p. 1



# OAR Box 1778 Prepped by Ollie Stewart



### Document

Number: 

# 245 ) ll-F-2 1
Docket Number: 

# A-90-0 6

Printed 10/28/2008 9:51:03 AM Sheet 245 of 276P. 2 

## v"''**
.

U J

O ^ UNITE D STATE S ENVIRONMENTA L PROTECTIO N AGENC Y Offic e o f Ai rQualityPlannin g an d Standard s Researc h Triangl e Park , Nort h Carolin a 2771 1

C ^ MEMORANDU

M TO : Docke t FROM : Chebryl l Edward s DATE : Jun e 4 , 199 1 SUBJECT : DO E Comment s o n WEPC O Legislativ e Rul e Draf t II-F-2 1

Th e revision s marke d i n thi s draf t legislativ e rul e reflec t Departmen t o f Energ yComment s give n t o EP Ai n a meetin g o n Ma y30 , 1991
.

1 ! >•• , : i 

### JJ M i 2 199 1 fp A AlRDOCX oP. 3

- 2 3 - I o f th e Act , unles s they ar e exclude d a s pollutioncontro l projects . Th e installation , operation , cessation , o r remova l o f a temporar

y CC T demonstration projec t tha t i s operated for 5 year s
or les s i s exemp t fro m NSP S an

d bot hPS D an

d nonattainmen t ne w
sourc e requirements . Se e § 415(b)(2) . However , th e facility stil l mus t compl y

wit hthe applicabl e SI P an d othe r requirement s
necessar

y t o attai n an

d maintai nth e NAAQS . y

• Finally , i

n sectio

n 415(c) , Congres s provided a n exemptio

n fro m NSP S an

d PS D fo r th e reactivationo f "ver y cleanunits " otherwis e in complianc e wit hthe Ac t tha t ha d beenshu t dow

nfor
at leas t the tw

o year s prio r t o enactmen t o f the 199 0 Amendment s
an d that , prio r t o the shutdown , had bee n equipped wit hpollution control s wit ha remova l efficienc y o f a t leas t 8 5 percen t for sulfu r dioxid e an

d 9 8 percen t fo r particulates , an d had bee n equippe d wit hlow-NO

xburners . III . DISCUSSIO

N A . Pollution Contro l Project s 1 . Proposed Regulatory Change s fo r Pollution Contro l Pro j ect s EP A propose s t o amen

d it s PS D an

d nonattainmen t regulation s a s the

y pertai nt o utilit y •change s tha t oonotit-uto— - pollutio

n contro l project s b y codifying the Agency' s curren t

n +.ha t pu^ hprojftg^ g ar e no t subjec t t o NS Rwhe n the y •^Hpe^^vS^njafiEtaiiy - beneficial . I n man y inctancos , i t i o •clea r tha-»/poiiutlo~

n contro l project s a t existin g stationar

yP. 4

- 2 4 - source s ar e no t majo r modification s subjec t t o ne w sourc e revie

w requirement s fo r the simpl e reaso ntha t the

y do no t resul t ina n increas e in actua l emissions . I n addition , EP A ha s alway s recognized tha t Congres s di d no t inten d tha t ever

y activity

a t a n existin g facilit y

b e consider^d_-a—pky-sica l o r operationa l chang e f or purpose s o f rtha . ne w sourceraequliament a o f th e PSD — •piuyiaiu. 1_3

r Also , a s ha s bee ndiscussed , the ne w aci d rai n provision s wil l requir e mos t electri c utilitie s t o undertak e pollution contro l project s withi n the nex t fe w year s an

d thei r decision s regardin g (the ) a pollutioncontro l strateg y for Phas e I
o f the aci d rai n progra m wil l b

e mad e withi nthe next year . At th e sam e time , base d o

nthe WEPC O decision , utilitie s ar e
concerned tha t EP

A wil l subjec t pollution contro l project s t o --»ctual-to-pqtcntia l evaluation.—I n fact , EP A ha s refrained frotf " -applyin g th e actual--t o potentia l melhudulu-j y t o sevtjid

l IMCMIIL "

_pollwtion eonti-ol-pyojects . ^— "

1 1 Fo r instance , EP A ha s specificall y

recognized tha t routine maintenance , repai r an d replacement , an

d change s inhour s o f operation o r i n the production rat e ar e no t considered a physica l chang e o r chang e i nthe method o f operation . Se e 4 0 CF R 52.21(b)(2)(iii) . 12"" ~ See , e.g. . letter s fro m Davi d Kee , Director , AirS i Radiatio

n Division , EPA , RegionV , t o Timoth y J . Method , Assistan t Commissioner , Indian a Departmen t o f Environmenta l Managemen t (Januar y 30 , 199 0 an

d Marc h8 , 1990) .P. 5

" 2 5 • " OLcicires s ~MJLz. CCTTVCMT V 

### T o provid e utilitie s wit haJJILluiid l m i I d inly , EP A

i s today proposin g t o adop t revision s t o it s PS D an d nonattainmen t regulation s fo r th e addition , replacemen t o r us e a t a n.existin g electri c utilit y

stea m generatin g uni t o f an y system o r devic e whos e primar y

functio ni s th e reductio no f ai r pollutant s (includin g th e switchin g t o a less-pollutin g fue l wher e th e primar y purpos e o f th e switc hi s th e reductio no f ai r pollutants) . Unde r today' s proposal , a utilit y pollutio ncontro l •pkusCce u cr erjoe^-echo^ai ckfl-^e . , projec t wil l no t b e treate d a s a/modification-s o lon g a s th e proj«£ T J_^c -wof TUrudet

r -Ha- Unf"Hfc> Le

_les s ' (TTV- - 1CK 

### ^ > 

### . ohang e ia^environmentall y beneficial. x^y A s indicate d above , th e ke y t o thi s additio nt o th e lis t o f

" exclusion s fro

m th e terag)physica l o r operationa l chang e i s EPA' s > judgmen t tha t Congres s di d no t inten d tha t pollutio ncontro l project s be ""considere d th e typ e o f activit y tha t coui4 . trigge r

A . new sourc e review . Rather , th e clea r focu s o f th e Act' s new sourc e requirement s are , a s the y relat e t o modifications , physica l o r operationa l change s t o pollutio ngeneratin g equipment . A s discusse d i ngreate r detai l i na subsequen t section , EPA' s positio ni nthi s regar d i s reflecte d i nth e existin g 1 3 C I ngeneral , EP A wil l conside r a pollutio ncontro l projec t to^ e environmentall y beneficia l s o lon g as , i nonattainmen t areas , i t doe s no t result^i na significan t ne t increase/i nrepresentativ e actua l annua l emission s oxany criter ^ pollutan t and / i nattainmen t areas , i t doe s no t resu l i nan/increas e i nthe/potentia l hoifrl y emissions/o f a regulat e pollutant . Howeve r ,/EPA wil l appl y

thes e guideline s wit h flexibilit y

and wil l deviat e fr0 m the m wher e th e merit s o f an individua l propose d pollutio ncontro l projec t t.: arrant .P. 6



### - 2 6 - regulator

y exclusio

n fo r pollutio

n contro l activitie s under NSP S regulations * an

d i n severa l caso-opccifi c nonapplicability ' 'determination

s under th

e ne w sourc e levie w piugrams . ' However,. . despit e th

e Agency' s vie

w that b y thei r natur

e pollutio

n contro l / A

y project s i

n .genera

l ar e not withi n th

e ambi t o f ne

w r.nurf! P ~, requirements , EPA' s pronouncement sA 

### r.acoqn t a c th e needfeV=g ^ oAy^/^/ 7 -99S^^Y^P^~^^^SL7Vt som

e consideratio

n of th e C^^y ^ environmenta l impact s of an y pollutio

n contro l <&o&Iv&%i$jfo • The— - ? G regulator

y exclusio

n empluy

s a n "environmentall

y beneficial " fy~~~~^\ tes t t

o QeLeimln

e it s scope.—Se e 4 0 CF R 60.13(e)(5).- - Wit h {A£&!^\ res 

### P e c t t 0 

### ne w source review , -EP

A ha s also oonoidere

d whether a &^*7 ! /pollutio

n contro l projec t would L e "en v ii oilme n tall y bene f luldl , " -^-an d today' s proposa l wouj.d—eodif y tha t practice b

y adogt4ft£=_».—

-r ^ ~ regulator

y exeiusionAtna t tracks th e NSP S 

### exclusiony-^TneiasS^-^^^/^ : 'QKSUJ 

### difference i

n th e NSR exclusio

n i s that i t woul d (consisten t wit h EPA' s practice under NSR 9 appl y theJenvironmentally beneficia l QJi\oL tyu£- / 

### tes t t o th e addition - a s wel l a s th e replacement , of a pollutio n contro l device, , bmuaua e Uiei e ma

y b e clicm m Lances l

n whic hsuc h ,addition

G ar c not environmentall y beneficial 1 

### . <• EP

A oolioit o •
commen t o n whether th

e Kar a tixelUBlc

n should b

o amende

d a t th e -tim o of fina l actio

n o n today' s proposa l t o appl y an envirnmnpntill

y beneficia l les t L

u afldlllon

u also . - Fo r th e purpose s o f thi s proposal , a pollutio n contro l pro j ect ii

a define

d as- an y ''physica

l chang e o r chang e in th o methodo f operatio

n a t a utilit

y uni t fo

r purpose s of reducin g emissionsP. 7

- 2 7 - fro m suchuni t -i

norde i L

y compl y witii Titl e I

V o f the 1000 -

prlMeX-a^T-a-aa- a ^ ^ ^ 0- ^ ^

_ Amendments. - These^hdngo a ar e limited t o th e installationo f conventiona l or innovative emission s contro l equipment , including , bu t no t limited to , installationo f conventiona l an d advanced flue ga s desulfurization , sorben t injectio nfo r SO , an

d NO xcontrol s an

d electrostati c precipitators . -Phyotga l changesy l 

### Ah&X UT^^cjuuiCLr ^ -___&£*& g r change s i n th

e method o

t OperaLiun

y t o accommodat e switchin g t o fue l wit ha lowe r sulfu r content , includin g natura l ga s or
coa l re-burning , co-firing o f natura l ga s an d othe r fuel s fo r the purpos e o f controlling S0 2 an d NO xemission s sh*l l als o constitut e a "pollutio ncontro l project. " 

# Ufa*.**/
£ny activit y

tha t i s necessar

y t o accommodat e switching t o a les s polluting fue l i s considere d t o b e par t o f the pollutio n < z contro l project . I n som e instances , thi s ma y involv e f&f&tczT^) change s t o the pollutio ngenerating equipmen t (e.g. . boiler) , bu t onl y i f the change s ar e necessar y t o maintai nthe norma l , project " operatin

g capabilit y

o f th e uni t a t the tim e o f the ibodlrlcdLlol I wher e the capabilit y woul d otherwis e be impaire d a s a resul t o f the fue l switch . Fo r example , a n electri c utilit y stea m generatin

g uni t tha t switche s fro m a highe r sulfur bituminou s
coa l t o a low-sulfu r subbituminou s coa l ma y nee d t o mak e certai n change s t o th e boile r i n orde r t o avoi d deratin g the unit . Change s tha t ar e intende d primaril y t o resto-re^'origina l capacit y

or t o improv

e th e operatigna4r--e"ff"icienc y o f th e facilit y
ar e no t consi : de^ed

- _taO--be^par

t o f a pollutioncontro l projec t for 

# fed- tt(s tycch/fiOA C

# ^ /L

# $ °^V a//-&^ w ^ Jfl \k fllt^^pt^'O^

of CUM/ ^-CfiOs?^

<^'C£A*LC?

C ^P. 8

- 2 8 - purpose s o f thi s proposal . Suchchange s ar e addressed elsewher e i n thi s proposal . Also , th e sourc e stil l mus t compl y wit hal l applicabl e SI P limit s an d requirements , permi t condition s an d applicabl e NAAQ S o r PS D incremen t limits . A s proposed , thi s pollutioncontro l projec t proposa l wil l
no t exten

d t o sourc e categorie s othe r tha nelectri c utilit y stea m generatin

g units . EP

A ha s s o limited thi s provisionfor oovegal - r^ ^ x*aoons~. —FircUin contras t wit ha genera l lac k o f experienc e wit hothe r industries , EP A ha s extensive experienc e i n addressin g
ne w sourc e applicabilit y issue s regarding pollution contro l project s i n the utilit y industry . Tha t experienc e ha s le d EP A t o conclude -i

n numerou s individua l cases , tha t pollutioncontro l •project s i n the utilit y industr

y ar e generall y

environmentall y beneficial.--I n addition ; the aci d rai n provision s o f Titl o I V of . •th o Cloan Ai r Ac t Amendment s o f 109 0 plao o a uniqu e burde nupon -th e utilit y

industr

y t o undertak e pollutioncontro l project s in -



### — Lhe nea r future: —

Additiona l Modeling Requirement s A propose d pollutioncontro l projec t o r physica l or operationa l chang e canno t resul t i n anemission s increas e tha t wil l caus e o r contribut e t o a violatio n o f a nationa l ambien t ai r quality standard , PS D increment , o r visibilit y limitation . Se e CAA/§ § 110(a)(2)(c) , 165 , 169A(b) , 173 . Nothing i ntoday' s notic e i s intended t o authoriz e an y significan t ne t increas e in emission s tha t woul d have thi s proscribe d impact . I t i s possibl eP. 9

- 1

- 2 9 - tha t a pollutio n contro l project , whil e no t causing an y increas e in maximu

m hourl y

emissions , wil l caus e a significan t ne t increas e in actua l emissions , whic hinturncoul d threate na NAAQS , incremen t or visibilit y limitation . Fo r thi s reason , unde r today' s proposal , the reviewin g authorit y

may requir e a
sourc e t o perfor

m a n ai r quality

impac t analysi s (modeling ) wheneve r i t appear s tha t a proposed chang e wil l resul t i n a significan t ne t increas e inactua l emission s o f an y criteri a pollutan t ove r level s used for tha t sourc e i nth e mos t recen t ai r qualit y impac t analysis . I f thi s modeling indicate s tha t thi s increas e i nemission s wil l caus e o r contribut e t o a violatio no f
an y ambien t standard , PS D incremen t or visibilit y violation , the pollutio n contro l exclusion doe s no t apply .

3. * EPA' s Existin g InterpretationRegarding Pollution Contro l Project s A s noted above , ±* <« • nffp n •-••«•>»» • »M-i#jpn»>.>s w

contro l project s a t existing stationar y source s ar e no t majo r modification s subjec t t o ne w sourc e revie

w becaus e they

do no t ^ju/aiiMj resul t i n a

n increas e i nactua l emissions . I naddition , EP A believe s that , i n general , pollution contro l project s wer e no t jzfXft "ft** intended b

y Congres s t o be considered physica l o r operaticj*a" l *"y - ^

prograa*—Wit hreopee t t o pollution contro l pro p acti o j EPA lid bi n C^-HJ L NSE . "JOnDvUCtnr ^ o-f 4^ . Cko-t ^ for Acf , Csv^rts s tK.+6*cle d recen t year s issued numerou s nonapplicabilit y determination s an d *\\<JX\- 

### --Kfi

- MSP- 5 excluL«,Ccv^ s cew4zulh^ d I K EPA\ S 

### mut*. «M*W^ W ''n o action " letter s t o utilit y source s baood o

na findin

g tha t *

J -f e MJU WS&- rucks . * pnvlrnnaantall y

bonoficia l pollution contro l projeot o ar e no t the



# * " ^ 2 

## F^.I^

. 

# its^t , <U>I. J 

# CvJuc^e

. \Hj(ns)

.- 3 0 - P.1 0

physica l or operationa l chanc e intended t o b e covered b y th e statut e or EPA' bleguiatluns. 1 * ET^o provid e utilitie s wit h
a greate r degre e o f certaint y pendin g adoptio

no f today' s
regulator

y ^interpretatio

n proposed regulations , EPA/i s today , formall y «^^W>»* V .^M & ^« L __—. , -——— ^ 

### f/0C M W ?»

• exc&/ # ^ftfaain^*tufa? (,rv/wA l^nfo f*f>e>**_<
individua l leLLer s a s wel l a s the provision s o f the Ne w Sourc e 

## A Performanc e Standard s (NSPS ) regulations

. Thi s iB&&pff&_f§) ft^/cu t-Zf&JCQyfjZjt*- -*y
, j provide s tha t the addition , or us e o f an y syste m o r devic e whos e primar y functio

n i s the reductio

n o f ai r pollutant s wil l no t constitut e a physica l o r operationa l chang e tha t coul d b e deeme d
a majo r modificatio nan d trigge r ne

w sourc e review , unles s the 

### ti*dU£

v

### ^\\ r

### o^r\p^~\Lc_jjyyr\ Jessy Administrato r determine s tha t the project*woul d no t be -



# *rr¥'v environmentall y

beneficial .

%%

_ I n *££*ct, EP

A ttgaD-niere-lYiH^S^gS ^ it s PS D regulation s i n harmon

y wit hit s NSP S regulations , whic hda no t attt-oA Ho mos t pollution contro l acti*iti%s . Se e 4 0 CF R 60.1 4 (e ) (5 ) . ^ farin g ' th e firs t year s o f th e PS D program , EP A interpreted it s PS D A regulation s t o simpl y include thi s NSP S provision. 1 5 Thi s wa s ^a. . Lette^ / Willia m PA , t o Andre

w Aitken/Vic e

. , March>6 , 1991;/£etter , Senio r Vioe

r President , Publi c 19*0 ; Letters ^ Davi d Ke e Region V , t o Timo t Dept.^e f Environmen 

### JP A 23 , Division Ind i Rosenberg , Assistan t President , Ne

w Englan d Roseriber

g t o Patric k Servic e Co . or

r xector/Ai r an

d Method , Assistan t ManagefriaOfflt , .Tannaiy -
Memorandu

m fro m Edwar d Reich , Director , Stationary Sourc e Complianc e Divisionan d Willia

m F . Pedersen , Actin g Associat e Genera l Counsel , Air , Noise , an d Radiatio n Divisiont o Ally n M . Davis , Region I V (Apri l 21 , 1983) .P.1 1


### Ortcf c «K * NSP S Tnocltfi<jflch«

w Je£l^+.»\ j fe'R4


### "^ H



### . ~ r



### CrvcTud e -H*

. USP S -provisio n

- i n part * ba-se d o n th e fac ttha tth e PS D definition/o f

modificatio n simpl y adopt s th e NSP S definitio n i n sectio n 11 1 (»)(*') - I n addition , th e legislativ e histor y reflect s that , a s agenera l matter , Congres s intende d t o confor m th e meaning/o f y / "modification " fo rPS D purpose s t o usag e unde rti e NSP S program . (Se e 12 3 Cong . Rec . H1195 7 (Novembe r1 , 1977 ) •» ) A-EP A ha s 'oinoa P J 

### tbvrejc^ut

- er f

O A Q"P S Cssuje. da-w . <Xrpp\icjxio\Xjtkd Ae^ejnrtuj^Mis^. {J



### j{u.~L. voioo d concer n wit h it o initia l vio w 'tha tth e Her s pollutio n . , 

### rtuudrtA -fke s (ywHSot

l Civkrpre^+^n« ^ o- f EPA ' ^ MSZ, r^uWStrni

. coivtro l languag e ma y b e incorpo gat 

### * d wholesal e i n th e ne w sourc e . rrccyvcqSoic

s Love . re^lCc d 6v

\ -fk u de^errrcLK°-T)C K •revie w context , largel y becaus e o f th e ambien tai rqualit y . . rnmponan

to f now , sourc e revie w Tha ti o absen tfro m th e Nfly i

•determination s assessin g pollutio n contro l project s hav e been base d o n afindin g tha tth e propose d projec twoul d be — Environmentall y beneficial. 1 7 

### fi n llyh L o l Ui e Titl e I V 

# T^ £ requirement s an

d othe r provision s o f th e CleanAi r Ac t Amendment s 

### •wr(es s o f 1990 , EP

A i s -toda

y formall y

adoptin

g the •Jjenvironmentall y beneficial " tes t fo r ne w sourc e revie

w applicabilit y

t o pollution contro l project s o naninteri m

basi s pending fina l action o n the proposed regulatory exclusio nfo r pollution contro l projects . Today' s ^environmentall y beneficial " approac haddreooc o the

• concern s nxyi eased i n the 10O C Eaioon Memorandum.—First , EP A i b
-no t simpl y

reading i n t o the ne w sourc e revie

w regulation s th

o -

1 See , e.g. . Memorandu m fro m Geral d A . Emison , Director , OAQPS , t o Regiona l DivisionDirector s (July 7 , 1986 ) ("Emiso

n Memorandum") . } ? ^e e /^upr ^ not e 2&P.1 2

f I

- 3 2 - NSP S axolusio n i u 4 0 Cf R 9 60.14(e)(5)*—Fo r th e reaoon a state d

, J. n th e Emioo n Memoiaudum,—LlidL woul d constitut e a regulatory , •change requiring , notic e an a comuieu L rulemaking-.— fiflr » w ^ , by , focusifie>o

n whethe r a pollutio n contro l projec t i s a physica l o r operationa l chang e withi n th e meanin g o f th e ne w sourc e revie w regulations , today' s m l ing

- avoid s xjbh e nee d t o undertak e a quantitativ e emission s increas e calculatio n i n everycase , a s woul d b e necessar yi f suc h project s wer e deeme d t o b e physica l o r operationa l changes
. Especiall yi n ligh t o f th e provision s o f thi s interpretatio n regardin g th e calculatio n o f actua l emission s baseline s and projection s o f futur e actua l emissions , EP Aexpect s tha t most , i f no t all , pollutio n contro l project s wil l reduc e A* 2 * / 

# v
actua l emissions
. Nevertheless , th e Administrator' s authorit yt o conside r individua l pollutio n contro l project s provide s a n adequat e opportunit yt o determin e tha t a pollutio n contro l projec t woul d someho w resul t i n a n advers e environmenta l impac t 

### re*AeTkri-{U-\A*vct- le** an d thu s conclud e tha t th e projec t i s not:environmentally , A beneficial , -bu

t i o inotead' a najo r aodifioatio n tha t should"b e O pj-ur ddjcfrrvux ! ckouavxie-
. subjec t t o no w oouree^-hroview i Fo r th e purpose s o f thi s interpretation , a pollutio n contro l pro j ec t refer s t o th e additionAo r replacemen t a t a sourc e o f a n emission s contro l syste mo r devic e primaril ydesigne d to-improve — -t&e-contro l o r prevention , cr t ai r pollutio n emissions
. Fue l switchin g wher e th e projec t i s designe d primaril yt o reduc e ai r pollutio n (a s describe d i n th e prio r section ) als o constitute s aP.1 3

' t i

- 3 3 - pollutio n contro l project . A s wit hthe propose d rule , change s tha t ar e intende d primaril y t o restor e origina l capacit y o r t o improv e th e operationa l efficiency o f the facilit y

ar e no t considere d t o b e par t o f a pollutioncontro l projec t fo r purpose s
o f thi s 'l-ulinu,. 1
B . Representative Actua l Annua l Emission s I n th e WEPC O decision , the cour t foun d tha t th e unit s in question had begu n norma l operations , an d thus , rejecte d EPA' s actua l t o potentia l methodolog y whic hthe cour t foun d impermissibl y

ignored the utility' s pas t utilizatio n o f th e units . Sinc e the propose d wor k consisted o f th e replacemen t o f existing component s wit h"like-kind " equipmen t — whic hthe cour t apparentl y

believe d woul d no t i nan d o f itsel f lead th e utilit y t o chang e it s patter no f utilizationo f the uni t — th e cour t foun d the methodolog

y arbitrar

y a s applied i ntha t case . A s a result , EP

A develope d a ne

w methodolog

y o nreman d ~ th e so called actua l t o futur e actua l emission s test . Today EPA propose s modifying it s regulation s t o codif y thi s methodology , and appl y

i t t o al l physica l or operationa l change s a t an existin g electri c utilit y stea m generatin

g uni t othe r thanthe addition o f a ne

w uni t o r the replacemen t o f a nexisting unit . Unde r today' s action , EP A propose s t o conside r a uni t t o b e replaced i f i t woul d constitut e a reconstructe d uni t withi nth e meaning o f 4 0 CFR60.15 . EP A believe s tha t fo r suc h"replaced " units , a s wel l a s wholl y ne w units , i t i s no t possibl e fo r the