p.1 

OAR Box 1796 

Prepped by Keeia Richards 

Document Number: 

18)IV-H-41 

Docket Number: 

A-90-37 

Printed 10/31/2008 4:20:37 PM Sheet 18 of 107 
P.2 

Bill Wehrum 

10/18/2002 08:36 AM 

To: Arthur_G._Fraas@omb.eop.gov, Paul_R. "^tfdomb.eop.gov, 

Amy_L._Farrell@omb.eop.gov 

cc: 

Subject: RMRR ICR and RIA Drafts 

Current draft RMRR ICR and RIA. More to follow. 

— Forwarded by Bill Wehrum/DC/USEPA/US on 10/18/2002 08:34 AM --

Dan Mussatti 

10/17/2002 04:00 PM 

To: Dave Svendsgaard/RTP/USEPA/US@EPA 

cc: Bill Harnett/RTP/USEPA/US@EPA, Bill Wehrum/DC/USEPA/US@EPA. 

Lynn Hutchinson/RTP/USEPA/US@EPA, Michael 

Ling/RTP/USEPA/US@EPA. Racqueline 

Shelton/RTP/USEPA/US@EPA, Ron Evans/RTP/USEPA/US@EPA 

Subject: Could it be true?B 

I think I have answered all of your concerns, and have attached the revised draft documents you need for 

OMB. If they meet your approval (and I have not overlooked anything or made some gargantuan typo), 

then all you need to do is change the name of the PDF file by deleting the word "draft" from the end of the 

name. If there are concerns, I will be in the office until noon tomorrow. IF I don't hear from anyone by then, 

I will assume there are no problems. 

Hope this does the trick. 

& 

RMRR Impact Analysis October 17 02 draf icr-NSR-RMRR 10-17-02 draft.f 

f jtiy/rtLxe-— 

NOV 2 2 2002 

EPA AIR DOCKET 

1 
P.3 

October 17, 2002 

MEMORANDUM: 

TO: Ron Evans, Group Leader 

Innovative Strategies and Economics Group 

FROM: Daniel Mussatti, Senior Economist 

Innovative Strategies and Economics Group 

SUBJECT: ANALYSIS OF PROPOSED DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR AND REPLACEMENT (RMR&R) FOR THE NEW SOURCE REVIEW 

PROGRAM 

Introduction: Currently, the Agency interprets and applies its major New Source Review (NSR) 

exclusion for sources performing routine maintenance, repair and replacement (RMR&R) on a caseby-case basis. This rulemaking provides a formal definition of what constitutes RMR&R and 

describes two alternatives through which sources of pollution may participate: an annual 

maintenance cost process that establishes an upper limit or "allowance" for exempted maintenance 

and repair activities, and a second process that identifies major source NSR projects on a case-bycase basis, employing a project cost test similar to that used for New Source Performance Standards 

(NSPS). These programs would exempt participating sources from costly and unnecessary major 

NSR determinations and permits for RMR&R-related activities and provide greater levels of 

certainty to industry when making permitting-related decisions. These alternative rulemaking 

options also limit the applicability of the previous case-by-case approach to determining which 

activities at a source constitute or do not constitute a major NSR action. 

This paper presents an overview of the impacts of the two proposed definitions of routine 

maintenance, repair, and replacement (RMR&R) within the framework of the NSR preconstruction 

permit program. To perform this analysis, the Agency relied heavily upon existing reports on file 

for various aspects of the major NSR program, including the June 2002 NSR Report to the 

President,1 the NSR 90-Day Review Background Paper,2 the current major NSR Information 

Collection Request (ICR),3 the ICRs submitted in May and June for revisions to the NSR 

U.S. EPA, 2002, "New Source Review: Report To the President," 

http://www.epa.gov/air/nsr-review/background.html 

U.S. EPA, 2001, "NSR 90-Day Review Background Paper," Docket A-2001-19, Document Number II-A01, http://www.epa.gov/air/nsr-review/background.html 

U.S. EPA, 2001, "Information Collection Request for 40 CFR Part 51 and 52 Prevention of Significant 

Deterioration and Nonattainment New Source Review," OMB Control Number 2060-0003; EPA Form 

Number 1230.09. 

RMR&R Impact Analysis August 29,2002 

Page 1 
P.4 

applicability requirements and the proposed RMR&R program,4'

5

 and their associated Federal 

Register notices and other public announcements. 

The Current NSR Program: The NSR program is a combination of air quality planning and air 

pollution control technology program requirements for new and modified stationary sources of air 

pollution. Section 109 of the Clean Air Act Amendments of 1990 (CAAA) requires EPA to 

promulgate primary National Ambient Air Quality Standards (NAAQS) to protect public health and 

secondary NAAQS to protect public welfare. Once EPA has set these standards, states must develop 

a State Implementation Plan (SIP) which contains emission limitations and other control measures 

to attain and maintain the NAAQS and to meet the other requirements of section 110(a) of the Act. 

The state's NSR program is a part of that SIP. 

The program commonly called the "major NSR" derives its authority from parts C and D of Title 

I of the Act and is a preconstruction review and permitting program applicable to new or modified 

major stationary sources of air pollutants. In areas not meeting the NAAQS and in the ozone 

transport regions (OTR), the program is the "nonattainment" NSR program, implemented under the 

requirements of part D of title I of the Act. In attainment areas (areas meeting NAAQS) or in areas 

where there is insufficient information to determine whether they meet the NAAQS ("unclassifiable" 

areas), the Agency implements major NSR as the Prevention of Significant Deterioration (PSD) 

program under the requirements of part C of Title I of the Act. Applicability of the major NSR 

program must be determined in advance of construction and is pollutant-specific. When a source 

triggers major NSR in attainment areas, it must install best available control technology (BACT) and 

conduct modeling and monitoring as necessary. If the source is located in a nonattainment area, it 

must install technology that meets the lowest achievable emission rate (LAER), secure emission 

reductions to offset any increases above baseline emission levels, and perform other analysis. 

One key attribute of the major NSR program in general is that sources with major modifications may 

"net" out of review by coupling the proposed emissions increases at the source with 

contemporaneous emissions reductions. In other words, a source can modify, or even completely 

replace, or add, emissions units without obtaining a major NSR permit as long as its "actual 

emissions" do not increase over baseline levels at the plant as a whole by a significant amount. 

Existing regulations define baseline actual emissions as "the average rate, in tpy, at which the unit 

actually emitted the pollutant during a 2-year period which precedes the particular date and which 

is representative of normal source operation." The permitting authorities will ordinarily allow use 

of a different time period "upon a determination that it is more representative of normal source 

operation." We have historically used the 2 years immediately preceding the proposed change to 

establish the baseline. However, in some cases we have allowed use of an earlier period. 

EPA defines a "net emissions increase" as the increase in "actual emissions" from the particular 

U.S. EPA, 2002, "Infonnation Collection Request for Changes to the 40 CFR Parts 51 and 52 PSD and 

NSR Applicability Requirements for Modifications to Existing Sources," EPA Form Number 2074.01. 

U.S. EPA, 2002, "Information Collection Request for the Establishment ofa Definition of Routine 

Maintenance, Repair and Replacement for the New Source Review Program," EPA Form Number 1713.04. 

RMR&R Impact Analysis August 29, 2002 

Page 2 
P.5 

physical or operational change (taking into account the use of emissions control technology and 

restrictions on hours of operation or rates of production where such controls and restrictions are 

federally enforceable), together with the source's other contemporaneous increases or decreases in 

actual emissions. 

Each source seeking an NSR permit must predict whether or not the proposed change will result in 

a significant net increase in the source's actual emissions. Currently, when a source unit (other than 

an electric utility steam generating unit)6 "has not begun normal operations," that unit's post-change 

actual emissions are equal the units Potential To Emit (PTE). This is referred to as the "actual-topotential" test. Sources may avoid this presumption by agreeing to limit the unit's PTE through the 

use of practically enforceable restrictions. The net result of this process lets sources ensure no 

increase in their actual emissions above baseline levels following the change. 

Elements of New Source Review Reform: In response to comments, discussions, and 

recommendations from the public and stakeholders, the EPA is revising regulations governing 

numerous provisions of the major NSR program. These revisions include:.7'

8 

• a new method for determining baseline emissions, 

a new actual-to-future-actual determination for whether a major modification will occur, 

a new applicability provisions for emission units designated as Clean Units or that 

participate in pollution control projects (PCPs), 

• changes to let major stationary sources manage facility wide air emissions through a Plantwide Applicability Limit (PAL) without requiring a preconstruction major NSR permit 

• a rule section that directs how a major modification is determined under the various new 

major NSR applicability options (baseline emissions, actual-to-future-actual methodology, 

PALs, and Clean Units) and clarifies where to find the provisions in the revised rules, 

codifying what has always been EPA policy: that determining whether a major modification 

has occurred is a two-step process involving an assessment of whether:(l) a significant 

emissions increase of a regulated pollutant occurred from a combination of one or more 

emissions units following the physical or operational change; and (2) a significant net 

emissions increase of that pollutant occurred from the major stationary source over the 

contemporaneous period, 

• a formal definition of what constitutes RMR&R and describes a program through which 

sources of pollution may voluntarily participate and potentially avoid costly and unnecessary 

major NSR determinations and permits, based upon the reasonableness of the projects 

undertaken and offering relief from the regulatory uncertainty associated with permit-related 

decisions. 

The regulations define electric utility steam generating units (EUSGUs), which have special rules for 

physical and operational changes that employ an actual-to-future-actual methodology for all changes (but 

not replacement) at an existing electric utility steam generating units. 

These provisions also let States make similar changes in their major NSR programs. 

This analysis uses the terms "process unit" and "source" as synonyms for the same entity. 

RMR&R Impact Analysis August 29,2002 

Page 3 
P.6 

Routine Maintenance, Replacement and Repair - Background: The modification provisions of 

the NSR program in parts C and D are based on the definition in section 111(a)(4) of the Act: 

"... ['modification' means]... any physical change in, or change in the method of 

operation of, a stationary source which increases the amount of any air pollutant 

emitted by such source or which results in the emission of any air pollutant not 

previously emitted." 

That definition involves a two-step test for determining whether source activities constitute a 

modification subject to major NSR requirements: the source determines whether a physical or 

operational change will occur and then determines whether the change will result in (1) a significant 

emissions increase of a regulated pollutant from a combination of one or more emissions units 

following the physical or operational change; and (2) a significant net emissions increase of that 

pollutant from the major stationary source over the contemporaneous period. 

The Agency, industry, and environmental groups have debated for years as to the types of projects 

or activities that qualify as RMR&R. The reference to "any physical change .. . or change in the 

method of operation" could mean that even the repair or replacement ofa single leaky pipe could 

meet the requirements for a major NSR modification. However, the EPA has previously adopted 

several limited exclusions from the "physical or operational change" component of the definition 

to recognize that routine maintenance, repair and replacement (RMR&R), and changes in hours of 

operation or in the production rate are not by themselves considered a physical change or change 

in the method of operation within the definition of major modification. The Agency also limited the 

scope of the second step of the statutory definition of modification by excluding all changes that do 

not result in an emissions increase at a major source above a "significant" level. Taken together, 

these regulatory limitations restrict the application of the major NSR program to only "major 

modifications" at existing major stationary sources. Currently, the RMR&R exclusion is interpreted 

and applied on a case-by-case basis. The current process still "imposes significant burdens on the 

utility practices necessary to maintain the safety, availability, efficiency and reliability of the 

electricity supply at existing sources. . .[and] the current NSR program has actively discouraged 

efficiency improvement projects . . ."9 For example, the 2001 NSR 90-Day Report cites the 

following anecdotal evidence: 

". . .past blade maintenance and replacement of only the deteriorated blades at 

Detroit Edison has never increased efficiency over the original design. Yet because 

[blade upgrade] would result in substantially improved efficiency compared to the 

original design, EPA considered it a physical change under its NSR regulations, and 

[therefore] subject to NSR.. ."10 

Another major problem inherent in the current major NSR system is regulatory delay. Since 1997, 

the average time needed to obtain a major NSR or PSD permit, across all industries, is about seven 

9 U.S. EPA 2002, "New Source Review: Report To the President," p 8. 

10 U.S. EPA, 2001, "NSR 90-Day Review Background Paper," p 28. 

RMR&R Impact Analysis August 29, 2002 

Page 4 
P.7 

months." The average time needed to make a maintenance-related NSR determination is between 

thirty and sixty days. The National Petroleum Council reported in June 2000 that the lengthy process 

for obtaining permits can limit a refinery's ability to respond quickly to changing market conditions, 

offering the following list of average regulatory delays, based upon surveys of its members: 

3-6 months to prepare a permit application 

1-3 months for the permitting authority to deem the application complete 

3-6 months for the development and negotiation ofa draft permit 

An unstated period for public notice and the opportunity to receive public comments on the 

draft permit 

An unstated period of time for the permitting authority to respond to public comments and 

take final action on the permit12 

Note that these examples do not address only routine maintenance. In the Detroit Edison example, 

they decided against replacing its turbine blades with one with a better design to avoid NSR. But the 

deliberate improvement of a unit during routine maintenance is an integral part of a plant's 

operations and the upgrade would have made a significant improvement in energy consumption 

without affecting the environment. Relying on the results of the NPC survey, the entire process of 

merely getting approval to make a routine modification would require a minimum of year. 

Obviously, if such a routine change is warranted in response to changing market conditions, then 

a year's worth of delay would deeply threaten a company's ability to operate effectively in the 

market. Clearly, the formalized process through which a source reports its routine activities should 

not prevent such case-by-case decisions. One of the goals of the proposed new definition for routine 

maintenance, repair and replacement is to allow for this sort of flexibility. 

Under the current case-by-case approach, if a source needed to perform maintenance and repair at 

some unit, and the need for major NSR permitting for that repair was not clear, that source would 

have to postpone making the repair until an NSR applicability determination could be made. During 

that lag period, the unrepaired unit would continue to emit above-normal levels of pollutants (or part 

of the source's productive capacity would have to be shut down to await the NSR determination). 

Then, if the determination indicated the activity required major NSR permitting, the source would 

have to wait once more for its permit to be approved before beginning the repair. In other words, a 

source may have to wait for up to eighteen months to be able to make a repair because it triggers 

major NSR permitting. 

Approach A: The Annual Maintenance Allowance Approach: Under the proposed annual 

maintenance allowance approach, EPA proposes modifying the RMR&R exemption to explicitly 

include activities at facilities with total applicable costs below an annual maintenance allowance 

level, established for the aggregate of all units at the facility for each calendar year. The sum of all 

project costs at all ofa facility's units for the calendar year would be compared to the allowance. 

Facilities would make individual determinations on each potential project to be included in the 

11 Ibid, p 7. 

12 Ibid, p 44. 

RMR&R Impact Analysis August 29, 2002 

Page 5 
P.8 

RMR&R total and, for those projects it deems RMR&R is not appropriate, the facility will perform 

the 4-step determination test currently used for all routine maintenance repair and replacement 

activities. If the 4-step test determines the activity does not meet the requirements for RMR&R, the 

activity will be assumed to require a major source NSR permit. At the end of each year, facilities 

with total costs below the annual maintenance allowance would be considered to have undergone 

only routine maintenance, repair and replacement activities for those activities in the RMR&R 

report. If the total yearly RMR&R cost for a facility exceeds the annual maintenance allowance, all 

of the facility's reported activities would be reviewed as follows: 

The owner/operator shall subtract projects from the total yearly cost, starting with the most 

expensive project, until the remainder is less than or equal to the annual maintenance 

allowance. (For simplicity, this report differentiates these projects as "excluded".) 

• Projects that were removed from the total yearly cost would be evaluated on a the current 

case-by-case basis in accordance with current EPA policy. 

Any "excluded" project found to be require major source NSR permitting through the ex post 

case-by-case review would be subject to the requirements of NSR, including any potential 

enforcement-related requirements from its failure to apply for an NSR permit. 

The Agency will establish the annual maintenance allowance equal to the product of the replacement 

cost of the unit and a specified maintenance percentage established in the proposed rule, where 

replacement cost is defined as the total capital investment necessary for the complete replacement 

of the unit, calculated according to the EPA's cost methodology, set out in the EPA Air Pollution 

Control Cost Manual for annual operations and maintenance activities.13 When a stationary source 

uses the annual maintenance allowance to determine RMR&R activities, all projects must be 

included in the annual cost calculations. A stationary source may not select which projects undergo 

a case-by-case review and which are included in the cost calculations. 

Facilities must submit an annual report, aggregated across all units at the facility, to the appropriate 

Permitting Authority (PA) within 60 days of the end of the year over which project costs have been 

summed. Each report must provide a summary of the estimated replacement value of each unit, the 

aggregated annual maintenance allowance for the facility, a description of all changes made to each 

unit, and the costs associated with those projects. If the sum of the cost of the projects at a facility 

exceed the annual aggregate maintenance allowance for the facility, the outcome of the case-by-case 

review of all nonroutine projects must also be included in the unit's report. 

Approach B: The Equipment Replacement Approach: Under the alternative RMR&R approach 

that delineates when an equipment replacement activity will trigger a major NSR permit, sources 

will not perform an annual inventory of its units. Instead, each instance where the source must 

replace an existing piece of equipment integral to the emission of pollution will be subjected to a 

project cost threshold similar to the New Source Performance Standards (NSPS) reconstruction test. 

Activities that fall outside the threshold of that test will be subject to major source NSR permitting -

an outcome that is identical to that of the annual maintenance allowance scenario and the current 

13 The EPA Air Pollution Control Cost Manual, 6th Edition, Daniel Mussatti, ed., January 2002, EPA #452-B02-001, Section 1, Chapter 2. 

RMR&R Impact Analysis August 29,2002 

Page 6 
P.9 

common-sense approach. 

The equipment replacement approach is very similar in impact to the expected impact of the annual 

maintenance allowance approach in that all sources will have to annually determine how they will 

perform planned maintenance and repair activities in the presence of the RMR&R requirements 

(Rule Assimilation, Development of Strategy), and, to be able to anticipate large-scale RMR&R 

activities, will also need to perform an annual assessment of the replacement value of its polluting 

units. However, unlike the annual maintenance allowance approach, the equipment replacement 

approach does not require an annual report to the PA on RMR&R activities. Consequently, there is 

no analogous report preparation activity for the equipment replacement approach. For those 

activities identified as requiring major source NSR permitting, the improved verification process laid 

out in the equipment replacement approach will result in some reduction in burden and costs. 

However, the extent of that burden reduction cannot be determined a priori. Instead, the Agency 

must wait for a formal definition of the components of the determination process before assessing 

its relative impact. While the Agency may promulgate either Approach A or Approach B, or some 

combination of both approaches, this analysis assumes the two approaches are mutually exclusive -

that the final rule will be either Approach A or Approach B, but not a combination of the two. 

Profile of Regulated Entities: There are two types of sources potentially affected by the proposed 

approaches to routine maintenance, repair, and replacement within the framework of the Agency's 

NSR preconstruction permit program. The following discussion includes brief descriptions of the 

two types: electricity generating units and non-utility large industrial boilers, combustion turbines, 

and other units. The Agency made this determination based upon existing air quality reports and 

regulatory analyses: the Ozone Transport Assessment Group's (OTAG's) 1990 data base; tlie 

Operating Permits data base of respondents; and the data base developed by the 

RACT/BACT/LAER Clearinghouse (RBLC). 

Electricity Generating Units: In 1990, approximately 2.8 trillion kilowatt hours (kWh) of 

electricity were generated in the United States. By 2005, EPA projects this total to increase to about 

3.6 trillion kWh.14 More than 95 percent of the nation's generating capacity is owned by electric 

utilities and a significant portion of the nation's electricity generating industry is in the region 

affected by the final Section 126 rule.15 EPA estimates 842 electrical generating units of less than 

25 MW will be operating in this region in the year 2000. In addition to electric utility power units 

that produce only electricity, this number includes units owned by independent power producers 

(IPPs) and units that co-generate electricity and steam (co-generators), whether owned by utilities 

or IPPs. 

Non-Utility Potentially Affected Sources: There are about 14,500 sources subject to Title I 

14 EPA's generation requirement projections are based on an extension of the electric demand forecast of the 

North American Electric Reliability Council, adjusted for the impact of the Climate Change Action Plan. 

15 The final Section 126 region consists of whole or parts of Delaware, District of Columbia, Indiana, 

Kentucky, Maryland, Michigan, North Carolina, New Jersey, New York, Ohio, Pennsylvania, Virginia, and 

West Virginia. The petitions filed with EPA only name parts of Indiana, Michigan, Kentucky, and New 

York while naming the whole of the other jurisdictions. 

RMR&R Impact Analysis August 29,2002 

Page 7 
P.10 

operating permits requirements in the EPA's Operating Permits Database, encompassing all industry 

classifications in 34 states and the District of Columbia. EPA believes this database represents the 

majority of the universe of potentially affected sources for the NSR program. Table 1 below is in 

the current NSR ICR and in the ICR for the direct-to-final set of changes to the NSR program 

dealing with applicability. Table 1 displays the industry classifications most commonly affected by 

NSR permitting requirements.16 

Table 1 Most Commonly Affected Entities 

Industry Group 

Pulp and Paper Mills 

Paper Mills 

Chemical Processes 

Pharmaceuticals 

Petroleum Refining 

Automobile Manufacturing 

Electric Services 

Natural Gas Transport 

SIC 

261 

262 

281 

283 

291 

371 

491 

492 

NAICS 

32211,322121,322122,32213 

322121,322122 

325181, 32512, 325131, 325182, 211112, 325998, 331311, 325188 

325411, 325412, 325413, 325414 

32411 

336111, 336112, 336712, 336211, 336992, 336322, 336312, 33633, 33634, 

33635,336399,336212,336213 

221111,221112,221113,221119,221121,221122 

48621.22121 

Assessing Benefits and Costs: The Agency believes all sources potentially subject to major NSR 

permitting will use the RMR&R approach promulgated by EPA. In the past, maintenance and repair 

activities at a process unit were screened by the facility according to a case-by-case rule for 

determining whether or not the activity could trigger major NSR. The facility would apply for an 

NSR determination for all activities it believed may trigger major NSR permitting and those 

activities for which a case-by-case determination was inconclusive. Based upon the results of this 

determination, the facility would respond accordingly, applying for a major NSR permit when 

necessary. Under the annual maintenance allowance approach to RMR&R program, EPA has 

developed an objective test to reduce the uncertainty associated with determining whedier a source 

is eligible for routine maintenance exclusion. Under the equipment replacement approach, EPA has 

streamlined the major source permit determination process to remove uncertainty and decrease 

regulatory delays. EPA anticipates sources will choose to participate in the new RMR&R program 

under either of its to proposed approaches because of the increased regulatory certainty offered by 

the program. 

Benefits: "Benefits" refers to any and all outcomes ofa regulation that contribute to an enhanced 

level of social welfare. The two primary types of benefits that can be attributed to tiie RMR&R 

definition are temporal health-related benefits and benefits from avoided costs. Eliminating the 

regulatory lag in the RMR&R process can reduce short-term exposures to pollutants and would also 

lead to de minimis improvements vis a vis the cumulative effect of some pollutants. Furthermore, 

16 Information Collection Request for 40 CFR Part 51 and 52 Prevention of Significant Deterioration and 

Nonattainment New Source Review, Office of Management and Budget (OMB) Control Number 2060-

0003; EPA Form Number 1230.09. 

RMR&R Impact Analysis 

Page 8 

August 29,2002 
P.11 

stimulating the firm's incentive for making technological improvements while performing RMR&R 

tasks could lead to permanent decreases in emissions (and improvements in energy consumption and 

production) that were not anticipated by the underlying air quality standard. The concomitant 

decrease in pollution control costs (by reducing the need for further controls at other sources) and 

increased health-related benefits offer opportunities for yet unrealized economic improvements 

through the proposed RMR&R program. However, given the long time needed for the build-up of 

cumulative exposure affects and the lack of data to define the trade-off between control alternatives, 

this analysis defers quantifying these potential health-related and control cost benefits until better 

data are available. 

The Agency believes most of the benefits from the proposed definition of RMR&R activities will 

be derived from cost savings, of which this report identifies two primary types: improved flexibility 

and reaction time, and avoided NSR costs. Bureaucratic delays due to processing time and review 

limit industry's ability to react quickly in a changing economic environment. For many source 

categories, this is not a big problem because they undertake NSR-related activities on an infrequent 

basis. However, for a number of industries, the Agency has identified as many as three or four 

changes take place each year that could prompt an Operating Permit revision and, potentially, a 

major NSR permit, as well.17 When such changes occur, permitting lags can significantly impact the 

profitability of the source by preventing timely changes in processes that improve competitiveness 

and protect market share. For EGUs and other boiler applications, the failure to perform timely 

repairs and maintenance can reduce boiler efficiency and thereby reduce electricity generating 

capacity. Even a one percent change in the heat rate ofa boiler {ceteris paribus) can impose a half 

a million dollar change in net revenues for a 500 MWe coal-fired boiler.18 Allowing sources to 

respond to maintenance-related problems in a revenue maximizing fashion will unambiguously 

increase revenues (and profits) and reduce operating costs for industry. 

The net effect of these cost savings could be substantial. In tangible cost savings, the ability to 

address larger routine maintenance and repair problems quickly can conceivably result in tens of 

millions of dollars in savings through more efficient electricity generation alone. That, combined 

with the potential for improved national and international competitiveness and market share due to 

RMR&R flexibility improvements could potentially result in job savings, job creation, and other 

macro-economic improvements. Unfortunately, there is no way to determine a realistic value for 

these improvements. Consequently, this report invites the public, regulated community, 

environmental organizations and other stakeholders to offer their input into this assessment toward 

future refinement of this analysis. 

Source Costs: EPA believes costs will be insignificant for most of the sources participating in the 

RMR&R program under either approach. For instance, the first annual task at each participating 

facility will be to estimate the replacement costs of all of its process units. Since these data are 

readily available to the applicant through financial records (such as insurance forms) it should take 

17 U.S. EPA, 1994, "Economic Analysis, Regulatory Flexibility Act Screening Analysis, and Paperwork 

Reduction Act Information Collection Request Analysis for Proposed Revisions to Part 70 Operating 

Permits Regulations," by Daniel Charles Mussatti, pp 33-48. 

18 http://ildpower.com/fossil02.html 

RMR&R Impact Analysis August 29,2002 

Page 9 
P.12 

no more than 4 hours per process unit (source) for each facility to inventory all of its units. 

Following the estimation of replacement cost for each process unit, the facility must create an annual 

report for each source, detailing all of the RMR&R-related costs and activities at that unit. For most 

units, this will be a relatively short report, again probably no more than 4 hours per report to gather 

and record each unit's RMR&R-related activities into the facility's annual report. 

As stated in the preamble to the proposed RMR&R definition and in the accompanying ICR 

revision, the facility must report activities aggregated by RMR&R-related costs across all 

appropriate process units, rather than aggregating the cost of activities across pollutants. While this 

limitation necessarily increases the burden and cost to industry, EPA believes the cost of that 

additional burden is minimal. Table 2 displays the expected long-term annual burden and cost of this 

rulemaking to sources for the maximum scope of this proposed rulemaking. 

Table 2 Expected Annual Marginal Burden and Cost to Process Units (Sources) for the 

Annual Maintenance Allowance Approach 

Entity/Activity 

Sources 

Rule Assimilation, Development of 

Strategy2 

Assessment of Replacement Value 

Preparation of Annual RMR&R Report 

Total Source Burden and Cost 

Respondents 

1,450 

1,450 

1,450 

1,450 

Hours Per 

Respondent 

per Year 

4 

4 

4 

12 

Total Annual 

Hours (All 

Respondents) 

5,800 

5,800 

5,800 

17,400 

Annual Cost 

per 

Respondent' 

S300 

$300 

$300 

$900 

Total Annual 

Cost (All 

Respondent)1 

• 

$435,000 

$435,000 

$435,000 

$1,305,000 

1 All costs are in 2002 dollars 

2 One-time items have been averaged over the three year life of this ICR. 

There are approximately 14,500 sources of air pollution potentially subject to NSR permitting.19 

Each of these sources will have to undertake the tasks listed in Table 2, resulting in an increased 

burden to all potentially affected sources of about $900 per year ($1.3 million annually for all 

sources) under the annual maintenance allowance approach. Because there are so many sources that 

are potentially affected and will need to perform the minimal annual tasks of inventory and 

reporting, the increase in burden dominates the expected effects of the RMR&R program. However, 

through the potential for reduced uncertainty and improved flexibility and competitiveness found 

in the RMR&R program, the Agency believes that although not measurable, for those sources 

subject to major source NSR under the current case-by-case process, the overall benefit to sources 

able to avoid major NSR permitting through the RMR&R program outweighs the de minimis 

increase in burden and costs imposed upon the entire universe of potentially affected sources. 

Consequently, the Administrator asserts that while not estimable in the traditional sense, the 

19 Most sources contain more than one pollution creating unit, but this report does not need to differentiate by 

pollutant for the purposes of this analysis. 

RMR&R Impact Analysis 

Page 10 

August 29, 2002 
P.13 

proposed RMR&R approaches provide regulatory relief to those sources currently subject to major 

source NSR under the current routine maintenance provisions. 

Table 3 Expected Annual Marginal Burden and Cost to Process Units (Sources) for the 

Equipment Replacement Approach 

Entity / Activity 

Sources 

Rule Assimilation, Development of 

Strategy2 

Assessment of Replacement Value 

Total Source Burden and Cost 

Respondents 

1,450 

1,450 

1,450 

Hours Per 

Respondent 

per Year 

4 

4 

8 

Total Annual 

Hours (All 

Respondents) 

5,800 

5,800 

11,600 

Annual Cost 

per 

Respondent ' 

$300 

$300 

$600 

Total Annual 

Cost (All 

Respondent)1 

$435,000 

$435,000 

$870,000 

1 All costs are in 2002 dollars 

2 One-time items have been averaged over the three year life of this ICR. 

The 14,500 sources of air pollution potentially subject to NSR permitting under the proposed 

equipment replacement approach will have to undertake the tasks listed in Table 3, above. Because 

the activities that fall within the definition of routine maintenance repair and replacement are 

independent of the program that governs it, there is no reason to believe the number of affected 

sources or the burden differs between the two proposed approaches. The primary difference between 

the two proposed approaches is that the equipment replacement approach does not have an 

associated annual reporting requirement. Consequently, the number of affected sources and the 

burden associated with each of the tasks in Table 3 has the same value as its analog in Table 2 for 

the annual maintenance allowance approach. Each affected source will expend about 8 additional 

hours in regulatory-related activities, relative to the status quo, for a total additional cost of about 

$870 thousand per year. As with the annual maintenance allowance approach, the Administrator 

asserts that the reduction in uncertainty and improved flexibility and competitiveness available 

through the equipment replacement RMR&R approach also provides regulatory relief to industry. 

Permitting Authority Costs: Permitting authorities seeking to implement the new RMR&R 

provisions will incur the costs outline in this section. PAs, however, do not have to adopt any 

particular provision as long as they can show that their version of the program is at least as stringent 

as ours. PAs who do not want to implement the new provisions will incur costs associated with 

demonstrating the adequacy of their existing programs. Each participating PA will have to learn the 

rule and incorporate it into its SIP. The Agency identified five tasks that each PA must perform for 

the incorporation of the RMR&R program into its SIP and two annual tasks it will have to perform 

to maintain the RMR&R program. Table 4 displays the expected annual burden and cost of this 

rulemaking to PAs for the maximum scope of this analysis. Each PA can expect to incur an 

additional 1,400 hours of activity per year 

RMR&R Impact Analysis 

Page 11 

August 29,2002 
P.14 

Table 4 Expected Marginal 

Entity / Activity 

Rule Familiarization2 

Applicability Determinations2 

SIP Revision2 

Public Hearing and SIP Modification2 

Legislative Coordination2 

Annual Report Review3 

NSR Determination5-' 

Total One-Time PA Burden and Cost' 

Total Annual Burden and Cost' 

Burden 

Respondents 

112 

112 

112 

112 

112 

112 

112 

112 

112 

and Cost to Permitting Authorities 

Hours Per 

Activity 

20 

10 

40 

30 

40 

8 

10 

Total Annual 

Hours (All 

Respondents) 

2,240 

1,120 

4,480 

3,360 

4,480 

116,480 

7,280 

15,680 

123,760 

Annual Cost 

per Respondcnj 

$740 

$370 

$1,480 

$1,110 

$1,480 

$38,480 

$2,405 

$5,180 

Total Annual 

Cost (All 

Respondent)1 

$82,880 

$41,440 

$165,760 

$124,320 

$165,760 

$4,309,760 

$269,360 

$580,160 

$4,579,120 

1 All costs are in 2002 dollars 

2 One-time items have been averaged over the three year life of this ICR. 

3 Annual items have been estimated at 130 sources per PA per year.. 

4 Assumes 1 determination for every 20 sources. 

Federal Cost: The Federal government incurs a moderate long-run burden from the promulgation 

of this rule, but the Agency believes the burden and cost of the RMR&R program to be justified. 

EPA will be responsible for two one-time activities, SIP revision support (at least 10 hours of 

guidance per year, or 3,360 hours over the three years of expected SIP revision), and SIP review and 

approval (about one day per SIP, or a total of 299 hours per year). Annually, the EPA will have two 

tasks to perform: management of the RMR&R program to those sources where it has authority 

(about 10 hours per year, or 1,450 hours per year per Federally managed source), and oversight of 

PA report review and NSR determinations, which will take about half as long for the Federal 

government to review each form, relative to the PA's burden for each task. The Agency typically 

estimates it offers oversight to one source in ten. Table 5, below, displays the average annual 

expected burden and cost to the Federal government for the RMR&R program. 

Bottom Line Impacts: The proposed annual maintenance allowance approach to RMR&R 

activities will add about $13 million annually to the cost of the NSR program. However, the effect 

of small costs accrued by large numbers of sources makes this total misleading. About 61 percent 

of that cost applies to the annual cost of the RMR&R program to sources - most of which is 

attributable to the de minimis cost of additional reporting that is spread across 14,500 sources (at an 

annual cost of less than a thousand dollars per source). If that de minimis cost is removed from total, 

the annual cost of the annual maintenance allowance RMR&R program is less than $200,000. The 

equipment replacement approach costs somewhat less than the annual maintenance allowance 

approach, since it does not have an annual reporting requirement. Consequently, for sources, the 

equipment replacement approach will cost sources an expected $870 thousand per year, or about 

$600 per source per year. 

RMR&R Impact Analysis 

Page 12 

August 29,2002 
P.15 

Table 5 Expected Yearly Marginal Burden and Cost to The Federal Government 

Entity/Activity 

Coordination with PAs

 2 

Review of SIPS2 

Management of Federal Program ' 

Annual Report Review3 

NSR Determination3'

4 

TOTAL One-Time Federal Burden and Costs ' 

TOTAL Annual Federal Burden and Costs ' 

Number of 

Respondents 

Served 

112 

112 

145 

13,050 

13,050 

Hours per 

Year Per 

Respondent 

10 

8 

10 

4 

10 

13 

Total Annual 

Hours 

1,120 

896 

1,450 

5,220 

13,050 

1(456 

Average Annual 

Cost per 

Respondent' 

$41,440 

$11,063 

$370 

$4 

$6 

$52,503 

Total Annual 

Cost (All 

Respondent)' 

$41,440 

$11,063 

$53,650 

$193,140 

$482,850 

$52,503 

$502,190 

1 All costs are in 2002 dollars 

2 One-time items have been averaged over the three year life of this ICR. 

3 Annual items have been estimated at 130 sources per PA per year.. 

4 Assumes 1 determination forevety 20 sources. 

Under both approaches, the Agency has provided opportunities for industry to improve its 

responsiveness to changing economic conditions while performing critical repair, replacement and 

maintenance activities. These improvements derive from the RMR&R program's primary goals -

the reduction of uncertainty and regulatory delay related to the performance of such activities. While 

valuable, the decrease in uncertainty and regulatory delay are not quantifiable in the traditional 

sense. Instead, the Agency's assertion that the two alternative approaches to RMR&R provide 

regulatory relief depends on a simple concept, the Le Chetalier Principle in its economic application: 

reducing the restrictions on industry reduces costs. Consequently, while the measurable portion of 

the proposed approaches indicate increases in burden and cost, the program in toto should be 

beneficial. 

Table 6 Bottom Line One-Time and Annual Burden and Costs'of the RMR&R 

Program (Both Approaches) 

Entity / Activity 

Process Units (Sources) Annual Maintenance Allowance 

Approach 

Process Units (Sources) Equipment Replacement Approach 

Permitting Authorities (Both Approaches) 

US Environmental Protection Agency (Both Approaches) 

Total Expected Cost ( Annual Maintenance Allowance Approach) 

Total Expected Cost (Equipment Replacement Approach) 

Number of 

Respondents 

1,450 

1,450 

112 

1 

Hours 

Yea 

Respon 

per 

per 

dent 

12 

8 

140 

23 

Total Annual 

Hours (All 

Respondents) 

17,400 

11,600 

15,680 

2,906 

Annual Cost 

per 

Respondent' 

$900 

$600 

$5,180 

$851 

Total Annual 

Cost (All 

Respondent)1 

$1,305,000 

$870,000 

$580,160 

$107,522 

$1,992,682 

$1,557,682 

All costs are in 2002 dollars 

RMR&R Impact Analysis August 29, 2002 

Page 13 
P.16 

Caveats: The analysis is based upon the best data available to the Agency at this time. However, 

inconsistencies in PA reporting techniques, incomplete data sets, and sampling limitations imposed 

upon the Agency by the Paperwork Reduction Act necessitated a certain amount of extrapolation 

and "best-guess" estimations by PAs and Agency experts. Consequently, the reader should not 

consider the conclusions to be an exact representation of the level of burden or cost that will occur. 

Instead, this report should be considered a directionally correct assessment of the impact the 

programmatic changes included in this rulemaking. 

Furthermore, because the final version of this rulemaking has not been determined, the EPA cannot 

make a fair estimate ex ante of the impact on number of permits that will be affected by this 

rulemaking. However, in the context of what has been done for over ten years for NSR, the Agency 

can be relatively confident that the DIRECTION and the MAGNITUDE of the expected changes 

due to the new RMR&R program reported in this analysis are representative of what will be observe 

ex post. 

Throughout this report the reader will observe estimated values that show accuracy to the single 

hour or dollar. However, reporting values at the single unit level can be misleading. In most 

situations, the proper way to present estimated data would be to determine an appropriate level of 

precision and truncate values accordingly, usually in terms of thousands or millions of units. For 

instance, a spreadsheet generated estimation of $5,456,295 could be presented in the text as $5.5 

(millions) or $5,456 (thousands). One problem with such an approach is the loss of data richness 

when the report contains a mixture of very large and very small numbers. Such was the case with 

this analysis, where source values are consistently in the millions and Federal values in the tens of 

thousands. Consequently, to avoid the loss of information through rounding, EPA reported all values 

at the single unit level and reminds the reader that there is no implied precision inherent in this style 

of reporting. 

RMR&R Impact Analysis August 29,2002 

Page 14 
P.17 

The Agency believes that the benefits from the RMR&R program 

outweigh the cost of that program, whether the Agency can quantify that 

net benefit or not. Under this assertion, "costs" and "benefits" include 

things other than monetary measures and sources potentially subject to 

major NSR permitting will avail themselves of the RMR&R program 

because of the increased regulatory certainty. Consequently, the 

Administrator asserts that the components of the major source permit 

exemption processes (both the annual maintenance allowance program 

and the equipment replacement program) are nonincreasing in cost to 

sources. 

Table E-l Bottom Line Effects for All Respondents 

Entity / Activity 

Process Units (Sources) Annual Maintenance Allowance 

Approach 

Process Units (Sources) Equipment Replacement Approach 

Permitting Authorities (Both Approaches) 

US Environmental Protection Agency (Both Approaches) 

Total Expected Cost ( Annual Maintenance Allowance Approach) 

Total Expected Cost ( Equipment Replacement Approach) 

Number of 

Respondents 

1,450 

1,450 

112 

1 

Hours per 

Year per 

Respondent 

12 

8 

140 

23 

Total Annual 

Hours (All 

Respondents) 

17,400 

11,600 

15,680 

2,906 

Annual Cost 

per 

Respondent ' 

$900 

$600 

$5,180 

$851 

Total Annual 

Cost (All 

Respondent)1 

$1,305,000 

$870,000 

$580,160 

$107,522 

$1,992,682 

$1,557,682 

I All costs are in 2002 dollars 
P.18 

United States Environmental Protection Agency 

EPA Office of Air and Radiation 

Office of Air Quality Planning and Standards 

Innovative Strategies and Economics Group 

October, 2002 

INFORMATION COLLECTION REQUEST 

FOR THE ESTABLISHMENT OF A 

DEFINITION OF ROUTINE 

MAINTENANCE, REPAIR AND 

REPLACEMENT FOR THE NEW SOURCE 

REVIEW PROGRAM 

prepared by 

Daniel Mussatti, Senior Economist 

Innovative Strategies and Economics Group 

Air Quality Strategies and Standards Division 

EPA # 1713.04 
P.19 

Executive Summary Currently, the EPA interprets and applies its major New Source Review 

(NSR) exclusion for sources performing routine maintenance, repair and 

replacement (RMR&R) on a case-by-case basis. This rulemaking provides 

a formal definition of what constitutes RMR&R and describes two 

approaches through which sources of pollution may participate: an annual 

maintenance cost process that establishes an upper limit or "allowance" 

for exempted maintenance and repair activities, and a second process that 

identifies major source NSR projects on a case-by-case basis, employing a 

project cost test similar to that used for New Source Performance 

Standards (NSPS). These approaches would exempt participating sources 

from costly and unnecessary major NSR determinations and permits for 

RMR&R-related activities and provide greater levels of certainty to 

industry when making permitting-related decisions. These options also 

limit the applicability of the current case-by-case determination approach 

to determining which activities at a source constitute or do not constitute a 

major NSR action. 

The calculation for the burden and cost to sources differs slightly between 

alternative approaches. Sources incur the most annual cost (about $1.3 

million for all affected sources) under the annual maintenance allowance 

approach, but that is an artifact of the number of sources affected, since 

sources also incur the lowest per-entity cost each year (about $900). 

Sources incur a lesser cost ($870 thousand per year for all sources) if the 

Agency adopts the equipment replacement approach due to a streamlined 

determination process and reduced reporting requirements. 

PAs will have the second lowest cost per entity ($5 thousand), and the 

Federal government will incur the highest cost per year at over $ 100 

thousand. For PAs and the Federal government, these are costs in addition 

to those reported in the current Information Collection Request (ICR), but 

for sources, the reported cost is to a large (and presently unmeasurable) 

extent, the same burden for the same activities under the current system, 

with no more than perhaps five or ten percent of the total burden and cost 

being new. Tables E-l displays the results of this ICR for all respondents 

for both RMR&R alternative approaches. 

Under both approaches, the Agency has provided opportunities for 

industry to improve its responsiveness to changing economic conditions 

while performing critical repair, replacement and maintenance activities. 

These improvements derive from the RMR&R program's primary goals -

the reduction of uncertainty and regulatory delay related to the 

performance of such activities. While valuable, the decrease in uncertainty 

and regulatory delay are not quantifiable in the traditional sense. Instead, 

the Agency's assertion that the two alternative approaches to RMR&R 

provide regulatory relief depends on a simple concept, the Le Chetalier 

Principle in its economic application: reducing the restrictions on industry 

decreases costs. Consequently, while the measurable portion of the 

proposed approaches indicate increases in burden and cost, the program in 

toto should be beneficial. 
P.20 

1 Identification of the Information Collection 

1.1 Title This document fulfills the Agency's requirements under the Paperwork 

Reduction Act (PRA) with regards to determining the regulatory burden 

associated with the proposed change to the preconstruction permitting 

program to provide a clear category of activities that will be considered 

routine maintenance, repair, and replacement under the New Source 

Review (NSR) program. It has been assigned EPA tracking number 

1713.04. The title of this Information Collection Request (ICR) is 

"Information Collection Request for the Establishment ofa Definition of 

Routine Maintenance, Repair and Replacement for the New Source 

Review Program." 

1.2 Description The program commonly called the "major NSR program" derives its 

authority from parts C and D of Title I of the Act and is a preconstruction 

review and permitting program applicable to new or modified major 

stationary sources of air pollutants. In areas not meeting National Ambient 

Air Quality Standards (NAAQS) and in ozone transport regions (OTR), 

the program is the "nonattainment" NSR program, implemented under the 

requirements of part D of title I of the Act. In attainment areas (areas 

meeting NAAQS) or in areas where there is insufficient information to 

determine whether they meet the NAAQS ("unclassifiable" areas), the 

Agency implements the Prevention of Significant Deterioration (PSD) 

program under the requirements of part C of Title I of the Act. 

Applicability of the major NSR program must be determined in advance 

of construction and is pollutant-specific. When a source triggers major 

NSR in attainment areas, it must install Best Available Control 

Technology (BACT) and conduct modeling and monitoring as necessary. 

If the source is located in a nonattainment area, it must install technology 

(hat meets the Lowest Achievable Emission Rate (LAER), secure 

emission reductions to offset any increases above baseline emission levels, 

and perform other analysis. 

The NSR program is a combination of air quality planning and air 

pollution control technology program requirements for new and modified 

stationary sources of air pollution. In brief, section 109 of the Act requires 

us to promulgate primary NAAQS to protect public health and secondary 

NAAQS to protect public welfare. Once EPA has set these standards, 

states must develop a State Implementation Plan (SIP) which contains 

emission limitations and other control measures to attain and maintain the 

NAAQS and to meet the other requirements of section 110(a) of the Act. 

The state's NSR program is a part of that SIP. 

In response to comments, discussions, and recommendations from the 

public, and stakeholders, EPA is revising regulations governing the NSR 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Pagel 
P.21 

programs mandated by parts C and D of title I of the Clean Air Act (CAA 

or Act) to clarify and formalize the process through which routine 

maintenance, replacement, and repair of process units is handled.'2 

The modification provisions of the NSR program in parts C and D are 

based on the definition in section 111(a)(4) of the Act: 

"... ['modification' means] .. . any physical change in, or change 

in the method of operation of, a stationary source which increases 

the amount of any air pollutant emitted by such source or which . 

results in the emission of any air pollutant not previously emitted." 

That definition involves a two-step test for determining whether source 

activities constitute a modification subject to major NSR requirements: the 

Permitting Authority (PA) determines whether a physical or operational 

change will occur and then determines whether the change will result in an 

emissions increase over baseline levels. 

The reference to "any physical change .. . or change in the method of 

operation" could mean that even the repair or replacement ofa single 

leaky pipe could meet the requirements for a major NSR modification. 

However, the EPA has previously adopted several limited exclusions from 

the "physical or operational change" component of the definition to 

recognize that routine maintenance, repair and replacement (RMR&R), 

and changes in hours of operation or in the production rate are not by 

themselves considered a physical change or change in the method of 

operation within the definition of major modification. The Agency also 

limited the scope of the second step of the statutory definition of 

modification by excluding all changes that do not result in an emissions 

increase at a major source above a "significant" level. Taken together, 

these regulatory limitations restrict the application of the major NSR 

program to only "major modifications" at existing major stationary 

sources. Currently, the RMR&R exclusion is applied on a case-by-case 

basis, and is interpreted in a case-by-case fashion. 

There has been considerable debate over the years as to the types of 

projects or activities that qualify as RMR&R. While EPA does not expect 

every source contemplating a repair and replacement activity to seek an 

applicability determination, the consequences of an incorrect 

determination by a stationary source could be an enforcement action for 

1 This analysis uses the terms "process unit" and 'source" as synonyms for the 

same entity. 

2 These provisions also let States make similar changes in their major NSR 

programs. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 2 
P.22 

failure to obtain the necessary pre-construction permit. The addition ofa 

clear category of activities considered to be RMR&R will provide more 

certainty to a stationary source in planning and decision making. 

1.2.1 Alternative A: 

Annual 

Maintenance 

Allowance 

Approach 

EPA proposes modifying the RMR&R exemption to explicitly include 

activities with total costs below an annual maintenance allowance for a 

unit. The annual maintenance allowance and the rules for calculation and 

summation of projects under the allowance would be defined in new 

provisions at 40 CFR 51.165 (a) (1) (xxvi), 40 CFR 51.166 (b) (38), 40 

CFR 52.21 (b) (39), and 40 CFR 52.24 (f) (25). Under EPA's proposed 

approach a maintenance allowance would be established for each facility 

for each pre-defined year (typically a calendar year or fiscal year). The 

costs of projects on which construction commences during the calendar 

year would be summed across all units regardless of the pollutant it emits 

from least expensive to most expensive to get a total yearly cost for a unit. 

Facilities with total RMR&R-related costs below the annual maintenance 

allowance would be considered to have undertake only routine 

maintenance, repair and replacement activities for those projects in its 

annual report. When a facility's total yearly reported cost exceeds the 

annual maintenance allowance, the activities would be reviewed as 

follows: 

The owner/operator shall subtract projects from the total yearly cost, 

starting with the most expensive project, until the remainder is less 

than or equal to the annual maintenance allowance. 

• Projects that were removed from the total yearly cost would be 

evaluated according to the 4-step case-by-case basis in accordance 

with current EPA policy. 

• Any removed project found to require major source NSR permitting 

through the ex post case-by-case review would be subject to the 

requirements of NSR, including any potential enforcement-related 

requirements from its failure to apply for an NSR permit before 

beginning the modification. 

The Agency will establish the annual maintenance allowance equal to the 

product of the replacement cost of the unit and a specified maintenance 

percentage established in the proposed rule, where replacement cost is 

defined as the total capital investment necessary for the complete 

replacement of the unit, calculated according to the EPA's cost 

methodology, set out in the EPA Air Pollution Control Cost Manual, 

(excluding the costs for installing and maintaining pollution control 

equipment).3 When a stationary source uses the annual maintenance 

The EPA Air Pollution Control Cost Manual, 6,h Edition, Daniel Mussatti, ed., 

January 2002, EPA #452-B-02-001, Section 1, Chapter 2. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 3 
P.23 

allowance to determine RMR&R activities, all projects must be included 

in the annual cost calculations. 

Facilities must submit an annual report, aggregated across all units at the 

facility, to the appropriate Permitting Authority (PA) within 60 days of the 

end of the year over which project costs have been summed. Each report 

must provide a summary of the estimated replacement value of each unit, 

the aggregated annual maintenance allowance for the facility, a 

description of all changes made to each unit, and the costs associated with 

those projects. If the sum of the cost of the projects at a facility exceed the 

annual maintenance allowance for the unit, the outcome of the 4-step caseby-case review of all projects selected in accordance with the steps 

outlined above must also be included in the unit's report. 

Depending on the Agency's decisions in the post-proposal stage, a 

possible outcome to this rule is that the current interpretation of RMR&R 

would be broaden, particularly if we focus on a single factor such as cost. 

To minimize the chances that the cost of an activity could broaden its 

interpretation of RMR&R activities, EPA's recommended approach will 

also contain safeguards to help ensure that projects that should be 

considered a major modification under the regulations are ineligible for 

exclusion from NSR under the annual maintenance allowance. EPA 

proposes excluding from use of the annual maintenance allowance: 

1. The installation of a new process unit. The types of activities 

eligible for an automatic RMR&R exemption should be limited to 

maintenance of existing equipment at a stationary source in order 

to ensure continued safe and reliable operation. The addition of 

new process units that did not previously exist should receive 

greater scrutiny before a determination of routineness is made. 

2. The replacement of an entire process unit. The replacement of 

an entire process unit should be automatically considered routine 

since a variety of operating parameters could change. Therefore, a 

wholesale exchange ofa process unit should be subject to greater 

scrutiny under the NSR program. 

3. Any change that would result in an increase in short term 

emission rates of any regulated pollutant, or in the emission of 

any regulated pollutant not previously emitted. Any project 

that will result in a higher emission rate or the emission ofa new 

pollutant should not be automatically excluded from the NSR 

program as these increases may result in a significant net 

emissions increase or may have a significant impact on the 

environment. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 4 
P.24 

1.2.2 Alternative B: 

Equipment 

Replacement 

Approach 

Concomitant with the proposed annual maintenance allowance approach, 

the Agency developed a second approach to the management of RMR&R 

activities that focuses on clarifying when the replacement of existing 

equipment with equipment that serves the same function and that does not 

alter the basic design parameters ofa unit would be considered RMR&R. 

Under this approach, EPA would establish a percentage (yet to be 

determined) of the replacement value of an emissions unit (yet to be 

defined) as a per-project threshold for applying the RMR&R exclusion in 

a fashion similar to that employed for New Source Performance Standards 

(NSPS) purposes. This approach would let sources determine more readily 

what large-scale replacement activities would or would not trigger major 

NSR permitting. The equipment replacement approach would apply to the 

replacement of existing equipment with either identical new equipment or 

with improved, functionally equivalent equipment. 

While the annual maintenance provisions described above will improve 

implementation of the RMR&R exclusion, the allowance applies primarily 

to lower cost, short turn-around activities. For large scale projects that 

should qualify for an RMR&R exemption, the current common-sense 

approach and the proposed annual maintenance allowance approach may 

not provide sufficient relief. The current approach has too much 

uncertainty with regard to whether or not proposed projects (the same 

projects that would not meet the annual maintenance allowance criteria) 

constitute RMR&R. Affected sources must choose between proceeding 

without a permit (with all of the potential liabilities of noncompliance) or 

seeking an applicability determination, which delays major source NSR 

project implementation by a minimum of six months. Given such a choice, 

it is not surprising that the Agency has amassed anecdotal evidence there 

have been cases in which the uncertainty about the exemption for routine 

activities has resulted in expensive delays or even the cancellation of 

beneficial projects. Such regulatory discouragement results in lost 

productive capacity, as well as lost opportunities to improve energy 

efficiency and reduce air pollution. 

Sources are not the only entities that incur undue costs from such 

determinations. State and local permitting authorities must devote scarce 

resources to make complex determinations, consult with other agencies to 

ensure their determinations are consistent with decisions made for similar 

circumstances in other jurisdictions (and the EPA), and confer with other 

regulators to ensure consistency among the PA's conclusions. 

Because the equipment replacement approach has not been fully defined, 

EPA cannot perform a highly integrated analysis of its potential impact on 

industry at this time. Consequently, the Agency had to make an important 

limiting assumption with regard to this analysis. Although the NSR 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 5 
P.25 

proposal package indicates the Agency seeks comment on whether this 

approach should be adopted separately or along with the annual 

maintenance allocation option, this analysis assumes the two approaches 

are mutually exclusive and that one or the other of the approaches - but 

not both - will be present in the final rule. The results of the EPA's 

analysis are found below. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 6 
P.26 

2 

2.1 

Need and Use of the Collection 

Need / Authority 

for the Collection 

Title I of the Act requires EPA to collect this information. Through the 

NSR program it requires owners or operators of units that emit air 

pollutants to submit an application for a permit to construct, modify, or 

significantly alter the operations of each source of criteria pollutants. 

2.2 Practical Utility / 

Users of the 

Data 

2.3 Caveats and 

Considerations 

For EPA to carry out its required oversight function of reviewing 

preconstruction permits and assuring adequate implementation of the 

program, it must have available to it information on proposed construction 

and modifications. The burden estimates included in this ICR provide 

emissions, source, and control information for the PSD/NSR and 

nonattainment NSR program. 

The analysis included in this ICR is based upon the best data available to 

the Agency at this time. However, inconsistencies in PA reporting 

techniques, incomplete data sets, and sampling limitations imposed upon 

the Agency by the Paperwork Reduction Act necessitated a certain amount 

of extrapolation and "best-guess" estimations by PAs and Agency experts. 

Consequently, the reader should not consider the conclusions to be an 

exact representation of the level of burden or cost that will occur. Instead, 

this ICR should be considered a directionally correct assessment of the 

impact the programmatic changes included in this rulemaking. 

Throughout this ICR, the reader will observe estimated values that show 

accuracy to the single hour or dollar. However, reporting values at the 

single unit level can be misleading. In most situations, the proper way to 

present estimated data would be to determine an appropriate level of 

precision and truncate values accordingly, usually in terms of thousands or 

millions of units. For instance, a spreadsheet generated estimation of 

$5,456,295 could be presented in the text as $5.5 (millions) or $5,456 

(thousands). One problem with such an approach is the loss of data 

richness when the report contains a mixture of very large and very small 

numbers. Such was the case with this ICR, where source values are 

consistently in the millions and Federal values in the tens of thousands. 

Consequently, to avoid the loss of information through rounding, this ICR 

reports all values at the single unit level and reminds the reader that mere 

is no implied precision inherent in this style of reporting. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 7 
P.27 

3 Non-Duplication, Consultation, and Other Collection Criteria 

3.1 Non-Duplication For approval of a proposed ICR, the Agency must ensure that it has taken 

every reasonable step to avoid duplication in its paperwork requirements 

in accordance with 5 CFR 1320.9. The Administrator asserts that the data 

collected for this rulemaking is more specific than other, similar, 

collections and constitutes a necessary component of the NSR program to 

ensure the protection of the environment. 

3.2 Public Notice 

Requirements 

For any existing rule, § 3507(g) of the PRA limits how long a Director 

may take to approve a collection of information to 3 years. The ICR for 

the 40 CFR Part 51 and 52 Prevention of Significant Deterioration and 

New Source Review Program was renewed last in February of 2001. This 

ICR analysis presents an update to that renewal, based upon programmatic 

changes completed since February, 2001. For all of the elements of this 

rulemaking, significant public comment periods were given. 

3.3 Consultations 

3.4 Effects of Less 

Frequent 

Collection 

The process of discussing possible improvements to the NSR program 

included significant interagency consultation, including meetings with 

representatives from the Department of Energy, the Department of the 

Interior, and the Office of Management and Budget. Building on that 

input, EPA held conference calls with various stakeholders during October 

2001, including representatives from industry, state and local 

governments, and environmental groups to discuss new ideas that were 

raised. During many of these meetings, EPA discussed ideas for how to 

define routine maintenance, repair and replacement in order to create more 

certainty for the regulated community. Today's proposed rule is an 

outgrowth of ideas discussed in those meetings. 

The Act defines the rate of reporting by sources, states, and local entities. 

Consequently, less frequent collection is not possible. 

3.5 General 

Guidelines 

OMB's general guidelines for information collections must be adhered to 

by all Federal Agencies for approval of any rulemaking's collection 

methodology. In accordance with the requirements of 5 CFR 1320.5, the 

Agency believes: 

1. The NSR regulations do not require periodic reporting more frequently 

that semi-annually. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 8 
P.28 

2. The NSR regulations do not require respondents to participate in any 

statistical survey. 

3. Written responses to Agency inquiries are not required to be submitted 

in less than thirty days. 

4. Special consideration has been given in the design of the NSR 

program to ensure that the requirements are, to the greatest extent 

possible, the same for Federal requirements and those PAs who 

already have preconstruction permitting programs in place. 

5. Confidential, proprietary, and trade secret information necessary for 

the completeness of the respondent's permit are protected from 

disclosure under the requirements of §5 03(e) and §114(c) of the Act. 

6. The NSR regulations do not require more that one original and two 

copies of the permit application, update, or revision to be submitted to 

the Agency. 

7. Respondents do not receive remuneration for the preparation of reports 

required by the Act or parts 51 or 52. 

8. To the greatest extent possible, the Agency has taken advantage of 

automated methods of reporting. 

9. The Agency believes the impact of NSR regulations on small entities 

to be insignificant and not disproportionate. 

The record keeping and reporting requirements contained in the current 

NSR program and the changes made in this rulemaking do not exceed any 

of the Paperwork Reduction Act guidelines contained in 5 CFR 1320.5, 

except for the guideline which limits retention of records by respondents 

to three years. The Act requires both respondents and State or local 

agencies to retain records for a period of five years. The justification for 

this exception is found in 28 U.S.C. 2462, which specifies five years as the 

general statute of limitations for Federal claims in response to violations 

by regulated entities. The decision in U.S. v. Conoco. Inc., No. 83-1916-E 

(W.D. Okla., January 23, 1984) found that the five year general statute of 

limitations applied to the Clean Air Act. 

3.6 Confidentiality Confidentiality is not an issue for this rulemaking. In accordance with the 

Clean Air Act Amendments of 1990, the monitoring information to be 

submitted by sources as a part of their permit application and update; 

applications for revisions and renewals is a matter of public record. To 

the extent that the information required is proprietary, confidential, or ofa 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 9 
P.29 

nature that could impair the ability of the source to maintain its market 

position, that information is collected and handled subject to the 

requirements of §503(e) and §114(c) of the Act. Information received and 

identified by owners or operators as confidential business information 

(CBI) and approved as CBI by EPA, in accordance with Title 40, Chapter 

1, Part 2, Subpart B, shall be maintained appropriately (see 40 CFR 2; 41 

FR 36902, September 1, 1976; amended by 43 FR 39999, September 8, 

1978; 43 FR 42251, September 28, 1978; 44 FR 17674, March 23, 1979). 

3.7 Sensitive The consideration of sensitive questions, (i.e., sexual, religious, personal 

Questions

 o r otne r

 private matters), is not applicable to this rulemaking. The 

information gathered for NSR applications does not include personal data 

on any owner or operator. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 10 
P.30 

4 The Respondents and the Information Requested 

4.1 Respondents The Agency asserts that the benefits from the RMR&R program outweigh 

its costs, whether the Agency can quantify that net benefit or not. Under 

this assertion, "costs" and "benefits" include things other than monetary 

measures. Consequently, the Administrator asserts that the RMR&R 

program (the annual maintenance allowance program and the equipment 

replacement program) must be nonincreasing in cost to sources. 

This rulemaking pertains to two separate methodologies for the reporting 

of physical changes at a pollution source that may be classified as routine 

maintenance, repair, and replacement. The Agency believes sources will 

participate in the RMR&R program because of the increased regulatory 

certainty it will offer. In the past, maintenance and repair activities at a 

process unit were screened by the facility according to a case-by-case rule 

for determining whether the activity could trigger major NSR. The facility 

would apply for an NSR determination for all activities it believed may 

trigger major NSR permitting and those activities for which a case-by-case 

test was inconclusive. Based upon the results of this determination, the 

facility would respond accordingly, applying for a major NSR permit 

when necessary. Under both of the new RMR&R programs, EPA has 

provided an objective test to reduce the uncertainty associated widi 

determining whether a source is eligible for an RMR&R major source 

permit exclusion. 

There are approximately 14,500 sources of air pollution potentially subject 

to NSR permitting, representing all industry classifications in 34 states 

and the District of Columbia.4'

5

 This comprises the majority of the 

universe of potentially affected sources for the NSR program and for this 

ICR. Table 4-1 in the current ICR displays the industry classifications 

most commonly affected by NSR permitting requirements6. Table 4.1, 

below, reproduces that table for this analysis. 

The database does not include AK, AR, AZ, ID, KS, KY, MT, NJ, NM, PA, SD, 

TN, TX, UT, WA, and WY. While several of these states contain many sources 

subject to NSR, EPA believes the lack of their infonnation in this database does 

not harm this analysis. 

Most sources contain more than one pollution creating unit, but this report does 

not need to differentiate by pollutant for the purposes of this analysis. 

Information Collection Request for 40 CFR Part 51 and 52 Prevention of 

Significant Deterioration and Nonattainment New Source Review, Office of 

Management and Budget (OMB) Control Number 2060-0003; EPA Form 

Number 1230.09. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 11 
P.31 

Table 4.1 Potentially Affected Entities 

Industry Group 

Pulp and Paper Mills 

Paper Mills 

Chemical Processes 

Pharmaceuticals 

Petroleum Refining 

Automobile Manufacturing 

Electric Services 

Natural Gas Transport 

SIC 

261 

262 

281 

283 

291 

371 

491 

492 

NAICS 

32211,322121,322122,32213 

322121,322122 

325181,32512, 325131,325182,211112, 325998,331311, 325188 

325411,325412,325413,325414 

32411 

336111, 336112,336712, 336211, 336992, 336322, 336312,33633, 

33635,336399,336212,336213 

221111,221112,221113,221119,221121,221122 

48621.22121 

33634, 

For the period of time covered by this ICR revision for this rulemaking 

(until the next NSR Update in 2004), most states will not be affected by 

this regulation due to the regulatory lag needed for SIP review, revision, 

and approval. During this period, the only sources affected by this final 

action will be sources located in attainment areas in states or other areas 

where the Federal government has direct regulatory authority.7 

Eventually, this rulemaking will affect all States, territories, and 

possessions of the United States, as well as all local and Tribal 

governments. Of the states in the Operating Permits Database, only New 

Jersey and South Dakota are not available for this analysis. 

For those states with Federal delegation not in the Operating Permits 

database, the Agency used "proxy" data to represent them. To identify an 

appropriate proxy state, the Agency employed the same methodology it 

used when estimating the universe of states with Federal delegation in the 

ICR update for NSR applicability issues.8 The Agency estimated the 

Federally controlled state source count to be about one third of the total 

number of sources in the Operating Permits Database - about the same as 

the ratio of Federally controlled states to the number of states in the 

database. Since this ICR revision deals exclusively with sources in 

attainment areas, and since PSD permit applications constitute about oneThese areas include Puerto Rico, Guam, and the Virgin Islands; Washington 

D.C; Hawaii, Illinois, Indiana, Michigan, Minnesota, North Dakota, Nevada, 

New Hampshire, New Jersey, New York, Ohio, South Dakota, and parts of 

California. The Federal government also has authority in Texas and Washington 

State, but only for one source category in each SIP, so this analysis will treat 

Texas and Washington State as though their SIPs were fully approved. 

U.S. EPA, 2002, "Information Collection Request for Changes to the 40 CFR 

Parts 51 and 52 PSD and NSR Applicability Requirements for Modifications to 

Existing Sources," EPA Form Number 2074.01. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 12 
P.32 

third of all NSR permit applications annually, after establishing proxies 

for the missing states, the EPA estimated about 10 percent (1,450 sources) 

of all of the sources in the Operating Permits Database will be in areas 

affected by this rulemaking and will participate in the RMR&R program. 

In accordance with the methodology employed for other permit-related 

ICRs, we determined there are 112 PAs affected by this rulemaking. 

4.2 Information 

Requested 

The data required by sources for a complete preconstruction permit for 

NSR or PSD purposes are in the various parts of Title 40 of the Code of 

Federal Regulations (40 CFR) and reported in other NSR ICRs. These 

requirements constitute the burden that would be avoided by a source 

using the RMR&R exemption; and the burden that would be imposed 

upon sources using the RMR&R exemption but exceed their annual 

maintenance allowance or program cost threshold (if using Alternative A) 

or their per-project cost threshold (if using Alternative B). 

4.3 Collection 

Schedule 

4.4 Small Entity 

Flexibility 

Under the current NSR system, respondents are not subjected to a 

collection schedule per se under NSR permitting regulations of parts 51 

and 52. However, the provisions of the annual maintenance allowance 

alternative add an annual burden to all sources subject to and potentially 

subject to PSD and nonattainment NSR application requirements. Within 

60 days of the end ofa facility's reporting year, the facility must produce 

and submit a report for each process unit's annual maintenance, repair, 

and replacement activities, including the replacement value (current 

purchase and installation cost ofa similar device) of each process unit, a 

description of all changes made to the unit (including the cost of those 

changes), and, if the total cost of those changes exceed the processing 

unit's annual maintenance allowance, the determination of each 

nonroutine activity's case-by-case NSR determination. There is no 

analogous reporting process for the equipment replacement approach. 

The Regulatory Flexibility Act (RFA) as amended by the Small Business 

Regulatory Enforcement and Fairness Act (SBREFA) requires regulatory 

agencies, upon regulatory action, to assess that actions potential impact on 

small entities (businesses, governments, and small non-governmental 

organizations) and report the results of the assessments in (1) an Initial 

Regulatory Flexibility Analysis (IRFA), (2) a Final Regulatory Flexibility 

Analysis (FRFA), or (3) a Certification. For ICR approval, the Agency 

must demonstrate that it "has taken all practicable steps to develop 

separate and simplified requirements for small businesses and other small 

entities" (5 CFR 1320.6(h)). In addition, the agencies must assure through 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 13 
P.33 

various mechanisms that small entities are given an opportunity to 

participate in the rulemaking process. 

A Regulatory Flexibility Act Screening Analysis (RFASA) developed as 

part ofa 1994 draft Regulatory Impact Analysis (RIA) and incorporated 

into the September 1995 ICR renewal analysis showed that the changes to 

the NSR program due to the 1990 Clean Air Act amendments would not 

have an adverse impact on small entities.9 This analysis encompassed the 

entire universe of applicable major sources that were likely to also be 

small-business - approximately 50 "small business" major sourcesl0. 

Because the administrative burden of the NSR program is the primary 

source of the NSR program's regulatory costs, the analysis estimated a 

negligible "cost to sales" (regulatory cost divided by the business category 

mean revenue) ratio for this source group. Currently, there is no economic 

basis for a different conclusion at this time. 

4.4.1 Measures to 

Avert Impacts 

on Small Entities 

The Agency may not, as a general rule, exempt a major source of air 

pollution. Since the impacts of NSR regulations which may impact small 

entities are predominantly to major sources, little room exists for 

regulatory flexibility to avert the impact of the proposed rulemaking on 

small entities through exemption. However, even though the NSR 

program does not have an adverse impact on a significant number of small 

businesses, EPA takes measures to assist sources in affected small entities 

through the implementation of small business stationary source technical 

and environmental compliance assistance programs, as called for in 

section 507 of the Act. These programs can reduce the reporting burden of 

small entities which are subject to major NSR and may significantly 

alleviate the economic burden on small sources by establishing programs 

to assist small businesses with determining what Act requirements apply 

to their sources and when they apply, and guidance on alternative control 

technology and pollution prevention for small businesses. 

4.4.2 Measures to 

Mitigate Impacts 

on Small Entities 

Generally, EPA has several methods by which it can minimize the 

disproportionate effect ofa rulemaking on small entities. Net costs an be 

reduced through the use of small business stationary source technical and 

environmental compliance assistance programs, the Agency can defer 

applicability for one or several source categories, and mitigation can be 

9 "Economic Assessment of the Impacts of Part C and D Regulatory Changes,' 

June 2, 1994. 

10 The definition for "small business" employed for all SIC categories in this 

analysis was any business employing fewer than 500 employees. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 14 
P.34 

achieved by discretion of the Federal government. However, these 

avenues do not apply to the NSR program. 

4.5 Environmental 

Justice 

Considerations 

The President's priorities in promoting environmental justice are 

contained in Executive Order #12898. By the nature of the tasks included 

in this rulemaking, it is not likely there will be any disproportionate 

environmental justice effects derived from this part of the NSR program. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 15 
P.35 

5 

5.1 

The Information Collected - Baseline, Methodology, and Management 

Determination 

of Baseline 

Tables 6-1,2, and 3 of the current ICR for the PSD/NSR program (as 

revised by recent applicability provisions) lists the activities, burden, and 

costs of the NSR activities required under 40 CFR parts 51 and 52 for 

sources, PAs, and the Federal government, respectively. For convenience, 

Tables 5.1, 2, and 3, below, recreate this information. These estimates 

form the baseline for this ICR. 

Table 5.1 Baseline Annual Source Burden and Cost" Estimates 

Activity 

I. Part C (PSD) 

A. 

B. 

C. 

D. 

E. 

F. 

Preparation and Planning 

Determination of Compliance Requirements 

Obtain guidance on Data Needs 

Preparation of BACT Engineering Analysis 

Data Collection and Analysis 

Air Quality Modeling 

Determination of Impact on Air Quality Related Values 

Post-construction Air Quality Monitoring 

Permit Application 

Preparation and Submittal of Permit Application 

Public Hearings 

Revisions to Permit 

Subtotal burden 

Direct cost for Pre-construction Air Quality Monitoring 

Total cost 

II. PART D (Nonattainment) 

A. 

B. 

C. 

D. 

Preparation and Planning 

Deteimination of Compliance Requirements 

Obtain guidance on Data Needs 

Data Collection and Analysis 

Preparation of LAER Engineering Analysis 

Demonstrate Offsets 

Prepare Analysis of Alternative Sites, Processes, etc. 

Air Quality Modeling 

Permit Application 

Preparation and Submittal of Permit Application 

Public Hearings 

Revisions to Permit 

Total 

III. MINOR NSR 

A. Preparation and Submittal of Minor NSR Permit Application 

III. GRAND TOTAL 

Units 

320 

320 

320 

320 

320 

320 

320 

320 

320 

34 

590 

590 

590 

590 

590 

590 

590 

590 

590 

56.500 

57.410 

Hours 

per Unit 

170 

120 

85 

200 

100 

50 

50 

24 

40 

839 

150 

100 

40 

40 

60 

100 

38 

25 

24 

577 

40 

Annual 

Hours 

54,400 

38,400 

27,200 

64,000 

32,000 

16,000 

16,000 

7,680 

12,800 

268,480 

88,500 

59,000 

23,600 

23,600 

35,400 

59,000 

22,420 

14,750 

14,160 

340,430 

2,260,000 

2,868.910 

Annual 

Cost 

$4,080 

$2,880 

$2,040 

$4,800 

$2,400 

$1,200 

$1,200 

$576 

$960 

$20,136 

$7,099 

$27,235 

. $6,637 

$4,425 

$1,770 

$1,770 

$2,655 

$4,425 

$1,681 

$1,106 

$1,062 

$25,532 

$177,000 

$215,000 

In thousands of 2000 dollars 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 16 
P.36 

Table 5.2 Baseline Annual State and Local PA Burden and Cost" 

Activity 

I. PART C (PSD) 

A. Attend Pre-application Meetings 

B. Answer Respondent Questions 

C. Log In and Review Data Submissions 

D. Request Additional Information 

E. Analyze for and Provide Confidentiality Protection 

F. Prepare Completed Applications for Processing 

G. File and Transmit Copies 

H. Prepare Preliminary Determination 

I. Prepare Notices for and Attend Public Hearings 

J. Application Approval 

K. Notification of Applicant of PA Determination 

L. Submittal of Information on BACT / LAER to RBLC 

M. Total 

II. PART D (Nonattainment) 

A. Attend Pre-application Meetings 

B. Answer Respondent Questions 

C. Log In and Review Data Submissions 

D. Request Additional Information 

E. Analyze for and Provide Confidentiality Protection 

F. Prepare Completed Applications for Processing 

G. File and Transmit Copies 

H. Prepare Preliminary Determination 

I. Prepare Notices for and Attend Public Hearings 

J. Application Approval 

K. Notification of Applicant of PA Determination 

L. Submittal of Information on BACT / LAER to RBLC 

M. Total 

III. MINOR NSR 

Total for Preparation and Submittal of Minor NSR Permit Application 

III. GRAND TOTAL 

Units 

320 

320 

320 

320 

320 

320 

320 

320 

320 

320 

320 

320 

590 

590 

590 

590 

590 

590 

590 

590 

590 

590 

590 

590 

56,500 

57,410 

Hours Per 

Unit 

36 

20 

16 

8 

24 

32 

8 

24 

40 

40 

8 

16 

272 

7 

10 

8 

4 

4 

12 

4 

8 

18 

16 

2 

16 

109 

30 

Annual 

Hours 

11,520 

6,400 

5,120 

2,560 

7,680 

10,240 

2,560 

7,680 

12,800 

12,800 

2,560 

5,120 

87,040 

4,130 

5,900 

4,720 

2,360 

•2,360 

7,080 

2,360 

4,720 

10,620 

9,440 

1,180 

9,440 

64,310 

1,695,000 

1,846,350 

Annual 

Cost 

$428 

$238 

$190 

$95 

$285 

$380 

$95 

$285 

$475 

$475 

$95 

$190 

$3,231 

0 

$153 

$219 

$175 

$88 

$88 

$263 

$88 

$175 

$394 

$350 

$44 

$350 

$2,387 

0 

$62,918 

$68,536 

a In thousands of 2000 dollars 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 17 
P.37 

Table 5.3 Baseline Annual Federal Burden and Cost" 

Activity 

I. PART C (PSD) 

A. Review and Verify Applicability Determination 

B. Review Control Technology Determination 

C. Evaluate Air Quality Monitoring 

D. Evaluate Alternative and Secondary Impact Analysis 

E. Evaluate Class I Area Analysis 

F. Administrative Tasks 

G. Total 

II. PART D (Nonattainment) 

A. Review and Verify Applicability Determination 

B. Review Control Technology Determination 

C. Evaluate Offsets 

D. Evaluate Air Quality Monitoring 

E. Evaluate Alternative and Secondary Impact Analysis 

F. Administrative Tasks 

G. Total 

III. MINOR NSR 

Review Synthetic/Netting-Based Minor NSR Permits 

III. GRAND TOTAL 

Units 

320 

320 

320 

320 

320 

320 

590 

590 

590 

590 

590 

590 

2,825 

3,735 

Hours Per 

Unit 

2 

3 

4 

2 

2 

1 

14 

2 

3 

1 

4 

2 

1 

13 

2 

29 

Annual 

Hours 

640 

960 

1,280 

640 

640 

320 

4,480 

1,180 

1,770 

590 

2,360 

1,180 

590 

7,670 

5,650 

17,800 

Annual 

Cost 

$24 

$36 

$48 

$24 

$24 

$12 

$166 

0 

$44 

$66 

$22 

$88 

$44 

$22 

$285 

0 

$210 

$661 

In thousands of 2000 dollars. 

5.2 Burden 

Statement 

This section discusses the development of burden estimates and their 

conversion into costs, which are separated into burden costs and capital 

and O&M costs. Burden means the total time, effort, or financial resources 

expended by persons to generate, maintain, retain, or disclose or provide 

information to or for a Federal agency. This includes the time needed to 

review instructions; develop, acquire, install, and utilize technology and 

systems for the purposes of collecting, validating, and verifying 

information, processing and maintaining information, and disclosing and 

providing information; adjust the existing ways to comply with any 

previously applicable instructions and requirements; train personnel to be 

able to respond to a collection of information; search data sources; 

complete and review the collection of information; and transmit or 

otherwise disclose the information. The Agency may not conduct or 

sponsor, and a person is not required to respond to, a collection of 

information unless it displays a currently valid OMB control number. The 

OMB control numbers for EPA's regulations are listed in 40 CFR Part 9 

and 48 CFR Chapter 15. 

5.3 Cost Statement According to the latest guidance for ICRs (EPA 1995), capital and O&M 

costs report the cost of any new capital equipment the source or PA may 

have to purchase solely for the purpose of information collection, 

assimilation, and storage. For example, if a source had to purchase a new 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 18 
P.38 

mini-computer to store and manipulate data, that computer would be a 

cost of administration subject to reporting in the ICR. For this ICR 

revision, the Agency believes all the information needed for the inventory 

assessment activities at each process unit area readily available and do not 

require additional capital investment for their handling. Furthermore, the 

Agency believes all of the data required for the determination of the 

replacement value of each process unit are readily available through 

accounting activities currently undertaken by each facility (e.g., through 

insurance documentation). 

The latest guidance also instructs the Agency to differentiate the burden 

associated with a source's labor and that which it hires through outside 

contractors. For this ICR revision, the Agency believes the activities 

required for a source to participate in the RMR&R program are 

proprietary activities that preclude the recruiting of consultants and 

contractors to perform them. Therefore, all of the source respondent 

activities reported in this ICR revision are calculated as administrationlevel tasks. 

5.4 Data Collection 

Methodology 

Under the current NSR system, each facility submits information for a 

case-by-case determination of whether a maintenance activity will trigger 

the need for an NSR application. Under the two alternative RMR&R 

systems in this proposal, each nonroutine activity must have that same 

determination. However, the set of determinations proposed in the annual 

maintenance allowance approach is a subset of the determinations 

currently made. Therefore, the annual maintenance allowance approach 

constitutes a reduction in burden for sources and PAs, relative to the status 

quo. For the equipment replacement approach, the Agency believes the 

activities that would trigger an NSR determination (and any subsequent 

major source permitting) is the same set of activities that would be subject 

to the new approach's case-by-case analysis. Given the streamlined 

assessment procedure inherent in the proposed approach, the equipment 

replacement process must also constitute a reduction in burden for sources 

and PAs, relative to the status quo. 

The Agency believes nonroutine activities that will trigger a major NSR 

application under either RMR&R program are the same activities that 

would have triggered a major NSR application under the current system. 

Consequently, for this ICR revision, the burden associated with NSRtriggering maintenance activities is the same for sources and PAs under 

the current and proposed programs. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 19 
P.39 

6 

6.1 

Estimating the Burden and Cost of the Collection 

Estimating The 

Respondent 

Burden 

6.2 Estimating 

Source 

Burden 

This section presents estimates of the burden hours and cost expected to 

be incurred by respondents (sources, PAs, and the EPA) during the scope 

of this ICR revision, applying the methodology established for economic 

analyses established by the Agency in The OAQPS Economic Resource 

Document" and The EPA Air Pollution Control Cost Manual. The 

burden estimates reflect the expert judgement of EPA staff, contractors, 

and industry experts. All burden estimates represent the marginal cost of 

this rulemaking, based upon the baseline burden and costs described in the 

NSR program's February 14, 2001 ICR renewal.12 

The change in burden due to this rulemaking will eventually apply to all 

sources in attainment and nonattainment areas. However, for several years 

following the promulgation of this rulemaking, the Agency anticipates 

only the following entities may be affected by this rulemaking: 

• Federal EPA offices: including Regional Offices and The Office of Air 

and Radiation, The Office of Air Quality Planning and Standards, the 

Air Quality Standards and Strategies Division, and the Information 

Transfer and Integration Division 

• All Permitting Authorities 

• Federally controlled areas such as outer continental shelf drilling 

platforms, and Tribal lands and Federal territories and holdings (e.g., 

American Samoa) 

• Sources of air pollution wiuhin attainment areas within states that have 

Federal authority, Federally managed areas, and Tribal lands 

As part of the burden estimates for this ICR revision, the first task that 

must be undertaken is for the environmental managers at each facility to 

read and assimilate the information contained in this rulemaking, and then 

to develop a strategy and accounting system for complying with it. This is 

a one-time activity and, according to the direction of the Office of 

Management and Budget, has been averaged over the three-year life ofa 

typical ICR. The Agency believes that, on average, it should take a facility 

no more than ten or twelve person-hours to perform this task and has 

allocated 4 hours per year to this activity in this analysis. 

11 United States Environmental Protection Agency, The OAQPS Economic 

Resource Document, http://vvww.epa.gov/ttn/ecas/econdata/6807-305.pdf. 

April 1999 

12 United States Environmental Protection Agency, February 14, 2002, Information 

Collection Request for 40 CFR part 51 and 52 Prevention of Significant Deterioration and Nonattainment New Source Review, OMB Control No. 2060-0003, 

EPA No. 1230.09 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 20 
P.40 

6.2.1 Estimating 

Source Burden 

Under Approach 

A: The Annual 

Maintenance 

Allowance 

Approach 

The first annual task at each facility applying for an RMR&R exemption 

under the annual maintenance allowance approach is to estimate the 

replacement costs of all of its process units. This assessment must be done 

initially and each year thereafter, at the end of the facility's reporting year. 

EPA believes that it will take no more than 4 hours per process unit 

(source) for each facility determine the replacement cost of that process 

unit affected by a routine maintenance provision, including inquiries of 

financial officials and maintenance personnel within that facility or its 

owning firm. Generally, the initial burden and costs for a program exceed 

the cost of repeating the program in subsequent years. However, tlie 

Agency believes the relative ease of collection of the data necessary for 

the RMR&R program precludes any economies of scale or savings 

through learning-by-doing. Therefore, the annual long-term burden for 

data collection for each process unit (source) in the RMR&R program will 

also be 4 hours. 

Following the estimation of replacement cost for each process unit, the 

facility must create an annual report for each source, detailing all of the 

RMR&R-related activities at that unit and their costs. For some units, this 

may be a relatively short report, but for many process units in highly 

competitive industries, it may take as much as a full person-day to compile 

and assimilate all of the information on many RMR&R-related actions 

taken throughout the year. On average, EPA believes it will take no more 

than 4 hours per report to gather and record each unit's RMR&R-related 

activities into the facility's annual report. 

According to the methodology established in the preamble, if the total 

value of RMR&R activities in the annual report from a source exceeds the 

limit established for a particular unit, the most expensive of those 

activities must be reviewed under the current 4-step case-by-case process 

to determine whether or not they qualify as major source NSR activities. If 

an activity qualifies under the 4-step test as a major source NSR permit 

activity, the source must immediately apply for that major source NSR 

permit and may incur some enforcement related costs due to ex post 

application for the activity. In these cases, the Agency believes there will 

be no net increase or decrease in burden to the source, since the activities 

are the same as their analog in the base case, but there may be a slight 

increase in costs. 

The Agency has identified one potential cost savings to sources that 

cannot be quantified at this time. Under the current system, sources must 

wait until an NSR application has been approved before it can commence 

construction, modification, or maintenance activities. Under the proposed 

system, that regulatory lag has been removed by allowing for NSR permits 

to be applied for after the fact. While mitigated somewhat by the potential 

for enforcement actions, the Agency believes ex post permit applications 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 21 
P.41 

are potentially significant in impact. EPA does not have data upon which 

to base any numeric conclusion and invites the public to comment on the 

potential scope of this element of the RMR&R program. 

Table 6.1 displays the expected annual burden and cost of this rulemaking 

to sources for the three years immediately following promulgation (the 

maximum scope of this ICR revision). 

Table 6.1 Expected Yearly Marginal Burden and Cost to Process Units (Sources) for 

Alternative A: The Annual Maintenance Allowance Approach 

Entity / Activity 

Sources 

Rule Assimilation, Development of Strategy2 

Assessment of Replacement Value 

Preparation of Annual RMR&R Report 

Total Source Burden and Cost 

Respondents 

1,450 

1,450 

1,450 

1,450 

Hours Per 

Respondent 

per Year 

4' 

4 

4 

12 

Total Annual 

Hours (All 

Respondents) 

5,800 

5,800 

5,800 

17,400 

Annual Cost 

per 

Respondent' 

$300 

$300 

$300 

$900 

Total Annual 

Cost (All 

Respondent)1 

$435,000 

$435,000 

$435,000 

$1,305,000 

1 All costs are-in 2002 dollars 

2 One-time items have been averaged over the three year life of this ICR. 

6.2.2 Estimating 

Source Burden 

Under Approach 

B: 

The Equipment 

Replacement 

Approach 

Under the alternative RMR&R approach that delineates when an 

equipment replacement activity will trigger a major NSR permit, sources 

will not perform an annual inventory of its units. Instead, each instance 

where the source must replace an existing piece of equipment integral to 

the emission of pollution will be subjected to a project cost threshold 

similar to the New Source Performance Standards (NSPS) reconstruction 

test. Activities that fall outside the threshold of that test will be subject to 

the current 4-step case-by-case determination test for major source NSR 

permitting - an outcome that is identical to that of the annual maintenance 

allowance scenario and the current common-sense approach. 

The equipment replacement approach is very similar in impact to the 

expected impact of the annual maintenance allowance approach in that all 

sources will have to annually determine how they will perform planned 

maintenance and repair activities in the presence of the RMR&R 

requirements (Rule Assimilation, Development of Strategy), and, to be 

ableto anticipate large-scale RMR&R activities, will also need to perform 

an annual assessment of the replacement value of its polluting units. 

However, unlike the annual maintenance allowance approach, the 

equipment replacement approach does not require an annual report to the 

PA on RMR&R activities. Consequently, there is no analogous report 

preparation activity in Table 6.2 for the equipment replacement approach. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 22 
P.42 

For those activities identified as requiring major source NSR permitting, 

the improved verification process laid out in the equipment replacement 

approach will result in some reduction in burden and costs. However, the 

extent of that burden reduction cannot be determined a priori. Instead, the 

Agency must wait for a formal definition of the components of the 

determination process before assessing its relative impact. 

As in the annual maintenance allowance alternative, the Agency has 

identified one potential cost savings to sources that cannot be quantified at 

this time. Under the current system, sources must wait until an NSR 

application has been approved before it can commence construction, 

modification, or maintenance activities. Under the proposed system, that 

regulatory lag has been removed by allowing for NSR permits to be 

applied for after the fact. While mitigated somewhat by the potential for 

enforcement actions, the Agency believes ex post permit applications are 

potentially significant in impact. EPA does not have data upon which to 

base any numeric conclusion and invites the public to comment on the 

potential scope of this element of the RMR&R program. 

Table 6.2 Expected Yearly Marginal Burden and Cost to Process Units (Sources) for 

Alternative B: The Equipment Replacement Approach 

Entity / Activity 

Sources 

Rule Assimilation, Development of Strategy2 

Assessment of Replacement Value 

Total Source Burden and Cost 

Respondents 

1,450 

1,450 

1,450 

Hours Per 

Respondent 

per Year 

4 

4 

8 

Total Annual 

Hours (All 

Respondents) 

5,800 

5,800 

11,600 

Annual Cost 

per 

Respondent' 

$300 

$300 

$600 

• Total Annual 

Cost (All 

Respondent)' 

$435,000 

$435,000 

$870,000 

1 All costs are in 2002 dollars 

2 One-time items have been averaged over the three year life of this ICR. 

6.3 Estimating PA 

Burden 

Permitting authorities seeking to implement the new RMR&R provisions 

will incur the costs outlined in this section. PAs, however, do not have to 

adopt any particular provision as long as they can show that their version 

of the program is at least as stringent as the EPA's. PAs who do not want 

to implement the new provisions will incur costs associated with 

demonstrating the adequacy of their existing programs. While 

participating PAs will not have to directly manage RMR&R programs 

during the scope of this ICR revision, each participating PA will have to 

begin the process of understanding the rule and incorporating it into its 

SIP. In addition, many states must have SIP approval from their legislature 

and all participating PAs will face some sort of public comment period on 

their revised SIPs. The EPA believes the assessment for these activities 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 23 
P.43 

represented in other rulemaking ICRs are representative of the burden that 

this rulemaking will impose. Consequently, the Agency applied the burden 

estimates from recent title V-related ICRs to this rulemaking. 

The Agency identified five tasks that each PA must perform for the 

incorporation of the RMR&R program into its SIP. First, each PA must 

spend (on average across all PAs) about 60 hours in rule familiarization 

activities, after which it will expend about 30 hours in determining tlie 

criteria for applicability of the rule to each of the sources within its 

purview. The next step involves SIP revision, which the Agency believes 

will take about 120 hours. Once the PA has revised its SIP, it must first 

take public comment, revise the SIP based upon those comments, and then 

guide the new SIP through the legislative process. Public hearings and SIP 

modification should take, on average, about 90 hours, based on the fact 

that public hearing requirements vary significantly between states. 

Legislative coordination will also vary across states, but on average, the 

Agency believes will take no more than 90 hours per PA. Table 6.3 

displays the expected annual burden and cost of this rulemaking to PAs 

for the three years immediately following promulgation (the maximum 

scope of this ICR revision). Table 6.3, below, also displays the expected 

number of source, PA, and Federal respondents for the period of time 

immediately following promulgation, and their expected annual burden 

and cost.13 

Table 6.3 Expected Marginal Burden and Cost to Permitting Authorities - Both Approaches 

Entity / Activity 

Permitting Authorities 

Rule Familiarization2 

Applicability Determinations2 

SIP Revision2 

Public Hearing and SIP Modification2 

Legislative Coordination2 

Total Permitting Authority Burden and Cost' 

Respondents 

112 

112 

112 

112 

112 

112 

Hours Per 

Respondent 

per Year 

20 

10 

40 

30 

40 

140 

Total Annual 

Hours (All 

Respondents) 

2,240 

1,120 

4,480 

3,360 

4,480 

15,680 

Annual Cost 

per 

Respondent' 

$740 

$370 

$1,480 

$1,110 

$1,480 

$5,180 

Total Annual 

Cost (All 

Respondent)' 

$82,880 

$41,440 

$165,760 

$124,320 

$165,760 

$580,160 

1 All costs are in 2002 dollars 

2 One-time items have been averaged over the three year life of this ICR. 

13 Tables 6.3 and 6.4 deal exclusively with the burden and cost of the alternative 

approaches to RMR&R during the first three years following promulgation of 

the rule. Consequently, neither table includes the review of annual reports (an 

element of this rulemaking's associated Impact Analysis paper). 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 24 
P.44 

6.3 Estimating 

Federal 

Burden 

The Federal government incurs a significant short-run burden from the 

promulgation of this rule, but the Agency believes the burden and cost of 

the RMR&R program after the SIP approval process has been completed 

will decline to minimal levels. During the first three years following 

promulgation (the maximum scope of this ICR revision), the Agency will 

be responsible for three primary activities. First, in support of each of the 

112 PAs working to revise their SIPs to include RMR&R the Agency can 

be expected to offer at least 10 hours of guidance per year, or 3,360 hours 

over the scope of this ICR. Furthermore, as each PA completes its SIP, 

EPA will have to review and approve it. This process should take about 

one day per SIP, or a total of 896 hours (266 hours per year average). 

Finally, the EPA must administer the RMR&R program to those sources 

where it has authority. EPA believes the review and approval of each 

RMR&R report will take about 10 hours per year, or 1,450 hours per year 

for all process units (sources) and 4,350 hours over the three-year 

maximum life of this ICR revision. Table 6.4, below, displays the average 

annual expected burden and cost to the Federal government for the 

RMR&R program. 

Table 6.4 Expected Federal Yearly Marginal Burden and Cost - Both Approaches 

Entity / Activity 

Number of 

Respondents 

Served 

Total 

Annual Cost 

Year per Hours (All Annual Cost per Responde ^ ! 

Respondent Respondents) Respondent ' 

Hours per Total Annual 

US Environmental Protection Agency 

Coordination with PAs2 

Review of SIPS2 

Management of Federal Program 

112 

112 

145 

10 

3 

10 

1,120 

336 

1,450 

$370 

$111 

$370 

$41,440 

$12,432 

$53,650 

23 2,906 $851 $107,522 

1 All costs are in 2002 dollars 

2 One-time items have been averaged over the three year life of this ICR. 

6.3 Estimating 

Respondent 

Costs 

The ICR-related cost to respondents are the annual burden cost of 

personnel and the capital cost of collection-related equipment. Since all of 

the elements of this rulemaking constitute opportunities for reductions in 

source burden, there will be no potential change in the capital costs 

associated with this ICR update. Consequently, all of the costs in this ICR 

update are related to the change in administrative burden each element of 

this rulemaking provides. 

6.3.1 Source 

Costs 

Source burden costs are typically wage rates paid to employees and costs 

incurred by the use of consultant labor. However, for this analysis, the 

Agency assessed source burden as only wages for employees within the 

affected firms. The current ICR displays the standard derivation for source 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 25 
P.45 

wage rates employed in many air-related ICRs, in accordance with 

guidance established by the Agency's Office of General Council (OGC) 

for its initial Federal Operating Permits Regulatory Impact Analysis (RIA) 

and ICR.I4 For this analysis, the Agency assessed source burden as only 

internally generated wages, established at the administrative (white-collar) 

rate of $75 per hour (fully loaded) as established in the August 2001 ICR 

for the Compliance Assurance Monitoring Rule (EPA Number 1663.03). 

6.3.2 Estimating 

Agency and 

PA Costs 

During the development of the 1997 ICR for the part 71 Federal Operating 

Permit Regulations, the Agency established the methodology by which it 

estimates the appropriate wage rates to apply to Federal burden categories. 

For this ICR, the Agency employed the same methodology to determine 

2002 Federal and state burden costs and established the appropriate rate at 

$37 per hour. The Agency has asserted for each ICR performed in support 

of the Air Office's permitting function that the wage for state agencies and 

other PAs is the same as the wage for the Federal government. The current 

ICR also displays the derivation of these wages, as well 

6.4 Expected 

Benefits 

For those activities that trigger NSR under the RMR&R program, the 

Agency believes those same activities would have triggered major NSR 

applications, anyway. Consequently, the savings to sources participating 

in the RMR&R program will derive from smaller maintenance and repair 

activities that would have triggered a major NSR application but were not 

identified as not RMR&R activities through this program's ranking 

process. An additional savings to participating sources can be found in the 

avoidance of requests for determination for all activities that did not pass 

the case-by-case test under the current approach. However, while this 

rulemaking will potentially produce a savings in burden for sources of air 

pollution, EPA does not have the necessary data to estimate the level of 

that savings. Consequently, EPA invites the public to provide comments 

on the extent to which sources are able to avoid major NSR determination 

requests and major NSR permitting because of the RMR&R program. 

6.5 Conclusions For the three years following promulgation of this rulemaking, the Agency 

expects the RMR&R program will generate costs of about $2 million per 

year, of which process units will accrue about 65 percent. While sources 

have the most annual cost, the large number of affected units means 

sources will actually incur the lowest per-entity cost each year. PAs will 

have the second lowest cost per entity ($5 thousand per PA), and the 

Federal government will incur the highest cost per year at over $ 100 

thousand. For PAs and the Federal government, these are new costs, in 

addition to those reported in the current ICR, but for sources, the reported 

14 United States Environmental Protection Agency, May, 1995 , Part 71 Information Collection 

Request. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 26 
P.46 

cost is to a large (and presently unmeasurable) extent, duplicative of the 

burden for the same activities under the current system. While the extent 

of the new source burden of this rulemaking is unknown, the Agency has 

asserted that no more than perhaps five or ten percent of the total burden 

and cost will be new. Table 6.5, below, displays the results of this ICR for 

all respondents. 

Table 6.5 Bottom Line Effects 

Entity / Activity 

Process Units (Sources) Annual Maintenance Allowance 

Approach 

Process Units (Sources) Equipment Replacement Approach 

Permitting Authorities (Both Approaches) 

US Environmental Protection Agency (Both Approaches) 

Total Expected Cost ( Annual Maintenance Allowance Approach) 

Total Expected Cost ( Equipment Replacement Approach) 

Number of 

Respondents 

1,450 

1,450 

112 

1 

Hours per 

Year per 

Respondent 

12 

8 

140 

23 

Total Annual 

Hours (All 

Respondents) 

17,400 

11,600 

15,680 

2,906 

Annual Cost 

per 

Respondent' 

$900 

$600 

$5,180 

$851 

Total Annual 

Cost (All 

Respondent)' 

$1,305,000 

$870,000 

$580,160 

$107,522 

$1,992,682 

$1,557,682 

1 All costs are in 2002 dollars 

6.6 Reasons For 

Change In 

Burden 

Through years of negotiation, public meetings, and draft revisions, the 

Information Transfer and Program Integration Division has strived to 

streamline and simplify the reporting and record keeping requirements for 

the preconstruction permit proceed mandated by the Clean Air Act for 

sources of criteria and hazardous air pollutants. This rulemaking 

represents the culmination of many parts of that process. Because the goal 

of this effort was to reduce burden and costs, the reasons for the change in 

burden displayed above in Tables 6.3, 6.4, 6.5 and 6.6 is self evident. 

Send comments on the Agency's need for this information, the accuracy of 

the provided burden estimates, and any suggested methods for minimizing 

respondent burden, including through the use of automated collection 

techniques to the Director, OPPE Regulatory Information Division, U.S. 

Environmental Protection Agency (2137), 401 M St. S.W., Washington 

D.C. 20460; and to the Office of Information and Regulatory Affairs, 

Office of Management and Budget, 725 17th Street, N.W., Washington 

D.C. 20503, Attention: Desk Officer for EPA. Include the EPA ICR 

number and OMB control number in any correspondence. 

INFORMATION COLLECTION REQUEST FOR THE ESTABLISHMENT OF A DEFINITION OF ROUTINE MAINTENANCE, 

REPAIR, AND REPLACEMENT FOR THE NEW SOURCE REVIEW PROGRAM 

Page 27