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# OAR Box 1778 Prepped by Ollie Stewart



### Document

Number: 

# 185 ) ll-F-1 2

Docket Number: 

# A-90-0 6

Printed 10/28/20089:51:00AM Sheet 185of 276P. 2

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_ MEMORANDU

M TO : Docke t
FROM : Chebryl l Edward s (U^jb^ujLi &LAJO^A*AJ~^ DATE : Jun e 4 , 199 1 SUBJECT : DO J Comment s o n WEPC O Legislativ e Rul e Draf t II-F-1 2

Th e revision s marke d i n thi s draf t legislativ e rul e reflec t Departmen t o f Justic e comment s giv e t o EPAi n a meetin g o n Ma y30 , 1991
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# I P. 3



### 5/30/9 1 [ revise d pp . 15-1 8 ] &

2 . Th e WEPC o an

d Puert o RicaiyCemen t Decision s A s noted above , t o calculat e whethe r a physica l or operationa l chang e "increases " emissions , EP A regulation s -eall •«u.if ^ \-^*gj»*e - a cempnii«_«__i

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*.*> jy*. ^.W" x .UJV J iP-f r &*jLtfr\ ^°'ioo , *^*»v>^4 0 CFR52.21(b ) (3 ) (i)(. I f y ..uwevu i y fehe emission s •^•'jNuni t ha s no t "begu nnorma l operations, " EP A regulation s recogniz e ""• * 'that futur e actua l emission s ar e difficul t t o predic t an d s o emplo y futur e "potential " emission s a s a proxy . 4 0 CF R 52.21(b)(21)(iv) . The linchpi nunde r the curren t regulation s fo r predictin

g futur e emission s afte r a modification- whethe r t o — -ff 1 ? **** * ••*•"•»•»-«-"-•""'-"? 1 p r th e a_H-ii:*-1-frn-pr._-_-r>-*-.a* l t-nrf^— ^ i s thu s whethe r the uni t ha s "begu nnorma l operations. " Tw o recen t federa l appellat e cour t decision s have addressed EPA' s interpretatio no f the phras e "begu nnorma l operations. " Thes e decisions , Puert o RicanCemen t Co. . Inc . v . U S EPA . 88 9 F.2 d 29 2 (1s t Cir . 1989 ) an d Wisconsi nElec . Powe r Co . v . Reilly . 89 3 F.2 d 90 1 (7t hCir . 1990 ) ("WEPCo") . occasio na reexaminationo f EPA' s interpretatio no f the phrase , an d o f th e usefulnes s o f the regulator y languag e itself . The meaning o f the . phras e i s highl y

fact-dependent , an d ha c proved anbigueua an d r^J^^i k troublesom

e in- application ; thus , a s described late r i nthi s ^LVLGU^S * notice , EP

A toda y propose s t o chang e it s Regulation s t o remove . '^^* T $%* t th e "begu nnorma l operations " usefu l criterion . -tac t an d t o regu l a

t nreplace i t wit ha mor e

Bot hcase s involved physica l change s t o existin g emission s units , bu t change s o f differin g extent , natur e an d result . I nPuert o RicanCement , the owne r o f a cemen t plant 1 wit hsevera l kiln s sough t t o conver t one "wet " kil nint o a "dry " kiln , an

d t o combine tha t kil nwit hanothe r kiln . 88 9 F.2 d a t 293 . Th e cour t observed tha t the tota l productioncapacit y o f th e renovated singl e kil nwoul d exceed the combined production capacity

o f the previou s tw o separat e kiln s b y "abou t 35%. " Id . I t noted tha t the renovated singl e kil nwoul d emplo y a differen t "cement-makin

g process " thanthe origina l kil nfro m whic hi t wa s "converted, " id . An d i t sai d tha t the ne w kil nwoul d be "mor e efficien t [and ] ma y lea d the fir

m t o decid e t o increas e the leve l o f production. " id . a t 29 7 (emphasi s i noriginal) . I nreviewin g EPA' s interpretationo f "begu nnorma l operations, " the cour t

1 Puert o RicanCemen t involved a cemen t plant , no t an electri c utility , bu t the court' s lega l analysi s o f the phras e "begu nnorma l operations " i nthe curren t regulation s i s relevan t t o al l facilities .

# 1

- 2 - applie da highl y

deferentia l standar do f review , sinc e a n agency' s interpretatio no f it s ow nregulator y languag e i s typicall y

give n"'controllin g weigh t unles s i t i s plainl y erroneou s o r inconsisten t wit hth e regulation.' " 88 9 F.2 da t 297 , quotin g Udal l v . Tallman . 38 0 U.S . 1 , 16-1 7 (1965 ) (citatio n omitted) . Th e cour t conclude dtha t o nth e fact s o f th e case , EPA' s interpretatio ntha t "norma l operations " ha d no t begu nwa s no t "arbitrar y

o r irrational, " id . a t 298 , an d henc e EPA' s applicatio no f th e actual-to-potentia l tes t t o predic t fututr e emission s wa s permissible .

I nWEPCo . 89 3 F.2 d 901 , th e Sevent hCircui t wa s face d wit ha differen t kin do f modification . Ther e renovation s wer e propose dfo r severa l olde r (3 5 t o 5 0 yea r old ) coal-fire d electri c utilit y

boilers . Th e physica l change s involve drepai r an dreplacemen t o f turbine-generators , stea m drum s an d othe r majo r components . EP A contended , a s i t ha d i nPuert o Rica n Cement . tha t thes e change s wen t beyon d"norma l operations " an d thu s warrante dus e o f futur e potentia l emission s a s th e tes t fo r a nemission s increas e ove r pas t actua l emissions . Her e th e cour t disagree dwit hEPA' s interpretatio ntha t "norma l operations " ha d no t begun . Th e cour t note dtha t non e o f th e repair s o r replacement s woul dhav e "change do r altere dth e desig no f th e facility, " id . a t908 . -g""
- ""^nr i n f p m m Inf. * . u n •.nr . Hoc-ig n ^Tira-iri^

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a •» " '"-^angar i Th e cour t coine dth e phras e '"like-kin dreplacement " t o describ e th e typ e o f renovatio n occurrin g a t th e WEPC o plant . Id . a t 917 . I t sai dtha t wher e th e renovation s wer e "like-kin dreplacements, " EP A coul dno t reasonabl y

interpre t it s regulation s t o sa y tha t suc ha uni t wa s s o differen t tha t i t ha d no t "begu nnorma l operations. " Thus , i t conclude dtha t th e "actual-to-potential " tes t coul dno t b e applied , unde r EPA' s regulations , t o unit s simpl y undergoin g "like-kin dreplacements." 2

So-»a__ S c/ w -TVOAO . iL_u_AJtj_A_ov»v

^ > Thr-i r tw nrlrnicinn B nampr i nn r reevi.r- . unde r it s curren t regulation , EP A mus t conside r th e fact s o f eac hcas e an d —-pl y th e actual-to-potentia l tes t onl y wher e th e chang e i s sufficientl y

significan t t o suppor t a findin g tha t "norma l operations " hav e no t "begun. " A t leas t fo r change s tha t ar e "lik e kin dreplacements, " "norma l operations " hav e begun , an d th e actual-to-potentia l tes t i s impermissible .

Neither ) decision*specifie dth e -dividin g l i norma l operations . " J Th e cour t i nHEPC o sai d replacements".^M-^ a t e rej-yulatlons^- ^ fal l w M% e for\"begu n kin d

2 O nremand , EP A employe da nactual-to-futur e actua l test , comparin g WEPCo' s representativ e actua l emission s fo r th e baselin e perio dt o estimate dfutur e actua l emission s base do nal l th e availabl e fact s i nth e record .P. 5



### iJ-

- 3 - tha t" Pu e ronably b sa y tha t no rwha tth e


### o clarif y

thi s stat e o f affairs , th e phras e "hegThi norma l oper a
uffigionfe j depar t fro

m thi§ , gate t\J coul dexpressl y o explai nwha t Th e phra s

too t and thus , warran t an j a s explaine dJ561ow , J_P A regulation s t o appl y th t moelificafcimi s sav e thos e constitut e a replacemen t adoptio no f thi s ne w ru ] to-actua l tes t t o units K a c tha,_ajfe__e**w

Ulupl i dicatorft f o f wrieil—^trtur e edictablc . fo r a naiLual-Lu-arfcua. V Ctual-tQ-potentia l test . ^Consequently r 

### s toda y proposin g t o revis e it s fl actual-to-actua l tes t t o al l ? 

### ^> - o r 

### <^'* MAt 

### ^f tha t ar e a nadditio no f a ne w uni t o r o f a nexistin g unit. 3 

### Pendin g fina l

, EP A wil l continu e t o appl y a nactual hav e "begu nnorma l operations, " .ouc h tmenteaf f conctdew i hv th a cour t i nWEPCo . • —

3 

### A s a nillustration , ha d thi s ne w tes t governe dth e fact s i nWEPC o o r th e fact s i nPuert o Rica nCemen t (wer e i t a nelectri c utility) , EP A

woul dhav e applie dth e actual-to-actua l test .