*,?ED -4% 3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 5
77 WEST JACKSON BOULEVARD CHICAGO, IL 60604-3590

REPLY TO THE ATENTION OF:

DATE : 

## JAN 

## 2 

## 5 2009

SUBJECT: Technical Support Document for the Approval of Wisconsin Nitrogen Oxides (NOx) Reasonably Available Control Technology (RACT) and Additions
and Amendments to Other Non-RACT NOx Rules

/-&if- 

### FROM: Douglas Aburano, Environmental Engineer 

# , Criteria Pollutant Section

TO: 

### Docket

The Clean Air Act amendments of 1990 (CAA) introduced the requirement for existing major stationary sources of NOx in nonattainment areas to install and operate NOx RACT. Specifically, section 182(b)(2) of the CAA requires states
to adopt RACT for all major sources of volatile organic compounds (VOC) in ozone nonattainment areas and section 182(f) requires the RACT provisions for major stationary

sources of oxides of nitrogen.

Section 302 of the CAA defines major stationary source as any facility which has the potential to emit 100 tons or

more per year of any air pollutant. For serious ozone nonattainment areas, a major source is defined by section 182(c) as a source that has the potential to emit 50 tons

or more of NOx per year. For severe ozone nonattainment

areas, a major source is defined by section 182(d) as a source that has the potential to emit 25 tons per year.

Since the only areas in Wisconsin that are required to adopt NOx RACT are classified as moderate, the rules that
have been adopted only need to address sources with the potential to emit 100 tons or more per year.

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Pursuant to sections 182(b)(2) and 182(f) of the Clean Air Act (CAA), Wisconsin is required to implement RACT for all major VOC and NOx sources in the Milwaukee-Racine area and Sheboygan County because they are classified as moderate. The other nonattainment areas are not classified high enough to have the RACT requirement. The major source threshold in moderate areas is 100 tons per year.

**Wisconsin’s Submittal**

The Wisconsin Department of Natural Resources (WDNR) submitted NOx RACT regulations for the Milwaukee-Racine and Sheboygan County areas on June 12, 2007 and September 14, 2009. The WDNR held a public hearing for the June 12, 2007 rules on March 15, 2007. WDNR also provided a comment period that was announced on February 2, 2007 and ended on March 19, 2007. The WDNR held a public hearing for the September 14, 2009 rules on December 5, 2008. WDNR also provided a comment period that was announced on October 30, 2008 and ended on December 10, 2008.

Additionally, WDNR submitted minor additions and amendments to other non-RACT NOx rules as part of the June 12, 2007 and September 14, 2009 submittals. The non-RACT NOx rules that are being changed were originally approved into Wisconsin’s SIP on November 13, 2001 (66 FR 56931). These other NOx rules were submitted as part of Wisconsin’s reasonable further progress SIP for the 1-hour ozone
standard.

**Summary of Wisconsin’s Rules**

June 12, 2007 Submittal

Chapter NR 428 of the Wisconsin Administrative Code Environmental Protection Air Pollution Control, entitled, “Control of Nitrogen Compound Emissions,” includes provisions limiting the emissions of NOx from stationary sources in Wisconsin. While Part NR 428 contains many sections, Wisconsin submitted only a portion of them to address the NOx RACT requirements, rules 428.20 through 428.26 and 428.02(7m). Wisconsin submitted other non-RACT rules for approval because they are additions or amendments to rules already approved into the SIP. The other non-RACT rules submitted for approval are: 428.02(7m), 428.04(2)(h)1. and 2., 428.05(3)(e)1. to 4., 484.04(13),3

484.04 (15m) and (16m),and 484.04(21m) ,(26m)(bm),(26m)(d) and
(27) for federal approval.

• Rule 428.02(7m),is part of the “Definitions” section. Rule 428.02(7m) creates the definition of “Process
heater”. • Rules 428.04(2)(h)1.and 2.are part of the section, entitled “Requirements and performance standards for new or modified sources”. These rules have been corrected to use the units of “grams per brake horsepower-hour” from “grams per brake horsepower.” • Rules 428.05(3)(e)1.to 4,are part of the section, entitled “Requirements and performance standards for existing sources”. These rules have been corrected to use the units of “grams per brake horsepower-hour” from “grams per brake horsepower.” • Rule 428.20 through 428.26,are part of a newly created subchapter to address the NOx RACT requirements. This subchapter is entitled “Subchapter IV – NOx Reasonably Available Control Technology Requirements.” • Rule 428.20,entitled “Applicability and purpose,” establishes the geographic area and size and types of sources that the NOx RACT requirements apply to. • Rule 428.21, entitled “Emission unit exceptions” establishes the subset of sources that these rules will not apply to. • Rule 428.22,entitled “Emission limitation requirements,” establishes the emission limits for sources subject to
these rules. • Rule 428.23,entitled “Demonstrating compliance with emission limitations,” establishes compliance methods for sources subject to these rules. • Rule 428.24,entitled “Recordkeeping and reporting,” establishes the recordkeeping and reporting requirements for sources subject to these rules. • Rule 428.25,entitled “Alternative compliance methods and approaches,” establishes the provisions describing the emissions averaging provisions and other alternative RACT requirements allowed for compliance. • Rule 428.26,entitled “Utility reliability waiver,” establishes the provisions under which utilities can request a waiver from emission limits under Subchapter IV given specific criteria. • Rule 484.04(13),is part of chapter NR 484, “Incorporation by reference” and a section entitled “Code of federal regulations appendices”. Rule 484.04(13) has been4

amended to reference 40 CFR Part 60 Appendix A for NR 428.25(1)(b)4. • Rule 484.04(15m) and (16m), are part of chapter NR 484, “Incorporation by reference” and a section entitled “Code of federal regulations appendices”. Rules 484.04(15m) and (16m) have been created to reference 40 CFR Part 60 Appendix A for NR 428.23(1)(b)3.a., NR 428.23(1)(b)2.d.,
5.a. and b. and 6.b. • Rule 484.04(21m), is part of chapter NR 484, “Incorporation by reference” and a section entitled “Code of federal regulations appendices”. Rule 484.04(21m) has been amended to reference 40 CFR Part 60 Appendix F for NR 428.23(1)(b)2.c. • Rule 484.04(26m)(bm), is part of chapter NR 484, “Incorporation by reference” and a section entitled “Code of federal regulations appendices”. Rules 484.04(26m) has been created to reference 40 CFR Part 75 Appendix E for NR 428.23(1)(2)e. • Rule 484.04(26m)(d) and (27), are part of chapter NR 484, “Incorporation by reference” and a section entitled “Code of federal regulations appendices”. Rules 484.04(26m)(d) and (27) have been amended to reference 40 CFR Part 75 Appendix F for NR 428.23(1)(b)5.c. and 6.b.and c., and to reference 40 CFR Part 75 Appendices A to I for NR 428.23(1)(b)1.

September 14, 2009

Like the June 12, 2007 submittal, the September 14, 2009 submittal contains both RACT and non-RACT rule additions and amendments. The same rules, 428.20 through 428.26, along with 428.02(7e) are being submitted for approval as RACT and the other rules are being submitted as miscellaneous changes to rules that have already been approved into the SIP.

The following rules have been amended, renumbered or added: renumber and amend 428.22(1)(d); amend NR 428.04(1) and (3)(b), 428.05(1) and (4)(b)2., 428.07(intro.), (1)(a) and (b)1. and 3., (3) and (4)(c), 428.08(title) and (2)(title), 428.09(2)(a), 428.20(1), 428.22(2)(intro.), 428.23(1)(b)1., 428.24(1)(b)(intro.) and 428.25(1)(a)1.a. and c. and (3)(b); and to create NR 428.02(7e), 428.08(2)(f), 428.12, 428.22(1)(d)2., and 428.23(1)(b)9., relating to modification of existing rules for control of nitrogen oxide (NOx) emitted by stationary sources in the ozone nonattainment area in southeastern Wisconsin.5

The revisions to the RACT rules do two things, they : 1) incorporate and add a definition of "maximum theoretical emissions" (MTE) in place of “potential to emit" (PTE) in order to adequately identify major sources; and 2) make revisions which clarify and facilitate implementation of requirements within ch. NR 428.

There are a number of non-substantive revisions in the rule package that clarify implementation issues which are consistent with the original intent of the rules. The revisions to the June 12, 2007 submittal do not alter the primary emission limitations or alter those individual emissions units subject to emission requirements. These revisions include:

• Removal of the reference to the federal Clean Air Interstate Rule (CAIR) and application of standard terms in identifying the appropriate units.

• Allowance of additional time for sources to submit an application for an alternative emission limit or compliance schedule.

• Allowance for a source with an approved alternative RACT requirement to participate in emissions averaging for purposes of demonstrating compliance with the original RACT limitation or schedule.

• Avoiding triggering new source NOx limits under s. NR 428.04 when the modification is made solely to comply with existing source NOx control requirements under ss.
NR 428.05 or 428.22.

• Clarification and simplification of monitoring and reporting requirements.

• The applicability statement in s. NR 428.05(1) is being revised to remove the reference to “modified" sources.

• The Department identifies limited periods when the current form of the emission limitation for glass furnaces is not appropriate. During these periods the numerical emission limit does not apply. Instead, the source is required to minimize NOx emissions through combustion optimization techniques described in s. NR
439.096.

**C. Review of Wisconsin's RACT Submittal** 

**Background**6

The Clean Air Act requirements are described by EPA in a document entitled, “State Implementation Plans; Nitrogen Oxides Supplement to the General Preamble; Clean Air Act Amendments of 1990 Implementation of Title I; Proposed Rule,” published November 25, 1992, also known as the NOx Supplement, should be referred to for more detailed information on NOx requirements. Additional EPA guidance memoranda, such as those included in the “NOx Policy Document for the Clean Air Act of 1990,” (EPA-452/R-96-005, March 1996), should also be referred to for more information on NOx requirements. These are the documents EPA used to review Wisconsin’s NOx RACT submittal.

The WDNR created Subchapter IV entitled “NOx Reasonably Available Control Technology Requirements” to address the NOx RACT requirements of the Clean Air Act. Subchapter IV consists of rules 428.20 through 428.26. Additional provisions of 428.02(7e) and (7m) were also created to support the Subchapter IV RACT requirements.

Rules 428.01, 428.02, 428.04, 428.05 and 428.07 through 428.11 were originally approved into the Wisconsin SIP to fulfill Reasonable Further Progress requirements for 1-hour ozone nonattainment areas (66 FR 56931). Rules 428.02(6m), 428.04(2)(g)(3) and 428.06 were later approved (68 FR 17551). Rules 428.02(1) and (1m), 428.04(2)(g)(1), 428.04(2)(g)(4), and 428.06(2)(a) were then approved (70 FR 22259). Minor additions and changes have been made to these rules and WDNR has requested approval of these additions and amendments into the SIP.

**NR 428.20 Applicability**

Rule 428.20 “Applicability and Purpose” establishes the geographic scope of the rule and the sources that are subject to the rule. The rules apply in the nonattainment areas that are classified as moderate under the 1997 8-hour ozone standard. Therefore, the rules apply in the Milwaukee-Racine area (Kewaunee County, Milwaukee County, Ozaukee County, Racine County, Washington County and Waukesha County) and Sheboygan County. The requirements apply to the owner or operator of a NOx emissions unit which is located at a facility with a combined total maximum theoretical emissions for all NOx emissions units of 100 tons per year or more. This is consistent with the Clean Air Act and EPA guidance. Rule 428.20 refers to Wisconsin’s definition of “Maximum theoretical emissions”7

found in Wisconsin rule NR 428.02(7e). These two rules, in combination, satisfy the requirements for adequate applicability in terms of geographic coverage and the types and sizes of sources covered.

**NR 428.21 Exemptions**

Rule 428.21, entitled “Emission unit exceptions” establishes a number of default exemptions from the emission limits for units meeting certain conditions. The exemptions streamline compliance by identifying sources for which control cost-effectiveness is beyond that considered in the rule. These sources otherwise would likely apply for a variance to the RACT requirement. The rule identifies minimal recordkeeping requirements to ensure continued qualification under the applicable exemption. There are generally two bases for the exemptions: 1) unit types or applications with low operation levels; and 2) units which are meeting the emission limit and have sufficient monitoring requirements in place or are well controlled and for which the incremental control to meet the RACT emission limit is significantly more costly.

Specifcally:

“(1) GENERAL EXEMPTIONS. The following emissions units and processes are exempt from the emission limitations in
s. NR 428.22:

(a) Any emissions unit operated only to restart electric generation in the event of a complete loss of facility power. (b) Any emissions unit which is operated no more than 500 hours per year and no more than 200 hours during the ozone season and whose only purpose is to provide electricity to a facility if normal electricity service is interrupted or to replace normal critical operations at a facility. (c) Any emissions unit whose only function is to pump water in the case of a fire emergency. (d) Any emissions unit whose utilization is less than 10% of its capacity factor on an annual average basis over a 3-year rolling period and less than 20% of its capacity factor in any year of the 3-year rolling period and which is owned or operated by an electric generation utility or gas transmission utility. (e) A research or development unit.8

(f) An engine testing operation or process line. (g) Any gaseous fuel fired unit used to control VOC emissions from a commercial or industrial process.

(2) LOW OPERATING UNIT. An emissions unit described in s. NR 428.20 is exempt from the emission limitations of s. NR 428.22 if, during each ozone season, the emissions unit's utilization based on actual measured heat input or output is less than the utilization threshold for the source category according to the following equation:

UU i < (Category capacity ) x (3,672 hours / Ozone Season ) x Capacity Factor

where:

UU i is the unit's actual fuel consumption or output in measurement units consistent with the calculated utilization threshold for the source category in s. NR
428.22

Category capacity is the lower value in the range of unit capacity or design output used to describe the unit’s source category i in s. NR 428.22

Capacity factor is 0.20 for all source categories in s.
NR 428.22

(2m) RECIPROCATING ENGINES. Any reciprocating engine that is certified to meet the applicable federal non-road engine emission standards specified in this subsection is exempt from the emission limitations of s. NR 428.22(1)(i):

(a) A reciprocating compression ignition engine that is certified as meeting Tier 1 requirements as specified in 40 CFR part 89, if one of the following applies: 1. The engine has a maximum design power output of less than 2,000 horsepower. 2. The engine has a maximum design power output equal to or greater than 2,000 horsepower and has a total utilization during each ozone season of less than 1.5 million horsepower-hours, based on actual measured output. (b) A reciprocating compression ignition engine that is certified as meeting the Tier 2 standard, as specified in 40 CFR part 89, or a reciprocating compression ignition engine that is certified as9

meeting the requirements of a more stringent Tier standard, as specified in 40 CFR part 89 or 1039. (c) A reciprocating spark ignition engine that is certified as meeting the Tier 1 standard or a reciprocating spark ignition engine that is certified as meeting a more stringent Tier standard, as specified in 40 CFR part 1048.

(3) OTHER REGULATED UNIT. An emissions unit which is subject to and meeting an emission limitation in s. NR 428.04 or 428.05(3) is exempt from the emission limitations in s. NR 428.22, if one of the following applies:

(a) The emissions unit is subject to a federally enforceable condition in an air permit which limits its emissions to no more than 75 tons of NO X per year. (b) The emissions unit, because of a physical operating constraint, cannot emit more than 75 tons of

NO X per year.”

Because the specific units that qualify for these exemptions are estimated to incur costs significantly greater than $2,500/ton, the exemptions, as described above are acceptable. An explanation of why the $2,500/ton threshold was chosen is given below in the description of “NR 428.22 Emission Limits”.

The one exemption not based on cost-effectiveness but rather on technical issues is the exemption under s. NR 428.21(g) for a "gaseous fuel fired unit used to control VOC emissions" The primary consideration in design and operation of such an emissions unit is for the efficient destruction of VOC emissions and not to minimize NOx emissions. For this reason this exemption is appropriate.

**NR 428.22 Emission Limits**

Rule 428.22, entitled “Emission limitation requirements,” establishes the emission limits for sources subject to
these rules.

The rule establishes NOx emission rate limits by source category applicable to individual emission units. The emission limits must be complied with on a 30-day rolling average basis throughout the year.10

Wisconsin’s rule requires compliance with these limits beginning on May 1, 2009.

WDNR looked to the 8-hour Ozone Implementation Guidance (70 FR 71654) in determining the cost range of controls considered for NOx RACT. This guidance referred to 1994 EPA guidance that considered a 30-50% reduction within a cost range of $160-1,300 per ton of NOx removed as RACT. $1,300/ton adjusted using the consumer price index is approximately $2,000/ton in 2005 dollars. For their evaluation of RACT, WDNR assumed an upper limit of approximately $2,500 per ton in estimating applicable RACT
controls.

We have found that these limits taking cost-effectiveness into consideration are consistent with EPA guidance for the various categories for which Alternative Control Technology documents have been issued. They are also consistent with other RACT limits in other states.

For solid fuel-fired boilers , the emission limits range from .10 lb/mmBtu to .25 lb/mmBtu based on boiler type and size.

Lime kiln limits are as follows:

1. For a gaseous fuel-fired unit, 0.10 pound per mmBtu of heat input. 2. For a distillate oil-fired unit, 0.12 pound per mmBtu of heat input. 3. For a residual oil-fired unit, 0.15 pound per mmBtu of heat input. 4. For a coal-fired unit, 0.60 pound per mmBtu of heat input. 5. For a coke-fired unit, 0.70 pound per mmBtu of heat input.

These limits apply to lime kilns with a maximum heat input capacity equal to or greater than 50 mmBtu/hour.

Reheat, annealing or galvanizing furnaces with a maximum heat input capacity equal to or greater than 75 mmBtu/hour are limited to 0.08 lb/mmBtu.

Glass furnaces with a maximum heat input capacity equal to or greater than 50 mmBtu per hour, are limited to 2.0 pounds per ton of produced glass. During periods when the11

furnace is operating for purposes other than producing glass, NOx emissions must be minimized (refer to modifications in the September 14, 2007 submittal).

Asphalt plants with a maximum heat input capacity equal to or greater than 65 mmBtu per hour, are required to meet one of the following as applicable:

1. For a gaseous fuel-fired unit, 0.15 pound per million Btu of heat input. 2. For a distillate fuel oil-fired unit, 0.20 pound per million Btu of heat input. 3. For a residual fuel oil-fired or waste oil-fired unit, 0.27 pound per million Btu of heat input.

Process heaters, dryers, ovens or other process heating devices , are required to meet one of the following as applicable:

1. For a gaseous fuel-fired unit with a maximum heat input capacity equal to or greater than 100 mmBtu per hour, 0.10 pound per mmBtu of heat input. 2. For a distillate oil-fired unit with a maximum heat input capacity equal to or greater than 100 mmBtu per hour, 0.12 pound per mmBtu of heat input. 3. For a residual oil-fired unit with a maximum heat input capacity equal to or greater than 65 mmBtu per hour, 0.18 pound per mmBtu of heat input.

Simple cycle combustion turbines shall meet one of the following exhaust outlet concentrations, corrected to 15% O 2 and at ambient temperatures greater than 0 o F, as applicable:

1. For a unit with a maximum design power output equal to or greater than 50 megawatts, one of the following, as applicable:

a. If natural gas-fired, 25 parts per million dry
volume. b. If distillate oil fuel-fired, 65 parts per million dry volume. c. If biologically derived gaseous fuel-fired, 35 parts per million dry volume.

2. For a unit with a maximum design power output equal to or greater than 25 megawatts and less than 50 megawatts, one of the following as applicable:12

a. If natural gas-fired, 42 parts per million dry
volume. b. If distillate oil fuel-fired, 96 parts per million dry volume. c. If biologically derived gaseous fuel-fired, 35 parts per million dry volume.

Combined cycle combustion turbines shall meet one of the following exhaust outlet concentrations, corrected to 15% O 2 and at ambient temperatures greater than 0 o F, as applicable:

1. For a natural gas-fired unit with a maximum design power output equal to or greater than 25 megawatts, 9 parts per million dry volume. 2. For a natural gas-fired unit with a maximum design power output equal to or greater than 10 megawatts and less than 25 megawatts, 42 parts per million dry volume. 3. For a distillate oil fuel-fired unit with a maximum design power output equal to or greater than 10 megawatts, 42 parts per million dry volume. 4. For a biologically derived gaseous fuel-fired unit with a maximum design power output equal to or greater than 10 megawatts, 35 parts per million dry volume.

Reciprocating engines with a maximum design power output equal to or greater than 500 horsepower shall meet one of the following as applicable:

1. For a rich-burn spark ignition unit, 3.0 grams per brake horsepower-hour. 2. For a lean-burn spark ignition unit, 3.0 grams per brake horsepower-hour. 3. For a diesel fuel-fired compression unit, 3.0 grams per brake horsepower-hour. 4. For a dual fuel-fired compression unit, 3.0 grams per brake horsepower-hour.

Electric utility boilers For electric utility coal-fired boilers the rule sets a phased compliance schedule with interim emission limits for May 1, 2009 and final RACT emission limits by May 1, 2013. The schedule of phased limitations is provided in Table 2.

The purpose of the phased compliance schedule is to allow the electric utilities the necessary time to install post combustion controls while maintaining a reliable electric13

supply. Some control technologies, like selective catalytic reduction equipment, can take up to two years to install for an individual project. This is compounded by the fact that utilities are subject to limited installation windows which further restrict the installation schedule. On this basis, multiple installations cannot be fully accomplished on all electric utility boilers within the moderate nonattainment area by 2009.

The emission limits for 2009 reflect NOx controls which can be installed within the intervening timeframe including combustion modifications and selective non-catalytic reduction systems. The final 2013 compliance date reflects the timing necessary for anticipated installations of selective catalytic reduction systems. The phased approach is also consistent with operating generating units on a system-wide basis and utilization of a multi-facility averaging program. In this manner, the phased emission limits set forth a RACT level of NOx control across utilities boilers on a schedule which is expeditious as practicable.

**Table 2. Compliance Schedule for Electric Utility Coal-Fired Boilers**  **Emission Limits (lbs/mmbtu) Compliance** 

**Date Coal-fired Boilers >**  **1000 mmbtu/hr Coal-fired Boilers** 
**>500 and <1000 mmbtu/hr** 

May 1,
2009 wall fired = 0.15 tangential fired =
0.15 cyclone = 0.15 fluidized bed = 0.15 arch fired = 0.18 wall fired = 0.20 tangential fired =
0.15 cyclone = 0.20 fluidized bed =
0.15 arch fired = 0.18

May 1,
2013 wall fired = 0.10 tangential fired =
0.10 cyclone = 0.10 fluidized bed = 0.10 arch fired = 0.18 wall fired = 0.17 tangential fired =
0.15 cyclone = 0.15 fluidized bed
=0.10 arch fired = 0.1814

It should be noted that arch fired boilers have the same limit in 2009 as in 2013. This is because RACT for arch fired boilers (tertiary air) can be implemented by the 2009 date and no additional controls are necessary. Other boiler types are expected to implement add-on controls that will reduce emissions from 2009 to 2013 and this is reflected in their emission limits.

Since the RACT emission limits are implemented on a schedule which is as expeditious as practicable the proposed phasing of electric utility boiler emission limits is acceptable. This approach has been approved by EPA for other RACT programs.

**NR 428.23 Compliance**

The rule requires compliance monitoring, record keeping, and reporting specified for each source category. For units already required to do so, emissions are to be measured according to Part 75 CEMs monitoring requirements. Remaining units are specified by source category to either install and operate continuous NO
x emission monitors according to 40 CFR Part 60 methods or perform stack testing every two years. The rule specifies the methods and calculations to tabulate emissions under each requirement. Units which may emit over 3 lbs. per hour or 15 lbs. per day of NOx are required to have a malfunction and abatement plan for the monitoring system.

Monitors are required to be installed by April 1, 2009 or by April 1 of the year a unit becomes subject to an emission limit in Rule 428.22.

The rule requires most source categories subject to emission limitations to demonstrate compliance using continuous emissions monitoring. For electric utility (EGU) sources this monitoring is based on 40 CFR part 75 methods and for industrial source monitoring is based on 40 CFR part 60 methods. For a few source categories with low variability in operations or emission rates, compliance is demonstrated by periodic stack testing. The emission monitoring requirements are consistent with existing state and EPA programs. The rule will also allow a source to request approval of an alternative monitoring method that, in addition to WDNR approval, must be approved by EPA.15

Boilers, lime kilns, reheat, annealing or galvanizing furnaces, and glass furnaces are required to follow the monitoring requirements from 40 CFR Part 60 that have been adopted.

Asphalt plants, process heaters, simple cycle combustion turbines, combined cycle combustion turbines and reciprocating engines are required to conduct an initial performance emissions test and periodic emissions performance tests every two years thereafter.

**NR 428.24 Recordkeeping and Reporting**

All owners and operators of units subject to a an emission limit in NR 428.22 are required to maintain records and submit reports that will demonstrate compliance with thoseemission limits or can be used to identify periods of noncompliance.

Units subject to emission limits are required to keep records of fuel usage, heat input, the 30-day rolling average emission rate, capacity utilization (on an ozone season basis and an annual basis) and maintenance records of the monitoring system.

Reports documenting compliance, or noncompliance, with the emission limits are required. On an monthly basis, subject units are required to report the highest 30-day rolling average emission rate. On an ozone season and annual bases, operational parameters of both the unit and monitoring devices will also be reported.

Units that qualify as exempt are required to record and maintain emissions unit operating data onsite which certifies continued qualification with the exemption

status.

These recordkeeping and reporting requirements are approvable.

**NR 428.25 Alternative compliance methods and approaches**

NR 428.25 provides several compliance options. These options include emissions averaging, a case-by-case RACT determination, and a CAIR equivalency provision. These programs are structured to meet EPA's guidance for economic16

incentive programs, public notification and review, and EPA approval requirements.

1) Emissions average. Emissions from one or more units subject to a RACT emission limitation may be averaged with other similar units at an affected facility. Except for "new units", which are excluded from averaging, all similar units, both RACT and non-RACT affected units, at a facility must be included in the averaging program. This is to eliminate a potential shift in generation/ production to any unit not subject to the RACT requirements.

The emissions averaging applies the current applicableemission limit (or a fixed historic emission rate for nonRACT units) of each unit on a heat input weighted basis to determine an average facility or system emission limit. This averaging emission limitation is determined on an ozone season and annual basis.

In both the facility and multi-facility cases, the longer averaging periods (the length of the ozone season and annually) are integral to the development of the averaging programs (programmatic) in several respects and are therefore acceptable. The longer averaging periods considers that the proposed emission limits are more stringent than historic NOx RACT programs and are set on a 30 day rolling average basis. There are inherent difficulties associated with monitoring and showing compliance for averaging multiple units over shorter compliance periods or on a rolling average basis. Also, in this case where there is a limited pool of sources and with the lower emission limits there is less ability to leave sources uncontrolled under the averaging program. Rather, averaging addresses the last margins of control between sources or provides the ability to accommodate installations of controls on multiple units such as those addressed by the phasing of electric utility units. In these cases, the longer averaging periods are appropriate in which already low emitting sources further reduce emission levels in order to offset emissions from other

sources.

The EPA requires that averaging programs like those in the rule have an additional emission reduction as an environmental benefit in lieu of the provided flexibility. (See Improving Air Quality with Economic Incentive
Programs , EPA-452/R-01-001, Jan. 2001.) When averaging17

emission units at one facility the rule requires an environmental benefit of an annual and ozone season mass cap. When averaging units across multiple facilities the environmental benefit is the EPA default of 10% reduction in the annual and ozone season emission rate. The environmental benefit under both averaging approaches becomes effective beginning in 2013. Applying the environmental benefit earlier than this date is not consistent with the need for phasing of emission limits applicable to electric utility emission units.

Because the averaging periods are programmatic and incorporate the required "environmental benefit" as well as meeting other EPA requirements for public notice and compliance, the proposed averaging provisions are acceptable. In addition, the averaging allowed under these NOx RACT rules, after the environmental benefit is required, in all cases, results in lower total emissions during the ozone season and annually than units meeting the limits on an individual basis. In this respect this NOx RACT program is more restrictive in averaging during the
ozone season than that allowed for RACT sources under the NOx SIP Call and the recently vacated CAIR rule. Therefore, it makes sense to allow these averaging provisions given the environmental benefit of lower emission limits.

Facility Averaging

As one of the alternative compliance options, Wisconsin’s rules offer averaging within a facility given the following conditions:

• Emissions from one or more units subject to a RACT emission limitation may be averaged with other similar units at an affected facility.

• Under this approach all similar units at the facility must be included in the averaging program unless meeting a RACT emission limit separately. This eliminates any potential shift in generation/ production to units not subject to the RACT requirements.

• Emissions averaging applies the current applicable emission limit of each unit on a heat input weighted basis to determine an average facility or system emission limit.18

• The proposed environmental benefit is a mass cap on the affected emission units beginning in 2013

Section 16.7 “Area-wide RACT provisions” of the EIP guidance allows for the use of an EIP to meet RACT requirements. Section 16.7 refers to section 4.3 “How must my EIP meet the environmental benefit principle?” which describe the environmental benefit that would be derived from application of an EIP.

In the case of facility averaging, the environmental benefit is the implementation of an ozone season mass cap and an annual mass cap. Both caps are calculated using RACT emission rate limit multiplied by the average of the three years of highest heat input from 2000 to 2005. By using this mass cap approach, the future emissions are limited to a greater degree than a scenario where an EIP is not in place and sources are allowed to operate at maximum capacity with only an emission rate limit in place.

The requirement of the mass cap environmental benefit begins in 2013 when all of the EGU controls are expected to be in place and the final EGU limits are to be complied with. A number of variables were addressed in determining the final emission rates for EGUs, included among them were the dates by which controls could be installed and another is that both facility and multi-facility averaging would be allowed as a compliance option.

Section 16.13 “Provisions for EIPs that include RACT sources” requires the following:

For Economic Incentive Programs(EIPs) that affect VOC and NOx for ozone purposes the EIP must:

• have an averaging time of no more than 30 days,

o This seems to be contradicted by the requirement listed below for NOx EIPs that are required to comply with the NOx SIP Call (or in this case, the CAIR).

o The longer averaging periods are based on lower RACT emission limits, limited pool of sources, control equipment installation requirements, and technical issues related to monitoring and averaging over multiple units over short periods on a rolling basis.19

• prohibit emission reductions created outside the ozone season from being used during the ozone season, and

o This has been done through the use of mass caps on an ozone season and an annual basis.

• within an Open Market Trading (OMT) EIP, limit Discrete Emission Reductions (DERs) created in 1 year to use the same or in a subsequent year, subject to the restrictions of all applicable requirements.

o This does not apply in this case.

Section 16.13 goes on for NOx sources that are required to comply with the NOx MOU regulation or the NOx SIP call, the averaging time of an emission limit must not exceed a compliance period of an area’s ozone season. [While Wisconsin is not subject to either the NOx MOU regulation or the NOx SIP Call, it was subject to CAIR at the time these NOx RACT rules were adopted. As the NOx SIP Call requirements were to have been subsumed by the CAIR requirements, it stands to reason that sources subject to CAIR would be subject to the same requirements as the NOx SIP Call.]

Sources involved with EIP trades must meet all requirements applicable to the program. The averaging time for any specified emission rate limits for trading purposes shall be consistent with:

• attaining and maintaining all applicable NAAQS,

o The averaging time is consistent with attaining the applicable NAAQS, specifically ozone as there is an ozone season mass cap, similar to the NOx
SIP Call or CAIR.

• meeting Reasonable Further Progress/Rate-of-Progress (RFP/ROP)requirements, and

o The averaging time does not interfere with RFP/ROP requirements.

• ensuring equivalency with all applicable RACT requirements ( e.g. calculated coating of solid applied basis, use of the more stringent of the actual or allowable baselines, etc. ).

o Wisconsin’s RACT rule goes beyond equivalency with the applicable RACT requirements by setting a mass cap based on historical heat input.

Multi-facility Averaging20

Wisconsin also offers averaging across multiple facilities as a compliance option given the following conditions:

• Emissions units may participate in an emission averaging program across multiple units and facilities.

• Each unit can only participate in one type of averaging program on an annual basis (facility or system-wide).

• The proposed environmental benefit is the EPA default of 10% reduction in the emission rate on an annual and an ozone season basis, beginning in 2013.

Section 16.7 “Area-wide RACT provisions” of the EIP guidance allows for the use of an EIP to meet RACT requirements. Section 16.7 refers to section 4.3 “How must my EIP meet the environmental benefit principle?” which describes the environmental benefit that would be derived from application of an EIP.

In the case of multi-facility averaging, the environmental benefit is a 10% reduction in the emission rate on an annual and an ozone season basis. The environmental benefit of 10% begins in 2013 when all of the EGU controls are expected to be in place and the final EGU limits are to be complied with. A number of variables were addressed in determining the final emission rates for EGUs, included among them were the dates by which controls could beinstalled and another is that both facility and multifacility averaging would be allowed as a compliance option.

The aggregate emission limitations are calculated as
follows:



## ( ) EBF 1

HI

EL HI

EL

n

1 u u n

1 u u u

aggr − × = 

## ∑ ∑

=

=

where:

• EL aggr is the aggregate emission limit in aggregate for all emissions units on an annual or ozone season basis

• HI u is the heat input for each emissions unit, u, for the specified period of time21

• EL u is the emission limit for each emissions unit, u. For emission limitations in units other than heat input, the emission limitations shall be converted to a heat input basis.

• EBF is the environmental benefit factor. For averaging programs effective on or after January 1, 2013, the EBF is 10% for the annual emission limit and 10% for the ozone season emission limit. Prior to this date the EBF is 0%.

Section 16.13 “Provisions for EIPs that include RACT sources” requires the following:

For EIPs that affect VOC and NOx for ozone purposes the EIP

must:

• have an averaging time of no more than 30 days,

o This seems to be contradicted by the requirement listed below for NOx that are required to comply with the NOx SIP Call (or in this case, CAIR)

o The longer proposed averaging periods are based on lower RACT emission limits, limited pool of sources, control equipment installation requirements, and technical issues related to monitoring and averaging over multiple units over short periods on a rolling basis.

• prohibit emission reductions created outside the ozone season from being used during the ozone season, and

o This has been done through the implementation of the ozone season averaging period.

• within an OMT EIP, limit DERs created in one year to use the same or in a subsequent year, subject to the restrictions of all applicable requirements.

o This does not apply in this case.

Section 16.13 goes on for NOx sources that are required to comply with the NOx MOU regulation or the NOx SIP call, the averaging time of an emission limit must not exceed a compliance period of an area’s ozone season. [While Wisconsin is not subject to either the NOx MOU regulation or the NOx SIP Call, it was subject to CAIR at the time the NOx RACT rules were adopted. As the NOx SIP Call requirements were to have been subsumed by the CAIR requirements, it stands to reason that sources subject to CAIR would be subject to the same requirements as the NOx SIP Call.]22

Sources involved with EIP trades must meet all requirements applicable to the program. The averaging time for any specified emission rate limits for trading purposes shall be consistent with:

• attaining and maintaining all applicable NAAQS,

o The averaging time is consistent with attaining the applicable NAAQS, specifically ozone as there is an ozone season mass cap, similar to the NOx
SIP Call.

• meeting RFP/ROP requirements, and

o The averaging time does not interfere with RFP/ROP requirements.

• ensuring equivalency with all applicable RACT requirements ( e.g. calculated coating of solid applied basis, use of the more stringent of the actual or allowable baselines, etc. ).

Wisconsin’s RACT rule meets these requirements with the applicable RACT requirements by providing a 10% environmental benefit reduction that applies to the units participating in a multi-facility averaging program.

2) CAIR emissions units.

We find all of the portions or NR 428.25 approvable except for NR 428.25(2). NR 428.25(2) would allow sources subject to CAIR to demonstrate compliance with RACT requirements by virtue of meeting the CAIR requirements. We cannot approve this portion of Wisconsin’s submittal at this point because CAIR has been remanded to EPA and we do not know if CAIR or the replacement rule for CAIR will be a substitute for RACT

or not.

3) Alternative RACT requirement.

Wisconsin’s NOx RACT rules also offer an individual source the option to request an alternative emission limitation orcompliance schedule, with a determination made on a caseby-case basis by the Department and by EPA. An alternative emission limit may be the result of an engineering
assessment that demonstrates RACT controls are not economically or technically feasible for that unit. Any determination of an alternative limit or schedule must also account for a unit’s ability to participate in either a facility or system-wide emissions averaging program.23

Since any alternative RACT requirement must be approved by EPA as well, these provisions are acceptable as currently written

**.**

**NR 428.26 Utility reliability waiver**

The rule contains a provision that allows an electric or steam utility or natural gas transmission facilities to request a waiver from an applicable emission limit for a period of time due to reliability issues. This provision acknowledges that these facilities serve non-interruptible customers and uncontrollable events may occur which result in an increase in emissions. Facilities generating steam for process and manufacturing purposes are not eligible for the waiver. This provision is acceptable because it requires consultation with both EPA and the Wisconsin Public Service before a determination can be made that the waiver will be granted.

**D. Review of Wisconsin’s Non-RACT Submittals**

A number of NOx regulations were approved into the Wisconsin SIP on November 13, 2001 (66 FR 56931). They were approved as part of the reasonable further progress requirements for the Milwaukee-Racine and Sheboygan County 1-hour ozone nonattainment areas. The following changes were made to the "non-RACT" portions of ch. NR 428:

NR 428.02 “Definitions” adds the definition of “process heater”, rule NR 428.02(7e). This addition is acceptable.

NR 428.04(2)(h)1. and 2.,428.05(3)(e)1. to 4,have beencorrected to use the units of “grams per brake horsepowerhour” from “grams per brake horsepower.” These corrections are acceptable.

The revision avoids triggering new source NOx limits under s. NR 428.04 when the modification is made solely to comply with existing source NOx control requirements under ss. NR 428.05 or 428.22. This modification does not alter the original intended emission limitation of the rule and therefore is acceptable.

A number of clarifications and simplifications were made to the monitoring and reporting requirements under 428.23(1)(b)1., 428.23(1)(b)9, and 428.24(1)(b)(intro.).24

These changes are not substantive in nature nor do they eliminate dual requirements. Therefore these modifications are acceptable.

The applicability statement in s. NR 428.05(1) is being revised to remove the reference to “modified" sources. The use of the term "modified" in this case states that a source modified before the February 1, 2001 is an existing source. Some inferred this meant a source existing prior to that date but modified afterwards is not subject to an emission limit. The applicability language is altered to clearly identify units subject to an existing source emission limitation. This correction is acceptable.