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Printed 10/28/20089:51:00AM Sheet 176 of 276P. 2 

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.COUNCI L O FECONOMI C ADVISER S EXECUTIV E OFFIC E O FTH E PRESIDEN T

WASHINGTO

N

Jul y 23 , 199 0 MtMbtnu r1ncv.uu111.1 1

Dea r Chairma nFord :
Pursuan t t o m

ytestimonyo f May8 , 1990 , legislativ e languag e tha t addresse s th e WEPC O issu e i s enclosed

. Th e Administratio nbelieve s tha t languag e alon g thes e line s woul d bot hprotec t environmenta l qualit yand remove the uncertaint y surroundin g th e applicatio no f th e modificatio nrul e t o electri c utilit yplant s a s th e electri c utilit yindustr ymake s th e physica l an d operationa l change s necessar yt o mee t ne wpollutio n reductio nreguirement s unde r th e Clea nAi r Ac t Amendment s no w unde r conferenc e consideration

. Answer s t o th e specifi c question s raise d i n you r lette r o f Ma y18 , 199 0 wil l b e forthcomin g shortly

. Pleas e d o no t hesitat e t o cal l o n m e i f I ca n b e o f assistanc e regardin g an yaspec t o f thi s issue

.

ar d Schmalense e

Enclosur e

Th eHonorabl eWendel lH

. For d Chairman , Subcommitte eo nEnerg y Researc h an dDevelopmen t Committe eo nEnerg y an dNatura lResource s Unite s State s Senat e 36 4 Dirkse nBuildin g Washingto nD.C

. 20510-615 0P. 4

Propose d WEPC O Languag e

Sec

. XX XAPPLICABILIT YO F NE WSOURC E REVIE WT OEXISTIN GELECTRI C

UTILIT YSTEA

M GENERATIN GUNITS . (a ) Applicabilit y o f Ne w

Sourc e Performanc e Standards—N o physica l change , o r chang e i nth e metho do f operation , a t a nexistin gelectri c utilit y steam generatin guni t shal l b e treate da s a modificatio nfo r purpose s o f Sectio n111 , provide dsuc hchang e doe s no t increas e th e maximum

hourl y

emission s o f any pollutan t regulate d unde r th e sectio nabov e th e maximum hourl y

emission s achievabl e a t tha t uni t durin gth e 5 year s prio r to th e change . (b ) Applicabilit y o f Par t C o f Titl e I — (1 ) Pollutio nContro l Projects—Fo r purpose s o f Par t C , n o physica l change , o r chang e i nth e metho do f operation, , a t a nexistin gelectri c utilit y steam generatin guni t shal l b e treate da s a modificatio n o f th e sourc e fo r a specifi c regulate dpollutant , provide dtha t th e chang e constitute s a pollutio n contro l projec t a t tha t uni t an ddoe s no t increas e maximum

hourl y

emission s o f tha t pollutan t abov e pas t maximum

hourl y

emission s o f tha t pollutan t a t tha t unit ; o r (2 ) Pollutio nContro l Project s wit hContemporaneou s Changes—Fo r purpose s o f Par t C , n o physica l change , o r chang e i nth e metho do f operation , a t a nexistin gelectri c utilit y steam generatin guni t shal l b e treate da s a modificatio no f th e sourc e fo r a specifi c regulate dpollutant , provide dtha t th e chang e i s par t o f a pollutio ncontro l projec t a t tha t uni t and
(A ) i s accompanie db y contemporaneou s physica l o r operationa l change s to tha t unit , tha t do no t excee d2 0 percen t o f th e tota l cos t o f th e pro j ect ; and (B ) th e chang e doe s no t increas e maximum hourl y emission s o f tha t pollutan t abov e pas t maximu mhourl yemission s o f tha t pollutant . Fo r a uni t subjec t t o sectio n407 , immediatel yfollowin g th e changes , th e uni t shal l b e require d t o mee t th e nitroge noxid e emissio nlimitatio nspecifie d fo r tha t boile r typ e pursuan t t o sectio n407 . I n th e even t tha t th e chang e precede s th e establishmen t o f nitroge noxide s emission s limitation s fo r tha t boile r type , pursuan t t o sectio n407 ,P. 5

th e uni t shal l b e require d t o mee t th e applicabl e emissio nlimitatio nupo nth e dat e require d b

yth e regulation ; (i ) fo r a n existin g electri c utilit ysteamgeneratin g uni t no t subjec t t o sectio n407 , immediatel y following th e change , th e uni t shal l b e require d t o mee t th e nitroge noxid e limi t equivalen t t o th e limi t achievabl e using "low-NOxburners. " (3 ) Excep t a s provide d i n(b)(2) , i nth e even t tha t th e maximumhourl yemission s o f anyregulate d pollutan t increase , th e sourc e i s subjec t t o th e requirement s o f subsectio n(c ) fo r th e pollutant

. (c ) Nonpollutio nContro l Project s and Pollutio nContro l Project s i nNonattainmen t Areas—Excep t fo r a uni t tha t i s subjec t t o th e provision s o f subsectio n(b) , n o physica l change , o r chang e i nth e metho d o f operation , a t a nexistin g electri c utilit ysteamgeneratin g uni t shal l b e treate d a s a modificatio nfo r purpose s o f Par t C o r Par t D , provide d tha t suc hchang e doe s no t resul t i na significan t ne t increas e i nrepresentativ e actua l annua l emission s o f an yregulate d pollutan t a t th e sourc e i nth e cas e o f Par t C and o f anycriteri a pollutan t i n th e cas e o f Par t D

. (d ) System-wid e Netting — (1 ) Th e operatin g compan ymay , fo r purpose s o f subsectio n(c ) o f thi s section , elec t t o calculat e it s representativ e actua l annua l emission s (A ) o n a statewid e basis , wher e EP Ai s th e permi t issuing authorit yi nth e Stat e an d the s tat e agrees , o r (B ) o n a systembasis , wher e EP Ai s th e permitting authorit yi non e o r mor e State s i nwhic hth e operatin g compan

yown s electri c generatin g units , provide d al l affecte d State s agree . (2 ) AnyStat e permitting authorit yma yallo wactua l annua l emission s i nbot hrepresentativ e period s t o b e (A ) tota l operating compan yemission s withi n th e State , (B ) wit hth e agreemen t o f th e owner s o f al l othe r electri c generating unit s wit hth e State , tota l emission s withi nth e State , o r (C ) wit hth e agreemen t o f an yothe r State s i nwhic h th e operatin g compan yown s electri c generatin g units , tota l operating compan yemissions

. (e ) Modelin g Requirements—Nothin g i nthi s sectio nshal l authoriz e a nincreas e i nemission s whic hcause s o r contribute s t o a violatio no f a nationa l ambien t ai rP. 6

qualit ystandard , PS D increment , o r visibilit y limitation

. Anyphysica l o r operationa l chang e a t a sourc e subjec t t o subsectio n(b ) o f thi s sectio ntha t result s i nanincreas e i nrepresentativ e actua l annua l emission s o f an

ycriteri 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 for th e purpose s o f Titl e I , i f any , whic hthe Administrato r determine s i s reliable , mayb e require d t o perfor m anai r qualit y impac t analysis , wheneve r the Administrato r ha s reaso n t o believ e tha t th e increas e vil l caus e o r contribut e t o a violatio n o f an yambien t standard , PS Dincrement , o r visibilit ylimitation . Th e Administrato r shal l hav e th e authorit yunde r thi s sectiont o gathe r an y necessar yinformation , includingrequiringth e sourc e t o conduc t modeling , i f necessary . (f ) Nitroge nOxid e Contro l Requirement s (1 ) Anymodification , a s define d i nsectio n169(2)C) , a t a nexisting electri c utilit ysteam generating uni t subjec t t o sectio n16 5 shal l b e deeme d t o satisf yth e technologyrequirement s o f sectio n 165(a) 4 fo r nitroge noxide s i f i t meet s th e following : (A ) Fo r a uni t subjec t t o a requiremen t promulgate d pursuan t t o sectio n407 , immediatel yfollowin g th e modification , th e uni t shal l b e require d t o mee t th e nitroge n oxid e emissio nlimitatio nspecifie d fo r tha t boile r typ e pursuan t t o sectio n407

. I n th e even t tha t th e modificatio nprecede s th e establishmen t o f nitroge noxide s emission s limitation s fo r tha t boile r typ e pursuan t t o sectio n407 , th e uni t shal l b e require d t o mee t th e applicabl e emissio nlimitatio n upo n th e dat e require d b yth e regulation

. (B ) Fo r a nexistin g electri c utilit ysteam generatio nuni t no t subjec t t o sectio n407 , immediatel yfollowin g th e modification , th e uni t shal l b e require d t o mee t th e nitroge n oxid e limi t equivalen t t o th e limi t achievabl e usin g "low-NOxburners. " (2 ) AnyStat e o r loca l permittin g authorit yshal l retai nth e righ t t o impos e mor e stringen t limitation s fo r contro l o f nitroge noxides

. (g ) Definitions—Fo r purpose s o f thi s section ,P. 7

(1 ) "Pollutio nContro l Project " mean s an yphysica l change , o r chang e i nth e metho d o f operation , a t a nexistin g electri c utilit ysteamgeneratin g uni t fo r purpose s o f reducin g emission s from suc huni t i norde r t o compl ywit hTitl e V

. Suc hchange s ar e limite d to : (A ) Installatio no f conventiona l o r innovativ e pollutio ncontro l technology , including bu t no t limite d t o conventiona l and advance d flu e ga s desulfurization , sorben t injectio nfo r S0 2 and NO xcontrol s and electrostati c precipitators ; and (B ) Physica l changes , o r change s i nth e metho d o f operation , t o accommodat e switchin g t o fue l whic hi s lowe r i nsulfu r conten t tha nth e fue l use d prio r t o th e change , including natura l ga s o r coa l re-burning , co-firin g o f natura l ga s and othe r fuel s fo r th e purpos e o f controllin g S0 2 o r NO xemissions ; an d (C ) Clea ncoa l technologydemonstratio nproject s conducte d unde r Titl e II , sectio n101(d ) o f th e Furthe r Continuin g Appropriation s Ac t o f 198 5 (sectio n5903(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 $2,750,000,00 0 fo r commercia l demonstratio n o f clea ncoa l technology , o r simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio nAgency

. (2 ) "Representativ e Actua l Annua l Emissions " means : (A ) fo r th e perio d prio r t o a physica l chang e o r chang e i nth e metho d o f operatio no f a unit , th e averag e rate , i nton s pe r year , a t whic h th e uni t actuall yemitte d th e pollutan t durin g th e two-yea r perio d whic hprecede s th e change , provide d tha t th e Administrato r shal l allo wus e o f a differen t consecutiv e two-yea r perio d withi nth e 5 year s befor e th e change , wher e th e Administrato r determine s tha t suc h a perio d i s mor e representativ e o f norma l sourc e operations ; and (B ) fo r th e two-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 differen t consecutiv e two-yea r perio d withi n1 0 year s afte r tha t change , wher e th e Administrato r determine s tha t suc hP. 8

perio d i s mor e representativ e o f norma l sourc e operations) , th e projecte d averag e rat e i nton s pe r yea r a t whic hth e sourc e i s projecte d t o emi t a pollutant , and considering th e effec t anyphysica l o r operationa l change s hav e o nincreasing o r decreasing th e hourl yemission s rat e an d o n projecte d capacit yutilization

. I n projecting futur e capacit yutilization , th e Administrato r (i ) ma yconside r al l relevan t information , includin g bu t no t limite d to , historica l operationa l data , th e company' s ow nrepresentations , filing s wit hStat e o r Federa l regulatoryauthorities , and complianc e plan s unde r th e Titl e V o f thi s Act , an d (ii ) shal l exclud e tha t portio n o f th e increase d rat e o f utilization , i f any , du e t o factor s unrelate d t o th e physica l o r operationa l change , includin g a nincreas e i n projecte d capacit yutilizatio nequa l t o th e rat e o f electricit ydeman d growt hfo r th e utilit ysystema s a whole

. (h ) EP AGuidance—Withi n 2 4 month s o f enactmen t o f thi s section , th e Administrato r shall , afte r notic e an d th e opportunit yfo r publi c comment , issu e guidanc e fo r us e b ypermittin g authoritie s i ndeterminin g criteri a unde r whic hvariou s refurbishmen t project s woul d b e considere d routin e o r nonroutine

.

NOTE : Reference s t o "sectio n407 " refe r t o S.1630

. Othe r

sectio nnumber s refe r t o th e curren t Clea nAi r Act

.