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# OAR Box 1778 Prepped by Ollie Stewart



### Document

Number: 

# 270 ) IV-C-1 6 Docket Number: 

# A-90-0 6

Printed 10/28/20089:51:04

AM Sheet 270of 276P. 2 HQ*GflQPS. J

1 - •-"WH^v.: - TEL : 202-252-045 1 Mar 13,9 2 5:0 2 No.00 1 P-0 2

Not e To : Howard Gruenspec t

Departmen t o f Energ y From : TomKierna n

E.P.A . Attache d i s a ne wdraf t o f the WEPC O rule . W e hav e mad e change s t o reflec t ou r discussion s o n Marc h10 , 1992 , including the following : o Ther e i s n o chang e to*"ai r qualit yrelate d values " fo r "visibilit ylimitations " i nthe modeling requirement . Pleas e note : EPA' s Offic e o f Genera l Counse l continue s t o hav e strong concern s regarding the legalit yo f referencing onl yvisibility . W e ar e stil l a t a los s o nthe lega l rational e an

d hav e no t prepare d a respons e t o the DO I commen t suggesting the change . o W e hav e retaine d the five yea r tracking provisio n bu t hav e accommodate d your reques t tha t source s b e allowe d t o satisf y thi s requiremen t throughutilizatio n(rathe r than emissions ) data . W e hav e limite d thi s alternativ e t o situation s wher e the emission s factor s d o no t increas e a s a resul t o f the physica l o r operationa l change . (I f the unit' s emission s rat e increases , utilizatio ncoul d remai nthe same o r eve n decreas e ye t emission s coul d stil l increase. ) Othe r suggestion s fro

myo u woul d b e appreciated . o w e hav e adde d the requeste d languag e regarding efficiency change s being treate d the same a s an yothe r physica l o r operationa l change . o W e hav e added a referenc e t o the us e o f sourc e categorie s fo r determining wha t constitute s "routine " an d hav e noted ou r plan t o issu e guidanc e on the subjec t b yearl ysummer . Beyond thes e specifi c changes , w e hav e generall yrevise d the draf t fina l rul e an d preambl e submitte d fo r interagencyreviewon January22 , t o followthe rul e an d preambl e t o the propose d rul e (excep t fo r deletio n o f the NOxBAC T presumption) . However , man y o f th e comment s discusse d rais e issue s tha t wer e no t discusse d i n th e proposa l an

d ou r response s coul d no t b e drawn fro mthe prio r language .P. 3

76560-5 0

ENVIRONMENTAL PROTECTIONAGENC Y

4 0 CF RPart s 51 , 52 , an d 6 0 REQUIREMENT S FORPREPARATION , ADOPTION , AND SUBMITTAL O F IMPLEMENTATION PLANS ; APPROVAL AND PROMULGATIONO F IMPLEMENTATIONPLANS ; STANDARD S O F PERFORMANC E FORNE WSTATIONARYSOURCE S

AGENCY : Environmenta l Protectio nAgenc y(EPA) . ACTION : Fina l Rule . SUMMARY : O n Jun e 14 , 1991 , EPApropose d amendment s t o it s regulation s governing applicabilit yo f th e ne wsourc e revie w (NSR ) requirement s o f titl e I o f th e Clea nAi r Ac t (CAA ) t o physica l o r operationa l change s a t electri c utilit y generating units.—Thes e propose d amendment s clarifie d tha t certai n utilit ypollutio n contro l project s (including fue l switche s fro

ma mor e polluting fue l t o a les s polluting fue l suc ha s natura l gas ) shoul d no t b e subjec t t o NS R requirements . Thes e propose d amendment s als o clarifie d th e applicabilit yo f existing ne wsourc e regulation s t o modification s i n ligh t o f tw o recen t Federa l appellat e cour t decisions : Wisconsi nElectri c Powe r Compan yv . Reill y (WEPCO) , 89 3 F.2 d 90 1 (7thCir . 1990) , an d Puert o Rica n Cemen t Compan

yv . EPA . 88 9 F.2 d 27 2 (1s t Cir . 1989) . Today EPAi s taking fina l actio n o n thes e changes . Th e regulation s promulgate d todaywil l encourag e pollutio nP. 4

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- contro l project s (including fue l switche s t o natura l gas) , clarif yth e scop e o f th e tw o appellat e decision s and , i n general , assur e tha t utilitie s ca n undertak e pollutio n contro l project s require d b yth e aci d rai nprovision s o f titl e IV

o f th e CA

Aan d othe r modification s wit hcertaint y a s t o th e applicabilit yo f th e variou s titl e I ne wsourc e requirements . Specifically , today' s amendment s recogniz e a broa d NS R exclusio n fo r utilit ypollutio n contro l project s including fue l switche s t o les s polluting fuels . Thes e project s wil l no t trigge r NS Runles s the yrende r th e uni t les s environmentall ybeneficia l o r caus e o r contribut e t o a violatio n o f a nationa l ambien t ai r qualit ystandard , PS D incremen t o r visibilit ylimitation . I naddition , th e rule s implemen t a n "actual-to-future-actual " methodologyfo r determining whethe r certai n othe r physica l o r operationa l change s a t utilitie s ar e subjec t t o NS Runde r eithe r preventio n o f significan t deterioratio n(PSD ) o r nonattainmen t provision s o f Part s C an d D , respectively , o f titl e I th e Act . I n conjunctio n wit hth e propose d methodologychange , EPAals o propose d t o allo wutilitie s t o us e a s thei r pre-chang e baselin e an ytwo-yea r perio d withi n th e las t fiv e years . Today' s actio n als o implement s § § 40 9 an d 41 5 o f titl e IV o f th e Clea n Ai r Ac t Amendment s o f 199 0 (199 0 Amendments ) whic hcreate d specia l NSP S treatmen t fo r certai nrepoweringP. 5

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- project s an

d a limite d NS Rexemptio nfo r temporaryan d permanen t clea n coa l technolog y(CCT ) project s an d fo r certai n "ver

yclean " units . Finally , th e regulatorychange s promulgate d today modif yth e provision s o f th e titl e I NSP S progra mt o provid e tha t a utilit ymayus e fo r it s prechang e baselin e th e highes t hourl yemission s rat e achievabl e a t an ytime during th e 5-yea r perio d prio r t o th e physica l o r operationa l change . I n it s Jun e 1 4 notice , EPAals o propose d t o creat e a presumptio n tha t low-NO xburner s woul d satisf yth e bes t availabl e contro l technolog y(BACT ) requirement s fo r modifie d utilit yunits . A s discusse d i ntoday' s notice , EP A ha s determine d no t t o adop t thi s presumption . DATES : Thi s rul e take s effec t o n(dat e o f publicatio ni n FEDERAL REGISTER) . Unde r § 307(b)(1 ) o f th e Act , petition s fo r judicia l revie wmus t b e file d o no r befor e (6 0 day s afte r th e dat e o f publication ) i nth e U.S . Cour t o f Appeal s fo r th e D.C . Circuit . ADDRESSES : Materia l relevan t t o thi s rulemaking mayb e foun d i n Publi c Docke t A-90-06 . Thi s docke t i s locate d i n U.S . EPA' s Centra l Docke t Sectio n(LE-131) , Watersid e Mall , M-1500 , 40 1 MStree t SW , Washington , D.C . 20460 . Th e docke t mayb e inspecte d betwee n 8:0 0 a.m . an d 3:0 0 p.m . o n weekday s an

d a reasonabl e fe e mayb e charge d fo r copying .P. 6

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- FORFURTHE RINFORMATIONCONTACT : Mr . Davi d A . Solomo n a t (919 ) 541-5375 , Ne wSourc e Revie wSectio n (MD-15) , Offic e o f Ai r Qualit yPlanning an d Standards , U.S . EPA , Researc h Triangl e Park , Nort hCarolin a 27711 . SUPPLEMENTARYINFORMATION : Th e following outlin e reflect s th e organizatio no f today' s notice : I . Introductio n II . Discussio n o f Fina l Actio no n Proposa l A . Pollutio n Contro l Project s 1 . RegulatoryChange s fo r Pollutio nContro l Project s 2 . Additiona l Modeling Requirement s B . Representativ e Annua l Emission s C . Th e Causatio n Requiremen t D . Repowering E . Clea n Coa l TechnologyDemonstratio nProject s an d Very Clea n Unit s F . Calculatio n o f NSP S Baselin e G . Utilit yBAC T Presumptio n H . Limitatio n o f Proposa l t o Electri c Utilitie s III . Miscellaneou s A . Executiv e Orde r (E.O. ) 1229 1 B . Paperwor k Reductio nAc t C . Economi c Impac t Assessmen t D . RegulatoryFlexibilit yAc t Certificatio n E . Effectiv e Dat eP. 7

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- F . Federalis mImplication s

I . Introduction . O n Jun e 14 , 1991 , EPApropose d t o amend it s regulation s implementing variou s titl e I ne wsourc e revie wrequirement s governing majo r modification s a s theyappl yt o electri c utilit ygenerating units . Specifically , a namendmen t t o th e definitio n o f "majo r modification " i nth e regulation s implementing th e NS Rprovision s o f par t C an d D , 4 0 CF RPart s 51.165 , 51.155 , 52,2 1 an d 52.24 , exclude s fro m NS Rcoverag e th e addition , replacemen t o r us e a t existing electri c utilit ygenerating unit s o f an ysystemo r devic e whos e primaryfunctio n i s th e reductio no f ai r pollutant s (including switching t o a les s polluting fuel) , s o long a s th e pollutio n contro l projec t doe s no t rende r th e uni t les s environmentall ybeneficial. 1 Th e EPAals o propose d t o amen d it s NS Ra s theyappl yt o utilitie s to : (1 ) se t fort hanactual-to-future-actua l methodology fo r determining whethe r a physica l o r operationa l chang e i s subjec t t o NSR ;

1 Unles s otherwis e noted , reference s t o "NSR " refe r t o th e majo r ne wan d modifie d sourc e preconstructio n revie w requirement s o f bot hpar t C (PSD ) an d par t D (nonattainment ) o f titl e I o f th e Act . Regulation s pertaining t o thes e part s ar e codifie d a t 4 0 CFR51.165 , 51.166 , 52.2 1 an d 52.24 .P. 8

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- (2 ) provid e clarificatio n tha t onl ythos e increase s i n emission s tha t actuall yresul t fro mth e physica l chang e o r chang e i n th e metho d o f operatio n ar e considere d i n determinin g whethe r th e propose d chang e subject s th e utilit y t o NS Rrequirements ; an d (3 ) implemen t § § 40 9 an d 41 5 o f titl e I V o f th e 199 0 Amendment s whic hcreat e specia l NSP S treatmen t fo r certai n repowerin g project s an d a limite d NS Rexemptio n fo r temporar yan d permanen t CC T projects , an d fo r certai n "ver y clean " units . Finally , EP Aannounce d tha t fo r purpose s o f establishin g th e baselin e fo r th e ne wactual-to-futur e methodology , EP Awoul d interpre t it s existin g regulation s t o allo wth e sourc e t o selec t anytw o year s ou t o f th e fiv e tha t precede d th e propose d change . Th e EP Aals o propose d t o amen d it s NSP S regulation s (4 0 CF RPar t 60 ) t o allo wa utilit yt o us e a s a unit' s pre-chang e baselin e it s highes t hourl yemission s rat e achievabl e durin g th e 5 year s prio r t o th e propose d change . I n additio n t o thes e applicabilit ychanges , EP A propose d t o creat e a presumptio n tha t lo wNO xburner s woul d constitut e BAC T fo r NO xfo r modifie d utilit yunits . I n takin g th e action s announce d today , EP Aha s relie d o n th e writte n comment s provide d t o th e docke t i n thi s matte r a s wel l a s testimon yprovide d a t a publi c hearin g o n th e propose d rul e conducte d byEP Ao n Jul y14 , 1991 .P. 9

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- Th e publi c commen t period , originall yschedule d t o clos e o n Augus t 19 , 1991 , wa s extende d unti l Septembe r 18 , 199 1 (5 6 FR40843 , Augus t 16 , 1991 ) t o receiv e additiona l comments . Th e commen t perio d wa s late r reopene d o n Novembe r 25 , 199 1 (se e 5 6 F R59238 ) fo r 2 week s t o receiv e comment s o n th e informatio n containe d i nth e transcrip t o f a congressiona l hearing conducte d b yth e Subcommitte e o n Healt han

d th e Environmen t o f th e Hous e Committe e o nEnerg y an d Commerc e o n Jul y22 , 1991 , an d othe r relate d information . I n respons e t o severa l request s t o extend th e commen t period , th e commen t perio d wa s extende d fo r a n additiona l 7 days , making th e fina l deadlin e fo r comment s Decembe r 17 , 1991 . See , 5 6 F R65203 .

II . Discussio no f Fina l Actio n o nProposal . A . Pollutio nContro l Projects . 1 . RegulatoryChange s fo r Pollutio nContro l Projects . a . Background . Las t June , EPApropose d t o amen d it s regulation s t o clarif ytha t a pollutio n contro l projec t (including a fue l switc ht o a les s polluting fuel ) undertake na t a nelectri c utilit ystea

mgenerating uni t woul d no t trigge r NS Runde r eithe r th e PS D o r nonattainmen t programs . Bot hth e PS D an d nonattainmen t NS Rprograms 2 appl yt o a "modification, " whic h

2 Fo r a mor e detaile d descriptio n o f th e existing regulatorystructur e o f th e NS Ran d NSP S program s o f titl e I , reader s ar e directe d t o sectio nII , Background , o f th e Jun e 14 , 199 1 notice . (5 6 FR27631 , 36-37) .1 , ' to -8

- i s define d a s "an

yphysica l chang e in , o r chang e i nth e metho d o f operatio n of , a stationarysourc e whic hincrease s th e amoun t o f an

yai r pollutan t emitte d b ysuc hsourc e o r whic hresult s i n th e emissio n o f an yai r pollutan t no t previousl yemitted . CA A§ 111(a)(4) , 4 2 U.S.C . 7411(a)(4) ; se e als o CA

A§ § 169(2)(C ) an

d 171 ( ) , 4 2 U.S.C . . Thi s P.1 0

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sectio n contemplate s a two-ste p tes t fo r determining whethe r activitie s a t a n existing facilit yconstitut e a modificatio n subjec t t o ne wsourc e requirements . I n th e firs t step , th e reviewing authorit ydetermine s whethe r a physica l o r operationa l chang e wil l occur . I f so , th e reviewing authorit yproceed s i nth e second step t o determin e whethe r th e physica l o r operationa l chang e wil l resul t i n a n emissio n increas e ove r baselin e levels . EPApropose d t o amen d it s PS D an

d nonattainmen t regulation s a s theypertai n t o utilit ypollutio ncontro l project s b

yexercising it s authorit yunde r th e statutory definitio n o f "modification " t o exclud e "pollutio n contro l projects, " whic hinclud e certai nfue l switches , fromth e definitio n o f physica l o r operationa l chang e unles s the y rende r th e uni t les s environmentall ybeneficial . I n th e propose d regulations , a pollutio ncontro l projec t wa s define d a s a projec t undertake na t a utilit y uni t fo r purpose s o f reducing emission s fromsuc hunit . Pollutio n contro l project s ar e limite d t o th e installatio n o f conventiona l o r innovativ e emission s contro l equipment ,P.1 1

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- including , bu t no t limite d to , installatio no f conventiona l an d advance d flu e ga s desulfurization , sorben t injectio nfo r S0 2 an d N0 Xcontrols , electrostati c precipitators , an d project s undertake n t o accommodat e switching t o a les s polluting fuel , including natura l ga s o r coa l re-burning an d th e co-firing o f natura l ga s and othe r fuel s fo r th e purpos e o f controlling S0 2 an d N0 Xemissions . Th e proposa l als o include d an yactivit ytha t i s necessaryt o accommodat e switching t o a les s polluting fuel . Change s tha t ar e intende d primaril yt o restor e origina l capacit yo r t o improv e th e operationa l efficienc yo f th e facilit ywer e no t considere d t o b e par t o f a pollutio n contro l project . Th e pollutio n contro l projec t exclusio n a s propose d di d no t exten d t o sourc e categorie s othe r tha n electri c utilit ystea mgenerating units . b . Comment s Generall yFavoring th e EPAProposal . I n general , comment s fromindustrysupporte d th e proposa l t o exclud e pollutio n contro l projects . Commenter s supporting th e provisio nnote d tha t th e exclusio ni s consisten t wit hth e Ac t an d EPA' s earlie r determination s regarding suc hprojects . Indeed , severa l commenter s expresse d th e vie wtha t n o chang e i nEPA' s rule s wer e necessary . On e commente r note d tha t Congres s indicate d it s inten t no t t o appl yNSP S o r NS Rrequirement s t o pollutio n contro l project s b

yadopting th e NS Rdefinitio no f "modification. "P.1 2

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- Anothe r commente r pointe d ou t tha t becaus e o f th e numbe r o f project s tha t wil l shortl yb e spawne d b yth e aci d rai n provision s o f th e CAA , i f permitting wer e require d fo r everyutilit yoperato r tha t plan s a fue l switc ho r th e installatio n o f pollutio ncontro l equipment , EPAwoul d b e overwhelme d wit happlications . Thi s coul d affec t th e reliabilit yo f th e electri c utilit yindustryan d delay complianc e wit htitl e IV . On e commente r note d tha t a utilit yshoul d no t b e prevente d fro m qualifying fo r th e pollutio n contro l exclusio ni f tha t utilit ytake s step s t o restor e diminishe d capacit yo f a powe r plan t a t th e sam e tim e tha t th e utilit yundertake s a pollutio ncontro l projec t suc ha s repowering . Severa l commenter s supporte d flexibilit yfo r utilitie s o n strategie s fo r S0 2 control . Tw o commenter s note d tha t i f th e nationa l S0 2 emission s cap i s maintained , plan t modification s tha t mayincreas e S0 2 emission s a t on e uni t shoul d no t trigge r NS Ro r NSP S requirements . Anothe r commente r suggeste d tha t i nligh t o f th e S0 2 emission s caps , utilitie s shoul d b e permitte d t o undertak e pollutio n contro l project s o r mak e nonroutin e modifications , eve n thoughsuc h change s increas e S0 2 emissions , withou t being force d t o instal l technology(sucha s scrubbers ) t o contro l S0 2 . c . Comment s Generall yOpposing th e EPAProposal . Commenter s oppose d t o th e exclusio no f pollutio n contro l project s fromNS Rprovision s dispute d EPA' sP.1 3

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- authorit yt o creat e suc h"exemptions " an d disagree d tha t Congres s intende d t o exemp t pollutio ncontro l project s fro m NSR . On e commente r state d tha t th e pollutio ncontro l projec t exemptio n i s illega l an d conflict s wit h§ 182(e)(2 ) o f th e Act , noting tha t whil e § 182(e)(2 ) provide s limite d NS Rrelie f fo r some pollutio n contro l projects , i t i s no t a blanke t exemptio n fromNSR , becaus e th e requiremen t t o achiev e th e lowes t achievabl e emissio nrat e (LAER ) remain s effective , whic hdemonstrate s congressiona l inten t t o preven t EPAfromgranting broade r exclusions . Opponent s t o th e exclusio nfo r pollutio ncontro l project s als o pointe d ou t tha t effort s b yutilitie s t o reduc e on e pollutan t ca nofte nincreas e emission s o f another . Suc hefforts , a s wel l a s project s tha t reduc e pollutio n i n on e are a bu t increas e i t i n another , shoul d no t b e exempte d fromNS Ro r PS D provisions . Severa l commenter s provide d example s o f ho winstallatio n o f pollutio n contro l equipmen t o r fue l switching aime d a t reductio no f S0 2 als o ha d th e effec t o f increasing emission s o f N0 Xan d PM , an

d ho winstallatio n o f low-NO xburner s increase d VO C emissions . Some opponent s t o th e exclusio n fo r pollutio ncontro l project s sai d tha t th e definitio no f pollutio n contro l projec t i s overl ybroad , an d tha t EP

Alack s authorit yt o appl ysuc ha broa d definition . d . Comment s Suggesting Revision s t o th e Proposal . Severa l commenters , bot hfo r an d agains t th e exclusion ,P.1 4

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- suggeste d specifi c regulator ychange s t o th e pollutio n contro l exemption . Fo r instance , numerou s commenter s requeste d a clarificatio n o f th e environmentall ybeneficia l test . I n addition , th e followin g suggestion s wer e mad e wit h regar d t o th e definitio n o f "pollutio n contro l project" : (1 ) includ e anyupgrad e o f th e pollutio n contro l efficiencie s o f existin g devices ; (2 ) includ e "pollutio n prevention " change s suc ha s lea k detectio n an d repai r program s an d th e attendan t sit e changes ; (3 ) clarif ytha t th e pollutio n contro l projec t nee d no t b e a permanen t change ; (4 ) includ e boile r modification s involvin g natura l ga s cofiring , reburn , o r rebur n wit hsorben t injectio n eve n thoug hther e ar e benefit s othe r tha n pollutio n control ; an d (5 ) includ e impact s o n othe r Clas s I are a ai r qualit y relate d value s a s wel l a s visibilit yi n determinin g whethe r a projec t tha t woul d increas e emission s i s nevertheles s environmentall ybeneficial . e . Th e EP AAnalysis . Base d o n a revie wo f th e comments , EP Aha s determine d t o adop t a forma l pollutio n contro l projec t exclusio n fo r electri c utilit ystea mgeneratin g units . Thu s EP Ai s toda y adoptin g revision s t o it s PS D an d nonattainmen t regulation s fo r th e addition , replacemen t o r us e a t a n existin g electri c utilit ystea m

generatin g uni t o f anysyste mo r devic e whos eP.1 5

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- primaryfunctio n i s th e reductio n o f ai r pollutant s (including th e switching t o a less-polluting fue l wher e th e primarypurpos e o f th e switc hi s th e reductio n o f ai r pollutants) . Unde r th e regulation s a s adopte d today , a utilit yundertaking a projec t meeting th e pollutio n contro l projec t definitio n wil l no t b e subjec t t o NS Runde r eithe r PS D o r nonattainmen t unles s th e projec t render s th e uni t les s environmentall ybeneficial . I n th e propose d rule , EPAdi d no t provid e an yspecifi c definitio n o f th e environmentall ybeneficia l standard . Numerou s commenter s note d th e lac k o f a specifi c standard fo r th e environmentall ybeneficia l tes t an d requeste d tha t EPAprovid e a definitio n fo r thi s ne wter man d guidanc e a s t o ho wi t wil l b e applied . O f course , a s note d i n th e proposa l (5 6 FR27634) , pollutio n contro l project s a t existing stationarysource s ar e generall yno t subjec t t o NS R requirement s fo r th e simpl e reaso n tha t theyd o no t resul t i n a n increas e i n actua l emissions . I naddition , a s als o note d i n th e proposa l (5 6 FR27635) , EPAha s determine d that , i n general , Congres s di d no t inten d tha t pollutio n contro l project s b e considere d th e typ e o f activit ytha t shoul d trigge r NSR . On th e othe r hand , severa l commenter s pointe d ou t tha t a projec t tha t reduce s on e pollutan t shoul d no t b e allowe d t o increas e emission s o f anothe r pollutan t i f tha t increas e wil l caus e o r exacerbat e a differen t pollutio nproblem .P.1 6

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- Mor e specifically , a n environmenta l commente r suggeste d tha t EPAha d endorse d a t th e Congressiona l hearin g a vie wtha t increase s woul d no t b e allowe d i nnonattainmen t area s absen t "compelling showing. " Th e proposa l sough t t o reconcil e thes e factor s b

yindicating tha t th e exclusio nwoul d allo w th e permitting authorit yt o conside r project s o n a case-by

cas e basi s an

d furthe r indicate d tha t project s nee d no t necessaril ypas s a quantitativ e emission s increas e tes t t o qualif yfo r th e exclusion . I n addition , th e modelin g provisio n(discusse d i n th e following section ) provide s tha t pollutio n contro l project s tha t wil l resul t i n significan t ne t increase s ove r level s attribute d t o th e sourc e i nth e las t modelin g analysi s prepare d fo r th e area , wil l b e evalute d fo r thei r impac t o n NAAQS , PS D increments , an d visibilit ylimitations. 3 Thi s safeguard , i n additio n t o th e permitting agency' s authorit y t o determin e a pollutio ncontro l projec t t o b e les s environmentall ybeneficial , prevent s an yemission s increas e

3 Th e NS Rregulation s defin e a "majo r modification " subjec t t o revie wa s an yphysica l o r operationa l chang e a t a majo r stationarysourc e tha t woul d resul t i na "significan t ne t emission s increase " i nan yregulate d pollutant . Se e e.g. , 51.166(a)(1)(v)(A) . I nnonattainmen t area s "significant" , i n referenc e t o a ne t emission s increase , i s define d a s a rat e o f emission s tha t woul d equa l o r excee d a specifie d amount . Fo r example , unde r th e curren t regulation s a rat e o f 4 0 ton s pe r yea r o r mor e i s "significant " fo r S0 2 . [Cite ]P.1 7

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- from adversel yaffecting ai r qualit yi n eithe r a n attainmen t o r nonattainmen t area . Severa l commenter s challenge d th e nee d fo r a regulatory exclusion , noting tha t EPAha d alread yexclude d numerou s individua l pollutio n contro l project s pursuan t t o it s existing regulatoryauthority . However , whil e EPAha s i n fac t mad e case-by-cas e determination s excluding pollutio n contro l project s fro mNSR , i t ha s neve r provide d a comprehensiv e statemen t o f it s policyi n thi s regar d no r formall yinclude d thi s exclusio ni n it s NS Rregulation s governing SIP' s o r it s ow n NS Rregulations . Becaus e o f th e enormou s surg e i n project s tha t utilitie s ca nb e expecte d t o undertak e i n respons e t o th e aci d rai nprovisions , EPA believe s tha t a forma l rulemaking spelling ou t th e exac t parameter s o f th e exclusio n i s necessary . A t leas t on e commente r cautione d EPAagains t requiring source s t o submi t "applications " t o secur e th e pollutio n contro l projec t exclusion , les t source s fac e excessiv e paperwor k burden s an d length

ydelay s everytime theychang e thei r pollutio n contro l equipment . Unde r today' s rule , an d consisten t wit hth e othe r NS Rapplicabilit ydecisions , source s remai n responsibl e i nth e firs t instanc e fo r determining wha t permitting requirement s appl yt o thei r activities . Beyond issuing an yconstructio n o r operating permit s tha t mayb e needed , th e permitting authorit yi s no t necessaril yinvolve d unles s a sourc e seek s a determinatio nP.1 8

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- o f NS Rapplicabilit yo n it s ow n o r a modelin g analysi s i s required . Severa l commenter s requeste d tha t thi s exclusio n b e extende d t o nonroutin e repair s tha t ar e undertake nb yth e utilit yi n conjunctio nwit hth e pollutio ncontro l project . However , titl e IV s overal l nationa l S0 2 ceiling an d emissio n trading programd o no t allo wEPAt o simpl yignor e th e loca l ai r qualit yimpac t o f S0 2 increase s a t individua l titl e IV-covere d facilities . Th e nationa l emission s cap s establishe d b

ytitl e IV

ar e no t designe d t o protec t plant

specifi c consideration s o f loca l ai r quality , th e focu s o f titl e I' s NS Rrequirements . Thi s argumen t i s als o refute d b yth e plai n languag e o f titl e IV whic hb

yit s term s doe s no t supersed e titl e I . Se e § 403(f) , (g ) 4113 . Severa l opponent s o f th e exclusio n poin t ou t tha t certai n pollutio n contro l technologie s ca n actuall yincreas e emission s o f othe r pollutant s an d tha t th e installatio n o f a pollutio n contro l projec t mayresul t i n increase d utilizatio n o f th e unit , an d thereb

yresul t i n a nincreas e i n actua l emissions . A s note d abov e an d i nth e proposal , EPAexpect s tha t mos t pollutio ncontro l project s wil l decreas e actua l emissions . Moreover , eve n thoughemission s increase s ar e possibl e i nsome cases , EPAi s no t preclude d fromcreating thi s exclusion . Th e mer e fac t o f a n emission s increase , standing alone , doe s no t rende r th e exclusio n inconsisten t wit hth e Act . Fo r instance , EPAregulation sP.1 9

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- hav e long exclude d emission s increase s associate d wit h routin e repairs , a s wel l a s increase s i nth e operation s o f a uni t i n respons e t o fluctuation s i n th e market . [see , e.g. , 4 0 CF R52.21(b)(2)(iii)(a) , (f)] . Give nth e modeling safeguar d an

d th e overal l benefi t t o th e environmen t o f pollutio n contro l projects , EPAi s confiden t tha t th e creatio n o f thi s exclusio ni s a lawfu l an d appropriat e exercis e o f it s powers . I t wa s als o suggeste d tha t th e pollutio n contro l projec t exclusio n i s inconsisten t wit h§ 182(e)(2 ) o f th e CAA . Sectio n 182(e)(2 ) provide s tha t i n extreme ozon e nonattainmen t area s (th e Lo s Angele s are a i s th e onl yone) , an yphysica l o r operationa l chang e "whic hresult s i nan y increas e i n emissions " wil l b e considere d a modification . Th e sourc e can avoi d th e offse t requirement s (but no t th e res t o f NSR ) b

yinternall yoffsetting (i.e. , netting ) an y increas e i n emission s a t a rati o o f a t leas t 1. 3 t o 1 . Th e provisio n als o provide s tha t th e extreme are a offse t provision s (but agai nno t th e res t o f NSR ) d o no t appl yt o th e installatio n o f equipmen t require d t o compl ywit h"the applicabl e implementatio nplan , permit , o r thi s Act. " Th e EPAdoe s no t agre e tha t thi s nonattainmen t provision , whic happlie s t o onl yon e area , somehowpreclude s EPAfro madopting a nexclusio nt o it s genera l NS Rrule s regarding pollutio n contro l projects . Whil e ther e mayb e some overlap (i.e. , utilit ycomplianc e project s undertake nP.2 0

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- i n th e Lo s Angele s are a tha t qualif yunde r thi s rul e a s pollutio n contro l projects) , i n genera l th e tw o provision s ar e quit e different . Today' s rul e i s limite d t o utilitie s bu t applie s t o al l area s o f th e country , whil e § 182(e)(2 ) applie s t o al l sourc e categorie s bu t onl yt o th e Lo s Angele s area . Sectio n 182(e)(2 ) als o appear s t o appl yt o a broade r categoryo f changes . Ther e i s n o evidenc e tha t Congres s intende d thi s limite d provisio nt o preemp t EPAfromadopting a broa d pollutio n contro l projec t exclusion . O nth e othe r hand , th e Clea n Ai r Ac t conferee s di d specificall ydirec t EPAt o fin

d a n administrativ e resolutio no f th e WEPC O issues . Conferenc e Comm. , Join t ExplanatoryStatemen t o f th e Committe e o f th e Conferenc e t o Accompan yS . 1630 . Rep . 101-951 , 101s t Cong . 2n d Sess . (1990 ) pp . 344-45 . Fo r thes e reasons , EPAdoe s no t believ e tha t § 182(e ) directl yo r indirectl ylimit s EPA' s authorit yhere . 2 . Additiona l Modeling Requirements . a . Background . Apollutio n contro l projec t canno t resul t i na n emission s increas e tha t wil l caus e o r contribut e t o a violatio n o f a nationa l ambien t ai r qualit ystandard , PS D increment , o r visibilit ylimitation . Fo r thi s reason , th e proposa l include d a safeguar d provisio ntha t allowe d th e reviewing authorit yt o requir e a sourc e t o performa nai r qualit yimpac t analysi s (modeling ) wheneve r (1 ) th e permitting authorit yha s reaso nt o believ e tha t th eP.2 1

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- propose d chang e wil l resul t i n a significan t ne t increas e i n actua l emission s o f an ycriteri a pollutan t ove r level s use d fo r tha t sourc e i n th e mos t recen t ai r qualit yimpac t analysis , an

d (2 ) th e permitting authorit yha s reaso n t o believ e tha t suc ha n increas e woul d caus e o r contribut e t o a violatio n o f a NAAQS , incremen t o r visibilit ylimitation . I f th e modeling i s conducte d an d th e permitting agenc y determine s tha t thi s increas e i n emission s wil l caus e o r contribut e t o a violatio no f an yambien t standard , PS D increment , o r visibilit ylimitation , th e pollutio n contro l projec t exclusio n doe s no t apply . b . Comment s o n th e EPAProposal . Man ycommenter s viewe d th e modeling requiremen t a s ensuring tha t th e pollutio n contro l projec t exclusio nwil l no t hav e a n advers e impac t o n loca l ai r qualit ybecaus e source s mus t stil l compl ywit hal l applicabl e emissio n limit s necessaryt o protec t NAAQS , PS D increments , an d visibility . However , severa l commenter s expresse d concer nove r th e adequac yo f EPA' s ai r qualit yimpac t analysi s requiremen t a s a safeguar d du e t o th e methodologypropose d t o calculat e actua l emissions . Specifically , a n environmenta l grou p pointe d ou t tha t using increase s i n"representativ e actua l annua l emissions " a s th e tes t fo r determining whethe r a pollutio n contro l projec t result s i nunacceptabl e impact s o n ai r qualit yca n exclud e rea l emission s increase s (e.g. , du eP.2 2

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- t o demand growth) , an d thu s fail s t o accoun t fo r th e ful l impac t o f th e project . Thi s commente r asserte d tha t increase s i n "actua l emissions " shoul d b e th e ke yt o us e o f th e pollutio n contro l projec t exclusion . Some commenter s als o objecte d du e t o th e fac t tha t th e proposa l relie s o n Stat e an d loca l agencie s t o b e awar e o f th e projec t an

d reques t th e analysis . On e commente r adde d tha t i t i s unclea r ho wa violatio no f th e NAAQ S ca n b e avoide d befor e th e fac t an d ho wth e permittin g agenc ycoul d requir e a n ai r qualit yanalysi s i f th e pollutio ncontro l projec t i s no t subjec t t o NSR . Finally , a governmen t agenc yquestione d wh yth e safeguar d provisio n protecte d "visibilit ylimitations " whe n th e PS D programi s designe d t o protec t al l ai r qualit y relate d value s i n Clas s I areas . c . Th e EPAAnalysis . Afte r carefu l revie wo f th e proposa l an d th e comments , EPAha s determine d t o promulgat e th e modelin g provisio na s proposed . Th e EPAdoe s no t believ e th e objection s t o thi s provisio n t o b e well-founded . Althoughth e proposa l doe s no t explicitl yrequir e source s t o infor mth e permittin g authorit yo f pollutio ncontro l projects , EPAanticipate s tha t i n most , i f no t all , circumstance s involving pollutio n contro l projects , permitting authoritie s wil l b e awar e o f th e source' s intentions . Fo r instance , stat e permittin g requirement s mayrequir e th e sourc e t o brin g th e projec t t oP.2 3

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- th e permitting authorit yo r th e sourc e maywis ht o d o s o t o secur e emissio n reductio ncredit s fo r pollutant s tha t wil l b e decreased . I n addition , mos t project s a t utilitie s ar e typicall ysubjec t t o publi c scrutin yi na variet yo f forum s a s a resul t o f filing s mad e wit hPubli c Utilit yCommission s and othe r local , stat e o r federa l agencies . Consequently , i t i s unlikel ytha t a utilit ycoul d procee d wit ha pollutio n contro l projec t withou t some typ e o f revie wregarding CA Ao r othe r requirements . Thi s wil l b e especiall ytru e o f pollutio n contro l project s undertake nfo r th e purpos e o f complianc e wit htitl e IV . EPAdisagree s wit hth e environmenta l grou p commen t tha t i t i s inappropriat e t o hing e us e o f th e pollutio ncontro l projec t exclusio n o n increase s i n"representativ e actua l annua l emissions " rathe r tha n increase s i n "actua l emissions. " Th e commente r i s correc t tha t th e rul e a s propose d woul d i n certai ncircumstance s no t subjec t t o revie wsignifican t increase s i nactua l emission s froma sourc e tha t followcompletio no f th e pollutio ncontro l project . However , th e rul e i s clea r tha t thi s coul d occu r onl ywher e th e increas e i n questio n i nfac t doe s no t resul t fromth e pollutio n contro l project , bu t rathe r from a n independen t facto r suc ha s demand growth . A s discusse d abov e an

d i n th e propose d rule , i t i s no t th e purpos e o f th e ne wsourc e revie wprogramt o subjec t al l emission s increase s t o permitting requirements , onl yincrease s tha t resul t fromP.2 4

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- a nonroutin e chang e a t a nexisting plant . Th e stat e may alway s revis e it s SI P t o correc t NAAQ S violation s tha t i t conclude s ar e cause d b yincrease d utilizatio n bu t d o no t resul t froma pollutio n contro l projec t a t tha t plant. 4 [Ad d discussio no f AQR V objection. ] B . Representativ e Actua l Annua l Emissions . a . Background . T o determin e i f a physica l o r operationa l chang e a t an existing electri c utilit ystea mgenerating uni t woul d resul t i n a n increas e i n actua l emission s an d thu s trigge r NS Ra s a "majo r modification, " EPApropose d t o allo wutilitie s t o compar e thei r actua l emission s befor e an d afte r th e physica l o r operationa l change. 5 A s proposed , th e "representativ e actua l annua l emissions " methodologyallow s th e utilit yt o compar e it s pre-chang e actua l emission s wit hfutur e actua l emission s t o determin e i f th e propose d chang e wil l resul t i n a n increas e i n emissions . Th e EPA' s existing regulation s define d pre-chang e actua l emission s a s "th e averag e rate , i n

4 I n part , commenters ' objection s t o us e o f th e representativ e actua l annua l emission s methodologyt o determin e i f th e pollutio n contro l projec t wil l resul t i n a significan t ne t emission s increas e i s grounde d i n a concer n wit hth e reliabilit yo f it s methodology . Thes e concern s ar e addresse d i n th e following section .

5 Aful l discussio n o f th e NS Rregulatoryschem e including th e methodologyfo r determining whe n a chang e t o a n existing emission s uni t wil l trigge r NS Rmayb e found i n Sectio n I I o f th e proposa l (5 6 F R27631 , 36-37) . Thi s discussio n assume s tha t th e reader' s familiarit ywit htha t explanation .P.2 5

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- ton s pe r year , a t whic hth e uni t actuall yemitte d th e pollutan t durin g a 2-yea r perio d whic hprecede s th e particula r dat e an d whic hi s representativ e o f norma l sourc e operation " (see , e.g. , 4 0 CF R52.21) . Th e Administrato r ca n allo wth e us e o f a differen t tim e perio d "upo n a determinatio n tha t i t i s mor e representativ e o f norma l sourc e operation. " Id . Th e EP Apropose d t o retai n thi s regulator ylanguage , bu t t o presum e tha t any2 consecutiv e year s withi n th e 5 year s prio r t o th e propose d chang e i s representativ e o f norma l sourc e operation s fo r a utility . Sourc e owner s o r operator s desirin g t o us e a baselin e perio d prio r t o th e las t 5 year s ma ysee k th e reviewin g authority' s specifi c determinatio n tha t suc hperio d i s mor e representativ e o f norma l operations . Unde r th e proposal , th e future-actua l projectio n i s th e produc t of : (1 ) th e hourl yemission s rate , whic hi s base d o n th e unit' s physica l an d operationa l capabilitie s followin g th e chang e an d federally-enforceabl e operationa l restriction s tha t woul d affec t th e hourl yemission s rat e followin g thi s change ; an d (2 ) projecte d capacit yutilization , whic hi s base d o n (a ) th e unit' s historica l annua l utilization , an d (b ) al l availabl e informatio n regardin g th e unit' s likel ypost chang e capacit yutilization .P.2 6

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- I n projecting futur e utilizatio n and emission s factors , th e permitting authorit ymayconside r th e company' s historica l operationa l data , it s ow nrepresentations , filing wit hFederal , Stat e o r loca l regulatoryauthorities , an d complianc e plan s develope d unde r titl e I V o f th e 199 0 Amendments . Th e projectio n o f post-chang e capacit yutilizatio n fo r applicabilit ypurpose s wa s t o b e base d o n a projectio n o f utilizatio n fo r a perio d afte r th e physica l o r operationa l change . Th e EPApropose d t o allo wsource s t o bas e th e projectio n o f utilizatio no n th e 2 year s immediatel yafte r th e change , o r a differen t consecutiv e 2-yea r perio d withi n th e 1 0 year s afte r th e change , wher e th e reviewing authorit y determine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations . Thi s methodologyapplie s t o al l physica l o r operationa l change s a t an existing electri c utilit ygenerating unit , othe r tha n th e additio no f a ne wuni t o r th e replacemen t o f a n existing unit . Unde r th e propose d rules, , a uni t i s considere d t o b e replace d i f i t woul d constitut e a "reconstructed " unti l withi nth e meaning o f 4 0 CF R60.15 . b . Comment s Generall yFavoring th e EPAProposal . Severa l commenter s favore d th e expansio no f th e tim e perio d fo r establishing th e pre-chang e emission s baseline . Suggestion s included :P.2 7

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- (1 ) allo wth e us e o f any2 consecutiv e year s withi n th e las t 5 year s o f operatio n t o allo wfo r a mor e representativ e baselin e fo r unit s tha t hav e bee n shu t down ; (2 ) allo wutilitie s t o reques t t o us e period s o f representativ e hig hutilizatio n outsid e th e 5 yea r tim e period ; (3 ) ad d th e "any2 ou t o f th e prio r 5 yea r baselin e period " discusse d i n th e preambl e t o 4 0 CF Rpart s 51 , 52 , an d 60 ; (4 ) allo wutilitie s t o us e th e maximu mutilizatio n i n an y1 yea r withi n a t leas t th e las t 1 0 years , sinc e 1 0 year s i s a mor e relevan t capacit yinvestmen t plannin g horizo n tha n 5 years ; (5 ) clarif ytha t th e sourc e wil l b e abl e t o selec t th e relevan t 2-yea r perio d wit happrova l o f th e reviewin g authorit yrequire d onl ywhe n th e pre-chang e baselin e i s outsid e o f th e 5-yea r perio d proceedin g th e change ; (6 ) expan d th e baselin e calculatio n perio d fro m 5 year s t o 1 0 year s t o b e consisten t wit hth e after-chang e calculatio n perio d an d t o addres s a mor e representativ e tim e period ; (7 ) allo wth e us e o f any2 year s (rathe r tha n consecutiv e years ) du e t o lon g reserv e shutdown s an d becaus e maintenanc e plannin g require s tha t utilit yboiler s b e operate d i n "abnormal " condition s fo r lon g durations ; an dP.2 8

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- (8 ) requir e source s t o bac k u p th e choic e o f whic h 2 year s t o us e wit ha short-termstandard using a n hourl y rate , us e th e same 2-yea r perio d fo r determining th e shor t terman d annua l rates , an d codif yth e 2 year s use d fo r th e limit . Severa l comment s tha t recommende d expanding th e proposa l t o includ e industria l source s i nth e NS Rexemptio n als o note d tha t a "5-yea r window " i s no t satisfactoryfo r industria l source s whic hd o no t alway s hav e representativ e period s o f emission s immediatel ybefor e a physica l change . On e industria l commente r suggeste d th e us e o f an y2-yea r perio d b e allowed . Commenter s i n favo r o f th e futur e actua l emission s calculatio n metho d note d tha t i t wil l alleviat e uncertaint y fo r nonroutin e repair , replacement , an d maintenanc e project s whil e stil l protecting loca l ai r quality ; th e future-actua l metho d reduce s speculatio nan d allow s mor e relianc e o n factua l data ; an

d th e actual-to-future-actua l emission s compariso n i s mor e appropriat e t o look a t th e operating historyan

d projecte d capacit yo f anexisting uni t t o determin e whethe r a chang e wil l increas e emissions . On e commente r state d tha t th e actual-to-potentia l metho d discourage d environmentall ybeneficia l modifications , bu t suggeste d tha t th e mos t appropriat e polic ywoul d b e t o adop t a potential-to-potentia l test .P.2 9

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- On e commente r note d tha t th e actual-to-future-actua l tes t woul d en

d wha t wa s fel t t o b e th e "unlawfu l an d unfai r practice " o f usin g th e NS Rprogra mt o "arbitraril yreduc e allowabl e hour s o f operatio n o r rate s o f productio nfo r existing sources. " Countering th e argumen t tha t th e actual

to-future-actua l tes t coul d creat e publi c healt hproblems , tw o commenter s note d tha t utilitie s mus t compl ywit hal l Federal , Stat e an

d loca l ai r qualit yrestriction s regardles s o f th e test s used . Als o supporting th e actual-to-future

actua l test , on e commente r pointe d ou t tha t sourc e owner s wil l b e motivate d b yincentive s i n th e Act , propose d regulations , an

d marke t force s t o financ e an d enginee r economi c an

d efficien t physica l an d operationa l change s a t plant s s o a s t o achiev e excellen t environmenta l control . On e commente r favore d calculating futur e emission s ove r a representativ e 2-yea r perio d withi n a 5-yea r perio d afte r th e change . c . Comment s Generall yOpposing th e EPAProposal . On e opponen t o f th e propose d method s state d tha t emissio n increase s a t powe r plant s woul d no wb e fostere d sinc e th e proposa l wil l allo wutilitie s t o choos e thei r ow n definition s fo r whe n emission s hav e increased . I n general , opponent s o f th e proposa l regarding th e pre-chang e baselin e note d tha t th e chang e i s arbitraryan d capriciou s an

d tha t ther e i s n o analysi s i n th e docke t suggesting tha t an

y2-yea r perio d i s mor e representativ e o fP.3 0

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- pre-chang e maximu

memissions . Commenter s note d tha t unde r th e proposal , source s coul d selec t th e year s i n whic hthey ha d th e highes t emission s i na n attemp t t o minimiz e th e appearanc e o f a n increas e and escap e NSR . On e commente r note d tha t th e chang e i nbaselin e calculatio n methodology woul d giv e utilitie s suc hflexibilit yi nrefurbishing , repowering , an

d lif e extensio nproject s a s t o bia s competitiv e powe r market s toward s th e continue d us e o f existing ol d unit s rathe r tha n th e constructio n o f ne wones . Opponent s t o th e us e o f futur e actua l emission s state d tha t ther e i s n o reasone d basi s fo r anunenforceabl e representativ e actua l emission s approach , an d applicatio no f thi s tes t t o electri c utilitie s i s no t consisten t wit hEPA' s establishe d polic ytowar d othe r sources . Othe r comment s contende d tha t th e futur e actua l tes t ignore s al l pas t precedent s an

d that , i ndetermining whethe r a modificatio n trigger s NSR , EPAshoul d compar e actua l emission s fo r th e curren t uni t t o potentia l emission s fromth e modifie d source ; th e future-actua l tes t doe s no t guar d agains t artificiall ylowestimate s mad e b ysource s t o escap e NSR , no r doe s i t protec t agains t substantia l increase s mad e immediatel yafte r th e 2-yea r period ; an d th e future-actua l emission s calculatio n procedur e amount s t o self-regulatio n and i s easil ysubjec t t o abuse . Stat e an

d loca l ai r agencie s generall yoppose d th e futur e actua l metho d o f calculating post-chang e emissions .P.3 1

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- On e note d tha t th e appropriat e emissio nincreas e tes t shoul d b e determine d o n a case-by-cas e basis . On e agencynote d tha t th e actual-to-futur e actua l approac hresult s i na significan t relaxatio n o f titl e I NS Rrequirement s an d woul d allo wutilitie s t o upgrad e equipmen t whic hmayhav e los t significan t generating capacit ywithou t th e equipmen t being subjec t t o NSR , hampering loca l ai r qualit yattainmen t an d maintenanc e efforts . Ther e wer e severa l comment s tha t futur e emission s canno t b e reasonabl ydetermine d solel yo n pas t operating history . On e Stat e note d tha t directio n i s neede d o n ho wactua l versu s potentia l emission s ar e estimated . Afewcommenter s addresse d th e 2-yea r perio d afte r th e propose d chang e whic hi s th e basi s fo r calculating th e future-actua l emissions . Opponent s o f th e futur e actua l concep t state d tha t us e o f suc ha provisio nwoul d resul t i n unrealisticall ylowfutur e emission s projection s an d shiel d a compan

yagains t effort s t o enforc e NS Rrequirement s a t a sourc e tha t increase d emission s 3 year s afte r making physica l changes . A n environmenta l grou p an d severa l Stat e agencie s note d tha t th e projecte d post-chang e emission s shoul d become a n enforceabl e permi t conditio n i norde r t o commi t a sourc e t o limi t it s futur e emission s t o a specifi c amoun t an d t o provid e assuranc e tha t thes e projection s ar e reasonabl e estimate s o f expecte d emissions . I f a sourc e wil l no tP.3 2

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- accep t suc ha permi t condition , the n th e sourc e shoul d hav e t o us e potentia l post-chang e emissions . d . Comment s Suggestin g Revision s t o th e Proposal . Thre e commenter s suggeste d a mor e flexibl e tes t fo r ascertainin g S0 2 increase s fo r determinin g applicabilit yo f NS Ran d NSP S requirements , namel ya measur e o f pollutio n pe r uni t o f electrica l output . Commenter s mad e th e followin g specifi c suggestion s fo r change s surroundin g th e futur e actua l calculatio n method : (1 ) develo p guideline s t o assis t State s i n makin g like-kin d determinations ; (2 ) requir e like-kin d replacement s t o us e th e representativ e actua l annua l emission s fo r calculatio n o f actua l emissions ; (3 ) defin e "like-kin d replacement " t o includ e complet e replacemen t o f a n existin g emission s unit ; (4 ) defin e "routin e repai r an d replacement; " (5 ) appl yth e actual-to-actua l tes t t o like-kin d replacemen t o f a n entir e emittin g unit ; (6 ) allo wne wunit s o r greenfiel d plant s t o rel yo n futur e actua l emission s i f the yca n reliabl yprojec t futur e emissions ; an d (7 ) conside r a n alternativ e wa yt o mak e th e NS R accountin g syste m consistent , suc ha s basin g i t o n pas t allowabl e t o futur e allowabl e emissions . Othe r suggestion s include d th e following :P.3 3

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- (1 ) provid e guidanc e o n routin e repai r an d replacemen t an d maintenanc e activitie s t o includ e placin g unit s o n col d reserv e an d bringin g the mbac k o n line , an d (2 ) us e a 2-yea r perio d othe r tha n immediatel yafte r th e chang e onl ywhe n th e EP Acanno t clearl ydemonstrat e tha t th e 2-yea r perio d immediatel yfollowin g th e chang e i s no t representative . e . Th e EP AAnalysis . Th e EP Aha s decide d t o promulgat e th e propose d "representativ e actua l annua l emissions " methodolog yfo r calculatin g emission s change s a t utilit ystea mgeneratin g units . Afte r a thoroug hrevie wo f th e comments , EP A conclude s tha t th e compariso n o f "actua l emission s before " t o a projectio n o f "actua l emission s after " a physica l o r operationa l chang e a t a n existin g utilit ystea mgeneratin g uni t i s workabl e and , wit hth e adde d safeguar d discusse d below , i s th e mos t suitabl e metho d fo r evaluatin g emission s change s a t suc hsources . Th e EP Awil l als o retai n th e provision s excludin g constructio n o f ne wo r replacemen t unit s fro m

th e "representativ e actua l annua l emissions " methodology . Man ycommenter s questione d EPA' s propose d presumptio n tha t source s ma yuse , a s th e baseline , emission s fro man y2 consecutiv e year s withi n th e 5 year s prio r t o th e propose d chang e withou t regar d t o norma l sourc e operations . A s discusse d i n th e proposal , thi s presumptio n i s consisten t-32

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wit hEPA' s decisio n i n WEPC O an d th e 5-yea r perio d fo r "contemporaneous " emission s increase s an d decrease s i n 4 0 CF R52.21(b)(3)(i)(b). 6 Moreover , EPAi s no t reading "norma l sourc e operations " ou t o f th e regulatio n a s changed . Rather , th e presumptio n recognize s th e natur e o f utilit yoperation s withou t compromising th e existing regulatorylanguag e whic hrequire s tha t th e pre-chang e 2-yea r perio d use d i ndefinin g baselin e emission s b e representativ e o f "normal " operations . Fo r example , a s a systema utility' s "normal " operation s mean s directl yresponding t o a demand fo r electricity . Acol d winte r o r ho t summe r wil l resul t i nhighlevel s o f "normal " operation s whil e a relativel ymil d yea r wil l produc e lowe r "normal " operations . B ypresumabl yallowing a utilit yt o us e an y2 consecutiv e year s withi nth e pas t 5 , th e rul e bette r take s int o consideratio n tha t electricit ydemand an d resultan t utilit yoperation s fluctuat e i n respons e t o variou s factor s suc ha s annua l variabilit yi nclimati c o r economi c condition s tha t affec t demand , o r change s a t othe r plant s i n th e utilit ysystemtha t affec t th e dispatc ho f a particula r plant . Byexpanding a baselin e fo r a utilit yt o an yconsecutiv e 2 i n th e las t 5 years , thes e type s o f fluctuation s i n operation s ca n b e mor e realisticall y

6 Thi s presumptio n doe s no t appl yt o pas t modification s a t an emission s uni t fo r th e purpos e o f determining contemporaneou s emissio n change s a t a sourc e an d canno t b e use d t o extend th e 5-yea r perio d specifie d i ntha t provisio n [se e 4 0 CFR52.21(b)(3)(i)(b)] .P.3 5

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- considered , wit hth e resul t being a presumptiv e baselin e mor e closel yrepresentativ e o f norma l sourc e operation . Th e EPAdisagree s wit hcomment s seeking t o allowth e us e o f an

y2 consecutiv e year s withi n th e las t 5 year s o f a unit' s "operation " rathe r withi n tha nth e 5 year s directl y preceding th e propose d change . Ashifting o f th e 5-year perio d woul d b e difficul t t o harmoniz e wit hdefinition s o f contemporaneou s containe d i n th e regulation s [see , e.g. , 4 0 CF R§ 52.21(b)(3)(iii)] . Thi s typ e o f open-ende d provisio n woul d eve n credi t a uni t whic hha s bee n inoperativ e fo r 2 0 o r 3 0 year s o r longe r wit ha highleve l o f emissions . Th e EPAnotes , however , tha t a s ha s alway s bee n th e cas e unde r th e prio r regulations , an ysourc e owne r o r operato r mayreques t a determinatio n tha t anothe r baselin e perio d i s mor e representativ e o f th e unit' s "normal " operations . Severa l commenter s opposing today' s regulatorychange s charge d tha t withou t appropriat e assurance s utilitie s coul d deliberatel yunderestimat e futur e operation s (an d thu s emissions ) fo r th e purpos e o f avoiding revie wo r tha t eve n wher e a forthrigh t estimat e i s made , th e forecas t mayprov e inaccurate . EPAi s concerne d tha t withou t appropriat e safeguard s increase s i nfutur e actua l emission s tha t i n fac t resulte d fromth e physica l o r operationa l chang e coul d g o unnotice d an

d unreviewed . Fo r thi s reason , EPAha s adde d th e safeguard explaine d below .-34

- Th e EPAdoe s not , however , agre e wit hcomment s tha t post-chang e emission s estimate s mus t alway s b e mad e int o permanen t federally-enforceabl e permi t conditions . T o d o s o woul d permanentl yrestric t a utility' s legall yallowabl e emissio n limit s t o it s pre-chang e actua l emission s leve l unles s i t subsequentl yunderwen t NSR , an d woul d fai l t o accoun t fo r th e veryrea l possibilit ytha t emission s migh t increas e ove r baselin e level s i n th e futur e fo r reason s unrelate d t o th e physica l o r operationa l chang e i nquestion . A s discusse d mor e full yi n th e following section , NS R applie s onl ywher e th e emission s increas e i s cause d b yth e change . Thu s th e issu e shoul d b e viewe d mor e a s on e o f tracking an

d monitoring post-chang e emission s level s a t th e modifie d uni t t o confirmtha t baselin e emissio nlevel s ar e no t exceede d a s a resul t o f th e change . T o guar d agains t th e possibilit ytha t significan t increase s i n actua l emission s attributabl e t o th e chang e may occu r unde r thi s methodology , EPAi s clarifying i nth e fina l regulation s tha t an yutilit ywhic hutilize s th e "representativ e actua l annua l emissions " methodologyt o determin e tha t i t i s no t subjec t t o NS Rmus t submi t fo r 5 year s afte r th e chang e sufficien t record s t o determin e i f th e chang e resulte d i na nincreas e i nrepresentativ e actua l annua l emissions . Utilitie s mayus e continuou s emission s monitoring data , operationa l levels , fue l usag e data , sourc e tes t result s o r an

yothe r readil yavailabl e dat a o fP.3 7

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- sufficien t accurac yfo r th e purpos e o f documenting a unit' s post-chang e actua l annua l emissions . Wher e th e chang e doe s no t increas e th e unit' s emission s factor , i.e. , th e amoun t o f pollutio n emitte d b ya sourc e afte r contro l pe r uni t o f fue l combuste d o r materia l processe d (sucha s pound s o f sulfu r dioxid e emitte d pe r to n o f coa l burned) , th e utilit y maysubmi t utilizatio ndata , rathe r tha nemission s data , a s a metho d o f tracking post-chang e emissions . I f thi s dat a suggest s tha t th e utilit yha s increase d annua l emission s ove r baselin e levels , th e permitting authorit yshoul d inquir e whethe r th e increas e resulte d from th e physica l o r operationa l change . Th e utilit ymay demonstrat e tha t an yincreas e wa s cause d b yan independen t factor , suc ha s demand growth . Suc hrecord s ar e t o b e submitte d t o th e permitting agencyo n a n annua l basi s fo r a perio d o f 5 year s fromth e dat e norma l operatio n begin s a t th e modifie d source . A longe r period , no t t o excee d 1 0 years , mayb e require d b y th e permitting agenc ywher e i t ha s determine d tha t n o perio d withi n th e firs t fiv e year s following th e chang e i s representativ e o f norma l sourc e operations . Sinc e i t i s expecte d tha t utilitie s wil l submi t th e same dat a normall yuse d t o repor t emission s o r operationa l level s unde r existing Federal , Stat e o r loca l ai r pollutio n contro l agencyrequirements , EPAdoe s no t envisio n documentatio n o f post-chang e actua l annua l emission s a s-36

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requiring an

yadditiona l dat a collectio nburde n o n th e par t o f a utility . Th e purpos e o f thi s provisio ni s t o provid e a reasonabl e mean s o f determining whethe r a significan t increas e i n actua l annua l emission s resultin g froma propose d chang e a t a nexisting utilit yoccur s withi nth e 5 year s following th e change . Thu s th e inten t i s t o confirm th e utility' s initia l projection s rathe r tha n annuall y revisiting th e issu e o f NS Rapplicability . If , however , th e reviewing authorit ydetermine s tha t th e source' s emission s hav e i n fac t increase d significantl yove r baselin e level s a s a resul t o f th e change , th e sourc e woul d becom e subjec t t o ne wsourc e revie wrequirement s a t tha t time . Th e EPAha s adopte d thi s approac han d th e tim e perio d becaus e i t believe s that , i n mos t cases , an yemission s increas e resulting froma physica l o r operationa l chang e a t a utilit y uni t woul d occu r withi nth e firs t 5 year s o f norma l operatio n o f th e uni t afte r th e change . Thus , EPAwil l presum e tha t an

yincreas e i n emission s level s mor e tha n 5 year s afte r th e chang e ha s occurre d i s no t relate d t o th e physica l o r operationa l change . I n respons e t o comment s regarding "like-kind " replacements , EPAnote s tha t today' s regulation s recogniz e n o distinctio n betwee n"like-kind " replacement s an d othe r nonroutin e physica l o r operationa l change s a t a utilit y stea mgenerating unit . Th e "actual-to-future-actual "P.3 9

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- methodologypromulgate d todayfo r calculating emission s change s applie s t o al l type s o f change s a t utilit yunits , including th e replacemen t o f "like-kind " component s a t a n existing unit . However , th e "like-kind " replacemen t o f a whol e uni t i s fo r al l practica l purpose s a replacemen t uni t and , therefore , i s treate d a s a ne wunit . Althoughsevera l commenter s suggeste d tha t EPAshoul d expan d th e representativ e actua l emission s tes t t o ne wan d reconstructe d units , EPAha s decide d no t t o d o so . Sinc e ther e i s n o relevan t operating historyfo r ne wo r reconstructe d units , i t woul d no t b e possibl e t o accuratel y projec t operation s o r emission s fo r thes e units . Consequently , th e EPAha s lef t unchange d th e regulation s whic hrequir e tha t fo r an yuni t whic hha s no t begun norma l operations , actua l emission s ar e considere d equa l t o th e unit' s potential-to-emit . Afewcommenter s requeste d tha t EPAdefin e o r provid e guidanc e o n "routin e repair , replacemen t an d maintenance " activities . Th e Jun e 1 4 proposa l di d no t dea l wit hthi s aspec t o f th e regulations , no r d o th e regulatorychange s promulgate d today . However , EPAplan s t o issu e guidanc e o n thi s subjec t a s par t o f a NS Rregulatoryupdat e packag e whic hEPApresentl yintend s t o propos e b yearl ysummer . I n th e meantime , EPAi s todayclarifying tha t th e determinatio n o f whethe r a physica l o r operationa l chang e i s "routine " unde r th e NS Rregulations , whil e mad e o na case-by-cas eP.4 0

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- basis , shoul d includ e consideratio no f whethe r simila r project s hav e bee n undertake nb ysource s withi nth e relevan t industria l category .

C . Th e Causatio nRequirement . a . Background . Th e statutorydefinitio n o f "modification " i s limite d t o a physica l o r operationa l chang e "whic hincreas e th e amoun t o f an

yai r pollutant" . Se e CAA(lll)(a)(4) , 4 2 U.S.C . 7411(a)(4) . Th e EPA' s NS Rregulation s similarl y limi t th e definitio n o f majo r modificatio nt o a chang e "tha t woul d resul t in " a n emission s increase . See , e.g. , 4 0 CF R 52.21(b)(2)(i) . I n keeping wit hthes e provisions , th e propose d rul e make s clea r tha t wher e increase d operation s ar e i n respons e t o independen t factors , suc ha s system-wid e demand growth , whic hwoul d hav e occurre d an d affecte d th e unit' s operatio n eve n i nth e absenc e o f th e physica l o r operationa l changes , suc hincrease s d o no t "resul t from " th e chang e an

d shal l b e exclude d fromth e projectio n o f futur e actua l emissions . However , during th e representativ e baselin e period , a utilit yplan t mus t hav e bee nabl e t o accommodat e th e projecte d demand growt hphysicall yan d legall yeve n absen t th e particula r change . Increase d operation s tha t coul d no t hav e physicall yan d legall ybee n accommodate d bu t fo r th e propose d physica l o r operationa l chang e shoul d b e considere d t o resul t fromth e change . b . Comment s Generall yFavoring th e EPAProposal .P.4 1

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- Severa l utilit yrepresentative s supporte d th e propose d demand growt hexclusio nan d th e causatio nrequirement . Man y commenter s requeste d clarificatio n o f certai npoint s o r expansio n o f certai nprovisions . On e commente r note d tha t ther e shoul d b e a specifi c exclusio n fo r emission s increase s a t a generating statio n resulting fromgeneratio n shift s an d decrease d plan t efficiencie s cause d b yoperatio no f pollutio n contro l systems . Anothe r note d tha t th e discussio n o f th e criteri a fo r recognizing "factor s unrelate d t o th e physica l o r operationa l change " shoul d b e improve d upo n becaus e th e propose d requirement s tha t a facilit ymus t hav e bee nphysicall yabl e t o accommodat e th e projecte d growt hduring a "representativ e baselin e period " coul d hav e a negativ e impac t i nutilit ycapacit yplanning an d investmen t decisions , depending upo nho wsuc ha perio d i s determined . On e commente r note d tha t EPAshoul d specificall y recogniz e an exceptio nfo r unit s whic hhav e bee ninactive , becaus e a uni t shoul d no t hav e t o includ e al l o f it s emission s du e t o demand growt hmerel ybecaus e i t wa s i n nee d o f repai r o r maintenanc e whil e inactive . Commenter s aske d tha t EPAbette r defin e "independen t factors " i nth e contex t o f th e deman

d growt hexclusion . Lastly , on e commente r state d tha t th e fina l rul e shoul d reconcil e th e "deman d growt hexclusion " wit hth e existing "hour s o f operation/rat e o f production " exclusio n b yconfirming tha t increase sP.4 2

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- attributabl e t o system-wid e demand growt har e alread y exclude d unde r th e already-existing exclusio n and , therefore , th e "deman d growt hexclusion " onl yapplie s wher e ther e i s a federally-enforceabl e permi t termlimiting hour s o f operatio n o r productio nrate . c . Comment s Generall yOpposing th e EPAProposal . Opponent s o f th e exclusio n o f emission s attributabl e t o demand growt hcontende d tha t ther e i s n o rationa l basi s fo r ignoring suc hemissions . Whe n increase d capacit yo r utilizatio n i s th e immediat e goa l o f a projec t an d a n increas e i n emission s occur , th e projec t mus t b e subjec t t o NS Rregardles s o f th e underlying reason s fo r th e increase d capacit yo r utilizatio n an d corresponding emissio nincrease . Contraryt o th e lette r an d purpos e o f th e statute , th e demand growt hexclusio ncoul d resul t i nmajo r increase s i n actua l emissio n going unreviewe d an d unregulated , woul d creat e seriou s loca l pollutio n problems , an d woul d discriminat e agains t companie s tha t wer e successfu l i n implementing energ

yefficienc yprograms . On e loca l agency pointe d ou t tha t i t i s virtuall yimpossibl e t o determin e wit han ydegre e o f certaint ywha t portio n o f a unit' s emission s ar e attributabl e t o an increas e i n projecte d capacit yutilization . I n addition , commenter s note d tha t th e exemptio nwil l hav e a n advers e effec t o nloca l agencies ' abilit yt o contro l emission s an

d tha t th e time o f constructio no f aP.4 3

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- modificatio n i s th e mos t efficien t an d effectiv e tim e t o addres s suc hemissions . On e commente r state d tha t th e exclusio n fo r demand growt hmayfurthe r bia s competitiv e powe r market s towar d existing units , an d tha t EPAfaile d t o conside r th e impac t o f th e causatio nrequiremen t o n utilit y operations , emission s o r competitio n i npowe r markets . d . Th e EPAAnalysis . Afte r carefu l consideratio n o f th e comment s receive d an d furthe r analysi s o f th e issue s involved , EPAha s decide d t o promulgat e th e causatio n provisio na s proposed . Commenter s argue d tha t an ypost-chang e emission s increase , regardles s o f it s origin , shoul d subjec t a sourc e t o NSR . However , thes e argument s ignor e th e relevan t statutoryan

d regulatorymodificatio n provisions . N o commenter s challenging th e provisio n hav e suggeste d tha t th e statut e an

d implementing regulation s d o no t contai na causatio n provision . Rather , theyargu e tha t i nth e propose d rul e EPAha s misconstrue d thi s requirement . Congres s intende d th e NS Rprogram s t o appl y"wher e industria l change s migh t increas e pollutio n i nan area. " Alabama Powe r Co . v . Costle . 63 6 F.2 d 323 , 40 1 (D.C . Cir . 1979) ; se e als o § 160(5 ) o f th e Ac t ( a purpos e o f th e PS D programi s "t o assur e tha t an ydecisio nt o permi t increase d ai r pollutio n i n an are a .. . i s mad e onl yafte r carefu l evaluatio n o f al l th e consequence s o f suc ha decisio nan d afte r adequat e procedura l opportunitie s fo r informe d publi cP.4 4

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- participation") . Base d o n thes e an d othe r directives , EPA ha s i n th e pas t simpl ypresume d tha t an ysignifican t emission s increas e tha t followe d a physica l o r operationa l chang e "resulte d from " tha t change . I n conjunctio n wit hdeveloping th e representativ e actua l annua l emission s methodology , EPArecognize d tha t th e analysi s o f th e causatio n requiremen t maydisclos e tha t a n emission s increas e tha t follow s a nonroutin e physica l o r operationa l chang e i s merel ycoincidental , an d i nfac t result s fromindependen t factor s suc ha s demand growth . I t i s importan t t o emphasize , however , tha t thi s doe s no t amoun t t o a pe r s e exclusio n o f demand growt hfromth e emission s increas e calculation . Rather , demand growt hca n onl yb e exclude d t o th e exten t i t — an d no t th e physica l o r operationa l chang e —i s th e caus e o f th e emission s increase . Th e EPAbelieve s tha t thi s i s a reasonabl e interpretatio n o f th e statutoryprovisio n i n question , an d reject s th e view s o f commenter s wh o asserte d tha t th e Agenc y i s compelle d t o retai nit s previou s vie wo f th e statutory scheme . Consequently , wher e projecte d increase d operation s ar e i n respons e t o a n independen t factor , suc ha s demand growth , whic hwoul d hav e occurre d an d affecte d th e unit' s operation s eve n i n th e absenc e o f th e physica l o r operationa l change , th e increase d operation s canno t b e sai d t o resul t fromth e chang e an

d therefor e mayb e exclude d fromth e projectio no fP.4 5

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- th e unit' s futur e actua l emissions . Conversely , wher e th e increas e woul d no t hav e occurre d bu t fo r th e physica l o r operationa l change , tha t chang e wil l b e deeme d t o hav e resulte d i n the increase . Th e EPAdi d receiv e numerou s comment s regarding th e difficult yo f applying thi s ne winterpretation . However , EPAbelieve s i t i s possibl e t o discer n betwee n emission s increase s tha t ar e relate d t o a physica l o r operationa l chang e fro

mthos e tha t ar e not . Thi s issu e i s a fact

dependen t determinatio ntha t mus t b e resolve d o n a case-by

cas e basis . However , EPAha s identifie d certai nprinciple s whic hshoul d assis t permitting authoritie s i n making thei r determination . Fo r example , a s discusse d i nth e proposal , EPAconsider s emission s increase s du e t o increase d operation s tha t coul d no t b e physicall yo r legall y accommodate d bu t fo r th e propose d physica l o r operationa l change , t o resul t fromth e change . Th e preambl e t o th e proposa l als o mad e clea r tha t an yemission s increas e attributabl e t o a physica l o r operationa l chang e tha t significantl yalter s th e efficienc yo f th e plant , (se e Puert o Rica n Cement . 88 9 F.2 d a t 297-8) , mus t continu e t o b e include d i n th e post-chang e emission s calculations . However , EPAi n n o wayintend s t o discourag e physica l o r operationa l change s tha t increas e efficiencyo r reliabilit y o r lowe r operating costs . Rather , physica l o r operationa l change s undertake n fo r thes e reason s ar e treate d th e same a sP.4 6

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- physica l o r operationa l change s undertake nfo r an yothe r reason : the yar e onl ysubjec t t o NS Ri f the yresul t i na n emission s increase . Severa l commenter s requeste d a clarificatio nconcerning a unit' s abilit yt o accommodat e demand growt hi nit s pre-chang e configuration . I nEPA' s view , suc ha clarificatio n i s no t warranted . A s discusse d above , operationa l level s tha t a uni t coul d no t hav e achieve d bu t fo r th e physica l o r operationa l chang e ar e considere d t o resul t fromth e change . Post-chang e emission s increase s associate d wit hsuc hoperationa l level s must , therefore , b e considere d t o resul t fro mth e chang e an

d b e take n int o accoun t fo r NS Rapplicabilit ypurposes . Numerou s commenter s pointe d ou t tha t i t mayb e very difficul t t o determin e whe n a n increas e i s cause d b y independen t factor s an d whe ni t i s cause d b yth e physica l change . Also , a n environmenta l commente r argue d tha t thi s causatio n questio n mus t alway s b e resolve d i nfavo r o f including al l post-chang e emissio n increase s tha t follo wa chang e whic himprove s a unit' s efficiency , sinc e i n it s vie w a n efficienc ygai n wil l alway s b e th e primarydeterminan t o f th e utility' s us e o f a generating unit , notwithstandin g th e presenc e o f othe r necessary—bu t no t o f themselve s sufficien t —

factor s suc ha s demand growth . However , a s s o formulated , th e commen t answer s itself . I f efficienc y improvement s ar e th e predominan t caus e o f th e chang e i nP.4 7

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- emission s an

d demand growt hi s not , th e exclusio ndoe s no t apply . Bu t thi s i s a questio n o f fac t whic hmus t b e resolve d o n a case-by-cas e basi s an d depending o nth e individua l fact s an d circumstance s o f th e chang e a t issue . EPAdecline s t o creat e a presumptio n tha t everyemission s increas e tha t follow s a chang e i nefficienc yi s inextricabl y linke d t o th e efficienc ychange . I n calculating demand growth , utilitie s mayrel yo n demand growt hprojection s i nth e for mo f prio r filing s wit h Federal , Stat e o r loca l regulatoryauthoritie s (e.g. , a governing PUC ) o r othe r documentatio nwhic hprojecte d expecte d operation s o f a n emission s uni t o r utilit yplan t pas t th e dat e o f a propose d change . Th e informatio nshoul d sho who wan emission s unit , plant , o r utilit ysystemwoul d hav e bee n expecte d t o operat e i nth e absenc e o f th e propose d change . Th e EPAdisagree s wit hcomment s tha t thi s provisio n coul d resul t i n majo r increase s i nactua l emission s going unregulate d wit hth e potentia l t o creat e seriou s loca l ai r pollutio n problems . First , th e NS Rmajo r modificatio n provision s d o no t appl yt o al l increase s i n emissions , jus t emissio n increase s whic hstemfroma nonroutin e physica l o r operationa l chang e a t a nexisting majo r source . Second , a s ha s alread

ybee n observed , thi s provisio ndoe s no t amoun t t o a pe r s e exclusio n o f demand growth . Finally , thi s ne w provisio n doe s no t diminis hth e scop e o f th e coverag e o fP.4 8

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- EPA' s NS Rregulations . Rather , i t merel yincorporate s int o th e actual-to-future-actua l methodologya requiremen t o f th e pre-existing statutoryan d regulatoryscheme . Moreover , i n respons e t o thos e concern s tha t a demand growt hexclusio n coul d lead t o seriou s loca l ai r pollutio n problems , EPAnote s th e restriction s i t place d o nth e overal l futur e projectio n i nth e proposal : th e leve l o f emission s th e sourc e claim s tha t i t wil l operat e a t shoul d b e consisten t wit hcurren t assumption s regarding th e source' s emission s tha t ar e use d i n th e relevan t Stat e Implementatio n Pla n (SIP) . Finall yth e EPAdoe s no t agre e wit hth e commente r requesting tha t th e fina l rul e confirmtha t increase s attributabl e t o system-wid e demand growt har e alread y exclude d unde r th e existing exclusio nfo r increase s i n hour s o f operatio n and , therefore , th e "deman d growt hexclusion " onl yapplie s wher e ther e i s a federally-enforceabl e permi t termlimiting hour s o f operatio no r productio nrate . Th e commenter' s statemen t i s no t correct . Althougha sourc e may varyit s hour s o f operatio no r productio na s par t o f it s everydayoperations , an increas e i n emission s attributabl e t o a n increas e i n hour s o f operatio no r productio nrat e whic hi s th e resul t o f a construction-relate d activit yi s no t exclude d fromreview . Se e WEPCO , 89 3 F.2 d a t 91 6 n.ll ; Puert o Rica n Cement . 88 9 F.2 d a t 298 .P.4 9

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- D . Repowering . a . Background . Titl e IV

o f th e 199 0 Amendment s grant s specia l treatmen t t o utilitie s tha t see k t o compl ywit hmandate d aci d rai n reduction s b yrepowering a uni t wit hqualifying Clea n Coa l Technology(CCT) . Se e section s 402(12) , 409(a) . Repowering project s tha t qualif yfo r a nextensio no f th e Phas e I I S0 2 requirement s wil l b e exemp t fromNSP S requirements , s o long a s th e repowering "doe s no t increas e actua l hourl yemission s fo r an ypollutan t regulate d unde r th e Act " § 409(d) . EPApropose d t o interpre t th e requiremen t tha t repowering no t lead t o a nincreas e i n "actua l hourl yemissions " a s a nexpressio no f Congressiona l inten t tha t EPAshoul d us e th e same genera l approac h—on e keye d t o change s i n maximu mhourl yemissio n rate s —t o determin e applicabilit yfo r repowering project s a s i t ha s fo r othe r physica l o r operationa l change s unde r th e NSPS . Accordingly , EPApropose d tha t a repowering projec t whic h doe s no t resul t i n anincreas e ove r baselin e i n a unit' s post-chang e hourl yemission s wil l b e eligibl e fo r thi s limite d NSP S exemption . Th e statutoryNSP S exemptio napplie s t o repowering o f existing unit s a t existing sources , s o long a s th e projec t qualifie s fo r a n extensio no f th e Phas e I I S0 2 requirement s and satisfie s th e emission s increas e tes t [se e § 409(d)] , Becaus e o f thi s explici t statutoryprovision , th eP.5 0

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- reconstructio n limitation s specifie d i n 4 0 CFR60.1 5 ar e no t applicabl e t o qualifying repowering projects . However , unde r th e term s o f § 409(d) , ne wunit s locate d a t a differen t sit e tha n th e existing uni t i t replace s ar e no t afforde d specia l treatment . Th e EPAregulatoryproposa l o n CC T followe d thes e statutoryprovisions . I neffect , EPA propose d t o mak e al l regulatorychange s necessaryt o reflec t thes e ne wCC T statutoryprovisions . Th e EPAals o propose d t o us e th e statutorydefinitio no f repowering se t fort hi n § 402(12) . Th e EPApropose d regulation s als o provide d fo r "expedited " NS Rprocessing fo r repowering project s a s require d b

y§ 409(e) . b . Publi c Comment . Th e EPAdi d no t receiv e an ycomment s opposing th e repowering proposa l whil e severa l industryan d Congressiona l commenter s supporte d it . Th e Congressiona l commenter s requeste d clarificatio n o f EPA' s interpretatio no f term "repowering. " Th e Congressiona l commenter s state d tha t th e propose d definitio n o f "repowering " ca nb e interprete d a s limiting qualifyin g repowering technologie s t o thos e tha t onl yinvolv e th e replacemen t o f th e boiler , disqualifyin g highly-promising , multi-pollutan t technologie s tha t d o no t involv e boile r replacement . c . Th e EP AAnalysis . I n ligh t o f th e lac k o f negativ e comments , EPAi s today promulgating th e CC T provision s a s proposed . Thi s include sP.5 1

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- n o chang e i n th e definitio n o f "repowering. " However , EPA wil l followa n expansiv e interpretatio no f th e term repowering , whic hshoul d addres s man yo f th e concern s expresse d b

ysom e o f th e commenter s whil e remaining consisten t wit hstatutoryterm s an d Congressiona l intent . Sectio n 402(12) , i nrelevan t part , define s "repowering " a s follows : Replacemen t o f a nexisting coal

fire d boile r wit hon e o f th e following clea n coa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio n combine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio n fue l cell s o r a s determine d b yth e Administrator , i nconsultatio n wit hth e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an

d an yothe r technolog

y capabl e o f controlling multipl e combustio n emission s simultaneousl ywit h improve d boile r o r generatio nefficienc y an d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technolog

yi nwidesprea d commercia l us e a s o f th e dat e o f enactmen t o f th e Clea n Ai r Ac t Amendment s o f 199 0 * * * 7

Th e definitio n thu s provide s fo r thre e majo r categorie s o f repowering technologies :

7 Th e las t sentenc e i nth e definitio no f "repowering " i n § 402(12 ) o f th e Ac t refer s t o a specifi c clea n coa l technologyprojec t i n Tallahassee , Florid a (Arva hB . Hopkin s Statio n Uni t 2 Circulating Fluidized-Be d Repowering Project ) awarde d Novembe r 30 , 1990 .P.5 2

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- (1 ) Technologie s specificall yliste d i n th e statute ; (2 ) derivative s o f on e o r mor e o f thes e liste d technologies ; an d (3 ) technologie s which : (a ) Ar e capabl e o f controllin g multipl e combustio n emission s simultaneously ; (b ) wit himprove d boile r o r generatio n efficiency ; an d (c ) wit hsignificantl ygreate r wast e reductio n tha n technologie s i n widesprea d commercia l us e a s o f th e dat e o f enactmen t o f th e Ac t (Novembe r 15 , 1990) . I n accordanc e wit hth e languag e o f th e statutor y definitio n o f repowering , th e fina l rul e provide s tha t a qualifyin g repowerin g technolog ymus t involv e "replacement " o f a n existin g boiler . Th e languag e o f § 402(12) , thoug h ambiguou s i n man ysignifican t respects , wil l no t suppor t a n interpretatio n whic hfail s t o recogniz e tha t repowerin g require s us e o f a n appropriat e ne wtechnolog yinstea d o f th e existin g boiler . Th e EP Aconsidere d whethe r th e referenc e t o boile r replacemen t i n § 402(12 ) coul d b e rea d a s referrin g t o onl y th e firs t categor yo f technologies . However , suc ha n approac hwoul d requir e readin g th e provisio n a s i f th e recita l o f th e thre e alternativ e technologie s bega n immediatel yafte r th e phras e "repowerin g means, " rathe r tha n afte r th e phras e "repowerin g mean s replacemen t o f a nP.5 3

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- existing coal-fire d boile r wit hon e o f th e following clea n coa l technologies:. " Suc ha reading i s inconsisten t wit hth e structur e o f th e provision , i n whic hth e colon , whic hi s "used chiefl yt o direc t attentio n t o matte r tha t follow s (a s a list , explanation , o r quotation) " [se e Webster' s Nint hNe w Collegiat e Dictionary26 6 (1985)] , follow s rathe r tha n precede s th e referenc e t o boile r replacement . Moreover , al l thre e categorie s o f technologie s woul d b e properl ydescribe d a s "th e following clea n coa l technologies:. " Whil e i t i s tru e tha t th e lis t following th e colon , lik e th e phras e "th e following clean coa l technologies: " coul d b e read t o refe r exclusivel yt o th e seve nname d technologie s (or t o thos e technologie s an d thei r approve d derivatives) , suc ha n interpretatio n woul d stil l fai l t o provid e a satisfactoryexplanatio n o f th e grammatica l structur e o f th e provision . Eithe r o f thes e tw o reading s woul d fai l t o explai n ho wth e technologie s that , according t o thos e reading s d o no t conside r boile r replacement , relat e t o th e ter

m "repowering. " I n othe r words , i f th e concep t o f boile r replacemen t wer e remove d fro m eithe r th e thir d categoryo f technologie s o r frombot hth e secon d an d thir d categories , th e provisio n woul d read , wit hrespec t t o thos e categories : Th e term "repowering " mean s * * * a derivativ e o f on e o r mor e o f (th e seven ) technologies , an

d an yothe r technolog

yP.5 4

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- capabl e o f (meetin

g th e thre e performanc e criteria) .

Th e difficult ywit hthi s reading i s tha t "repowering, " whateve r th e precis e scop e o f it s definition , clearl ymean s doin g something wit ha derivativ e technologyo r a multipollutan t contro l technology , rathe r tha n simpl ythos e technologie s themselves . Requiring boile r replacemen t fo r al l thre e categorie s avoid s thi s particula r infirmity . Th e EPAals o considere d anothe r textua l argumen t tha t coul d b e advance d t o suppor t a ninterpretatio no f § 402(12 ) tha t boile r replacemen t i s no t require d fo r th e thir d categoryo f technology , bu t i t als o i s unpersuasive . I t simpl ydoe s no t followfromth e fac t tha t th e categoryo f multipollutan t contro l technologie s alon e ha s expressl y enumerate d performanc e criteri a tha t thos e criteri a ar e mean t t o b e th e exclusiv e tes t fo r qualifying technologie s o f thes e types . Becaus e th e thir d categoryo f technology wa s intende d t o encompas s type s o f technologie s whic hwer e unknown o n th e dat e o f enactmen t (an d thus , unlik e th e prio r categories , no t susceptibl e t o being enumerate d i nth e statute ) tha t categorywoul d necessaril yhav e t o includ e explici t definin g criteria , whethe r o r no t th e boile r replacemen t criterio n applie d t o it . B yth e same token , th e fac t tha t th e latte r tw o categorie s ar e subjec t t o EPA approva l i n consultatio n wit hDO E doe s no t impl ytha t thi s i s th e onl ycriterio n applicabl e t o them . Eac hi s subjec tP.5 5

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- t o additiona l criteri a (i.e. , th e requiremen t o f derivatio n i n th e cas e o f th e secon d category , an

d th e thre e performanc e criteri a i nth e cas e o f th e thir d category) . Th e pivota l phras e "replacemen t o f a nexisting coal-fire d boiler " i s undefine d i nth e statute , an d it s scop e i s no t clearl ydelineate d b yit s context . Some o f th e seve n liste d technologie s mayno t requir e tota l boile r replacement , althoughal l requir e suchextensiv e change s t o th e boile r tha t theyar e tantamoun t t o boile r replacement . Unde r th e principl e o f eiusdemgeneris , therefore , th e Agenc yclearl yhas , a t a minimum , ampl e discretio n t o trea t a s functiona l boile r replacemen t an ychange s broadl ysimila r i n scop e t o thos e involve d i ninstalling th e seve nname d technologies . Suc ha definitio n woul d clearl yrepresen t th e lower , no t th e upper , limi t o nth e Agency' s discretio n t o giv e meaning t o th e ter m"replacement" . Accordingly , th e statut e confer s o n EPAth e additiona l discretio n t o defin e boile r replacemen t i n a functiona l manne r tha t take s int o accoun t achievemen t o f th e specifie d performanc e criteri a a s wel l a s th e degre e o f change s t o th e boiler . B ywayo f example , elsewher e i ntoday' s fina l rul e th e Agenc y consider s a uni t t o b e "replaced " i f i t woul d "constitut e a reconstructe d uni t withi n th e meaning o f 4 0 CFR60.15. " I n accordanc e wit hth e abov e languag e EP Awil l us e th e 4 0 CF R 60.1 5 tes t fo r "reconstruction " a s genera l guidanc e i n determining whethe r eac hindividua l applicatio nunde r § 40 9P.5 6

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- involve s sufficien t replacemen t t o qualif yfo r a repowering extensio n an

d hence , a nNSP S exemption . I n short , becaus e "Congres s ha s no t directl yspoke nt o th e precis e questio n a t issue, " Chevron . U.S.A . vNRDC . 46 7 U.S . 837 , 842-4 3 (1984) , EPAenjoy s a siqnifican t measur e o f discretio nt o determin e t o wha t exten t replacemen t o f les s tha n10 0 percen t o f th e part s o f a n existing boile r coul d b e deeme d replacemen t fo r purpose s o f § 402(12 ) an

d thi s rule . Fo r th e reason s discusse d above , EPAbelieve s th e propose d regulatorylanguag e regarding repowering i s reasonable . Tha t proposa l i s today promulgate d withou t change . E . Clea n Coa l TechnologyDemonstratio n Project s an d Very Clea n Unit s a . Background . Today' s notic e make s n o change s wit hrespec t t o th e propose d provision s fo r CC T demonstratio nproject s create d b yth e 199 0 Amendments . TemporaryCC T demonstratio n project s ar e define d a s thos e CC T demonstratio n project s lasting 5 year s o r less . Titl e IV o f th e amende d Ac t give s thes e project s a n exemptio n fromNSPS , PSD , an d nonattainmen t requirement s [se e § 415(b)(2)] . However , th e facilit yi s stil l subjec t t o an yapplicabl e SI P and mus t compl ywit han

yothe r requirement s necessaryt o attai n an d maintai n th e NAAQS . Th e EPAconsider s th e 5-yea r perio d a s beginning o n th e dat e o f startu p (a s define d i nP.5 7

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- 4 0 CFR60.2) . Atemporarydemonstratio nprojec t mayb e converte d t o a permanen t statu s a t an ytime , provide d i t meet s al l th e requirement s tha t appl yt o a permanen t CC T projec t th e tim e o f conversion . A t th e en

d o f a temporaryproject , th e facilit ymus t b e returne d t o pre-demonstratio n condition s an d hourl yemissio n rate s (or lower) . Th e EPAconsider s emission s increase s (above th e predetermine d levels ) tha t ar e attributabl e t o physica l o r operationa l changes , othe r tha n thos e necessary t o restor e tha t uni t t o it s pre-demonstratio ncondition , t o b e beyon

d th e scop e o f th e Congressiona l exemption . I n addition , repowering projects-whic har e awarde d funding fro

m th e DO E a s permanen t CC T demonstratio nproject s ar e exempte d fromNSP S an d PS D requirements , s o long a s potentia l emission s fro mth e uni t d o no t increas e a s a resul t o f th e projec t [se e § 415(b)(3)] . However , repowering project s tha t qualif ya s pollutio ncontro l project s wil l b e treate d a s othe r pollutio n contro l project s fo r th e purpose s o f th e nonattainmen t provision s o f titl e I o f th e Act . Finally , today' s notic e promulgate s th e statutory exemption s i n § 415(c) . I ntha t section , Congres s provide d a n exemptio n fromNSP S an d PS D fo r th e reactivatio no f "ver y clea n units " otherwis e i n complianc e wit hth e Ac t tha t ha d bee n shu t dow

n fo r a t leas t th e 2 year s prio r t o enactmen t o f th e 199 0 Amendment s an d that , prio r t o th e shutdown , hadP.5 8

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- bee n equippe d wit hpollutio ncontrol s wit ha remova l efficienc yo f a t leas t 8 5 percen t fo r S0 2 an d 9 8 percen t fo r particulates , an

d ha d bee nequippe d wit hlow-N0 xburners . a . Comment s Generall yFavoring th e EPAProposal . Some commenter s specificall ymentione d tha t CC T demonstratio n project s shoul d no t b e subjec t t o NS R provisions . b . Comment s Generall yOpposing th e EPAProposal . Some commenter s di d no t suppor t th e propose d blanke t inclusio n o f al l CC T project s a s pollutio ncontro l projects . On e commente r suggeste d tha t eac hCC T projec t b e reviewe d o n a case-by-cas e basi s and , i f th e projec t result s i nhighe r emissio n levels , i t shoul d no t b e considere d a pollutio n contro l project . Anothe r commente r gav e a nexampl e o f a CC T projec t tha t convert s a n oil-fire d uni t t o a highe r emitting coal-fire d unit , noting tha t thi s projec t shoul d no t b e considere d a pollutio ncontro l project . On e commente r oppose d t o th e pollutio ncontro l projec t exemptio n questione d th e verynarro wexemptio nfromNSP S an d PS D fo r th e reactivatio n o f well-controlled , veryclea n unit s tha t ha d bee n shu t dow n fo r a t leas t 2 year s prio r t o th e enactmen t o f th e 199 0 Amendments . I f suc hexemption s ar e granted , th e commente r urge d EPAt o includ e a conditio n tha t an yreactivate d source s performa nai r qualit yimpac t assessmen t an

d demonstrat e tha t theywoul d no t caus e o rP.5 9

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- contribut e t o a violatio n o f NAAQS , PS D increments , o r visibilit ystandards . c . Comment s Suggestin g Revision s t o th e Proposal . Th e followin g suggestion s wer e mad e wit hregar d t o th e definitio n o f "pollutio n contro l project" : (1 ) includ e al l element s o f CC T demonstratio n project s a s a n exclude d project ; (2 ) ad d th e word s "clea n coa l technology " i n th e example s o f pollutio n contro l project s i n 4 0 CF R51.165 , 51.166 , 52.21 , an d 53.24 ; an d (3 ) us e th e statutor ydefinitio n o f CC T demonstratio n projec t i n 60.14(j)(l) . Th e statutor ydefinitio n omit s th e requiremen t tha t a t leas t 2 0 percen t o f th e fundin g fo r a CC T demonstratio n projec t com e fro mth e Federa l government . d . Th e EP AAnalysis . Afte r revie wo f th e publi c comment s an d furthe r analysi s o f th e subjec t provision , EP Aha s decide d t o promulgat e th e propose d rule s implementin g th e CC T an d ver y clea n uni t exemptio n create d byth e 199 0 Amendments . Th e EP Aview s thi s actio n a s merel yincorporatin g int o it s existin g regulator yframewor k statutor yexemption s tha t wer e immediatel yeffectiv e upo n passag e o f th e 199 0 Amendments .

F . Calculatio n o f NSP S Baselin e a . Background . A s discusse d i n th e proposal , "anyphysica l o r operationa l chang e t o a n existin g facilit ywhic hresult s i nP.6 0

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- a n increas e i n th e emissio n rat e t o th e atmospher e o f an y pollutan t t o whic ha standar d applies " i s a modificatio nfo r NSP S applicabilit ypurpose s [se e 4 0 CF R60.14(a)] . A prechang e baselin e mus t b e establishe d i n orde r t o determin e i f a n increas e i n hourl yemission s ha s occurre d a t a unit . Unde r curren t regulations , th e emission s rat e befor e an d afte r a physica l o r operationa l chang e i s evaluate d a t eac h uni t b ycomparing th e curren t hourl ypotentia l emission s a t maximu moperating capacit yt o hourl yemission s a t maximu m capacit yafte r th e change . Th e reviewing authorit y disregard s th e unit' s maximu mdesigncapacit yi nthi s calculation . Th e origina l designcapacit yo f a unit , t o th e exten t i t differ s fro mactua l maximu

m capacit ya t th e tim e tha t th e baselin e i s establishe d du e t o physica l deterioratio n o f th e facility , i s immateria l t o thi s calculation . I n it s propose d regulations , EPApropose d that , fo r a n existing electri c utilit ystea mgeneratin g unit , th e pre-chang e baselin e fo r NSP S applicabilit y purpose s shal l b e calculate d using th e highes t hourl y emission s rat e achievabl e a t an ytime during th e 5 year s prio r t o th e change . b . Comment s Generall yFavoring th e EPAProposal . Severa l commenter s note d tha t EPA' s proposa l wil l provid e neede d flexibilit yan d alleviat e uncertaint yfo r nonroutin e repair , replacement , an d maintenanc e project s whil e stil l protecting loca l ai r quality . On e commente r supporte dP.6 1

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- retentio n o f th e keyconcep t o f equating contemporaneou s emission s wit hrepresentativ e emissions . c . Comment s Generall yOpposing th e EPAProposal . On e commente r opposing th e proposa l note d tha t th e provisio n fo r th e maximu mhourl yemission s achievabl e during th e las t 5 year s woul d resul t i na significan t relaxatio no f NSP S requirement s an d woul d allo wutilitie s t o upgrad e equipmen t whic hmayhav e los t significan t generating capacit ywithou t th e equipmen t being subjec t t o NSPS . Source s tha t hav e bee noperating belowthei r maximu m achievabl e emissio n rate s fo r th e 5 year s prio r t o th e chang e can caus e increase s i n actua l hourl yemissio n rates , inconsisten t wit hth e inten t o f th e NSP S program . I n addition , th e chang e i n th e baselin e wil l allowutilitie s suc ha extensiv e abilit yt o mak e unregulate d change s suc ha s refurbishment , repowering o r life-extensio n a s t o interfer e wit hcompetitio n betwee nexisting unit s an d ne wunits . d . Comment s Suggesting Revision s t o th e Proposal . Th e mos t frequen t commen t o nthi s par t o f th e proposa l wa s tha t th e rul e shoul d b e clarifie d t o sa ytha t th e baselin e shoul d reflec t th e las t 5 year s o f operation , t o addres s unit s tha t hav e no t bee noperating . I nthi s regard , commenter s wer e concerne d abou t whethe r th e approac hwil l ensur e th e establishmen t o f pas t emissio n level s tha t ar e trul yrepresentativ e o f norma l sourc e operation s fo r utilit y unit s i n col d storag e fo r mor e tha n 5 years .P.6 2

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- On e commente r aske d tha t th e NSP S baselin e [4 0 CFR60.14(h) ] b e mad e consisten t wit hth e NS Rpre-chang e baselin e [4 0 CF R52.21(b)(21)(ii) ] b yadding th e phrase , "o r othe r perio d deeme d b yth e Administrato r t o b e mor e representativ e o f norma l operation. " On e commente r remarke d tha t i f th e rul e canno t b e change d t o allo wconsideratio no f th e pas t 5 year s o f operation , the nEPAshoul d selec t a n alternativ e tha t woul d reflec t a mor e representativ e baseline . I n addition , some commenter s aske d fo r clarificatio n tha t a uni t may"ne t out " o f NSP S requirement s b yswitching t o lowsulfu r coal . e . Th e EPAAnalysis . Afte r carefu l consideratio no f th e comment s receive d an d furthe r analysi s o f th e subjec t provision , EPAha s decide d t o promulgat e th e propose d revise d methodologyfo r calculating th e pre-chang e baselin e fo r NSP S applicabilit y purpose s fo r a n existing electri c utilit ystea m generating unit . Th e amende d methodologywil l us e th e highes t hourl y emission s rat e achievabl e a t an ytime during th e 5 year s prio r t o th e change . Th e revise d methodologyretain s th e ke yconcep t i n existing regulation s tha t th e baselin e b e determine d during a perio d tha t i s roughl ycontemporaneou s wit hth e propose d chang e a t th e affecte d facility . Th e EPAbelieve s tha t thi s decisio n t o revis e th e curren t regulatio nwil l allo w utilitie s flexibilit yfo r nonroutin e repair , replacement ,P.6 3

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- an d maintenanc e projects . Also , th e EPAbelieve s tha t withou t thi s revision , th e NSP S regulation s mayundul y burde n utilitie s undertaking physica l o r operationa l change s i n conjunctio n wit hth e aci d rai nprogram . Thi s chang e wil l allo wutilitie s t o demonstrat e tha t an earlier , highe r capacit ywa s mor e representativ e o f th e unit' s maximu m hourl yemission s rate . Th e EPAdi d no t agre e wit hcomment s tha t th e us e o f th e maximu mhourl yemission s achievabl e during th e las t 5 year s woul d resul t i n a significan t relaxatio no f NSP S requirement s an

d allowutilitie s t o upgrad e equipmen t whic h mayhav e los t significan t generating capacit ywithou t th e equipmen t being subjec t t o NSPS . Th e promulgate d chang e provide s a mor e flexibl e provisio nenabling unit s t o establis ha baselin e tha t i s representativ e o f thei r physica l an

d operationa l capacit yi n recen t years , whil e stil l precluding th e us e o f a baselin e tie d t o origina l design capacity , whic hmaybea r n o relationshi p t o th e facility' s capacit yi n recen t years . Th e EPAdi d no t agre e wit hth e commen t tha t degre e o f flexibilit ygrante d utilitie s t o mak e unregulate d change s suc ha s refurbishment , repowering o r life-extensio nproject s a s a resul t o f rul e change s woul d interfer e wit hcompetitio n betwee n existing unit s an d ne wunits . Th e prio r regulation s allowe d refurbishment , repowering o r life-extensio n projects , provide d emission s doe s no t increas e abov e th eP.6 4

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- unit' s curren t maximu mhourl yemission s rate . Bot hth e prio r an

d newl ypromulgate d regulation s requir e a uni t tha t undergoe s a refurbishment , repowering o r life-extensio n projec t whic hincrease s emission s abov e th e unit' s actua l curren t maximu

m hourl yrat e t o b e subjec t t o NSPS . Th e promulgate d regulatio n simpl yallow s mor e flexibilit yi n defining a unit' s curren t capacity . Th e EPAcanno t agre e wit hcomment s tha t th e methodology fo r computing th e NSP S baselin e reflec t th e las t 5 year s o f operatio n rathe r tha nth e 5 year s prio r t o th e change . A s discusse d i n conjunctio nth e NS Rbaseline , th e us e o f suc ha baselin e woul d credi t a uni t whic hha s bee ninoperabl e fo r 2 0 o r 3 0 years , o r longer , an d i n nee d o f extensiv e nonroutin e changes , wit ha emission s baselin e tha t doe s no t reflec t curren t achievabl e level s o f operations . Th e EPA notes , however , tha t th e NSP S regulation s hav e alway s allowe d a dorman t uni t t o demonstrat e it s curren t capacit y i n orde r t o determin e it s emission s baseline . Thu s a n operabl e unit , o r on e i n nee d o f onl yroutin e maintenanc e o r repair , whic hha s bee n dorman t fo r an extende d perio d o f tim e ca n stil l demonstrat e it s achievabl e capacit yan d associate d emission s leve l b yoperating fo r a relativel y shor t perio d o f time . Acommente r requeste d tha t th e NSP S baselin e b e revise d t o b e consisten t wit hth e NS Rpre-chang e baselin e b yadding th e phrase , "o r othe r perio d deeme d b yth e Administrato r t oP.6 5

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- b e mor e representativ e o f norma l operation. " Th e EPAdi d no t gran t thi s reques t becaus e i t woul d chang e th e emphasi s o f th e NSP S program . A s a technology-base d program , th e NSP S progra

mexamine s maximu

mhourl yemission s rates , expresse d i n kilogram s pe r hour . Thus , emissio n increase s fo r NSP S purpose s ar e determine d b ychange s i n th e hourl y emission s rate s a t maximu mphysica l capacity , regardles s o f ho wth e uni t ha s actuall yoperated . I n contrast , i n ligh t o f th e ai r qualit yplanning componen t o f th e NS Rprogram , th e NS Rregulation s examin e tota l actua l annua l emission s t o th e atmosphere . Consequently , norma l operation s ove r a perio d o f time i s considere d fo r purpose s o f determining a source' s impac t o n ambien t air . Fo r NS Rapplicabilit y determinatio n purpose s emission s increase s ar e determine d b y change s i n actua l annua l emission s a s expresse d i n ton s pe r year . Some commenter s requeste d clarificatio no n"netting out " o f NSP S requirement s b yswitching t o lowsulfu r coal . Th e propose d regulatorychange s wer e specificall ylimite d t o addressing th e maximu m achievabl e emission s a t a specifi c poin t i n time (i.e. , immediatel yprio r t o th e chang e versu s achievabl e ove r th e las t 5 years ) an d no t th e parameter s use d i n quantifying maximu mhourl yemissions . Today' s rul e doe s no t alte r curren t NSP S regulation s o nthi s point . Unde r thos e presen t NSP S regulations , onl yphysica l limitation s o n maximu mcapacit yar e considere d i nP.6 6

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- determining potentia l emission s a t powe r plants . Thus , an y prospectiv e change s i n fue l o r rawmaterial s accompanying th e physica l o r operationa l chang e ar e no t considere d i n determining maximu m capacity . G . Utilit yBAC T Presumptio n fo r N0 X . a . Background . Th e EPApropose d t o adop t an assumptio n that , i nth e cas e o f PS D permit s issue d b yEPAunde r 4 0 CFR52.21 , BAC T fo r emission s o f N0 Xfromexisting coal-fire d electri c utilit ystea

mgenerating unit s undergoing a modificatio n i s th e technologyrequire d unde r § 40 7 o f th e Act . b . Comment s Generall yFavoring th e EPAProposal . Supporter s o f th e low-NOxburne r BAC T presumptio n pointe d t o strong Congressiona l policyjudgemen t favoring th e us e o f low-NOxburne r technology . Th e BAC T presumptio n shoul d provid e greate r certaint yan d consistenc yt o utilities , ye t on e supporte r though t i t woul d no t limi t th e permitting authority' s abilit yo r obligatio nt o conside r othe r factors . On e commente r note d tha t th e BAC T presumptio n establishe s tha t low-NO xburner s constitut e reasonabl e availabl e contro l technolog y(RACT ) a s wel l a s BACT . c . Comment s Generall yOpposing th e EPAProposal . Concluding tha t th e presumptio ni s unwarranted , misguided , an

d possibl yillegal , severa l opponent s o f th e BAC T presumptio n note d tha t i t foreclose s consideratio no fP.6 7

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- othe r N0 Xcontro l technologie s an d ignore s th e demonstrate d trac k recor d an

d cost-effectivenes s o f othe r technologie s suc ha s selectiv e catalyti c reductio n(SCR ) o r selectiv e noncatalyti c reduction . Commenter s note d tha t SCR technologyi s i n us e i nmor e tha n 20 0 powe r plant s i n si x nation s an

d ca n achiev e twic e th e N0 Xreductio nachievabl e b ylow-NO

xburners . Th e SCRo r othe r technologie s mor e effectiv e tha n low-NO xburner s mayb e neede d a s retrofi t requirement s t o attai n th e ozon e standard . Anothe r commen t voice d b yopponent s o f th e low-NOx burne r BAC T presumption , wa s tha t i t canno t b e reconcile d wit hth e statutorycomman d fo r case-by-cas e decisions . Th e EPAdoe s no t hav e th e righ t t o mak e suc ha presumptio nan d severa l instance s wer e cite d wher e EPAha s uphel d th e case by-cas e BAC T determinatio n process . Th e BAC T presumptio n fail s t o recogniz e tha t ther e ar e site-specifi c consideration s tha t wil l affec t th e selectio n o f BACT . Some commenter s representing Stat e an d loca l ai r agencie s note d tha t theyfavore d keeping th e top-dow nBAC T process . Opponent s o f th e BAC T presumptio n als o note d tha t suc h a presumptio n improperl yshift s th e burde n o f technology analysi s t o State s a t a time whe ntheyar e overburdened . I n addition , i t wil l hav e a n advers e effec t o n th e abilit yo f Stat e an

d loca l agencie s t o contro l emission s t o th e degre e necessarybecaus e i t limit s a nagency' s attainmen t strategies .P.6 8

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- Som e o f th e northeaster n State s discusse d a studyo f th e relationshi p o f N0 Xemission s an d attainmen t o f ozon e standard s i n tha t area . Th e stud yconclude d tha t substantia l N0 Xan d VO C emissio n reduction s mus t b e achieve d i n orde r t o attai n th e ozon e NAAQS , ye t th e lo wN0 Xburne r technolog ywil l no t resul t i n sufficien t N0 Xreduction s t o attai n th e ozon e standard . Th e followin g comment s opposin g th e BAC T presumptio n wer e als o made : (1 ) i t ignore s th e legislativ e an d polic yimperative s t o reduc e N0 Xemissions ; (2 ) th e Ac t ( § 407 ) di d no t se t BAC T unde r th e PS D program , i t merel yestablishe d a cos t ceilin g fo r N0 X control s o n existin g source s unde r th e aci d rai n program ; (3 ) i t wil l encourag e utilitie s t o structur e thei r capacit yexpansio n program s a s modification s t o existin g unit s an d thi s woul d effectivel yrepea l th e genuin e NO xBAC T technolog yrequirement s fo r companie s tha t ow n agin g powe r plants ; (4 ) i t set s a poo r precedent ; (5 ) i t woul d undercu t marketplac e incentive s t o develo p an d promot e new , cost-effectiv e contro l technologies ; an d (6 ) th e environmenta l impact s hav e no t bee n determined .P.6 9

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- d . Comment s Suggestin g Revision s t o th e Proposal . Commenter s mad e thre e suggestion s wit hrespec t t o th e BAC T presumption : (1 ) "low-NO xburne r technology " shoul d b e define d t o encompas s technologie s suc ha s fue l staging , ai r staging , in-furnac e injectio n o f urea/ammoni a an d natura l ga s cofirin g an d reburn , a s wel l a s N0 Xburner s suc ha s th e P M an d CF/S F o r IF S models ; (2 ) promotin g maximu mflexibility , low-NO xburner s shoul d no t b e mandator yi f th e uni t ca n mee t th e emission s limit s throug hothe r burne r modification s o r in-furnac e processes ; an d (3 ) low-NO xburner s ca n b e use d fo r tangentially-fire d boiler s t o compl ywit htitl e I V requirement s accordin g t o th e inten t o f Congress . e . Th e EP AAnalysis . Base d upo n a consideratio n o f th e comment s received , an d a reexaminatio n o f th e relevan t fact s an d statutor y provisions , EP Aha s determine d no t t o adop t th e propose d presumptio n regardin g BAC T fo r N0 X . Th e EP Ai s concerne d tha t thi s presumptio n woul d sugges t preemptio n o f th e exercis e o f Stat e discretio n an d case-by-cas e decisionmakin g whic hCongres s envisione d a s fundamenta l t o th e BAC T process . Th e presumptio n coul d als o imped e th e developmen t o f mor e effectiv e o r les s costl ycontro l options .P.7 0

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- I n ligh t o f it s decisio n no t t o adop t a BAC T low-NOx presumption , EPAwil l no t respond t o othe r objection s raise d b ycommenters. 8 I . Limitatio n o f th e Proposa l t o Electri c Utilities . 1 . Background . Consisten t wit hth e propose d rule , th e regulatory provision s promulgate d todayar e limite d t o electri c utilit y stea mgenerating units . Suc hunit s ar e define d a s an ystea m electri c generating uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha none-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha t 2 5 megawatt s o f electrica l outpu t t o an

yutilit ypowe r distributio nsystemfo r sale . I n th e proposal , EPAindicate d tha t i t wa s limiting thi s rulemaking t o electri c utilit ystea mgenerating unit s fo r tw o reasons . First , titl e IV o f th e Ac t addresse s aci d precipitatio n an

d focuse s exclusivel yo nutilit ypowe r plants . Today' s ruling ensure s tha t th e titl e I an d titl e IV

program s wil l no t impos e conflicting requirement s fo r thos e plants . Th e second reaso ntha t th e provision s wer e limite d t o utilitie s i s tha t EPA' s extensiv e experienc e wit helectri c utilities , th e genera l similarit yo f equipmen t withi n th e category , an d th e particularl yexten t o f publicl y availabl e information , indicat e tha t a revisio nt o th e NS R

8 Thi s include s comment s o nth e environmenta l impact s o f th e low-NOxpresumption , elaboratio no n wha t constitute s low-NOxburne r technology , an d th e merit s an

d curren t us e o f othe r NO contro l technologie s a s BACT .P.7 1

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- applicabilit ycriteri a fo r thi s sourc e categoryi s warranted . 2 . Publi c Comments . Severa l commenter s note d tha t limitatio no f th e proposa l t o electri c utilitie s lack s rationa l justificatio n a s wel l a s lega l an d technica l support . Severa l note d tha t th e limitatio n i s unfair , arbitrary , an d capricious . Typica l o f severa l letters , on e commente r note d tha t EPA offere d n o qualitativ e evidenc e o f underlying assumptions , an d anothe r note d tha t EPAviolate s th e Administrativ e Procedure s Ac t b

ylimiting th e proposa l t o electri c utilities . T o thi s commenter , th e limitatio ndiscriminate s agains t industria l source s an d i s no t i n lin e wit hth e intention s o f th e legislation . On e commente r note d tha t th e WEPC O cour t di d no t bas e it s analysi s o n an yparticula r characteristic s o f th e utilit yindustry . Numerou s commenter s countere d EPA' s clai m an d justificatio n fo r th e limitatio n tha t th e Agenc yha s mor e experienc e wit helectri c utilitie s tha nothe r industries . Illustrating tha t EP Aha s extensiv e experienc e wit hothe r industries , commenter s mentione d chemica l manufacturing , cemen t plants , refineries , pape r mills , aut o assembl y plants , th e 6 5 NSP S sources , an d source s covere d i n numerou s guidelin e document s an d RAC T guidance . I naddition , severa l note d tha t th e lac k o f understanding i s a poo r excus e fo r no t applying th e proposa l t o al l industries .P.7 2

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- Commenter s als o note d tha t othe r industrie s fac e th e same problem s tha t utilitie s d o whe nattempting t o instal l pollutio n contro l equipment . Lik e electri c utilities , pollutio n contro l project s i nothe r industrie s ar e generall y environmentall ybeneficial , bu t th e limitatio n o f th e exclusio n t o electri c utilitie s a s propose d woul d discourag e th e othe r sourc e categories , from installing pollutio n contro l projects . Severa l commenter s note d tha t othe r industrie s wil l b e equall yimpacte d b

yextensiv e regulation s unde r title s I , III , an d V , jus t a s electri c utilitie s wil l b e affecte d b y titl e IV . Fo r example , pharmaceutica l plant s wil l underg o physica l an

d operationa l change s t o mee t reasonabl y availabl e contro l technolog y(RACT ) and/o r maximu m achievabl e contro l technology , an d thes e project s shoul d no t b e subjec t t o NS Ro r NSPS . The ynot e tha t th e burde n burden s an

d supportiv e reason s fo r makin g th e propose d change s ar e jus t a s grea t fo r othe r categorie s o f source s a s theyar e fo r electri c utilities . Some commenter s pointe d ou t tha t EPApresentl yapplie s th e pollutio n contro l projec t exemptio n fromNSP S t o al l industrie s an

d tha t existing NS Rrule s ar e no t industry

specific . 3 . Th e EPAAnalysis . Th e EPAdoe s no t find th e factua l o r lega l argument s i n favo r o f expanding th e presen t rulemaking t o b e compelling .P.7 3

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- Prio r t o proposa l o f thi s rule , EPAconsidere d going forward wit ha rul e tha t applie d t o al l sourc e categories . However , th e complexit yo f tha t tas k mean t tha t a rul e coul d no t b e develope d i n a shor t tim e frame , a fac t tha t pose d uniqu e an d seriou s difficultie s fo r on e sourc e category , utilities . Whil e th e commenter s favoring expansio n o f thi s rul e t o al l sourc e categorie s ar e accurat e i nthei r claim s tha t source s outsid e utilitie s fac e Clea nAi r Act-mandate d pollutio n contro l projects , utilitie s alon e ar e single d ou t t o participat e i n th e 199 0 Amendments ' ne waci d rai nprogram . Thi s progra

mrequire s tha t unit s subjec t t o phas e I o f th e programmee t S0 2 reductio nlimit s b y1995 . Give n th e size , complexity , an

d expens e o f scrubber s an d othe r S0 2 pollutio n contro l technologies , th e affecte d utilitie s nee d guidanc e todaya s t o th e titl e I implication s o f thei r contro l strategies . Whil e othe r source s maysoo n hav e ne wcontro l requirement s impose d o n them , utilit ysource s fac e th e mos t immediat e nee d fo r clarificatio n o f thei r NS R responsibilities . I n addition , EPAals o had highconfidenc e tha t a workabl e "future-actual " methodologycoul d b e develope d fo r th e utilit yindustry . Th e sourc e populatio ni s relativel y smal l an

d th e technolog

yi nus e i s relativel yuniform . Moreover , utilit ysource s ar e largel yregulate d b yPUC whic h evaluat e anticipate d utilit ygrowt ha s par t o f th e regulatoryoversigh t process . Th e fac t o f PUC revie whelp sP.7 4

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- ensur e th e reliabilit yo f utilit yprojection s o f futur e operating conditions . Th e EPAanticipate s tha t NS R permitting authoritie s wil l b e abl e t o drawupo nPU C proceeding s i n evaluating utilit yclaim s o f futur e utilization . I n addition , th e emission s monitoring provision s o f titl e IV

require s tha t continuou s emission s monitorin g dat a o r othe r highl yaccurat e method s fo r reporting actua l emission s wil l b e use d fo r al l affecte d sources . Thi s wil l assur e tha t actua l emission s dat a wil l b e readil yavailabl e fo r utilit ysource s subjec t t o today' s rule . Sinc e othe r sourc e categorie s ar e no t subjec t t o th e variet yo f regulatoryprogram s a s utilitie s an d fo r th e othe r reason s note d above , EPAdecline s t o exten d thi s rulemaking t o othe r sources . Notwithstanding thi s response , EPAcurrentl yha s underwaya separat e rulemaking whic hwil l conside r th e desirabilit yo f adopting fo r othe r sourc e categorie s th e NS R pollutio n contro l projec t exclusio nan d th e change s t o th e methodologyfo r determining whethe r a sourc e chang e constitute s a modificatio ntha t hav e bee n adopte d todayfo r utilities . Thi s rulemaking wil l als o discharg e EPA' s obligatio n t o propos e an d tak e fina l actio no n a potential

to-potentia l methodologya s require d b yExhibi t B o f th e settlemen t agreemen t i nChemica l Manufacturer s Associatio nP.7 5

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- v . EPA(D.C . Cir. , No . 79-1112) . Th e EPApresentl yintend s t o propos e thes e NS Rrevision s late r thi s year . III . Miscellaneou s A . E.O . 12291 . Unde r E.O . 12291 , EPAmus t judg e whethe r a regulatio n i s a "majo r rule " an d therefor e subjec t t o th e requiremen t fo r preparatio n o f a RegulatoryImpac t Analysi s (RIA) . Thi s ruling i s no t a majo r rul e becaus e i t wil l reduc e th e economi c cost s o f meeting th e requirement s o f th e Act . However , thi s ruling wa s submitte d t o th e Offic e o f Managemen t an

d Budge t (OMB ) fo r review . Writte n comment s fromOMB t o EPAan

d an yEPArespons e ar e include d i nDocke t A-90-06 . B . Paperwor k Reductio n Act . Th e proposa l packag e state d tha t n o additiona l publi c reporting burde n wil l resul t fro mthi s ruling . Tha t i s stil l th e cas e despit e fina l rul e requirement s fo r reporting emission s dat a t o agencie s fo r 5 year s following a chang e an d fo r documenting demand growt hexclusio n i n applicabilit y determinations , becaus e thi s informatio ni s alread yrequire d b yothe r provision s o f th e lawan d th e fina l rul e i n doing s o i s providing exclusion s fo r th e affecte d source s an d th e ne t resul t i s a decreas e i n thes e source' s publi c reporting burden . Al l informatio n collectio n requirement s o f th e Federa l NS Rand NSP S regulation s hav e bee napprove d b yOM B unde r th e provision s o f th e Paperwor k Reductio nAct ,P.7 6

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- 4 4 U.S.C . 3501 , e t seq. , an d hav e bee nassigne d OMB contro l number s 2060-000 3 fo r NSR , an d 2060-0023 , 2060-002 6 an d 2060-007 2 fo r NSPS . Th e effec t o f thi s rul e woul d b e a reductio n i n paperwor k relate d t o complying wit hNS Ran d NSP S requirements , sinc e thi s ruling provide s additiona l clarificatio n a s t o physica l an d operationa l change s tha t mayb e exclude d fromthes e requirements .

C . Economi c Impac t Assessmen t Th e requiremen t fo r performing a n Economi c Impac t Assessmen t unde r § 31 7 o f th e Ac t (4 2 U.S.C . 7617) , doe s no t appl yt o th e amendment s EPAi s promulgating today . Sectio n 31 7 applie s onl yt o "revision s whic hth e Administrato r determine s t o b e substantia l revisions. " Th e promulgate d amendment s ar e no t substantia l revision s becaus e the yreliev e curren t regulatoryburdens .

D . RegulatoryFlexibilit yAc t Certification . A s note d i n th e proposa l notice , thi s actio n i s no t subjec t t o th e certificatio nprovision s o f § 605(b ) o f th e RegulatoryFlexibilit yAc t becaus e thi s rul e wil l resul t i n a reductio n o f administrativ e cost s an d n o increas e i n contro l costs , therefor e having n o significan t impac t o n industry . E . Effectiv e Date . A s state d earlie r i n thi s notice , thi s rul e i s effectiv e immediatel yupo npublicatio ni n th e FEDERAL REGISTER . Th e EPAha s conclude d that , unde r § 307(d)(1 ) o fP.7 7

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- th e Act , th e requiremen t o f sec . 4(d ) o f th e Administrativ e Procedure s Act , 5 U.S.C . 553(d) , fo r a 30-da ywaiting perio d befor e making a rul e effectiv e i s no t applicable .

F . Federalis mImplications . Unde r E.O . 12612 , EPAmus t determin e i f a rul e ha s federalis mimplication s (i.e. , substantia l direc t effect s o n th e States , o n th e relationshi p betwee n th e nationa l governmen t an

d th e States , o r o n th e distributio no f powe r an d responsibilitie s among th e variou s level s o f government) . Fo r thos e rule s whic hhav e federalis m implications , a Federalis mAssessmen t i s t o b e made . Th e EPA' s determinatio n i s tha t ther e ar e n o federalis m implications ; thes e ar e relativel ymino r change s t o existing federa l la

wan d regulations . Th e executiv e orde r als o require s tha t agencies , t o th e exten t possible , refrai nfromlimiting th e Stat e polic y options , consul t wit hState s prio r t o taking an yaction s tha t woul d restric t Stat e polic yoptions , an d tak e suc h action s onl ywhe n ther e i s clea r constitutiona l authorit y an d th e presenc e o f a problemo f nationa l scope . Th e executiv e orde r provide s fo r preemptio n o f Stat e law , however , i f ther e i s a clea r congressiona l inten t fo r th e agenc yt o d o so . An ysuc hpreemption , however , i s t o b e limite d t o th e exten t possibl e Sinc e th e rul e i s a direc t effor t t o ensur e implementatio n o f th e 199 0 CAA , EPA consider s al l o f th e abov e requirement s t o b e met .P.7 8

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- List s o f Subject s

4 0 CF Rpar t 5 1 Administrativ

e procedur e an

dpractices , Intergovernmenta l relations , Ai r pollutio ncontrol , NSR , Clea n Coa l Technologyprojects , Sulfu r oxides , Nitroge n dioxide , Particulat e matter , Carbo n monoxide , Hydrocarbons , Lead .

4 0 CF Rpar t 5 2

Ai r pollutio n control , NSR , Clean Coa l Technology projects , Repowering , Sulfu r oxides , Particulat e matter , Nitroge n dioxide , Carbo n monoxide , Hydrocarbons , Lead .

4 0 CFRpar t 6 0 Ai r pollutio n control , NSPS , CleanCoa l Technology projects , Repowering , Sulfu r oxides , Particulat e matter , Nitroge n dioxide , Carbo nmonoxide , Hydrocarbons , Lead . Authority : 4 2 U.S.C . 7401(b)(1) , 7410 , 7411 , 7470

- 7479 , 7491 , 7501-7508 , 760 1 an d 7602 , a s amende d b yth e Clea n Ai r Ac t Amendment s o f 1990 , Pub . L . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) ; 402 , 409 , 41 5 o f th e Clea n Ai r Ac t a s amended , 10 4 Stat . 2399 ; 4 2 U.S.C . 7401-764 2 a s amende d b

yth e Clea n Ai r Ac t Amendment s o f 1990 ,P.7 9

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- Pub . L . NO . 101-549 , 10 4 Stat , 239 9 (Nov . 15 , 1990) ; 4 2 U.S.C . 7401 , 7411 , 7414 , 7416 , an d 760 1 a s amende d b yth e Clea n Ai r Ac t Amendment s o f 1990 , Pub . L . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990 ; 402 , 409 , 41 5 o f th e Clea n Ai r Ac t a s amended , 10 4 Stat . 2399 , unles s otherwis e noted .P.8 0

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- Fo r th e reason s se t fort hi nth e preamble , Par t 5 1 o f Chapte r I o f titl e 4 0 o f th e cod e o f Federa l Regulation s i s propose d t o b e amende d a s follows :

Par t 5 1 - REQUIREMENT S FO RPREPARATION , ADOPTION , AN D SUBMITTA

L O F IMPLEMENTATIO

N PLANS .

1 . Th e authorit ycitatio n fo r Par t 5 1 i s amende d t o rea d a s follows : Authority : 4 2 U.S.C . 7401(b)(1) , 7410 , 7411 , 7470

- 7479 , 7491 , 7501-7508 , 760 1 an d 7602 , a s amende d b yth e Clea n Ai r Ac t Amendment s o f 1990 , Pub . L . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) ; 402 , 409 , 41 5 o f th e Clea n Ai r Ac t a s amended , 10 4 Stat . 2399 , unles s otherwis e noted .

2 . Sectio n 51.16 5 i s propose d t o b e amende d t o read a s follows : 51.16 5 Permi t requirements . (a ) 

### ( D (v ) V

c * * * * * * * * (C ) Aphysica l chang e o r a chang e i nth e metho d o f operatio n shal l no t include :P.8 1

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- (8 ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t a n existing electri c utilit ystea

mgenerating unit , unles s th e Administrato r determine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentall ybeneficial , and except : (i ) whe nth e Administrato r ha s reaso nt o believ e tha t th e pollutio ncontro l projec t woul d resul t i n a significan t ne t increas e i n representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d fo r tha t sourc e i nth e mos t recen t ai r qualit yimpac t analysi s i n th e are a conducte d fo r th e purpos e o f titl e I , i f any , an d (ii ) th e Administrato r determine s tha t th e increas e wil l caus e o r contribut e t o a violatio no f an

ynationa l ambien t ai r qualit y standard o r PS D increment , o r visibilit y limitation . (9 ) Th e installation , operation , cessation , o r remova l o f a temporaryclea ncoa l technology demonstratio nproject , provide d tha t th e projec t complie s with :P.8 2

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- (i ) th e Stat e implementatio npla nfo r th e stat e i n whic hth e projec t i s located , an d (ii ) othe r requirement s necessaryt o attai nan d maintai n th e nationa l ambien t ai r qualit y standard s during th e projec t an d afte r i t i s terminated . (10 ) Th e reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea mgenerating unit .

(xii )

(D ) Fo r an

yemission s uni t (othe r tha na nelectri c utilit ysteamgenerating uni t specifie d i nparagrap h (E ) o f thi s subsection ) tha t ha s no t begunnorma l operation s o n a particula r date , actua l emission s shal l equa l th e potential-to-emi t o f th e uni t o ntha t date . (E ) Fo r a n electri c utilit ystea mgenerating uni t (othe r tha n a ne wuni t o r th e replacemen t o f a n existing unit) , actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e unit , provide d th e sourc e owne r o r operator,maintain s an dP.8 3

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- submit s t o th e permitting authorit yf o na nannua l basi s fo r a perio d o f 5 year s fromth e dat e norma l operatio n begins ' a t th e modifie d unit , informatio ndemonstrating fciiaif th e physica l o r operationa l chang e di d mo t resul t

; i_i"an"emissions * increase * A'longe r perio d fro mth e 'date norma l operation s begins , no t t o excee d i d years , mayb e require d toyth e permittin g authorit yi f i t determine s suc ha perio d t o b e mor e representativ e o f norma l sourc e post-chang e operations . (xx ) "Electri c utilit ystea mgenerating unit " mean s an y stea melectri c generating uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha n one-third o f it s potentia l electri c outpu t capacit yan d mor e tha n 2 5 megawatt s (MW ) electrica l outpu t t o an yutilit ypowe r distributio nsystem fo r sale . An

ystea msupplie d t o a stea mdistributio nsystem fo r th e purpos e o f providing stea mt o a steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility . (xxi ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e 2-yea r perio d afte r a physica l chang e o r chang e i nth e metho d o f operatio n o f a unit , (o

r a differen t consecutiv e 2-yea r perio d withi nP.8 4

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- 1 0 year s afte r tha t change , wher e th e permitting authorit y determine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations) , considering th e effec t an ysuc hchang e wil l hav e o n increasing o r decreasing th e hourl yemission s rat e an d o n projecte d capacit yutilization . I nprojectin g futur e emission s th e permitting authorit yshall :

(A ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s ow

n representations , filing s wit h th e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r titl e IV o f th e Clea nAi r Act ; an d (B ) exclude , i n calculating an yincreas e i n emission s tha t result s fro mth e particula r physica l chang e o r chang e i nth e metho d o f operatio n a t a nelectri c utilit ystea mgenerating unit , tha t portio n o f th e unit' s emission s following th e chang e tha t i s attributabl e t o a n increas e i nprojecte d capacit yutilizatio n a t th e uni t tha t i s unrelate d t o th e particula r change , including an

yincrease d utilizatio ndu e t o th e rat e o f electricit ydemand growt hfo r th e utilit y systema s a whole .P.8 5

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- (xxii ) "Temporaryclea n coa l technologydemonstratio n project " mean s a cleancoa l technologydemonstratio n projec t tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic h complie s wit hth e Stat e implementatio n pla n fo r th e Stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai n an d maintai nth e nationa l ambien t ai r qualit ystandard s during th e projec t an d afte r i t i s terminated . (xxiii ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existing facilit ywhic hwil l achiev e significan t reduction s i n ai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hth e utilizatio no f coa l i nth e generatio n o f electricity , o r proces s stea mwhic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (xxiv ) "Clean coa l technolog ydemonstratio nproject " mean s a projec t using fund s (1 ) appropriate d unde r th e heading 'Departmen t o f Energy-Clea nCoa l Technology, ' up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea ncoa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency . Th e Federa l contributio n fo r aP.8 6

-84

- qualifyin g projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio nproject . (xxv ) "Reactivatio n o f a veryclea n coal-fire d electri c utilit ystea

mgeneratin g unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio nassociate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio n wher e th e unit : (i ) ha s no t bee ni n operatio nfo r th e 2-yea r perio d prio r t o th e enactmen t o f th e CleanAi r Ac t Amendment s o f 1990 , an

d th e emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n8 5 percen t an

d a remova l efficiencyfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NO xburner s prio r t o th e time o f commencemen t o f operation s following reactivation ; an

dP.8 7

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- (iv ) i s otherwis e i ncomplianc e wit hth e requirement s o f th e Clea n Ai r Act . (xxvi ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t a n existing electri c utilit ystea mgenerating uni t fo r purpose s o f reducing emission s fro msuc hunit . Suc hchange s ar e limite d to : (i ) th e installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e an d nitroge n oxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i n th e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting than th e fue l i n us e prio r t o th e chang e including , bu t no t limite d t o natura l ga s o r coa l re burning , o r th e co-firing o f natura l ga s and othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea n coa l technolog ydemonstratio n projec t conducte d unde r titl e II , sec . 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sec . 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) ,P.8 8

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- o r subsequen t appropriations , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r simila r project s funde d through appropriation s fo r th e Environmenta l Protectio nAgency ; o r (iv ) a permanen t clea ncoa l technologydemonstratio n projec t tha t constitute s a repowering project .
3 . Sectio n 51.16 6 i s propose d t o b e amende d t o read a s follows :

51.16 6 Preventio

no f significant deterioratio no f ai r quality .
**** * (b ) * * * (2 ) * * * (iii ) Aphysica l chang e o r chang e i nth e metho d o f operatio n shal l no t include :

* * * *
(h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t a nexisting electri c utilit ystea

mgenerating unit , unles s th e Administrato r determine s tha t suc haddition ,P.8 9

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- replacement , o r us e render s th e uni t les s environmentall ybeneficial , an d except : (a ) whe n th e reviewing authorit yha s reaso n t o believ e tha t th e pollutio ncontro l projec t woul d resul t i na significan t ne t increas e i n representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d fo r tha t sourc e i nth e mos t recen t ai r qualit yimpac t analysi s i n th e are a conducte d fo r th e purpos e o f titl e I , i f any , an d (b ) th e reviewing authorit ydetermine s tha t th e increas e wil l caus e o r contribut e t o a violatio no f an

ynationa l ambien t ai r qualit y standard o r PS D increment , o r visibilit y limitation . (i ) an yphysica l chang e o r chang e i nth e metho d o f operatio n a t a n existing electri c utilit y generating uni t (othe r tha nth e additio no f a ne w uni t o r th e replacemen t o f a n existing unit ) tha t woul d no t resul t i n a significan t ne t increas e i n representativ e actua l annua l emission s o f a regulate d pollutan t a t th e unit .P.9 0

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- (j ) Th e installation , operation , cessation , o r remova l o f a temporarycleancoa l technology demonstratio nproject , provide d tha t th e projec t complie s with : (i ) th e Stat e implementatio n pla n fo r th e Stat e i nwhic hth e projec t i s located ; an d (ii ) othe r requirement s necessaryt o attai n an d maintai nth e nationa l ambien t ai r qualit y standard s during th e projec t an d afte r i t i s terminated . (k ) Th e installatio no r operatio no f a permanen t clea n coa l technologydemonstratio n projec t tha t constitute s repowering , provide d tha t th e projec t doe s no t resul t i nan increas e i nth e potential

to-emi t o f an

yregulate d pollutan t emitte d b yth e unit . Thi s exemptio n shal l appl yo n a pollutant

by-pollutan t basis . (1 ) Th e reactivatio n o f a veryclea n coal-fire d electri c utilit ystea mgenerating unit .

(21 )P.9 1

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- (iv ) Fo r an

yemission s uni t (othe r tha nan electri c utilit ystea

mgenerating uni t specifie d i n paragrap h (v ) o f thi s subsection ) tha t ha s no t begun norma l operation s o n a particula r date , actua l emission s shal l equa l th e potential-to-emi t o f th e uni t o n tha t date . (v ) Fo r a n electri c utilit ystea mgenerating uni t (othe r tha n a ne wuni t o r th e replacemen t o f a n existing unit) , actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e uni t following th e physica l o r operationa l change,provide d th e sourc e owne r o r operato r maintain s and submit s t o th e permittin g authority , o na nannua l basi s fo r a perio d o f 5 year s fromth e dat e norma l operatio nbegin s a t th e modifie d unit , informatio n demonstrating tha t th e physica l o r operationa l chang e di d no t resul t i nan emissiori s increase . Alonge r perio d from th e dat e norma l operation s begins , no t t o excee d 1 0 years , may b e require d byth e permitting authorit yi f i t determine s suc ha perio d t o toe mor e representativ e o f norma l sourc e post-chang e operations . (30 ) "Electri c utilit ystea mgenerating unit " mean s an y stea melectri c generating uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha none-thir d o f it sP.9 2

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- potentia l electri c outpu t capacit yan d mor e tha n2 5 MW electrica l outpu t t o an yutilit ypowe r distributio n system fo r sale . Anystea msupplie d t o a stea m distributio n systemfo r th e purpos e o f providing stea m t o a steam-electri c generato r tha t woul d produc e electrica l energyfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility . (31 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio n a t anexisting electri c utilit ystea mgenerating uni t fo r purpose s o f reducing emission s fromsuc hunit . Suc hchange s ar e limite d to : (i ) th e installatio no f conventiona l o r innovativ e pollutio ncontro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio nfo r sulfu r dioxid e an

d nitroge n oxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i nth e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s pollutin g tha n th e fue l i nus e prio r t o th e change , including bu t no t limite d t oP.9 3

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- natura l ga s o r coa l re-burning , o r th e co-firing o f natura l ga s an

d othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea n coa l technology demonstratio nprojec t conducte d unde r titl e II , sec . 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sec . 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clean coa l technology , o r simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency , o r (iv ) a permanen t clean coa l technolog y demonstratio nprojec t tha t constitute s a repowering projec t (32 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e 2-yea r perio d afte r a physica l chang e o r chang e i nth e metho d o f operatio n o f a unit , (or a differen t consecutiv e 2-yea r perio d withi n 1 0 year s afte r tha t change , wher e th e reviewing authorit ydetermine s tha t suc hperio d i s mor eP.9 4

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- representativ e o f norma l sourc e operations) , considering th e effec t an ysuc hchang e wil l hav e o n increasing o r decreasing th e hourl yemission s rat e an d o n projecte d capacit yutilization . I n projectin g futur e emission s th e reviewing authorit yshall : (A ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s ow

n representations , filing s wit h th e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r titl e IV o f th e Clea nAi r Act ; an d

(B ) exclude , i n calculating an yincreas e i n emission s tha t result s fro mth e particula r physica l chang e o r chang e i nth e metho d o f operatio n a t a n electri c utilit ystea m generating unit , tha t portio no f th e unit' s emission s following th e chang e tha t i s attributabl e t o an increas e i n projecte d capacit yutilizatio na t th e uni t tha t i s unrelate d t o th e particula r change , including an

yincrease d utilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit y systema s a whole .P.9 5

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- (33 ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existing facilit y whic hwil l achiev e significan t reduction s i nai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hth e utilizatio no f coa l i n th e generatio n o f electricity , o r proces s stea m whic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (34 ) "Clean coa l technolog ydemonstratio nproject " mean s a projec t using fund s (1 ) appropriate d unde r th e heading 'Departmen t o f Energy-Clea nCoa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea ncoa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio nAgency . Th e Federa l contributio n fo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio n project . (35 ) "Temporaryclea n coa l technolog ydemonstratio nproject " mean s a clea n coa l technolog ydemonstratio nprojec t tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic hcomplie s wit hth e Stat e implementatio npla n fo r th e Stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai nan d maintai nth eP.9 6

-94

- natio n ambien t ai r qualit ystandard s during an d afte r th e projec t i s terminated . (36)(i ) "Repowering " mean s replacemen t o f a n existing

coal-fire d boile r wit hon e o f th e following clean coa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio n combine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio nfue l cells , o r a s determine d b yth e Administrator , i nconsultatio nwit hth e Secretary o f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an

d an yothe r technologycapabl e o f controlling multipl e combustio n emission s simultaneousl ywit himprove d boile r o r generatio n efficienc yan

d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technologyi nwidesprea d commercia l us e a s o f Novembe r 15 , 1990 . (ii ) Repowering shal l als o includ e an yoi l and/o r gas fire d uni t whic ha s bee nawarde d clea ncoa l technologydemonstratio n funding a s o f January1 , 1991 , b yth e Departmen t o f Energy .P.9 7

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- (iii ) Th e reviewing authorit yshal l giv e expedite d consideratio nt o permi t application s fo r an y sourc e tha t satisfie s th e requirement s o f thi s subsectio nan

d i s grante d a nextensio nunde r § 40 9 o f th e Clea n Ai r Act . (37 ) "Reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea

m generating unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio n associate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio nwher e th e unit : (i ) ha s no t bee n i n operatio n fo r th e 2-year perio d prio r t o th e enactmen t o f th e Clea nAi r Ac t Amendment s o f 1990 , an

d th e emission s fromsuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow nwit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficiencyfo r sulfu r dioxid e o f n o les s tha n8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ;P.9 8

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- (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e tim e o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i ncomplianc e wit hth e requirement s o f th e Clea n Ai r Act .P.9 9

-97

- Fo r th e reason s se t fort hi nth e preamble , Par t 5 2 o f Chapte r I o f titl e 4 0 o f th e Cod e o f Federa l Regulation s i s propose d t o b e amende d a s follows :

Par t 52-APPROVA

L AN DPROMULGATIO

N O F IMPLEMENTATIO

N PLANS

1 . Th e authorit ycitatio n fo r Par t 5 2 i s amende d t o read a s follows : Authority : 4 2 U.S.C . 7401-764 2 a s amende d b yth e Clean Ai r Ac t Amendment s o f 1990 , PubL . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) , unles s otherwis e noted . 2 . Sectio n 52.2 1 i s propose d t o b e amende d t o read a s follows :

52.2 1 Preventio

no f significant deterioratio nof ai r quality .

(b )

(2 )P.10 0

-98

- (iii ) Aphysica l chang e o r a chang e i nth e metho d

o f operatio nshal l no t include :

**** *
(h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t a nexisting electri c utilit ystea

mgenerating unit , unles s th e Administrato r determine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentall ybeneficial , an d except :

(a ) whe nth e Administrato r ha s reaso n t o believ e tha t th e pollutio n contro l projec t woul d resul t i na significan t ne t increas e i n representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d fo r tha t sourc e i nth e mos t recen t ai r qualit yimpac t analysi s i nth e are a conducte d fo r th e purpos e o f titl e I , i f any , an d
(b ) th e Administrato r determine s tha t th e increas e wil l caus e o r contribut e t o a violatio no f an

ynationa l ambien t ai r qualit y standar d o r PS D increment , o r visibilit y limitation .p. 1

-99

- (i ) Th e installation , operation , cessation , o r remova l o f a temporaryclean coa l technolog

ydemonstratio nproject , provide d tha t th e projec t complie s with : (i ) th e Stat e implementatio npla nfo r th e Stat e i n whic hth e projec t i s located , an

d (ii ) othe r requirement s necessaryt o attai nan

d maintai n th e nationa l ambien t ai r qualit ystandard s during th e projec t an d afte r i t i s terminated . (j ) Th e installatio n o r operatio no f a permanen t clea n coa l technolog y demonstratio nprojec t tha t constitute s repowering , provide d tha t th e projec t doe s no t resul t i na n increas e i nth e potentia l t o emi t o f an yregulate d pollutan t emitte d b yth e unit . Thi s exemptio n shal l appl yo n a pollutant-by

pollutan t basis . (k ) Th e reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea mgenerating unit .P. 2

-100

- (21 ) (iv ) Fo r an

yemission s uni t (othe r tha na n electri c utilit ysteam

generating uni t specifie d i nparagrap h (v ) o f thi s subsection ) tha t ha s no t begunnorma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o emi t o f th e uni t o ntha t date . (v ) Fo r a n electri c utilit ystea mgenerating uni t (othe r tha n a ne wuni t o r th e replacemen t o f a n existing unit) , actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e unit,provide d th e sourc e owne r o r operato r maintain s an d submit s t o th e permitting authority, % o n a nannua l basis'fo r a perio d o f 5 year s fromth e dat e norma l operatio n begin s at ; th e modifie d unit , informatio n demonstratin g tha t th e physica l o r operationa l chang e di d no t resul t i n a nemission s increase . Alonge r perio d fro m

th e dat e norma l operation s begins , no t t o excee d 1 0 years , ma yb e require d b yth e permittin g authorit yi f it ' determine s suc ha perio d t o b e mor e representativ e o f norma l sourc e post-chang e operations .P. 3

-101

- (31 ) "Electri c utilit ystea mgenerating unit " mean s an y stea melectri c generating uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha n one-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n 2 5 M

W electrica l outpu t t o an yutilit ypowe r distributio n systemfo r sale . Anystea msupplie d t o a stea m distributio n systemfo r th e purpos e o f providing stea m t o a steam-electri c generato r tha t woul d produc e electrica l energ

yfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility . (32 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t a n existing electri c utilit ystea mgenerating uni t fo r purpose s o f reducing emission s fromsuc hunit . Suc hchange s ar e limite d to : (i ) th e installatio no f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e an d nitroge n oxide s control s an

d electrostati c precipitators ; (ii ) a physica l change , o r chang e i nth e metho d o f operation , t o accommodat e switching t o a fue lP. 4

-102

- whic hi s les s polluting tha nth e fue l i n us e prio r t o th e chang e including , bu t no t limite d t o natura l ga s o r coa l re-burning , o r th e co-firing o f natura l ga s an

d othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea n coa l technolog y demonstratio nprojec t conducte d unde r titl e II , sec . 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sec . 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clean coa l technology , o r simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio nAgency ; o r (iv ) a permanen t clea ncoa l technology demonstratio n projec t tha t constitute s a repowering project . (33 ) "Representative actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e 2-yea r perio d afte r a physica l chang e o r chang e i nth e metho d o f operatio n o f a unit , (or a differen t consecutiv e 2-yea rP. 5

-103

- perio d withi n 1 0 year s afte r tha t change , wher e th e Administrato r determine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations) , considering th e effec t an ysuc hchang e wil l hav e o n increasing o r decreasing th e hourl yemission s rat e an d o n projecte d capacit yutilization . I n projectin g futur e emission s th e Administrato r shall : (i ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s ow

nrepresentations , filing s wit h th e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r titl e IV o f th e Clea nAi r Act ; an d (ii ) exclude , i ncalculating an yincreas e i n emission s tha t result s fro mth e particula r physica l chang e o r chang e i nth e metho d o f operatio n a t a nelectri c utilit ystea mgenerating unit , tha t portio n o f th e unit' s emission s following th e chang e tha t i s attributabl e t o an increas e i n projecte d capacit yutilizatio na t th e uni t tha t i s unrelate d t o th e particula r change , including an

yincrease d utilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit y system a s a whole .P. 6

-104

- (34 ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion , o r pos t combustio nstage , a t a ne wo r existing facilit y whic hwil l achiev e significan t reduction s i n ai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hth e utilizatio n o f coa l i n th e generatio n o f electricity , o r proces s stea mwhic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (35 ) "Clean coa l technolog ydemonstratio nproject " mean s a projec t using fund s (1 ) appropriate d unde r th e heading 'Departmen t o f Energy-CleanCoa l Technology' , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clean coa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency . Th e Federa l contributio n fo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio n project . ( 3 6 ) "Temporaryclea n coa l technolog ydemonstratio nproject " mean s a clea n coa l technologydemonstratio nprojec t tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic hcomplie s wit hth e Stat e implementatio nplan s fo r th e Stat e i n whic hth e projec t i s locate d an d othe rP. 7

-105

- requirement s necessaryt o attai nan d maintai n th e nationa l ambien t ai r qualit ystandard s during th e projec t an

d afte r i t i s terminated . (37)(i ) "Repowering " mean s replacemen t o f a nexisting

coal-fire d boile r wit hon e o f th e following clea n coa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio n combine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio n fue l cells , o r a s determine d b yth e Administrator , i nconsultatio n wit hth e Secretary o f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an

d an yothe r technologycapabl e o f controlling multipl e combustio nemission s simultaneousl ywit himprove d boile r o r generatio n efficienc yan

d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technologyi nwidesprea d commercia l us e a s o f Novembe r 15 , 1990 . (ii ) Repowering shal l als o includ e an yoi l and/o r gas fire d uni t whic hha s bee n awarde d clea n coa l technologydemonstratio nfunding a s o f January1 , 1991 , b yth e Departmen t o f Energy .P. 8

-106

- (iii ) Th e Administrato r shal l giv e expedite d consideratio nt o permi t application s fo r an ysourc e tha t satisfie s th e requirement s o f thi s subsectio n an d i s grante d a n extensio nunde r § 40 9 o f th e Clea n Ai r Act . (38 ) "Reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea

m generating unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio nassociate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio n wher e th e unit : (i ) ha s no t bee n i noperatio nfo r th e 2-yea r perio d prio r t o th e enactmen t o f th e Clea nAi r Ac t Amendment s o f 1990 , an

d th e emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficiencyfo r sulfu r dioxid e o f n o les s tha n 8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ;P. 9

-107

- (iii ) i s equippe d wit hlow-NO xburner s prio r t o th e time o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i ncomplianc e wit hth e requirement s o f th e Clea nAi r Act . 3 . Sectio n 52.2 4 i s propose d t o b e amende d t o rea d a s follows :

52.2 4 Statutor

y restrictio

no nne w sources .



### (f ) (5 ) * * *

* * * (iii ) Aphysica l chang e o r chang e i n th e metho d o f operatio n shal l no t include :

* * * (h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t an existing electri c utilit ystea m generatin g unit , unles s th e Administrato r determine sP.1 0

-108

- tha t suc haddition , replacement , o r us e render s th e uni t les s environmentall ybeneficial , an d except : (1 ) whe nth e Administrato r ha s reaso nt o believ e tha t th e pollutio ncontro l projec t woul d resul t i na significan t ne t increas e i n representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d fo r tha t sourc e i n th e mos t recen t ai r qualit yimpac t analysi s i nth e are a conducte d fo r th e purpos e o f titl e I , i f any , an d

(2 ) th e Administrato r determine s tha t th e increas e wil l caus e o r contribut e t o a violatio n o f an

ynationa l ambien t ai r qualit y standard o r PS D increment , o r visibilit y limitation . (i ) Th e installation , operation , cessation , o r remova l o f a temporarycleancoa l technolog ydemonstratio n project , provide d tha t th e projec t complie s with : (1 ) th e Stat e implementatio npla nfo r th e Stat e i n whic hth e projec t i s located , an dP.1 1

-109

- (2 ) othe r reguirement s necessaryt o attai nan d maintai n th e nationa l ambien t ai r qualit y standard s during th e projec t an d afte r i t i s terminated . (j ) Th e reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea mgenerating unit .P.1 2

-110

- (13 ) * * * (iv ) Fo r an

yemission s uni t (othe r tha na nelectri c utilit ystea

mgenerating uni t specifie d i nparagraph (v ) o f thi s subsection ) tha t ha s no t begunnorma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o emi t o f th e uni t o n tha t date . (v ) Fo r a n electri c utilit ystea mgenerating uni t (othe r tha n a newuni t o r th e replacemen t o f an existing unit) , actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e unit,provide d th e sourc e owne r o r operato r maintain s an d submit s t o th e permittin g authorit y r o n a nannua l basi s fo r a perio d o f 5 year s fromth e dat e norma l operatio n begin s a t th e modifie d unit , informatio n demonstrating tha t th e physica l o r operationa l chang f di d no t resul t i n a n emission s increase . Alonge r perio d fromth e dat e norma l operation s begins , no t t o excee d 1 0 years r

ma yb e require d b yth e permittin g authorit yi f i t determine s such ' a perio d t o b e mor e representativ e "o

f norma l sourc e post-chang e operations . (18 ) "Electri c utilit ystea mgenerating unit " mean s an y stea melectri c generating uni t tha t i s constructe d fo r th eP.1 3

-Ill

purpos e o f supplying mor e tha none-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n2 5 MWelectrica l outpu t t o an

yutilit ypowe r distributio nsystemfo r sale . Anystea

msupplie d t o a stea mdistributio nsystemfo r th e purpos e o f providin g stea m t o a steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility . (19 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e 2-yea r perio d afte r a physica l chang e o r chang e i nth e metho d o f operatio no f a unit , (or a differen t consecutiv e 2-yea r perio d withi n 1 0 year s afte r tha t change , wher e th e Administrato r determine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations) , considering th e effec t an ysuc hchang e wil l hav e o n increasing o r decreasing th e hourl yemission s rat e an d o n projecte d capacit yutilization . I nprojecting futur e emission s th e Administrato r shall : (i ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s own representations , filing s wit hth e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r titl e IV

o f th e Clea n Ai r Act ; an dP. M

-112

- (ii ) exclude , i n calculating an yincreas e i nemission s tha t result s fro

mth e particula r physica l chang e o r chang e i n th e metho d o f operatio n a t a nelectri c utilit ystea

mgenerating unit , tha t portio no f th e unit' s emission s following th e chang e tha t i s attributabl e t o a n increas e i n projecte d capacit y utilizatio n a t th e uni t tha t i s unrelate d t o th e particula r change , including an yincrease d utilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystema s a whole . (20 ) "Temporarycleancoa l technolog ydemonstratio n project " mean s a cleancoa l technolog ydemonstratio n projec t tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic h complie s wit hth e Stat e implementatio nplan s fo r th e Stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai n an d maintai nth e nationa l ambien t ai r qualit ystandard s during th e projec t an d afte r i t i s terminated . (21 ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion , o r pos t combustio nstage , a t a ne wo r existing facilit ywhic hwil l achiev e significan t reduction s i nai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hth e utilizatio n o f coa l i n th e generatio no fP.1 5

-113

- electricity , o r proces s stea mwhic hwa s no t i nwidesprea d us e a s o f Novembe r 15 , 1990 . (22 ) "Clean coa l technologydemonstratio n project " mean s a projec t usin g fund s (1 ) appropriate d unde r th e headin g 'Departmen t o f Energy-Clea n Coa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency . Th e Federa l contributio nfo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio n project . (23 ) "Reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea

m generating unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio nassociate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio n wher e th e unit : (i ) ha s no t bee n i noperatio n fo r th e 2-yea r perio d prio r t o th e enactmen t o f th e Clea nAi r Ac t Amendment s o f 1990 , an

d th e emission s fromsuc huni t continu e t o b e carrie d i n th e permittin g authority' s emission s inventorya t th e tim e o f enactment ;P.1 6

-114

- (ii ) wa s equippe d prio r t o shut-dow nwit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficiencyfo r sulfur dioxid e o f n o les s tha n8 5 percen t and a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e time o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i n complianc e wit hth e requirement s o f th e Clea n Ai r Act . (24 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t a nexisting electri c utilit ystea mgenerating uni t fo r purpose s o f reducing emission s fro msuc hunit . Suc hchange s ar e limite d to : (i ) th e installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorbent-injectio n fo r sulfu r dioxid e an d nitroge noxide s control s an d electrostati c precipitators ;P.1 7

-115

- (ii ) a physica l change , o r chang e i n th e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting tha n th e fue l i nus e prio r t o th e chang e including , bu t no t limite d t o natura l ga s o r coa l re burning , co-firing o f natura l ga s an d othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea ncoa l technolog ydemonstratio n projec t conducte d unde r titl e II , sec . 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sec . 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r simila r project s funde d through appropriation s fo r th e Environmenta l Protectio nAgency ; o r (iv ) a permanen t clea n coa l technologydemonstratio n projec t tha t constitute s a repowering project .P.1 8

-116

- Fo r th e reason s se t fort hi n th e preamble , Par t 6 0 o f Chapte r I o f titl e 4 0 o f th e Cod e o f Federa l Regulation s i s propose d t o b e amende d a s follows :

PART 60-STANDARD S O F PERFORMANCE FO

RNE W STATIONAR

YSOURCE S

1 . Th e authorit ycitatio nfo r Par t 6 0 i s amende d t o read a s follows : Authority : 4 2 U.S.C . 7401 , 7411 , 7414 , 7416 , an d 760 1 a s amende d b

yth e Clean Ai r Ac t Amendment s o f 1990 , Pub . L . 101-549 , 10 4 Stat . 239 9 (Nov./15 , 1990 ; 402 , 409 , 41 5 o f th e Clea n Ai r Ac t a s amended , 10 4 Stat . 2399 , unles s otherwis e noted .

2 . Sectio n 60. 2 i s propose d t o b e amende d b yadding th e following definitions :

"Clean coa l technolog ydemonstratio nproject " mean s a projec t usin g fund s appropriate d unde r th e heading 'Departmen t o f Energy-CleanCoa l Technology' , u p t o a tota l amoun t of'$2,500,000,00 0 fo r commercia l demonstration s o f clea n coa l technology , o r simila r project s funde d through appropriation s fo r th e Environmenta l Protectio nAgency .P.1 9

-117

- "Electri c utilit ystea mgenerating unit " mean s an ystea m electri c generating uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha n one-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n2 5 MWelectrica l outpu t t o an y utilit ypowe r distributio n system fo r sale . Anystea m supplie d t o a stea

mdistributio n systemfo r th e purpos e o f providing stea

m t o a steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determining th e electrica l energyoutpu t capacit yo f th e affecte d facility . "Repowering " mean s replacemen t o f a nexisting coal-fire d boile r wit hon e o f th e following clea ncoa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio ncombine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio nfue l cells , o r a s determine d b

yth e Administrator , i n consultatio nwit hth e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an

d an yothe r technologycapabl e o f controlling multipl e combustio nemission s simultaneousl y wit himprove d boile r o r generatio nefficienc yan d wit h significantl ygreate r wast e reductio nrelativ e t o th e performanc e o f technologyi nwidesprea d commercia l us e a s o f Novembe r 15 , 1990 . Repowering shal l als o includ e an yoi l and/o r gas-fire d uni t whic hha s bee nawarde d clea n coa lP.2 0 # , ,

-118

-

technolog

ydemonstratio n funding a s o f January1 , 1991 , b y th e Departmen t o f Energy . "Reactivatio n o f a veryclea n coal-fire d electri c utilit y stea mgenerating unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio n associate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio n wher e th e unit : (i ) ha s no t bee ni n operatio nfo r th e 2-year perio d prio r t o th e enactmen t o f th e Clea n Ai r Ac t Amendment s o f 1990 , an

d th e emission s fromsuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s system o f emission s contro l tha t achieve s a remova l efficienc yfo r sulfur dioxid e o f n o les s tha n 8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e time o f commencemen t o f operation s following reactivation ; an

d-119

- (iv ) i s otherwis e i ncomplianc e wit hth e requirement s o f th e Clea n Ai r Act .

3 . Sectio n 60.1 4 i s propose d t o b e amende d t o rea d a s follows : 60.1 4 MODIFICATION .

**** * (h ) N o physica l change , o r chang e i nth e metho d o f operation , a t a n existing electri c utilit ystea m generatin g uni t shal l b e treate d a s a modificatio nfo r th e purpose s o f thi s sectio n provide d tha t suc hchang e doe s no t increas e th e P.2 1

maximu mhourl yemission s o f an ypollutan t regulate d unde r thi s sectio n abov e th e maximu mhourl yemission s achievabl e a t tha t uni t during th e 5 year s prio r t o th e change . (i ) Repowerin g project s tha t ar e awarde d funding from th e Departmen t o f Energ ya s permanen t clea n coa l technology demonstratio n project s (or simila r project s funde d b yEPA ) ar e exemp t fromth e requirement s o f thi s sectio n provide d tha t suc hchang e doe s no t increas e th e maximu m hourl y emission s o f an

ypollutan t regulate d unde r thi s sectio n abov e th e maximu

mhourl yemission s achievabl e a t tha t uni t during th e fiv e year s prio r t o th e change .P.2 2

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- (j)(1 ) Repowering project s tha t qualif yfo r a n extensio n unde r § 409(b ) o f th e Clean Ai r Ac t ar e exemp t fromth e requirement s o f thi s section , provide d tha t suc h chang e doe s no t increas e th e actua l hourl yemission s o f an y pollutan t regulate d unde r thi s sectio nabov e th e actua l hourl yemission s achievabl e a t tha t uni t during th e 5 year s prio r t o th e change .

(2 ) Thi s exemptio nshal l no t appl yt o an yne w uni t that : (a ) i s designate d a s a replacemen t fo r a n existing unit ; (b ) qualifie s unde r § 409(b ) o f th e Clea n Ai r Ac t fo r an extensio n o f an emissio n limitatio n complianc e dat e unde r § 40 5 o f th e Clea nAi r Act ; an

d

(c ) i s locate d a t a differen t sit e tha nth e existing unit . (k ) Th e installation , operation , cessation , o r remova l o f a temporaryclea n coa l technolog ydemonstratio n projec t i s exemp t fromth e requirement s o f thi s section . A "temporaryclea n coa l contro l technolog ydemonstratio nP.2 3

M~,-~..~ l -121

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project" , fo r th e purpose s o f thi s sectio ni s a clea n coa l technologydemonstratio n projec t tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic hcomplie s wit hth e Stat e implementatio n pla n fo r th e Stat e i n whic hth e projec t i s locate d an

d othe r requirement s necessaryt o attai n an d maintai n th e nationa l ambien t ai r qualit ystandard s during th e projec t and afte r i t i s terminated . (1 ) Th e reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea m generating uni t i s exemp t from th e requirement s o f thi s section .