April 18, 2012 

HUNTON & WILLIAMS LL,P 

2200 PENNSYLVANIA AVENUE, NW 

WASHINGTON. D.C. 20037-1701 

Tk.L 202 955 1500 

FAX 202 77X 2201 

HENRY V. NICKEL 

DIRECT DIAL: 202 955 1561 

EMAIL: hn~ckel@hunton.com 

FILE NO: 37552.000007 

Privileged and Confidential 

Attorney Work Product 

Colleen McKaughan 

Associate Director, Air Division 

United States Environmental Protection Agency 

Region IX 

75 Hawthorne Street 

San Francisco, CA 94 105 

Dear Ms. McKaughan: 

We have been requested to respond to your letter of March 14, 2012, to Jeffrey Yockey 

regarding the BART-eligibility status of Unit 4 of TEP's Sundt Generating Station under the 

visibility program of the Clean Air Act ("CAA). TEP appreciates your interest in 

understanding the arguments that TEP intends to pursue in this matter. This response 

supplements the March 16, 201 1 email from Mr. Yockey to Francisco Donez addressing this 

issue and providing data regarding Unit 4's emissions, information on stack parameters for Unit 

4, and screening-level cost estimates fnr various categories of emission controls. 

We appreciate EPA's recognition, as stated in your letter, that the text of EPA's BART 

Guidelines, which are codified rules at 40 C.F.R. Part 5 1 App. Y (hereinafter "Appendix Y") and 

thus are binding on EPA, expressly provide that "any emissions unit for which a reconstruction 

'commenced' after August 7, 1977, is not BART-eligible." 40 C.F.R. Part 5 1 App. Y 5 II.A.2 

(emphases added). There is no dispute that Sundt Unit 4's reconstruction commenced after 

August 7, 1977. Moreover, Appendix Y contains no exceptions or qualifications to the broad 

exemption established by the rule quoted above. The footnote in the preamble to the BART 

Guidelines that you cite is not to the contrary, as it merely reflects the reality that post-1977 

source reconstructions in the general run of cases would have "gone through NSRIPSD 

permitting." 70 Fed. Reg. 39104, 391 11 n.9 (July 6, 2005). Nothing in that footnote does -- or 

ATLANTA AUSTIN BANGKOK BElJlNG BRUSSELS CHARLOTTE DALLAS HOUSTON LONDON LOS ANGELES 

McLEAN MIAMI NEW YORK NORFOLK RALEIGH RICHMOND SANFRANCISCO TOKYO WASHINGTON 

www hunton.com 
HUN'ION 

WILLIAMS 

Ms. Colleen McKaughan 

April 18, 20 12 

Page 2 

could -- contradict the plain, unqualified language of EPA's rule text that exempts "any" post1977 reconstruction. In any event, as EPA is aware, "[iln the context of the CAA, 'the word 

"any" has an expansive meaning."' New Jersey v. EPA, 5 17 F.3d 574,582 (D.C. Cir. 2008) 

(quoting New York v. EPA, 443 F.3d 880,885 (D.C. Cir. 2006)). Likewise, while it is generally 

true that BART was intended to "apply to sources which had been 'grandfathered"' from NSR 

permitting requirements, 70 Fed. Reg. at 39 11 1, it does not follow that BART applies either to 

all "grandfathered" sources (it does not apply, for example, to sources that were in operation 

before 1962) or to sources, like Sundt Unit 4, that were not grandfathered but instead were 

exempt from NSR permitting requirements as a result of a mandatory coal conversion pursuant 

to a Department of Energy Order under Section 301(c) of the Power Plant and Industrial Fuel 

Act of 1978 (which superseded Sections 2(a) and (b) of the Energy Supply and Environmental 

Coordination Act of 1974), see 40 C.F.R 5 52.2l(b)(2)(iii)(b). (Because this order may have 

been the only one of its kind, a broader precedent is not presented by accepting TEP7s argument.) 

For the foregoing reasons, we believe it is clear that Sundt Unit 4 "is not BART-eligible," 40 

C.F.R. Part 5 1 App. Y 5 II.A.2, and thus cannot be subject to BART requirements. While TEP 

requests that EPA reconsider its position on the BART-eligibility of Sundt Unit 4, TEP 

understands that EPA may decide to evaluate BART factors as applied to Unit 4 while 

considering this request. If EPA intends to evaluate these factors for Unit 4, EPA must provide 

adequate time for development of relevant information and exchange of that information among 

EPA, the Arizona Department of Environmental Quality, and TEP, including information 

regarding visibility modeling and cost evaluations of alternative potential BART emission limits 

that might be considered for the unit. 

Unlike other sources in western states that have been evaiuated for BART over the last two or 

more years, Unit 4 has not previously been identified as potentially subject to BART 

requirements. Thus, in contrast to other cases where potential BART emission limit 

determinations have been developed following extensive study and consultation, such study and 

consultation have not occurred with respect to Sundt Unit 4. Accordingly, unless EPA 

determines very soon (as it should) that Unit 4 is not BART-eligible -- or that, even if it is, it is 

not subject to BART -- TEP and the State of Arizona should be given an opportunity to provide 

information and input to EPA, and to react to EPA's information, views, and conclusions, on 

these matters. 
HUNTON 

WILLIAMS 

Ms. Colleen McKaughan 

April 18,2012 

Page 3 

Finally, TEP does not believe the provision of the pending proposed district court consent decree 

that would require proposed EPA action on regional haze implementation plan requirements for 

Arizona by May 15, 2012, and final EPA action by November 15,2012, should be adopted. If, 

however, the decree is adopted and those dates are not significantly extended, then the decree 

should be revised to exclude Sundt Unit 4 from that provision's coverage, with later dates 

established for Unit 4 that would allow for resolution of the BART-eligibility issue (and the 

"subject to BART" issue) for Unit 4 and development of necessary BART-related information 

with respect to the unit. 

We would be happy to discuss these matters with you further at your convenience. 

Sincerely, 

EPA Region IX 

, Arizona Department of Environmental Quality 

Marc ~erden, Esquire, TEP 

Erik Bakken, TEP 

Jeffrey G. Yockey, P.E., TEP