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OAR Box 1778 

Prepped by Ollie Stewart 

Document Number: 

219) ll-F-29 

Docket Number: 

A-90-06 

Printed 10/28/2008 9:51:02 AM Sheet 219 of 276 
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APR 0 9 1991 

MEMORANDUM TO: 

FROM: 

SUBJECT: 

Department of Energy 

Washington, DC 20585 

A *]* IJ '.: • .-•*; 

4 ^ fi-qo-oL 

jr-F-28 

•5 JUN 1 41991 

Don Elliott 

General Counsel 

Environmental Protection Agency 

tC 

Linda Stuntz ^ 

Deputy Under Secretary for 

Policy, Planning and Analysis 

WEPCo Exclusion for Pollution Control Projects 

At our last White House WEPCo meeting, DOE agreed to draft a WEPCo exclusion 

for pollution control projects. I am enclosing our proposal for an exclusion. 

This proposal reflects the position that pollution controls can be excluded 

from WEPCo as a matter of legal interpretation and should be excluded as a 

matter of policy and common sense. 

Although you are drafting another interpretative rule, we have still used the 

format and, to the extent possible, language from EPA's most recent draft 

rule. As you know, this exclusion will affect other provisions of your 

redrafted rule. We believe this pollution control exclusion can be adopted 

through an interpretative rule. However, 1f the decision is made that an 

exclusion like the one enclosed must be adopted through formal rulemaking, 1t 

is critical that the formal rule not be prejudiced 1n any way by a more 

restrictive treatment of pollution control projects in an interpretative rule. 

We trust this proposal will be helpful to EPA and hasten the development of a 

good WEPCo fix. Please call 1f you wish to discuss this matter. 

cc: w/attachment 

Dick Schmalensee 

Bill Rosenberg 

Art Fraas 

Teresa Gorman 

Barry Hartman 

Jeff Holmstead 

Ed Watts 
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NSR AND NSPS APPLICABILITY FOR 

POLLUTION CONTROL PROJECTS AT RLL SOURCES 

A. Definition 

For purposes of this ruling, the term "pollution control project" 

means any activity undertaken at an existing stationary source or 

facility primarily for the purpose of reducing air pollution. 

Pollution control projects generally include add-on types of 

emissions control equipment as well as the use of a less 

polluting fuel. Coiiventlonal and advanced scrubbers, sorbent 

injection. low-NOK burners, electrostatic precipitators, and 

fabric filters are examples of add-on control equipment. 

Switching to coal with a lower sulfur content, switching from a 

more polluting fuel to natural gas, natural gas or coal 

reburning, and cofirlng of natural gas and other fuels are 

examples of pollution control projects where a less polluting 

fuel is being used. 

In addition, any activity that is necessary to accommodate 

switching to a less polluting fuel is considered to be part of 

the pollution control project. In some instances, this may 

involve physical changes to the pollution generating equipment 

_9^_g. . boiler), but only if the changes are necessary to maintain 

the jjTorfrfa.'l operating capability of the unit which otherwise would 

be impaired as a result of the fuel switch. For example, an 

electric utility steam generating unit that switches from a 

higher sulfur bituminous coal to a low-sulfur subbituminous coal 

may_ n^ed ,to make certain changes to the boiler in order to avoid 

derating- llie unli\. The appropriate reviewing authority may 

request such Information as may be necessary to determine that 

tho changes to be undertaken are part of the pollution control 

project. However, changes whlcli are intended primarily to ' 

restore original capacity or to improve the operational 

efficiency of the facility are not considered to be part of a /9^ / 

pollution control project for purposes of this ruling, £fls such~7\ y ^ 

these changes are subject to requirements described elsewhere inj-^ 

this rullng7~~) —-' 

B. Rationale for Excluding Pollution Control Projects from NSR 

and NSPS Requirements 

EPA has always recognized that Congress did iiot Intend that e^ery 

activity at an existing facility be considered a physical or 

operational change for purposes of new source requirements. 

Also, Congress has singled out electric utilities to play a major 

role In reducing S02 and N0K emissions under Title IV of the 

Clean Air Act. As a result, many powerplants will be undertaking 

activities over the next decade to comply with the new acid rain 

requirements. In addition, other stationary sources and 

facilities will be undertaking activities to comply with other 

titles of the Clean Air Act. Because of these activities whose 
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purpose is to reduce emissions, EPA believes that guidance must 

be provided as soon as possible concerning the applicability of 

NSPS and NSR to pollution control projects. Without such 

guidance, affected sources may be unable to make timely decisions 

about how to comply with Clean Air Act requirements in the least 

costly and most efficient manner. 

In practice, EPA has clarified the definition of "modificatioii" 

in both the NSPS and NSR regulations through the adoption of a 

number of common-sense exclusions, such as routine maintenance, 

repair aiid replacement activities. In addition, under existing 

NSPS regulations, the Installation or improvement of an emissions 

control system or device (I.e., a pollution control project) 

which reduces hourly emission rates does not trigger NSPS: 

mflj>.p£aO-rrJi*X 

The addition^or use of any system or device whose 

primary function is the reduction of air pollutants [is 

excluded from NSPSJ , except when afl—emi&*tU7TS—eerrtrr©! 

sijstWn~is~-r^moved or repla^^d—by--^~-sysiye^I^-^rihieh the 

Administrator determines,to be Jrenilpenvironmentally 

beneficial. 40 CFR 60.14 &JJ 5 ) . ^ J^J^j «r&u*«jJC tn. ***-

This exclusion does not apply If the facility Is reconstructed. 

Changes that are determined to constitute reconstruction would 

trigger NSPS. 

In the past, EPA has taken various views as to whether the NSPS 

emissions control excluslo:. should apply for NSR purposes. 

However, it is clear that the NSR statutory definition of 

modification simply adopts the NSPS definition in Section 

111(a)(4). In addition, the legislative history reflects that, 

as a general matter, Congress Intended to conform the meaning of 

"modification" for PSD purposes to usage under NSPS [See 123 

Cong. Rec. H11957 (November 1, 1977)]. Finally, the Clean Air 

Act Amendments of 1990 impose new emission reduction requirements 

on many existing sources, wliich, as a consequence, must undertake 

various types of pollution control projects without delay. 

Therefore, today EPA Is clarifying its intention to apply for NSR 

purposes the same common-sense exclusion for pollution control 

projects that has been adopted for NSPS purposes. under today's 

interpretative rule, existing sources which would otherwise 

become subject to NSR only because they decide to install or 

improve an emissions control system or device, or participate in 

the CCT program or similar demonstration projects approved by 

EPA, would Instead be excluded from NSR coverage.