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OAR Box 1778 

Prepped by Ollie Stewart 

Document Number: 

180) ll-F-7 

Docket Number: 

A-90-06 

Printed 10/28/2008 9:51:00 AM Sheet 180 of 276 
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

Office of Air Quality Planning and Standards 

Research Triangle Park, North Carolina 27711 

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MEMORANDUM 

TO: Docket 

FROM: Chebryll Edwards 

DATE: June 4, 1991 

SUBJECT: Interagency Review of WEPCO Material 

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The attached material was sent to the Department of Energy on 

April 22, 1991 for their review. 

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[EXCERPT FROM LEGISLATIVE RULE] 

Draft:April 22, 1991 

Utility Pollution control Proiect Exemption 

EPA also seeks to revise the treatment of utility 

modifications that consist solely of the installation of 

pollution control equipment. EPA has always recognized that 

Congress did not intend that every activity at an existing 

facility be considered a physical or operational change for 

purposes of the new source requirements of the PSD program.1 

Also, as has been discussed, the new acid rain provisions will 

require most electric powerplants to vindertake pollution control 

projects within the next few years. Decisions regarding the 

utilities1 pollution control strategy under Phase I of the acid 

rain program will be made in the next few months. However, 

utilities are concerned that EPA will subject pollution control 

projects to an actual-to-potential evaluation. In fact, EPA has 

refrained from applying the actual-to-potential methodology to 

several recent pollution control projects and has instead used an 

actual-to-future actual methodology.2 That policy has been 

1 For instance, EPA has specifically recognized that 

routine maintenance, repair and replacement, and changes in hours 

of operation or in the production rate are not considered a 

physical change or change in the method of operation. See 40 CFR 

52.21(b)(2)(iii). 

2 [Cite pollution control and CCT non-applicability 

letters.] 
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formalized in an interpretative ruling.3 T O provide utilities 

with additional certainty, EPA is today proposing to adopt a PSD 

exemption that provides that the addition, replacement or use at 

an existing electric utility steam generating unit of any system 

or device whose primary function is the reduction of air 

pollutants (including the switching to a less-polluting fuel 

where the primary purpose of the switch is the reduction of air 

pollutants), except when (1) such addition, replacement or use 

will result in a reduction in the control efficiency of any air 

pollution control system or device at the source; or (2) the 

reviewing authority determines that such addition, replacement or 

use is not environmentally beneficial. Pending final action on 

today's proposal, EPA will continue to use the actual-to-future 

actual methodology specified in the interpretative ruling. 

For the purposes of this exemption, a pollution control 

system or device includes add-on types of emissions control 

equipment such as conventional and advanced scrubbers, sorbent 

injection, low-NOx burners, electrostatic precipitators, and 

fabric filters. Switching to coal with a lower sulfur content, 

sv/itching from a more polluting fuel to natural gas, natural gas 

or coal reburning, and cofiring of natural gas and other fuels 

are examples of such fuel switching. -Any activity that is 

necessary to accommodate switching to a less polluting fuel is 

considered to be part of the pollution control project. In some 

[Cite interpretative rule.] 
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instances, this may involve physical changes to the pollution 

generating equipment (e._g_._, boiler) , but only if the changes are 

necessary to maintain the normal operating capability of the unit 

at the time of the modification where the capability would 

otherwise be impaired as a result of the fuel switch. For 

example, an electric utility steam generating unit that switches 

from a higher sulfur bituminous coal to a low-sulfur 

subbituminous coal may need to make certain changes to the boiler 

in order to avoid derating the unit. 

Changes that are intended primarily to restore original 

capacity or to improve the operational efficiency of the facility 

are not considered to be part of a pollution control project for 

purposes of this exemption. Also, the source still must comply 

with all applicable SIP limits and requirements, permit 

conditions and applicable NAAQS or PSD increment limits. 

For utilities undertaking a pollution control project (as 

defined above) in a nonattainment area, the actual-to-future 

actual methodology specified in EPA's interpretative ruling 

should be applied. In contrast to the projection of estimated 

future actual emissions for like-kind replacements, in making PSD 

applicability determinations for pollution control projects, EPA 

will presume that the project will not result in an increase in 

capacity utilization. This presumption may be overcome only if 

applicable information clearly demonstrates that capacity 
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utilization will increase as a result of the pollution control 

project. 

Proposed text of 40 CFR 52.21(b)(2): 

(ii) A physical change in or change in the method of operation 

shall not include: 

* * * 

(h) The addition, replacement or use at an existing electric 

utility steam generating unit of any system or device whose 

primary function is the reduction of air pollutants, or the use 

of a less polluting fuel, except when: 

(i) the Administrator determines that such addition, 

replacement or use is not environmentally beneficial; or 

(ii) such addition, replacement or use will result in a 

reduction in the control efficiency of any other air pollution 

control system or device at the source. 

Disk:Diane-C:WP5.1:Bill.18:April 22, 1991