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OAR Box 1778 

Prepped by Ollie Stewart 

Document Number: 

73) ll-C-15 

Docket Number: 

A-90-06 

Printed 10/28/2008 9:50:54 AM Sheet 73 of 276 
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EBP TEL Mo.202-382-6950 

.ito su. II-C-15 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

JUL I 4 1969 

Mr. William R. Elliott 

Vice President, General Manager of Electri c Supply 

Northern Indiana Public Service Conpany 

5265 Hohman Avenue 

Hammond, Indiana 46320 

OFFICE OP 

All. AND RADIATION 

Re: Bailly Generating Station Units 

Technology Project 

Dear Mr. Elliott: 

#7 and #8, Clean Coal 

I am responding to your May 15, 1989, lette r to 

Mr. William K. Reilly regarding a Clean Coal Technology demonstratio n project at the Bailly Generating Station Units #7 and 

#8. As represented to us, this project will test the abilit y 

of an advanced flue gas desulfurization process to reduce 

sulfur dioxide emissions and will involve the construction and 

operation of a limestone based scrubber. According t o the 

information you submitted, this technology is not intended to 

change the rate of emissions of other criteri a pollutants. I 

understand you would like an assurance from the United States 

Environmental Protect ion Agency (EPA) not to enforce New Source 

Performance Standards (NSPS) and Prevention of Significant 

Deterioration (PSD) regulations at the Bailly Generating Station 

Units #7 and #8 during the demonstration project or when the 

units are restored to their pre-demonstration condition following 

completion of the project. 

in your lette r you asked whether conduct ir.y the project or 

restoration of Bailly Units #7 and #8 to their pre-project condition would constitute a "modification" or "najor modification" 

pursuant to 40 CFR §§60.14 or 52.21(b)(2). The information 

submitted is not sufficient to determine whether there would 

be a physical or operational change which would increase 

emissions. Therefore, i t is not possible for EPA t o determine 

with certainty whether there would in fact be a modification or 

major nodi f ication under the NSPS and PSD programs. 
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U,S,. EPA _ TEL No .202-382-6950 .Jan 17,90 14:50 No.004 ? .0', 

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However, assuming these units will be subject to new source 

requirements, EPA has evaluated the merits of the Bailly Units 

#7 and #8 project with regard to applicability of the Agency's 

November 16, 1984, Policy Against "No Action" Assurances. As a 

result, EPA believes a "no action" assurance is appropriate 

in this case because the project appears to be "clearly 

necessary to serve the public interest; " i t is expected to 

provide "important infornation for research purposes?" and there 

is a need "which no other mechanism can address adequately." 

EPA supports this innovative technology demonstration as a means 

of potentially reducing emissions-of sulfur dioxide. 

Based on the representations made in your May 15, 1989, 

letter, EPA provides an assurance not to enforce against 

civil violations of NSPS and PSD requirements tha t may apply, 

pursuant to 40 CFR §§60.14 and 52.21(b)(2), as a result of emission 

increases which may occur during and after completion of the 

innovative technology demonstration at Bailly Units #7 and #8. 

This assurance does not apply to emission increases which 

result from physical or operational changes that are unrelated 

to the conduct of the deironstration project, whether these 

changes are made before, during or after the project. In 

addition, we have noted that your lette r state s that the project 

may be conducted on a permanent basis. This assurance does not 

apply to pernanent deironstration projects, that is, projects 

lasting more than five years. Of course, Bailly Units #7 and #8 

must continue to comply with all applicable EPA and State 

emission limits and permit conditions during and after the 

demonstration. 

EPA is now evaluating if a change is necessary to the NSPS 

and PSD regulations to accommodate temporary Department of 

Energy Clean Coal Technology Projects and similar EPA-funded 

projects to ensure that the rules do not discourage these 

types of projects. Also, EPA and DOE have agreed to a proposed 

Clean Air Act amendment that addresses these projects. 

In the future, when we receive a request for a "no 

action" assurance, we will routinely ask the source for 

information to allow us to determine if i t would be appropriate 

to issue an assurance. We have now made a decision as to 

precisely what information we need. We will be sending you a 

lette r asking you for this information about your project. 

We will be asking you to submit this information to ensure 

that we have complete file s on all the projects. 
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EPfi TEL .202-382-6950 Jan 17,90 14:50 No . 004 P.04 

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Please keep EPA's Regional Office i n Chicago notifie d of 

t h e statu s and significan t results of this project. Your 

contac t ther e will be Mr. David Kee a t (312) 353-2212. If this 

technology is successful and emission' reductions ar e demonstrated, 

the continued use of this technology would be strongl y encouraged 

by EPA, 

Sincerely , 

.am G. Re 

Assistan t Administrato r 

for Air and Radiation 

c c : David Kee, Region V 

Terrel l Hunt, OECM 

Alan Eckert, OGC 

Brian McLean, OAIAP 

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