet per year, as described in our Supplemental Proposal.Page 76 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## 5.0

4 B 

## Comments on Factor Three – Ex isting Controls at FCPP

Comment:

One of the owners of FCPP (0176/0177) agre ed with EPA’s summary of the existing controls at the plant, but noted that the proposed FIP is only the most recent action in a long line of regulatory and voluntary efforts to reduce emi ssions of pollutants that impact visibility, including SO 2 , NO

x , and PM emissions. The commenter asse rted that FCPP has a strong history of retrofitting pollution controls and recounted the facility’s hist ory of installing these controls and reducing emissions.

Response:

EPA agrees that there have been numerous inst allations of pollution controls over the several decades that FCPP has been in operatio n. The most recent voluntary effort by FCPP

increased the SO 2 removal from its long-term level of 72% removal to 88% removal. This was accomplished before the end of 2004 and became e ffective as a regulatory requirement in June 2007. The improvement in SO 2 removal resulted in a decrease of over 22,000 tons of SO 2 per year since that time.Page 77 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## 6.0

5 B 

## Comments on Factor Four – Re maining Useful Life of FCPP

Comment:

One of the owners of FCPP (0176/0177) noted th at the BART rules state that the normal amortization period (20 years for NO

x control devices) is appropria te in applying the remaininguseful-life BART if the plant’s “remaining usef ul life will clearly exceed” that amortization period (citing 70 FR 39169). The co mmenter asserted, however, that as a result of substantial uncertainty related to multiple factors, it is not at all clear that the plant’s remaining useful life is at least 20 years. Thus, the commenter asserted th at EPA must give proper consideration in its analyses to the possibility of a shorter usef ul life for FCPP. Moreover, according to the commenter, one factor that should not be allowed to shorten the useful life under the BART rules

is the choice of BART itself – EPA cannot us e a 20-year amortizati on period to justify a specified technology (e.g., SCR) if the application of the technol ogy would be so costly as to make the facility uneconomical and shorten its useful life (citing 70 FR 39164, 39171). The commenter made the following arguments related to the possibility of a shorter useful life at

FCPP:

 The excessive cost of SCR will dramatically increase the energy costs of the plant, potentially making it uneconomical. The insta llation of SCR on Units 1–3, including bag house retrofitting, would increase the cost of electricity production on a $/MWh basis by more than 50 percent which, in conjunc tion with other market and regulatory uncertainties, may make the units uneconomic . Retrofitting SCR on Units 4 and 5 would raise the cost of generation at those units by more than 25 percent, and there is a reasonable possibility that such a cost incr ease would threaten the economic viability of

those units.

 The proposed “phase-in schedule” for SCRs ma y force closure of units because APS will not have certainty by the compliance deadline that the lease will be extended or that SCE’s ownership share will have been succe ssfully transitioned. Numerous approvals must be obtained to allow any of the units at FCPP to continue to operate, including Units 4 and 5; securing each of these approvals takes time and presents risk. In particular, APS must obtain federal grants of right-o f-way from DOI pursua nt to 25 U.S.C. 323,

which constitute “federal actions” that are likely to trigger review under the National Environmental Policy Act, possibly taking seve ral years. Thus, APS would have to make significant capital expenditures on Units 1 – 3 before obtaining the needed approvals, and

would instead close the units.

 The proposed FIP would require retrofitting BA RT controls on Units 1 – 3 much sooner than the time allowed under the Regional Haze regulations, which is 5 years. This is

unreasonable in that APS must allow time for a final decision to be made on the proposed SCE transaction before making the substantial capital expenditures to retrofit Units 1 – 3. A requirement to install SCR and baghouses on those three units in such a short time would likely lead to increased engineeri ng and installation costs. APS needs the flexibility of 5 full years to install SCR.Page 78 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments  Emerging environmental laws and regulations present cost and ope rational uncertainty that may shorten FCPP’s useful life. Th ese include potential new GHG laws and regulations, a Maximum Achievable Contro l Technology (MACT) standard for EGUs, new ash-handling requirements, and new requirements for cooling water intake

structures.

Another of the FCPP owners (0174) cited the comments above to argue that EPA’s economic analysis should have considered shorte r “payback periods” because a reduced payback period could result in FCPP power (with SCR cost s included) exceeding wholesale market costs.

Response:

EPA disagrees with commenters that we must consider a shorter useful life because of uncertainty related the factors c ited by the commenter. It is inappr opriate to consider a useful life shorter than 20 years based solely on a possibili ty of shut down. EPA furt her notes that in its FCPP cost analysis on behalf of APS, B&V stated “t he remaining useful life of Units 1 through 5 was at least 20 years”.

5 1 F 52 In our proposed BART determination, EPA described the analysis conducted to examine the competitiveness of FCPP compared to purchasing power on the open market if SCR were required on all five units at FCPP and determined that if SCR were applied on all units at FCPP, the cost to produce electricity at FCPP would still be lower than the cost to purchase power on the open market. Unless there is an enforceable obligation for APS to cease operations on a given date or unless APS convincingly demonstr ates that controls (rather than uncertainly associated with future requirements) will cause facility closure, the default 20 year amortization period represents the appropria te period for the remaining useful life.

In our proposed BART determination for FC PP, EPA proposed a PM emission limit for Units 1 – 3 that can be achieved through the inst allation of any of four different PM control options. EPA did not prescribe which PM contro l APS must use to comply with the proposed

limit. Wet membrane electrostatic precipitators (ESPs) represente d the least cost ly option, while baghouses represented the most costly option. At the time of our BART proposal, the Mercury and Air Toxics Standard (MATS Rule) for electric utility steam generating units had not yet been proposed, nor had APS suggested its alternative emi ssion control strategy to close Units 1 – 3 in lieu of complying with BART for NO

x . Because the MATS rule is now final

5 2 F 53 , and EPA is finalizing the option to allow APS to either comply with the alternative emission control strategy or BART, EPA is not taking action at this time on our proposal to set new PM limits for Units 1 – 3. Therefore, the comment that installation of baghouses in addition to SCR on Units 1-3 will increase the cost of power by approxim ately 50 percent is not relevant.

While the commenter’s suggested increase in the cost of power from Units 4 and 5 as a result of SCR (25 percent increase) is reasonably consistent with the results of the EPA analysis (22 percent) with respect to the power cost impact of SCR on all five FCPP units, it must be noted that the original EPA analysis did not evaluate SCR on Units 4 and 5 exclusively. For more information on cost of SCR on units 4 and 5 see our response above in Section 4.1.2.

52 See B&V Engineering Analysis for Units 1 – 5 at FCPP dated December 2007. Document number 0011 in docket for proposed rulemaking: EPA-R09-OAR-2010-0683.

53 77 FR 9304, February 16, 2012.Page 79 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments EPA agrees that the phased-in schedule for installation of SCRs on Unit 1 – 3 for BART, which was added in the supplemental proposal, ma y have allowed only 2 years for engineering and installation of these pollution controls from the date by which APS intends to make its decision on continuing operation or shutti ng the units down by 2014. EPA is changing the schedule for SCR installation by requ iring the SCRs for either Unit 4 or 5 to be installed within 4 years of the effective date of this rule and the remaining Units (Units 1-3 and the either 4 or 5) within 5 years of the effective date.

With respect to the “payback period” refe renced by the commenter, EPA’s analysis did not identify “payback periods.” Rather, the commenter appears to be referring to the 25-year period utilized for the discounted cash flow calc ulations within the model. Nevertheless, EPA does not disagree with the commenter’s stated concern that shorter plant life (as may be precipitated by other possible emerging regulations unrelated to Regional Haze), and thus shorter discounting periods, would yield different economic results. However, EPA disagrees

with commenters that a shorter us eful life should be considered in the economic analysis because consideration of other regulati ons are outside the scope of th e Regional Haze BART analysis.

Comment:

One industry commenter (0117) stated th at EPA, rather than evaluate APS’s supplemental proposal as an alternative emission control strategy, should instead “re-determine”

BART for each of the five units at FCPP ba sed on the APS-proposed shutdown scenario for

Units 1 – 3. The commenter noted th at consideration of the shorte ned remaining useful lives of

Units 1 – 3 could result in a dete rmination that BART for these units is no additional control prior to shutdown, while considera tion of the remaining useful liv es of Units 4 and 5 would not be heavily weighted since they are not to be shut down in the near term. The commenter

concluded that a “better-than -BART” control strategy does no t seem to be necessary for determining the appropriate requirements for FCPP under the APS-proposed shutdown scenario; instead, a BART determination for each unit with appropriate weighting of the statutory factors appears to present a logical a nd less-burdensome means of appl ying section 169A(b)(2) of the

CAA to FCPP.

Response:

EPA disagrees with the commenter’s sugge stion that APS’s supplemental proposal should be evaluated in terms of a BART-redetermina tion rather than in terms of its current status

as a “better-than-BART” alternative measur e. EPA has met its obligation under 40 CFR 51.308(e)(1) by performing a BART determinatio n for FCPP in accordance with 40 CFR 51, Appendix Y (Guidelines for BART Determinations Under the RHR). We do not consider a redetermination of BART that takes into acc ount APS’s supplemental proposal the most appropriate method for evaluating APS’ proposal in light of the “alternative measure” provisions contained in 40 C FR 51.308(e)(2) and (3). The 2006 RHR (71 FR 60612) specifically established the procedures described in 40 CFR 51.308(e)(2) and (3) for scenarios involving programs that may make greater reasonable progress than source-by-source BART. ThesePage 80 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments provisions were specifically included to allow for the flexibility to consid er alternative measures such as the one proposed by APS, and EPA cons iders it the most appropriate method for evaluating APS’s supplemental proposal.

Comment:

One industry commenter (0117) discussed th e “remaining useful life” statutory factor, noting that under the BART Guide lines remaining useful life is ignored in th e majority of BART determinations (citing 40 CFR part 51, Appe ndix Y, section IV.D.4.k), which the commenter alleged is inappropriate. According to the comme nter, Congress designated the remaining useful life of the source as an important consideration because it did not want to impose the burdens of control technology retrofits on source s that were more than 15 y ears old at the time the statute

was enacted. Given that it is now 34 years after the BART requirements were enacted, the commenter stated that the “remaining useful life” statutory factor should weigh heavily in BART

determinations for older sources such as FCPP, instead of be ing ignored. See Section 10.0 for more on this commenter’s legal interpre tation of the Regional Haze requirements.

Response:

EPA disagrees with the commenter that we i gnored the “remaining useful life” statutory factor in our BART decision. EPA considered this factor in our BART analysis (see pages 42-43 of the TSD). As discussed in the TSD the remain ing useful life of an EGU subject to BART is determined by the utility. EPA cannot arbitrarily decide that an EGU has less us eful life when it is not within our BART rulemaking authority to re quire closure of an EGU. If a utility used a shorter useful life than one that would allow the full amortization of any necessary pollution controls, EPA would take that into account in the cost analysis, prov ided that there was an enforceable obligation that the EGU would cease operation by that time.

Comment:

One private citizen (0163/0164/0216 ) stated that it a ppears that APS is trying to keep its workers from telling the truth a bout metal fatigue problems and major corrosion problems at FCPP. The commenter noted that fly ash has sulfur in it which, when mixed with water, forms sulfuric acid which can corrode iron pipe. The commenter included a newspaper article profiling a manager at the plant which recounted an incide nt in which a pipeline transporting fly ash and water at the plant burst. The commenter was apparently questioning whether the remaining useful life of the plant is as much as 20 years as assumed in the BART analysis.

Another private citizen (0144) simply stated that FCPP has lived beyond its usefulness.

Response:

As mentioned in the previous comment, in ge neral, the util ity determines the appropriate useful life of their EGUs subject to BART. Un less there is an enforceable obligation for APS toPage 81 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments cease operations on a given date or unless APS convinci ngly demonstrates that controls (rather than uncertainly associated with future requireme nts) will cause facility closure, the default 20 year amortization period represents the appropr iate period for the remaining useful life.Page 82 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## 7.0

6 B 

## Comments on Factor Five – Anticipated Visibility Improvements

Comment:

One of the owners of FCPP (0176/0177) presen ted information on visibility conditions on

the Colorado Plateau and the role of NO

x emissions in Western visibility impairment. The

commenter noted that SO 2 and NO

x emissions have been decreasing in recent years and cited a status report prepared by the Western Regional Air Partnership (WRAP) stati ng that (1) visibility has been improving at the Class I areas on the Colorado Plateau, (2) fire is the dominant contributor to haze on the 20 percent worst visibility days, (3) the sulfate contribution to haze is steadily decreasing, and (4) significan t improvement can be seen on th e 20 percent best visibility days. The commenter also presented information that purported to show that whether averaged over the haziest 20 percent of days, the clearest 20 percent of days, or all days, power plant NO

x emissions contribute less than 1.5 percent to th e light extinction at Me sa Verde National Park. Another of the FCPP owners (0168) cited this comment and emphasized this last point. A utility industry association (0169) also presented information to show th at less than 1.5 percent of light

extinction at Mesa Verde National Pa rk is the result of power plant NO

x emissions.

Another commenter (0223) questione d EPA’s assertion that that NO

x and PM from FCPP are significant contributors to vi sibility impairment in the nu merous mandatory Class I areas surrounding FCPP (citing 75 FR 64221), stating that coal-fired pow er plants, including FCPP, are relatively small contributors to regional haze in the surrounding Class I Areas. According to the commenter, the WRAP has concluded that visibility impairment caused by PM and attributable to all stationary s ources is probably less th an 2 percent, and th at stationary source

NO

x emissions probably cause between 2 and 5 pe rcent of the visibility impairment on the

Colorado Plateau.

In contrast, the comments of an enviro nmental advocacy group (0182) included a quote from EPA’s Section 110 proposed rule for th e San Juan Generating Station stating, “NO

x and

SO 2 are significant contributors to visibility impairment in an d around New Mexico. As the Four Corners Task Force notes, ‘[r]eduction of NO

x is particularly important to improve visibility at Mesa Verde National Park.... [V]isibility has degrad ed at Mesa Verde over the past decade, and the portion of degradation due to nitrate has increased....’”.

Response:

EPA modeling of FCPP showed visibility im pacts from 1.2 to 6.0 deciviews, depending on the Class I area, with the sum of impacts at all sixteen Class I area s totaling 43 deciviews. This is a significant contribution to visibility impairment. Even if an individual source category appears small by itself, the many segments of the emi ssions inventory together cause significant visibility impairment and must be addressed in order to make progress towards the national goal of remedying visibility impairm ent from manmade pollution. Sec tion 169A of the Clean Air Act requires BART determinations on B ART-eligible EGUs regardless of trends or ambient visibility conditions. Application of BART is one means by which we can ensure that downward emissionPage 83 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments and visibility impairment trends continue. EPA identifies stati onary sources as an important category to evaluate in a BART analysis.

Comment:

Three of the owners of FCPP (0168, 0174, 0176/0177, 0179), a group of owners (0185), the Navajo Nation (0223), and tw o utility industry associations (0169, 0187) argued that EPA’s use of Interagency Workgroup on Air Qualit y Modeling (IWAQM) Phase II default background ammonia values is not appropr iate. In extensive comments dr awing heavily on a report by Dr. Ivar Tombach that was appended to the co mments, one of the owners of FCPP (0176/0177) argued the following:

 Actual field measurements show lower am monia concentrations than used by EPA.

 The EPA is mistaken in its assumption th at background ammonia c oncentrations along the path of the plant’s plume determine nitr ate concentrations and their contribution to haze at the receptor site.

 The EPA’s “corroborating” approach of “back- calculating” ammonia is flawed because it erroneously assumes that the ammonia associ ated with measured sulfate and nitrate

would all be available to react with FCPP emissions, whereas in reality those measurements reflect emissions from many sources.

 The EPA’s analysis of nitrate predictions as a check on the ammonia values used is also flawed because it erroneously assumes that the resulting measured nitrate levels are solely due to FCPP emissions, whereas in reality they reflect emissions from many sources. A comparable analysis using th e EPA ammonia value shows substantial and “physically impossible” overp redictions of nitrate.

 The sensitivity analysis carried out for APS of the alternate ammonia concentrations in

the CALPUFF model demonstrates that th e ammonia values AECOM used in its modeling are valid and correct.

One of the utility industry associations (0187) and the group of FCPP owners (0185) similarly stated that for EPA to reject the body of direct measurements of ammonia concentration in the FCPP region, it must provide substantial scientific justificati on, which it has not done. These commenters also stated that EPA’s supplem ental sensitivity analysis was flawed because it consists almost entirely of modeling conducted using the “discredited” back-calculation method, which the commenter alleged is as insufficient for this purpose as it was for setting the background ammonia levels directly . The commenters concluded th at the use of IWAQM values invalidates EPA’s BART modeling and the BART determination based upon it. Other of the FCPP owners (0168, 0179) stated that APS provide d ample justification for using its proposed lower background ammonia levels and successfully refuted EPA’s arguments for using IWAQM default value. Accordingly, the commenters requ ested that EPA accept the visibility modeling using the lower variable background ammonia values, which will significantly reduce the visibility benefits ascribed to SCR.Page 84 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Another utility industry asso ciation (0169) stated that se veral measurement programs on

the Colorado Plateau show that actual amm onia values in Class I areas near FCPP are significantly lower than the IWAQM default value, indicating that these values typically range from 0.1 to 0.6 ppb.

5 3 F 54 The commenter noted that ammonia c oncentrations are lowest during the cold season when the visibility impacts of NO

x emissions are the highest. Accordingly, the commenter asserted that using a single ammonia value throughout the year is not scientifically valid and should be replaced with seasonally va riable values. The commenter stated that modeling with “valid, accurate” ammonia values will show significantly lower visibility changes resulting from SCR at FCPP.

The Navajo Nation (0223) expressed concer n regarding discrepancies between EPA and APS modeling inputs, given the commenter’s understanding that APS obtained advance EPA approval for its modeling protocols. The comment er expressed a preference for using recorded data wherever possible and noted difficulties associated with estim ating background ammonia levels and the CALPUFF model, citing the disc ussion in the initial proposal (75 FR 64226) and the associated TSD for our proposed BART dete rmination (pages 70-72). The commenter argued that EPA’s use of various sensitivity analyses in support of the use of the IWAQM default and then corroborating with revised background amm onia data further complicates the modeling protocols. The commenter alleged that this appr oach is fundamentally flawed. Some commenters stated that EPA had earlier agreed to lower am monia concentrations, and so should not be using the higher IWAQM value now.

A utility industry association (0169) speculated that cost eff ectiveness in terms of dollars per deciview improved resulting from retrof itting FCPP with SCR (b ased on modeling using CALPUFF version 6.4 and “valid” background a mmonia values) would be an order of magnitude higher that the $17 million per deciview benchmark that the commenter ascribed to EPA’s TSD. Accordingly, the comme nter asserted that SCR cannot be justified as BART at

FCPP.

In contrast, one public interest advocacy group (0112) concurred with EPA’s backcalculation method for ammonia background levels (citing the TSD, page 60). The commenter added that the requests to EPA from other commenters for additional ammonia monitoring data are unrealistic in today’s budget environment. Th e commenter agreed with EPA’s statement in the TSD that initiation of a new monitoring progr am would be a much larger undertaking than the analysis procedures descri bed in the BART Guidelines.

Response:

EPA disagrees with commenter objections to the background ammonia concentrations used in our modeling. Our use of the 1 ppb IWAQM Phase II defa ult background ammonia

54 The commenter (0169.1) cited “Base line ambient gaseous ammonia concentra tions in the Four Corners area and eastern Oklahoma, USA” by Mark E. Sath er, Johnson Matthew, Nghia Nguyen, et al., Journal of Environmental Monitoring , Vol. 10 (2008), pp. 1319-1325; Ammonia measurement data provided by Dr. Jeff Collett of Colorado State University; and “Measurements of Ambient Backgr ound Ammonia on the Colorado Plateau and Visibility Modeling Implications,” I. Tombach and R. Paine, contributors, Report by Salt River Project, Phoenix, Arizona, September 2010.Page 85 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments value is appropriate. Most of the objections have already been discussed in EPA’s TSD for the proposal; and several of them concern the “back-calculation” method that we used only as corroboration for the 1 ppb results we principa lly relied on. Also, even if the lower ammonia concentrations urged by some commenters were accepted, EPA’s sensitivity modeling results provided in the TSD for our proposed BART determ ination showed the visibility benefits would still support EPA’s BART determina tion. EPA also provided the resu lts of modeling runs that used the lower ammonia background concentra tions recommended by some commenters (see TSD Table 37). The visibility benefits of the proposed NO

x controls for BART are substantial under all ammonia scenarios, including the lower background ammonia concentrations recommended by commenters. For 12 Class I areas, modeling even with those lower backgrounds showed benefits of 0.5 dv or more , an amount recognized in the BART Guidelines as significant (e.g. at 70 FR 39120).

The lack of measurements of ammonia and a mmonium in the Class I areas of concern requires that EPA estimate background ammonia c oncentrations by some method, considering available data and approaches. As discussed in the BART proposal and its accompanying TSD, EPA understands that there is no single accep ted method for estimating the background concentration of ammonia, and that any me thod will have advantages and disadvantages. The lack of consensus on a method was a factor in E PA’s decision to rely on the 1 part per billion (ppb) default value in IWAQM, as was the fact that IWAQM is the onl y available guidance on this issue. In summary, there is insufficient m onitoring information availa ble to use a different value, or to support any seasonally varying values.

On issue (1), field measurements cited by th e commenters were not performed in the Four Corners area, nor at the Class I areas near FCPP, so they do not necessarily give appropriate ammonia background concentrations for modeling of FCPP. In addition, the studies provide only gaseous ammonia (NH 3 ) and not ammonium (NH 4 ) that has reacted with SO 2 or NO

x emissions. For purposes of assessing FCPP im pacts relative to natural background, per the BART Guidelines, both ammonia and ammonium should be assumed to be available to interact with emissions from FCPP. The ammonia-onl y measurements cited by the commenters underestimate the available ammonia. Finally, as di scussed in the TSD, field measurements in

the Four Corners area showed ammonia me asurements ranging from 1.0 ppb to 1.5 ppb, and sometimes as high as 3.5 ppb.

5 4 F 55 This provides some additional support for the 1 ppb used by

EPA.

On issue (2), in using a 1 ppb background EPA did not rely on an assumption about the importance of background ammonia along the path of the plume, as claimed by the commenters. The 1 ppb background is representative of areas in the west under existing EPA guidance, in the IWAQM document. The commenters’ objection is based on the rapidity of the nitrate-nitric acid equilibrium, which they state implies that ammonium nitrat e can only be estimated using ammonia measurements right at the Class I ar ea, and not the ammonia that occurs earlier along the plume’s path to the area. EPA’s TSD for the proposed rulemaking did state (TSD p.62) that the Federal Land Managers partly relied on this a ssumption as one of the rationales for the back-calculation method, discussed below; EPA al so expressed support for the idea that the

55 Mark E. Sather et al. , 2008. “Baseline ambient gaseous ammonia c oncentrations in the Four Corners area and eastern Oklahoma, USA”. Journal of Environmental Monitoring , 2008, 10, 1319-1325, DOI: 10.1039/b807984fPage 86 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments method can be viewed as a 24-hour temporal integr ation, not just a spatia l integration over the plume path, and that this aspect can be viewed as desirable fo r the 24-hour average visibility estimate that CALPUFF provides (TSD pp.71-72). This plausibility argument applies despite the rapid nitrate-nitric acid equili brium cited by the commenters, and in any case was not relied on by EPA in using the 1 ppb default ammonia background.

As the commenters stated under issue (3), E PA used a back-calculation ammonia estimation method as an alternative that provides so me corroboration for the 1 ppb IWAQM method, and which is more fully explained in the TSD for the proposal. Essentiall y, it uses measured particulate ammonium sulfate and nitrate to estimate the amount of ammonia that must have been present to form those ammonia com pounds. The commenters object that the method

assumes that all the calculated ammonia is av ailable to interact with the FCPP plume as background ammonia. However, this assumption is reasonable for the single-source CALPUFF modeling performed under the BART Guidelines. It estimates ammonia concentrations that would be monitored at the Class I area if only this single source existed; it includes ammonia that is currently in the form of ammonium because of interact ion with other sources’ emissions. It remains true that some portion of the calculat ed ammonia would in reality not be available for FCPP, because it arrives at the monitor from a different direction than FCPP’s pollutant plume; on the other hand, the data would also include di rections contributing below-average ammonia, reducing that effect.

In addition, the back-calculated ammonia is based on measurements only of particulate ammonium, the form associated with measured sulfate and nitrate; it does not include any gaseous ammonia that may also be present. In this sense, th e back-calculated ammonia is a lower bound on the ammonia that may be available to interact with source emissions; that is, the method may underestimate ammonia concentratio ns. This possible under estimation tends to offset possible overesti mation discussed above.

EPA does not claim that the back-calculati on method is dispositive; it incorporates various assumptions and imperfec tions that make clear it is on ly an estimate. However, it is based on real measured data at Class I areas, and has some counterbala ncing tendencies for over- and under-estimation. After weighing variou s lines of argument about the back-calculation method, EPA disagrees with the commenters who r ecommended that it be rejected altogether. The method provides a useful estimate of ammonia for BART modeling, by providing concentrations representative of the high values that would be observed at the Class I areas in the absence of other sources. On balance, EPA believes the back-cal culation provides a reasonable corroborating method for selecting th e appropriate ammonia background to use.

In issue (4) the commenters claim that the assu mption of full availability to FCPP of the back-calculated ammonia invalidates EPA’s compar ison of monitored nitrate levels with those modeled using the back-calculated ammonia (TSD p.73). As just discussed for issue (3), EPA disagrees that the assumption is invalid for corroboration of single-source BART assessment modeling. For single-source BART modeling, on bal ance, it is reasonable to assume all the ammonia is available to the source, given the counterbalancing tende ncies for over- and

underestimation inherent in the back-calculati on method discussed above. In any case, this method mainly provided corroboration for the resu lts from using the 1 pp b ammonia default. ThePage 87 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments related issue (5) about “physically impossible” nitrate over-predi ctions does not account for the fact that any model evaluation is expected to have under- and over -predictions, depending on the meteorological conditions and the geographic location modeled, as we ll as on the location of the monitor used for comparison. While consistent over-prediction in a full model performance

evaluation would indeed raise concerns over its validity, as EPA stated, our nitrate comparison was not intended as a model performance evalu ation, but rather as a “rough check” for the back-calculation corroboratory method (TSD p. 73). EPA found that the modeled and monitored values, for both the maximum values and the 98th percentiles, were generally in agreement.

Finally, contrary to the commenter’s assert ion, EPA did not receive a modeling protocol in advance of modeling by APS’s contract or. EPA disagrees with commenters that EPA

committed to use the same ammonia concentrati ons used by APS’s contractor in our own modeling analysis for our BART determination.

Comment:

Three of the owners of FCPP (0168, 0176/0177, 0179) and a utility industry association (0169) asserted that CALPUFF version 5.8 used in the EPA’s BART analysis is outdated. Some of these commenters stated that past EPA statem ents make clear that the BART analysis should be based on the best application currently availa ble to predict visibility impacts (citing 70 FR 39121-23). Because of enhancements to the mode l’s chemistry, the commenters stated that CALPUFF version 6.4 represents the best application that is curren tly available. A number of the commenters mentioned a December 2010 meeting between the CALPUFF developer and the FLMs where the FLMs reportedly supported an e xpedited review and approval of CALPUFF

version 6.4.

One of these commenters (0168) stated that it is extremely con cerning that EPA would impose a requirement costing a facility hundreds of millions of dollars based on results from the “regulatory version” of a model when a newer, mo re accurate version of the model is available. Another of the commenters (0179) stated that EPA should re-run its FCPP visibility modeling using CALPUFF version 6.4 and th e seasonally adjusted backgr ound ammonia levels developed by APS’s modeling contractor or accept the APS modeling analysis using these tools. A third commenter (0169) similarly indicated that EPA should revise its BART analysis using actual measured background ammonia values and CALPUFF version 6.4.

Another of these commenters (0176/0177) pr esented the results of comparison tests purported to show that version 6.4 produced result s that more closely matched measured values than did version 5.8. (The commenter appended the report of these comparison tests to the comments.) This commenter (0176/0177) also pr esented the results (APS comment, attached Exhibit F) of comparative modeling carried out for FCPP using CALPUFF versions 5.8 and 6.4, and three different background ammonia levels (IWAQM default, CMAQ model-derived, and the AECOM values). This modeling showed that th e predicted visibility impacts (in terms of dv) decline significantly from CALPUFF version 5.8 to version 6.4 for all three background

ammonia values used in the model runs.Page 88 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments The commenter concluded that the emission lim itations specified in the proposed FIP will not result in any perceptible visibility improvement s at any of the 16 Class I areas in the Four Corners region. [Two of the other owners of FC PP (0168, 0179) and a utility industry association (0169) also stated this conclusi on.] The commenter stressed that this is not a surprising result given that studies have shown that power plant NO

x emissions comprise a de minimis contribution to the observed visibility c onditions as Mesa Verde National Park.

The commenter (0176/0177) added that these results are confirmed by a multi-year regional air quality study carried out for the F our Corners Air Quality Task Force by Environ, which concluded in August 2009. This study used the CAMx model and predicted even less visibility improvement at Mesa Verde from the application of SCR at FCPP and nearby San Juan Generating Station than did AECOM’s modeling with CALPUFF version 6.4 using the AECOM values for background ammonia concentrations. A nother of the owners of FCPP (0168) also cited this as confirming evidence.

Using the modeling results based on CA LPUFF version 6.4 and the AECOM background ammonia concentrations, and its own contro l cost analysis, the commenter (0176/0177)

calculated the cost effectiveness of combustion controls and SCR in terms of dollars per dv improved at Mesa Verde. According to the co mmenter, the cost effectiveness of advanced combustion controls would be about $64 millio n per dv and SCR would be about $365 million per dv. The commenter stated that in its TSD, EP A indicated that $17 mill ion per deciview is a

reasonable benchmark for a cost-effective BA RT control technology. Based on this cost effectiveness metric, the commenter concluded that advance combustion controls constitute

BART for FCPP.

Another owner of FCPP (0174) stated that the version of CALPUFF used by EPA has a tendency to over-predict nitrate concentrations, which is com pounded by EPA’s use of what the

commenter asserted are overestimated ammonia background values. The commenter stated that this combination of errors results in a signifi cant over-prediction of visibility improvements for more stringent NO

x BART control options. Further, the commenter stated that this disproportionately affects the incremental visibility benefits predicted for SCR over LNB compared to LNB over baseline. The comment er supported the related comments submitted by Commenter 0176/0177 and stated that the modeling results submitted by that commenter should

be used to determine BART.

In contrast, one federal agency (0175) wa s generally supportive of the modeling methods employed by EPA with the regulatory approve d version 5.8 of the CALPUFF modeling system.

This commenter noted that in email corres pondence dated December 22, 2010 from Mr. Robert Paine to Mr. Scott Bohning, there is a specific refe rence to a meeting held between Mr. Joe Scire and the FLMs regarding CALPUFF version 6.4, i ndicating that the FLMs were “pleased to receive this presentation and will be working to ‘expedite’ the review and implementation for this improved version of CALPUFF.” The commenter stated for the record that its agency was not represented at the December 10, 2010 meeting and has not officially endorsed or committed to expediting the review and implementation of this version of the CALPUFF system. Moreover, it remains the commenter’s position that until this versi on has undergone a scien tific peer review,Page 89 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments model code review, and more rigorous performa nce evaluation than presented, this version should not be used for regulatory purposes.

Response :

EPA disagrees with the commenters that any new CALPUFF version should be used for

the BART determination. EPA relied on version 5.8 of CALPUFF because it is the EPAapproved version in accordance with the Guideline on Air Quality Models (“GAQM”, 40 CFR 51, Appendix W, section 6.2.1.e); EPA updated the sp ecific version to be used for regulatory purposes on June 29, 2007, including minor revisions as of that date; the approved CALPUFF modeling system includes CALPUFF version 5.8, level 070623, and CALMET version 5.8 level 070623. CALPUFF version 5.8 has been thoroughly te sted and evaluated, and has been shown to perform consistent with the initially pr omulgated version from 2003 in the analytical situations it has been approved for. Any ot her version would be cons idered an “alternative model”, subject to the provisi ons of GAQM section 3.2.2(b), re quiring full model documentation, peer-review, and performance eva luation. No such information for the later CALPUFF versions that meet the requirements of section 3.2.2(b) has been subm itted to or approved by EPA. Experience has shown that when the full evaluat ion procedure is not followed, errors that are not immediately apparent can be introduced al ong with new model features. For example, changes introduced to CALMET to improve simula tion of over-water convective mixing heights caused their periodic collapse to zero, even over land, so that CALPUFF concentration estimates were no longer reliable.

In addition, the latest version of CALPUFF, 6.4, incorporates a detailed treatment of chemistry. EPA’s promulgation of CALPUFF (68 FR 18440, April 15, 2003) as a “preferred” model approved it for use in analyses of Preven tion of Significant Deterioration increment consumption and for complex wind situations, neither of which involve chemical transformations. For visibil ity impact analyses, which do invo lve chemical transformations, CALPUFF is considered a “screening” model, rather than a “preferred” model; this “screening” status is also described in the preamble to the BART Guidelines (at 70 FR 39123, July 6, 2005). The change to CALPUFF 6.4 is not a simple model update to address bug fixes, but a significant change in the model science that requires its own rulema king with public notice

and comment.

Furthermore, it should be noted that th e US Forest Service and EPA review of CALPUFF version 6.4 results for a limited set of BART applications showed that differences in its results from those of version 5.8 are driven by two input assu mptions and not associated with the chemistry changes in 6.4. Use of the so-c alled “full” ammonia limiting method and finer horizontal grid resolution are the primary dri vers in the predicted differences in modeled visibility impacts between the model versions. These input assumptions have been previously reviewed by EPA and the FLMs and have been rejected based on lack of documentation, inadequate peer review, and lack of tec hnical justificati on and validation. EPA intends to conduct a comprehensive evalua tion of the latest CALPUFF version along with other “chemistry” air quality models in consul tation with the Federal Land Managers, including a full statistical performance evaluation, verificati on of its scientific basis, determination of whether the underlying science has been incorpor ated into the modeling system correctly, andPage 90 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments evaluation of the effect on the regulatory fram ework for its use, including in New Source Review permitting. CALPUFF version 5.8 has already g one through this comprehensive evaluation process and remains the EPA-approved version, and is thus the appropriate version for EPA’s BART determination for FCPP.

Comment:

The Navajo Nation (0223) expressed concer n about the accuracy of CALPUFF based on a 2010 study that concluded that the closure of Mojave Generati ng Station had resulted in no perceptible visibility improvement in Grand Canyon National Park, despite predictions based on CALPUFF modeling that visibility in the park would improve.

5 F 56 According to the commenter, the study’s authors concluded that their results raise questions a bout the reliability of CALPUFF. The commenter found this uncertainly alarming gi ven that CALPUFF is the model used for the FCPP BART analysis and the si gnificant economic impacts that the commenter alleged the BART determination could have on the Navajo Na tion if FCPP were to shut down rather than install emission controls. (See Section 4.1 for the comments on potential economic impact.)

Response:

As discussed in the response to the previ ous comment, EPA affirms that the regulatory version of CALPUFF is the correct model to use for this BART determination.

The study cited by the commenters raises issues that should be considered as EPA revisits visibility modeling in consultation with th e Federal Land Managers. It found significant decreases in sulfate and nitrat e concentrations after the cl osure of the Mojave Generating Station, but little improvem ent in associated visibility impairm ent. The authors tried to eliminate other possible causes for this; however, they state “This is partially explained by fluctuation in other aerosols masking the drop in sulfate. It is also possible that the su lfate change is too small relative to natural daily variati on in visibility conditions to have a significant impact. ... Our results indicate that other components of visi bility, in particular coarse mass and nitrate, changed in GCNP after the closure. ... These di fficulties are indicative of a larger problem encountered when attempting to conduct inference on a calculated parameter (like deciviews) which is itself a function of many stochastic processes, each governed by a unique set of anthropogenic and natural factors.” While not dow nplaying the quality and importance of this work, CALPUFF 5.8 is adequate for BART determina tions; regulatory use of later versions must await their full EPA evaluation.

Comment:

One federal agency (0175) sought clarifica tion of the nature of the comparison between

the APS BART alternative CALPUFF modeli ng and the EPA BART modeling that was presented in Table 8 in the supplemental proposal (citing 76 FR 10538-39). The commenter

56 The commenter cited “Effect of Coal-fired Power Ge neration on Visibility in a Nearby National Park,”

44 Atmospheric Environment 2524, Jonathan Terhorst and Mark Berkman, 2010.Page 91 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments noted that correspondence from APS AECOM to EPA Region 9 staff dated December 23, 2010

indicates that the “model combinations are CALPUFF v5.8 and also v6.4 with two sets of ammonia backgrounds....” The commenter wished to make certain that the data presented in Table 8 is a direct comparison of modeling resu lts using the APS BART alternative proposal to the October 19, 2010 EPA BART modeling usin g CALPUFF version 5.8 and is not a

combination of version 5.8 and version 6.4 of CALPUFF.

Response:

To clarify, although APS provided document ation modeling results using both CALPUFF versions, the EPA proposals and technical support documents presented only results from version 5.8, the approved regulatory model.

Comment:

Some commenters (0168, 0174, 0176/ 0177, 0179, 0185, 0187) argued against the visibility metrics that EPA introduced in the BART proposal. These comments are summarized

below.

One of the owners of FCPP (0176/0177) argued that the new visibility metrics proposed in the ANPR are inappropriate and unsupported, a nd should be discarded. The commenter noted that none of the metrics (percent improvement in dv impacts, cumulative changes in dv, and dv impacts scaled by the geographic area of the aff ected Class I area) are addressed in the BART rules, and posited that their introduction into the BART process is intended to inflate the estimated visibility benefits of the control options at FCPP. In addition, the commenter noted that these metrics do not appear to have been s ubjected to peer review or public comment independent of this rulemaking, as would be nor mal for what the commenter stated to be a critical change to a defined regulatory process.

Regarding the percent improvement metric, the commenter (0176/0177) stated that these values (unlike values of the haze index in dv) have no consistent relationship to the humanperception of haze changes and no consistent relationship to changes in ambient visibilityimpairing particle concentrations. As a result, th e commenter asserted that this metric is not appropriate and must be rejected. For similar reasons, a utility industr y association commenter (0187) and a group of FCPP owners (0185) asserted that the percent improvement metric does not provide useful information for assessing visibility improvement and EPA cannot legitimately rely on this method in maki ng a BART determination.

Similarly, one of the owners of FCPP (0176/ 0177) contended that cumulative change in dv is not an appropriate metric to describe vi sibility improvement and should be withdrawn. The commenter made the following points:

 The peak impact from a source occurs at diffe rent times in different Class I areas because a facility’s emissions cannot resu lt in peak concentrations in all directions at once. Thus, this metric really does not represent a cu mulative regional impact of the source (andPage 92 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments hence the benefit of controls); rather it simply produces a mathematical summation of the peak impacts occurring at different times at various Class I areas.

 The value of the total depends in part of the number of Class I areas included in the analysis. This raises questions regarding the utili ty of the CALPUFF model when Class I

areas are at distances where the accuracy of CALPUFF is in question. The BART rule notes that uncertainties in model performan ce increase at distances greater than 200 km from the source (citing 70 FR 39125-26), and 10 of the 16 Class I areas evaluated for

FCPP are located more than 200 km from the plant. These 10 areas show some of the highest modeled visibility improvements, a nd it is likely that these predictions are

overstated.

 It is inappropriate to add improvements ove r all Class I areas. A 0.5 dv improvement in one Class I area and a 0.5 dv improvement in another area does not result in a 1 dv improvement – the improvement is a 0.5 dv improvement, which occurs in two different locations. Any one observer would experience only a 0.5 dv improvement; he or she can only experience the visibility improvement in the Class I area being visited. Adding improvements across Class I areas flies in th e face of the basic sc ience of visibility perception thresholds.

The utility industry associ ation (0187), one FCPP owner (0179), and a group of FCPP owners (0185) also argued agai nst use of the cumulative impact metric, which they asserted dramatically overstates projected visibility im provements. These commenters claimed that the cumulative approach contradicts the BART rules, which state that it is appropriate to model impacts at the nearest Class I area and other near by Class I areas “to determine whether effects at those [other] areas may be greater than at the nearest Class I area,” and that “[i]f the highest

modeled effects are observed at the nearest Class I area, you may choose not to analyze the other Class I areas further” (citing 70 FR 39170). The commenters concl uded from this that the BART rules envisage a visibility analysis that is focuse d on visibility impacts in the most impacted area,

not all areas. The commenters added that cumu lative impact is ina ppropriate because no individual will perceive impacts in more than one Class I area at a time. The commenters also said this approach arbitrarily inflates the be nefit that might be associated with emissions limitations at a single source, illustrating this point by noting that this method would yield

different results if a Class I area were divided into two or more areas – increasing the benefit simply by increasing the number of areas. One of these commenters (0187) also pointed out that this approach would equate a small, imperceptib le benefit summed over more than one area with a much larger, humanly perceptible improvement in a single area, which the commenter stated are not equivalent.

Two other owners of FCPP (0168, 0174) voiced general support for the comments on visibility metrics submitted by Commenter 0176/0177.

Conversely, one environmental advocacy group commenter supported the use of a cumulative impact analysis. The commenter asserted that the cumulative impact of a source’s emissions on visibility, as well as the cumulative benefit of emi ssion reductions, is a necessary consideration as part of the fifth step in the BA RT analysis, particularly in cases such as FCPP

where the source causes or contribut es to visibility impairment at a significant number of Class IPage 93 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments areas. The commenter stated that failing to accoun t for a source’s cumulative impairment and the cumulative pollution control benefit would resu lt in a failure to acknowledge the regional approach to reducing haze.

Response:

EPA believes that it is important to consider the visibility impac t on multiple Class I areas. The goal of the visibility program is to remedy visibility impairment at all Class I areas. CAA 169A (a)(1). One approach to a ccount for the benefits to all affected Class I areas is the

cumulative “total dv” metric. However, there is no EPA approved cumulative metric to account for visibility impacts at multiple Class I area s. EPA relied on the modeled impacts and benefits at each Class I area individually, the number of Class I areas affected, a nd also considered, but did not specifically rely on, the sum of visibil ity impacts and benefits ac ross all sixteen Class I

areas.

The comments about the visibility metrics have largely already been addressed by EPA in the TSD for our proposed BART determinati on (pp.61-63 and pp. 67-68), which also explained that EPA did not rely on any alternative visi bility metrics in the BART determination. The comments on this issue are therefore moot, but we will briefly summarize the issues, which are discussed more fully in the TSD.

As for the percent deciview visibility im provements that some commenters objected to, EPA refers the commenters to the proposal TSD, whic h explains what it represents for visibility impacts (TSD for proposed BART determination, p.62). EPA understands, and is confident that the commenters understand, the diffe rence between absolute numbers and percentages. In brief, the percent improvement for a particular area and control scenario shows only the relative improvement in the impact of FCPP alone, and not improvemen ts in overall visibility impairment. A given absolute deciview impr ovement translates into a large percent improvement at an area having only a small FCPP impact in the first place, and a small percent improvement at an area having a large FC PP baseline impact. EPA notes that the BART Guidelines do mention percent im provement as a legitimate metric.

5 6 F 57

EPA considered this information qualitatively, but arrived at conclusi ons about the degree of visibility improvement in terms of deciviews, in accordance with the BART Guidelines (75 FR 64229, and TSD p.76).

Finally, EPA disagrees with the commenters th at EPA is restricted to considering only impacts at the single nearest Class I area, or th e single Class I area with the highest impacts. A somewhat fuller excerpt from the commenters’ citation of 70 FR 39162 is: “One important element of the protocol is in establishing the re ceptors that will be used in the model. ... you may choose not to analyze the other Class I area s any further as addition al analyses might be unwarranted.” When read in context, this language in the BART Guidelines is clearly meant to provide a common sense approach to streamlining a complex and difficul t modeling exercise where “an analysis may add a significant resour ce burden to a State.” 70 FR at 39126. While the BART Guidelines indicate that a detailed analys is of the visibility impac ts at each area in a cluster of Class I areas may not be necessary, this is not because the visibi lity impacts at Class I

57

70 FR 39170 “Comparison thresholds can be used in a number of ways in evaluating visibility improvement (e.g. ... a threshold representing an x percent change in improvement).”Page 94 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments areas other than the most impacted ar e irrelevant but rather because the visibility benefits at the most impacted Class I area alone may be sufficient to justify the selection of the most stringent control technology as BART. Where, as here, th e benefits of controls have been modeled for a number of surrounding areas and consideration of th ese benefits is useful in determining the appropriate level of controls, EPA does not agree that these benefits should be ignored.

Comment:

Two commenters (0174, 0187) questioned EPA’s use of 0.5 dv as the threshold of a humanly perceptible change in visibility (ci ting 75 FR 64228). One of the commenters (0187) cited scientific literature, while the second (0174) cite d the report by Dr. Ivar Tombach that is

attached to Comment 0176/0177. The latter commenter (0174) added that the establishment of a specific deciview threshold as a “bright line” to define whether a certain control will be imposed as BART is contrary to the intent of the BART rules and the objectives of the Regional Haze program, which require EPA to consider the co st of each control opti on in relation to the associated visibility benefit.

One of the owners of FCPP (0176/0177) expresse d the belief that application of SCR at FCPP would result in no perceptib le visibility improvement and therefore cannot be BART. The commenter based this conclusion on modeling results discussed previously in this section. Based on these results, the commenter stated that the changes in visibility that would result from combustion controls and SCR are all humanly imperceptible, as is the difference between combustion controls and SCR – thus, there is no basis for concluding that SCR constitutes

BART. Am. Corn Growers , 491 F.3d at 7 (rejecting EPA’s positi on, as reflected in the original BART rules, that allowed for the possibility “that a source may be forced to spend millions of dollars for a new technology that will have no ap preciable effect on haze in any Class I area.”).

Response:

EPA disagrees with the commenters that the vi sibility benefit from the proposed BART controls is too small to warrant requiring the controls; in add ition, EPA is not using a perceptibility threshold in this BART determin ation. EPA agrees that thre sholds should not be considered a “bright line” in making BART d ecisions. In the BART Guidelines, EPA described 1 dv as the threshold for an impact that “causes” visibility impairment, and 0.5 dv as a threshold for an impact that “contributes” to visibility impairment, for determining whether a source is subject to BART, though States were accorded discretion to use different thresholds (70 FR 39118, July 6, 2005; also 39120-39121). These threshol ds do not apply to BART determinations for sources have been found subject to BART; Stat es or EPA could consider visibility impacts

less than 0.5 dv to warrant BART controls. To the extent that the co mment is questioning the BART eligibility of FCPP, EPA has already esta blished that FCPP is BART eligible and the commenter did not provide evidence to the contrary.

Even if the commenters are correct that 0.5 dv change is not perceptible, EPA noted that “[e]ven though the visibility im provement from an individual s ource may not be perceptible, it

should still be considered in se tting BART because the contributi on to haze may be significantPage 95 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments relative to other source contributions in the Class I area. Thus, we disagree that the degree of improvement should be contingent upon perceptib ility. Failing to consid er less-than-perceptible contributions to visibility im pairment would ignore the CAA’s in tent to have BART requirements apply to sources that contribute to, as well as cause, such impairment.” (70 FR 39129)

That is, impacts smaller than this to c ontribute to impairment. Conversely, an improvement of 0.5 dv or less contributes to impro vement in visibility impai rment. As stated in the proposal, the modeled improvements in visi bility are large enough to warrant requiring the proposed BART controls. While the actual im provements may be larger, from 0.6 to 2.8 deciviews, even an improvement of 0.5 dv is a contribution toward improving visibility, especially when the benefits at multiple Class I areas are considered. In conjunction with improvements from other sources , this will help toward the Clean Air Act goal of remedying manmade visibility impairment.

Comment:

One environmental advocacy group commente r (0182) stated that EPA underestimated visibility improvement from installing NO

x controls because it overestimates the production of sulfuric acid by the SCR and underestimated the amount of sulfuric acid removed downstream of the SCR. The commenter cited reports attached to the comments (0182) to argue that sulfuric

acid does not limit SCR NO

x control efficiency. The commenter also states that modeling shows that greater NO

x removal rates are not offset by sulfuric acid emissions but instead yield greater visibility improvements than those proposed by EP A. The commenter argues that there will be a significant visibility benef it from increasing the SCR NO

x efficiency from 80 percent to 90 percent and therefore conclude s that a higher level of NO

x control than 80 percent should be

determined BART.

Response :

EPA disagrees with the comment that we overst ated the production of sulfuric acid from the SCR catalyst and underestimated the amount of sulfuric acid removed downstream of the SCR. In the TSD for our proposed BART determi nation, we estimated sulfuric acid emissions using the EPRI methodology and provided detailed explanations for all of the assumptions we applied as well as a discussion to compare measur ed and calculated values of sulfuric acid emissions from the Navajo Generating Stati on (see TSD p.55-59, 64-65, and 68). While we fully acknowledge and understand that the genera lized EPRI methodology does not precisely represent true sulfuric acid emissions for a gi ven facility, this met hod is a commonly used calculation methodology fo r estimating sulfuric acid emissions under a future operating scenario involving SCR. The assumptions we applied in estimating sulfuric acid emissions after the installation and operation of SCR using the EPRI methodology were justified and appropriate.

EPA assumed in our BART proposal a 3+1 system (4 layers of catalyst) would achieve

80% NO

x removal. Greater reduction efficiencies would likely require an additional layer of catalyst, which would likely increase sulfuri c acid emissions . Based on the SO 2 to SO 3 conversion rate guarantee we received from Hita chi for its CX series catalyst (ultra-lowPage 96 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments conversion) of 0.167% per layer, the use of an add itional catalyst layer would equal 5 layers of catalyst and a 0.835% conversion rate. EPA is not aware of SCR systems that use 5 layers of catalyst, and the addition of a 5 th layer would certainly affect the cost and operation of the unit. Although EPA agrees that the modeling referen ced by the commenters appears to indicate greater visibility improvement from an SCR sy stem achieving 90% removal compared to 80% removal despite higher sulfuric acid emissions

5 7 F 58 , EPA does not agree that this requires EPA to

determine that 90% control be determined BART. In Section 8.1 of this document, we respond to

the comment that the emission limitation for BART should be bas ed on 90% control with SCR

rather than 80% control with SCR. Based on the rationale outlined in that response, EPA determined that 80% control, achievable with SCR, is appropriate for BART for FCPP.

Comment:

One of the owners of FCPP (0176/0177) subm itted the results of a dditional modeling and concluded that the proposed alternative strategy would result in greater visibility improvements in the Class I areas surrounding FCPP than would the proposed BART FIP; however, the commenter continued to disagree that the improvement would be humanly perceptible. According to the commenter, the commenter’s additional visibility modeling using “valid background ammonia values and the revised CALP UFF model” show that none of the modeled

NO

x emission reduction strategies at FCPP will re sult in humanly perceptible improvement in visibility in the 16 surrounding Class I areas. The commenter i ndicated that highest predicted visibility improvement (change in deciview) by applying SCR, compared to baseline emissions, is 0.28 dv, while the incremental improvement in dv resulting from app lication of advanced combustion control technology and SCR is predicted to be 0.21 dv. Because both these numbers

are well below the EPA-threshold for human perception of 1.0 dv, SCR does not constitute

BART for the Plant.

Response:

EPA agrees with the commenter that the a lternative emission control strategy (of shutting down units 1, 2, and 3, and placing SCR on units 4 and 5) may “result in greater visibility improvement at the surrounding Cla ss I areas” (EPA's supplemental proposal, 76 FR 10532, February 25, 2011). However, as discussed in the response to another comment, EPA does not agree that the visibility improvem ent from the original or alternative NO

x reduction strategies would be imperceptibl e; EPA anticipates the improvements from either strategy would be perceptible.

Comment:

One of the owners of FCPP (0176/0177) st ated that EPA’s TSD Table 21 (TSD p.44) mischaracterized the measured visibility impairment at nearby Class I areas as 10 th and 90 th

58 EPA notes that the baghouses on Units 4 and 5 are assumed to provide a significant amount of control of sulfuric acid emissions, therefore, such slight incr eases in sulfuric acid emissions would not be expected on units that are not equipped with baghouses.Page 97 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments percentile deciview values, whereas the figures actually represent the average of deciviews on the best and worst 20% of days, respectively. The commenter also point ed to contradictory statements in the TSD (pp.46-47) about the maxi mum relative humidity used in the relative humidity adjustment factor ( f(RH)) that accounts for the effect of water on particle size growth: the TSD states that the IMPROVE equation uses a maximum humidity of 98%, whereas IMPROVE and the RHR actually use 95%.

Response:

EPA agrees with the commenter that in Table 21 of the TSD, we incorre ctly identified the

measured values as the 10 th and 90 th percentile deciview impairm ent, rather than the average deciview impairment on the best and worst 20% days. However, Table 21 was presented only for background informational purposes and the values in that Table were not germane to nor relied upon in our BART determination. EPA relied on Tables 36 – 39 to assess the anticipated visibility improvement from controls under th e final factor of the BART analysis. Even though mislabeled, Table 21 does give a corr ect impression of the magnitude of visibility impairment. The 98% humidity maximum is a value from an earlier guidance document; the value in the Regional Haze guidance

5 8 F 59 and correctly used in EPA’s modeling was 95%. EPA also notes that this maximum (RHMAX in the input for the CALPOST post-processor) is not directly used in the visibility calculation method (MVISBK=6 in CA LPOST) that was relied upon, and therefore was adequate for the BART determination modeling.

59 “Guidance for Estimating Natural Vi sibility Conditions Under the Regiona l Haze Rule”, EPA- 454/B-03-005, EPA 2003, p.A-3.Page 98 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## 8.0

7 B 

## Comments on BART Determinations

8.1

2 0 B 

### Comments on the Proposed BART Determination for NO

x

Comment:

A number of commenters, includ ing owners of FCPP (0168, 0174, 0176/0177, 0179, 0185), the Navajo Nation (0223), and a utility indus try association (0187), asserted that EPA’s BART analysis was inconsistent with its own regula tions in that it did not give proper weight to the “presumptive BART” limits for NO

x that it established for EGUs through notice-andcomment rulemaking (generally citing 70 FR 39104, July 6, 2005). The commenters noted that these presumptive BART limits are based on the use of combustion controls, and that EPA had considered and rejected establishing presumptive BART limits based on SCR.

In the most extensive comments on this t opic, one of the commenters (0176/0177) made the following points. The other comm enters (0168, 0174, 0179, 0185, 0187, 0223) presented arguments similar to some or all of these points.

 In establishing presumptive BART limits for NO

x emissions from EGUs, EPA concluded that combustion control-based presumptive lim its “are extremely likely to be appropriate for all greater than 750 MW power plants su bject to BART” (a category that includes FCPP), that they are “highly cost-effective c ontrols,” and that they “would result in significant improvements in visibility and help to ensure reasonable progress toward the national visibility goal (citi ng 70 FR 39131). Additionally, EPA has made clear that “the presumptions represent a reasonable estimate of a stringent case BA RT...” (citing 71 FR 60612, 60619, Oct. 13, 2006).

 The EPA was not correct in stating in the proposal that in setting presumptive BART limits, it “did not consider the question of what more stringe nt control technologies might be appropriately determined to be BA RT” (citing 75 FR 64226). Rather, EPA’s 2005 rules were clear that the Agency had considered – and rejected – establishing presumptive BART limits based on SCR (citing 70 FR 39136). Thus, EPA established through rulemaking that SCR is not an appropriate basis for presumptive BART limits

and that combustion controls s hould generally be deemed BART.

 In this context, a BART analysis must begi n with and take into account the presumptive BART limits and EPA’s rationale for setting them. If a source is able to meet the limit through the application of com bustion controls, there should be an exceedingly strong presumption that such controls constitute BA RT. This principle was further supported in EPA guidance to the states, where EPA ge nerally directs aut horities to “require such utility boilers to meet the [presumptive BART] limits...” and to consider requiring technologies other than combus tion controls only when comb ustion controls cannot meet the presumptive limit (citing 70 FR 39171-72).

 In effect, the EPA’s analytical approach di sregarded the presumptive limits entirely. By using a top-down approach in which it starte d its analysis by evaluating SCR and thenPage 99 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments determined that SCR is BART for FCPP, EPA never undertook an assessment of the combustion control technologies that EPA deemed, through notice-and-comment rulemaking, to constitute presumptive BART . (See Section 3.2 for additional comments on the use of the top-down approach.)

 In its BART analysis, APS has demonstrat ed that each unit at FCPP can meet the presumptive BART limits through the appl ication of advanced combustion control technologies. Therefore, EPA thus must ma ke an exceedingly compelling case for SCR as BART if it intends to pr oceed with the proposed BART determination, which it has not done. To the contrary, it has done little more than to conclude that SCR is acceptable as BART based on an unexamined and arbitrary a ssumption that other t echnologies are not.

 Under the BART rules, a deviation from presumptive BART, either upwards or downwards, is authorized if an alternative control level is justified based on “careful consideration of the statutory factors” (citing 70 FR 39131). However, EPA did not carefully consider the BART factors and then conclude that an alternative to presumptive BART limits is appropriate. Instead, EPA di smissed the presumptive BART limits before even considering the BART factors.

 The EPA appears to have adopted a new st andard for deviations from presumptive BART, stating that presumptive BART contro ls are required “unless there are sourcespecific circumstances that would justify a different conclusion” (citing 75 FR 64226). Using this new standard, EPA dismissed pr esumptive BART prior to undertaking any BART factor analysis and argued for post-co mbustion controls on the grounds that FCPP “is the largest source of NO

x emissions in the United States and ... is surrounded by 16 mandatory Class I areas” (citing 75 FR 64226) . Rather than using an analysis of the BART factors to support a non-presumptive BART limit, EPA dismissed presumptive BART outright, based on factors not refe renced anywhere in the BART rules.

Response:

EPA disagrees with the commenters’ assertions that we did not give su fficient weight to presumptive BART NO

x limits, or that the BART determin ation for FCPP was performed in a

manner inconsistent with the RHR.

As noted in other responses in this document, the presumptive NO

x limits established in

the BART Guidelines are determined to be cost effective and appropriate for most units. The establishment of presumptive BART limits, and the corresponding techno logy upon which those limits are based upon, does not precl ude states or EPA from setting limits that diffe r from those presumptions. Indeed, the five statutory factors enumerated in the BART Guidelines provide the mechanism for establishing different requirement s. EPA’s site-specific fi ve-factor analysis for FCPP demonstrates that, in considering the ex pected remaining useful life of FCPP and the existing controls, SCR is cost effective , results in the most visibility improvement of all feasible control technologies, and does not cause energy or non-air quality enviro nmental impacts that

warrant its elimination as the t op control option. As a result, regardless of the appropriateness of SCR as a control technology for most units on a national scale, or the extent to which EPA considered SCR in establishing the presumptive limits, the site-specific five-factor analysisPage 100 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments performed for FCPP justifies a different NO

x BART limit than the presumptive NO

x BART limit.

We note the RHR states:

States, as a general matter, must require owners and operators of greater than 750 MW power plants to meet these BART emission limits. We are establishing these requirements based on the consideration of certain factors discussed below. Although we believe that these requirements are extremely likely to be appropriate for all greater than 750 MW power plants subject to BART, a State may est ablish different requirements if the

State can demonstrate that an alterna tive determination is justified based on a consideration of the fi ve statutory factors.

The RHR also states:

If, upon examination of an individual E GU, a State determines that a different emission limit is appropriate based upon its analysis of the five factors, then the State may apply a more or less stringent limit.

Therefore, the presumptive em ission limits in the BART Guid elines are rebuttable. The presumptive emission limits apply to power plants with a total generati ng capacity of 750 MW or greater insofar as these sources are required to adopt emission limits at least as stringent as the presumptive limits, unless after considering the fi ve statutory factors, the State determines that the presumptive emission limits are not appropriate. Moreover, the RHR and BART Guidelines do not exempt states from a five factor BART an alysis, and that BART analysis may result in a determination of BART emission limits that are more or less stringent than the presumptive emission limits for subject to BART sources. The RHR states:

For each source subject to BART, 40 CFR 51.308(e)(1)(ii)(A) requires that States identify the level of control representing BART after considering the factors set out in CAA section 169A(g), as follows:

States must identify the best sy stem of continuous emission control technology for each source subject to BART taking into account the technology available, the costs of compliance, the energy and non-air quality environmental impacts of compliance, any pollution control equipment in use at the source, the re maining useful life of the source, and the degree of visibility improvement that may be expected from available control technology.

EPA disagrees with commenters’ asserti ons that we disregar ded presumptive NO

x BART limits entirely, and that we faile d to evaluate combusti on controls in any s ubstantive manner. Although we do not rely upon the numerica l values of the presumptive NO

x limits listed in the BART Guidelines, the technologi cal basis for presumptive NO

x BART limits, such as the use of combustion control technology, boile r type, and coal type, were cons idered in the site-specific five-factor analysis. Combustion co ntrol technology was specifical ly considered as a potential retrofit technology, and costs and visi bility improvements associat ed with combustion controlsPage 101 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments were calculated and included in the TSD in order to provide a comparison to other NO

x control technologies. As a result, presumptive BART wa s not disregarded or dismissed during the NO

x BART determination process.

In addition, EPA disagrees that th e rule directs authorities to consider non-combustion control technology only when presumptive limi ts cannot be met using combustion control technology. While a BART determination deviati ng from presumptive BART must be supported by the results of the five-factor analysis, the rule does not restrict the ability of States (or in this case, EPA) to initiate a five-factor analysis . Although the inability of a boiler to meet presumptive NO

x BART limits through the use of combus tion control technology is described as

one circumstance in which a non-combustion cont rol BART determination may be considered (70 FR 39172), it does not preclude c onsideration of other circumstan ces, nor is it identified as a qualifying threshold for perfor ming a five-factor analysis, as commenters suggest.

Comment:

One of the owners of FCPP (0176/0177) stated that an agency is re quired to follow its own rules, and that failure to do so makes its action unlawful and subj ect to vacatur, citing Way of Life Television Network, Inc. v. FCC, 593 F.2d 1356, 1359 (D.C. Cir. 1979) (“[A]n agency’s failure to follow its own regulati ons is fatal to the deviant acti on.”) The commenter asserted that in this case, EPA must develop and use a BA RT evaluation methodology that properly accounts for the presumptive BART limits (see above), an incremental cost effectiveness assessment (see Section 3.2), an analysis of control costs as a function of visibility improvement (see Section 3.3), and site-specific cost information (s ee Section 3.1) to deve lop lawful BART limits

for FCPP.

Response:

EPA disagrees that we have not followe d our own rules in performing the NO

x BART determination for FCPP. We address the co mmenter’s specific concerns as follows:

 Presumptive BART limits - As noted in res ponses above to comments on the presumptive

NO

x limit and the cost effectiveness of the presumptive NO

x limit, while we did not propose that BART for FCPP was satis fied with the presumptive NO

x BART limits, the site-specific five-factor analys is we performed did account for the technological basis for presumptive NO

x BART limits, such as the use of combustion control technology, boiler type, and coal type, and also examined the abi lity of combustion c ontrol technology to meet the numerical presumptive NO

x BART limits.

 Incremental cost effectivene ss assessment - As describe d in the comment responses written in Section 3.2, we agree with co mmenters that the BART Guidelines do recommend consideration of incremental co st effectiveness an d our BART analysis performed such an assessment in accordan ce with the methodology described in the

BART Guidelines.Page 102 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments  Analysis of control costs as a function of visibility improv ement – As described in the comment responses written in Section 3.1, although $/deciview is discussed as an example of one element that may be considered when determining cost of compliance, we do not regard it as a mandatory metric under the five-factor analys is. We considered several other metrics, including total capita l costs, annual costs, $/ton, and incremental $/ton, and do not regard $/deciview as a useful metric to inform our decision at this time.

 Site specific cost info rmation – As described in the comme nt responses written in Section 3.1, we disagree with the commenters’ assertion that our cost analysis did not take into account the site-specific cost information supplied by APS. As part of the line-by-line analysis we performed (described in S ection 3.1 responses) on the cost estimates provided by APS, we ultimately incorporated most of the APS cost estimates in our final SCR cost estimate. Our detailed, line-by-line analysis is included in the docket for this rulemaking and provides an explanation for why we retained, modified, or rejected each line item in the SCR cost estimate fo r each of the five units at FCPP.

Comment:

Two of the owners of FCPP (0168, 0176/0177) and the Navajo Nation (0223) asserted

that advanced combustion controls constitute BART for FCPP because such controls will result in meaningful emission reductions and will contri bute to reasonable progress toward visibility improvement.

One of these commenters (0176/0177) noted that EPA has “determined that combustion controls are not likely to be effective control technologies at FCPP” (citing 75 FR 64226). The commenter alleged that EPA’s determination is based on superficial anal ysis and is mistaken. This commenter (0176/0177) cited Exhi bit J to its comments on the ANPR,

5 9 F 60 which contains a detailed analysis of the use of LNB and OFA on FCPP’s units. According to the commenter, this analysis confirms that the use of advanced combustion controls on the five units at FCPP will reduce plantwide NO

x emissions by 34 percent and, for t hose units that are subject to presumptive BART limits, the reductions more than satisfy the presumptive limits in the BART

rules.

Two of the commenters (0168, 0176/0177) added that considering that neither SCR nor

advanced combustion controls wi ll produce humanly perceptible vi sibility improvements in the nearby Class I areas (see the commente rs’ comments in Section 7.0) these NO

x emission

reductions must constitute BART . The commenters indicated that this is true given that the reductions meet presumptive BART and will make a contribution to reasonable progress toward the national visibility goal. On e of the commenters (0176/0177) added that this conclusion is reinforced by the cost differential between the technologies and th e other BART factors

discussed in the commenter’s commen ts elsewhere in this document.

The Navajo Nation (0223) stat ed that a phased approach to emissions controls at FCPP, beginning with combustion controls, is fully consis tent with both the CAA and the RHR, and is

60 See item 11 from collection of documents titled “Comments on ANPRM 09 0598 APS Comments and Exhibits”,

Document No. EPA-R09-OAR-2009-0598-0195.Page 103 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments the approach that the EPA should take as a prud ent trustee of the Navajo Nation. According to the commenter, installing LNB a nd OFA as a first step in a phased approach to BART for the FCPP (and NGS) would:

 Be consistent with the presumptive BART limits established in the BART Guidelines.

 Result in a more clearly fact driven process, by allowing all interested parties to review recorded, not simply modeled, results at the next review phase.

 Aid in the resolution of disput es over the costs to instal l the emission control options under consideration by providing the opportunity to review the actual costs incurred by FCPP to install LNB and OFA. (The comment er noted that NGS completed installation of LNB/OFA this year.)

 Provide a reasonable timeframe in which to resolve outstanding lease and ownership issues that affect the produc tive life of FCPP (Factor 4).

This commenter (0223) added that the BART component of the CAA and RHR was meant to provide for a measured response to em issions from aging power plants; thus, requiring the most expensive controls is inconsistent w ith the law and regulati ons governing the BART process. The commenter also emphasized that requiring a power plant over which EPA has exclusive jurisdiction to bear a greater regulatory burden than similarly situ ated plants regulated by the states is contrary to the purposes of the Act, the RHR, and to the economic interests of the Navajo Nation.

Response:

As noted in the responses to comments in Section 3.3, EPA disagrees with the comment that Exhibit J of APS’s comments on the ANPR confirm that advanced combustion controls on all five units at FCPP will reduce plant-wide NO

x emissions by 34%. APS has provided conflicting information regarding whether or not advanced combustion contro ls will be effective at significantly reducing NO

x emissions at FCPP. As outlined in the TSD for our 2010 BART proposal, based on an independent report by An dover Technology Partners dated April 5,

2004

6 0 F 61 , we have concluded that combustion controls will in fact not be eff ective at significantly reducing NO

x emissions at FCPP. Furthermore, i ndependent of whether or not advanced combustion controls will allow the FCPP units to achieve presumptive NO

x BART limits, EPA disagrees with the commenter’s assertion that a unit’s ability to m eet presumptive BART precludes a more stringent BART de termination. As noted in a pr evious response to comment in this section, while the inability of a boiler to meet presumptive NO

x BART limits through the use of combustion control technology is described as one circumstance in which a non-combustion control BART determination may be considered (70 FR 39172), it is not identified as a qualifying threshold for performing a five- factor BART determination.

EPA disagrees that SCR will not produce hum anly perceptible impacts. As noted in responses to comment in Secti on 7, visibility modeling performe d by EPA of the impacts of SCR

installation at FCPP indicates visibility impacts from 1.2 to 6.0 deciviews, depending on the Class I area (based upon IWAQM Phase 2 background ammonia value of 1 ppb). If low

61 See Document No. EPA-R09-OAR-2010-0683-0059.Page 104 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments ammonia background values are used as recommende d by some commenters, visibility impacts range from 0.8 to 3.2 deciviews. Although the lower range of th ese less conservative modeling results fall below the 1.0 deciview value commonly cited as the threshold for human perceptibility, the range of impacts is not negligible.

EPA does agree with certain aspects of the Navajo Nation’s comments regarding a phased implementation strategy to attaining national visibility goal s. In 40 CFR 51.308(f), States are required to revise their regional haze im plementation plans every ten years, which is a process that involves evaluati ng their ability to attain reas onable progress goals and potentially updating their long-term strategy for regional haze. The periodic revision requirement described in 40 CFR 51.308(f), however, does not exte nd to the implementation plan for BART requirements. The phased approach described by the Navajo Nation has certain benefits, and a phased approach is incorporated into the alternative emission control strategy.

Comment:

Two federal agencies (0175, 0224)) and two groups of environmental advocacy groups (0095, 0182) argued that the NO

x emission limit for the units at FCPP should be 0.05 lb/MMBtu based on the capabilities of SCR. Another enviro nmental advocacy group (0183) stated that EPA should reexamine the basis for determining the NO

x limit and consider tighter NO

x controls, but did not specify what that tight er limit should be. The comments of the federal agencies are summarized below, followed by those of the environmental advocacy groups.

The federal agency commenters (0175, 0224) st ated that, given that BART is meant to achieve the best possible emissions reductions, EPA should not base its emission limits on the “minimum reduction expected from SCR, estimat ed by Hitachi Power Systems America” (citing the TSD for our proposed BART determination) b ecause real-world application of SCR indicates

that lower NO

x emission limits are routinely reached. Regarding the emission limits for Units 4 and 5, the commenters noted that of the 20 cel l burners with SCR in 2010, 12 had lower NO

x limits than proposed by EPA for FCPP, with 3 EGUs at less than 0.06 lb/MMBtu. Based on this information, the original APS BART analysis of SCR at 0.06 lb/MMBtu (annual and 24-hour average), and the “common knowledge” that SCR can achieve at least 90 percent reduction, the

commenters concluded that the installation of SCR at FCPP is capable of reducing annual NO

x emissions by 90 percent to 0.05 lb/MMB tu on an annual average basis.

One of the federal agency commenters (0224) specifically refuted the additional rationale provided by EPA in the supplemental proposal fo r its 80 percent SCR efficiency estimate:

 The EPA took into account the degradation of the SCR catalyst over its lifetime and calculated the emission limit to reflect the capa bility of the catalyst just prior to its replacement on a 3-year cycle. According to the commenter (0224), modern SCRs are typically designed with one or two spare catalyst layers to facilitate catalyst management and account for catalyst degrada tion over time; the issue cited by EPA is not a technical limitation on SCR, but is simply a cost item to be accounted for in the proper design and operation of the SCR.Page 105 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments  The EPA stated that pursuing NO

x control efficiencies of greater than 80 percent on Units 4 and 5 is limited by formation of H 2 SO 4 from the SCR catalyst because the additional layers of catalys t needed to increase NO

x control efficiency would increase

emissions of H 2 SO 4 , most affecting nearby Mesa Ve rde National Park. The commenter (0224) gave the following reasons why this argument is incorrect. (Commenter 0175 also made similar points.)

– The EPA’s statement “the presence of additional catalyst would result in higher emissions of sulfuric acid” is unsuppor ted. The EPA used the EPRI method for estimating H 2 SO 4 emissions. The only factor in the EPRl method that is related to the

SCR and affects H 2 SO 4 generated by the catalyst is the catalyst oxidation rate, not the volume, area, or number of catal yst layers as implied by EPA.

– The EPA statement that “Minimizing the formation of primary SO 3 /H 2 SO 4 in the catalyst bed is most important for visibi lity improvement at Mesa Verde National Park, the closest Class I ar ea to FCPP” is unsupported.

o The EPA’s modeling results in the Oct ober 2010 TSD show that even with

increases in sulfate emissions from SCR installation, visibility improves at Mesa Verde National Park and every other national park.

o The EPA appears to have assumed that at least one additional catalyst layer would have to be added to the two layers assumed by APS, thus increasing H 2 SO 4 emissions by 50 percent, but applicati on of EPA’s Control Cost Manual method for estimating SCR catalyst volume indicates that increasing NO

x removal efficiency from 80 to 90 percent would require only a 14 percent increase in catalyst volume. If one assumes that H 2 SO 4 emissions are directly related to catalyst volume, a 14 percent increase in catalyst volume would mean an increase in sulfate emissions of 0.3 lb/hr, which is highly unlikely to have any appreciable impact upon visibility when compared to the much greater NO

x reductions. To verify the potential visibility impact, EPA should model the 90 percent NO

x reduction scenario with its increased sulfate emissions.

 The EPA stated that the high ash content (approx imately 25 percent) of the coal burned at FCPP may adversely affect the capability of S CR to reach the highest end of the control efficiency range without the use of additional la yers of catalyst or more frequent catalyst replacement. According to the commenter, th is is not consistent with previous EPA proposals for SCR emissions limits at facilities that use coal with si milar ash content. For Desert Rock power plant with coal at 23.4 percent ash, EPA issued a permit limiting

annual NO

x emissions to 0.0385 lb/MMBtu, and EPA has recently proposed NO

x BART at 0.05 lb/MMBtu (30-day rolling average) at the nearby San Juan Generating Station which burns local coal with 21.3 percent ash. Unless the FCCP ash contains some unusual catalyst poison, the 25 percent ash conten t is not a technical f easibility issue that would affect SCR effectiveness, but is a matter of proper SCR design, operation, and

maintenance.

This federal agency commenter (0224) also stated that NO

x BART for Units 1-3 should

be 0.05 lb/MMBtu on an annual basis. The comme nter noted that unsuccessful attempts to

reduce NO

x emissions at FCPP with combustion contro ls occurred over a decade ago when thisPage 106 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments technology was not as fully developed as now, and pointed out that APS’s BART analysis

concluded that such controls are te chnically feasible and would reduce NO

x emissions significantly. The commenter ev aluated Clean Air Markets Division (CAMD) data for 2000 - 2009 and found 33 dry-bottom, wall-fired boilers with NO

x emissions rates similar to FCPP Units 1-3 (0.6 - 0.8 lb/MMBtu) that had been re duced to 0.4 lb/MMBtu or less by application of

modern combustion controls. The commenter assert ed that because the typical approach is to

first reduce NO

x emissions by combustion controls before adding SCR, these real-world CAMD data support the belief that using com bustion controls and SCR could reduce NO

x at FCPP Units

1-3 to 0.05 lb/MMBtu on an annual basis.

One group of environmental advocacy groups (0 182) made similar arguments in asserting

that a lower NO

x limit is technically feasible and legally required as BART for FCPP. To support this assertion, the commenter drew heavily on an attachment containing comments prepared by Dr. Phyllis Fox

6 1 F 62 This comment summary includes th e comments presented by Commenter 0182; the reader may refer to th e attachment (0182) for greater detail. Commenters also argued

that emission limits should be based on a rolli ng average of 30 successi ve boiler operating days.

The commenter (0182) argued that neither the BART proposal nor the supplemental proposal represents the emission reduction capabilities of BART and thus fail to satisfy the

CAA. The commenter asserted that a lower limit of 0.05 lb/MMBtu for NO

x over a 30-day rolling average at each FCPP unit is technically feasible based on a combination of combustion controls (LNB and OFA) and a 90-percent-efficient SCR.

The commenter (0182) noted that the de finition of BART at 40 CFR 51.301 is “an emission limitation based on the degree of reducti on achievable through th e application of the best system of continuous emission reduction.... ” The commenter asserted that EPA picked 80 percent NO

x removal because it was the minimum level of control estimated by Hitachi (citing TSD pages 31 and 87), but selecting the lower end of a range quoted by a single vendor when the EPA only asked for 80 percent remova l efficiency does not satisfy the minimum statutory requirements of BART.

The commenter (0182) also stated the EP A indicated that 80 percent removal is appropriate because it provides the operator a marg in of safety. However, the commenter stated

the definition of BART doe s not anticipate a margin of safety, asserting that arbitrarily adjusting

down the emission reduction that can be achieved by SCR from 90 percent to 80 percent violates the requirement that BART emission limits be set based on the best removal system operated at the optimal efficiency to elim inate visibility impairment.

The commenter (0182) asserted that modern SCRs are routinely designed and operated to achieve 90 percent NO

x control and that based on this well-accepted industry standard, NO

x control of at least 90 percent is BART. The commenter noted that the BART Guidelines at 40 CFR part 51, Appendix Y state, “In general, a commercially available control option will be presumed applicable if it has been used on the same or a similar source type.”

62 See item (2) in collection of documents titled “Public Comment_8 Environmental Groups (Barth)_Letter 5-2-11”.

EPA-R09-OAR-2010-0683-0182.Page 107 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments The commenter (0182) also contended that LNB and OFA are feasible for all five units at FCPP. The commenter rejected EPA’s statement that it would be difficult to retrofit Units 4 and 5 with modern LNB technology (citing 76 FR 10534) and pointed out that the operator of FCPP

has stated that the combination of LNB and OF A is technically feasible for these units. The

commenter indicated that the use of LNB/OFA on Units 1-5 would reduce NO

x emissions by 27 to 46 percent, making SCR with a removal effi ciency of 90 percent sufficient to satisfy a

0.05 lb/MMBtu NO

x limit.

The commenter (0182) argued that a 0.05 lb /MMBtu limit is consistent with EPA’s determinations elsewhere, such as for the San Juan Generating Station (proposed limit of 0.05 lbs/MMBtu, 30-day rolling average) and for Desert Rock (final permit limit of 0.035 lbs/MMBtu, 365-day rolling average). Accordi ng to the commenter, an EPA-issued permit containing a lower NO

x limit creates a presumption of techni cal feasibility for purposes of BART – the BART Guidelines at 40 CFR part 51, Appendi x Y state that “if there is a permit requiring the application of a certain technology or emi ssion limit to be achieved for such technology, this usually is sufficient justificati on for you to assume the technical feasibility of that technology or

emission limit.”

According to the commenter ( 0182), EPA asserted that lower NO

x limits were not feasible for two reasons: (1) excessive formation of sulfuric acid mist, and (2) high ash content in the FCPP coal supply. The commenter asserted that the formation of sulfuric acid mist is not expected to be as high as cl aimed by EPA, and that inde pendent air dispersion modeling

established that the actual forma tion of sulfuric acid mist does not cause a significant level of visibility impairment in any case (c iting an attached re port by Andrew Gray

6 2 F 63 ). The commenter added that the ash content of FCPP’s coal (25% ) is not significantly higher than other coals where EPA imposed a lower NO

x limit, such as at the San Juan Generating Station. The

commenter concluded that a lower BART limit is technically feasible and legally required.

In “preliminary” comments submitted prior to the supplemental proposal, a similar group of environmental advocacy groups (0095) suggested NO

x limits of 0.05 lb/MMBtu on a 30-day rolling average measured using continuous emission monitoring system (CEMS), with compliance in 2014. The commenter added that the BART determination should include a provision that FCPP may forego BART implementation at any unit if it agrees to retire that unit prior to the deadline for BART implementation. The commenter requested that these limits be published for comment in any Federal Register notice published to take comment on the FCPP alternative BART proposal.

Another environmental advocacy group (0183) argued that EPA should reexamine its basis for determining NO

x BART, believing that SCR likely can achieve greater than 80 percent efficiency (EPA’s assumed efficiency) and a lo wer emission rate at FCPP. The commenter noted that the BART analysis submitted by the faci lity found SCR with approximately 90 percent removal efficiency to be feasible, resulting in an emission rate of 0.06 lb/MMBtu for Units 2 – 5.

The commenter stated that EPA should reexam ine its consideration of catalyst life, H 2 SO 4

63 See item (5) in collection of documents titled “Public Comment_8 Environmental Groups (Barth)_Letter 5-2-11”.

EPA-R09-OAR-2010-0683-0182.Page 108 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments formation, and ash content of the coal by compari ng its assumptions with other coal-fired power plants with similar parameters, and should establish a rigorous NO

x limit reflecting BART.

Response:

EPA disagrees with the commenter’s assertion th at emission limits a ssociated with BART

must meet the lowest emission rate achieved with that technology at any coal-fired power plant. The Regional Haze Regulations at 40 CFR §51.308(e)(1)(ii)(A) state that:

The determination of BART must be based on an analysis of the best system of continuous emission control technology available and associated emission reductions achievable for each BART-eligible so urce that is subject to BART . . .

Additionally, the BART Guidelines state that: “[ i]n assessing the capability of the control alternative, latitude exists to consider special circumstances pertinent to the specific source under review, or regarding the prior application of the control alternative”, (70 FR at 39166) and that “[t]o complete the BART process, you mu st establish enforceabl e emission limits that reflect the BART requirements . . .” (70 FR at 39172). The five-factor BART analysis described in the Guidelines is a case-by-case analysis t hat considers site specific factors in assessing the best technology for continuous emission controls. After a technology is determined as BART, the BART Guidelines require establishment of an emi ssion limit that reflects the BART requirements, but does not specify that the emis sion limit must represent the maxi mum level of control achieved by the technology selected as BART. The BART Guidelines and the RHR do not preclude selection of the maximum level of control achi eved by a given technology as BART, however, the emission limit set to reflect BART must be achievable by the specific source and should be

determined based on consideration of site-specific factors. Theref ore, limits set as BACT during PSD review (e.g., Desert Rock), or emission rate s achieved from the operation of individual facilities under an emissions trad ing program (e.g., Clean Air Act Interstate Rule (CAIR)) may provide important information, but should not be construed to aut omatically represent the most appropriate BART limit representative of a given technology for a given facility.

While some commenters asserted that combus tion controls would be feasible upstream of SCR to further reduce NO

x emissions to meet a limit of 0.05 lb /MMBtu, in its comment letter, the National Park Service agreed with EPA that th e addition of combustion controls such as OFA may “not (be) worth the small incremental reduction in NO

x emissions”, based on its review of the CAMD database showing that of the 35 ce ll burner boilers, only eight had combustion controls, and that two cell burner boilers at Ha tsfield Ferry were retrofit with OFA in 2001 and

2003 with minimal NO

x reductions.

6 3 F 64 As discussed in the TSD for our proposed BART determination, because additiona l combustion controls at FCPP would not achieve significant

reductions in NO

x and may cause operability issues for th e boilers, EPA determined that SCR, without the addition of new combus tion controls, is BART for FCPP.

64 See page 1 of the attachment (titled “National Park Service Comments on EPA's February 25, 2011 BART Proposal for the Four Corners Power Plant, April 22, 2011 AS REVISED MAY 17, 2011”) to document titled “DOI Resubmission of Comments on EPA BART Four Corners Navajo Nation_7-11-11”, EPA-R09-OAR-2010-0683-

0224.Page 109 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments A consortium of several environmental organi zations (0182) argued that a 30-day rolling average emission limit of 0.05 lb/MMBtu should be determined BART for FCPP, based on a final report written by Dr. Phyllis Fox.

6 4 F 65 In Table 10 – CAMD Maximum Rolling Averages (2006 – 2010) Calendar-Day Basis of her final re port, Dr. Fox argued that because 3 of the 20 best performing units achieved a maximum 30- day calendar average emission rate of 0.05 lb/MMBtu (rounded to 1 decimal place), that 0.05 lb/MMBtu is the appropriate BART limit for FCPP. As stated above, EPA dis agrees that an emission limit se t in association with a BART determination must represent the lowest achieved emission rate from the best performing unit using that technology. EPA further notes that the maximum 30-day calendar average emission rates for the 17 other top performing units listed in Table 10 of the comment er’s report exhibited significant variability (0.056 – 1.1 lb/MMBtu), even though the annual average emission rates

listed are all below 0.07 lb/MMBtu.

In its comments, NPS provided examples of 3 cell burner boilers curre ntly equipped with

SCR: Cardinal Units 1 and 2 and Belews Creek Unit 1. In the context of an annual average limit, however, examination of the 30-day calendar average emission rates is also informative. Based

on NO

x data from the Clean Air Markets Divisi on (CAMD), EPA notes that over 2009 – 2011 (January – June 2011), NO

x emissions from Cardinal Unit 1 showed an increasing trend, with minimum 30-day calendar average NO

x emission rates increasing from 0.025 to 0.033 to 0.043 lb/MMBtu in 2009, 2010, and 2011, and maximum 30-day calendar average NO

x emission rates increasing from 0.049

6 5 F 66

to 0.052 to 0.065 lb/MMBtu in 2009, 2010, and 2011.

6 F 67

The CAMD data show that Cardinal Unit 2 had numerous day s of non-operation during 2009 – 2011, so 30-day calendar average values were generally hi gher. However, if we exclude 30-day calendar averages that were clearly affected by nearly a full month of non-operation

6 7 F 68 , Cardinal Unit 2 shows a similar pattern as Unit 1, with an increasing trend in minimum (0.021, 0.043, 0.051 lb/MMBtu) and maximum 30-day calendar averages over 2009 – 2011 (0.056, 0.074, 0.076 lb/MMBtu). Belews Creek 1 also showed a si milar pattern of generally increasing minimum (0.027, 0.040 and 0.041 lb/MMBtu) and maximu m (0.078, 0.099, 0.094 lb/MMBtu) 30-day calendar average emission rates over 2009 – 2011, w ith the highest maximum 30-day average in 2010 of 0.0989 lb/MMBtu. Although commenters are corre ct in stating that the best performing units can achieve 30-day rolling emission rates of 0.05 lb/MMBtu or lower, CAMD data show significant variability in emission rates, both over time for a given unit, and between the best performing units. Some of this vari ability may be related to cataly st aging, or may be related to the participation of these units in trading progr ams (therefore these units operate without an absolute limit on individual boilers) . Regardless of the cause of th is variability, EPA notes that significant variability over a 30-day average, even among the best performing units, does exist, and EPA disagrees that an emission limit set in association with a BART determination must

65 See items (2 and 3) in collection of documents titled “Public Comment_8 Environmental Groups (Barth)_Letter 5-

2-11”. EPA-R09-OAR-2010-0683-0182.

66 For Cardinal Unit 1, to be more indicative of normal operation, EPA excluded the monthly emission rate from May 2009 of 0.085 because it represented just one day of partial operation during the month of May. Unit 1 was not operated for the remainder of May 2009.

67 See tab titled “with SCR” in spreadsheet titled “Cellbur ners CAMD CAIR.xlsx” in docket for this final rulemaking.

68 For Cardinal Unit 2, to be more indicative of normal operation, EPA excluded the monthly emission rate from March and November in 2009, and April in 2011.Page 110 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments represent the lowest rate achieved on 30-day rolling average basis from the best performing unit using that technology.

Commenters recommended that EPA set the 30- day rolling average limit based on a boiler operating day (BOD), which would serve to average out emission spikes better than a calendar average (especially spikes that are caused by a single ope rating day experiencing shutdown in a calendar month), suggesting that higher limits to accommodate these emission spikes are not needed. Commenters assert that extreme values in the 30-day calendar averages reported by CAMD, in particular, those that are controlled by a very limited number of operating hours in a calendar month, will be dampened by application of the 30-BOD rolling average, but we note that signifi cant variability still exists desp ite the application of a 30-BOD rolling average. EPA agrees that the emission limit should be based on a 30 BOD for the BART alternative option identified in the supplemental proposal. Th e 30-calendar-day average was inadvertently carried over from the original proposal. We do find that the 30-calendar-day average for the plant-wide average NOx BART determination is the appropriate approach for this limit. All hours of operation of all of th e units go into this plant -wide average and it is appropriate to base this on a rolling 30-calendar-day basis.

Over the 2009 – 2010 period examined in Ex hibit 14 to item 2 of comment number 0182, the 30-BOD rolling averages calculated by Dr. Fox for Cardinal Unit 3 shows a range of 0.028 lb/MMBtu to 0.065 lb/MMBtu, with reported 1-year (2010) and 2-year (2009 – 2010) averages of 0.048 lb/MMBtu. The 30-BOD rolling averages for Cardinal Unit 3 also show a general increasing trend in actual emission rates ov er the two year period of 2009 – 2010. For Havana Unit 9, which commenters cited as the best perf orming unit achieving a 30 calendar day rolling average of 0.05 lb/MMBtu in 2010 and a 365-day rolling calendar average of 0.036 lb/MMBtu, Dr. Fox calculated 30-BOD rolling averages ov er 2006 – 2010 that exhibited a significant range of 0.022 to 0.067 lb/MMBtu. NO

x emission rates over 2006 to early 2009 appear to exhibit seasonal variability that may be related to active operator manageme nt of the SCR system (lower emission rates during the summer ozone season and higher emission rates during the non-ozone season). However, over 2009 – 2010, this seasonalit y was not shown but the general increasing trend over that 2-year period is still exhibite d. Although EPA agrees that using the definition of BOD in calculating 30-day rolli ng averages will help to dampen em ission spikes associated with startup or shutdown events, significant variability still occurs, and steady increases in actual emission rates are exhibited and may be associat ed with catalyst aging. Even when Dr. Fox calculated 30-BOD rolling averages for Cardinal Unit 3, where the high value for the maximum 30-day calendar average resulted from one partial day of operation in April 2010, Cardinal Unit 3 would not have consistently met an em ission limit of 0.05 lb/MMBtu over 2009 – 2010. EPA disagrees with commenters that 0.05 lb/MMBtu achieved as a 30-calendar day average at Havana Unit 9 and Parish Unit 8 is representati ve and appropriate to appl y automatically as a BART limit for any unit for which SCR was determined to be BART.

EPA examined the most recent CAMD emissi on rate data for 12 cell burner boilers currently operating with SCR

6 8 F 69 over 2009 – June 2011. Table 1 summarizes the NO

x emission rates (in lb/MMBtu) and th e percent reduction in NO

x when the SCR was operated for the lowest

69 See tab titled “with SCR” in spreadsheet titled “Cellbur ners CAMD CAIR.xlsx” in docket for this final rulemaking.Page 111 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments achieved monthly calendar averages and the highest achieved monthly calendar averages to show the range in variability within each year and compar ed across 2009 – 2011. EPA did not exclude any monthly calendar averages from the minimum and maximum analyses shown in Table 1. In order to determine what might be an appropriate % reduction to represent all cell burner boilers currently using SCR, we calculat e the average % reduction from the highest

emission rate achieved over all 12 units. As stated above, the 30- day rolling limit must be set to accommodate the highest emission rate expected over the life of the catalyst. The percent reduction achieved from the monthly calendar average emission rate over 2009 – June 2011 from the 12 units ranged from 48% to 90%, w ith an average value of 78%. The percent

reduction associated with the lowest emission rates achieved over 2009 – June 2011 are on par with the percent reductions cited by commenters as the “c ommon knowledge” capabilities of

SCR.

Table 1: NO

x Emission Rates (lb/MMBtu) and Percent NO

x Reductions from Cell Burner Boilers with SCR over January 2009 – June 2011
Facility (State) Unit Lowest Emission Rate and Highest % Reduction Highest Emission Rate and Lowest % Reduction

2009 2010 2011 2009 2010 2011

Rate Reduc Rate Reduc Rate Reduc Rate Reduc Rate Reduc Rate Reduc

Alcoa

(IN) 4 0.088 79% 0.080 81% 0.085 80% 0.161 62% 0.173 59% 0.115 73%

Monroe

(MI) 3 0.048 90% 0.052 89% 0.065 86% 0.124 73% 0.146 69% 0.208 55%

Monroe

(MI) 4 0.058 88% 0.053 89% 0.070 85% 0.248 48% 0.134 72% 0.157 67%

Belews

(NC) 1 0.027 95% 0.040 93% 0.041 92% 0.078 85% 0.099 81% 0.094 82%

Belews

(NC) 2 0.024 94% 0.033 92% 0.032 92% 0.064 85% 0.061 86% 0.063 85%

Cardinal

(OH) 1 0.025 95% 0.033 94% 0.043 92% 0.085 83% 0.052 90% 0.065 87%

Cardinal

(OH) 2 0.021 96% 0.043 93% 0.051 91% 0.206 65% 0.074 87% 0.076 87%

Gavin (OH) 1 0.065 91% 0.071 90% 0.072 90% 0.105 85% 0.122 83% 0.083 88%

Gavin (OH) 2 0.063 93% 0.068 92% 0.071 92% 0.099 88% 0.102 88% 0.099 89%

Muskingum (OH) 5 0.049 92% 0.048 92% 0.051 91% 0.188 69% 0.149 75% 0.088 85%

Cumberland (TN) 1 0.060 91% 0.069 89% 0.060 91% 0.135 79% 0.129 80% 0.102 84%

Amos (WV) 3 0.041 94% 0.045 94% 0.052 93% 0.185 74% 0.090 87% 0.107 85%

Commenters claim that emissions of sulfuric acid mist and th e high ash content of coal used by FCPP, and considerations of catalyst life are not barrie rs to achieving higher NO

x reduction efficiencies than propos ed by EPA. EPA disagrees with comments that our statementPage 112 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments regarding the impact of additional la yers of catalyst on increasing sulfuric acid emissions is unsupported. EPA understands from our corresponden ce with Hitachi Power Systems America that each layer of catalyst used results in an incremental increa se in the conversion rate of SO 2 to SO 3 . The EPRI method used for calculating sulfuric acid requires the input of a SCR catalyst

oxidation rate. This oxidation ra te varies depending on catalyst type and number of layers used.

For the ultra low SO 2 to SO 3 oxidation catalysts offered by Hitachi, each layer contributed roughly 0.167% conversion, with 3 layers totaling 0.5%. The use of an additional layer, such as in a 3+1 system, would thus increase the conve rsion rate to nearly 0.7% when all 4 catalyst layers are in operation. Further NO

x reductions achieved from the addition of a 5 th layer of catalyst would likely exacerbate pl uggage and back-pressure concerns related to the ash content of the coal and also may affect cost and operation of the unit. Commenters have not submitted information to refute this.

The ash content of coal has an important effect on the effectiveness of SCR because high ash content in coal can cause pluggage and cataly st erosion and thus re duce available catalyst area and activity for NO

x reduction. Based on coal quality info rmation provided by the Energy Information Administration within the U.S. Department of Energy ’s Office of Coal, Nuclear,

Electric and Alternate Fuels

6 9 F 70 , the coal ash content of coal burned at FCPP (20.34%)

7 0 F 71 is significantly higher (see Table 2) than th e ash content of coals burned by the 11

7 1 F 72 cell burner boiler units operating with SCR at 7 different facilities, as well as the Parish facility (Unit 5 is reported in CAMD to be a wet- bottom wall-fired boile r) cited by commenters (0182) as being one of the best performing units. EPA could not lo cate ash content of coal burned at the Havana facility (Unit 9 is reported in CAMD to be a we t-bottom wall-fired boiler) in Illinois in the EIA report. EPA notes that only four other facilities, in addition to FCPP, were reported in the EIA to burn coal with ash content greater than 20%: San Juan Generating Station (SJGS) in New Mexico, San Miguel in Texas, Nucla in Colorado, and North Branch in West Virginia. None of those facilities currently have SCR installe d on their boilers, however, Region 6 recently finalized a FIP for SJGS with a limit of 0.05 lb/MMBtu, representing an 83% reduction in NO

x emissions. The emission limit EPA Region 6 set for SJ GS is lower than the limit we set for FCPP because SJGS uses a different boiler type than FCPP and modern combustion controls have already been installed and have reduced NO

x emissions at SJGS by 29 - 33%.

7 2 F 73 EPA has

determined that because Units 4 and 5 at FC PP are cell burner boilers, modern combustion

controls would not significantly reduce NO

x emissions from FCPP. Even though the emission limit differs, the reduction effi ciency from the installation and operation of SCR at FCPP and SJGS are generally consistent, particularly when considering the simila rly high ash content of coal (>20%) used at both facilities. In 2008, EPA Region 9 issued a pre-construction Prevention of Significant Deterioration (PSD) permit to allo w construction of a new coal-fired power plant

70 “Cost and Quality of Fuels for Electric Utility Plants 2001 ”. Energy Information Administration, Office of Coal, Nuclear, Electric, and Alternative Fuels, US Department of Energy, March 2004. DOE/EIA-0191(01), included in the docket for this final rulemaking.

71 APS reports the ash content of coal burned at FCPP as approximately 25%, as stated in the TSD for our proposed BART determination (EPA-R09-OAR-2010-0683-0002).

72 EPA could not locate information in th e EIA report on the Alcoa Allowance Management Inc Facility in Indiana.

73 See page 4-3 of report titled “PNM BART Report for SJGS_final to PNM_June 18, 2007.pdf” in the docket for this final rulemaking. Pre-consent decree emission rates on Units 1 – 4 at SJGS ranged from 0.42 – 0.45 lb/MMBtu.

Post-consent decree emission limits fo r those units were 0.30 lb/MMBtu.Page 113 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments on the Navajo Nation, known as the Desert Rock Energy Facility (Desert Rock).

7 3 F 74 If constructed,

Desert Rock would have used the same coal as FCPP from the BHP Navajo Mine and the final PSD permit set a NO

x limit of 0.05 lb/MMBtu (on a rolling 365-day average). Commenters argue that if Desert Rock was required to meet a limit of 0.05 lb/MMBtu using the same coal as FCPP, the ash content should not hinder FCPP from achieving similarly low NO

x emission rates. EPA notes that if constructed,

7 4 F 75 Desert Rock would have been a new, state-of-the -art facility specifically designed with boiler characterist ics, combustion controls, and post-combustion

controls to meet the Best Av ailable Control Technology (BAC T) requirements for numerous criteria and non-criteria pollutants. FCPP is an existing, over 40-year-old power plant. The Regional Haze Rule requires a case-by-case BAR T (best available retrof it determination), which need not be equivalent to BACT for new facilities.

Table 2: Ash Content of Coals Burn ed at Various Facilities using SCR
Facility Name Owner

7 5 F 76 State Ash Content

Monroe Detroit Edison Michigan 6.3%

Belews Creek Duke Power North Carolina 12.23%

Cardinal Cardinal Operating Company Ohio 11.56%

Gavin Ohio Power Company Ohio 11.3% Muskingum Ohio Power Company Ohio 11.54%

Cumberland Tennessee Valley Authority Tennessee 9.42%

Amos Appalachian Power West Virginia 11.93%

HL&P Parish Reliant Texas 5.28%

Based on the significant 30-calendar-day a verage variability exhibited by the top performing units in Table 10 of comment num ber 0182, and the variability in 30-calendar-day average and the 2009 – June 2011 30-calendar-day average % NO

x reduction of 78% exhibited by 12 cell burner boilers equipped with SCR, EPA continues to affirm that a limit representing

an 80% reduction in NO

x emissions reflects what is achieva ble using the technology determined as BART for FCPP.

Commenters further argue that many of th e best-performing units operate without permitted emission limits under an emission trad ing program and therefore have no incentive to optimize SCR operation because they do not ne ed to comply with an emission limit. EPA disagrees with that statement and notes th at units that operate under a regional NO

x trading program have a financial incentive to reduce emissions to th e greatest economic extent possible in order to sell those emission of fsets to units that cannot meet the emission cap established by the trading program.

74 http://www.epa.gov/region9/air/permit/desert-rock/

75 Desert Rock has not been constructed. EPA requested a voluntary remand of the Desert Rock PSD permit in 2009 to incorporate new applicable requirements. The develope rs of Desert Rock have not yet submitted a revised PSD application to EPA.

76 As reported in the EIA Report (March 2004), in cluded in the docket for this final rulemaking.Page 114 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Annual Average Limit

In our Supplemental Proposal, EPA reque sted comment on setting a lower NO

x limit over a longer averaging time to account for catalyst degradation over time. In its comments, NPS recommended an emission limit of 0.05 lb/MMBtu or lower, on an annual average. NPS cited three examples of cell burner boilers achieving annual average NO

x emission rates less than 0.06 lb/MMBtu and greater than 90% NO

x removal: Cardinal Units 1 and 2, and Belews Creek Unit 1. EPA agrees with NPS that over a 2-year average, NO

x emissions from Cardinal Unit 1 averaged 0.036 lb/MMBtu (2009 – 2010), however, as discussed above, these three units showed a general increasing trend in NO

x emission rates over time and the highest 30-day calendar average in 2011 of 0.065 lb/MMBtu was over 1.8 times greater than the 2-year average NO

x emission rate achieved by Cardinal Unit 1. Fo r Cardinal Unit 2, the maximum 30-day calendar average in 2011 was nearly 1.8 times higher than the 2-year average of 0.043 lb/MMBtu (2009 – 2010), and for Belews Creek 1 the highest maximum 30-day average in 2010 of 0.0989 lb/MMBtu that was nearly 2.2 times higher than the 2-year average of 0.045 lb/MMBtu (2009 – 2010). The emission rate data from the three un its cited by NPS suggest that 30-day average emissions for these three units were roughly two times higher than the 2-year annual average

emission rates.

Data provided by Dr. Fox in Table 10 of comment number 0182 shows that 9 of the top 20 performing units with SCR met an emission ra te of 0.05 lb/MMBtu or better over a 365-day calendar average. The remaining units range d from 0.055 – 0.069 lb/MMBtu over a 365-day calendar average. Based on our review of the mo st recently available CAMD data from 12 cell burner boilers currently equi pped with SCR, the % NO

x reduction exhibited over a nearly 3 year average (2009 – June 2011) ranges fr om 73 – 92%, with an average % NO

x reduction of 87%.

7 6 F 77
EPA agrees with commenters that NO

x emission limits over a l onger averaging time can be lower than emission limits over a shorter averagi ng time. However, in its comment letter on the Supplemental Proposal, APS stated that it opposed any further lowering of the NO

x emission limit for several reasons, including cost of compliance and potential operational problems. Although not specifically stated by APS, EPA in fers that APS’s opposi tion to a lower limit includes opposition to a lower limit over a longer averaging time. Additionally, APS stated that, based on statistical analysis it has conducted, it believes there may be potential compliance problems with the 30-day rolling average pe riod, in particular, if two malfunction events occurred close together towards the end of the ca talyst replacement cycle. Therefore, APS stated a 90-day rolling averaging would be needed to reasonably assure continuous compliance with the proposed emission limit in the Supplemental Proposal. APS did not include its statistical analysis in its comments on the Supplemental Pr oposal, and, for the reasons stated above and supported by the emission rates and control efficien cies from other cell burner boilers with SCR (Table 1), EPA has determined a 30 calendar-day rolling average is appropriate for the final

NO

x limit for BART. Under the alter native emission control strate gy we based the limit on 30- BOD average. In addition, although EPA agrees with commenters that setting a lower emission limit over a longer averaging tim e is supported by a review of emission data from other facilities, we do not have enough information specif ic to Units 4 and 5 at FCPP to set a different limit over a longer averaging time, nor is it necessary to supplem ent the short-te rm limit (30-day

77 See summary tab in “Cellburners CAMD CAIR.xlsx” spreadsheet in the docket for this rulemaking.Page 115 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments rolling average) EPA is setting in our final acti on with an additional limit over a longer averaging time.

Comment:

One of the owners of FCPP (0176/0177) stated a willingness to support a NO

x emission

limit of 0.098 lb/MMBtu for Units 4 and 5 under the alternative proposal, but only in the context

of an alternative emission reduc tion strategy that incl udes resolution of the related issues. The

commenter asserted that issues with the cell-bu rner configuration of these units, the high-ash coal that is burned, and the increase in H 2 SO 4 emissions that would occur at increased NO

x efficiency preclude any fu rther tightening of the NO

x limit. The commenter recommended that compliance with the emission limit be determined on a 90-day rolling average basis, instead of the proposed 30-day rolling average. The co mmenter strongly opposed any plantwide NO

x limit more stringent than 0.11 lb/MMBtu in a traditional BART FIP.

The Navajo Nation (0223) similarly endor sed the proposed 80 percent reduction in NO

x emissions from Units 4 and 5, with a limit of 0.098 lb/MMBtu, under the supplemental proposal, based on the site-specific parame ters at FCPP. The commenter al so cautioned that any reduction in this standard must be evaluated carefully, be cause additional catalyst layers would be required which could result in increased ammonia slip and H 2 SO 4 emissions contributing to visibility impairment, increased compliance costs, and opera tional difficulties. The commenter noted that selection of the catalyst will be critical for the operation and performance of the SCR system.

Response:

EPA agrees that the appropriate limit for Unit s 4 and 5 under the alternative strategy is 0.098 lb/MMBtu (over a rolling average of 30 succe ssive boiler operating days) for the reasons aforementioned. The final ru le reflects this limit.

Comment:

In virtually identical comments that addressed both FCPP and NGS submitted prior to the supplemental proposal, one public interest a dvocacy group (0094) and one environmental advocacy group (0146) requested that EPA implem ent the most stringent air pollution control measures, specifically SCR, as BART for these plants in order to improve vi sibility in the Class I areas to the greatest extent possible. The comme nters noted that FCPP and NGS are two of the biggest sources of NO

x on the Colorado Plateau, and stated that they should not be allowed to be permitted polluters and impair visibility throughout the region.

In later comments, the public interest advocacy group (0112) took the position that SCR is BART for FCPP. The commenter opposes any attempt to substitute SNCR for SCR as BART, which the commenter indicated the owner of SJGS is trying to do.Page 116 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments One private citizen (0160) also urged EPA to require FCPP to install SCR controls at all five of the plants units.

Response:

EPA agrees with these comments and the final BART rule and the BART alternative require SCR at emission levels for NO

x that will be achievable over the 3 year period between scheduled maintenance for these EGUs.

Comment:

One environmental advocacy group (0182) asse rted that EPA failed to consider data sources critical to ensuring a t horough analysis and adequate NO

x BART determination. To support this assertion, the comm enter drew heavily on an attachment containing comments prepared by Dr. Phyllis Fox (0182). This comm ent summary includes the comments presented by Commenter 0182; the reader ma y refer to the attachment (0182) for greater detail.

The commenter (0182) noted that EPA’s BA RT Guidelines require permitting agencies to “consider recent regulatory decisions a nd performance data (e.g., manufacturer’s data, engineering estimates and the e xperience of other sources) wh en identifying an emissions performance level or levels to evaluate” (cit ing 40 CFR part 51, Appendix Y). The commenter stated that there are numerous examples of SIP and permit limits set below the FCPP NO

x limit:

 Texas SIP emission limits under a cap and trade program of 0.033 lb/MMBtu for the

Dallas/Fort Worth ozone nonattainment area and 0.050 lb/MMBtu for the

Houston/Galveston ozone nonattainment area for wall-fired boilers burning coal and 0.045 lb/MMBtu for tangential- fired boilers burning coal.

 Vendor guarantees that SCR at the limits of 0.03 lb NO

x /MMBtu at Texas Parish’s four units is achievable, which were the basis for the Texas SIP limits above.

 The permit limits for Desert Rock, requiring the facility to achieve a NO

x limit of 0.035 lb/MMBtu on a 365-day rolling average basis.

 Ten other similar facilities identified in Comment 0182 with permit or other instruments establishing limits of 0.05 lb/ MMBtu or better on a 30- or 365-day rolling average.

The commenter (0182) also stated that EP A should have evaluated performance data, specifically the information available in the CA MD database that compiles CEMS data. The

commenter indicated that this information must be understood in the context of the regulatory programs prompting its collection, which do not require the technology performs to its reasonable capability. The commenter asserted th at while this information in itself does not establish a BART limit, evaluation of this information helps to determine a BART floor.

Response:Page 117 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments EPA agrees with the commenter that the BART Guidelines state that agencies “should consider recent regulatory d ecisions and performance data . . . when identifying an emissions performance level or levels to evaluate”. However , the BART Guidelines further state that “[i]n assessing the capability of the co ntrol alternative, latitude exists to consider special circumstances pertinent to the specific source under review”, but the agency “should explain the basis for choosing the alternate level (or range) of c ontrol in the BART analysis”. See 70 FR at 39166, July 6, 2005. We discuss in the TSD for our proposed BART determination and in our Supplemental Proposal for the alte rnative emission control strate gy our rationale for proposing a limit of 0.11 lb/MMBtu on a plant-wide basis as BART and 0.098 lb/MMBtu for Units 4 and 5 as part of the alternative emission control st rategy, based on our determination that the installation of combustion controls is not likely to result in significant NO

x reductions without potential operational cha llenges to the boilers bec ause of inherent limita tions associated with the boiler design. Our final NO

x limit for BART and for Units 4 and 5 under the alternative emission control strategy is discusse d in further detail in this sect ion of this RTC, in response to

the comment that the BART limit should be 0.05 lb/MMBtu, or at least lower than 0.11 lb/MMBtu. In that response, we also discuss emission levels reported to CAMD for several cell burner boilers at different facilities. As reflect ed in presumptive NO

x limits in the BART Guidelines, different types of boilers are expected to achieve different levels of NO

x control. Thus, comparing emission limits achieved by di fferent boilers is not an “apples to apples” comparison.

The commenter is correct in st ating that compliance with the Texas SIP emission limits of 0.033 lb/MMBtu for the Dallas/Fort Worth ozon e nonattainment area and 0.050 lb/MMBtu for
the Houston/Galveston ozone nonattainment area for wall-fired boilers burning coal and 0.045 lb/MMBtu for tangential-fire d boilers burning coal is achieved through a cap and trade program. See Texas Administrative Code Chapter 117 requirements for combustion control at major utility electric generation sources, e.g., Rules 117.1210 and 117.1220.

7 F 78 This type of cap and trade program offers much greater flexibility at meeting the standards (because units that do not, by themselves, meet the emission standard can demonstrate compliance with the standard by purchasing equivalent emission credits from units that perform better than the standard) compared to an explicit permit lim it for a single unit, which must be met by that specific unit continuously for the life of the facility. Therefore, comparing th e system cap emission limits set in the Texas SIP and a plant-wide or unit specific emission limit under BART for units at FCPP, which include cell burner boilers, is misleading.

Although the commenter notes that vendor guar antees of 0.03 lb/MMBtu for the Parish

units were demonstrated on Parish Unit 8 in August – November 2006, where Unit 8 was run at 0.03 lb/MMBtu, then at 0.035 lb/MMBtu, EPA notes, and the commenter acknowledges, that the Parish units do not normally and consistently achieve the vendor guarantee of 0.03 lb/MMBtu. Parish Unit 8 typically achieves 0.044 lb/MMBtu, and other coal-fired units at Parish typically achieve closer to or above 0.05 lb/MMBtu. EPA further notes that the coal-fir ed units at Parish (units 5 – 8), equipped with advanced LNB+O FA systems, e.g., based on CAMD data from 2001

and 2002

7 8 F 79 , typically achieved 0.14 – 0.18 lb/MMbtu. Fo llowing installation with SCR, a vendor guarantee of 0.03 lb/MMBtu represents a 79 – 83% reduction in NO

x emissions. Based on more

78 See http://info.sos.state.tx.us/pls/pub/readtac$ ext.ViewTAC?tac_view=5&ti=30&pt=1&ch=117&sch=C

79 See “WA Parish CAMD monthly 2001-2010.xlsx” in the docket for this final rulemaking.Page 118 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments typical emission rates of around 0.05 lb/MMBtu from the Parish Units 5 – 8, the percent NO

x reduction ranges from approximat ely 64 – 72%. Thus, our final NO

x limit for FCPP based on an 80% reduction from SCR alone is co mparable to the vendor guaranteed NO

x reductions for

Parish and exceeds the NO

x reductions typically achieved at the Parish facility.

The commenter further cites the BACT determination and limit for NO

x in the final PSD permit issued by EPA Region 9 to the Desert Rock Energy Facility (DREF) as a lower limit than the one proposed and finalized as BART for FC PP. If constructed, DREF would have used coal from the same mine as FCPP, thus commenters generally argue that emission limits set for

DREF should be achievable at FCPP as well. EP A notes that DREF was permitted as a new, greenfield facility using the mo st advanced boiler design and air pollution control equipment to meet the BACT requirements under the PSD pr ogram. EPA Region 9 requested a voluntary remand of the DREF permit to address issues re lated to other pollutants (greenhouse gases and

PM 2.5 ), therefore the final permit issued by Re gion 9 to DREF is not valid, and DREF has not, and cannot, commence construction. Thus, the NO

x emission limits set for DREF, in particular, the 365-day rolling average limit of 0.035 lb/MMBtu, have not been achieved or demonstrated in practice on the high ash coal from the Navajo Mine. Furthermore, EPA disagrees that the emission limits set as BART necessarily must reflect lim its set as BACT.

As stated in responses to other comments in this s ection, EPA disagrees with the

assertion that emission limits a ssociated with BART must meet the lowest emission rate achieved at any coal-fired power plant. The Regional Haze Regulations at 40 CFR §51.308(e)(1)(ii)(A)

state that:

The determination of BART must be based on an analysis of the best system of continuous emission control technology available and associated emission reductions achievable for each BART-eligible so urce that is subject to BART . . .

Additionally, the BART Guidelines state that: “To complete the BART process, you must establish enforceable emission limits that reflect the BART re quirements . . .”. See 70 FR 39172, July 6, 2005. The five-factor BART analysis descri bed in the Guidelines is a case-by-case analysis that considers site spec ific factors in assessing the be st technology for continuous emission controls. After a tec hnology is determined as BART, the BART Guidelines require establishment of an emission limit that reflects the BART requireme nts, but does not specify that the emission limit must represent the maximum level of control achieved by the technology

selected as BART. The BART Guidelines and the RHR do not preclude selection of the maximum level of control achieved by a given technology as BART, however, the emission limit set to reflect BART must be achievable by the speci fic source and should be determined based on consideration of site-specific factors. Theref ore, limits set as BAC T during PSD review (e.g., Desert Rock), or emission rates achieved from the operation of individual facilities under an emissions trading program (e.g., Te xas SIP) may provide important information, but should not be construed to automatically represent a ceiling for BART lim its representative of a given technology.

Comment:Page 119 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments One of the owners of FCPP (0176/0177) opposed EPA’s proposal to “phase in” NO

x controls at FCPP under a traditional BART FIP, commencing 3 years from the date the FIP

becomes effective. The commenter asserted that this proposal does not afford adequate time to properly design, engineer, and cons truct the controls before the compliance deadline because the proposal would give APS only 2 years after the approval or disapproval of the proposed

transaction with Southern Calif ornia Edison to achieve full co mpliance with the new emission limit. The commenter argued this schedule would be very nearly impossible to meet because of the scale and complications involve d in this large and expensive en gineering project. See related

comments in Section 6.0. Another FC PP owner (0168) expressed support for

Commenter 0176/0177 on this issue. This commente r stated that the proposed phase-in is burdensome and unnecessary, and that the FCPP owne rs should be afforded the flexibility to

schedule construction of BART controls w ithin 5 years as is typically allowed.

Response:

EPA revised the BART compliance date for on e 750 MW unit (either Unit 4 or 5) to within 4 years from the effective date of this final rule, and the remaining 750 MW unit and Units 1-3 to within 5 years of the eff ective date of the final rule. The revised compliance time within 4 and 5 years allows time for design, e ngineer, and construct controls.

Comment:

One environmental advocacy group (0182) stat ed that the proposed plantwide BART

limit of 0.11 lb/MMBtu across all five FC PP units violates Executive Order 12898 on environmental justice. Specifically, the commenter stated that given the si gnificant differences in pollution control systems among FCPP’s five units, allowing a plant-wide average could create pollution “hotspots” with respect to co-pollutant s. As an example, the commenter noted that while Units 4 and 5 have baghouses, Units 1 – 3 use less efficient venturi sc rubbers for control of sulfur dioxide, particulate matte r, and mercury. The commenter asserted that the plantwide average limit for NO

x would allow increased emissions fr om Units 1 – 3 in the event of a temporary outage or reduced output from one or both of the larger units. The commenter stressed that while this may not increase the total NO

x emissions from the plant, it would increase the amount of mercury and other toxic co-pollutant s emitted into the surrounding community, which is a low-income community of color.

The commenter (0182) stated that this is precisely the type of scenario Executive

Order 12898 seeks to avoid. The commenter indi cated that EPA should impose unit-specific BART limits, which it unquestionably has th e authority to do (citing 40 CFR part 51, Appendix Y). In the alternativ e, the commenter urged EPA to conduct a full environmental justice analysis, supported by modeling, to show that its plantwide average will not cause disproportionate environmental harm in the surrounding community under any operating

scenario.

Response:Page 120 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments EPA disagrees with the commenter that a plant-wide BART limit of 0.11 lb/MMBtu across all five FCPP units violates Executive Or der 12898 on environmental justice. EPA’s final action establishing this plant -wide emission limit for NO

x represents an 80% reduction in overall

NO

x emissions over the current baseline emissions for this single facility. This final rule is not expected to have disproportionately high and adverse human health or en vironmental effects on minority or low-income population because it incr eases the level of envi ronmental protection for all affected populations in the area includi ng any minority or low-income population.

The commenter is correct that in the event of a temporary outage or reduced output from unit 4 or 5 the operator could continue to operate FCPP units 1-3 under the original BART proposal provided that they maintain compli ance with the plant-wid e emission limit of 0.11 lb/MMBtu for NO

x . In order to maintain compliance with the plant-wide emissi on limit, units 1-3 would have to operate at a lesse r capacity than they would norma lly operate if unit 4 and 5 were functioning because units 1- 3 emit higher amounts of NO

x than units 4 and 5. The NO

x emission rates from Units 1-3 with SCR, based on 80 perc ent control of current emission rates would be 0.16, 0.13, and 0.12 lb/MMBtu respecti vely which are higher than the proposed plant-wide

emission limit.

7 9 F 80 Therefore, to maintain compliance with the plant-wide NO

x emission limit (which is based upon a 30 calendar-day rolling a verage), units 1-3 would have to operate at a reduced capacity and could only operate if unit 4 or 5 were also concurrently operating. This reduced capacity would result in an overall lo wer rate of emission for mercury and other copollutants from units 1-3. Therefore, there woul d be no increased emissions of mercury or other co-pollutants and no “hot-spots” or dispropor tionately high and adve rse human health or environmental effects on minority or low-income population.

The BART Guidelines at 40 CFR Part 51, Appe ndix Y, Section 4 state that average emissions across any set of BART-e ligible emission units within a fenceline should be considered provided that the emission reductions from the po llutant be equal to those reductions that would be obtained by simply controlling each of the BART-eligible units at that source. EPA proposed and is finalizing a plant-wide heat input-weighted average em ission limit of 0.11 lb/MMBtu. This BART determination can be met by achievin g 80% control on Units 1 – 5 by the application of SCR. EPA further notes that the commenter’s concern about increased usage of the less efficient Units 1 – 3 would not occur if APS implemented the alternative emission control strategy involving closure of Units 1 – 3.

Comment:

One of the owners of FCPP (0174) and one utility industry associ ation (0169.1) consider the BART proposal to be inconsistent with President Obama’s January 18, 2011 Executive Order 13563 pertaining to regulatory strategy. One of the commenters (0174) alleged that EPA failed to properly consider the two key prin ciples of the Executive Order:

80 See page 87 of the TSD for the proposed rule; Document No. EPA- R09-OAR-2010 -0683-0002.Page 121 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments  Consistent with law, Agencies must consid er costs and benefits and choose the least burdensome option.

 Agencies must consider low-cost approaches that reduce burdens and maintain flexibility. Regulations must be guided by objective scientific evidence.

The commenters (0169.1, 0174) asserted that SCR represents a very high cost, low benefit option. In addition, they stated that modeling that relies on CALPUFF version 5.8 and the IWAQM default background ammonia values does not represent the best available science.

Response:

EPA disagrees that our BART de termination is inconsistent with President Obama’s

Executive Order 13563 or that SCR is a high-cost, low-benefit option.

Executive Order 13563 is supplemental to and re affirms the principles, structures, and definitions governing contemporary regulatory review that were established in Executive Order 12866 of September 30, 1993. Our proposed and final actions are not “significant regulatory actions” under the terms of Executive Or der 12866 (58 FR 51735, October 4, 1993) because these rules only apply to one facility and are not rules of general applicability.

The President issued Executive Order 13563 on January 18, 2011, after we issued our Proposed Rule but just prior to our Supplementa l Proposal. In general, the Order seeks to ensure the regulatory process is based on the best available scienc e; allows for public participation and an open exchange of ideas; promotes predictability and reduces uncertainty; identifies and uses the best, most innovativ e, and least burdensome tools for achieving regulatory ends; and takes into account benef its and costs, both quantitative and qualitative.

EPA conducted our BART determination for FCPP using the site-specific five-factor analysis in the BART Guidelines. As part of that analysis, EPA carefully considered the cost of controls and the benefits of thos e controls to improve visibility in the surrounding Class I Areas to achieve the goals stated in the CAA and RHR. As described below in more detail, based on the results from the original analys is for the proposed BART determi nation, EPA concluded that the installation and operation of SCR on all five unit s at FCPP would not adversely affect the competitiveness of FCPP’s cost to generate el ectricity compared to the cost to purchase electricity on the open market. EPA notes that our BART determination for FCPP does not specifically require SCR t echnology, rather, we have set an emission limit for NO

x that can be achieved from the installation of SCR. The fa cility has the flexibility to determine the leastcostly, least burdensome way of meeting that emission limit. EPA provides additional flexibility by giving the owners of FCPP the option to implement the alternat ive emission control strategy in lieu of BART, an alternative that was larg ely proposed by APS on behalf of FCPP’s owners.

As discussed more fully in Section 3.1 of th is RTC, EPA disagrees that SCR represents a high cost, low benefit option.Page 122 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments EPA’s use of CALPUFF version 5.8 for modeling of visibility benefits and the IWAQM default background ammonia values represent the best available science as discussed above in responses to comments in Section 7.0 of this RTC.

Comment:

One of the owners of FCPP (0174) stated th at in establishing BA RT for FCPP, EPA did not consider the progress already made toward s improving visibility on the Colorado Plateau.

The commenter asserted that inst ead of taking this progress into consideration as support for establishing a cost-effective control option as BA RT in this first planning period, EPA imposed the most stringent and costly co ntrols as BART and attempted to justify this proposal by raising uncertainties with respect to the contribution of nitrates to regional haze in the Colorado Plateau. The commenter argued that if EPA takes into consideration the availa ble data showing the progress already made towards improving visibil ity on the Colorado Plat eau, and the extensive work performed by the Western Regional Air Part nership that shows the small contribution of nitrates to regional haze, EPA will be compelle d to conclude that reasonable progress can be made in the first planning period by requiring the installation of cost-eff ective LNB as BART for FCPP, and additional controls can be required, if necessary, in future planning periods.

The Navajo Nation (0223) acknowledged a nd supported the intent of the reasonable progress goals under the CAA [ quoting 40 CFR 51.308(d)(1)(i)(B), which discusses calculating and using the necessary uniform rate of progress to set the reasonable progress goal], but stated that in its visibility analys is, EPA should consider the cumulative benefits in visibility improvements from all neighboring states’ region al haze SIPs and BART determinations. The

commenter also indicated that r eal-time data should be used wh enever possible as it becomes

available.

Response:

EPA disagrees with the commenter that we mu st consider progress already made toward improving visibility on the Colorado Plateau or that reasonable progress can be made by the installation of LNB as BART at FCPP. EPA fu rther disagrees that any reasonable progress already made towards improving visibility would invalidate the BART provisions of the RHR, as the commenter seems to imply. The FCPP is one of the largest stationary sources of NO

x in the country, and is located near many Class I areas wh ere visibility is highly valued, so it is highly appropriate to undertake a BART analysis for it. In any case, a BART analysis for FCPP is required under the RHR.

EPA does agree with certain aspects of the comments regarding a phased implementation strategy to attaining national vi sibility goals. In 40 CFR 51.308(f), States are required to revise their regional haze implementation plans every te n years, which is a process that involves evaluating their ability to attain reasonable pr ogress goals and potential ly updating their longterm strategy for regional haze. The peri odic revision requirement described in 40 CFR 51.308(f), however, does not extend to the implementation plan for BART requirements. ThePage 123 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments phased approach described by the commenter has certain benefits, and a phased approach is incorporated into the alternati ve emission control strategy.

Any downward trends in SO 2 and NO

x emissions or improvemen t in visibility on the Colorado Plateau are due to variability in natural emissions on a short te rm basis, or else to reductions of anthropogenic emissions, whic h occur partly in re sponse to regulatory requirements like BART. Application of BART is one means by which downward emission and impairment trends may continue.

Contrary to what the comment ers seem to imply, seemingl y small relative contributions to visibility impairment do not exempt sources fr om BART. Estimates of visibility impairment vary by the estimation method used. Reliance on an average o ver groups of days and on the percentage of the overall inventory may not be the best method for attributing impairment to particular sources; under the BART Guidelines, individual source impacts are estimated using CALPUFF modeling. Estimates of impai rment from stationary source NO

x also vary by location, calendar year, and time of year. For many Class I areas in the western U. S., the worst visibility occurs during summer, when carbon from fires is a dominant impairment component; this makes stationary source NO

x appear small in a relative sense. Nevertheless, stationary source NO

x remains an important component of visibility impairment, one t hat cannot be neglected. Any one segment of the overall emission in ventory might be dismissed as t oo small to apply controls to, in which case no progress could be made toward the RHR national goal of remedying visibility impairment from manmad e pollution. Instead, the RHR iden tifies stationary sources as an important category for evaluation, in the form of a BART analysis. Modeling has shown that many individual stationary sources have the poten tial to contribute to visi bility impairment (i.e., have a modeled impact of at least 0.5 dv, 70 FR 39161). In particular, EPA modeling of FCPP as discussed in the TSD for our proposed rulema king showed visibility impacts from 1.2 to 6.0 deciviews, depending on the Class I area (o r from 0.8 to 3.2 deciviews if lower ammonia background is assumed as recommended by some commenters). These are not negligible impacts.

EPA also disagrees with the commenter that we should consider the cumulative benefits in visibility improvements from all neighbori ng states’ regional haze SIPs and other BART determinations in determining BART for FCPP. The BART analysis is conducted on a sourcespecific basis. Nothing in the BART regulations or guidance requires that EPA consider visibility improvements from other sources in determining BART for a par ticular source under the RHR.

The Navajo Nation EPA has not developed a TI P for Regional Haze, nor does the Navajo Nation have within its jurisdic tion any federal mandatory Class I areas as set by Congress

8 0 F 81 . As explained in the preamble to our propos ed BART rule, FCPP and NGS are the only BARTeligible sources located on the Navajo Nati on. FCPP contributes to impairment at many surrounding Class I areas.

81 EPA notes that Navajo Nation has established its own parks and monuments, including Monument Valley, Canyon de Chelly, and the Four Corners Monument, however, these parks are not mandatory Class I Federal Areas as set by Congress.Page 124 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments EPA is exercising its discretion to promulgate emission limitations for FCPP to close the regulatory gap with respect to this facility. In light of the magnit ude of emissions of NO

x from FCPP, EPA is proposing to find that it is n ecessary or appropriate to establish BART requirements for NO

x from FCPP, and is proposing specific NO

x limits as BART.

EPA agrees with the commenter that real-time data should be used whenever possible as

it becomes available.



### 8.2

2 1 B 

### Comments on the Proposed BART Determination for PM

Comment:

One of the owners of FCPP (0176/0177) asse rted that the existing controls at FCPP

constitute BART for PM emissions. The commenter contended that the impact of PM controls on the visibility in the neighboring Class I areas would be “vanishingly small” while the cost would be “exorbitant” (resul ting in cost effectiveness rangi ng from $51,500 – $148,659 per ton reduced and from $1.4 billion – $3.7 billion per dv im provement). The commenter pointed out that Table 4 in the proposal preamble, where EPA’s modeling of the proposed BART emission levels is summarized, shows visibility improvements of 0.02 dv at three Class I areas, 0.01 dv at seven areas, and 0.00 at the remaining areas. Given th at the EPA’s own definition requires at least

0.5 dv to “contribute” to visibility impairment, the commente r argued that EPA has not presented a basis to require FCPP to retrofit any additional PM controls at the plant, particularly not at an estimated capital cost of over $215 million. Another of the FCPP owners (0179) and the Navajo Nation (0223) made similar points, but in re lation only to Units 1 – 3. A third FCPP owner (0174) similarly noted that the impact of PM reductions estimated by EP A would have almost no effect on visibility, concluding that no additional controls should be required as BART for FCPP.

The Navajo Nation (0223) st ated that EPA acknowledged th e high incremental cost of new PM controls on Units 1 – 3 (citing 75 FR 642 30), yet justified the cost effectiveness of baghouses by comparison with similar retrofit projects in EPA Region 9. This commenter argued that EPA failed to properly evalua te the costs associated with installation of bag houses using site-specific parameters, thereby deviating fr om the BART Guidelines. The commenter also stated that future CAA rulemakings, such as MACT regulations, will provide EPA an opportunity to evaluate the feas ibility of control technology duri ng periodic reviews of the EPA air quality standards. The commen ter asserted that continued ope ration of venturi scrubbers to meet emission limits of 0.03 lb/MMBtu and an op acity limit of 20 percen t satisfies BART for

Units 1 – 3.

The Navajo Nation (0223) e xpressed support for the supplem ental proposal to require a PM emission limit of 0.015 lb/MMBtu and 10 pe rcent opacity limit on Units 4 and 5. The commenter presumed that FCPP can readily meet these standards prior to installation of SCR

since the limits can be achiev ed with the existing bag houses.

Regarding the EPA’s proposed 10 percent opacity standard for each unit, two of the owners of FCPP (0168, 0176/0177) stated that the EP A has not specified any costs or predictedPage 125 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments any improvement in visibility that would result from such limits. The commenters asserted that without such basis, the EPA cannot justify the proposed opacity limits. The commenters

concluded that the EPA should w ithdraw its proposed determin ation that baghouses are BART for Units 1 – 3 and its proposal to make the opaci ty standard for Units 4 and 5 more stringent.

Response:

As stated in our proposed BART determinati on for PM, the existing venturi scrubbers on

Units 1 – 3 at FCPP do not constitute BART. In our proposed BART determination for FCPP, EPA proposed a PM emission limit for Units 1 – 3 that can be achieved through the installation of any of four different PM c ontrol options. At the tim e of our BART proposal, the MATS Rule for electric utility steam generating units had not yet been proposed, nor had APS suggested its

alternative emission contro l strategy to close Units 1 – 3 in lieu of complying with BART for NOx. Because the final MATS rule has been issued See 77 FR 9304, February 16, 2012 and sets filterable PM and mercury limits that would be applicable to the units at FCPP, and because EPA is finalizing this rule to allow APS to eith er comply with the alte rnative emission control strategy or BART for NOx, EPA is determining that it is not nece ssary or appropriate at this time to finalize our proposal to set new PM limits for Units 1 – 3.

Regarding our proposed BART determination fo r PM for Units 4 and 5, we are finalizing the proposed 0.015 lb/MMBtu emission limit ba sed upon the proper operation of the existing baghouses. However, we have determined based on the comments we received from the operator of FCPP that it is not necessary or appropriate to take final action on the proposed 10 percent opacity limit. We have determined that impos ing a 10 percent opacity limit will not provide greater assurance that Units 4 and 5 at FCPP are meeting the PM emission limit of 0.015 lb/MMBtu. We have determined pr eviously that a 20 percent opacity limit is sufficient to ensure the PM emission limit is being continuously met. The 10 perc ent opacity limit was generally supported by the Navajo Nation and environmental groups. EPA has promulgated some recent rules for electric generating uni ts that have retained a 20 pe rcent opacity standard rather than reducing that limit to 10 percent. Specifica lly, EPA’s revised the New Source Performance Standard for large electric generating units at 40 CFR Part 60, Subpart Da, to lower the PM emission limit for new units to 0.09 lb/MMBtu fo r gross energy output or 0.097 lb/MMBtu for net energy output. For existing units that rec onstruct or modify, Subpart Da establishes an emissions limit of 0.015 lb/MMBt u. For both standards, EPA retained a 20 percent opacity standard as being sufficient to ensure compli ance with either the 0.090 (0.097) lb/ MMBtu or

0.015 lb/ MMBtu PM emission limit. EPA’s MATS ru le, which was finalized just a few months ago, also retained a 20 percent opacity standard as being sufficient to ensure compliance with the PM emission limit that will be required for electric generating units subject to that rule.

The importance of the opacity limit is that a certai n percentage opacity is an

instantaneous demonstration that a unit is in compliance with its PM emission limit. If a unit does not install and operate a PM continuous emi ssions monitor, then EPA ensures compliance with the PM emission limit by requiring an ep isodic source test. For the periods between episodic source testing, EPA can ensure continuous compliance with the PM emission limit by observing that the unit’s stack em issions do not exceed a set opacity. EPA’s recent rulemakings have determined that 20 percent opacity is suffi cient to ensure compli ance with a PM emissionPage 126 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments limit lower than the emissi on limit we have determined is BART for Units 4 and 5. Accordingly, EPA is determining the 20 percent opacity limit that we promulgated in our 2007 FIP for FCPP as being adequate to ensure continuous co mpliance with the PM BART limit or 0.015 lb/

MMBtu.

Comment:

One group of environmental advocacy groups (0182) supported setting a 10 percent opacity limit for Units 1 – 5, as measured by continuous opacity monitors (COMS), for the reasons stated in the proposal preamble. Howeve r, based on information in a report prepared by Vicki Stamper and submitted by the commenter (docket number 0182.3), the commenter (0182) argued that the particulate matter BART limits for FCPP Units 1 – 3 should be based on the

installation of fabric filt er baghouses, as this control is likely the only PM control that will ensure the FCPP units can meet the forthcoming mercur y MACT limit of 1 lb/TBtu and the related PM limit. The commenter added that baghouses will al so likely result in th e lowest filterable PM emission rates and will also gr eatly reduce fine particulate.

The commenter (0182) added that based on prior PM 10 BACT determinations with baghouses, a BART limit on filterable PM 10 should be no higher th an 0.010 lb/MMBtu, along with an opacity limit no higher than 10 percent as EPA required as BACT at the Desert Rock facility. The commenter agreed that an opacity limit is necessary to show continuous compliance with the particulate matter BART limits (citing 75 FR. 64223).

In addition, the commenter (0182) indicated that EPA ha s proposed a BART limit only for PM, which appears to be only filterable part iculate matter. The commenter stated that the BART guidelines specify that BART shoul d be evaluated and defined for both PM 10 and PM 2.5 (citing 40 CFR part 51, Appendix Y, section IV.A ) and, consequently, that EPA must evaluate

and define BART limits for both PM 10 and PM 2.5 . The commenter also assert ed that as part of the

PM 2.5 BART determination, EPA must impose emission limits on condensable particulate matter, which is typically in the size range of 2.5 micrometers or smaller. Thus, the commenter

asserted that in addition to a filterable PM BART limit, EPA should impose a BART limit on

total PM 2.5

.

One public interest advocacy group (0112) supported EPA’s proposal and supplemental proposal to require a PM limit and a 10 percent opacity limits on Units 4 and 5. The commenter

indicated that these limits should become eff ective prior to SCR inst allation, regardless of

whether the BART or alternativ e emission control plan is impl emented. A private citizen (0192) also stated that PM and opacity limits on Units 4 and 5 should become eff ective at the earliest practicable date, seeing no reason why their effective date should be tied to SCR installation.

In “preliminary” comments submitted prior to the supplemental proposal, a similar group of environmental advocacy groups (0095) sugge sted PM limits of 0.012 lb/MMBtu on a 6-hour block average, applicable to each individual unit at FCPP. The commenter suggested that compliance be required by 2014, determined using CEMS. The commenter also supported EPA’s proposal of an opacity limit of 10 percent, to be measured using COMS. The commenter addedPage 127 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments that the BART determination should incl ude a provision that FCPP may forego BART implementation at any unit if it agrees to retire that unit prior to the deadline for BART implementation. The commenter requested that th ese limits be published for comment in any Federal Register notice published to take comment on the FCPP alternative BART proposal.

Response:

EPA proposed a BART limit of 0.012 lb/MMbtu fo r Units 1-3. There are various control technologies that can achieve this limit includi ng a baghouse, as mentioned by the commenter. The least expensive approach would be to in stall a wet membrane ESP after the venturi

scrubber. BART is an emission limit and EPA does not dictate the control te chnology that must be installed to meet it. As mentioned in the pr evious response, EPA is determining that it is not necessary or appropriate at this time to ta ke final action on the pr oposed PM BART limit for Units 1-3. Nonetheless, as stated in the TS D for our proposal, EPA does not believe the existing

venturi scrubbers constitute BART.

EPA agrees with the commenter that the PM and Hg emission limits in the MATS Rule

8 1 F 82
may require installation of baghous es on Units 1-3 to meet the standards. EPA is not finalizing a PM BART determination at this time for those 3 un its because these units will either be closed,

consistent with the alternative emission control strategy, or will be subject to the MATS Rule,

which will set additional emission limits. Because EPA is not finalizing a PM standard at this time for Units 1-3, it is not timely to addre ss the commenters’ recommendation on an opacity limit for these units or the tighter limit of 0.01 lb/MMbtu.

EPA is finalizing the proposed PM BART limit for Units 4 and 5 of 0.015 lb/MMbtu which can be met with the proper operation of the existing baghouses. Because these baghouses are more than 25 years old, it is not appropriate to impose a more stringent PM limit such as one that has been set or proposed for a newly constructed EGU.

EPA disagrees with the commenters’ recommenda tion that the condensable fraction must

be included in the PM BART limits. EPA has previously outlined our reasoning as to why an

H

2 SO 4 limit is not appropriate at th is time (it will be addresse d through the pre-construction permitting process if need ed) and EPA expects that H 2 SO 4 will be the main component of condensable PM from a coal fired EGU with an SCR. The existing 20% opacity limit is sufficient to provide reasonable assurance of the uni t’s compliance with the PM BART limit.

As mentioned in a previous response, EPA is not finalizing the proposed 10% opacity limit. While the 10% opacity limit was ge nerally supported by the Navajo Nation and environmental groups, upon further consideratio n of opacity limits set in other national EPA rulemakings, including the final MATS rule and NSPS Subpart Da, EPA is maintaining the 20% opacity limit that is already in the 2007 FCPP FIP.

EPA agrees with commenters that PM limits on Units 4 and 5 should become effective prior to SCR installation, as Units 4 and 5 ge nerally already meet th e 0.015 lb/MMBtu limit.

82 See 77 FR 9304, February 16, 2012Page 128 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments EPA is finalizing a compliance date for PM emissi on limits on Units 4 and 5 to be within 6 months after restart following the next scheduled major outages in 2013 and 2014.

EPA disagrees with the commenter that a CE Ms (presumably a PM CEMs) be used to determine the continued complian ce with the PM limits for Units 4 and 5. As stated previously, the existing 20% opacity limit is sufficient to provid e reasonable assurance of the unit’s compliance with the PM BART limit.

Comment:

One commenter (0182.3) submitted a technical review of the PM BART determination, which was attached to the comments of an environmental advocacy group (0182), as noted above. A brief summary of the major points of this review related to Units 1 – 3 follows:

 Venturi scrubbers are not the best system of c ontinuous emission reduction.

 The costs of installation new particulate controls, particular ly baghouses, at FCPP

Units 1 – 3 are reasonable.

– Costs of PM controls are overestimated.

– Effectiveness of PM cont rols is underestimated.

– APS’s cost effectiveness analysis of PM c ontrols only reflects incremental costs.

– Revised analyses show that the installati on of a baghouse is cost effective – average cost effectiveness ranging from $40.04/ton to $52.56/ton.

 The energy and environmental impacts analyses we igh strongly in favor of installation of baghouses at FCPP Units 1 – 3.

– A baghouse will likely be necessary to meet mercury MACT limits.

– New PM controls will be needed to meet the EPA’s proposed PM limit for nonmercury metal HAPs.

– The greater reduction in mercury emissions that a baghouse would allow for could help address mercury depos ition levels in the region.

– The secondary plume from FCPP Units 1 – 3 causes localized visibility impairment.

 Upgraded PM controls at FCPP Units 1 - 3 w ill improve visibility at nearby Class I areas.

 The BART limits for Units 1 – 3 should be based on the installation of baghouses with a

limit on filterable PM 10 no higher than 0.010 lb/MMBtu, along with a 6-minute average opacity limit no higher than 10 percent. The EPA must also define BART limits for PM 2.5 and condensable PM.

The commenter’s (0182.3) major points relate d to PM BART for Units 4 and 5 are as

follows:

 Units 4 and 5 can meet lower particulate matter BART limits than proposed by EPA.

 The EPA should evaluate the PM and SO 2 reductions that can be obtained with the elimination of bypasses of the scrubber.

 The EPA must evaluate and impose BART limits for PM 10 and PM 2.5

.Page 129 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments  The filterable PM emission limits should be no higher than 0.012 lb/MMBtu, which the units are actually achieving. The EPA should evaluate options for achieving filterable PM

emission limits of 0.010 lb/MMBtu as has b een required to meet BACT requirements in several recent PSD permits. The proposed 10 percent opacity limit measured with COMS is necessary to show continuous co mpliance with the PM BART limits.

Response:

As previously mentioned, EPA is not finaliz ing the PM BART determination for Units 1-3

at this time.

With regards to units 4 and 5 PM BART, EPA does not agree that the lim it needs to be set at what can be achieved by new EGUs considering these baghous es are more than 25 years old. EPA also disagrees with the need for a PM 10 , PM 2.5 or a condensable limit for these units. There is very little data available at this time for setting any of thes e limits. A PM limit is an adequate surrogate for these smaller fractions. A leak in a baghouse will pass all size fractions of PM and setting the limit with a Method 5 front half measurement is adequat e for all size fractions for a baghouse-controlled coal fired EGU. As mentio ned previously and elaborated on more in RTC in section 8.4, EPA does not agree that a condensable limit is needed for BART.



### 8.3

2 B 

### Comments on BART for SO 2

Comment:

Some commenters (0095, 0112, 0140, 0182) asserted that SO 2 BART should be required for FCPP, while one commenter (0224) simply noted that FCPP is subject to BART for SO 2

. Their comments are summarized in the paragraphs that follow.

One federal agency commenter (0224) stat ed that FCPP is subject to BART for SO 2 . The

commenter stated that Units 4 and 5 should be able to meet a limit of 0.12 lb/MMBtu on an annual average basis by upgrad ing the existing scrubbers.

One group of environmental advocacy groups (0 182) discussed the Regional Haze rules, the TAR, and the SO 2 emissions from FCPP and concluded that EPA is under a legal obligation to conduct a BART analysis for SO 2 emissions from FCPP and, to the extent EPA has failed to make a finding that it is “necessary or appropriate” to regulate SO 2 emissions from the FCPP, such a failure is arbitrary, capricious, and not supported by the administrative record. The commenter added that EPA’s proposed FIP is also arbitrary and capriciou s because it fails to conduct any BART analysis for SO 2 emissions from the FCPP, and because EPA fails to comply with its methodology for conducting BART determ inations found in the Regional Haze rules at 40 CFR 51.308(e) and the BART Guidelines.

According to the commenter (0182) , EPA argues that FCPP’s current SO 2 emissions limits are “close to or equivalent” to the lim it that would be establ ished under BART. The commenter argued that this conclusion is likew ise arbitrary and capricious because EPA hasPage 130 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments failed to undertake any scientific or technical analysis to supp ort its conclusion – rather than conduct such an analysis, EPA simply stated that the FCPP agreed to reduce SO 2 emissions pursuant to a prior voluntary compliance agreement. However, the commenter notes that a

review of the administra tive record shows that EPA did not conduct an SO 2 BART determination for the FCPP at that time, and has not conduc ted such an analysis since that time.

The commenter (0182) goes on to assert that under the plain language of the Regional

Haze rules at 40 CFR 51.308 and the BART Guid elines, EPA must make now make an SO 2 BART determination for the FCPP as part of this source-specific regional haze FIP. Moreover, the commenter argued that an SO 2 BART determination is likew ise important to meet the requirements of section 110 of the CAA as it relates to interstate transport of visibility impairing

emissions. The commenter contended that EPA’s failure to make an SO 2 BART determination for FCPP under the methodology prescribed by its ow n regulations and guidelines is arbitrary and capricious and must be corrected in the final rule.

The commenter (0182) made the following points about an SO 2 BART analysis at FCPP:

 The fact that the FCPP reduced SO 2 earlier than BART deadlines should not influence a proper BART determination . The commenter asserted that given the complicated regulatory history of SO 2 controls at FCPP and the fact that SO 2 controls were required

since the mid 1970’s but were not installed until the early 1980’s, APS should not be given credit to avoid a complete SO 2 BART analysis because the company finally took

actions to achieve better SO 2 control. The commenter also st ated that an analysis of the new 1-hour average SO 2 NAAQS standard could show th at FCPP’s current controls are necessary to ensure the FCPP does not cause or contribute to violations of the 1-hour average SO 2 NAAQS, and thus are not early controls . Finally, the commenter stated that given that EPA imposed enforceable SO 2 emission limits in 2007, the same year regional haze SIPs were due to be submitted to EPA and given that the methods planned on to

reduce SO 2 at FCPP could be implemented fairly r eadily (i.e., there wa s no installation of new pollution controls), it is difficult to consider these controls as being implemented early.

 The SO 2 limits of the FCPP FIP are not as stringent as BART . The commenter stated that without a BART analysis for SO 2 for each of the FCPP units, it is not known how much the current FIP requirements differ from what would have been requi red to meet BART. The commenter indicated that EPA can only al low an alternative to BART as long as it has been demonstrated to result in great er reasonable progress that BART. The commenter noted that the permit for Desert Rock, which would also use Navajo coal,

limited SO 2 emissions to 0.06 lb/MMBtu. In addition, the commenter added that the

current SO 2 controls on Units 4 and 5 do not treat 100 percent of the flue gas – the EPA’s

BART determination should evaluate the cost and visibility benefits of treating 100 percent of the flue gas for all units.

 FCPP must meet presumptive SO 2 BART limits at a minimum . The commenter pointed out that the presumptive BART limit for EGUs like FCPP is 95 percent control, the commenter asserted should be the regulator y floor. The commenter requested that EPA

undertake an SO 2 BART analysis for FCPP on a unit- by-unit basis and develop specific limits for each unit. The commenter argue d that a plantwide limit would only bePage 131 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments acceptable if it ensured emission reductions that were better than what would be required by a BART determination for each unit. Th e commenter added that the presumptive limits may be BART, but this will be known only after a thorough BART analysis. Finally, the commenter asked th at EPA not delay the final NO

x and PM BART determinations while conducting the required SO 2 BART rulemaking.

In “preliminary” comments submitted prior to the supplemental proposal, a similar group of environmental advocacy groups (0095) suggested that the owners of FCPP should be required to perform an SO 2 BART analysis for all five units for submission to EPA and the public no later than February 18, 2011, with comments due by the comment deadline that was then in force for the BART rulemaking (i.e., March 18, 2011). The commenter further stated that EPA should propose an SO 2 BART determination by April 30 and a final determination at the time it finalized the FIP, with compliance with the SO 2 BART limits required by 2014. The commenter

added that the BART determination should in clude a provision that FCPP may forego BART implementation at any unit if it agrees to retire that unit prior to the deadline for BART implementation. The commenter requested that these proposed requirements be published for comment in any Federal Register notice published to take comme nt on the FCPP alternative BART proposal.

A public interest advocacy gr oup (0112) stated that the SO 2 limits need to be tightened up for FCPP to further reduce visibility impairment a nd to reduce the acidifi cation of rainfall caused by the formation of H 2 SO 4 . The commenter stated that because the damaging effects of H 2 SO 4 in precipitation on ancestral Puebloan sandstone dwellings and pictographs are not fully understood, it is disappointing for the FCPP proposals not to address SO 2 . The commenter asked that FCPP be required to perform a BART analys is for all five units by a date established by

EPA.

Response:

As many of the commenters acknowledge, EPA finalized a FIP in May 2007 that required significant SO 2 emissions reductions from FC PP and established continuous SO 2 emissions limits for FCPP. See 72 FR 25698 (May 7, 2007). Th e 2007 FIP required FCPP to increase the removal efficiency if its SO 2 emissions controls from 72% to 88%, resulting in a SO 2 emissions reduction of approximately 22,000 tons per year. EPA had proposed this FIP in September 2006. The 2006 proposed FIP stated t hat “EPA believes that the SO 2 controls proposed today for FCPP are close to or the equivalent of a regional haze BART determination of SO 2 . This takes into consideration the early reductions this action will achieve and th e modification to the existing SO 2 scrubbers.” 72 FR 25700. We received several comments on our 2006 proposal which stated that EPA should be undertaking a BART analysis for SO 2 rather than setting the

SO 2 emissions limit based on FCPP’ s agreement to improve its SO 2 removal efficiency from 72% to 88%. In finalizing that rulemaking in the 2007 FIP, EPA responded that it was exercising its authority pursuant to Section 49.11 of the TAR to implement measures that are necessary or appropriate to protect air quality in Indian country. Id. EPA determined that the SO 2 emissions reductions would be federally enforceable as so on as the 2007 FIP was finalized which would be potentially five years before EPA could achieve enforceable SO 2 emissions reductions through making a BART determination. See id. EPA also c onsidered the Navajo Nation’s request for EPAPage 132 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments to establish enforceable SO 2 emissions reductions immediately t hat, in the opinion of the Navajo Nation, “appear[] to be equivalent to BART.” Id . Therefore, EPA’s determination on this issue in finalizing the 2007 FIP was “that it is neithe r necessary nor appropriate at this time to undertake a BART determination for SO 2 from FCPP given the timing of the substantial SO 2 reductions resulting from this FIP.” Id. In addition, we stated that “given that the SO 2 controls for FCPP immediately achieve si gnificant reductions in SO 2 comparable to what could ultimately be achieved through a formal BART de termination, EPA believes that it will not be necessary or appropriate to devel op a regional haze plan to address SO 2 for the Navajo Nation in the near term.” Id. 25700-701.Both APS, as operator of FCPP, and Sierra Club sought judicial review of our 2007 FIP.

The comments on this action essentially repackage the comments we received and provided a response for on the 2007 FIP. The co mments have not presented any new facts or legal considerations that have arisen or c hanged since we responded to comments requesting a BART determination for SO 2 in 2007.

Comment:

One commenter (0182.3) submitte d a technical review of SO 2 BART, which was attached to the comments of an environmental advocacy group (0182). The commenter asserted that the

SO 2 FIP requirements do not reflect the level of SO 2 control currently be ing achieved at FCPP Units 1 – 3. According to the co mmenter, a review of 2008 and 2009 SO 2 emissions data compared to APS data on annual uncontrolled SO 2 emissions in the coal show that these FCPP units are achieving greater than 93 percent cont rol on an annual average basis. Thus, the commenter argued that the 88 percent control lim itation cannot be considered as “close to or equivalent to” BART and the emission limits for SO 2 should be no higher than the removal efficiencies actually being achieved.

The commenter (0182.3) provide d a BART analysis for SO 2 at FCPP Units 1 – 3 and

concluded that SO 2 BART for FCPP Units 1 – 3 should be a 95 percent SO 2 control requirement or an emission limit of 0.09 lb/MMBtu, applicable to each unit on a rolling average basis of 30 boiler operating days. The commenter added that this BART limit would be met by the addition of baghouses upstream of the existing wet scrubber s at these units (which will be required to meet MACT and also PM BART), along with other physical or operational changes to the scrubbers to improve SO 2 removal efficiency to 95 percent. The commenter indicated that compliance should be based on CEMS and, if a pe rcent removal requirement is imposed, daily sampling of sulfur in the coal from which daily percent SO 2 removal is then determined with the

actual SO 2 data from the CEMS. Finally, the commente r stated that these limits should apply on a unit-by-unit basis to ensure that each unit is required to achie ve the best continuous level of

emission reductions.

The commenter (0182.3) also asserted that the 2007 SO 2 FIP requirements do not reflect

the level of SO 2 control currently being achieved at FCPP Units 4 and 5. According to the commenter, the annual data show that the FCPP Units 4 and 5 are achieving approximately 90 to 91 percent SO 2 removal from the uncontrolled SO 2 in the coal on an annual average basis. Thus,Page 133 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments the commenter claimed that the 88 percent control limitation cannot be consid ered as “close to or equivalent to” BART and the emission limits for SO 2 should be no higher than the removal efficiencies actually being achieved.

The commenter (0182.3) stated that FC PP Units 4 and 5 are not meeting EPA’s presumptive BART limits of 95 percent SO 2 control or an SO 2 emission limit of 0.15 lb/MMBtu. The commenter presented a BART analysis for SO 2 at FCPP Units 4 and 5 and concluded that

SO 2 BART for FCPP Units 4 and 5 should be a limit of 95 percent SO 2 control based on EPA’s presumptive BART requirements, which would be achieved with the elimination of all scrubber bypass along with other scrubber modi fications necessary to improve SO 2 removal efficiency to 95 percent. At the minimum, th e commenter asserted that SO 2 BART for FCPP Units 4-5 should be no less than a limit reflecting 92 percent control or 0.14 lb/MMBt u, as this would reflect the

level of control the FCPP Units 4 and 5 were de signed for with the elimination of all scrubber bypass. The commenter proposed the same complianc e requirements set out above for Units 1 –

3.

Response:

As discussed in response to the prior comme nt, EPA finalized a FIP in 2007 for FCPP. EPA responded to comments in t hat FIP action suggesting that EPA should require FCPP to achieve a 95% removal efficiency to be consistent with presumptive BART for SO 2 . The 2007 FIP stated: “EPA disagrees with the comment that the BART Guidelines, 70 FR 39104, 39171 (July 6, 2005) establish a presumption that BART at FCPP is 95% control for SO 2 . Although the BART Guidelines did establish a presumpt ion of either 95% control for SO 2 or 0.15 lbs/MMBtu for large power plants, this presump tion applies only to power plants t hat are currently uncontrolled or achieving less than 50% control of SO 2 . Id. As indicated in the prea mble to this proposed FIP, this presumption thus does not apply to pow er plants, such as FCPP, with existing SO 2 controls achieving at least 50% removal efficiency.” Id. at 25700, n.3. The comments here have not set forth any new facts or changes in the law since we responded to this comment in 2007.



### 8.4

2 3 B 

### Other Comments on BART

Comment:

One group of environmental advocacy groups (01 82) stated that as an alternative to a

condensable PM 2.5 limit, EPA could set limits on the pollutants which form condensable PM 2.5 , such as sulfuric acid mist (H 2 SO 4 ) and ammonia, as EPA proposed as part of the SJGS BART rulemaking (citing 76 FR 491, January 5, 2011). If EPA adopts this approach, the commenter urged EPA to set an emission limit for H 2 SO 4 no higher than the limit of 1.06 x 10 -4 lb/MMBtu for each unit as proposed for SJGS based on the use of low reactivity catalyst and the most

current information from the Electric Power Resear ch Institute. If CEMS are unavailable for this pollutant, the commenter urged EPA to require stack test monitoring for H 2 SO 4 on a more frequent basis than annual monitoring.Page 134 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments The commenter (0182) also requested that EP A set emission limits for ammonia at a rate no higher than the 2.0 parts per million as proposed at SJGS, to be monitored with CEMs. The commenter indicated that EPA should clarify in the final rule that the emission limits for H 2 SO 4 and ammonia are being required under the Re gional Haze program as part of a BART determination for the facility and must be complied with within 3 years of the date of the final

rule.

In “preliminary comments submitted prior to the supplemental proposal, a similar group of environmental advocacy groups (0095) sugge sted the same limits for ammonia and H 2 SO 4 based on the proposed limits for SJGS. The commenter added that the BART determination should include a provision that FCPP may forego BART implementation at any unit if it agrees to retire that unit prio r to the deadline for BA RT implementation. The commenter requested that these limits be published for comment in any Federal Register notice published to take comment on the FCPP alternative BART proposal.

Response:

EPA disagrees with the comment that Region 9 should set the same emission limits for ammonia and sulfuric acid as Region 6 in its proposed BART determination for SJGS.

In its January 5, 2011 proposed rulemaking for SJGS, Region 6 proposed an ammonia slip limit of 2.0 ppmvd on an hourly average and requested comment on a range from 2.0 ppmvd to 6.0 ppmvd. In its final BART rulemaking (76 FR 52388, August 22, 2011), Region 6

determined that an emission lim it and monitoring were not wa rranted for ammonia and did not finalize its BART determination for SJSG with the proposed 2.0 ppmvd ammonia limit.

In its proposal for SJGS, Region 6 proposed an emission limit for sulfuric acid of 1.06 x

10 -4 lb/MMBtu on an hourly average, and requested comment on a range from 1.06 x 10 -4 to 7.87

x 10 -4 lb/MMBtu. In its final rulema king, Region 6 finalized an emissi on limit for sulfur ic acid of

2.6 x 10 -4 lb/MMBtu to minimize its contribution to visibility im pairment. Region 6 calculated this emission limit using an estimation methodology from the EPRI, assuming the use of an ultra low activity catalyst (0.5% total conversion of SO 2 to SO 3 ), zero ammonia slip, no sorbent injection, and EPRI-recommended values for removal by existing downstream control equipment.

Actual measurements of baseline sulfuric acid emissions have not yet been determined at FCPP and the calculation of projected sulfuric acid emissions after installation and operation of SCR using the EPRI methodology is dependent on future decisions made by the facility on the type of SCR catalyst and number of layers used, as well as nume rous assumptions about loss to downstream components, such as air preheate rs and baghouses, the true values of which are currently not yet defined or known for FCPP., EPA Region 9 is the permitting authority for preconstruction permits on the Navajo Nation, and an increase in sulfuric acid emissions from the installation of SCR may trigger major m odification PSD permit requirements at a low threshold of 7 tpy (see 40 CFR 52.21) or Tri bal minor new source review (NSR) permit requirements at a threshold of 2 tpy (see 40 CFR Part 49 Subpart C). Preconstruction permitting review may also be triggered from significant emissions increases of PM 2.5 from SCR installationPage 135 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments at FCPP. If one of these pollutant triggers PSD, the permitting aut hority must provide an Additional Impact Analysis under the PSD pr ogram. The PSD program also requires the permitting authority to determine BACT for pollu tants that triggered PSD. A similar control technology review may also be required at the discretion of the permitting aut hority under the Tribal Minor NSR program. For these reasons , Region 9 has determined that for FCPP, emission limits and monitoring requirements for sulfuric acid are more appropriately reviewed in the preconstruction permitting process.

Comment:

Citing the BART Guidelines at 40 CFR part 51, Appendix Y, section V, one environmental advocacy group (0182) stated that BART emission limits and compliance schedules must be based on “boiler operati ng day.” The commenter indicated that the NO

x BART proposal of 0.11 lb/MMBtu is based on a 30-day, calendar rolling average (citing 75 FR 64235) and the supplemental BART proposal is silent as to type of 30-day rolling average is intended (citing 76 FR 10530).

The commenter (0182) claimed that the “very high” proposed BART emission limits suggest that EPA set these limits to encompass sp ikes that occur during startups and shutdowns.

The commenter asserted that se tting and enforcing limits base d on boiler operating day would necessarily exclude spikes that occur before and after outages, su ch as startups, shutdowns, and malfunctions. According to the commenter, such periods should be subject to separate limits set at the pre-SCR uncontrolled level to encour age good work practice standards during these periods while allowing the SCR and other emissi on control technologies to be operated at an efficient and continuous capacity in compliance with BART. The commenter argued that it is clear that the BART Guidelines are based on establishing separate limits for emissions spikes to avoid misapplying the Guidelines and setti ng unnecessarily high BA RT emission limits.

Response:

EPA agrees that the BART Guidelines specify that the permit (or implementation plan

that establishes the emission lim itations), for EGUs must “sp ecify an averaging time of a 30-day rolling average, and contain a definition of “boiler operating day” that is consistent with the definition in the proposed revisions to the NSPS for utility boilers in 40 CFR Part 60 subpart Da (70 FR 9705, February 28, 2005)”. The proposed r evisions to the NSPS in 2005 included a definition for “boile r operating day”:

Boiler operating day for units constructed, reconstructed, or modified on or before February 28, 2005, means a 24-hour period during which fossil fuel is combusted in a steam generating unit for the entire 24 hours. For units constructed, reconstructed, or modifi ed after February 28, 2005, boiler operating day means a 24-hour period between 12 midnight and the following midnight during which any fuel is combusted at any time in the steam generating unit. It is not necessary for fuel to be co mbusted the entire 24-hour period.Page 136 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments The definition of boiler operating day wa s finalized on June 13, 2007 (72 FR 32722) as proposed.

EPA agrees that the NO

x limit for the alternative proposal should be set for30 successive boiler operating days and that a “boiler operating day” should be defined as any day in which the boiler fires fossil fuel and therefore include s periods of startup or shutdown. Because the

NO

x emission limit under the alternative emission c ontrol strategy already includes periods of startup or shutdown, separate limits are not required. The final rule reflects this approach.

For the original proposal, EPA does not find it necessary to defin e boiler operating day

because the limit is a heat input weighted plant-wide limit. Only operating hours for any of the 5 units would be included. When a unit is not ope rating, those hours are notincluded in the plantwide 30 day average. Additionally, the heat-input weighted plant-wide limit also includes periods of startup and shutdown, therefore, separate limits are not required.

Comment:

One environmental advocacy group (0182) co mmented that EPA should require FCPP to install all control equipment within 3 years of the date of a final FIP, as EPA did at the San Juan Generating Station. The commenter stated that there is ample da ta to supporting the contention

that all this emission control t echnology can be installed and opera tional within 3 years or less.

Response:

EPA disagrees with the comment that EPA should set a 3 year compliance timeframe because EPA proposed a 3 year compliance timefra me for SJGS. In its proposed rulemaking for

SJGS

8 2 F 83 , Region 6 proposed a 3 year timeframe for SJGS to comply with the proposed limits but requested comment on a compliance range of 3 – 5 years. In its final rulemaking, Region 6 finalized a compliance timeframe of 5 years and dete rmined that because of site congestion at SJGS, a longer timeframe than average (37 – 43 m onths) to install SCR on the 4 units at SJGS would be required. The final BART determination for FCPP requires retro fit of 5 existing units at FCPP. In the final rule for FCPP, Region 9 is requiring installati on and operation of SCR controls for one 750 MW unit w ithin 4 years of the effective date, and the remaining 750 MW unit and Units 1 – 3 within 5 years of the effective date. Based on all of the factors that will be involved in the design, purchase and operation of the SCR controls, Region 9 considers this schedule to be appropriate and expeditious.

Comment:

One group of environmental advocacy groups (0095) stated in comments submitted prior to publication of the supplementa l proposal that FCPP has a large impact on visibility in the region, and that time has come to eliminate th ese impacts. The commenter opined that it is incumbent upon EPA to curtail these impacts to the maximum extent possible by issuing a strong

83 See 76 FR 491, January 5, 2011Page 137 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments FIP addressing all visibility-impai ring pollutants. (See the comment er’s suggested limits for the pollutants elsewhere in this section.)

In comments dated prior to publication of the supplemental proposal, a near-by county in a neighboring state (0106) a nd an individual county commissioner (0108) supported EPA’s proposed action on FCPP because it will re sult in significant reductions in NO

x and other hazeforming pollutants that also negatively impact public health. The commenters noted that ozone levels in the area have nearly reached nonatta inment levels, and that the regional economy thrives on the quality of the natural and hist orical resources which may be significantly diminished by the presence of haze. In a re solution passed prior to publication of the supplemental proposal, a near-by city in a neighb oring state (0105) encouraged EPA to comply with both the RHR and the CAA’s “good neighbor ” provisions and require BART on FCPP (and SJGS) to reduce haze and to improve visibility and health in the Four Corners airshed.

A private citizen (0084) stated, in comment s submitted after APS announced its intent to purchase SCE’s stake in Units 4 and 5 and to sh ut down Units 1 – 3 but prior to publication of the supplemental proposal, that APS should conti nue with its proposed transactions and EPA should continue to consider its proposed BART rule. The commenter argued that APS’s plans

would result in a smaller reduction in emi ssions than would the BART proposal, but a combination of the two would provide more jobs and economic stability a nd improve air quality.

Response:

As stated in other EPA responses within this document, a BART determination represents a case-by-case determination that accounts for site sp ecific characteristic s in the five-factor analysis. While choosing an emission limit that repr esents the lowest emission rate achieved by similar facilities may be justified in some case s, the BART Guidelines do not specifically require emission reductions “to the maximum extent possibl e”. As discussed in more detail elsewhere in this RTC (See Section 8.1), EPA has determined that a plant-wide NO

x emission limit of 0.11 lb/MMBtu, representing an 80% reduction in plant-wide emissions and achievable by the installation and operation of post-combustion contro ls, is BART for FCPP based on site-specific considerations, includ ing physical limitations of the boilers.

EPA has determined that finalizing a FIP impl ementing the BART provisions of the RHR

to reduce NO

x emissions from FCPP on the Navajo Na tion is appropriate at this time. EPA expects the NO

x reductions required for FCPP in the final FIP, combined with the NO

x reductions required in the final FIP for SJ GS issued by EPA Region 6 (76 FR 52388, August 22, 2011), will contribute to improved air quality in the Four Corne rs area; therefore a FIP for the Navajo Nation implementing the “good neighbor” provisions under the Clean Air Act (Section 110(a)(2)(D)(i)) is not necessa ry at this time.

EPA disagrees with the commenter that the a lternative emission cont rol strategy would result in smaller emission reductions compared to our final BART determination. As outlined in more detail elsewhere in this RTC (See Secti on 9.0), EPA has determined that the alternative emission control strategy will result in greater annual emission reductions than BART.Page 138 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Comment:

One public interest advocacy group (0112) st ated that EPA should hold FCPP to the highest possible level of monitori ng and validation of the FIP. The commenter indicated that this is justified by the fact that FCPP previously disc ontinued use of a re-heat of the scrubber exhaust

on Units 1 – 3 without aut horization from EPA.

Response:

EPA agrees that monitoring, record-keeping, and reporting requirements are critical elements in enforcing the emissi on rates established in the final FIP. As stated in the proposed BART determination, the final BART determination requires FCPP to comply with 40 CFR Part 75 requirements, including requirements related to quality assurance testing, relative accuracy test audits. The requirements of the final FIP will be incorp orated by the Navajo Nation Environmental Protection Agency (NNEPA) into the fa cility’s Part 71 Operating Permit, and will require FCPP to submit annual compliance reports and testing results to the NNEPA and EPA Region 9

.

EPA was never notified of the discontinued use of the reheaters for Units 1-3. EPA is not aware of when these units were taken out of service. Although EPA would have appreciated the opportunity to weigh in on this decision, we are not aware of any regulation that would have prevented APS from removing the re-heaters.

These 3 units do not have an opacity limit under the 2007 FIP, so the wet stack and lack of continuous opacity monitors should not be a monitoring issue. They are required to monitor and report deviations of the pr essure drop and scrubber liquid flo w to the venture scrubbers to assure proper operation of these control devices for PM.Page 139 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## 9.0

8 B 

## Comments on APS’s Alternative Proposal and EPA’s Supplemental Proposal

Comment:

One of the owners of FCPP (0176/0177) pointed out that the November 2010 APS proposal included two critical com ponents: (1) a proposal to close Units 1 – 3 and install SCRs on Units 4 and 5; and (2) EPA’s contemporaneous agreement that these activities resolve any liability FCPP may have under regional haze BA RT, Reasonably Attrib utable Visibility Impairment Best Available Retrofit T echnology (RAVI BART), NSR, and NSPS. The commenter asserted that EPA’s supplemental pro posal addresses only half of APS’s proposal –

the half that achieves better than BART emissi on reductions, plant-wide reductions of all other emissions, and greater visibility improvement at nearby Class I areas – but ignores the other half of the APS proposal – the half that provide s APS and the FCPP co-owners with needed regulatory certainty. Unless there is a contemporaneous resolution of these key issues with EPA, the commenter cannot and does not support EPA’s supplemental proposal. With a full resolution of these issues, the commenter would then support the supplemental proposal.

In the November 2010 APS proposal, APS expl ained that it proposed the alternative strategy because it was faced with uncertain ty on all sides. The commenter (0176/0177) indicated that FCPP must resolve these uncertainties before spending significant capital on upgraded pollution controls. For th is reason, the proposal to inst all SCRs on Units 4 and 5 in 2018 is inexorably linked with EPA’s contem poraneous agreement to resolve any plant obligations under the referenced programs.

Another of the owners of FCPP (0168) si milarly rejected the supplemental proposal without contemporaneous resoluti on of all obligations that FCPP may have related to the CAA programs listed above. The commenter added that it would consider accepting the supplemental proposal if these other potentia l issues are resolved, but emph asized that acceptance of the supplemental proposal would be voluntary and based on its own business interests.

Response:

EPA understands that the owners of FCPP ar e seeking to resolve any potential regulatory noncompliance at a roughly simultaneous time. However, EPA must use different mechanisms for promulgating rules and resolvin g enforcement issues. The comment requests resolution of potential past non-compliance wi th NSR and NSPS requirements. Potential past non-compliance can be resolved through entering into a Consent Decree c ontaining a judicially approved release from liability. Such a Cons ent Decree under the Clean Air Act must be approved by the United States Depa rtment of Justice and must also be lodged in a United States District Court where the public is allowed to co mment on it. Consent Decrees must be entered by

the United States District Court for a release of liability of po tential past non-compliance to be effective. Accordingly, this rulemaking action cannot effectuate any re lease of liability for potential past non-compli ance with NSR or NSPS.Page 140 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments The comment is also seeking some resolution wi th respect to a poten tial finding by the Department of Interior that visi bility impairment at a Class I ar ea is reasonably attributable to FCPP’s emissions. If the Department of Interi or made such a finding, then EPA would be obligated to determine whether EPA should make a BART determination.

EPA is aware that several environmental groups have petitioned the Department of Interior to make a finding that impairment at Class I areas is reasonably attributable to FCPP.

8 3 F 84
The NPS, on behalf of Department of Interior, has declined to make such a finding based on EPA’s work in this rulemaking.

8 4 F 85 The environmental groups also filed a Complaint in the United States District Court for the District of Columbia

8 5 F 86

contending that the De partment of Interior was unreasonably delaying making a finding of re asonable attribution from FCPP. On June 30, 2011, the Court dismissed the Complaint

8 6 F 87

holding that the NPS’s le tters refusing to make the finding of reasonable attribution constituted denyi ng the Petitioners’ request for a RAVI finding. Therefore, there are no pending petitions with the Department of Interi or requesting a finding that visibility impairment at any Class I areas is reasonably attributable to FCPP. In any event, a BART determination under RAVI would likely be the same as under this BART determination.

Comment:

One public interest advocacy group (0112) reque sted that EPA publicly disclose (to the extent legal counsel will allow) how each of the conditions set forth in the APS proposal (i.e., related to RAVI BART, NSR, and NSPS violations) is incorporated into and/or is accommodated by the EPA’s supplemental proposal.

Response:

As discussed above, EPA can resolve potenti al past non-compliance with NSR and NSPS through entering into a Consent Decree approved by the Department of Justice and lodged in the United States District Court. The public wi ll have an opportunity to comment on any Consent Decree and may request the Court to determine wh ether the Consent Decr ee is in the public

interest.

Although EPA does not believe that there are an y pending petitions to the Department of Interior to make a finding that the visibility impairment at any Class I area is reasonably

84 See National Parks Conservation Association, et al., Petition to United States Department of Interior, United States Department of Agriculture, and United States Fore st Service, February 16, 2010, in the docket for this rulemaking.

85 See letter from Will Shafroth, Department of Interior to Stephanie Kodish, NPCA, March 8, 2011 in the docket for this proposed rulemaking.

86 See National Parks Conservation Association, et al., Petitio n to United States District Court for the District of Columbia, January 20, 2011, in the docket for this final rulemaking.

87 See National Parks Conservation Association, et al., Plaintiffs, v. United States Department of Interior and United States Department of Agriculture, Defendants. Civil Action No. 11-130 (GK). United States District Court for the District of Columbia, June 30, 2011, 794 F. Supp. 2d 39; 2011 U.S. Dist. LEXIS 70170; 74 ERC (BNA) 1015. In the docket for this final rulemaking.Page 141 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments attributable to FCPP’s emission, EPA also consid ers any BART determinations it makes to consider the same factors whether the BART determination is tri ggered by a finding of reasonable attribution or under 40 CFR 51.308(e).

Comment:

One of the owners of FCPP (0176/0177) stated th at it is imperative to note that its support of the supplemental proposal (if other potential li abilities are resolved as discussed above) is based solely on the rationale that this achieves a result better than the proposed BART FIP, and

that this “better than BART” outcome is a re sult of the closure of Units 1, 2, and 3. The

commenter stressed that in no case – either in the original BART FI P proposal or in the supplemental proposal – does the commenter s upport any determination that SCR constitutes BART for FCPP. A second FCPP owner (0168) stat ed that its acceptance of the supplemental proposal upon resolution of the other potential issues would be a voluntary action based on its own business interests; the commenter does not support any BART determination that calls for

installation of SCR at FCPP.

Another of the FCPP owners (0174) similarl y emphasized the belief that SCR cannot be justified as BART at FCPP. Accordingly, the co mmenter stated that EPA’s October 2010 BART proposal should not be used as the benchmark for evaluating and proposin g a BART alternative. The Navajo Nation (0223) also did not agree that SCR is BART for FCPP.

Response:

EPA disagrees with the commenters that SC R is not BART. Based on our five-factor analysis, as described in the TS D for our proposed BART determination, SCR is cost effective and results in the greatest anticipated improvem ent in visibility. One of the owners of FCPP

notes that the “better-than-BART” outcome is a result of the closure of Units 1, 2, and 3. However, the closure of Units 1 – 3 alone does not result in greater emission reductions than EPA’s proposed BART determination, and repres ents only a roughly 30 % reduction from baseline emissions. The closure of Units 1 – 3, in combination with SCR on Units 4 and 5, results

in the “better-than-BART” outcome.

The voluntary nature of the alternative em ission control strategy does not negate EPA’s BART determination because (1) EPA must determ ine what BART is in order to fulfill the requirements of the alternative program to BART as prescribed in the RHR, and (2) EPA cannot require the full or partial closure of a facility as a BART alterna tive, therefore the alternative emission control strategy remains an optional business choice of the owners of FCPP to implement in lieu of BART, if they see fit.

Comment:

Eleven private citizens (0122, 0139, 0140, 0141, 0145, 0149, 0158, 0159, 0166, 0167, 0201) expressed general support for the suppl emental proposal, although five of thesePage 142 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments commenters (0122, 0145, 0156, 0158, 0167) did not support the 2018 completion date. One commenter (0167) preferred a completion date w ithin 3 years of the fi nal EPA decision, two commenters (0122, 0158) preferred a completi on date of 2014, and one commenter (0145)

asserted it cannot wait until 2014.

One of the private citizens (0139) suppor ted the supplemental proposal with a few changes: (1) APS should be required to implem ent the upgrades incrementally over the next 7 years, with 1/7th of the work to be complete d each year, (2) penalties should be enforced for any year in which they lag behind the schedule, (3 ) retirement of the existing units should follow the same schedule, and (4) clean-up of the ex isting sites, incrementally, over the 7 years.

Another of the private citizen s (0159) stated that the suppl emental proposal yields even greater emissions reductions th an the original BART proposal, promising greater health and economic benefits at significantl y lower cost to the utilities an d their ratepayers. The commenter also noted that APS and BHP Billiton pledged that no layoffs would be associated with the

shutdown of the three smaller un its at FCPP under this proposal.

A third private citizen ( 0167) urged EPA to lower the proposed numeric limits on NO

x and PM and to add limits for ammonia and H 2 SO 4 . The commenter argued that such limits would mean healthier air for us all, better views of our magnificent national parks, and a stronger tourism economy.

Several other commenters (0108, 0112, 0113, 0143, 0150, 0152, 0175, 0183, 0192, 0200, 0223) also expressed support for the supplemen tal proposal, although some indicated some

reservations about certain as pects of the proposal. These comments are summarized in the following paragraphs.

The Navajo Nation (0223) tentatively s upports the supplemental proposal with the following caveats:

 The alternative emission control strategy must be determined through government-togovernment consultation with the Navajo Nati on and give primary consideration to the

economic interests of the Nation in the con tinued operation of FCPP. (See Section 4.1 for more detail.)

 The Navajo Nation does not agree to a dete rmination that SCR is BART for FCPP.

The commenter (0223) agreed that the supplemen tal proposal would result in 100 percent control

of NO

x , SO 2 , PM, mercury, and other hazardous pollutants by shutting down Units 1 – 3 by 2014, which would significantly re duce the emissions of FCPP.

One state air agency (0113) anticipated subs tantial environmental benefits for the Four Corners region from the alternative proposal, and fr om an air emissions standpoint regarded this alternative proposal as superior to the October 2010 BART pr oposal. The commenter indicated that because the alternative propos al appears to have support from the facility’s operators, it should result in a higher likelihood of long-term success. The Attorney General’s office (0200) from the same state supported these comments. A U.S. Senator (0150) from the same state alsoPage 143 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments expressed support for the supplemental proposal b ecause it would help to address longstanding concerns with air quality in the Four Corners region at a lower cost than the initial BART proposal. This commenter noted that the Class I areas affected by FCPP (and SJGS) are drivers of the economy in Southwest Colorado, and that emission from the plants have caused a variety of negative public health impacts.

One federal agency (0175) supported the supplemental proposal, but would prefer a NO

x limit of 0.05 lb/MMBtu (as discussed in Sect ion 8.1). The commenter agreed that the supplemental proposal would provide greater visi bility improvement in the surrounding Class I areas than EPA’s original BART proposal of October 2010, as well as additional benefits such as reduced water consumption and reduced CO 2 , SO 2 , and mercury emissions. An environmental advocacy group (0183) similarly supported the supplemental proposal (with a lower, but unspecified, NO

x limit) and stressed the health and ecosy stem benefits that would result from

lower emissions of NO

x , PM, SO 2 , mercury, and CO 2 (which are discussed further in Section 4.2).

One public interest advocacy group (0143) and one private citizen (0192) supported EPA’s supplemental proposal for FCPP. The priv ate citizen (0192) speci fically supported the shutdown of Units 1 – 3 by 2014 and application of a NO

x limit of 0.098 lb/MMBtu for Units 4 and 5 with a compliance date of July 31, 2018. Gi ven that SCR is a mature technology, EPA originally proposed BART in October 2010, an d FCPP has operated with only minimal air emissions control for over 40 years, the commente r asserted this compliance schedule is ample. The commenter also voiced support for providing fl exibility to FCPP through setting the limit as heat-input weighted limit and through a lower NO

x limit on a 3-year rolling average.

One Tribe in the Four Corners area (0152) approximately 60 miles north of FCPP supported the supplemental proposal. The comment er gave the following reasons for this support: (1) any reductions in emissions from FCPP will result in cleaner and healthier air on the Reservation; (2) the tribe’s two air monitors show that the Rese rvation is neari ng nonattainment status for ozone, and reducing NO

x emissions from FCPP may help maintain attainment; and (3) any improvement in visibility in the Class I areas in the region will positively affect visibility

on the Reservation.

Another public interest advocacy group (0112) similarly expressed support for adding regulatory language to the proposed BART dete rmination for FCPP that would allow FCPP to implement the alternative cont rol strategy in lieu of having to implement EPA’s proposed

BART. This commenter also indicate d support for the option of adding a NO

x emission limit requiring greater than 80 percent control over longer averaging tim es weighted for heat input.

However, this commenter (0112) added th at EPA should not make a final decision on whether to accept the alternative control strate gy until it receives a “professional and credible” cost accounting of FCPP’s costs, including th e additional pollution control investments for

Units 4 and 5. The commenter indicated that the cost accounting s hould explain where the money will come from for retirement of Units 1 – 3 and for pollution control upgrades for

Units 4 and 5.Page 144 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments The commenter (0112) also questioned EPA’s statement that the alternative emission control strategy to shut down Units 1 – 3 by 2014 not only results in 100 percent control of NO

x , but also 100 percent control of all other pollu tants emitted by those units. The commenter alleged that this is a misleading statement because th e shutdown of Units 1 – 3 is simply a business decision; the emission reductions are not attributable to any C AA program or enforcement of controls by EPA. The commenter st ated that the “100 percent contro l” wording paints too rosy a picture by using the ratio of emissions after s hutdown to emission levels that are completely unacceptable at present. According to the comme nter, FCPP remained the most polluting power plant in the United States as of March 20, 2011.

Response:

EPA has reviewed the comments in genera l support of our Supplemental Proposal. Specific comments on revisions to various aspect s of the alternative em ission control strategy, such as compliance timeframes, emission limits for sulfuric acid and ammonia, lower limits for

NO

x , health and ecosystem benefits, disagreement that SCR is BART, and the interests of the Navajo Nation, are included and addressed in more detail elsewhere in this Section and more broadly within this document (e.g., Sections 4 and 8).

Regarding the timing of the installation of controls, EPA disagrees with commenters that the compliance date for the alte rnative to BART should occur earlier than 2018, or that EPA should impose incremental progress in NO

x reductions over the intervening 7 years. As described in our Supplemental Prop osal, in order to implement th e alternative em ission control strategy, APS and other owners of FCPP must receive approvals from three regulatory agencies as well as finalize coal contract negotiations with BHP Billiton, and receive approval from DOI on the lease agreement with the Navajo Nation. Th ese various components take time, as does the actual planning and installation of SCR as retrof its on existing boilers, Units 4 and 5. Therefore, the year 2018 compliance timeframe for the alter native emission control strategy in our final rulemaking is reasonable and appropriate.

EPA disagrees with the comment that EPA s hould not make a decision on the alternative emission control strategy until it receives a “professional and credible” cost accounting of FCPP’s costs for Units 4 and 5. Under the RHR (see 40 CFR §51.308(e)(2)), a cost analysis is not required element for an alternative to BART analysis. Even though EPA has not done a cost analysis of this alternative emi ssion control strategy, EPA expects th e cost of the alternative is likely to be lower than the cost of BART becaus e the BART Alternative involves installation of additional controls on fe wer units at FCPP.

EPA disagrees with commenters who contend that our statement that the closure of Units 1 – 3 at FCPP results in 100% control of those un its is misleading. If Units 1 – 3 close, those three units will not emit any air pollutants, i.e., 100% control. EPA further notes that the

alternative emission control st rategy not only involves clos ure of Units 1 – 3, but also installation of SCR on Units 4 and 5, furthe r reducing facility-w ide emissions of NO

x .

Comment:Page 145 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments The Navajo Nation (0223) agreed that s hut down of Units 1, 2, and 3 by January 2014 and installation of SCR on Units 4 and 5 by July 31, 2018, in order to satisfy the requirements of CAA section 169A(b)(2) and the RHR, 40 CFR 51.308(e), is realistically achievable. The commenter noted that EPA recognized in the su pplemental proposal that APS must obtain approvals from several agencies, and that the Navajo Nation Counc il recently endorsed a lease renewal for FCPP; however, the l ease renewal process is not yet complete as the lease renewal

still needs to be reviewed a nd approved by the DOI, which the commenter stated will likely include review required under NE PA. The commenter indicated that if the final approval is delayed, there may be associated delays in compliance scheduling.

The commenter (0223) expressed appreci ation for EPA’s understanding of the complexities related to the lease renewal that could delay the finalization of lease, including right-of-way issues that could al so impact the life of FCPP. Th e commenter requested that EPA continue to provide flexib ility to allow the leasing process to be completed.

Response:

EPA has reviewed the Navajo Nation’s co mments agreeing with the timing of the alternative emission control strategy. As noted in the comment, EPA is aware that the lease approval process through DOI will take time, as will the approval of the sale of Southern California Edison’s share of Units 4 and 5 to APS. Our final rulemaking requires a compliance timeframe for the alternati ve emission control strate gy no later than July 2018.

Comment:

One environmental advocacy group (0182) and one federal agency (0224) asserted that the supplemental proposal is not better than BART for NO

x . The commenters provided

somewhat different rationales for th is assertion, as summarized below.

The environmental advocacy group (0182) argue d that the supplemental proposal is not

better than BART for at least th ree reasons. The commenter indicat ed that to qualify as “better than BART,” an alternative must achieve “g reater reasonable pr ogress towards achieving national visibility conditions” than BART by resu lting in “greater emissions reductions” than BART [citing 40 CFR 51.308(e)]. The commenter stat ed that the alternative put forward by EPA fails to meet these requirements as follows:

 The alternative proposal’s delayed compliance date results in fewe r emission reductions as compared to those emission reductions that should be required to begin occurring no later than 5 years af ter plan approval.

– The CAA requires BART to be installed no later than 5 years after EPA’s final rulemaking [citing 42 U.S.C. 7479A(b)(2)(A)]. By offering FCPP a BART compliance deadline of July 2018, EPA is illegally extending a mandatory deadline

under the CAA. See Sierra Club v. EPA, 129 F.3d 137, 140 (D.C. Cir. 1997); Sierra Club v. EPA, 719 F.2d 436, 469 (D.C. Cir. 1983). Furthermore, installation of SCR atPage 146 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Units 4 and 5 can be accomplished easily within 2 years (c iting Comment 0182), making a 7-year “grace period” for BART compliance unnecessary.

– To justify this delay, EPA links the extended deadline to the end of the first long-term strategy period for regional haze [citi ng 76 FR 10535; 40 CFR 51.308(e)(2)(iii)], but these are separate and distinct deadlines. While the statute requires the installation and operation of BART within 5 years, the purpose of the first long-term strategy

deadline is to ensure that those alread y-imposed reductions are actually working. Also, the BART regulations require “all n ecessary emissions reductions [to] take place during the period of the first long-term st rategy for regional haze” [citing 40 CFR 51.308(e)(2)(iii)], but th e alternative proposal viol ates this requirement by deferring the required BART reductions until the very end of this period.

 Use of an artificially inflated baseline, coupl ed with the potential in crease in output from Units 4 and 5, renders the claimed emissions reductions largely illusory. The commenter quoted Comment 0182 as saying that EPA’s anal ysis incorrectly assumes that all five units currently operate at a 91 percent capacity factor when, in fact, they all operate at lower levels, which artificially inflates the baseline from which EPA calculated the

alternative’s emission reductions. On the othe r side of the equation, EPA underestimated potential emissions from increased output at Units 4 and 5 (i.e., beyond 91 percent) to make up for the lost generation from the shutdown of Units 1 – 3.

 The proposed emission limits do not constitute BART (see Section 8.1). The commenter cited comments prepared by NPS (submitted as an attachment to Comment 0182) which found that based on the assumption that SCR can achieve 0.05 lb NO

x /MMBtu on an annual basis, after 2016 the BART alternativ e would fail to achieve greater cumulative

NO

x reductions than would installation of BART (SCR) on all five units. (See the paragraph below for more on this NPS comment.)

.

As noted by the previous comment er, based on its assumption that NO

x BART for all five

units at FCPP should be 0.05 lb NO

x /MMBtu on an annual basis, the federal agency (0224)

found that after 2016 the BART alternative would fail to ach ieve greater cumulative NO

x reductions than would installation of BART (SCR ) on all five units. (The se calculations were made assuming that Units 4 a nd 5 would also achieve a NO

x emission rate of 0.05 lb/MMBtu on an annual basis under the supplemental proposal, a nd were projected out to 2028.) In order to achieve greater cumulative reductions than BART , the commenter identified an “Accelerated

BART Alternative” that would include shutdow n of Units 1-3 by 2014, as proposed, plus require that SCR be operational on Unit 4 by the be ginning of 2017 and on Unit 5 by the end of September 2017, 10 months soone r than proposed by EPA.

Response:

EPA disagrees with the comment that the alte rnative emission control strategy is not better than BART, but agrees that a reexamination of baseline emissions and projected capacity factors in the future is warranted. In our Supplemental Proposal, we relied upon the baseline emissions APS provided of 45,132 tons NO

x per year, representing a 91% capacity factor on all units. We examined annual emissions reported by FCPP to CAMD, and calculated averagePage 147 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments annual NO

x emissions over 2001 – 2010 of 42,395 tpy.

8 7 F 88 As reported in the TSD for our proposed BART determination, facility-wide NO

x emissions over 2001 – 2009 ranged from 40,331 to 47,300 tpy. While the baseline emissions provided by APS and used by EPA in our Supplemental Proposal was within the range of annual NO

x emissions, in response to these comments, we conducted an additional analysis to compare the alternative emission control strategy against our final BART determination for NO

x using the 2001 – 2010 average as the

baseline emission rate and an assumed c apacity factor of 81% for Units 4 and 5 under the alternative emission control strategy.

8 F 89 We assume no change in capacity factors of Units 1 – 5 if all 5 units continue operation under the BART sce nario. Based on heat input reported to CAMD and maximum capacity heat input reported in th e Part 71 permit for FCPP, we calculate the average capacity factor for Units 4 and 5 o ver 2001 – 2010 to be 76% and 75% respectively. This analysis shows that in 2014 and 2015, the alter native emission control strategy results in

lower NO

x emissions than BART due to the closure of Units 1 – 3 at the end of 2013. In 2016, 2017, and 2018, BART results in lower emissions t han the alternative, and in 2019 and beyond,

the alternative emission control strategy (5,556 tpy), with phased-in controls on Units 4 and 5 by the end of 2018, results in lower emissions t han BART (8,479 tpy). For comparison, our analysis from the Supplemental Proposal using a capacity fa ctor of 91% resulted in emissions under the alternative from 2019 and beyond to be 5,798 tpy, and under BART to be 9,026 tpy. In total, the alternative results lower emissions from FCPP over more calendar years (2014-2015, and 2019 and beyond) than does BART (2016-2018). Even if APS operated Units 4 and 5 at 100% capacity, EPA calculates that emissions under th e alternative emission co ntrol scenario in 2019 and beyond to be 6,859 tpy, which is still lowe r than under BART. On a cumulative basis, i.e., the sum total of NO

x emissions over 2011 to 2064, the BART A lternative also results in lower emissions than BART, both at an 81 percent ca pacity factor and at 100 percent capacity.

Commenters argue that if the BART emission limit were lower, the alternative would not be better than BART. For example, if EPA required an emission limit representing a 90%

reduction in NO

x emissions, annual NO

x emissions would be lower than 5,000 tpy. However, as discussed in great detail elsewh ere in this RTC (See response to comments in Section 8.1), EPA

has determined that an 80% reduction in NO

x emissions is BART for FCPP. It is inappropriate to compare the alternative emission control stra tegy against a target fo r BART that commenters

would like to see based on maximum emission reduc tions achieved without consideration of sitespecific characteristics of FCPP.

Commenters further argue that by offering FCPP a BART compliance deadline of July 2018, EPA is illegally extending a mandatory deadlin e under the CAA, and that installation of SCR at Units 4 and 5 can easily be accomplishe d within 2 years. EPA disagrees and notes that the compliance timeframe for EPA’s BART determ ination requiring SCR installation on all 5 units is within 5 years of the ef fective date of the final rule, co nsistent with the maximum time allowed under the CAA §169A(g)(4) in the definition of “as expedi tiously as practicable”. The commenter is confusing requirements under BART and requirements under the alternative to BART. EPA is not extending the BART complianc e deadline beyond a 5 year period. Rather,

88 See: “data 01-10” tab in “BART v Alternative.xlsx” in the docket for this final rulemaking.

89 In testimony to the ACC, Mark Schiavoni of APS testifie d that he anticipates capacity factors over 2015 – 2030 to range from 75 – 81% for Units 4 and 5 (See document titled “Schiavoni Testimony_TRANSCRIPT,pdf” in the docket for this final rulemaking).Page 148 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments EPA is allowing additional time to implement the alternative emission control strategy, as allowed under the provisions of the RHR for the implementation of “other alternative measure rather than to require sources subject to BART to install, operate, and maintain BART” (See 40 CFR §51.308(e)(2)).

EPA disagrees with commenters that reductions under the alternative to BART violates 40 CFR §51.308(e)(2)(iii). The requirement simply states the reductions take place during the period of the first long term st rategy and does not specifically pr escribe that those reductions must take place at the beginning, middle, or end of the period of the first long term strategy.

Based on the foregoing discussion and the calculations provided in our docket, EPA confirms our previous determination that the alte rnative emission control strategy will result in greater NO

x emission reductions than BART in 2019 and into the future.

Comment:

To evaluate the supplemental proposal’s impact on SO 2 emissions, one federal agency commenter (0224) assumed that the scrubbers on Units 4 and 5 would be upgraded (perhaps by conversion to a wet stack) concurrently with the SCR installation to achieve 0.12 lb/MMBtu. Based on this assumption, the commenter confirme d that both the supplemental proposal and the commenter’s “Accelerated BART Alternative” (s ee comment above) would be better than BART

at 0.12 lb/MMBtu or current emissions levels.

This commenter (0224) also noted that EP A has stated that the supplemental proposal would result in significant reductio ns of all relevant pollutants, including a 30 percent reduction in the FCPP’s carbon footprint. The commenter confirmed this for CO 2 emissions based on figures from CAMD from 2005-2010. According to the commenter, Units 1-3 accounted for an average of 5,056,802 tpy of CO 2 emissions out of a total of 15,499,044 tpy at FCPP during this period.

Response:

EPA agrees with the commenter that the Suppl emental Proposal will result in emission reductions beyond what would be achieved by the NO

x BART determination for multiple pollutants. As discussed in the Supplemental Pr oposed Rule (76 FR 10537), the shutdown of Units 1 through 3 will result in sign ificant additional reductions of NO

x , as well as reductions of,
PM, SO 2 , CO 2 , and mercury emissions that would ot herwise not be achieved by the NO

x BART

determination.

Comment:

One environmental advocacy group (0182) suppo rted APS’s “business decision” to close Units 1 – 3, but characterized the company’s alternat ive proposal as an attempt to leverage this business decision into a 2-year extension of time to install BART on Units 4 and 5. ThePage 149 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments commenter noted that the BART regulations are cl ear that installation of controls is to occur within 5 years, or sooner if practicable. Theref ore, the commenter asserted that it would be illegal for the EPA to extend the deadline fo r BART upgrades at Units 4 and 5 beyond the mandated 5-year or less timeframe.

The commenter (0182) noted that EPA refe rs to the supplemental proposal as an alternative to BART under 40 CFR 51.308(e), but th e commenter stated that this regulatory provision is inapplicable in the circumstances of this case. Base d on the commenter’s reading of 40 CFR 51.308(e), the commenter indi cated that the supplemental propos al fails as an alternative

to BART because it does not address all the BA RT-eligible sources on th e Navajo Nation – NGS is also a BART-eligible source. The commenter al so alleged that the supp lemental proposal does not qualify as an alternative to BART under the rules because, as discussed above, the commenter asserted that the alternative will not “achieve greater reasonable progress than would

have resulted from installation and operation of BART” for NO

x at all FCPP units during the period of the first long-term strategy for regional haze.

Response:

EPA disagrees with these comments. The motiv ation, whether financial or environmental, behind APS’s proposal to close Units 1 – 3 is not relevant to the analysis, as discussed in other EPA responses to comments in this Section, co mplies with the requirements of the RHR for implementing an alterna tive to BART (See 40 CFR §51.308(e)(2)(iii)). EPA further notes that our final BART determination of installing SCR on all 5 units requires co mpliance with the final BART limits within five years of the effective dat e of the final rule, consistent with the compliance timeframes in the CAA (See CAA §169A(g)(4)) and the RHR (See 40 CFR §51.308(e)(1)(iv)). As stated previously, thes e comments confuse the requirements of an alternative to BART with the requir ements of a BART determination.

EPA also disagrees with the commenter ’s reading of 40 CFR §51.308(e) that the Supplemental Proposal fails as an alternative to BART becaus e it does not address all BARTeligible sources on the Navajo Nation (i.e., Navajo Generating Station). The provisions of the RHR describing the requirements for an alte rnative measure to BART (i.e., see 40 CFR §51.308(e)(2)(i)(B)) states:

The State is not required to incl ude every BART source category or every BART-eligible source within a BART source category in an alternative program, but each BART -eligible source in the State must be subject to the requireme nts of the alternative program, have a federally enforceable emissi on limitation determined by the State and approved by EPA as m eeting BART in accordance with section 302(c) or paragraph (e)(1) of this section, or otherwise addressed under paragraphs (e)(1) or e(4) of this section.

The RHR allows some sources to be included under the alternative program, and some sources to meet BART (i.e., paragraph (e)(1) of the RHR at 40 CFR §51.308) or the CAIR (i.e., paragraph (e)(4) of the RHR at 40 CFR §51.308). As long as all BART-eligible sources arePage 150 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments subject to either the BART alternative, a BART limitation, CAIR, or a federally enforceable

emission limitation determined to meet BART , the requirements of the RHR under 40 CFR §51.308(e) are met. EPA agrees that NGS is the other BART-eligible source on the Navajo Nation. EPA Region 9 intends to propose a BART de termination for NGS in addition to finalizing

our BART determination and the alternativ e emission control st rategy for FCPP.

As described in detail in another EPA respons e to a comment within this Section of the RTC, EPA has determined that the alternativ e will achieve greater reasonable progress than would be achieved through the installa tion and operation of BART at FCPP.

Comment:

One of the owners of FCPP (0176/0177) and a utility industry association (0187) stated that EPA has the legal authority to implement an alternative emission control strategy, provided the plant owners agree to that strategy. The co mmenters indicated that the BART rules [40 CFR 51.308(e)] establish that alternative emission cont rol measures that achieve greater reasonable progress than BART – as “greater reasonable progress” is define d in EPA’s rules – may properly be adopted and implemented in lieu of BART. Th e commenters presented the history of related legal cases and added that the au thority for those regulations has been confirmed in three cases by two different federal appellate courts. Central Arizona Water Conservation District v. EPA

, 990 F.2d 1531 (9th Cir. 1993); Center for Energy and Economic Development v. EPA , 398 F.3d 653 (D.C. Cir. 2005); Utility Air Regulatory Group v. EPA , 471 F.3d 1333, 1340-41 (D.C. Cir. 2006).

Response:

EPA agrees with this comment and notes that our final rulemaking provides the owners of FCPP the option of implementing the alternativ e emission control strategy in lieu of BART.Page 151 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 

## 10.0

9 B 

## Other Comments

Comment:

Forty-five private citizens (0087, 0088, 0089, 0091, 0118, 0119, 0123, 0125, 0127, 0128, 0129, 0130, 0135, 0136, 0137, 0138, 0140, 0141, 0144, 0147, 0149, 0153, 0154, 0155, 0156, 0157, 0158, 0162, 0170, 0171, 0172, 0173, 0181, 0186, 0188, 0190, 0198, 0199, 0201, 0202, 0208, 0209, 0210, 0211, 0213, 0214) explicitly stated that they support EPA’s efforts to clean up FCPP. Many of these commenters asked for the strictest regulations. A nother private citizen (0093) implied that EPA should act to clean up em issions from FCPP and noted that cleaner air will result in a cleaner Colorado snow pack, whic h will result in cleaner water in the Colorado

River.

Twelve private citizens (0092, 0122, 0126, 0133, 0134, 0145, 0157, 0161, 0172, 0190, 0195, 0213, 0214) stated that FCPP should be de-com missioned. Several of these commenters argued that the plant should only be shut down if it cannot cease emitting pollutants, while others argued the plant should be shut down immediately. One of the la tter commenters (0092) stated

that if FCPP is not de-commi ssioned, it should be retrofitted with BART. Another of these commenters (0133) does not asserted that either of the two proposals is sufficient. In contrast, one private citizen (0135) finds either of the proposals to be sufficient.

Nine private citizens (0122, 0126, 0134, 0140, 0145, 0170, 0186, 0190. 0195, 0197) recommended that renewable energy sources can be used in place of co al-fired power plants.

Response:

EPA acknowledges the comments supportive of our proposals but disagrees with commenters that suggest that FCPP should be de-commissioned or shut down immediately.

In addition to other CAA programs, EPA asse sses air quality with respect to NAAQS. The Four Corners area is designated attainment for each of the NAAQS.

8 9 F 90 This means that the air quality in the Four Corners area is meeti ng the national health-bas ed standards set by EPA.

For this action, EPA finds that under 40 CFR 49.11, it is necessary or appropriate to achieve emissions reductions of NO

x from FCPP required by the CAA’s RHR program. NO

x is a significant contributor to visi bility impairment in the numerous mandatory Class I Federal areas surrounding FCPP. The emission reductions finaliz ed will help achieve the goals of the RHR. The RHR however does not require nor does it au thorize EPA to de-commission or shut down facilities to achieve the goals of the rule.

EPA agrees with commenters who stated that renewable energy sources can be used in place of coal-fired power plants. However, the RHR does not require that coal -fired facilities use or switch to renewable energy sources to meet the goals of the rule. Th e RHR establishes a five step process EPA must follow when performing a case-by-case BART determination. In the first

90 Please see http://www.epa.gov/region09/air/maps/maps_top.html for EPA Region 9 air quality designations.Page 152 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments step, “Identification of all avai lable retrofit technologies”, E PA does not consider BART as a requirement to redesign a s ource (see 70 FR at 39164).

Comment:

Fifty-two private citizens (0085, 0086, 0087, 0088 , 0089, 0091, 0092, 0122, 0123, 0124, 0125, 0126, 0127, 0128, 0132, 0134, 0135, 0136, 0137, 0138, 0140, 0141, 0147, 0148, 0149, 0151, 0153, 0154, 0155, 0156, 0157, 0158, 0159, 0160, 0161, 0162, 0165, 0166, 0170, 0171, 0172, 0173, 0178, 0181, 0188, 0190, 0197, 0199, 0202, 0208, 0211, 0213, 0214) expressed concern about the poor air quality in the Four Corners area. Forty of these commenters (0085, 0086, 0087, 0089, 0091, 0092, 0123, 0126, 0127, 0128, 0134, 0136, 0137, 0138, 0141, 0148 , 0149, 0151, 0153, 0154, 0155, 0157, 0158, 0159, 0160, 0161, 0162, 0166, 0170, 0171, 0172, 0173, 0178, 0181, 0188, 0197, 0202, 0211, 0213, 0214) claimed that FCPP has diminished the visual quality of their respective regions. Th e regions mentioned in the comments include Bayfield, Cortez, Durango, La Plata City, Pa gosa Springs, and Oxford, CO; Southwest CO; Albuquerque, Farmington , Mancos, Pecos, and Ship rock, NM; Bluff, UT; and Class I areas such as Arches, Chaco Canyon, Grand Canyon , Maroon Be lls, Mancos Valley, Mesa Verde, Sleeping Ute, and Wheeler Peak. One of these comment ers (0172) disapproved of pollution coming from Arizona affecting Colorado.

Five private citizens (0089, 0091, 0124, 0128, 0201) supported EPA’s proposal to reduce

NO

x emissions at FCPP. Two private citizens (0091, 0201) supported EPA’s proposal to reduce

PM emissions at FCPP.

Response:

EPA acknowledges the comments and genera lly agrees with comments regarding diminished visibility in the F our Corners Area. As detailed in our response to the previous comment above, the air quality in the Four Corne rs area is meeting the national health-based standards as set by EPA. EPA agrees with commenters that the NO

x emission reductions finalized will reduce visibili ty impairment in the numerous mandatory Class I Federal areas surrounding FCPP.

As described in Section 8.2 of this RTC, EPA is not taking action at this time on our proposal to set new PM limits for Units 1 – 3. If APS is unable to or decides against implementing the alterna tive emission control strategy and co ntinues operation of Units 1 – 3, EPA will again conduct a five-factor analysis for PM for Units 1 – 3 and propose another BART determination for public comment.

Comment:

The Navajo Nation (0223) pointed out that as a federal agency, EPA has a trust responsibility to the Navajo Nati on that requires it to give speci al consideration to the Nation’sPage 153 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments best interests in any action.

9 0 F 91 Because of the signifi cant interest of the Navajo Nation in FCPP (see related comments in Section 4.1), the comment er asserted that the BART proposal clearly implicates the Nation’s tribal trust interests. Th e commenter further contended that since EPA is adopting a FIP for BART in lieu of a TIP by the Navajo Nation, the EPA is essentially “standing in the shoes” of the Nation for purposes of making the BART determination and should, therefore, defer to tribal views when making e nvironmental policy decisions and give the same weight to the BART factors that the Navajo Na tion would in determining BART for FCPP; that is, to the extent that the Nation recommends a pa rticular control techno logy as BART for power plants located on the Nation’s la nds, EPA should give substantial weight to that recommendation as part of its decision-making pr ocess. (As discussed in Section 8.1, the commenter asserted that advanced combustion controls, ra ther than SCR, properly represent BART for FCPP.) Thus, the

commenter stated that as the Nation’s trust ee and “stand-in” for the BART determination for FCPP, the EPA should not select a more stringent BART than the commenter argued is required by the RHR to achieve “reasonable progress” wh ere doing so would likely have substantial adverse impacts on the Navajo Nation. (See Sec tion 4.1 for related comments on the potential impacts identified by the commenter.)

The commenter (0223) also stated that EPA has a duty to undertake government-togovernment consultations with the Navajo Nati on, and that EPA must coordinate with the Navajo Nation in its relationship with, and re liance on, other federal ag encies. The commenter pointed out that EPA relies on data provided by the NPS, another federal trustee of the Nation,

but has not coordinated consu ltation between NPS and the Navajo Nation on this rulemaking. The commenter indicated that the May 2011 EP A Tribal Policy recognizes that such coordination is required under Executive Order 13175 and asserted that EPA should coordinate consultation with the U.S. Forest Service (who provided data used in the proposed rulemaking) as well as various DOI agencies that have an interest in th is rulemaking, including NPS, the Bureau of Indian Affairs, the U.S. Fish a nd Wildlife Service, th e Office of Surface Mining Reclamation and Enforcement, and potentia lly the Bureaus of Land Management and

Reclamation. The commenter added that consulta tion with Department of Energy (DOE) may be important in regard to including FCPP in a st udy that DOE is proposing to carry out for NGS, which also is located on the Navajo reservation and uses Navajo coal.

Response:

It is EPA’s policy (EPA Policy on Consulta tion and Coordination with Indian Tribes, May 4, 2011 (EPA Tribal Consultation Policy))

9 1 F 92 to consult on a government-to-government basis with federally recognized tribal governments when EPA actions and decisions may affect tribal interests. Consultation is a proce ss of meaningful comm unication and coordination between EPA and tribal officials prior to EPA taki ng actions or implementi ng decisions that may affect tribes. One of the primary goals of the EPA Tribal Policy is to fully implement both

91 To support this assertion, the commenter cited Executive Order 13175 (65 FR 67249, November 6, 2000; EPA Policy on Consultation and Coordination with Indian Tribes , section IV “Guiding Principles,” May 4, 2011 (EPA Tribal Policy); and the 1984 EPA Indian Policy.

92 See “EPA Policy on Consultation and Coordination with Indi an Tribes”, May 4, 2011, in the docket for this final rulemaking.Page 154 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Executive Order 13175

9 2 F 93 and the 1984 Indian Policy, with the ultimate goal of assuring tribal concerns and interests are considered whenever EPA’s actions may affect tribes by strengthening the consultation, coordination, and partnership between tr ibal governments and

EPA.

For this action, EPA consulted with the Navajo Nation in accordance with the Executive

Order and EPA’s Indian Policies on numerous occasi ons. A record of all consultations with

tribes is included in the do cket for this final rulemaking.

9 3 F 94 As stated in the 2011 EPA Tribal Consultation Policy, as a process, consultation includes several methods of interaction that may occur at different levels.

9 4 F 95 EPA consulted with the Navajo Na tion at various tim es throughout the process at various levels of government, includi ng in-person consultation meetings with the President of the Navajo Nation on May 19, 2011 and June 13, 2012.

EPA acknowledges the significant interest of the Navajo Nation in FCPP. Based on a request made by the Navajo Nation during our May 19, 2011, consultation meeting, EPA examined potential adverse impacts to Navajo Na tion if the owners of FCPP chose to implement the alternative emission control strategy in li eu of BART. The results of this analysis were discussed with President Shelly during a consultation meeting on July 13, 2012 and will be provided to President She lly by letter as a follow-up to our consultation.

EPA agrees that we are acting to implement the BART requirements fo r a facility located on the Navajo Reservation in circumstances in which the Tribe has not applied, or been approved, to administer the applicable CAA progr am. EPA is mindful of the Navajo Nation’s views and recommendations, particularly where th ere is a potential substantial adverse economic impact to the Navajo Nation. We disa gree however that the Ag ency must “defer to tribal views when making environmental policy decisions”. EPA is carrying out the requirements of the CAA and the Regional Haze Rule purs uant to our authority to implement these requirements in the absence of an EPA-approved program. EPA notes that the CAA and the TAR provide mechanisms for eligible Indian tribes to seek approval of tribal programs should they wish to administer CAA requirements.

As we stated in our proposed rule, FCPP is one of the nation’s largest emitters of NO

x (over 42,000 tons of NO

x in 2009), was built roughly four decades ago, and has not installed any

new NO

x controls since the 1990’s. FCPP is also lo cated within 300 km of 16 Class I areas, sometimes known as the Golden Circle of National Parks.

9 5 F 96

For this action EPA carefully considered the unique location of FC PP with respect to proximate Class I areas as well as its economic importance to Navajo Nation. We conducted a detailed analysis of available emission control technologies against the fi ve-factors specified in

the BART Guidelines. EPA also conducted extens ive air modeling (included in the Supplemental Proposal). Additionally, we have considered the numerous comments we received on our

93 See “Executive Order 13175 of November 6, 2000” in the docket for this final rulemaking.

94 See document “Timeline of all Tribal Consultations on BART.docx” in the docket for this final rulemaking.

95 See “EPA Policy on Consultation and Coordination with Indi an Tribes”, May 4, 2011, in the docket for this final rulemaking.

96 See http://www.nps.gov/history/history /online_books/nava/adhi/adhi4e.htm.Page 155 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments proposals. In making our final decision we ha ve had to balance the findings of our analysis along with the interests of various stake holders, our unique government-to-government relationship with tribes, and our responsibility to carry out the requirements of the CAA and RHR to achieve reasonable progress towards visibility improvements.

This final FIP strikes a reasonable balan ce between reducing em issions to improve visibility while allowing for th e facility to implem ent those reductions in a manner that is consistent with its continued operation and economic viability

.

EPA has received information and comments from numerous federal agencies for this rulemaking and considered these in our final decision (all information and comments are included in the docket). However, EPA disagrees t hat we relied principally on data from the

National Park Service. EPA conducted our own cost and visibility analyses for FCPP. EPA plans to coordinate with the Department of Interior in any future tribal consultations related to BART for the two coal-fired facili ties located on the Navajo Nation.

EPA acknowledges that the Department of Inte rior has contracted with the National Renewable Energy Lab (NREL) of the Departmen t of Energy to examine renewable energy options for the Navajo Generating Station, which is also located on the Navajo Nation and uses coal from the Kayenta Mine, located on Navajo and Hopi land. Information on the NREL study is available from DOI

9 6 F 97

and will be included in the docket for EPA’s upcoming proposed rulemaking for NGS.

Comment:

One private citizen (0163/ 0164/0216) asserted that the FC PP BART analysis should be based on the use of bituminous coal (with heat c ontent of 11,500 Btu/lb) at the plant, but FCPP indicated that the plant uses sub-bituminous coal (with heat content of 8,880 or 8,776 Btu/lb). Based on this point, the commenter asserted th at FCPP needs to have the air models redone, available technologies reselect ed, cost of control technology redone, energy control impacts redone, economic control impacts redone, non-ai r quality control impacts redone, existing controls reevaluated, useful life of FCCP re-evalu ated, air visibility re-e valuated and anticipated improvement of visibility re-evaluated.

Response:

EPA disagrees with the commenter. The classi fication of coal us ed at FCPP is only relevant to the presumptive NO

x limits established for EPA’s RH R regulations, which suggest emission limits based on the coal classificati on and boiler type. 40 C FR Part 51, Appendix Y, E.5. Table 1. EPA discussed the presumptive NO

x limits for Units 3 – 5

9 7 F 98 at FCPP in terms of both bituminous and sub-bituminous coal, however , EPA conducted a full five-factor analysis for BART. Coal classification is not related to any aspect of th e full five-factor BART analysis, therefore, regardless of whethe r the coal burned at FCPP is sub-bituminous or bituminous,

97 http://www.doi.gov/navajo-gss/index.cfm

98 Presumptive limits apply only to EGUs greater than 20 0 MW in size. Units 1 and 2 are smaller than 200 MW, therefore the presumptive limits do not apply to those units.Page 156 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments EPA’s five-factor analysis does not need to be redone and our BART determination does not

need to be re-evaluated.

As stated in the TSD the classification of coal used by FCPP has historically been subbituminous;

9 8 F 99 however, FCPP asserts that its coal has more characteristics of bituminous coal than sub-bituminous coal, and should be classifie d as bituminous. Based on this categorization, FCPP cites the presumptive limit for NO

xfor bituminous coal of 0.39 lb/MMBtu from a drybottom wall fired boiler as its applicable presumptive BART limit for Unit 3. See 40 CFR Part. 51, Appendix Y, E.5. Table 1. The presumptive limit for NO

x for sub-bituminous coal is 0.23 lb/MMBtu. Id. Generally, the high volatile cont ent of sub-bituminous coal is known to ease burning and improve efficiency of combustion controls to reduce NO

x , thus, the presumptive limit for sub-bituminous coal is lowe r than for bituminous coal.

The presumptive limits are not binding requi rements for BART, rather they are included

in the BART Guidelines as limits that most EGUs can meet through the use of current combustion control technologies. However, the BART Guidelines further state that the reviewing authority may determine that an alternative cont rol level is appropriate based on the careful consideration of the statutor y factors. Because EPA made our BART determination based upon our careful examination of the fi ve factors rather than relying on the general presumptions set forth in the BART Guidelines, it was not necessary for our analysis or purposes of this regulation to determine whether the coal used by FCPP is bituminous or subbituminous.

With respect to the modeling of FCPP operatio ns the type of coal burned and associated heat content were not germane to the analysis. The model is not itself, nor does it rely upon, a production cost model. The underlying costs of operation, including fu el quantity and heat content, as they flow through the summary economic statistics, are not modified with respect to the type of coal consumed.

Comment:

Three of the owners of FCPP (0168, 0174, 0176/0177), who argued that advanced

combustion controls constitute BART for NO

x at FCPP, pointed out that SCR can be assessed as a potential control option later, under the reasonable progress co mponent of the regional haze program. One of the commenters (0176/0177) provided background information about the Regional Haze program and noted that the CAA a nd BART rules treat BART as a part of the larger “reasonable progress” requirement. Th e commenter asserted that under the broader visibility program, the advanced combustion co ntrols proposed by the commenter as BART can and should be deemed also to satisfy the reas onable progress milestone in the current planning period. The commenter added that whether additional emission controls may be needed after the application of this BART is a que stion that should be addressed in the larger context of the many sources of regional haze impairment on the Colo rado Plateau, including, for example, mobile sources and prescribed and uncontro lled fires, as well as the ongoi ng regional planning efforts to

address haze in the Western states. The commente r suggested that SCR can be considered during the next 10-year planning period (2018-2028) if it proves that additiona l emission reductions are

99 See Determination of Four Corners Coal Ranking, March 11, 2008 by Alan Papp. Docket ID: EPA-R09-OAR2010-0683-0056.Page 157 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments needed to ensure reasonable pr ogress. Another of the commente rs (0168) stated that this approach would achieve reasona ble progress and have the foll owing benefits: (1) reduce the immediate financial burden on its customers, (2) allow time for greater certainty in terms of potential carbon limits and customer demand, and (3) retain greater flexibility in future resource decisions including the possi bility of divestiture.

Response:

EPA disagrees with the commenter that adv anced combustion controls constitute BART for NO

x at FCPP, and that therefore SCR should be assessed as a potential control option later, under the reasonable progress compone nt of the regional haze progr am. EPA also disagrees that under the broader visibility program, the advanced combustion controls proposed by the

commenter as BART can and should be deemed also to satisfy the reaso nable progress milestone in the current planning period.

As detailed in the TSD, Unit 2 at FCPP experie nced operational difficulties subsequent to its 1999 retrofit with LNB. Additionally , as noted in the Andover Report

9 F 100 there are operational

risks associated with LNB/OFA re trofits on the Units at FCPP. Finally, it is not clear that the boilers APS cited as having achieved NO

x emissions of 0.4 lb/MMBtu or lower following retrofit with LNB + OFA are indeed comparable to the units at FCPP. EPA therefore concluded that LNB and LNB+OFA are not capable of achieving the level of NO x control needed for BART.

Regarding the comment to address FCPP in a broader regional planning context, EPA

addressed this comment in Section 8.0. However , EPA further notes that the BART requirement of the RHR applies to major stationary sources built within a limited timeframe that contribute to visibility impairment at nearby Class I areas. EPA and state or local air agencies have other regulatory mechanisms to address emissions from ne w stationary sources or mobile sources, and EPA further notes that those sources need not be addressed under BART, or assessed in a fivefactor analysis for an individual facility.

Comment:

One of the owners of FCPP (0176/0177), a gr oup of FCPP owners ( 0185), and a utility industry association (0187) noted that the proposal preamble indi cated that there is a visible plume originating from FCPP Units 1 – 3 that has some visibility-impairing effect in the area, and that EPA sought information on this secondary visible plume, its frequency and persistence,

and whether it affects or can be observed from any Class I area (citing 75 FR 64231-32). The owner of FCPP (0176/0177) stated that the BA RT rules [40 CFR 51.308(d)] and CAA [section 169(a)(1)] address visibility in Class I areas, and added that the EPA does not have a “roving commission” to address visibility impairments that occur outside Class I areas. The commenter pointed out that although there is an “integral vista program” to pr otect views from within Class I areas (citing 40 CFR 51.301), such integral vistas must be identified by a Federal Land Manager according to specified criteria (citing 40 CFR 51.304), and only one such vista has been identified (in Maine) (citing 40 CFR 81.437). On this basis, the commenter concluded that

100 See “TSD ref [104] Andover Report” in the docket for this rulemaking at: EPA-R09-OAR-2010-0683-0059.Page 158 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments “EPA’s attempt to justify additi onal regulation of [PM] emissions and opacity on the basis of a purported association with allege d visibility impairment that EPA stated may result from [an FCPP] ‘plume’ outside Class I areas is ill- considered and should be abandoned.”

The utility industry as sociation (0187) and gr oup of FCPP owners ( 0185) stated that the Regional Haze program cannot be used to address visibility impairm ent outside of a Class I area,

even if it is visible from such an area (citing CAA section 169A(a )(1), and that in the absence of evidence that this plume exists and significantly a ffects visibility in a Class I area, there is no basis for this aspect of the pr oposed rule. Another of the owners of FCPP (0174) simply asserted that the Regional Haze program provides no authority to require additional PM controls based on a “purported” plume generated by the units at FCPP.

The Navajo Nation (0223) stat ed that it is inappropriate for EPA to request comment on the secondary visible plume wit hout verifying the existence of the plume or characterizing the nature, cost, and effects observed in Class I ar eas. This commenter included this argument in justifying continued operation of venturi scrubbers with an em ission limit of 0.03 lb/MMBtu and a 20 percent opacity standard as PM BA RT for Units 1 – 3 (see Section 8.2).

Response:

EPA disagrees with the commenters that we were attempting to address visibility impairments outside of a Class I area under BART or that EPA requested comment without verifying the existence of the secondary plume. EPA specifically requested comment in our proposed rule about whether the secondary visibl e plume (that EPA Region 9 staff observed in New Mexico out as far as Aztec and Bloomfield en route to Farmington from Albuquerque ) can be seen from Mesa Verde National Park, the clos est Class I area to FCPP or any other Class I area near FCPP. In the TSD, EPA discusses whet her this secondary visible plume is related to the poor control of fine particulates by the venturi scrubbers. Although EPA did propose PM and opacity limits, EPA also took comment on whether BART can be satisfied by allowing APS to continue to operate its existi ng venturi scrubbe rs on Units 1–3.

Although EPA received numerous comments on vi sibility impairment and anticipated improvement in the area from both our propos ed rule and the supplem ental proposed rule, EPA did not receive any specific in formation regarding whether this secondary plume impacts visibility in any Cla ss I area near FCPP.

As described in Section 8.2 of this RTC, EPA is not taking action at this time on our proposal to set new PM limits for Units 1 – 3. If APS is unable to or decides against implementing the alterna tive emission control strategy and co ntinues operation of Units 1 – 3, EPA may again conduct a five-factor analysis fo r PM for Units 1 – 3 and propose another BART determination for public comment.

Comment:Page 159 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments One public interest advocacy group (0112), the Navajo Nation (0223), and one environmental advocacy group (0182) supported esta blishment of a 20 percent opacity limit for material handling. The public interest advocacy group (0112.1) stated that the FCPP site is subject to numerous dust-storm events originating in northwestern Arizona, and the additional fugitive dust that could be picked up by these strong winds at the FCPP property added to the incoming dust from the west makes breathing an d outdoor activity miserable on from 4 to 12 days per year for residents of Montezuma County, CO and San Juan County, NM. The commenter supports requiring FCPP to devel op a dust control plan within 90 days of promulgation of the final rule to be submitted to the EPA Regional Administrator and implemented immediately. The commenter also aske d that courtesy copies of the dust control plan be submitted to appropriate local governments in the Four Corners area, such as the Navajo Nation EPA, San Juan County (NM), and Montez uma, Dolores, and La Plata Counties (CO).

The Navajo Nation (0223) added that th e fugitive dust plan should be reviewed thoroughly and include appropriate recordkeeping and monitoring requirements. The commenter also expressed support for the constructive appro aches described in the supplemental proposal to the management of dust, ash, and PM, stating that these approaches are practicable and will be consistent with EPA’s ongoing progress and ru lemaking under the CAA for mercury, coal combustion residues, GHGs, and other contaminants ; improve the efficiency of Units 4 and 5; and provide environmental and health co-benefit s, which are essential for quality of life and economic opportunities.

One of the owners of FCPP (0176/0177) noted that in addition to the proposed BART requirements, EPA proposed separate fugitive dust control requirements a nd a 20 percent opacity limitation for certain material handling operations , which are unrelated to the CAA visibility program. The commenter laid out the history of EPA’s past attempt to apply fugitive dust controls to FCPP, pointing out that EPA include d such requirements in the 2007 FIP for the plant and the commenter sought judicial review of those requirements based on the absence of a reasoned explanation. Arizona Public Service Co. v. EPA , 562 F.3d 1116 (10 th Cir. 2009) (“ APS

v. EPA” ). The commenter added that upon EPA’s motion, the court vacated and remanded the fugitive dust requirements (citing APS v. EPA at 1121-22, 1131; the EPA Merits Brief at 53; and 75 FR 64232, Oct. 19, 2010).

The commenter argued that the proposed re quirements are arbitrar y and should not be finalized because the facts upon which EPA relies ar e inadequate to suppor t the conclusion that fugitive dust control requirements are “necessary or appropriate” to protect air quality at FCPP. The commenter’s points are outlined below:

 The “necessary or appropriate” language in the TAR at 40 CFR §49.11(a) is limiting – not all requirements that could potentially yiel d some air quality benefit are “necessary or appropriate to protect air qualit y.” The EPA has indicated in th e past that this language is intended to be limiting (citing the APS v. EPA EPA Merits Brief at 56, 60 and EPA’s NSR rules for Indian country at 71 FR 48696, 48714, August 21, 2006).

 Although the Administrative Procedures Ac t (APA) requires that there be some intelligible principle or criteria to guide the Agency‘s decisions, the EPA has not identified the criteria that guide its judg ment as to which regulatory requirements arePage 160 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments “necessary or appropriate” and which are not. Such exercises of standardless discretion are arbitrary and capricious. Qwest Corp. v. FCC , 258 F.3d 1191, 1201-02 (10th Cir. 2001); Dithiocarbamate Task Force v. EPA , 98 F.3d 1394, 1402 (D.C. Cir. 1996). See also Pennaco Energy, Inc. v. EPA , 692 F. Supp. 2d 1297, 1314 (D. Wyo. 2009). Without identified criteria, EPA’s proposed conclusion that fugitive dust controls are “necessary or appropriate” is in evitably arbitrary.

 The reasons given in the proposal preamble for imposing fugitive dust requirements are inadequate to support the proposed conclusi ons. In the end, EPA makes no effort to identify a specific, concrete air quality problem that needs to be addressed or to quantify FCPP’s contribution to any such problem.

 Regulation of fugitive dust without a well-de fined air quality basis would not only be arbitrary in and of itself, but would also conflict with gui dance the EPA has provided to the states. This guidance includes (1) the 1986 document Identification, Assessment, and Control of Fugitive Particulate Emissions (EPA/600/8-86/023, excerpt attached to the comments as Exhibit H); (2) the 1977 memorandum Guidance on SIP Development and New Source Review in Areas Impacted by Fugitive Dust (attached as E xhibit I); and (3)

the 1987 PM 10 SIP Development Guideline (attached as Exhibit J).

1 0 F 101

 The EPA may not depart from its establis hed policies without r easoned explanation. Although EPA may argue that it is not expressly bound by its SIP policies in crafting a FIP for Indian country, EPA cannot ignore those policies without expressing good reason to do so. To avoid being arbitrar y or capricious, a federal agency must treat like situations alike and must follow its own established policie s, in the absence of a well-reasoned basis for doing otherwise. Transactive Corp. v. United States , 91 F.3d 232, 237 (D.C. Cir. 1996); Illinois State Chamber of Commerce v. EPA , 775 F.2d 1141, 1147 (7th Cir. 1985).

 The EPA has provided no explanation for its se lection of the 20 percent opacity limit, as opposed to no limit or a higher limit (citing 75 FR 64232). A rule without any stated basis is necessarily arbitrary and capricious. Small Refiner Lead Phase-Down Task Force v.

EPA , 705 F.2d 506, 551 (D.C. Cir. 1983). See also, Appalachian Power Co. v. EPA , 135 F.3d 791, 818 (D.C. Cir. 1998). See Northeast Md. Waste Disp. Auth. v. EPA , 358 F.3d 936, 948 (D.C. Cir. 2004); Columbia Falls Aluminum Co. v. EPA , 139 F.3d 914, 923 (D.C. Cir. 1998); American Maritime Ass’n v. United States , 766 F.2d 545, 566 n. 30 (D.C. Cir. 1985).

 Opacity limits for fugitive dust in SIPs and TIPs appear to be widely varied, as shown in

the 1983 document Opacity Regulations: Summary of State Regulations and Rulemaking

Status (attached as Exhibit M with summary ta bles reproduced in the comments). Data from a 2007 study by UARG show a variety of opacity limits for coal handling activities in recent PSD permits for new coal-fired plants (excerpt attached as Exhibit N). The NSPS 20 percent opacity standard in 40 CFR part 60, subpart Y cannot properly be the basis for the FCPP opacity limit because Congr ess intended that, in general, existing sources such as FCPP would be subject to le ss stringent standards than new sources built after the applicab ility dates of the various NSPS. California v. Department of the Navy

,

101 The Exhibits referenced by commenter 0176/0177 are attached as embedded PDF files to the comment letter in the docket for this rulemaking, at EPA-R09-OAR-2010-0683-0177 or EPA-R09-OAR-2010-0683-0176.Page 161 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments 431 F. Supp. 1271, 1291 (N.D. Cal. 1977), aff’d , 624 F.2d 885 (9th Cir. 1980). See S. Rep. No. 1196, 91st Cong., 2d Sess. 15-16 (1970); Arbuckle, et al. , Environmental Law Handbook (Twelfth ed. 1993) at 127.

Another of the owners of FCPP (0168) expr essed general support for the points made by

Commenter 0176/0177.

Response:

EPA acknowledges support for establishing a 20% opacity limit for material handling and a Dust Control Plan at FCPP. For the reasons outlined below, EPA has finalized both these requirements. EPA notes that the Dust Control Plan shall include a description of the dust suppression methods for controlling dust from s ite activities including coal handling and storage facilities, ash handling , storage , and landfills, and road sweepi ng activities. The 20% Opacity standard will apply to any crusher, grinding mill, screening operation, belt conveyor, or truck loading or unloading operation.

1 0 F 102

As mentioned in an earlier response to this RTC, EPA notes that on June 21, 2010, EPA proposed and solicited comments on two regulatory options for establishi ng national standards for management of CCW (75 FR 35127). The proposal includes options for fugitive dust controls that would apply to FCPP when finalized.

EPA agrees with the commenter that the fugitive dust plan should be reviewed and should include appropriate recordkeeping and monitoring requirements. EPA intends to review the Dust Control Plan prior to approval for use.

EPA agrees with the commenter that the fugitive dust and 20% opacity limit are unrelated to the CAA visibility program. EPA al so agrees with the hist ory laid out by the commenter on fugitive dust contro ls at FCPP. EPA included these dust control requirements in the previous FIP finalized in 2007 because EPA considered them necessary or appropriate under the TAR to assure that the dust from this facility does not adversely contribute to possible violations of the NAAQS for PM 10 . Most large coal fired power plants are either covered by a State’s general opacity limit (generally set at 20 %), a specific limit in its permit or the NSPS Standards for coal handling (NSPS Subpart Y). AP S is correct that EPA withdrew the 2007 FIP requirements on dust when APS appealed the rule. EPA had not adequately documented in the record for the 2007 FIP our basis for establis hing the 20% opacity regulation. For the 2007 FIP, EPA chose not to defend our position based on the record for that rulemaking and instead

chose to address the issue in a subse quent FIP action, such as this one.

EPA disagrees with the commenter that the fugitive dust and opacity requirements are arbitrary or that our argument is inadequate to support our conclusion that fugitive dust control requirements are necessary or appropriate to protect air quality at FCPP. EPA first promulgated dust control requirements for new coal handling equipment on January 15, 1976

102 Submittals received by EPA as a result of these require ments may be requested by the public via a Freedom of Information Act request unless claimed as Confidential Busi ness Information (CBI) by the author of the document and determined to meet the CBI regulations at 40 CFR part 2 by EPAPage 162 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments (41 FR 2232). This rule affected equipment constr ucted or modified after the 1970s that affected facilities built or modified after October 24, 1974. The purpose of these New Source Performance Standards (NSPS) was:

NSPS implement CAA section 111(b) and are issued for categories of sources which have been identified as causing, or contributing signi ficantly to, air pollution which may reasonably be anticipated to endanger public health or welfare. The primary purpose of the NSPS are to help States attain and maintain ambient air quality by ensuring that the best demonstrated emission control technologies are in stalled as the industrial infrastructure is modernized.

See 74 FR 51951 (October 8, 2009).

EPA’s basis for finding that it is necessary or appropriate for FCPP to comply with a requirement to limit its material handling emissions to 20% or le ss is being set forth in this rulemaking. EPA has promulgated a 20 percent opacity limit for all new coal handling operations built after the mid 1970s in the New Source Performance Standards. This NSPS standard applied to any coal handl ing equipment processing more than 200 tons per day of coal. Because FCPP receives approximately 10 million tons of coal per year for combusting in Units 1-5, it may be processing more than 27,000 tons of c oal per day. This is more than 100 times the smallest size coal handling ope ration subject to the NSPS, and which EPA considered necessary for protecting public health and welfare. As me ntioned before, FCPP’s ma ssive quantity of coal moves by conveyor belt across FCPP’s property line, passing through numerous transfer points before the coal is loaded into the storage silos that feed the i ndividual pulverizers and combustion units. Each of these transfer points along with the c onveyor belts has the potential for PM emissions. The PM can be minimized by collection devices or dust suppression techniques such as covered conveyors or spraying devices at the transfer points.

FCPP and the BHP Navajo Mine that provides FCPP’s coal are within close proximity to Morgan Lake which is a recreational lake w ith public access just beyond the FCPP’s property

line. Excess dust can blow over the FC PP property line to Morgan Lake and adjacent properties. EPA has received complaints from Navajo Tribal members concerning excess dust emissions generated from the as h landfill FCPP maintains, as well as from the other material handling and storage operations.

EPA concludes that it is necessary or appropr iate to set enforce able fugitive dust/PM suppression measures to protect ambient air quality because (1) there is a large potential for dust emissions from the facility coal and ash operations to be emitted and blow across the property line, (2) EPA has received numerous comp laints concerning exce ss dust from the ash landfill and other operations, and (3) these activities are occurring in close proximity to a public

access area.

EPA disagrees with the commenter that th e 20 percent opacity lim it is arbitrary and capricious. While EPA acknowledges that New Mexico does not have a general opacity limit thatPage 163 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments applies to dust, the other three Four Corne rs States do. In Arizona and Colorado a general 20 percent opacity limit applies at all facilities including “grandfathe red” coal fired EGUs. In Utah the general opacity limit for facilities built before the CAA in 1971 are subject to a 40 percent opacity limit. However, all of Utah’s large coal-f ired EGUs were constructed after 1971 and are subject to a 20 percent general opac ity limit, i.e., the NSPS. Th erefore, if FCPP had been built a few years later or a few miles in a different direc tion, it would be subject to the NSPS or a SIP provision limiting its coal mate rial handling and storage opera tions to 20 percent opacity.

Because FCPP is located on the Navajo Nati on where generally applicable limits that often are included in SIPs do not exist and b ecause it was constructed nearly 40 years ago, and

because dust control measures at coal fired power plants are im portant for maintaining the PM 10 NAAQS in the areas adjacent to the power plant properties, EPA finds that it is necessary or appropriate to impose measures to limit the am ount of PM emissions from these material handling and storage emission sources. EPA recently imposed similar dust control requirements at the Navajo Generating Station, which is also on the Navajo Nation. 75 FR 10174.

Comment:

One environmental advocacy group (0182) noted that the owners of FCPP Units 4 and 5, or their governing utility commissions, may determin e that it is more prudent to cease coal-fired operations than to install the emissions controls required to operate the units indefinitely. The commenter suggested that the EP A should include alternative la nguage in the FIP that would accommodate cessation at or within the 5-year deadline for compliance with BART or, should the EPA require compliance with emission limits at an earlier date as the commenter recommended, the shutdown scenario should be tied to the date on which BART compliance is required. The commenter pointed out that Oregon has proposed a Regional Haze Plan including such multiple options, giving the plants and their governing commissions the flexibility to select the most economically and environmentally s ound option (citing the Oregon plan which was included with the comments as an attachment).

Response:

EPA disagrees with the commenter. The owners of FCPP Units 4 and 5 did not suggest in its alternative to BART proposal any scenario that would include shut down of Units 4 or 5. Unless the owners of FCPP suggest the closure of Units 4 and 5 as an alternative to BART, EPA does not have the authority to consider this as another option. At any time, the owners have the choice to shutdown entirely by th e BART compliance timeframe in lieu of installing BART. In the final rule EPA has finalized both BART and the a lternative to BART (which would include shut down of Units 1-3) and given the owners of FC PP the choice of which option to implement.

Comment:

One environmental advocacy group (0184) st ated that the EPA must consult in accordance with sections 7(a)(1) and 7(a)(2) of the Endangered Sp ecies Act (ESA) with regardsPage 164 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments to the proposed FIP because of the impacts of FC PP on threatened and endangered fish, wildlife, and plants and their designated critical habitats , which the commenter di scussed at some length.

The commenter added that EPA has discretion under the TAR to limit emissions of mercury, selenium, and other pollutants that may advers ely affect the razorback sucker and Colorado pikeminnow, and these species’ cri tical habitats. According to th e commenter, this discretion is part of what triggers the Agency’s obligation to consult pursuant to sect ions 7(a)(1) and 7(a)(2)

of the ESA.

Response:

EPA disagrees with the commenter that dete rmining BART and promulgating this FIP for

FCPP necessitates ESA Section 7 consultation. E PA understands that the US Fish and Wildlife Service (FWS) is primarily concerned about th e effects of mercury and selenium on endangered fish species in the San Juan River. EPA notes that under the BART Alternative, mercury and selenium emissions will be reduced from FCPP du e to the closure of Units 1 – 3. Additionally,

EPA’s national MATS rule set new emission limits for mercury that would apply to Units 1 – 3 at FCPP if those units are not close d. EPA further notes that the goal of the Regional Haze Rule is to control emissions of visibility-impairing pollut ants in order to restore visibility to natural conditions at the mandatory Federal Class I ar eas, and mercury and selenium do not affect visibility. Therefore, EPA does not have authority to regulate emissions of mercury or selenium

under BART.

Comment:

The coal supplier for FCCP (0117) questione d the legality of EPA’s approach to the Regional Haze program at FCPP. According to the commenter, EPA’s BART and better-thanBART proposals are not authorized because BART is not “reasonably separable” from the remainder of a regional haze implementation plan for the Navajo Nation under the TAR. The commenter went on to question EPA’s entire ap proach to the Regional Haze program, which the commenter asserted impermissibly isolates BART from the context of the overall reasonable progress goal in violation of the CAA. After a lengthy discussion, the commenter concluded that

the minimum amount of reasonable progress that BART needs to ach ieve in a given Class I area

cannot be determined until the amount of reas onable progress achieved by other CAA and state programs is subtracted from that area’s reasonabl e progress goal. The commenter asserted that

EPA’s determination of BART for FCPP is fatall y flawed because that determination has failed to consider not only the reasonabl e progress goals for affected Class I areas but also the amounts of reasonable progress that will be achieved in those areas by other non-regional-haze programs.

The commenter stated that EPA has not determin ed BART for FCPP in acco rdance with the law, and thus the Agency’s proposed BART for FCPP should be withdrawn. For similar reasons, the commenter alleged that the NO

x emission reductions that would be achieved under the supplemental proposal are in excess of the amount required to achieve the reasonable progress goals in the area.

The commenter (0117) added that EPA must consider the reasonable progress already achieved by past FCPP emission reductions. The commenter stated that until the 2007 FIPPage 165 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments became effective, emissions from FCPP were not subject to any enforceable limits, and that

FCPP’s uncontrolled SO 2 , NO

x , and PM emission rates should pe rhaps serve as the baseline for determining the visibility improvements resultin g from that FIP. The commenter argued that these visibility improvements would almost certain ly satisfy the reasonab le progress goals of many Class I areas for the first planning period, and that significant portions of the areas’ progress goals have likely been achieved by the “additional” SO 2 reductions provided by the 2007 SIP. The commenter concluded that any necessary reasonable progress remaining to be achieved by NO

x BART at FCPP cannot be determined un til the reasonable progress achieved by prior emissions reductions at FCPP is considered.

In this context, the commenter (0117) stat ed that EPA’s BART determination did not properly weigh the statutory factors. The commenter stated that it does not appear that EPA’s selection of BART has been influenced by any m eaningful consideration of the statutory factors (citing EPA’s rationale at 75 FR 64230). Specifi cally, the commenter indicated that individual Class I area visibility improvements from SCR ha ve not been compared with respect to the statutory factors to visibility improvements from LNB, and the actual amounts of those improvements have not been measured against the amounts of improvements needed to meet reasonable progress goals. The commenter also stat ed that cost effectiveness metric used by EPA (i.e., $/ton of NO

x reduced) does not satisfy the statutory requirement to consider the cost to comply with the Regional Haze program; that is, because EPA’s determination of BART for FCPP has not considered the true costs of comp liance with the statutory requirement to make reasonable progress, the determination is fatall y flawed and should be withdrawn. Finally, the

commenter discussed the “remaini ng useful life” statutory fact or, noting that under the BART Guidelines remaining useful life is ignored in the majority of BART determinations (citing 40 CFR part 51, Appendix Y, section IV.D.4.k), whic h the commenter assert ed is inappropriate. According to the commenter, Congress designated th e remaining useful life of the source as an important consideration because it did not want to impose the burdens of control technology retrofits on sources that were more than 15 year s old at the time the statute was enacted. Given that it is now 34 years after th e BART requirements were enacte d, the commenter argued that the “remaining useful life” statutory factor should we igh heavily in BART determinations for older sources such as FCPP, instead of being ignored.

In summing up these comments, the comme nter (0117) stated that EPA’s proposed BART determination and “better-than-BART” determination for FCPP are substantially flawed. According to the commenter, these determinations fail to implement fundamental statutory and regulatory concepts and instea d rely on EPA’s “inappropriate, incorrect, illogical, and/or unlawful” guidance, and fail to properly consider and weigh several of the five statutory factors for determining BART. As a result, the commente r stated that EPA shoul d consider withdrawing both proposals and begin anew in a manner that a voids the major flaws and deficiencies within the current proposals.

Response:

EPA disagrees with the commenter who questio ned the legality of our approach and that

stated that EPA’s BART and “b etter than BART” proposals are not authorized because BART is not “reasonably separable” from the remainder of a regional haze implementation plan for thePage 166 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Navajo Nation under the TAR. We also dis agree that our approach to the Regional Haze program impermissibly isolates BART from th e context of the overall reasonable progress goal in violation of the CAA, and that our pr oposed BART for FCPP should be withdrawn.

EPA’s authority to promulgate a source-speci fic FIP in Indian County is based on CAA sections 301(a) and (d)(4) and the regulations implementing these provisions known as the TAR at 40 CFR Part 49. CAA section 301(d)(4) prov ides EPA with broad discretion to promulgate regulations directly for sour ces located in Indian country

1 0 2 F 103 , including on Indian reservations if we determine such Federal regul ations are ‘‘necessary or ap propriate’’ and the Tribe has not promulgated a TIP. Specifically, in 40 C FR 49.11, EPA interpreted CAA section 301(d)(4) to authorize EPA to promulgate ‘‘such Federal implem entation plan provisions as are necessary or appropriate to protect air quality’’. As such, because the Navajo Nati on has not implemented a TIP for Regional Haze, EPA interprets the TAR to provide discretion to EPA to determine which requirements of the RHR are necessary or approp riate to protect air quality, and to promulgate just those implementation plan provisions acco rdingly. Because two st ationary sources on the Navajo Nation meet the BART elig ibility criteria, EPA has determined that it is necessary or appropriate at this time to evaluate source-specifi c FIPs to implement the BART requirement of the RHR for each BART-eligible facility located on the Navajo Nation. The basis for our determination is discussed in several prior responses (See, e.g., Sections 2.1, 4.1.2, and 8.1). The Courts have agreed with EPA that it may impl ement requirements that are necessary or appropriate without providing for all aspects of the CAA programs. See Arizona Public Service v. EPA 562 F.3d 1116 (10 th Cir. 2009).

EPA disagrees with the comment that BART must be established in relation to reasonable progress goals. State or Tribal Implementati on Plans for Regional Haze must establish goals that provide for reasonable progress towards achi eving natural visibility conditions for each mandatory Class I Federal area located with in its borders (40 CFR 51.308 (d)(1). The FCPP and the NGS are both located within the Navajo Nation Indian Reservation, and for the reasons outlined above, EPA is conducting BART determi nations for each facility. There are no mandatory Class I Federal areas as designated by Congress located within the Navajo

Nation.

1 0 3 F 104 EPA further notes that the five-factor a nalysis outlined in the BART Guidelines, which were promulgated as a notice and comment rulemaking, does not require consideration of reasonable progress goals in determin ing BART for a given facility.

EPA also disagrees with the comment that our cost effe ctiveness analysis should be

withdrawn because it did not satisfy statutory requirements . EPA notes that there is no regulatory or statutory requireme nt to consider the cost to comply with the Regional Haze

103 ‘‘Indian country’’ is defined under 18 U.S.C. 1151 as: (1 ) All land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and including rights-of-way running through the reservation, (2) all dependent Indian communities within the borders of the United States, whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a State, and (3) all Indian allotments, the Indian titles to which have not been extinguished, including rights-of-way running through the same. Under this defin ition, EPA treats as reservations trust lands validly set

aside for the use of a Tribe even if the trust lands have not been formally de signated as a reservation.

104 EPA notes that Navajo Nation has established its own parks and monuments, including Monument Valley, Canyon de Chelly, and the Four Corners Monument, however, these parks are not mandatory Class I Federal Areas as set by Congress.Page 167 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments Program as a whole within an i ndividual five-factor BART analys is. Because the Regional Haze Program requires review every ten years, it is impractical in a BART analysis (which occurs during the first Regional Haze planning period) to anticipate and consider the costs of undefined requirements in all future planning periods.

EPA also disagrees that the minimum amount of reasonable progress that BART needs to achieve in a given Class I area cannot be dete rmined until the amount of reasonable progress achieved by other CAA and state programs is su btracted from that area’s reasonable progress goal. Neither the CAA nor Regional Haze regula tions set any quantitative presumptive targets for the amount of reasonable progress that must be achieved. Rather, the regulations allow for flexibility in determining th e amount of reasonable progress towards the ultimate goal of returning to natural background conditions.

EPA disagrees with the commenter that EPA must consider the reasonable progress already achieved by past FCPP emission reduc tions and that previously uncontrolled SO 2 , NO

x , and PM emission rates prior to previous FIPs for FCPP should serve as the baseline for measuring visibility improvements. In its own five-factor BART analysis, APS used actual NO

x emissions from 2001 – 2003 as basel ine emissions for determining visibility improvement from

NO

x controls. NO

x emissions from 2001 – 2003 were generally consistent with and representative of NO

x emissions over the past ten years.

1 0 4 F 105 EPA agrees with APS in its use of

actual emissions over a recen t time frame, rather than atte mpting to rely on previously

uncontrolled emissions emission ra tes from FCPP as a baseline.

Additionally, nothing in the BART regulations or guidance requires that EPA consider past emission reductions in determining BART un der the RHR. However, as part of the required five-factor analysis for BART EPA did evaluat e and consider the current pollution control equipment in use at FCPP.

EPA disagrees with the comment that EPA’s BART determination di d not properly weigh the statutory factors. As discu ssed elsewhere in this document, the BART Guidelines allow the reviewing authority (State, Tribe, or EPA) the di scretion to determine how to weigh and in what order to evaluate the statutory factors (cost of compliance, the ener gy and non air quality environmental impacts of compliance, any exist ing pollution control tech nology in use at the source, the remaining useful life of the source, and the degree of improvement in visibility which may reasonably be anticipated to result from th e use of such technology), as long as the reviewing authority justifies its selection of th e “best” level of control and explains the CAA factors that led the reviewing aut hority to choose that option over other control levels (see 70 FR 39170, July 6, 2005). EPA provided a detailed ju stification for our BART evaluation process and five-factor analysis in the TSD for our proposed BART determination. This justification has been discussed in more detail in prior respons es to comments (see, e.g., Sections 6.0 and 8.1)

EPA also disagrees with the comment that indi vidual Class I area visibility improvements from SCR have not been compared w ith respect to the statutory fact ors to visibility improvements from LNB. In the preamble to our October 19, 2010 proposed BART determination and in the

105 As seen in Table 3 below, NO

x emissions in 2001 and 2003 were highest over the 10 year period, but generally

consistent with emissions ov er the past 10 years.Page 168 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments accompanying TSD, EPA compared the anticipated visibility improvemen t from SCR with the anticipated improvement from combustion controls (LNB or LNB+OFA) (See 75 FR 64230, Table 3, and TSD Tables 36 – 39), and noted that EPA modeled the visibili ty improvement from SCR to far exceed the modeled improvement from combustion controls. As discussed elsewhere in this document (see Section 3.0), commente rs and EPA both calculated the incremental cost between SCR and combustion controls, and the incr emental cost of SCR is reasonable and does not warrant eliminating SCR as the top BART option. In the TSD for our proposed BART determination, EPA also compared the non-air quality environmen tal impacts of LNB and SCR in the discussion on potential eff ects of both controls to the sa lability of fly ash. Because EPA determined, based on an affordabili ty analysis, that SCR should not force FCPP to close because it could still generate electricity at lower cost than to purchase power on the open market, a comparison of the effect of LN B and SCR on the remaining useful life of the facility is not necessary. Additionally, without a firm commitment from the facil ity owner to cl ose before the end of the 20-year amortization peri od, it is inappropriate to consider a shorter useful life in the five-factor analysis.

EPA disagrees with the commenter that we i gnored the “remaining useful life” statutory factor in our BART decision. EPA considered this factor in our BART analysis (see pages 42-43 of the TSD). As discussed in the TSD and in responses to comments within this document, the remaining useful life of an E GU subject to BART is determined by the utility. EPA cannot arbitrarily decide that an EGU has less useful life when it is not within our BART rulemaking authority to require closure of an EGU. If a util ity solicited a shorter usef ul life than one that would allow the full amortization of any necessary pollution contro ls, EPA would take that into account in the cost analysis, provided that there was assurance the EGU would cease operation by that time.

Comment:

In virtually identical comments that addressed both FCPP and NGS submitted prior to the supplemental proposal, one public interest a dvocacy group (0094) and one environmental advocacy group (0146) requested that EPA assert maximum responsibility to oversee the TAR for promulgating oversight of FCPP and NGS on the Navajo Nation.

Response:

EPA agrees with commenters that we have a responsibility under the TAR for oversight of FCPP and NGS. We are exercising our authority under the TAR to implement these BART provisions at FCPP as necessary or appropria te to protect air quality in Indian country.

Comment:

One private citizen (0131) a sserted that the BART proposal s for FCPP and SJGS unfairly subject SJGS to greater controls than FCPP for political reasons specifically that EPA seems to be favoring FCPP because of a potentially larg e local block of voters for 2012. The commenterPage 169 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments stated that EPA needs to wait until FCPP is clean ed up before taking any further action on SJGS. The commenter asserted that SJGS is proba bly being blamed for haze caused by FCPP.

Response:

EPA disagrees with this comment. EPA Regi ons IX and VI developed five-factor BART analyses for FCPP and SJGS indepe ndently following the establis hed BART Guidelines with absolutely no political considerations. EPA Regi on 9 notes that the BAR T determinations for FCPP and SJGS both require the installation an d operation of SCR, the most stringent NO

x control option, on all units no late r than 5 years from the effective date of the final rule. Region 9 is finalizing both our BART determination for FCPP, as well as the altern ative emission control strategy. If the owners of SJGS had proposed to Region 6 an alternative to BART, Region 6 would also have given serious consid eration to the merits of that alternative. Region 9 also notes that the boiler configurations and existing ai r pollution control equipment at FCPP and SJGS are different, resulting in th e different numerical emission limits set as BART. However, as discussed elsewhere in this RTC, the numer ical emission limits result in comparable NO

x reduction efficiencies at FC PP and SJGS (80% reduction at FCPP versus. 83% at SJGS).

EPA also disagrees with the commenter that EPA should wait until FCPP is cleaned up before taking action on SJGS because SJGS is probably being blamed for haze caused by FCPP.

The RHR and BART Guidelines do not limit BART de terminations for differ ent facilities located in close proximity to each other from o ccurring simultaneously, and if FCPP and SJGS were both located in the state of New Mexico, th e BART determinations would have been made concurrently. Additionally, visi bility modeling conducte d for each facility alone and based on the specific emissions from that gi ven facility, showed that SJGS and FCPP each contribute to visibility impairment at 16 nearby Class I areas.

Comment:

One private citizen (0151) supported the EPA Region 6’s proposal to implement retrofit technology at the San Juan Gene rating Station (SJGS). Another private citizen (0209) supported imposing maximum restrictions on both the FCPP and the San Juan Generating Station. A third private citizen (0210) supported the comments submitted by Senator Bennet of Colorado on cleaning up SJGS.

Response:

EPA thanks commenters for submitting comment s on Region 6’s BART determination for SJGS to the docket for the BART determina tion for FCPP proposed by Region 9. Region 9 provided comments we received on SJGS to Region 6. EPA agrees that reducing emissions at both power plants will result in improvements in both visibilit y and air quality in the Four

Corners area.

Comment:Page 170 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments While acknowledging that FCPP emits signifi cant amounts of air pollutants, the Navajo Nation (0223) pointed out that EPA’s statement that FCPP is the largest emitter of NO

x in the United States is based on gross emissions m easured in tons per year. According to the commenter, it would be more meaningful to consid er emissions in the co ntext of the size of FCPP and the energy produced, measured in poun ds per MMBtu, compared with other plants burning coal. The commenter stated that EPA s hould compile, and make available to the public,

information that would allow a fair and accurate assessment of emissions from FCCP compared to those from other coal-fired plants.

Response:

EPA agrees with the commenter that exp ressing emissions in pounds per MMBtu (lb/MMBtu) provides additiona l information and changes the relative “ranking” of FCPP against other coal-fired power plant s, but disagrees with the comme nter that lb/MMBtu is more meaningful for two reasons:

(1) The goal of the BART requirement of th e Regional Haze Program is to reduce the visibility impact of air polluti on emissions from certain stationary sources on nearby Class I areas. From this perspective, the total mass of visibility-impairing pollu tants emitted from the stationary source is most meaningful. If the goal of the program was to im prove the efficiency of the power plant, then evaluating emissions on a lb/MMBtu basis would be more meaningful than

a total mass basis.

(2) Evaluating “rankings” based on lb/MMBtu ignores how often th e facility operates and how large the facility is, both of which affe ct the annual mass emissions of pollutants into the atmosphere. For example, in 2001,

1 0 5 F 106 when FCPP was ranked #3 in terms of total tons of

NO

x emitted, FCPP was ranked #97 in terms of pounds of NO

x per MMBtu heat input. The top two facilities in terms of lb/MMBtu in 2001 emitted NO

x at rates of 1.7 and 1.4 lb/MMBtu, but only operated 3 and 6 months that year, and each emitted less than 200 tons of NO

x , compared to the 47,000 tons of NO

x emitted by FCPP. Similarly, in 2011,

1 0 6 F 107 when FCPP was the highest

NO

x emitter in the nation, FCPP was ranked #23 in terms of lb/MMBtu. The highest NO

x emitter in terms of lb/MMBtu in 2011 was a facility that emitted NO

x at a rate of 1.9 lb/MMBtu, but only emitted 146 tons of NO

x that year, compared to the 39,000 tons of NO

x emitted by FCPP.

Another way to evaluate the NO

x data, is to first sort facili ties by heat input before examining ranking based on lb/MMBtu. In 2001, FCPP was the 14 th largest power plant in terms of heat input. Compared to the 13 other fac ilities with greater heat input, FCPP emitted NO

x at the highest rate (0.56 lb/MMBtu), with emission ra tes of the 13 other faci lities ranging from 0.16 – 0.54 lb/MMBtu. This shows that all larger (h eat input) power plants, in 2001, achieved lower

lb/MMBtu NO

x emission rates than FCPP. In 2001, the best performing facility that was larger (heat input) than FCPP that was the WA Parish power plant in Texas, which operates four

106 See spreadsheet titled “2001 CAMD.xls” in the docket for this final rulemaking

107 Data reported for 2011 are preliminary data ava ilable from CAMD. See spreadsheet titled “2011 and 2012 prelim CAMD.xlsx” in the docket for this final rulemaking.Page 171 of 171

August 2012 – Four Corners Power Plant Final Rulemaking – Response to Comments natural gas-fired units and four coal-fired units. The emissi on rate reported in Table 3 represents coal-fired units only.

1 0 7 F 108

In 2011, FCPP was the 21 st largest power plant in the na tion in terms of heat input. Compared to the 20 other fa cilities with greater heat input, FCPP again emitted NO

x at the highest rate (0.55 lb/MMBtu), with emission rates of other larger facilities ranging from 0.01 to 0.24 lb/MMBtu. Of the largest facilities, the faci lity achieving 0.01 lb/MMBtu was a natural gasfired combined cycle facility (West County Energy Center in Florida), therefore,EPA did not include this facility in Table 3. The second best performer of th e 20 largest facilities was the John E. Amos power plant in West Virg inia, a coal-fired power plant emitting NO

x at a rate of

0.05 lb/MMBtu.

Between 2001 to 2011 (see Table 3 below),

1 0 8 F 109 the range of NO

x emission rates from the largest coal-fired power plants in the na tion declined, going from a range of 0.16 – 0.54 lb/MMBtu to 0.05 – 0.24 lb/MMBtu, whereas the FCPP NO

x emission rate over 2001 to 2011 showed little change. This suggests FCPP has not kept pace with the othe r largest coal-fired power plants in the nation in te rms of reducing its lb/MMBtu NO

x emission rate.

In this final rulemaking, EPA is requi ring FCPP to meet a facility-wide NO

x emission limit of either 0.11 lb/MMBtu as BART, or for Unit 4 and 5 to each meet a NO

x emission limit of

0.098 lb/MMBtu under the BART Alternative. This final rulemaking will allow FCPP to keep pace with the largest coal-fired power plants in the nation in te rms of reducing emissions of NO

x .

Table 3: Ranking of FCPP from 2001 – 2012 Based on 3 Metrics

Year Total NO

x Mass (tons) NO

x rate (lb/MMBtu) Heat Input (million MMBtu) NO

x range of larger heat input coal-fired power plants (lb/MMbtu)

2001 #3 (47,000) # 97 (0.56) # 14 (168) 0.15 – 0.54

2002 #8 (42,000) #75 (0.57) #26 (146) 0.16 – 0.59

2003 #3 (45,000) #57 (0.57) #18 (159) 0.11 – 0.53

2004 #1 (41,000) #43 (0.55) #23 (147) 0.04 – 0.47

2005 #1 (42,000) #48 (0.53) #21 (156) 0.05 – 0.46

2006 #1 (45,000) #40 (0.56) #18 (160) 0.05 – 0.41

2007 #2 (41,000) #37 (0.56) #23 (147) 0.05 – 0.46

2008 #2 (40,000) #29 (0.55) #25 (146) 0.04 – 0.46

2009 #1 (43,000) #28 (0.54) #16 (157) 0.05 – 0.33

2010 #1 (39,000) #20 (0.55) #23 (140) 0.05 – 0.28

2011 #1 (39,000) #22 (0.55) #21 (141) 0.05 – 0.24

2012 (1 st Q) #1 (9,700) #14 (0.54) #12 (36) 0.08 – 0.24

108 However, the natural-gas fired units at WA Parish do no t have a significant effect in dramatically reducing the total facility NO

x emission rate because those units are operated at a low capacity factor, e.g., see tab entitled “WA Parish only” in the spreadsheet “2001 CAMD.xls”.

109 See spreadsheets titled “2002 CAMD.xls”, “2003 CAMD .xls”, “2004 CAMD.xls”, “2005 CAMD.xls”, “2006 CAMD.xls”, “2007 CAMD.xls”, “2008 CAMD.xls”, “2009 CAMD.xls”, and “2010 CAMD.xls” in the docket for this final rulemaking.