1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION III 1650 Arch Street Philadelphia, Pennsylvania 19103 DATE: May

25, 2010 SUBJECT: Te chnical Support Document (TSD)

EPA - R03 - OAR - 2010 - 0386 ; Notice of Proposed Rulemaking

– Revision to Emission L i mitations for R. Paul Smith Power Station FROM: Marily

n Powers, Environmental Engineer /s/ Office of Air Program Planning TO: File THRU: Cristina Fernandez, /s/

Associate Director, Office of Air Program Planning A. BACKGROUND On September 4, 2008 (73 FR 51599), EPA approved COMAR regulation 26.11.27

– Emission L imitations for Power Plants into Maryland’s State Implementation Plan (SIP). This regulation , adopted to implement the statutory requirements of Maryland’s Healthy Air Act 1 (HAA), esta

blished emission limits for annual nitrogen oxides (NOx), ozone season NOx, and annual sulfur dioxides ( SO 2 ) for the 15 largest electric generating units (EGU) in the State located at seven power plants , includ ing units 3 and 4 at R. Paul Smith Power Stati on in Washington County , Maryland . Maryland ’s HAA has an exception that allow s R. Paul Smith units 3 and 4 to operate without complying with the emission reduction requirements set forth in the HAA if PJM Interconnection Inc. (PJM) determines that the ter mination of operation of the facility will adversely affect the reliability

of electrical service in the PJM region. Subsequent to Maryland’s adoption of COMAR 26.11.27 and EPA’s approval of the rule into the Maryland SI P, PJM determined that the R. Paul Smith facility is needed to maintain electricity reliability

in the State . The HAA requires that if R. Paul Smith units 3 and 4 are allowed to operate without comply ing with the emissions limitations established in the statute, certain conditions must be met. These conditions require that the facility not operate at emissions levels greater than the highest level measured at the facility

during the calendar years from 2000 through 2004, and that the Maryland
1 Annotated Code of Maryland Environment Title 2 Ambient Air Quality Control Subtitle 10 Health Air Act Sections 2 - 1001 - 2 - 1005.2

Department of the Environment (MDE) must review the operations of the facility , then adopt regulations to establish an alternative emissions requirement for the facility . In accordance with these statutory requirements, MDE revised COMAR 26.11.27 to establish alternate emission limits for these two EGUs at R. Paul Smith. On November 20, 2009 ( 74 FR 60199) , EPA determined that the Martinsburg Hagerstown area had attained the 1997 PM 2.5 standard on the basis of monitored air quality data from the three year period from 2006 through 2008 . B. EPA REQUIREMENTS Section 110(l) of the Clean Air Act (CAA) dictates that the EPA Administrator shall not approve a revision of a plan if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress (RFP) or any other applicable requirement of section 110. Maryland submitted COMAR 26.11.27 to EPA as one of the measures it is relying on to attain the 1997 8 - hour ozone and PM 2.5 NAAQS in nonattainment areas throughout the State. Washington County

is part of the Hagerstown - Martinsburg , M D - WV metropolitan statistica l area, which is in attainment of the 1997 8 - hour ozone standard but was designated as nonattainment for the 1997 PM 2.5 standard. Washington County ’s attainment of the 8 - hour ozone standard is b ased on an Early Action Compact (EAC) , approved on August 17, 2005 (70 FR 48283) , that included an action plan to assure the area continues to attain the standard through 2012. Washington County is also now attaining the PM 2.5 standard, and has submitted a PM 2.5 Attainment Plan for EPA’s approval . For EPA to approve this SIP revision for R. Paul Smith , Maryland is required to demonstrate that the revised emission limits do n ot impact either of these plans or any

other programs under section 110. C. STA TE’S SUBMITTAL: On December 15, 2009, the MDE submitted a revision to the Mary land SI P (Maryland revision #09 - 04) pertaining to the establishment of revised NOx and SO 2 emission limits for the EGUs located at R. Paul Smith . These revised limits are set f orth in Regulations .02 and .03 under COMAR 26.11.27. The submittal includes documentation that the revisions were properly adopted via the State’s administrative procedures, including public notice and opportunity for a public hearing. The only comments submitted were from EPA Region 3. On January 27, 2010, EPA determined that the submittal was administratively and technically

complete. The changes to COMAR 26.11.27 involve the removal of the existing R. Paul Smith caps from the statewide total cap and the addition of new sections that set forth the higher caps, as follows:3

- A new section C was added to Regulation .02

– Applicability and Exemptions, which stipulates that the R. Paul Smith facility is subject to the NOx and SO 2 emis sions in revised sec tions B(8) and C(3) of Regulation .03

– General Requirements.

- Section B(8) changes the NOx annual tonnage limits for R. Paul Smith from 416 tons to 1390 tons starting with the January 1, 2009 through December 31, 2009 control period, and the NOx ozone s eason tonnage limit from 140 tons to 545 tons starting with the 2009 ozone season .

- Section C(3) changes the SO 2 annual tonnage from 1002 tons to 4590 tons starting with the January

1, 2010 through December 31, 2010 control period . Itis noted that CO MAR 26.11.27 also includes revisions to section D of Regulation .03 . Maryland’s December 15, 2009 letter expressly submitted only the NOx and SO 2 limits in sections B and C as a SI P revision. As s ection D has not previously been approved as part of the M aryland SI P , the revisions to Section D are excluded from this action. D . EVALUATION OF STATE SUBMITTAL: As noted previously , Maryland is relying on COMAR 26.11.27 as one of the measures to help it attain the PM 2.5 NAAQS in the Washi ngton County nonattainment area. Section 110(l) requires that the revision not interfere with any applicable requirement pertaining to attainment for this area. Inresponse to an EPA comment regarding the section 110(l) requirements, Mary land submitted a demonstration to show that the increase in caps for NOx ozone season, NOx annual and SO 2 annual emissions at R. Paul Smith do not imp ede Washington County ’s attainment of the 1997 NAAQS . The demonstration is based on air monitoring data, emissions analy sis, and informati on from the attainment modeling that was done by MANE - VU for this area. For 8 - hour ozone, the State maintains that Washington County ’s attainment of the 1997 8 - hour ozone standard is not affected by the emission limit changes for R. Paul Smith contained in this SI P revision . The EAC for 8 - hour ozone showed attainment starting in 2007 , with an Early A ction P lan (EAP) to assure maintenance of the standard through 2012. Because the EAC program pre - dated the adoption of the HAA regulation, the emission limi ts originally required by COMAR 26.11.27 for R. Paul Smith were not reflected in th e emission reductions relied upon for the EAC , and are not relied upon for maintenance through 2012 . A review of the EAC and EAP showed that the projection of maintenance f or the five - ye ar period from 2007

– 2012 does not include the HAA as either a control measure or a contingency measure that is relied upon or this facility .4

Li kewise, for PM 2.5 , Maryland asserts that Washington County ’s attainment of the 1997 PM 2.5 stand ard is not affected by this SI P revision . The State notes that Washington County has been attaining the 1997 annual and 24 - hour standard since 2000 , and has continued to meet the standard through 2008 . As part of its section 110(l) demonstration, Marylan d included d ata from the Washington County

attainment plan 2 which shows annual PM 2.5 design values of 14.8 micrograms per cubic meter (μg/m 3 ) for the 2000

– 2002 period, with design values equal to or less than 14.1 μg/m 3 in the intervening years up to 200 8 . Maryland also provided information from the MANE - VU modeling which shows R. Paul Smith emissions in 2009 as 133 5 tons of NOx and 5426.8 tons of SO 2 . . On this basis, the State asserts that the total NOx and SO 2 emissions projected for 2009 , 6761.8 tons , is actually 11 percent higher than the total NOx and SO 2 emissions that would be allowed for R. Paul Smith by this SI P revision , 5,980 tons. T able 1 shows this comparison. Table 1. Comparison of emission caps to modeled values Plant I D Plant Name 200 9 Projected Emissions Revised Caps

– this SI P revision 043 - 0005 Allegany Energy Supply L LC

– R. Paul Smith NOx SO 2 NOx SO 2

1335 5426.80 1390 4590 A s shown in Table 1, the revised NOx limit for this facility , 1,390 tons , is actually higher than the 2009 model year NOx emission value , 1,335 tons , by 55 tons. However, the SO 2 limit for this facility , 4590 tons , is lower than the 2009 model year emissions , 5426.80 tons , by 836.8 tons . EPA looked to the Washington County PM 2.5 attainment plan submitted by Maryland to evaluate this situation. Inorder to address the contingency measures required to be included in the attainment plan , Maryland evaluated the equivalency of reductions for precursors of PM 2.5 to see if the excess SO 2 reductions were adequat e to offset the insufficient number of NOx reductions. The evaluation of relative impacts of reductions of NOx and SO 2 for this area was based on the modeling that was performed. Section 10.1.2 of the attainment plan explains how the relative reduction f

actor was derived:

“ The recommended approach is to review existing data and sensitivity studies performed as part of photochemical modeling to estimate the relative impact of reductions in different precursors on PM concentrations. Basing an equivalency r atio on relative reduction factors as generated by the Community

Multiscale Air Quality

(CMAQ) modeling results in a ratio of 1.1 to 1.4 tons of NOx for each ton of SO2 . . . . Using sensitivity

analy ses created by

Visibility

Improvement of State and Triba l Association of the Southeast (VI STAS) and Georgia Tech . . . , equivalency ratios range from 3.3 to 3.6 tons of NOx for each ton of SO2 .” A relative reduction factor ranging from 1.1 to 3.6 tons of NOx for each ton of SO 2 is adequate to 2 Washington County, MD PM 2.5 State Implementation Plan and Base Year Inventory, February 29, 2008 .5

of offset the higher NOx value . At the most conservative ratio of 1.1, 55 tons of NOx is equivalent to 50 tons of SO 2 . A further look at the air quality data for Washington County for 2009 is useful to inform this section 110(l) analy sis , particularly as the revised cap s for R. Paul Smith became effective beginning in 2009 . A lthough not yet certified or quality- assured, monitored 2009 ambient air quality concentration data for both 8 - hour ozone and PM 2.5 for the Hagerstown

– Martinsburg , MD - WV area continues to show att ainment of both standards, as can be seen in T able 2 and 3 below . The data shown in these tables is from the EPA Air Quality Sy stem (AQS), and the raw data reports , from which the tabular data is derived, are include d in the docket for this action. T able 2 . 2009 Monitored Values for Annual PM 2.5 , in μg/m 3 Site I D City County State First Quarter 2009 Second Quarter 2009 Third Quarter 2009 Fourth Quarter 2009 240430009 Hagerstown Washington Co MD 10.79 9.62 10.64 7.35 540030003 Martinsburg Berkel e y Co WV 14.02 11.35 12.47 10.38 Table 3 . 2009 Monitored Values for 8 - hour Ozone , in ppb Site I D City County State 4 th highest value in 2009 Highest

value in 2009 240430009 Hagerstown Washington Co MD 65 70 540030003 Martinsburg Berk e l e y Co WV 65 70 Finally , one other fact or to consider is that Maryland’s Clean Air Interstate Rule (CAIR) is in effect throughout the State, and appl ies to units 3 and 4 at the R. Paul Smith facility . Maryland’s CAI R SI P revision was approved on October 30, 2009 (74 FR 56117) . Under th e CAI R program , R. Paul Smith is allocated 191 tons of NOx allowances for the ozone season trading program, 454 tons of NOx allowances for the annual trading program , and 175 allo wances for annual SO 2 . These CAI R ozone season and annual allocations are less than the limits imposed in this SI P revision, however, r egardless of any emission limits established by the State for these units, R. Paul Smith must comply with the NOx and SO 2 allowance holding requirements of CAIR

– i.e. emissions that exceed its allocations would need to be covered on a one - to - one basis by obtain ing additional allowances f rom the CAI R allowance market. This SIP revision therefore does not impact the CAIR trading program.6

F. CONCLUSIONS AND RECOMMENDED AGENCY ACTION EPA’s analy sis of the impacts of this SIP revision concludes that it does not negatively affect the attainment requirements for either the PM 2.5 or 8 - hour ozone standard s . It is recommended that a notice of proposed rulemaking be prepared approv ing the SIP revision .