----- Forwarded by Brian Shrager/RTP/USEPA/US on 02/18/2011 03:06 PM

-----

From: Brian Shrager/RTP/USEPA/US

To: "Higgins, Cortney" <Cortney_Higgins@omb.eop.gov>

Cc: Jim Eddinger/RTP/USEPA/US@EPA, RobertJ Wayland/RTP/USEPA/US

Date: 02/14/2011 03:49 PM

Subject: Responses to OMB 12866 Comments

Cortney,

Attached are EPA responses to the summary of comments document that you

provided on 2/7/2011. I plan to send a redline version of the preamble

and rule tomorrow, but wanted to get this to you first.

Thanks!

Brian

(See attached file: EPA Responses to

Boilers_EO12866InteragencyComments_Feb42011.docx)
Summary of Interagency Working Comments on Draft Language under

EO12866 Interagency Review. Subject to Further Policy Review.

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Major Rule Preamble 

Interim Final Rule

Has EPA considered issuing an interim final rule to address issues for which they 

received comment on but haven’t yet analyzed or considered those comments? Note 

that in an interim final rule, all aspects of the rule would be effectively final, but it would 

allow for comment and possible amendment of the final rule. 

For instance, has EPA considered issuing an interim final rule with a solicitation for 

comments on acute exposure, cumulative effects, and data necessary to calculate a 

facility-by-facility HBEL? If not? 

EPA Response: We do not believe an interim final rule is appropriate in this 

circumstance for several reasons. First, as you know, we are required by court order to 

issue the boilers rules and the CISWI rule by February 21. We are concerned that 

issuance of an interim final rule would be viewed as a circumvention of the court's order 

to meet our obligation under section 112(c)(6) of the Act, and therefore possible 

grounds for a contempt motion from the environmental petitioners. Our obligation is to 

issue a final rule by February 21. Styling our action as "interim" would likely be viewed 

as insufficient to meet the court order. 

Second, an interim final rule is generally used when there is a need to put in place a 

final action when we do not have time to provide notice and an opportunity for public 

comment. For that reason, we include a good cause finding in the interim final rule 

notice explaining our basis for concluding that we have good cause to issue an interim 

final rule without prior notice and opportunity for comment. However, in this case, we 

did provide notice and an opportunity for comment, so an interim final rule is not 

appropriate. 

Finally, there is no need to utilize an interim final rule where we have an alternative 

mechanism that achieves the same result, i.e., granting reconsideration under section 

307(d)(7)(B) of the Clean Air Act. By granting reconsideration, we indicate that we will 

further evaluate the rules -- or certain aspects of the rules -- taking into account 

additional public comments. Also, the D.C. District Court in its recent grant of a 30-day 

extension to issue the final rules recognized our authority under section 307(d) to grant 

reconsideration. We believe the court's explicit reference to this authority makes a 

contempt motion unlikely if we issue final rules and at the same time indicate our intent 

to reconsider those aspects of the rule that lacked sufficient opportunity for public 

comment. 

HBEL

In the 2004 rule [55244] EPA stated, “To identify HAP with potential to cause multimedia 

and/or environmental effects, the EPA has identified HAP with significant potential to 

exist in the environment and to bio-accumulate. This list does not include HCl or 

manganese, which are the only HAP with health based compliance alternatives in the 
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final rule.” EPA went on to state, “Additionally, a screening level analysis conducted by 

the EPA indicates that acute impacts of these HAP from industrial boiler facilities are 

highly unlikely. For these reasons, we do not believe that emissions of HCl or 

manganese from industrial boiler facilities will pose a significant risk to the environment 

and facilities attempting to comply with the health based alternatives for these HAP are 

not required to perform an ecological assessment.” EPA states in the draft final rule 

that its concerns about environmental impacts and the cumulative impacts of acid gases 

“were not assuaged by the comments received.” Could EPA please describe in the 

preamble what has changed since 2004 that led to its reevaluation of environmental 

impacts and impacts of acute exposure to acid gases? Could EPA also explain in more 

detail why the information provided in the comments falls short? 

EPA Response: Numerous research studies over the last several decades have shown 

that atmospheric levels of various acids have contributed to current levels of 

environmental damage in any number of sensitive environments across the US. More 

recently, researchers in Europe have demonstrated that HCl emissions have been 

responsible for more environmental acidification than previously thought. Since various 

acid gases (including HCl, HF, CL 2 , and HCN) are emitted by boilers and since boilers 

are widely distributed across the US, it is clear that they may have contributed to this 

damage (although the extent to which is unknown), and that any efforts to reduce these 

emissions have the potential to reverse these acidification impacts on currently impaired 

environments. Also, industrial boilers are often located in areas with other sources of 

acid gases, and we believe it is appropriate to consider the cumulative health and 

environmental impacts of boiler emissions combined with emissions from other sources. 

Given this information, EPA now believes that efforts to reduce all acid gas and acid gas 

precursor emissions may ultimately be valuable toward reversing current acidified 

ecosystems. While additional information that might assist us in quantifying these 

impacts would be helpful toward informing us on the extent of boiler acid gas 

contributions to these problem areas, no additional information was received. As a 

result, our uncertainties lead us to lean protectively toward more acid gas control rather 

than less, leaving us less inclined to use our discretion to set less stringent limits on 

acid gas emissions from boilers. 

Does section 112(d) specify that emissions levels must be set or emissions standards? 

Are standards equivalent to levels? Can a standard consist of a methodology that 

applies equally to all facilities that results in exposure less than a given health 

threshold? 

EPA Response: Section 112 specifies that emission standards be established for 

categories or subcategories of sources. Recent court rulings have made it clear that a 

emissions standards must be established for each HAP emitted and that these limits 

must either specify numerical emission limits (e.g., pounds HAP emitted per hour, 

pounds HAP emitted per product produced, pounds HAP emitted per unit energy 

produced, etc.) or work practice standards (e.g., scheduled leak testing and 

maintenance, periodic cleaning of waste piles to reduce fugitive dust emissions, etc.), 
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and that these must apply to all sources in the category or subcategory. Emission 

standards are not equivalent to ambient concentration levels, which, in addition to levels 

of HAP emitted, are a complex function of stack heights, stack diameters, stack 

temperatures, and local meteorological temperature and wind flow patterns. While a 

standard could theoretically consist of a methodology such as the one suggested, we do 

not have enough emissions data on acid gases to calculate such a standard. Even if 

we had sufficient information, the implementation and enforcement of such a standard 

would require a prohibitive amount of manpower at the state and local level. Moreover, 

EPA does not believe that a plain reading of section 112 supports the establishment of 

an emission standard based on this theoretical approach, since it is tantamount to 

developing a different emission standard for each facility in the category. Section 112 

requires establishment of emissions standards "for each category or subcategory" of 

sources, and our only authority to distinguish among sources in a category is to 

subcategorize based on class, type, or size distinctions. We do not have the authority 

to distinguish among individual sources beyond the subcategorization authority. 

Also, according to the statistical data provided, there is a wide variation in exposures 

that would result from similar emissions levels of different facilities because of different 

physical configurations. It therefore seems possible that an HBEL set on a nationwide 

basis would only be useful to a small sample of facilities with the most advantageous 

physical configuration. Section 112(d)(3) is very specific about the methodology to be 

used to set emissions limits generally. What is the methodology (including statistical 

methodology) specified in 112(d)(4) for establishing an HBEL on a nationwide basis? 

EPA Response: Section 112(d)(4) does not specify a methodology to establish an 

HBEL. Rather, it refers to section 112(d) generally, and says we may consider an 

established health threshold when setting emissions standards under section 112(d). 

We believe a reasonable approach to consider an established health threshold, if we 

choose to do so, would be to simulate the ambient impacts of each source in the 

category using computer models fed with site-specific information on emissions, stack 

parameters, and meteorology, and to determine the nationally-applicable emission limit 

which keeps all source impacts below a specified concentration threshold which is 

developed considering co-emitted pollutants (e.g., all emitted acid gases) along with any 

factors which might be needed to ensure that public health is protected with an ample 

margin of safety. In this case, since we did not receive additional information on coemitted acid gas emission rates, we could not confidently apply this methodology to 

develop a credible HBEL which would protect public health from all acid gases from all 

covered sources. 

In its proposal, EPA indicated interest in receiving data to develop a “model plant” for 

each of the subcategories, to enable dispersion modeling. Wouldn’t this approach 

ultimately require site-specific testing and an eligibility determination based on actual 

emissions data from a given plant? 
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EPA Response: EPA was interested in receiving data toward model plant development 

as a means of determining whether a nationwide HBEL for acid gases from boilers 

might be significantly different from a MACT standard for them. While site-specific data 

on all facilities would be ideal for this determination, EPA is aware that the size of this 

source category makes it unlikely that such a database could be gathered between the 

proposal and the final rule. As such, we pared down the data request to be more 

manageable.

Has EPA consider an HBEL for manganese, or the use of a Total Select Metals 

approach for manganese? If not, why? 

EPA Response: EPA considered but did not include an option for an HBEL for 

manganese in the June 2010 proposal or the final rule. Based on ambient monitoring 

efforts over the last several years (including a Detroit study and ambient monitoring at 

various schools across the country), EPA is aware of a number of areas nationwide 

where ambient concentrations of manganese currently exceed the chronic reference 

concentration (RfC) for manganese, and, in order to protect public health with an ample 

margin of safety, EPA does not wish to relax controls on manganese in these areas. As 

a result, this national standard has been calculated using the MACT approach. 

Cost Estimates

The adjustment of subcategories and the new emissions limits based on data received 

has lowered EPA’s projected total capital costs by $4.4 billion, a reduction of almost 50 

percent. Regarding industry’s claim that the capital costs of the proposed rule would 

have been closer to $20 billion, to what extent has EPA modified its cost estimates to 

reflect industry’s comments? 

EPA Response: The $20 billion estimate provided by industry stakeholders at proposal 

assumes that most affected sources with coal, biomass, liquid, and Gas 2 boilers would 

install every type of emissions control available for units that did not meet the floor 

number(s). EPA has made several modifications to its cost analysis to incorporate 

suggestions from the affected industry. We have incorporated industry suggestions to 

consider other scrubber technologies at facilities that lack wastewater discharge 

permits. The final analysis considers dry injection/fabric filter combined technology in 

these cases. We have also adjusted our assumptions to increase the number of units 

expected to install CO catalyst to meet the CO limits, consistent with industry 

comments that many units will require more than a tune-up or combustion controls 

installed in order to meet these limits. We have made several revisions to the 

regulatory provisions and dataset used to generate the cost impacts in the final rule. 

 

 

The major regulatory provisions resulting in a reduction in the cost estimates were: 

• Consolidating the biomass and coal subcategories into a single solid fuel 

subcategory for fuel-based HAP and HAP surrogates (Hg, HCl, PM). This 
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provision has reduced the number of biomass units expected to require HCl 

control in order to meet the emission limits. 

• Creating a hybrid grate/suspension category for combustion based HAP and 

HAP surrogates to address boilers with unique design features to handle the 

combustion of fuels with a very high moisture content. This increased the CO 

emission level for this subcategory, which resulted in fewer units needing CO 

catalyst or advanced combustion controls in order to meet the limit. 

• Creating a limited use subcategory. This subcategory removes the control, 

testing and monitoring costs for 134 large boilers firing solid and liquid fuels that 

operate less than 876 hours per year. 

• Creating a fuel gas specification to allow additional gaseous fuels to qualify for 

the gas 1 subcategory. Based on the data in the record, most fuels are expected 

to meet the mercury specification and will qualify for a work practice standard 

instead of meeting emission limits. The number of gas 2 units estimated to meet 

emission limits has been reduced to an estimated 71 units in the final rule, 

compared with an estimated 199 gas 2 units in the proposed analysis. This is 

likely an overestimate because we also have exempted units that are part of the 

affected source of another MACT or are used to comply with another MACT 

(provided that 50% or more of the heat input comes from a MACT regulated gas 

stream). 

• Removing the CO CEMS monitoring requirement for units with a heat input 

capacity greater than 100 mmBtu/hr, although this change in monitoring is offset 

in part by O2 parameter monitoring requirement. 

• Removing duplicative monitoring requirements for PM CEMS, opacity monitoring 

and bag leak detection monitors. The proposal had included requirements to 

measure more than one of these parameters and this duplication has been 

removed from the final rule. 

• Reducing testing frequency for dioxin/furan emissions. The final rule requires a 

one-time initial test instead of annual testing. 

The major data analysis elements resulting in a reduction in cost were: 

• As discussed in detail in the “Handling and Processing of Corrections and New 

Data in the EPA ICR Databases (Gibson, 2011)” memorandum, several new data 

submissions and corrections to existing entries were received from the public 
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comment process. These new data were incorporated into the revised MACT 

floor, baseline emission, and emission reduction analysis. 

• The criteria for considering data in the MACT floor analysis were revised to 

reduce the low bias impact from tests conducted during co-firing configurations. 

In the final rule, the test had to be fired with at least 90 percent of its heat input 

belonging to the same subcategory for existing sources and 100 percent of its 

heat input belonging to the same subcategory for new sources. At proposal, data 

were considered relevant for consideration in the MACT floor analysis if at least 

10 percent of its heat input belonged to the same subcategory. This modified the 

make-up of the top performing units and the resulting emission limits. 

• The CO emission data analysis was revised to incorporate measurement error 

resulting from calibration error, system bias, and drift requirements using the 

reported instrument calibration span as the basis for estimating the error. This 

increased CO emission levels in several cases. 

• Several elements of the MACT floor analysis statistical approach were changed 

after consideration of public comment, which resulted in increased emission 

limits in some cases. The memorandum “Revised MACT Floor Analysis (2011) 

for the Industrial, Commercial, and Institutional Boilers and Process Heaters 

National Emission Standards for Hazardous Air Pollutants – Major Source” 

details the specific statistical modifications that were made in the final analysis. 

We also note that there is no estimate of the cost savings that would result from the 

HBEL alternative in the Regulatory Impact Analysis. Absent this information, a facilityby-facility HBEL, as proposed by industry, may still result in significant cost savings. 

Consistent with Executive Order 13563, could EPA quantify the anticipated costs of the 

draft final boiler MACT with and without an HBEL alternative? Regardless of the 

marginal impact (both costs and benefits) of the HBEL relative to the draft final rule’s 

chosen alternative, this supplemental analysis may provide useful information during the 

reconsideration phase of this final rule EPA has committed to. 

EPA Response: We cannot cost a facility-by-facility HBEL because we do not have the 

data to derive such facility-by-facility limits, let alone cost out the implementation of a 

program to support their implementation and enforcement. Additionally, as explained 

above, we do not believe a facility-by-facility HBEL would be consistent with section 

112(d), and we do not believe it is necessary to develop a cost analysis for an option 

that does not comport with the language of the Act. 

Emissions Limits
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Is EPA sure that the CO and NOx limits can be met simultaneously given that NOx 

increases when CO decreases and vice versa? If so, please describe in more detail the 

reasoning behind this conclusion. 

EPA Response: EPA does not have specific information on the NOx limits and NOx 

emissions for most of the units that will be subject to the standard. However, the CO 

limits have been revised and compliance is based on a full load test, while periods of 

startup and shutdown are subject to a work practice standard. To the extent that units 

cannot meet the CO floor and maintain NOx at the required level, oxidation catalysts 

can be used to reduce CO without an increase in NOx. EPA has included costs for 

these controls for many units in the cost analysis, although data on NOx requirements 

were not sufficient to allow NOx to be part of the analyses. 

Energy Audits

Will federal agencies have an opportunity to comment on the energy audit provisions 

again when the Notice or Reconsideration is published? There is concern that requiring 

Federal facilities to comply with the energy audit provision of the rule is duplicative and 

unnecessary since Federal facilities are already subject to energy reductions goals 

under E.O. 13514 and "Comprehensive Energy and Water Evaluations" under the 

Energy Independence and Security Act for which DoE has developed detailed guidance 

and criteria. Similarly, has EPA considered clarifying that the energy audits required by 

EISA and E.O. 13514 would be sufficient for compliance with this provision? 

EPA Response: EPA has included language that audits that have been conducted in 

the last three years can qualify as satisfying the energy assessment requirement if they 

meet the final energy assessment requirements. 

Tune-Ups

Several reviewers suggested that the documents provided to the interagency group do 

not provide support for EPA’s assertion that a 1% efficiency results from a tune-up – 

can EPA provide more information to support the 1% efficiency assumption included in 

the benefits estimates: 

The first document asserts a 1 to 5% efficiency gain in the executive summary, but does 

not provide a basis for the statement. The detailed tables present a confusing picture, 

since the time since last tune-up would have a significant impact on the projected fuel 

savings and costs. Nor is every boiler recommended for tune-up. The cost savings for 

annual tune-ups aren’t presented here. 

The second document was produced by “The Sustainable Energy Authority of Ireland,” 

but it isn’t sourced either. The graph is presented without additional information to 

support it. Also problematic is that the document is specifically about home boilers (i.e., 

very small and not subject to this rule) and is limited to home heating fuel sources (i.e., 

not coal or biofuels). 
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EPA Response: EPA has provided several additional references that support a 1 

percent efficiency gain as a conservative assumption. 

RIA 

Challenges in Monetization of the Benefits of Reductions in HAPs

We applaud EPA for including detailed modeling of the Major Source Boilers MACT 

rule’s estimated reductions in mercury dispositions, which is a great initial step towards 

quantifying benefits for mercury reductions. We also applaud EPA’s more detailed 

modeling, at the boiler-sector-level, of the Major Source Boilers MACT rule’s estimated 

benefits. However, the preamble and RIA would benefit from a fuller discussion 

regarding the difficulties preventing monetization of reductions in HAPs, discussion of 

the qualitative benefits of reducing HAPs, and why quantified benefits are reductions in 

PM and ozone. At a minimum, we think EPA’s discussion on this topic can be improved 

by addressing the tone of the preamble and RIA language. 

For example, we suggest that this issue be acknowledged explicitly in the introduction, 

the executive summary, etc. A footnote to Table 1-1 isn’t sufficient. The fact that this 

RIA fails to monetize the objective of the regulation is not noted explicitly until the 

bottom of page 7-1. 

EPA Response: We have included a summary of the challenges of quantifying HAP 

benefits in the benefits section of the preamble and a full discussion in section 7.5.5 of 

the revised RIA. A qualitative assessment of the HAP benefits are included in section 

7.5.5 of the RIA. 

Presentation of Direct Benefits

Suggest putting the HAP benefits discussion that begins on page 7-36 up front more 

prominently, since this is the reason the Clean Air Act requires regulations of these 

sources, and this should therefore not be omitted. 

EPA Response: We have added more HAP benefits information to the beginning of the 

benefits section preamble, the executive summary of the RIA, and the beginning of the 

benefits chapter of the RIA. A qualitative assessment of the HAP benefits are included 

in section 7.5.5 of the RIA. 

Interaction between this rule and others

Can EPA include a discussion of the interaction between this rule and others that 

regulate PM? If PM is abated from boilers, does that mean more PM can be emitted 

from other sources? If PM has already been abated from other sources, and as a cobenefit from other rules, does that mean the EPA’s standard valuation of PM reductions 

is becoming overstated? Has EPA made any adjustments to this analysis to account for 

potential double-counting of impacts (both costs and benefits); for example, by 
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considering whether some boilers in PM-nonattainment areas may already be obliged to 

control PM or precursors? 

EPA Response: We have added this discussion to section 7.2 of the RIA. 

Discussion of EPA’s Analysis on the Employment Impacts of the Rules

The RIA would benefit greatly from clarified exposition of the methodology used for 

employment impacts. 

In particular, EPA should be clear that they are not using the multimarket, partial 

equilibrium model to estimate employment effects. They are only using parameters from 

Table III of the Morgenstern et al paper (for now. On the call they mentioned potentially 

quantifying the impacts for the two other employment effects they listed, but are not 

addressed by Morgenstern et al). I’ve made some suggestions in the redline text. 

The employment effects, for the Major Source rule, should match in the preamble and 

the RIA. Currently, they differ. 

Employment impacts are reported as ranges, and are estimated using parameters from 

an academic paper in the literature (Morgenstern, Pizer, and Shih (2002)). The paper, 

examining data from four industries, concludes that increased pollution abatement 

expenditures generally do not cause a significant change in employment, and is so 

described in both the preamble and RIA. It is helpful that EPA includes a detailed 

discussion of the potential issues associated with using the paper and its limitations, 

while also describing its appropriateness for use in this context. 

The paper divides labor effects into three parts: a demand effect, a cost effect, and a 

factor-shift effect (changes in labor-intensity). The demand effect is negative, cost effect 

is positive, but the factor-shift effect could be either negative or positive, depending 

upon the relative labor-intensity of post-regulation production technologies. For 

transparency and methodological clarity, it would be helpful to describe the calculations 

for all three effects, in the RIA. Currently only the demand effect has a description. 

In addition, because the final rule includes requirements for work practice standards 

(“tune-ups”) that were not in the proposal, it would be helpful to include discussion of 

how this change has impacted the employment estimates (if work practice standards 

are labor-intensive, presumably through the factor-shift effect), separately by the Area 

Source Boilers MACT rule (where all sources are subject to work practice standards) 

versus the Major Source Boilers MACT rule (where some sources face work practice 

standards). 
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It appears that EPA assumes employment changes are proportional to output changes; 

if this is not the case, EPA should clarify that in the text. If it is the case, then the text 

describing the multi-market model in Appendix 2 is inconsistent with the employment 

effect assumption. Specifically, the following statements are problematic: 

 Model time horizon (“short-run”) 

– fixed production resources (e.g., capital) leads to an upward-sloping 

industry supply function 

– firms cannot alter input mixes; there is no substitution among production 

inputs (capital, labor, energy intermediates, and other intermediates) 

– price of labor (i.e., wage) is fixed 

Ignoring intermediate inputs (which you can because the intermediate technology is 

assumed Leontief), if capital and wages are fixed, output can change only by changing 

labor hours of employment. However, any given percent change in employment with 

capital fixed will lead to a smaller percent change in output (depending on the 

capital/labor ratio of the industry), which is inconsistent with the assumption that 

employment changes are proportional to output. 

We do not recommend changing the above text, since (except for the Leontief 

intermediate assumption) it describes standard assumptions for partial equilibrium 

models. One option is to redraft the text describing the “medium run” employment 

assumptions more carefully. Or, you could provide “short-run” and “medium-run” 

employment change estimates. The next paragraph describes how you could calculate 

“short run” employment effects consistent with the multi-market model assumptions 

(essentially, assuming capital and wages are fixed). The “medium-run” employment 

changes you’ve already calculated are an approximation of the employment effect after 

the capital stock has had a few years to adjust. 

Given the employment data and some compensation data from BLS, it should be 

possible to estimate the implied wage bill for each of the 100 sectors. Using the share 

of the wage bill in total output, and assuming fixed wages (and ignoring intermediate 

inputs), it would therefore be possible to calculate the percent change in employment 

required for a given percent change in output. 

The change in jobs range for the major boiler rule ranges between -3000 to 6000; the 

estimated change in jobs range for the area boiler rule ranges between -1000 to 2000. 

Would EPA articulate the job changes associated with compliance costs? Would EPA 

articulate the job changes associated with production decrease? 
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Also, are the job effects analyzed outside the multimarket analysis? The multimarket 

analysis lists the following assumptions: (1) firms cannot alter input mixes (4-2), and (2) 

price of labor is fixed (4-2). Please explain whether the job effects results are consistent 

with the multimarket analysis results, and why. 

Chapter 4 states that the “analysis’ time horizon is the intermediate run” (4-1). But the 

analysis goes on to state that “multimarket models focus on ‘short run’ time horizons.” 

Please discuss how the multimarket models were adjusted to analyze intermediate time 

horizon effects. 

EPA Response: These issues will be responded to in the revised RIA. 

Cost Estimate Methodology

Please provide undiscounted stream of costs estimated to occur with the rules. Over 

how many years are the capital costs spread over? 

EPA Response: EPA provided the total capital investments to OMB already, and the 

information is summarized in the cost impacts memo. The appendices of the “Revised 

Methodology for Estimating Control Costs for Industrial, Commercial, Institutional 

Boilers and Process Heaters National Emission Standards for Hazardous Air Pollutants 

– Major Source” detail the lifetimes assumed for each type of capital investment, which 

vary depending on the type of equipment. 

Energy Audit Benefits

The assessments are presented as a top-line cost in RIA sec 3, but it’s not clear in the 

RIA of the reasoning for adopting it in addition to the tune-up. 

EPA Response: The reasoning for adopting the energy audit is provided in the final 

preamble. 

Impacts of Rules on Small Entities

One reviewer stated that it does not appear that EPA has demonstrated compliance 

with the RFA, raising serious concerns about the rules as a whole. 

For the major source rule, EPA provides a brief statement referencing the Initial 

Regulatory Flexibility Analysis (IRFA) from the proposed rule and a conclusory 

statement about the impacts on small entities. (See VIII.F of the preamble.) 

• The requirements for a Final Regulatory Flexibility Analysis (FRFA) differ from 

those for an IRFA, so a simple cross-reference is not sufficient. 
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o EPA must respond to public comments on the IRFA, and specifically respond to 

comments from Chief Counsel for Advocacy. 

o Analysis prepared for the IRFA and the justifications for alternatives selected 

were based on the regulatory alternatives prepared for the proposed rule. New 

alternatives under consideration require a new discussion for the FRFA. 

• EPA has not provided an estimate of the number of small entities affected by this 

rule or explained why such an estimate is not available. 

• According to RIA Table 5-2, more small entities reach the 3% threshold under the 

final rule than the proposed rule, which contradicts the statement in the preamble. 

• EPA should direct the reader to its description of steps the agency has taken to 

minimize the significant economic impact on small entities. 

EPA Response: EPA has included a FRFA in the revised RIA and a complete FRFA 

discussion in the RFA section of the final preamble, including response to SBA 

comments, numbers of small entities affected, a correction to a typo regarding the 

number of units meeting the 3% threshold (the number has decreased from proposal), 

and a discussion of the various changes that were made that will reduce impacts. 

For the area source rule, EPA says in the preamble that it is certifying but the RIA says 

EPA cannot certify. It seems that EPA does not have a sufficient factual basis upon 

which to certify. EPA should prepare a FRFA that addresses the statutory points, 

including response to comments. The statutory points are summarized as follows: 

• EPA needs to provide an explanation of its assumptions about compliance costs 

and revenues. 

• EPA needs to estimate the number of small entities affected. 

• Average revenues are highly misleading, and that any significant variation in 

revenue or compliance cost would lead to significant economic effects. 

• Even small changes in revenue for non-profits and public institutions have 

significantly greater impact that they might for private institutions. 

EPA Response: The RFA section of the preamble has been revised to reflect the 

revised RIA and the recently prepared FRFA. 

Memo titled “Revised Methodology for Estimating Cost and Emissions Impacts 

for Industrial, Commercial, Institutional Boilers and Process Heaters National 

Emission Standards for Hazardous Air Pollutants – Major Source 

Work Practice Costs 

We suggest EPA provide a source for its tune-up costs. The wide range of boiler sizes 

and fuels makes a single number hard to justify without more explicit support. 

On page 7, we suggest EPA should restate their annualization assumptions here as 

they do in the next bullet. 
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If the cost of tune-up is related to the amount of time since the last tune-up (as would 

seem to be the case with the very large one-time cost), using the annual cost once 

every two years in lieu of the biennial cost understates the cost of the requirement. It is 

not clear from the write-up what was done; we suggest EPA clarify this. 

This document says energy audits are an annual requirement. This seems to contradict 

the rule. 

EPA should provide sources for its estimates of energy audit costs. (Footnote 2 is a 

self-reference; Is it supposed to be a reference to something else?) 

Fuel Savings Impacts (page 10)

EPA cites DOE estimate of 10 to 15 percent efficiency gains (please include 

references), but it isn’t clear to what extent these gains are incorporated into the 

analysis. This leaves the impression that benefits are being left on the table when, in 

fact, each process improvement must pass a C/B test and the costs of the energy audit 

are sunk. If EPA does not use the results of the energy audit to make assumptions 

about these calculations, they should be discussed elsewhere. If EPA does make use 

of the energy audits to make assumptions about cost savings, then the costs of the 

improvements needs to be incorporated into the cost estimates. 

The Sustainable Energy Authority of Ireland’s chart has no source, but, if reliable, the 

information presented should be applied only to home boilers using residential fuels, 

which are outside the scope of this rule. 

The statement about 1 to 5 percent efficiency is also unsupported. The document 

provided separate by EPA that makes this claim does not provide support for its 

assertion. I also note that this supporting document is focused on natural gas, oil, and 

propane boilers. It does not appear that the authors were addressing biofuels or coalfueled boilers. 

Secondary impacts analysis (page 18)

The second paragraph of this section also cites the assumption of a 1% energy 

efficiency gain. 

Section 5.5 again cites the 10 to 15 percent gains. EPA should avoid mention of these 

gains in this context because they are not including the cost of implementing the energy 

audit recommendation in their cost calculations. 

EPA Response: As mentioned earlier, EPA has provided additional supporting 

documentation to OMB and will reference these materials as appropriate in the 

supporting memoranda. We are making the suggested edits in the text of the Impacts 

memo and are updating the references with additional support for the tune-up costs and 

related efficiency gains/fuel savings. We will make it clear that our analyses do not 

count emission reductions from the energy assessment.