The Honorable Lisa Jackson 

Administrator 

U.S. Environmental Protection Agency 

Ariel Rios Building 

1200 Pennsylvania Avenue, NW 

Washington, DC 20460 

Dear Administrator Jackson: 

Enclosed for your consideration is the Report of the Small Business Advocacy 

Review Panel (SBAR Panel or Panel) convened for EPA’s planned proposed rulemaking 

entitled "National Emission Standards for Hazardous Air Pollutants (NESHAP) for Coaland Oil-fired Electric Utility Steam Generating Units (RIN 2060-AP52)." This notice of 

proposed rulemaking is being developed by the U.S. Environmental Protection Agency 

(EPA) under the Clean Air Act (CAA) section 112(d). 

BACKGROUND AND REGULATORY HISTORY 

In December 2000, EPA made a finding that it was appropriate and necessary to 

regulate coal- and oil-fired electric utility steam generating units (EGUs) under CAA 

section 112 and listed EGUs pursuant to CAA section 112(c). On March 29, 2005 (70 

FR 15994), EPA published a final rule (Section 112(n) Revision Rule) that removed 

EGUs from the list of sources for which regulation under CAA section 112 was required. 

That rule was published in conjunction with a rule requiring reductions in emissions of 

mercury from electric utility steam generating units pursuant to section 111 of the CAA 

(Clean Air Mercury Rule (CAMR), May 18, 2005, 70 FR 28606). The Section 112(n) 

Revision Rule was vacated on February 8, 2008, by the U.S. Court of Appeals for the 

District of Columbia Circuit. As a result of that vacatur, CAMR was also vacated and 

EGUs remain on the list of sources that must be regulated under CAA section 112. 

In the December 2000 regulatory determination, EPA made a finding that it was 

appropriate and necessary to regulate EGUs under CAA section 112. The February 2008 

vacatur of the Section 112(n) Revision Rule reverted the status to that of the December 

2000 regulatory determination. CAA section 112(n)(1)(A) and the 2000 determination 

do not differentiate between EGUs located at major versus area sources of hazardous air 

pollutants (HAP). Thus, the NESHAP for EGUs will regulate units at both major and 

area sources. 
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DESCRIPTION OF THE RULE AND ITS SCOPE 

The “electric utility steam generating unit” source category includes those units 

that combust coal or oil for the purpose of generating electricity for sale and distribution 

through the national electric grid to the public. CAA section 112(a)(8) defines an 

“electric utility steam generating unit” as: 

any fossil fuel-fired combustion unit of more than 25 megawatts electric 

(MWe) that serves a generator that produces electricity for sale. A unit 

that cogenerates steam and electricity and supplies more than one-third of 

its potential electric output capacity and more than 25 MWe output to any 

utility power distribution system for sale is also considered an electric 

utility steam generating unit. 

The source category includes investor-owned units as well as units owned by the 

Federal government, municipalities, and cooperatives, among others. These units provide 

electricity for commercial, industrial, and residential uses. Coal-fired generating units 

typically supply “base-load” electricity, which means these units operate continuously 

throughout the day and meet the part of electricity demand that is relatively constant. 

Oil-fired generating units typically supply “peak” power, when there is increased demand 

for electricity. Coal- and oil-fired EGUs have the potential to emit many HAP. 

Coal-fired electric utility steam generating units include electric utility steam 

generating units that burn coal, coal refuse, or a synthetic gas derived from coal either 

exclusively, in any combination together, or in any combination with other supplemental 

fuels. Examples of supplemental fuels include petroleum coke and tire-derived fuels. 

Oil-fired EGUs include units that burn liquid oil or solid oil-derived fuel (i.e., petroleum 

coke). The NESHAP will establish standards for HAP emissions from both coal- and oilfired EGUs and will apply to any existing, new, or reconstructed units located at major or 

area sources of HAP. Although all HAP are pollutants of interest, those of particular 

concern are hydrogen fluoride (HF), hydrogen chloride (HCl), dioxins/furans, and HAP 

metals, including antimony, arsenic, beryllium, cadmium, chromium, cobalt, mercury, 

manganese, nickel, lead, and selenium. 

In developing the vacated CAMR, EPA identified a total of 81 potentially 

affected small entities with coal-fired EGUs and determined that CAMR would not have 

a significant impact on a substantial number of those small entities. That determination 

was based on the fact that the final rule would not establish requirements applicable to 

small entities, other than new sources. At that time, EPA projected no new construction 

of coal-fired utility units. Additionally, CAMR did not establish requirements applicable 

to existing small entities because the final rule made allowances available to each State; 

the States were then to distribute their allowances to the EGUs within their State 

according to their individual situations. Based on current information, we have identified 

approximately 525 facilities with 1,350 individual coal- or oil-fired units. We estimate 

that 80 companies that own coal- or oil-fired EGUs are small entities. 
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PANEL BACKGROUND 

On October 27, 2010, EPA’s Small Business Advocacy Chairperson convened 

this Panel under section 609(b) of the Regulatory Flexibility Act (RFA), as amended by 

the Small Business Regulatory Enforcement Fairness Act (SBREFA). In addition to its 

chairperson, the Panel consists of the Director of the Sector Polices and Programs 

Division within the EPA Office of Air and Radiation, the Administrator of the Office of 

Information and Regulatory Affairs within the Office of Management and Budget 

(OMB), and the Chief Counsel for Advocacy of the Small Business Administration 

(SBA). It is important to note that the Panel’s findings and discussion are based on the 

information available at the time this report was drafted. EPA is continuing to conduct 

analyses relevant to the proposed rule, and additional information may be developed or 

obtained during this process, as well as from public comment on the proposed rule. The 

options the Panel identified for reducing the rule’s economic impact on small entities will 

require further analysis and/or data collection to ensure that the options are practicable, 

enforceable, protective of public health, environmentally sound and consistent with the 

Clean Air Act (CAA).

SUMMARY OF SMALL ENTITY OUTREACH 

Before beginning the formal SBREFA process, EPA engaged in outreach with 

entities that would potentially be affected by the upcoming rulemaking to provide an 

opportunity for discussion of their questions and concerns regarding the upcoming 

rulemaking. The outreach consisted of meeting with some organizations that represent 

and include small entities, including the American Public Power Association (APPA), 

Edison Electric Institute (EEI), the Utilities Air Regulatory Group (UARG), and the Coal 

Utilization Research Council (CURC). 

After the SBAR Panel was convened, the Panel distributed information to the 

small entity representatives (SERs) on November 17, 2010, for their review and comment 

and in preparation for the outreach meeting. On December 2, 2010, the Panel met with 

the SERs to hear their comments on the information distributed in these mailings. The 

SERs were asked to provide written feedback on ideas under consideration for the 

proposed rulemaking by December 16, 2010. The Panel received written comments from 

the SERs in response to the discussions at the outreach meeting and the outreach 

materials. See Section 8 of the Panel Report for a complete discussion of SER 

comments. Their full written comments are also included in the Panel Report. In light of 

these comments, the Panel considered the regulatory flexibility issues specified by 

RFA/SBREFA and developed the findings and discussion summarized below. 

PANEL FINDINGS AND DISCUSSION 

 Under section 609(b) of the RFA, the Panel is to report its findings related to these 

four items: 
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1) A description of and, where feasible, an estimate of the number of small 

entities to which the proposed rule will apply. 

2) A description of the projected reporting, recordkeeping and other compliance 

requirements of the proposed rule, including an estimate of the classes of 

small entities which will be subject to the requirement and the type of 

professional skills necessary for preparation of the report or record. 

3) Identification, to the extent practicable, of all relevant federal rules which may 

duplicate, overlap or conflict with the proposed rule. 

4) A description of any significant alternatives to the planned proposed rule 

which would minimize any significant economic impact of the proposed rule 

on small entities consistent with the stated objectives of the authorizing 

statute. 

The Panel’s most significant findings and discussion with respect to each of these items 

are summarized below. In some instances, the Panel has joint recommendations. In 

other instances, EPA, OMB, and SBA have different recommendations. To read the full 

discussion of the Panel findings and recommendations, see Section 9 of the Panel Report. 

A. Number and Types of Entities Affected

 The estimated number of small entities that will be potentially subject to the Utility 

NESHAP includes 66 small State/local governments and 14 small non-government 

entities. These numbers reflect additions and deletions to the initial list of potentially 

impacted small entities as suggested by SERs as appropriate. For an estimate of the type 

and number of small entities to which the proposed rule will apply, see Section 5 of the 

Panel Report. The list of potentially affected small entities includes electricity 

generators. SERs believe that this list should also include distribution cooperatives that 

own electricity generation and transmission (G&T) cooperatives and that qualify as small 

entities. SERs stated that the Utility NESHAP will have a direct impact on all electric 

cooperatives generating and/or distributing coal-based power given the closely 

interwoven nature of the G&T cooperatives and the distribution cooperatives. The Panel 

acknowledges that small entity distribution cooperatives that own generation processes 

would be impacted in some way by the Utility NESHAP because generation processes 

will be regulated by the standards, but the extent to which small entity distribution 

cooperatives would be impacted is unclear without more detailed information on these 

entities. 

B. Recordkeeping, Reporting, and Other Compliance Requirements

 In general, SERs recommended that recordkeeping, reporting, and monitoring 

requirements should be minimized and simplified to the maximum extent possible. 
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EPA recommendations: EPA panel members recommend that the Agency consider 

proposing alternative monitoring approaches (e.g., parameter monitoring in lieu of 

requiring the use of mercury continuous emissions monitoring systems (CEMS), sorbent 

traps, periodic stack testing, etc.) and consider requiring particulate matter (PM) CEMS 

only for the largest EGUs or allow use of PM CEMS as an alternative to conducting 

opacity monitoring and periodic emissions testing. With respect to SERs’ suggestion that 

if PM CEMS are required by the Utility NESHAP, opacity monitoring requirements of 

other Federal regulations should no longer apply, EPA panel members recommend that 

the Agency consider the available alternatives and options to the current opacity 

provisions. 

OMB recommendations: OMB recommends that alternative monitoring approaches (e.g., 

parameter monitoring in lieu of requiring the use of mercury CEMS, sorbent traps, 

periodic stack testing) be proposed for small entities and that EPA propose PM CEMS 

only for the largest EGUs or propose allowing use of PM CEMS as an alternative to 

conducting opacity monitoring and periodic emissions testing. 

SBA recommendations: SBA agrees that EPA should consider relevant factors identified 

by the SERs in developing this rulemaking, but it does not believe that the Panel has 

sufficient information to make recommendations beyond EPA's existing obligations 

under the RFA or Paperwork Reduction Act. SBA agrees that these are flexibilities 

worthy of consideration, and perhaps proposal, but without information necessary to 

evaluate specific regulatory alternatives or the impacts of those decisions on particular 

small entities or small entities in general, SBA believes that the Panel can make no 

recommendations as to what specific regulatory options would "accomplish the stated 

objectives of applicable statutes and which minimize any significant economic impact of 

the proposed rule on small entities." 

C. Related Federal Rules

SERs asked that EPA consider the impact of competing regulatory requirements 

and technologies when developing the Utility NESHAP. EPA is currently working on 

revisions to the PM, SO2, and NOX emissions limit in subpart Da. Sources subject to the 

NSPS would also be subject to the Utility NESHAP because those rules regulate sources 

of HAP whereas the NSPS does not. 

In June 2010, EPA issued a final rule that establishes thresholds for GHG 

emissions that define when permits under the New Source Review PSD and title V 

Operating Permit programs are required for new and existing industrial facilities (the 

Tailoring Rule). Beginning in January 2011, large industrial sources, including power 

plants, became subject to permitting requirements for their GHG emissions. 

On December 23, 2010, EPA announced a settlement agreement under which it 

would issue rules that will address GHG emissions from fossil fuel-fired power plants. 
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The rules would establish NSPS for new and modified EGUs and emission guidelines for 

existing EGUs. Under the agreement, EPA commits to issuing proposed regulations by 

July 26, 2011 and final regulations by May 26, 2012. 

In August 2010, EPA proposed a rule that would require 31 states and the District 

of Columbia (D.C.) to significantly improve air quality by reducing power plant 

emissions that contribute to ozone and fine particle pollution in other states (the 

Transport Rule). Specifically, the proposal would require reductions in SO2 and NOX

emissions that cross state lines. The Transport Rule is expected to be finalized in July 

2011. To the extent that EGUs are located in the final set of states or D.C., they would be 

subject to the Transport Rule. SERs expressed concern regarding what the impact of 

controlling SO2 and NOX emissions as a result of complying with the Transport Rule will 

do to the level of CO emissions. 

Based on the findings from EPA’s multi-year study of the Steam Electric Power 

Generating industry, EPA plans to revise the current effluent guidelines that apply to 

steam electric power plants. Revised effluent guidelines will be proposed in July 2012 

and finalized in January 2014. 

As required by section 316(b) of the Clean Water Act (CWA), EPA established 

best technology available standards to minimize adverse environmental impacts from 

cooling water intake structures. In developing these standards, EPA divided its effort 

into three rulemaking phases. Phase I standards, for new EGU plants using cooling 

water, were finalized in June 2003. Phases II and III standards, which address existing 

EGU plants that use cooling water, were promulgated in July 2004 and June 2006, 

respectively. Both regulations were challenged. Several provisions of the Phase II rule 

were remanded and EPA suspended most of the rule in response to the remand. EPA 

requested, and was granted, a partial remand of the Phase III rule. EPA signed a 

settlement agreement that requires regulations for Phase II and III facilities to be 

proposed by March 14, 2011, and promulgated by July 27, 2012. 

In June 2010, EPA proposed national rules for the management of coal ash, which 

are residues from the combustion of coal in power plants that are captured by pollution 

control technologies, like scrubbers. EGUs will be subject to these coal ash specific 

regulations when they are issued. 

SBA recommendations: SBA agrees that EPA should consider relevant factors identified 

by the SERs in development of this rulemaking, including the extent to which other 

recently proposed or finalized regulatory obligations imposed by EPA will impact small 

entities or make compliance with this rulemaking more difficult. SBA also agrees that 

EPA should always avoid duplication of requirements across programs. However, SBA 

does not believe that the Panel has information necessary make recommendations beyond 

a restatement of EPA’s existing obligations or to evaluate specific regulatory decisions 

and the impacts of those decisions on particular small entities or small entities in general. 

Therefore, SBA believes that the Panel can make no recommendations as to what specific 
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regulatory options would "accomplish the stated objectives of applicable statutes and 

which minimize any significant economic impact of the proposed rule on small entities." 

Panel recommendations: Although the requirements of section 112 of the CAA direct 

EPA to establish NESHAP for both major and area sources of HAP and prescribe the 

processes by which the standards are developed, the Panel recommends that the Agency 

consider the various flexibilities within its discretion in developing the proposed 

standards. The Panel recommends that the Agency investigate other potential surrogate 

pollutants for organic HAP in lieu of CO, given the NOX-CO relationship (i.e., when 

NOX emissions are reduced, CO emissions may increase). In developing the NESHAP 

for EGUs, the Panel recommends that the Agency avoid duplicating requirements to the 

fullest extent possible in order to minimize unnecessary costs. 

 D. Regulatory Flexibility Alternatives 

1. MACT Floors and Variability 

SERs raised four issues with respect to determining MACT floors and assessing 

variability: (1) pollutant-by-pollutant ranking approach, (2) pollutants to be regulated, 

(3) floor determination methodology for existing units, and (4) assessment of emissions 

variability, including periods of startup and shutdown, and fuel, performance, and load 

variability. A description of each of these issues along with the Panel recommendations 

is presented in succession below. 

SERs stated that the end result of determining a MACT floor for each HAP or 

HAP surrogate (a pollutant-by-pollutant approach) for each subcategory of sources is a 

set of MACT floors that do not represent the emission levels achieved by an actual, bestperforming EGU. SERs believe that this methodology for setting MACT floors is 

inconsistent with the requirements of CAA section 112(d)(3). It was suggested that 

MACT floors should be established using a facility-wide approach. 

EPA recommendation: Consistent with EPA’s legal interpretation, EPA panel members 

recommend that the Agency use the pollutant-by-pollutant approach for determining 

MACT standards for each HAP or HAP surrogate, while taking into account potential 

direct conflicts between pollution control technologies. 

There are concerns with respect to the suggestion that MACT floors should be 

established using a facility-wide approach. Determining floors based on a facility-wide 

approach would lead to least common denominator floors – that is floors reflecting 

mediocre or no control, rather than performance which, for existing sources, is the 

average of what the best performing sources have achieved. For example, if the best 

performing 12 percent of facilities for HAP metals did not control organics as well as a 

different 12 percent of facilities, the floor for organics and metals would end up not 

reflecting best performance. This fact pattern has come up in every rule where EPA 

investigated a facility-wide approach. See, e.g. 75 FR at 54999 (Sept. 10, 2010). Thus, 

utilizing the single-facility theory proffered by the stakeholders would result in EPA 
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setting the standards at levels that would, for some pollutants, actually be based on 

emissions limitations achieved by the worst-performing unit, rather than the bestperforming unit, as required by the statute. Moreover, a single-facility approach would 

require EPA to make value judgments as to which pollutant reductions are most critical in 

working to identify the single facility that reduces emissions of HAP on an overall bestperforming basis. 

OMB and SBA recommendation: OMB and SBA recommend that in the proposed rule, 

EPA seek comment on reasonable alternative approaches to setting the MACT floor, 

which account for achievement in practice for control of all HAP. 

SERs stated their belief that the Utility NESHAP should be limited to mercury 

control only. They explained that EPA has not determined that emissions of other HAP 

in the quantities emitted are detrimental to human health or the environment. SERs 

continue to support EPA’s 2004 legal analysis that stated EPA believed it only had 

authority to set MACT standards for mercury under CAA section 112(d). 

EPA recommendation: As to the comment that EPA should only regulate mercury from 

coal-fired EGUs and nickel from oil-fired EGUs consistent with the reasoning in the 

proposed NESHAP for these sources that was published on January 30, 2004, EPA panel 

members note that the Agency never finalized that proposed interpretation, and the 

Agency has determined that it must establish CAA section 112(d) standards for all HAP 

emitted from major source EGUs consistent with the statute and case law from the Court 

of Appeals for the D.C. Circuit. For these reasons, EPA rejects the proposed 

interpretation set forth in the 2004 proposed rule. 

OMB and SBA recommendation: OMB and SBA recommend that in the proposed rule, 

EPA seek comment on the specific elements of the 2004 legal analysis and how 

subsequent court decisions affect that 2004 legal analysis. 

Panel Recommendation: The Panel recommends that the analysis of impacts be able to 

distinguish the marginal costs and benefits of each required control technology, in order 

for the public to distinguish the impacts of regulating mercury from the impacts of 

regulating other HAPs. It should be noted that EPA cannot, at this point, estimate 

monetized benefits for HAP reductions other than Hg. 

In addition, by focusing on one HAP at a time, SERs believe that the antagonistic 

effects a given HAP limit will have on other regulated pollutants are missed. Because 

production of CO during the combustion process is inversely related to NOX production, 

it may be difficult to meet a CO limit if NOX reductions also are required. 

Panel Recommendation: The Panel recommends that the Agency investigate other 

potential surrogate pollutants for organic HAP (e.g., PAH, formaldehyde). The SERs’ 

example of how a pollutant-by-pollutant approach could result in technical infeasibility 
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with respect to CO and NOX may argue against using CO as the surrogate pollutant for 

organic HAP. 

SERs commented that the MACT floor for existing units should be determined 

using the entire inventory of EGUs and not using only the units for which EPA has test 

data. 

EPA recommendation: The CAA requires the MACT floor for existing sources be based 

on the best performing sources. Thus, EPA must be able to show that the best performing 

units are in fact used to establish the MACT floor. To use the entire inventory of EGUs 

as the basis for determining the average of the best performing twelve percent of units, 

EPA must be confident that the EGUs for which data are available are the best 

performers. EPA panel members recommend that the Agency establish the MACT floors 

using all the available ICR data that was received to the maximum extent possible 

consistent with the CAA requirements. 

OMB and SBA recommendations: OMB and SBA recommend that EPA establish 

MACT standards that minimize the burden on small entities. OMB and SBA also 

recommend that EPA consider, and present for comment, MACT floors based on the best 

performing 12 percent, rather than the best 12 percent of the data EPA collected. If EPA 

proposed the latter, OMB and SBA recommend that they clearly explain why the subset 

of sources for which they have data is representative of the entire set of sources. 

 

SERs asked that EPA consider establishing percent reduction limits as an 

alternative to complying with an emissions limit as a means of providing small entities 

flexibility in complying with the NESHAP in addition to providing a means of potentially 

accounting for variability. SERs expressed concern that periods of startup and shutdown 

could present problems with meeting emission limits and suggested that the emissions 

limits be based on a longer averaging time rather than basing limits on 3-run averages. 

SERs stated that the three-day stack sampling required by EPA’s ICR provides a 

snapshot of a unit’s HAP emissions and is not indicative or representative of the unit’s 

emissions over longer periods of time. SERs pointed out that a critical question is how 

EPA plans to modify the stack emissions reported during the ICR to account for fuel, 

performance, and load variability. One SER suggested that use of a longer-term rolling 

average (i.e., a 12-month minimum rolling average) is necessary in order to account for 

varying levels of mercury in fuel. Additionally, one SER indicated that a de minimis

exemption is a regulatory option/small entity flexibility that EPA should consider. 

EPA recommendations: EPA is limited in its ability to establish percent reduction limits 

as an alternative to complying with an emissions limit. Even assuming that EPA can 

establish percent reduction standards under CAA section 112, to establish such standards, 

emissions data for the inlet to the EGU and for the stack are necessary. At this time, EPA 

does not have such data. EPA panel members recommend that the Agency consider the 

inclusion of percent reduction standards given the legal constraints and the lack of data 

necessary to establish such standards. Regarding the SERs’ concerns with meeting 
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emissions limits during periods of startup and shutdown, EPA panel members 

recommend that the Agency base the proposed emission limits on reasonable averaging 

times where appropriate. In determining reasonable averaging times, EPA panel 

members recommend that in addition to considering performance during periods of 

startup and shutdown, the Agency also consider fuel and load variability. In addition, 

EPA panel members recommend that the Agency use all data gathered through the ICR 

for EGUs that comprise the MACT floor, to the maximum extent possible consistent with 

the CAA requirements and as appropriate, in order to account for fuel, performance, and 

load variability. With regard to one SER’s request that a de minimis exemption be 

considered, EPA must establish standards for all HAP emitted from major sources 

consistent with CAA section 112(d) and case law from the U.S. Court of Appeals for the 

D.C. Circuit. 

Panel recommendations: The Panel recommends that EPA propose provisions for 

emissions averaging between units at a facility and long averaging times to address 

startup, shutdown, and fuel variability for the proposed emissions limit and, further, that 

the Agency solicit comment on an appropriate averaging time. The Panel recommends 

that EPA consider fuel variability when deriving the emissions standards. The Panel 

recommends that the Agency evaluate whether establishing work practice requirements 

during periods of startup and shutdown would be consistent with CAA section 112(h) and 

investigate whether there are technical bases for establishing separate standards (e.g., 

work practices or subcategorization) for EGUs below a certain size and what that size 

threshold is. 

2. Subcategorization 

In general, SERs encouraged the broad use of subcategories. SERs commented 

that EPA should consider subcategorizing EGUs based on fuel type, boiler type, duty 

cycle, and size. Some SERs requested that EPA consider establishing a subcategory for 

combined heat and power (CHP) units that meet the definition of EGU (i.e., generate 

enough electricity). SERs explained that the duty cycles for some coal-fired EGUs are 

not primarily base-load, as in the past, but may alternate between operating as base-load 

units and peaking units. Similar comments were not made with regard to consideration 

of base-load oil-fired EGUs and peaking oil-fired EGUs as separate subcategories. 

EPA recommendations: EPA recognizes subcategorization may be necessary and we will 

consider whether subcategorization is reasonable in light of the data and other 

information obtained in response to the ICR to the utility industry and the information 

from the SERs. SERs recommended that EPA consider adopting the following 

subcategories for EGUs: 

 Fuel type 

► North Dakota lignite 

► Gulf Coast lignite 

► Bituminous coal 
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► Sub-bituminous coal 

► Blended bituminous/sub-bituminous coal 

► Powder River Basin coal 

► Illinois Basin coal 

 Boiler design 

► Units designed to burn coal 

► Units designed to burn oil 

► IGCC units 

► CHP units 

► Units designed to burn multiple fuels 

 Unit type 

► Fluidized bed 

► Pulverized coal 

► Wall-fired 

► Tangentially-fired 

 Duty cycle 

► Base-load oil-fired units 

► Peaking oil-fired units 

► Base-load coal-fired units 

► Coal-fired units that alternate operating as base-load and peaking 

 Boiler class 

► Small entity non-profit providers 

EPA and OMB recommendations: EPA panel members and OMB acknowledge that it 

may not be practicable to adopt all of the proposed subcategories, as there may be 

substantial overlap between the groups. EPA panel members and OMB recommend that 

EPA consider these subcategories and adopt a set of standards that is consistent with the 

CAA and which effectively reduces burden on small entities. 

SBA recommendations: SBA agrees that EPA should consider various subcategorization 

options in developing this rulemaking, but it does not believe that the Panel has sufficient 

information to recommend a particular subcategorization option that would minimize the 

significant economic impact of the proposed rule on small entities. While a large number 

of subcategories may serve to establish standards that minimize the economic impacts on 

some particular small entities, it could also disadvantage small entities that would 

otherwise be among the best performing 12 percent of a larger subcategory. 

3. Area Source Standards 

SERs suggested that EPA establish separate emission standards for EGUs located 

at area sources of HAP and that the standards be based on generally available control 

technology (GACT) as allowed under section 112(d)(5) of the CAA. Specifically, SERs 

recommended that EPA establish management practice standards for natural area source 

EGUs as well as synthetic area source EGUs. 
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EPA recommendations: EPA panel members recommend that the Agency consider a 

regulatory approach for EGUs at area sources of HAP based on GACT. Further, EPA 

panel members recommend that the Agency consider establishing management practices 

for area source EGUs. 

OMB recommendations: OMB recommends that EPA propose a regulatory approach for 

EGUs at area sources of HAP based on GACT and propose management practices for 

area source EGUs. 

SBA recommendations: SBA agrees that EPA should consider the use of its authority to 

establish area sources standards for natural and synthetic area sources to the maximum 

extent permitted by statute, but does not believe that the Panel has sufficient information 

to recommend a particular regulatory option that would minimize the significant 

economic impact of the proposed rule on small entities. 

4. Work Practice Standards 

 SERs recommended that EPA establish work practice standards for major source 

EGUs. A work practice standard, instead of MACT emission limits, may be proposed if 

it can be justified under section 112(h) of the CAA that it is not feasible to prescribe or 

enforce an emission standard (i.e., the application of measurement methodology to a 

particular class of sources is not practicable due to technological and economic 

limitations). Specifically, SERs believe it is not feasible to prescribe or enforce an 

emission standard for control of a HAP emitted at or below the detection limit of the 

method that was used to collect and analyze HAP emissions. A number of HAP, 

including a large percentage of the dioxin/furan and non-dioxin organics measurements, 

are emitted at or below detection limits. 

EPA and OMB recommendation: EPA panel members and OMB recommend that the 

Agency evaluate the availability of work practice standards, in particular with regards to 

HAP that are emitted at or below the detection limit. 

SBA recommendation: SBA recommends that EPA propose work practices standards to 

the maximum extent permitted by statute. However, the Panel does not have sufficient 

information to specify which work practices standards can be proposed. 

5. Health Based Emission Limits 

SERs commented that health based emission limits (HBELs) should be used to 

the maximum extent possible when facts support their use. Specifically, SERs 

encouraged EPA to use its CAA section 112(d)(4) authority to set a HBEL for HCl based 

on its reference concentration for the entire EGU source category. 
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EPA recommendation: EPA panel members recommend that the Administrator consider 

her discretionary authority to propose a HBEL for acid gas HAP emissions as a 

regulatory flexibility option. 

OMB and SBA recommendations: OMB and SBA recommend that in the proposed rule, 

EPA co-propose and seek comment on an HBEL for HAPs to the maximum extent 

permitted by statute, including, but not limited to, the acid gas HAP. OMB and SBA 

recommend that in the proposal EPA explain their method for deriving these limits, along 

with sample calculations. 

6. Potential Adverse Economic Impacts 

SERs commented on a number of concerns they have with respect to small 

entities’ ability to comply with the potential requirements of the Utility NESHAP. SERs 

inquired as to EPA’s authority to (1) move the effective date of the standards, (2) 

determine when implementation begins, (3) allow a phase-in of compliance, and (4) 

streamline the process for petitioning for a fourth year for purposes of complying with the 

standards. SERs asked that EPA consider the implications of EGU reliability versus 

compliance with the Utility NESHAP when establishing the rule’s requirements. SERs 

expressed concern that, depending on the type and stringency of requirements, the 

regulations could be so expensive that they cause extensive plant retirements and job 

losses. 

SBA recommendation: SBA recommends that EPA propose a streamlined process for 

granting a fourth year, including aiding small entities in gathering the information 

necessary to support such a petition, and recommends that EPA develop, in consultation 

with the Department of Defense and small entities affected by this rule, to develop the 

information necessary to support a recommendation under section 112(i)(4) of the CAA 

for consideration by the President. 

Panel recommendations: The Panel recommends that the Agency weigh the potential 

burden of compliance requirements and consider various options for all regulated entities, 

especially small entities. With respect to dates, EPA does not have the authority to move 

the effective date of the standards (see CAA section 112(d)(10)), to initially provide more 

than three years for compliance (see CAA section112(i)), or to allow a phase-in of 

compliance. The Panel recommends that the Agency investigate the potential for 

streamlining the process for petitioning for a fourth year for purposes of compliance with 

the standards and consider the need to invoke the national security exemption under 

section 112(i)(4) of the CAA. Additionally, the Panel recommends that EPA seek 

comment in the proposed rule on the potential adverse economic impacts of the rule for 

small entities and recommendations for mitigating or eliminating these adverse economic 

impacts on small entities. 

7. Concerns with the Small Business Advocacy Review Process

 
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SERs stated that they do not believe they were provided the opportunity for 

effective participation in the Federal regulatory process as required by SBREFA. SERs 

indicated that they were not provided descriptions of significant alternatives to the 

proposed rule, differing compliance or reporting requirements or timetables that take into 

account the resources available to small entities. SERs further indicated that there was no 

pre-meeting to go over information on the rule, there was only one outreach meeting, and 

SERs were only provided 14 days to prepare written comments. SERs had various 

suggestions including that EPA schedule additional panel meetings once the Agency has 

progressed further in its rulemaking preparation, that EPA consider starting over with the 

SBREFA process, and that EPA request an extension to allow time to (1) adequately 

analyze lessons learned in the Boiler MACT rule development process, (2) thoroughly 

analyze the emissions data, (3) continue to meet with utility industry representatives, and 

(4) consider the range of possible emission control options that would allow for 

implementation to take place such that the integrity of the Grid, the national economy, 

and national security will be protected. 

EPA recommendation: EPA appreciates the SERs’ concerns, but believes it has fulfilled 

its statutory obligations under SBREFA and has afforded SERs sufficient opportunity to 

suggest regulatory alternatives, and thus, makes no recommendations to address these 

concerns. The time constraints of the small business advocacy review process with 

respect to the Utility NESHAP were explained at the beginning of the process. That is, 

due to the regulatory schedule there could only be one SER outreach meeting. The nature 

of the information to be provided was also outlined to the SERs at the start of the process. 

EPA panel members believe they provided sufficient information to allow SERs to make 

suggestions concerning regulatory alternatives (e.g., regarding subcategories, HAP and 

HAP surrogates, monitoring requirements, control technologies potentially required to 

meet standards, CAA authorities to establish health-based emission limits and work 

practice standards) as part of the small business advocacy review process, and the SERs 

have in fact made many productive suggestions EPA will seriously consider as part of the 

rulemaking process. 

OMB recommendation: Although OMB understands the time constraints imposed on 

this rulemaking process, we recommend that once EPA has drafted a set of emissions 

limits for EGUs, they convene another meeting with the SERs to gather insight on the 

feasibility and achievability of those limits for small entities. To the extent feasible, we 

recommend this meeting take place before the proposal is issued. 

SBA recommendations: SBA agrees with the concerns raised by the SERs in their 

comments about the adequacy of the information provided to the Panel and the SERs and 

about the schedule for the Panel. SBA believes that more time is necessary for EPA to 

develop regulatory options and to share them with the SERs, so that the SERs could 

provide a more informed comment and better inform the Panel's recommendations. 

SBA recommends that EPA request an extension of the regulatory deadlines imposed by 

the consent decree. The extension should provide enough time for EPA to: