P.1 

OAR Box 1802 

Prepped by Charmelle Mathews 

Document Number: 

59) IV-E-54 

Docket Number: 

A-90-37 

Printed 11/4/200811:57:59 AM Sheet 59 of 117 
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A-**k.-5TMEETING SUMMARY 

EPA/UTILITY INDUSTRY MEETING 

NEW SOURCE REVIEW REFORM 

June 11, 1999 

The meeting was held at the offices of EPA, N.C. Mutual Building, 411 W. Chapel Hill 

Street, Durham, North Carolina. The meeting began at approximately 1:00 pm and closed at 

approximately 2:30 pm. Attached is a list of attendees. 

John Seitz opened the meeting by welcoming the participants. Mr. Seitz said that EPA 

acknowledged the work that the utility industry had done in preparing their NSR reform 

proposal, and that the purpose of today's meeting was for EPA to obtain clarifications on that 

proposal. Mr. Seitz mentioned that EPA had also received some other proposals for NSR reform 

and that EPA was considering all of them. Mr. Seitz also said that today's meeting would likely 

be the last meeting with the industry within the EPA's NSR reform process, and that Bob 

Perciasepe will now decide where the NSR reform "goes from here." Mr. Seitz indicated that 

EPA would not be able to make any decisions at today's meeting and that EPA will "get back" to 

the meeting participants by the end of June or early July regarding any decisions made relative to 

the utility industry's proposal. 

Henry Nickel responded to Mr. Seitz's opening remarks by saying that the utility industry 

has viewed this as a positive process. They have looked at what is at stake here, i.e., maintaining 

the existing facilities as safe, reliable, efficient and cost-effective. They realized that until 

December (1998) the direction was confrontational. Mr. Nickel also said that the utility industry 

acknowledged the frustration among the environmental groups and the State agencies, and 

understood that the feeling is that the existing facilities should be required to reduce emissions to 

NSR levels. Mr. Nickel said that at the December meeting we (the meeting participants) stepped 

away from discussions about actual-to-potential versus actual-to-actual versus 

potential-to-potential and looked at the bigger picture of how to reduce emissions. The (utility 

industry) proposal addresses both the concerns, i.e., continue to operate the existing facilities in a 

safe and reliable manner while allowing emission reductions to take place. The proposal allows 

the existing sources to lose the grandfather status over time. At the FebTruary meeting we (the 

utility industry) had specific ideas, i.e., a start date, desired reduction levels, end date etc. 

Mr. Nickel also indicated that they (the utility industry) received a positive response at the 

February meeting and also at subsequent meetings with State agencies, and that some changes 

were made to the proposal after those meetings. Mr. Seitz said that he was aware that the utility 

, industry had met with STAPPA/ALAPCO and asked whether they had met with the 

environmental community. Mr. Nickel replied that the utility industry had not, but indicated that 

they had sent a letter to Dave Hawkins who was aware of the utility industry's proposal and that 

the utility industry was trying to arrange a meeting with Mr. Hawkins. 

... . ) 

EPA AIR DOCKET 
_PJ_ 

John McManus presented and discussed two overhead graphical charts showing actual 

and projected emissions of S02 and NOx from coal-fired units over the 30-year period from 1990 

through 2020. (The charts are attached to this meeting summary). Mr. Seitz confirmed that the 

chart showed that the projected emission rate for NOx after signing up in 2010 was 0.4 

lb/MMBtu and indicated that STAPPA/ALAPCO was looking at a somewhat tighter limit. 

Mr. Nickel acknowledged that the utility industry's projection did not meet 

STAPPA/ALAPCO's expectation for reductions. David Solomon asked what control 

technology(ies) would account for the projected S02 emission reductions from 2010 through 

2020. Mr. McManus replied that most of the reductions would be achieved through the use of 

cleaner fuels (river-basin coal (??) and natural gas) and from banked emission allowances. When 

asked by Mr. Solomon whether the AEO (annual energy output) numbers were actuals or capped 

levels, Mr. McManus replied that the solid line shown on the chart reflected the actual levels. 

Mr. Solomon asked what projects were expected to achieve reductions in the NOx emission rate 

in the last 10 years (2010-2020). Mr. McManus replied that there were none, but possibly the 

use of low NOx burners or equivalent could be expected. When asked by Mr. Solomon why the 

chart showed an increase in total NOx emissions between 2010 and 2020, Mr. McManus 

explained that it was due to both some expected new (non-coal) capacity and an increase in the 

utilization of existing capacity. 

Richard Chastain presented and discussed an overhead chart showing the age structure of 

U.S. fossil-fired units (see attached). Mr. Chastain explained that the older units, although more 

in number, accounted for a relatively smaller percentage of total capacity. Mr. Chastain also 

explained that the newer units were cleaner, and that post-1975 units were subject to new source 

standards. He further explained that the newer larger units will also be subject to Title IV, NOx 

SIP call etc., and will be likely candidates for scrubbing; hence, these units were cleaner now and 

will be cleaner in the future. Mr. Solomon questioned whether the chart showed all utility units 

or just coal-fired units. Mr. Chastain indicated that there was a separate chart for just the 

coal-fired units which looked very similar to the overhead chart. (The chart for coal-fired units 

only was also provided to Mr. Solomon at the end of the meeting - see attached). 

Bill Brownell introduced the utility industry's proposal. Mr. Brownell said that the 

proposal consisted of two parts; the first part dealt with the simplification of the NSR 

requirements, and the second part was the existing source control program. The proposed 

components of the first part, NSR simplification, included the following: (1) NSR should apply 

to all new and modified units, (2) the emissions test for applicability should be similar to the 

NSPS test, (3) no "netting out" from emissions control requirement, and (4) no triggering of NSR 

based on emissions of CO (carbon monoxide). When asked by Mr. Solomon as to how many 

new units could be expected in reality, Mr. Brownell indicated that, looking into the future, there 

will be some new turbines. When asked to clarify about CO, Mr. Brownell explained that CO 

should have a separate NSR program, and that CO emissions should not be used to qualify a 

source for major source status for other pollutants under NSR. Regarding the emissions test for 

applicability (NSPS-type test), Mr. Solomon confirmed that an increase in hourly emissions 

would trigger review, and that the baseline would be the achievable hourly emission rate. 
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Mr. Brownell concurred with Mr. Solomon. For the second part of the proposal, Mr. Brownell 

said that there were two options proposed for reducing emissions from the existing sources: an 

"age based" option, and a "glide path" option. 

Mr. McManus presented the "age based" option. The option consisted of the following: 

the start date was year 2010, the trigger age for the units was 55 years (based on EPA studies that 

indicated a 55-65 year range of useful life), and the end date was 2030 when all units regardless 

of age would be covered under this option. Once triggered, the unit would either be controlled or 

shut down, or equivalent emissions would be reduced at other unit(s), such as a younger unit. 

When asked by Mr. Solomon about how emissions trading will work considering that some old 

units may not be able to meet a 0.15 lb/MMBtu NOx emission level, Mr. Brownell said that they 

will discuss details with EPA "if we go ahead with the proposal." Mr. McManus further said that 

the target emission levels were 0.6 lb/MMBtu for S02 (surrogate for NSPS) and 0.15 lb/MMBtu 

for NOx (current NSPS). Bruce Buckheit indicated that if a unit was not of much use after age 

55, and if the utility industry was proposing to shut it down at age 55, then the industry was not 

promising much. Mr. Nickel and Mr. McManus clarified that the units are still useful beyond 

age 55, maybe up to 75 or 80 years, and that they were only proposing to install controls at age 

55 for the rest of the unit's life. Mr. Seitz suggested that the industry should also talk to 

Mr. Hawkins about the 55-year age trigger. When asked by Mr. Solomon whether the age of 55 

would be measured from operation date or the date when construction is commenced, Mr. Nickel 

said that it would be measured from the operation date. Mr. McManus presented an overhead 

chart that showed the entry pattern of the fossil-fired units over the proposed 20-year period (see 

attached). Mr. Seitz confirmed that the chart showed that about 50% of the capacity would 

"come into" the program in 2030 at an age of less than 55 years. 

Jerry Golden presented the "glide path" option. The option consisted of the following: 

the start date was year 2010, all units would be covered at start, the initial emission limit would 

be set at the allowable levels, thefinal emission limit would be the same as the target emission 

levels under the "age based" option above (0.6 lb/MMBtu S02 and 0.15 lb/MMBtu NOx), and 

linear reduction of emissions through the end date of year 2030. When asked by Mr. Solomon 

whether the initial limit would be set at allowable or actual levels, Mr. Golden explained that the 

permit limits of the units, after accounting for reductions from other programs such as Title IV, 

would be used to set the initial limit, i.e., the industry is proposing to use a realistic allowable. 

Bill Harnett said that if the industry was proposing to use allowable levels as the initial limit, and 

if a source has banked a lot of emissions, then the actual reductions may only be seen after 2030. 

Mr. Golden said that the banked emissions were a result of several early reductions which have 

already been realized. Mr. Nickel said that the industry would sit down and talk about details if 

EPA decided to go forward with this proposal. Mr. Golden also explained that each source will 

have to decide on either the "age based" or the "glide path" option at the beginning, and that 

switching back and forth between the two options will not be allowed. 

Mr. Nickel said that the utility industry was now in the process of evaluating 

STAPPA/ALAPCO's questions. He felt that the industry has made a lot of progress, but also 
P.5 

realized that EPA did not want a lengthy process at this stage. Therefore, the utility industry was 

open to an EPA-proposed schedule, and was willing to sit down and talk about details of the 

proposal. Mr. Seitz said that EPA was respectful of the progress made and acknowledged that 

the proposals were a major step in the process. Mr. Seitz also said that Bob (Perciasepe) will 

now decide as to what should be done, and that Bob may ask about schedule, i.e., where is the 

end of the reform process. If the schedule is to finalize the reform rule by the end of the year 

(1999), then what is the forcing function? Mr. Seitz again mentioned that EPA had received 

other proposals and said that the STAPPA/ALAPCO would like input from the environmental 

community also before EPA considers any of these proposals. An industry representative (?) 

said that the EPA should not expect to get a full consensus, but that the EPA was on the right 

path and that they should call with any questions. Mr. Seitz said that he will convey this to 

Mr. Perciasepe and get back to the utility industry by early next month. 

The meeting was then adjourned. 
P.6 

ATTENDEES 

EPA/UTILITY INDUSTRY MEETING 

NEW SOURCE REVIEW REFORM 

June 11, 1999 

Name 

Henry Nickel 

Bill Brownell 

Jerry Golden 

Richard Chastain 

Gene Marshall 

Bernie Huff 

Barb Gambill 

Rob Brubaker 

Dan Steen 

Michael Cashin 

John McManus 

John Seitz 

Tom Curran 

Bill Harnett 

Karen Blanchard 

Dennis Crumpler 

David Solomon 

Dan DeRoeck 

David Svendsgaard 

Greg Foote (via phone) 

Anna Wood (via phone) 

Bruce Buckheit (via phone) 

Cajol Holmes (via phone) 

Sam Napolitano (via phone) 

Malay Jindal 

Valerie Everette 

Affiliation 

Hunton & Williams 

Hunton & Williams 

TVA 

Southern Co. 

PacifiCorp 

Cinergy 

Cinergy 

Porter Wright 

FE 

Minnesota Power 

AEP 

EPA/OAQPS 

EPA/OAQPS 

EPA/OAQPS 

EPA/OAQPS 

EPA/OAQPS 

EPA/OAQPS 

EPA/OAQPS 

EPA/OAQPS 

EPA/OGC 

EPA/OPAR 

EPA/OECA 

EPA/OECA 

EPA/OAP 

PES (EPA Contractor) 

PES (EPA Contractor) 

Telephone No. 

(202)955-1561 

(202)955-1555 

(423)751-6779 

(205) 257-6664 

(801) 220-2235 

(513)287-3884 

(513)287-2641 

(614) 227-2033 

(330) 384-3704 

(218) 722-5642 (x3339) 

(614)223-1268 

(919)541-5616 

(919)541-5559 

(919) 541-4979 

(919)541-5503 

(919)541-0871 

(919)541-5375 

(919)541-5593 

(919) 541-2380 

(202) 260-7620 

(202) 260-8772 

(202) 564-2260 

(202) 564-8709 

(202)564-9751 

(919) 941-0333 

(919) 941-0333 

5" 
P.7 

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Age structure of US fossil-fired units 

'Number of units

 B Capacitv m Generation DSQ2 DNOx 

25% 

20% 

S 15% 

g 10% 

pre-1946 1946- 1951- 1956- 1961- 1966- 1971- 1976- 1981- 1986-

1950 1955 1960 1965 1970 1975 1980 1985 1990 

1991 - 1996 - 2001 -

1995 2000 2005 

Vintage 

These data include coal-, gas-, and oil-fired units (including combustion turbines). Vintage and emissions data are from EPA. 

Capacity and generation data are from EIA. Capacity and emissions values are for 1996. 

•o 
Age structure of coal-fired units 

'Number of units

 B Capacitv D Generation aSQ2 DNOx 

25% T 

OO *! 

pre-1946 1946- 1951- 1956- 1961- 1966- 1971- 1976- 1981- 1986- 1991-

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 

1996 - 2001 -

2000 2005 

Vintage 

These data include only coal-fired units. Vintage and emissions data are from EPA. Capacity and generation data are from EIA. 

Generation and emissions data are for 1996. 

CO 
^ 

100% 

WD 80% 

.s 

u 

a» 

^ 60% 

w 

t-l 

a> 

a 

.1 40% 

S 

20% 

0% 

Entry pattern of fossil-fired units 

55 year age trigger, 20 year window 

I Number of units • Capacity DS02 SNOx 

Units that enter due to 

2030 end-date. 

Units that enter due 

to age. 

2010-2014 2015-2019 2020-2024 2025-2029 

Period of entry 

These data include coal-, gas-, and oil-fired units (including combustion turbines). Vintage and emissions data are from 

EPA. Capacity and generation data are from EIA. Capacity and emissions values are for 1996. 

•TJ 

P 
U.S. Coal-Fired S02 Emissions and Emission Rates, 

1990-2020 

AE099 Reference versus Potential PM2.5 

16.00 4.00 

in 

c 

o H 

t 

o 

-C 

OT 

c 

o 

14.00 

12.00 

10.00 

» 8.00 

CO 

I 6.00 

10 

<0 

E 

tu 

4.00 

2.00 

Reference S02 Emission Rate 

PM2.5 S02 Emissions 

PM2.5 S02 Emission Rate 

3.50 

3.00 

2.50 

CD S 

s 

"3 

_Q 

2.00* 

1.50 

IB 

OC 

c 

,o 

co 

jo 

E 

UJ 

1.00 

0.50 

0.00 -I 1 1 1 1 1 1 1 1 1 r 1 1 1 1 1 1 1 1 1 1 1 1 1 i I i r 

1990 1995 2000 2005 2010 2015 

0.00 

2020 
U.S. Coal-Fired NOx Emissions and Emission Rates, 

1990-2020 

AE098 Reference versus NOx SIP Call (AE099) 

7.00 

6.00 

5.00 

— S 4.00 

CO 

c 

i2 

r 

o 

_c 

CA 

c 

o 

I 3.00 

.2 2.00 

1.00 

0.00 

1.40 

1.20 

1.00 3 

m 

s 

0.80 2 

o 

flj 

oc 

tn 

0.40 i§ 

1990