BEFORE THE ADMINISTRATOR

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

)

IN THE MATTER OF )

MONROE ELECTRIC GENERATING )

PLANT )

ENTERGY LOUISIANA, INC. )

PROPOSED OPERATING PERMIT )

)

Proposed by the Louisiana )

Department of Environmental)

Quality )

) PETITION NO. 6-99-2

ORDER RESPONDING TO

PETITIONER’S REQUEST THAT

THE ADMINISTRATOR OBJECT

TO ISSUANCE OF A STATE

OPERATING PERMIT

ORDER PARTIALLY GRANTING AND PARTIALLY

DENYING PETITION FOR OBJECTION TO PERMIT

On February 9, 1999, Ms. Merrijane Yerger, Managing Director

of the Citizens for Clean Air & Water (“CCAW” or “Petitioner”),

petitioned the Environmental Protection Agency (“EPA”), pursuant

to section 505(b) of the Clean Air Act (“CAA” or “the Act”), to

object to issuance of a proposed State operating permit to

Entergy Louisiana, Inc.’s Monroe Electric Generating Plant in

Monroe, Louisiana (“Monroe plant”). The proposed operating

permit for the Monroe plant was proposed for issuance by the

Louisiana Department of Environmental Quality (“LDEQ”) pursuant

to title V of the Act, CAA §§ 501 - 507, the federal implementing

regulations, 40 CFR Part 70, and the State of Louisiana

regulations, Louisiana Administrative Code (“L.A.C.”), Title 33,

Part III, Chapter 5, sections 507 et seq

.

Petitioner has requested that EPA review, investigate, and

make an administrative determination on the entire matter of the

proposed operating permit and planned restart of the Monroe

plant, pursuant to section 505(b) of the Act and 40 CFR

§ 70.8(c). Petitioner alleges that the proposed operating permit

is not in compliance with applicable requirements of the Act

including Prevention of Significant Deterioration (“PSD”)

permitting requirements and New Source Performance Standards

(“NSPS”). Petitioner also alleges that Entergy’s operating

permit application fails to adequately demonstrate compliance

with hazardous waste disposal requirements under the Resource

Conservation and Recovery Act (“RCRA”).

For the reasons set forth below, I find that the proposed

title V permit does not assure compliance with applicable PSD

requirements as set forth in the Louisiana State Implementation

Plan (“SIP”). I therefore grant the Petitioner’s request in part

and object to issuance of the proposed title V permit unless thepermit is revised in accordance with this Order. I deny the

Petitioner’s remaining claims.

I. STATUTORY AND REGULATORY FRAMEWORK

Section 502(d)(1) of the Act calls upon each State to

develop and submit to EPA an operating permit program to meet the

requirements of title V. The State of Louisiana submitted a

title V program governing the issuance of operating permits on

November 15, 1993, and subsequently revised this program on

November 10, 1994. 40 CFR Part 70, Appendix A. In September of

1995, EPA granted full approval of the Louisiana title V

operating permits program, which became effective on October 12,

1995. 60 Fed. Reg. 47296 (Sept. 12, 1995); 40 CFR Part 70,

Appendix A. This program is codified in L.A.C. Title 33, Part

III, Chapter 5, sections 507 et seq

. Major stationary sources of

air pollution and other sources covered by title V are required

to obtain an operating permit that includes emission limitations

and such other conditions as are necessary to assure compliance

with applicable requirements of the Act. See CAA §§ 502(a) and

504(a).

The title V operating permits program is a vehicle for

ensuring that existing air quality control requirements are

appropriately applied to facility emission units in a single

document and that compliance with these applicable requirements

is assured. See Order In re Roosevelt Regional Landfill , at 2

(May 4, 1999). Such applicable requirements include the

requirement to obtain preconstruction permits that comply with

applicable new source review requirements. Id. at 8. 1

Under section 505(b) of the Act and 40 CFR § 70.8(c), states

are required to submit all operating permits proposed pursuant to

title V to EPA for review and EPA will object to permits

1 Louisiana defines “federally applicable requirement” in

relevant part to include “any standard or other requirement

provided for in the Louisiana State Implementation Plan (“SIP”)

approved or promulgated by EPA through rulemaking under title I

of the Clean Air Act that implements the relevant requirements of

the Clean Air Act, including any revisions to that plan

promulgated in 40 CFR part 52, subpart T.” L.A.C. 33:III.502.

EPA approved a PSD program in the State of Louisiana’s SIP on

April 24, 1987. 52 Fed. Reg. 13671; 40 CFR § 52.986. Thus, the

applicable requirements of the Act respecting the Monroe plant

permit include the requirement to comply with the applicable PSD

requirements under the Louisiana SIP.

2determined by the Agency not to be in compliance with applicable

requirements or the requirements of 40 CFR Part 70. If EPA does

not object to a permit on its own initiative, section 505(b)(2)

of the Act and 40 CFR § 70.8(d) provide that any person may

petition the Administrator, within 60 days of the expiration of

EPA’s 45-day review period, to object to the permit.

To justify exercise of an objection by EPA to a title V

permit pursuant to section 505(b)(2), a petitioner must

demonstrate that the permit is not in compliance with the

requirements of the Act, including the requirements of Part 70.

Petitions must, in general, be based on objections to the permit

that were raised with reasonable specificity during the public

comment period. A petition for review does not stay the

effectiveness of the permit or its requirements if the permit was

issued after the expiration of EPA’s 45-day review period and

before receipt of the objection. If EPA objects to a permit in

response to a petition and the permit has not been issued, the

permitting authority shall not issue the permit until EPA’s

objection has been resolved. 40 CFR § 70.8(d).

II. BACKGROUND

The Monroe plant, located in Monroe, Louisiana, 2 currently

consists of three units (Units 10, 11 and 12), each with a boiler

and ancillary equipment, which were installed in 1961, 1963, and

1968, respectively. 3 Each boiler is fired primarily with natural

gas, but is also capable of being fired with diesel fuel oil. 4

2 The Monroe area is currently designated as attainment for

all National Ambient Air Quality Standards (“NAAQS”) established

by EPA.

3 The City of Monroe built the plant in approximately 1895,

and owned and operated the plant until 1978, when Louisiana Power

& Light became the operator and subsequently the owner of the

plant. Louisiana Power & Light changed its name to Entergy

Louisiana, Inc. in 1996.

Units 10, 11 and 12 are the most recent additions Units 1

through 9 at the Monroe plant have been permanently

decommissioned. The last of these, Unit 9, was permanently

retired effective December 31, 1987. See Memo from D.L. Aswell,

LP&L, to William Phillips, SSI (Dec. 18, 1987). This memo and

other documents referred to in this Order are on file with EPA.

4 The proposed title V permit would allow up to 15 percent

of the facility’s fuel use to be diesel fuel oil.

3The rated capacities of the units are 23 megawatts (“MW”), 41 MW,

and 74 MW, respectively. The total heat input for the units is

1,961 million British thermal units (“MMBtu”). Installation of

these boilers was not subject to PSD review because it predated

the PSD program.

On July 1, 1988, Louisiana Power & Light (“LP&L”),

predecessor to Entergy Louisiana, Inc. (“Entergy”), placed the

plant’s three units in extended reserve shutdown (“ERS”). 5

According to Entergy, these units were placed in extended reserve

shutdown because of the addition of new electric generating

capacity in the area. Memo from Entergy to EPA, “Actions Taken

By Entergy At Monroe Generating Station.” At the time of

shutdown, LP&L projected that Units 10, 11 and 12 would not be

needed for three to five years. Id. That period grew to eleven

years as a result of “many factors,” according to Entergy,

including increased competition and demand-side management. Id.

Some time around September, 1988, LP&L initiated a number of

activities at the Monroe plant to prepare the plant for extended

shutdown, including draining, disconnecting and covering

equipment, and installing and operating dehumidification

equipment to prevent corrosion of the units. During shutdown,

LP&L/Entergy conducted some inspection and maintenance

activities, primarily in response to problems with the

5 Memo from E.M. Ormond, LP&L, to Glenn F. Phillips (June

28, 1988). Extended reserve shutdown is a program implemented by

the Entergy Operating Companies (of which Entergy Louisiana is a

member) in the mid-1980's to save money by placing units in

inactive status and reducing operating staff, maintenance costs,

and deferring the cost of repairing units. See Louisiana Public

Service Commission, Order No. U-20925-G at 8-9 (Nov. 18, 1998).

The record further reflects that the units were not in

regular operation for several years prior to placing the units in

extended reserve shutdown. See Letter from Entergy to Jayne

Fontenot, Chief, Permits Issuance Section, EPA, Region VI (July

18, 1994) (noting that Monroe plant has not operated on a routine

basis since 1981). Internal LDEQ memoranda further suggest that

the Monroe plant ceased operating around January 1988. See Memo

from Paul Laird, LDEQ Northeast Regional Office, to John R.

Newton, LDEQ, Air Quality Div. (Feb. 8, 1989); Memo from Paul

Laird, LDEQ Northeast Regional Office, to John R. Newton, LDEQ,

Air Quality Div. (Feb. 24, 1988).

4dehumidification system. 6 During this period, LP&L/Entergy also

maintained relevant environmental permits for the Monroe plant,

including payment of air quality maintenance fees to LDEQ

(between $1,100 and $1,300 per year), maintenance of water

permits, and applications for an acid rain permit (received

October 23, 1996) and a title V operating permit.

Entergy now proposes to restart Units 10, 11 and 12 at the

Monroe plant beginning this summer. On September 16, 1996,

Entergy submitted a title V permit application to LDEQ. The

total estimated annual emissions of air pollutants associated

with the plant, in tons per year (“tpy”), are as follows:

nitrogen oxides (“NO

X ”), 4,972.65 tpy; sulfur dioxide (“SO

2 "),

679.84 tpy; carbon monoxide (“CO”), 361.65 tpy; particulate

matter (“PM

10 "), 32.46 tpy; and volatile organic compounds

(“VOCs”), 12.74 tpy. These projected annual emission rates are

incorporated as annual emission limits in the proposed title V

permit. The requested operating permit includes no limitations

on the hours of operation or the capacities at which the units

would operate. Most relevant for purposes of this Order, neither

the permit application nor the proposed permit provides for

obtaining a PSD permit for the units prior to restart, under the

Louisiana PSD program.

LDEQ submitted a proposed title V permit to EPA Region VI

for review on November 16, 1998. The permit went out for public

comment on November 25, 1998. Public commenters requested a

public hearing. Notice of a public hearing was published on

January 16, 1999. A public hearing was held by LDEQ on February

18, 1999. The public comment period ended April 20, 1999. EPA’s

45-day review period expired on December 31, 1998. On February

9, 1999, Citizens for Clean Air & Water filed a timely petition

with EPA pursuant to section 505(b)(2) of the Clean Air Act

requesting that EPA object to issuance of the proposed permit for

the Entergy Monroe plant. As of this date, no final permit has

been issued.

III. ISSUES RAISED BY PETITIONER

Petitioner objects to issuance of the proposed permit on

five grounds: (1) LDEQ failed to subject the Monroe plant to PSD

review; (2) the maximum capacity of the Monroe plant may have

been increased by some unknown method at some time between 1976

6 Other activities included stack inspections in 1992,

installation of an oil/water separator for the stormwater system

in 1996, and cleaning of the diesel fuel oil tank system in 1996.

5and the time of the title V application without being subject to

PSD review or NSPS; (3) the proposed permit fails to incorporate

enforceable one-hour maximum emission rate limitations for sulfur

dioxide and other criteria pollutants; (4) the proposed permit

includes apparent annual emissions increases that suggest PSD

review should be conducted for the sulfur dioxide emissions; and

(5) sufficient information has not been provided in Entergy’s

permit application to ensure compliance with RCRA disposal

requirements. 7

In addition, the Petitioner requests the following: (1) that

EPA issue an information request letter to Entergy and the City

of Monroe under section 114 of the Act, requiring them to

disclose all matters raised by this petition; and (2) that EPA

conduct an on-site inspection of the Monroe plant to determine

whether PSD and NSPS have been triggered.

Items (1), (3) and (4) are either addressed in the PSD

applicability analysis or rendered moot by EPA’s conclusion that

the proposed title V permit must be revised to ensure compliance

with applicable PSD requirements. Section V addresses Item (2);

Section VI addresses Item (5). In response to Petitioner’s

request for an inspection, on May 17, 1999, EPA conducted an

inspection of the Monroe plant to verify the activities being

conducted at the plant and to confirm that the plant is not

operating. Finally, in response to Petitioner’s request that EPA

issue an information request letter, EPA believes it has

sufficient information to respond to the Petition and that there

is no need at this time for such a letter.

IV. PSD APPLICABILITY ANALYSIS

The following sections describe EPA’s analytical tests for

determining PSD applicability and apply these tests to the

proposed restart of the Monroe plant. EPA concludes that the

proposed restart of the Monroe plant should be subject to PSD

requirements and thus, that the title V permit does not assure

compliance with the applicable PSD requirements set forth in the

Louisiana SIP. The analysis in this Order, however, does not

7 These objections were also raised during the public

hearing and in correspondence to LDEQ and Region VI from Mr.

Alexander J. Sagady, Environmental Consultant, on behalf of CCAW,

dated February 18, 1999. Accordingly, Petitioner has met her

obligation to base the petition on objections to the permit

raised with reasonable specificity during the public comment

period.

6purport to dictate the specific PSD permit terms that the State

should adopt in revising the title V permit.

A. Analytical Approach

Part C of title I of the Clean Air Act establishes the

statutory framework for protecting public health and welfare from

adverse effects of air pollution, notwithstanding attainment and

maintenance of all NAAQS. Congress specified that the PSD

program is intended to:

(1) “insure that economic growth will occur in a manner

consistent with the preservation of existing clean air

resources”; and

(2) “assure that any decision to permit increased air

pollution . . . is made only after careful evaluation of all

the consequences of such a decision and after adequate

procedural opportunities for informed public participation

in the decisionmaking process.”

CAA § 160.

To accomplish these purposes, the Act relies primarily on a

permitting program as the mechanism for reviewing proposals to

increase air pollution in areas meeting the NAAQS. The Act

generally requires PSD permits prior to construction and/or

operation of new major stationary sources and major modifications

to stationary sources in areas designated attainment or

unclassified for the pollutants to be emitted by the sources.

See CAA §§ 165(a) and 169(2)(C). “Modification” is defined to

include, “any physical change in, or change in the method of

operation of, a stationary source which increases the amount of

any air pollutant emitted by such source or which results in the

emission of any air pollutant not previously emitted.” CAA

§ 111(a)(4). By regulation, EPA has limited the facially broad

sweep of the PSD provisions to only “major” modifications. 40

CFR § 51.166(i); see also L.A.C. 33:III.509(I).

As described in the following sections, reactivation of

facilities that have been in an extended condition of inoperation

may trigger PSD requirements as “construction” of either a new

major stationary source or a major modification of an existing

stationary source. Where facilities are reactivated after having

been permanently shutdown, operation of the facility will be

treated as operation of a new source. Alternatively, shutdown

and subsequent reactivation of a long-dormant facility may

trigger PSD review by qualifying as a major modification. This

section describes EPA’s approach for analyzing whether restart of

7a facility triggers PSD review as: (1) a new major source under

EPA’s Reactivation Policy; (2) a major modification by virtue of

a physical change resulting in a significant net emissions

increase; or (3) a major modification by virtue of a change in

the method of operation resulting in a significant net increase

in emissions. 8

1. Restart Treated as New Source -- EPA’s Reactivation

Policy

EPA has a well-established policy that reactivation of a

permanently shutdown facility will be treated as operation of a

new source for purposes of PSD review. 9 The key determination to

be made under this policy is whether the facility to be

reactivated was “permanently shutdown.” In general, EPA has

explained that whether or not a shutdown should be treated as

permanent depends on the intention of the owner or operator at

the time of shutdown based on all facts and circumstances.

Shutdowns of more than two years, or that have resulted in the

removal of the source from the State’s emissions inventory, are

presumed to be permanent. In such cases it is up to the facility

owner or operator to rebut the presumption.

To determine the intent of the owner or operator, EPA has

8 Whether a source is subject to preconstruction review as

a new source or as a major modification may be significant in

particular cases for determining the appropriate analysis of

control technology options and other PSD requirements. For

example, analysis of control technology for major modifications

might consider the age or configuration of the source where

review for new sources might not. Likewise, analysis of

alternatives for new sources might consider alternative locations

where the same analysis for major modifications might not.

9 See Memo from Edward E. Reich, Director, Div. of

Stationary Source Enforcement, to Stephen A. Dvorkin, Chief,

General Enforcement Branch, Region II (Sept. 6, 1978); Memo from

Edward E. Reich, Director, Stationary Source Enforcement Div., to

William K. Sawyer, General Enforcement Branch, Region II (Aug. 8,

1980); Memo from John S. Seitz, Director, Stationary Source

Compliance Div., OAQPS, to David P. Howekamp, Director, Air Mgt.

Div., Region IX (May 27, 1987); Letter from David P. Howekamp,

Director, Air Mgt. Div., Region IX, to Robert T. Connery, Holland

& Hart (Nov. 6, 1987); Memo from John B. Rasnic, Director,

Stationary Source Compliance Div., OAQPS, to Douglas M. Skie,

Director, Air Programs Branch (Nov. 9, 1991).

8examined factors such as the amount of time the facility has been

out of operation, the reason for the shutdown, statements by the

owner or operator regarding intent, cost and time required to

reactivate the facility, status of permits, and ongoing

maintenance and inspections that have been conducted during

shutdown. No single factor is likely to be conclusive in the

Agency’s assessment of these factors, and the final determination

will often involve a judgment as to whether the owner’s or

operator’s actions at the facility during shutdown support or

refute any express statements regarding the owner’s or operator’s

intentions. 10

While the policy suggests that the key determination is

whether, at the time of shutdown , the owner or operator intended

shutdown to be permanent, in practice, after two years,

statements of original intent are not considered determinative.

Instead, EPA assesses whether the owner or operator has

demonstrated a continuous intent to reopen. To make this

assessment, EPA looks at activities during time of shutdown that

evidence the continuing validity of the original intent not to

permanently shut down.

Thus, to preserve their ability to reopen without a new

source permit, EPA believes owners and operators of shutdown

facilities must continuously demonstrate concrete plans to

restart the facility sometime in the reasonably foreseeable

future. If they cannot make such a demonstration, it suggests

that for at least some period of the shutdown, the shutdown was

intended to be permanent. Once it is found that an owner or

operator has no real plan to restart a particular facility, such

owner or operator cannot overcome this suggestion that the

shutdown was intended to be permanent by later pointing to the

10 See Memo from John S. Seitz, Director, Stationary Source

Compliance Div., OAQPS, to David P. Howekamp, Director, Air Mgt.

Div., Region IX (May 27, 1987) (finding shutdown of Noranda

Lakeshore Mines’ roaster leach plant to be permanent despite

express statements from the facility owners that shutdown was

temporary, and evidence that the plant was maintained during

shutdown); but cf. Memo from John B. Rasnic, Director, Stationary

Source Compliance Div., OAQPS, to Douglas M. Skie, Chief, Air

Programs Branch (Nov. 19, 1991) (finding reactivation of

Watertown Power Plant did not trigger PSD based on the fact that

the statements of intent by the owners were supported by

documentation regarding maintenance of the facility during

shutdown and, as a result, the ability to reactivate the plant

easily).

9most recent efforts to reopen the facility. 11

2. Restart as a Major Modification -- Physical Change

In addition to possibly triggering PSD requirements as a new

source, restart of an idle facility may also trigger PSD review

if it meets the definition of a major modification. EPA’s PSD

regulations define “major modification” as “any physical change

in or change in the method of operation of a major stationary

source that would result in a significant net emissions increase

of any pollutant subject to regulation under the Act.” 40 CFR

§ 51.166(b)(2)(i); see also L.A.C. 33:III.509(B). 12

“Physical change” is not defined in the Clean Air Act or in

EPA’s PSD regulations. Instead, EPA’s regulations describe those

activities that are not considered physical changes; most

notably, the regulations exclude routine maintenance, repair and

replacement. Outside these exceptions, the Agency and courts

have interpreted “physical change” broadly. See, e.g.

, Wisconsin

Elec. Power Co. v. Reilly (“WEPCO”) , 893 F.2d 901, 908 (7 th Cir.

1990) (noting that “courts considering the modification

provisions of NSPS and PSD have assumed that ‘any physical

change’ means precisely that”).

As a result of this broad statutory definition, most

analysis of whether PSD review is triggered under this provision

will focus on whether the activities at the facility fit within

11 This approach for assessing the intent of the owner or

operator is consistent with the general notion that a company

cannot sit indefinitely on a governmental permission to emit air

pollution without showing some definite intention to use it. See

40 CFR § 52.21(r) (construction must be commenced within 18

months of receiving a permit); L.A.C. 33:III.509(R); see also In

re West Suburban Recycling and Energy Center, L.P. , PSD Appeal

No. 97-12, slip op. at 8 (EAB, Mar. 10, 1999) (finding PSD permit

should be denied because “there is no realistic prospect that the

resource recovery facility described in WSREC’s permit

application will be completed”).

12 Net emissions increases are calculated by combining any

increase in actual emissions from a particular physical change or

change in the method of operations, with any increase or decrease

in actual emissions at the source that are contemporaneous with

the particular change and otherwise creditable. 40 CFR

§ 51.166(b)(3); see also L.A.C. 33:III.509(B). See infra at

V.A.4.

10one of the regulatory exceptions, in particular the routine

maintenance, repair and replacement exception provided in 40 CFR

§ 50.21(b)(2)(iii)(a). To distinguish between physical changes

and work that is routine, “EPA makes case-by-case determinations

by weighing the nature, extent, purpose, frequency, and cost of

the work, as well as other relevant factors, to arrive at a

common-sense finding.” WEPCO , 893 F.2d at 910 (quoting Memo from

Don R. Clay, Acting Assistant Admin. for Air and Radiation, to

David A. Kee, Director, Air and Radiation Div., Region V (Sept.

9, 1988)); see also Letter from David P. Howekamp, Director, Air

Mgt. Div., Region IX, to Robert T. Connery, Holland & Hart

(“Cyprus Casa Grande Letter”) (Nov. 6, 1987) (concluding work

conducted at facility was not routine “when viewed as a whole”).

3. Restart as a Major Modification -- Change in the Method

of Operation

Restart of a long-dormant facility may also be treated as a

major modification subject to PSD review if it represents a

“change in the method of operation of a major stationary source

that would result in a significant net emissions increase of any

pollutant subject to regulation under the Act.” 40 CFR

§ 51.166(b)(2)(i); see also L.A.C. 33:III.509(B). As with the

term “physical change,” the regulations do not define the meaning

of “change in the method of operation” except by listing those

activities that do not constitute such changes. 40 CFR

§ 51.166(b)(2)(iii); see also L.A.C. 33:III.509(B). The most

relevant exception for analyzing whether restart of a shutdown

facility might be treated as a change in the method of operation

is 40 CFR § 51.166(b)(2)(iii)(f); see also L.A.C. 33:III.509(B).

This provision exempts from PSD review “[a]n increase in the

hours of operation or in the production rate, unless such change

would be prohibited under any federally enforceable permit

condition which was established after January 6, 1975, pursuant

to 40 CFR 52.21 or under regulations approved pursuant to 40 CFR

subpart I or 40 CFR 51.166.” 40 CFR § 51.166(b)(2)(iii)(f); see

also L.A.C. 33:III.509(B).

The purpose of this “increase in hours” exception was to

avoid undue disruption by allowing routine increases in

production during the normal course of business in order to

respond to market conditions. In the preamble to the PSD

rulemaking, EPA explained:

While EPA has concluded that as a general rule Congress

intended any significant net increase in such emissions to

undergo PSD or nonattainment review, it is also convinced

that Congress could not have intended a company to have to

11get an NSR permit before it could lawfully change hours or

rate of operation. Plainly, such a requirement would

severely and unduly hamper the ability of any company to

take advantage of favorable market conditions.

45 Fed. Reg. 52676, 52704 (Aug. 7, 1980). The court in WEPCO

explained further, “This exclusion . . . was provided to allow

facilities to take advantage of fluctuating market conditions,

not construction or modification.” 893 F.2d at 916 n.11.

Analysis of whether restart of a facility constitutes a mere

increase in the hours of operation or production rate must

consider whether the proposed activity is of the kind intended to

be covered by the provision. Specifically, EPA will look at

whether the proposed change requires enhanced flexibility to

avoid hampering a company’s ability to respond to market

fluctuations. In general, reactivation after long periods of

shutdown, though obviously motivated by long-term changes in the

market, is not a response to the same type of market fluctuations

and does not merit the same permitting flexibility envisioned by

the regulations.

Restart of a long-dormant facility also may not be entitled

to coverage under the “increase in hours” exemption if it would

disturb a prior assessment of the environmental impact of the

source. In the preamble for the 1980 PSD rulemaking, after

expressing its belief that Congress intended to allow certain

facilities flexibility to respond to market fluctuations, EPA

explained, “At the same time any change in hours or rate of

operation that would disturb a prior assessment of a source’s

environmental impact should have to undergo scrutiny.” 45 Fed.

Reg. 52676, 52704 (Aug. 7, 1980). As a result, EPA will not

exempt increases in the hours of operation in situations where

the increase in hours would be prohibited by a permit condition

or where the increase would “interfere with a state’s efforts in

air quality planning

. . . . ” Letter from David P. Howekamp,

Director, Air Mgt. Div., Region IX, to Robert T. Connery, Holland

& Hart (Nov. 6, 1987).

In the Cyprus Casa Grande PSD applicability determination,

EPA concluded that restart of a roaster/leach/acid (“RLA”) plant

after 10 years of shutdown constituted a change in the method of

operation. EPA distinguished restart of the plant from a mere

increase in the hours of operation, explaining that the exemption

was not intended to cover restart of facilities after long

periods of shutdown. The letter explained:

EPA’s original intention to disallow the [increase in hours]

12exclusion where it would “disturb a prior assessment of a

source’s environmental impact” leads me to conclude that the

exclusion should not be applied here. This is so because

our present assessment as well as that of the State of

Arizona, is that the RLA plant in its current non-operating

condition has no environmental impact. This is evidenced in

part by the removal of the plant from the state’s emission

inventory and the surrender of operating permits. An

additional factor is the simple physical fact that the RLA

plant has had zero emissions for ten years.

Letter from David P. Howekamp, Director, Air Mgt. Div., Region

IX, to Robert T. Connery, Holland & Hart (Nov. 6, 1987).

4. Restart as a Major Modification -- Emissions Netting

Baseline

Once restart is found to be involve either a physical change

or a change in the method of operation, the Agency must determine

if the change results in a significant net emissions increase of

a pollutant subject to regulation under the Act. 40 CFR

§ 51.166(b)(2)(i); see also L.A.C. 33:III.509(B). The first step

in calculating the net emissions increase is to determine whether

the particular physical or operational change in question would

itself result in a significant increase in “actual emissions.”

See 40 CFR § 51.166(b)(3)(i)(a) and (b)(21); see also L.A.C.

33:III.509(B). If so, the second step is to identify and

quantify any other prior increases and decreases in “actual

emissions” that would be “contemporaneous” with the particular

change and otherwise creditable. See 40 CFR

§ 51.166(b)(3)(i)(b); L.A.C. 33:III.509(B). The third step is to

total the increase from the particular change with the other

contemporaneous increases and decreases. See 40 CFR

§ 51.166(b)(3)(i)(b); L.A.C. 33:III.509(B). If the total would

exceed zero, then a “net emissions increase” would result from

the change. Whether this net emissions increase of a regulated

pollutant is “significant” is determined in accordance with the

annual tonnage thresholds set forth in 40 CFR § 51.166(b)(23) and

L.A.C. 33:III.509(B).

The primary issue in calculating the net emissions increase

associated with the restart of a shutdown facility is usually

calculation of the actual emissions increase. To calculate the

actual emissions increase associated with the change, the

emissions from the source after the change is made must be

compared to the “baseline emissions” of the source, which are the

actual emissions of the source as of a “particular date” (i.e.,

immediately prior to the physical or operational change in

13question). The regulations provide, “In general, actual emission

as of a particular date shall equal the average rate . . . at

which the unit actually emitted the pollutant during a two-year

period which precedes the particular date [the date of the

change] and which is representative of normal source operations.”

40 CFR § 51.166(b)(21)(ii); see also L.A.C. 33:III.509(B).

The regulations give EPA (or the permitting authority)

discretion to set a different period for determining baseline

emissions if such a period is more representative of normal

source operations. 40 CFR § 51.166(b)(21)(ii); see also L.A.C.

33:III.509(B). EPA, however, has applied its discretion narrowly

in assigning representative periods other than the two years

immediately preceding the physical or operational change. One

exception was provided in the preamble to the 1992 “WEPCO

rulemaking.” 57 Fed. Reg. 32314, 32325 (July 21, 1992). There

EPA said that for utilities it would consider as

“representative,” actual emission levels from any two years

within the five years preceding the physical or operational

change. 13 In that same preamble, however, EPA specifically

rejected one commenter’s argument that EPA should consider a twoyear period within the last five years of a plant’s operation as

the representative period for plants that have been shut down for

more than five years. See 57 Fed. Reg. 32314, 32325 (July 21,

1992).

On more than one occasion, EPA has made clear that in

calculating the net emissions increase for reactivation of longdormant sources potentially subject to PSD, the source is

considered to have zero emissions as its baseline. In both the

Cyprus Casa Grande applicability determination and the Cyprus

Minnesota applicability determination, EPA set the baseline

emissions level at zero for facilities that had been shut down or

idle for 10 years. See Letter from David P. Howekamp, Director,

Air Mgt. Div., Region IX, to Robert T. Connery, Holland & Hart

(Nov. 6, 1987); Memo from John Calcagni, Director, Air Quality

Mgt. Div., to David Kee, Director, Air and Radiation Div., Region

V (“Cyprus Minnesota”) (Aug. 11, 1992). In the Cyprus Minnesota

applicability determination, after noting EPA’s policy

announcement in the WEPCO rulemaking, EPA explained that it has

13 See also Memo from John Calcagni, Director, EPA Air

Quality Management Div., to David Kee, Director, Air and

Radiation Div., EPA Region V (Aug. 11, 1992) (noting that

representative period other than previous two years generally

limited to catastrophic occurrences); EPA, Draft New Source

Review workshop Manual at A.39 (Oct. 1990).

14limited flexibility to adjust the “representative period.”

For many reactivations of long-shutdown facilities that fall

within the definition of a physical or operational change, the

only step in calculating “significant net emissions increase”

will be a determination of whether the increase in emissions

resulting from the change is significant under 40 CFR

§ 51.166(b)(23) 14 because the baseline for actual emissions will

be zero, and there will be no other emissions increases or

decreases that are contemporaneous with the change. 15

14 For Louisiana, the thresholds are provided at L.A.C.

33:III.509(B) in the definition of “significant” and are the same

as the federal thresholds relevant here.

15 As discussed above, the PSD regulations provide that the

increase in emissions is determined by subtracting the affected

units’ pre-change “actual emissions” (referred to above as the

“baseline”) from their post-change “actual emissions.” For units

that have not “begun normal operations,” the regulations

generally provide that actual emissions are equal to the units’

“potential to emit.” 40 CFR § 51.166(b)(21)(iv). EPA interprets

this provision to mean that units which have undertaken a nonroutine physical or operational change have not “begun normal

operations” within the meaning of the PSD regulations, since prechange emissions may not be indicative of how the units will be

operated following the non-routine change. See 57 Fed. Reg.

32314, 32326 (amending rules only for certain modifications at

electric utility steam generating units and reserving “begun

normal operations” language for other modifications); 63 Fed.

Reg. 39857, 39859 n.4 (July 24, 1998) (post-change emissions of

unit following non-routine change is potential to emit). In

practice, this provision merely establishes a regulatory

presumption that the units will operate at their maximum design

capacity following the change. Sources can and frequently do

rebut this presumption and avoid PSD applicability. They do so

by agreeing to add pollution controls and/or accepting

operational restrictions in a “minor NSR” permit or similar

instrument that limits their emissions following the change to

levels that are not significantly greater than pre-change actual

emissions. See 40 CFR § 51.166(b)(4).

Since 1992, EPA regulations have allowed states to adopt a

somewhat different approach to determining emissions increases

for electric utility steam generating units. See 40 CFR

§ 51.166(b)(21)(iv), (v). Such units’ post-change emissions may

be established by a source estimating the future emissions of the

unit and submitting to the state information to confirm the

15B. Applicability of PSD to Restart of Monroe Plant

1. PSD Applicability Under EPA’s Reactivation Policy

Entergy is proposing to restart three units at its Monroe

plant that have been placed in “extended reserve shutdown” since

July 1, 1988. At the outset, under EPA’s Reactivation Policy,

because these units have been shut down for more than two years,

shutdown of these units is presumed to be permanent. Unless

Entergy provides adequate support to rebut this presumption,

restart of these units will be treated as activation of a new

source subject to PSD. The remainder of this section discusses

whether Entergy has adequately demonstrated that the units were

never intended to be permanently shut down. 16

Before formally placing the Monroe plant into extended

reserve shutdown, then-owner LP&L prepared an Extended Reserve

Shutdown Plan dated October 27, 1987, which described plans to

maintain the plant in a reserved status to be available when the

accuracy of those estimates. See 40 CFR §§ 51.166(b)(21)(v),

(b)(32). However, states and localities are not required to

include these special provisions for electric utility steam

generating units in their PSD programs. See 40 CFR § 51.166(b)

(allowing variations from federal rules when local rules are more

stringent). Louisiana has not adopted the special provisions;

accordingly, Entergy’s post-change emissions will in this case be

determined by its potential to emit, rather than by its

projections of future emissions. In this case, however, even if

Louisiana had adopted the special provisions for utilities, it

would not change the outcome. This is so because Entergy has

projected, and its proposed title V permit reflects, that it will

operate at its full, unrestricted maximum capacity of 8760 hours

per year. See Proposed Operating Permit, Monroe Electric

Generating Plant, at 15 (General Condition III) (incorporating

projected annual and hourly emissions rates).

16 Entergy has submitted its own self-determination on PSD

applicability. Letter from Frank Harbison, Sr. Lead

Environmental Analyst, Entergy, to Larry Devillier, Asst.

Administrator, LDEQ (Jan. 28, 1999). In addition, Entergy has

provided various materials regarding maintenance activities, work

needed to bring the plant back on line, permitting activities,

and ERS decisionmaking. Letter from Gerald G. McGlamery,

Louisiana Enviro. Admin., Entergy, to Hilry Lantz, Air Quality

Div., LDEQ (Feb. 3, 1999); Memo from Entergy to EPA, “Actions

Taken By Entergy At Monroe Generating Station” (w/ attachments).

16demand for electricity increased. This plan included the

installation of dehumidification systems, which were subsequently

installed, to preserve the electric generation units. At the

time of shutdown, at least, it appears that LP&L did not envision

a permanent shutdown, but rather a temporary shutdown to respond

to market conditions at the time. See Memo from Entergy to EPA,

“Actions Taken By Entergy At Monroe Generating Station.”

During shutdown, LP&L/Entergy continued to conduct minimum

maintenance at the plant. These activities primarily involved

responding to problems with the dehumidification system. Entergy

has provided maintenance records dating back to May 9, 1988

showing maintenance undertaken at the plant each year throughout

the shutdown period and indicating that LP&L/Entergy staff made

multiple inspection or maintenance visits to the facility.

During the period of shutdown, LP&L/Entergy also continued

to pay annual state air quality maintenance fees. Entergy has

provided receipts for these payments for the period October 7,

1988 through August 18, 1998. On December 14, 1995, Entergy

applied for a title IV Acid Rain permit, which it received

October 23, 1996.

Based on this record it would appear that Entergy did not

intend at the time of shutdown, and has never intended, to

permanently shut down the Monroe plant. On the other hand, it

appears that Entergy has not, until very recently, had definite

plans to restart these units.

The Louisiana Public Service Commission (“LPSC”), in a

review of whether Entergy had properly included ERS facilities,

including the Monroe plant, in its list of “available”

facilities, 17 found that Entergy had not adequately demonstrated

that these ERS facilities would be returned to service. LPSC,

Order No. U-020925-G (Nov. 18, 1998). Specifically, LPSC found

that Entergy had not analyzed the costs of returning the ERS

units to service, could not give a time frame for returning any

17 The dispute before the LPSC centered around a tariff

agreement between Entergy companies whereby each company had to

identify its available capacity and pay or receive compensation

according to whether it produced power below or in excess of its

listed available capacity. LPSC. Order No. U-020925 at 8-10.

The agreement defined a unit as “available” if it was under the

control of the system operator, was down for maintenance, or was

in extended reserve shutdown with the intent of returning the

unit to service at a future date. Id. at 10.

17of the units to service beyond saying that they would be needed

some time in the next 10 years, and had not made any efforts to

confirm that they would be needed in the next 10 years. LPSC

concluded that the fees resulting from Entergy’s inclusion of the

capacity of these ERS facilities could not be justified because

Entergy had not made efforts to reach a decision “based on

consideration of current and future resource needs, the projected

length of time the unit would be in ERS status, the projected

cost of maintaining such unit, and the projected cost of

returning the unit to service.”

The record before the EPA includes significant

circumstantial evidence suggesting that Entergy has never

intended the shutdown of the Monroe plant to be permanent.

Despite this evidence, however, EPA continues to have serious

doubts as to whether Entergy truly intended during much of the

11-year shutdown to expect to use the Monroe plant in the

foreseeable future. 18 Because restart of the plant more clearly

triggers PSD as a major modification involving a change in the

method of operation, EPA does not need to make a final conclusion

regarding Entergy’s regulatory status under the Reactivation

Policy at this time.

2. Physical Changes Triggering PSD

As described previously, changes at a facility may be

treated as a major modification subject to PSD review in one of

two ways -- changes involving a physical change of the source and

changes involving a change in the method of operation at the

source. Entergy has submitted a description of the work, and

associated costs, being conducted in order to restart the three

units at the Monroe plant. The total projected cost is

approximately $5.3 million. Of that, Entergy states that $1.4

million will be spent on capital improvements. These include

replacement of PCB-contaminated transformers, replacement of

controls using mercury, and installation of continuous emissions

monitoring equipment. The remaining work includes inspection and

18 The disparity between the company’s efforts to maintain

the plant to avoid the appearance of permanent shutdown, and its

failure to adequately demonstrate to the LPSC its plans to use

the plant in the future, highlight one of the weaknesses of EPA’s

Reactivation Policy in determining the appropriate regulatory

treatment of the restart of facilities after a lengthy shutdown.

As a result, I have directed my staff to reevaluate EPA’s

Reactivation Policy to determine if steps can be taken to clarify

the circumstances under which restart of a long-dormant source

should be subject to new source review as a new source.

18cleaning of equipment, some minor repairs of valves and piping,

and replacement of auxiliary equipment such as batteries and lab

equipment.

Analysis of whether these changes trigger PSD applicability

must consider whether, “as a whole,” the changes are exempt as

routine maintenance, repair and replacement. See 40 CFR

§ 51.166(b)(2)(iii); L.A.C. 33:III.509(B). In our review of the

proposed reactivation of the Cyprus Casa Grande RLA plant EPA

explained:

Although the [contractor’s] report notes the good condition

of the acid plant and characterizes some of the needed work

as “minor” or “moderate,” viewed as a whole, the minimum

necessary rehabilitation effort is extensive, involving

replacement of key pieces of equipment . . . and substantial

time and cost [(four months and $905,000)]. In an operating

plant some of the individual items of the planned

rehabilitation, e.g. painting, if performed regularly as

part of a standard maintenance procedure while the plant was

functioning or in full working order, could be considered

routine. Here, however, this and other numerous items of

repair, as well as replacement and installation of new

equipment, are needed in order for the RLA plant to begin

operation. The fact that the plant requires four months of

extensive rehabilitation work despite the adequate

maintenance Noranda claims to have undertaken during the

shutdown underscores the non-routine nature of the physical

change that will occur at the plant.

Letter from David P. Howekamp, Director, Air Mgt. Div., Region

IX, to Robert T. Connery, Holland & Hart (Nov. 6, 1987).

While the activities necessary to restart the Monroe plant

might, collectively, appear to be part of a large, non-routine

effort, EPA is not, at this time, making a finding as to whether

this effort amounts to a physical change of the source. Because

restart of the plant most clearly amounts to a change in the

method of operation, as described below, EPA need not reach a

final conclusion on whether such concentrated efforts without

repair or replacement of key pieces of equipment or key

components should be considered routine. 19

19 It is worth noting that while the Cyprus rehabilitation

effort included replacement of key pieces of equipment, the

rationale for our conclusion in Cyprus Casa Grande turned on the

non-routine collection of activities, and not on whether

193. Change in the Method of Operation of the Monroe Plant

For the last eleven years the Monroe plant has been

inoperative. To operate the plant now after such a long shutdown

constitutes a change in the method of operation within the

meaning of the PSD regulations. The mere fact that the plant is

changing from a lengthy “non-operational” and “unmanned”

condition, 20 to one in which the plant is fully operational, fits

the common sense meaning of a “change in the method of

operation.”

The proposed changes in the operation of the plant do not

qualify as exempt increases in either the hours of operation or

the rate of production, see 40 CFR § 51.166(b)(2)(iii)(f), and

L.A.C. 33:III.509(B), because they are not the type of changes

intended to be covered by the regulatory exemption. As discussed

above, the purpose of the “increase in hours” exception was to

provide flexibility to allow sources to adjust their operations

to take advantage of currently favorable or changing market

conditions without requiring a PSD permit. Restart of the Monroe

plant neither calls for the same type of permitting flexibility

nor can be considered a response to the kind of short-term, realtime market fluctuations envisioned by EPA in adopting the

exemption.

This is not a situation where the sources’s ability to plan

ahead for permitting is constrained by the need for quick

responses to short-term changes in the market. In its own

analysis of PSD applicability, Entergy notes that unlike normal

work outages where overtime is required to get the plants

operational again, repairs at the Monroe plant will be conducted

using “straight time” because “there will be no need to have the

units available for dispatch in a short time frame.” Memo from

Mark G. Adams, Entergy to Myra Costello, Entergy (Aug. 3, 1998).

Further, unlike the situations envisioned by the exemption,

restart of a long-dormant facility involves permits for more than

individual activities were themselves routine or non-routine.

20 In a 1994 letter to LDEQ, Entergy states that as a

result of placing the plant in ERS status in 1988, “[the] plant

is non-operational and unmanned.” Letter from Entergy to Cheryl

LeJeune, Office of Water Resources, LDEQ (July 18, 1994).

Entergy also noted that, “It has not generated electricity for

six years and has not operated on a routine basis since 1981.”

Letter from Entergy to Jayne Fontenot, Chief, Permits Issuance

Section, EPA, Region VI (July 18, 1994).

20just air releases. Entergy has budgeted over $175,000 to obtain

all of the necessary permits including a new water discharge

permit to reflect the change from inoperation. Where a facility

requires numerous permits to once again operate, PSD permit

review is no longer the solitary hindrance that the exemption was

designed to avoid.

EPA also believes the decision to operate after eleven years

of shutdown, while certainly motivated by changes in the

marketplace, is not the kind of quick decision to respond to

quick market fluctuations that EPA intended to allow without the

burden of the PSD permitting process. In the WEPCO rulemaking,

EPA discussed its view of the time period in which one would

expect to see the effect of market fluctuations for the utility

sector: 21

By presumably allowing a utility to use any 2 consecutive

years within the past 5, the rule better takes into

consideration that electricity demand and resultant utility

operations fluctuate in response to various factors such as

annual variability in climatic or economic conditions that

affect demand, or changes at other plants in the utility

system that affect the dispatch of a particular plant. By

expanding a baseline for a utility to any consecutive 2 in

the last 5 years, these types of fluctuations in operations

can be more realistically considered, with the result being

a presumptive baseline more closely representative of normal

source operation.

57 Fed. Reg. 32314, 32325 (July 21, 1992). The eleven-year

shutdown of the Monroe plant is well beyond the period in which

one would expect to see changes in operation in response to the

kind of market fluctuations addressed by the “increase in hours”

exception. The decision to restart the plant after such a long

period is a more fundamental change in the way the company has

done and plans to do business. Entergy’s decision to restart the

Monroe plant looks less like a quick decision to take advantage

of market conditions at an already-operational plant and more

like a decision to begin operation of a source that has not

previously participated in the market.

EPA has also made clear that the “increase in hours”

21 EPA’s comments were made in the context of describing

the representative period for determining baseline emissions from

utilities, but the analysis of what constitutes normal operations

is equally relevant to the discussion here.

21exemption is not available where it would “disturb a prior

assessment of a source’s environmental impact.” For the last

eleven years, the State has carried the Monroe plant in its

emissions inventory with zero actual emissions. From all

accounts, the State has treated the plant as having no

environmental impact. Restart of the plant would disturb this

assessment and is not, therefore, entitled to the “increase in

hours exemption.”

The State’s assessment of the plant’s environmental impact

is further demonstrated by the State’s submittal for the Ozone

Transport Assessment Group (“OTAG”) modeling effort to assess

interstate NOx transport contributions to ozone nonattainment in

downwind States. In late 1995, 37 States including Louisiana,

provided their emissions inventories to EPA for modeling and

analysis. Fifteen of those 37 States (including Louisiana)

claimed that actual emissions from sources in their State had no

impact on downwind ozone nonattainment. In 1995, the Monroe

plant was included in the State’s emissions inventory and was

still included in that inventory as having zero emissions when

the ultimate transport analysis was concluded in 1997. OTAG used

this inventory data to project emissions contributions and

nonattainment problems throughout the 37-State region through

2007. During this modeled period, emissions from the Monroe

plant were assumed to be zero. Based in large part upon OTAG’s

modeling results, EPA declined to require Louisiana to revise its

SIP as part of the recent “NOx SIP Call.” 22 EPA concluded that

the weight of evidence did not support a finding that Louisiana

made a significant contribution to downwind nonattainment. See

, 62 Fed. Reg. 60318, 60340 (Nov. 7, 1997), 63 Fed. Reg. 57356,

57398 (Oct. 27, 1998). 23

22 The Court of Appeals for the D.C. Circuit has stayed the

SIP Call pending further order by the court. State of Michigan

v. EPA , No. 98-1497 (D.C. Cir. Order filed May 25, 1999).

23 EPA conducted subsequent modeling efforts to evaluate

the costs and air quality impacts associated with the proposed

NOx SIP Call controls. This modeling did not rely on state

inventory data. Instead, the approach looked at Energy

Information Administration data regarding available power plants,

and projected emissions based on future demand and likely order

of dispatch (considering factors such as the plant’s age and fuel

type). This approach predicted future NOx emissions from Unit 12

of the Monroe plant of 148 tons per year. This amount of

emissions corresponds to approximately 550 hours of full-load

operation per year at Unit 12. Such minimal operations do not

22EPA believes restart of the Monroe plant will constitute a

change in the method of operation that is not otherwise exempted

by the PSD regulations. The only possible exemption, the

“increase in hours” exemption, simply was not intended to cover

this kind of change. As a result, EPA must next consider whether

the change in the method of operation will result in a

significant net emissions increase, thereby triggering PSD

applicability as a major modification.

4. Calculating Net Emissions Increase

Restart of the Monroe plant will result in emissions of NOx,

SO2, CO, PM10 and VOC. As discussed previously, the emissions

baseline for long-dormant sources such as the Monroe plant are

generally considered to be zero. EPA believes the zero emissions

baseline is representative of normal source operations at the

Monroe plant, which has had no emissions for the last eleven

years.

The following table lists the significance levels, see 40

CFR § 51.166(b)(23)(i) and L.A.C. 33:III.509(B), in tons per year

for each of the pollutants that could be emitted upon restart of

the Monroe plant. In addition, the table lists Entergy’s

potential to emit (assuming full-time operation, as is reflected

in the proposed operating permit) for these same pollutants. The

potential to emit is assumed to be the source’s “actual

emissions” following the change in the method of operation. See

note 16, supra

.

POLLUTANT SIGNIFICANCE LEVEL (TPY) POTENTIAL TO EMIT (TPY)

NOx 40 4,972.65

SO2 40 679.84

CO 100 361.65

PM10 15 32.46

VOC 40 12.74

With the exception of VOC, restart of the Monroe plant will

result in a significant emissions increase over its current zero

emissions baseline for each of the listed pollutants.

The regulations define the contemporaneous period as exalter EPA’s conclusions. No emissions were projected for any of

the other units at the plant.

23tending back five years from the physical or operational change.

No changes in emissions at the Monroe plant have been made during

last 5 years because it has been shut down during this entire

period. As a result there have been no increases or decreases in

emissions that are contemporaneous with the change. See 40 CFR

§ 51.166(b)(3)(ii); L.A.C. 33:III.509(B). Therefore, the net

emissions increases from start-up of the Monroe plant would be

approximately those stated in the chart above. Hence, EPA agrees

with Petitioner that the title V permit for the Monroe plant

should be revised to assure compliance with the Louisiana SIP PSD

requirements because start-up of the plant would be subject to

PSD as a major modification under the Clean Air Act, 40 CFR

§ 51.166, and L.A.C. 33:III.509(B).

V. NSPS APPLICABILITY

Petitioner claims that the maximum capacity of the affected

facilities at the Monroe plant may have been increased by some

unknown method at some time between 1976 and the time of the

title V application without being subject to NSPS review.

Petitioner points to differences in reported emission capacities

that suggest a modification has occurred at the Monroe plant. In

the April 27, 1976 compliance report from the City of Monroe to

the Louisiana Air Control Commission, the total capacity of the

Monroe plant was reported as 1365 MMBtu/hr. In the September 18,

1996 title V permit application, however, Entergy reports the

Monroe plant’s capacity as 1961 MMBtu/hr. While EPA believes

that Entergy has adequately explained this discrepancy in

reported capacities (see below), EPA nonetheless evaluates in

this section whether the changes to the Monroe plant might

otherwise be subject to NSPS.

Section 111 of the Clean Air Act requires EPA to adopt

standards of performance for stationary sources constructed or

modified after the date the standards are proposed. CAA

§§ 111(a)(2),(3) and (b)(1); see also 40 CFR § 60.1. 24 Unlike

the PSD program, reactivation of long-dormant facilities is not

considered construction of a new source. See Memo from Edward E.

Reich, Dir., Div. Of Stationary Source Enf., to Sandra S.

Gardebring, Dir., Region V Enf. Div. (Oct. 30, 1980).

Installation of Units 10, 11 and 12 occurred prior to adoption of

24 Louisiana has adopted the federal NSPS regulations by

reference. See L.A.C. 33:III.3003(A). For purposes of this

section, only the federal regulations are cited.

24all NSPS regulations. 25 Thus, to determine NSPS applicability

for restart of the Monroe plant, EPA need only consider whether

the affected facilities have been modified or reconstructed. See

40 CFR §§ 60.14 and 60.15.

A “modification” for purposes of NSPS applicability is

defined as:

[A]ny physical change in, or change in the method of

operation of, an existing facility which increases the

amount of any air pollutant (to which a standard

applies) emitted into the atmosphere by that facility

or which results in the emission of any air pollutant

(to which a standard applies) into the atmosphere not

previously emitted.

40 CFR § 60.1. As with PSD, the analysis of whether an activity

constitutes a modification is a two-part test. The first step --

identifying a physical or operation change -- is similar to the

first step for finding a PSD modification. The second step of

the NSPS analysis -- finding an emissions increase -- differs

from the emission netting step of PSD.

To find an increase in emissions, EPA compares the hourly

emissions capacity of an affected facility before and after the

change. See 40 CFR § 60.14; see also WEPCO , 893 F.2d at 913.

The changes at the Monroe plant do not appear to be of the type

that would increase the hourly emissions capacity of the affected

facilities. As described above, the major work being performed

at the Monroe plant appears to involve upgrading certain

controls, replacing PCB-containing transformers and some repairs

and maintenance of the boilers and associated auxiliary

equipment. Based on the information currently before it, EPA

believes the affected facilities could operate at the projected

capacities with or without the changes that have occurred at the

source. If, after further investigation, EPA finds that changes

to the facility in fact will increase the emissions capacity of

the affected facilities, EPA will revisit the question of NSPS

applicability.

In response to Petitioner’s claims that reported emissions

capacities had increased, Entergy explained that values derived

from fuel consumption in 1975 were erroneously reported as

25 The first NSPS for fossil-fuel-fired steam generators

applied to sources for which construction was commenced after

August 17, 1971. 40 CFR, Part 60, subpart D.

25maximum heat input values and appeared to be less than those

stated in the permit application. Entergy’s explanation appears

to be confirmed by reference to specification sheets for the

boilers. Because the manufacturer’s specification sheets for the

boilers reflect the same heat input values as represented in the

permit application, EPA concludes that, standing alone, the

differences in the reported emissions capacities, do not

demonstrate a change in the emissions capacity of the affected

facilities.

NSPS may also be triggered, irrespective of changes in

emission capacities, if the changes to the affected facility

amount to reconstruction of the facility. 40 CFR § 60.15(b). A

facility is considered to be reconstructed when the represented

fixed capital costs of new replacement components to reactivate

the facility exceed 50% of the fixed capital costs required to

construct a comparable new facility. 40 CFR § 60.15(b). Here,

Entergy has projected the total cost (capital and O&M) to restart

all affected facilities at the Monroe plant will be approximately

$5.3 million. Entergy estimates approximately $1.4 million of

these costs will be capital expenditures. Of these capital

expenditures, it appears that at least half relate to replacement

of PCB-containing transformers and thus do not relate to changes

to the affected facilities. Given the small capital costs

associated with reactivation of the affected facilities, it does

not appear that the restart activities at the Monroe plant would

trigger NSPS based upon a reconstruction analysis.

VI. RCRA DISPOSAL REQUIREMENTS

Entergy’s permit application contains reference to two

different procedures to remove iron oxide and copper from the

boilers. One procedure involves using up to 30,000 pounds of

ethylenediaminetetraacetic acid (“EDTA”). Spent boiler cleaning

solutions containing this chemical and scavenged metals are

injected into the boiler for combustion. The Petitioner claims

that Entergy’s permit application does not contain sufficient

information concerning the analysis of typical spent boiler

cleaning solutions nor citation to any regulatory provision that

would exempt boiler cleaning solutions from RCRA disposal

regulations. The Petitioner further asserts that if the spent

boiler cleaning solutions exhibit RCRA hazardous waste

characteristics, disposal would be prohibited unless the facility

obtains a RCRA permit, became regulated under EPA’s Boiler and

Industrial Furnace regulations, or otherwise demonstrated that

the spent boiler cleaning solution complied with EPA’s

“comparable fuels” specification.

26To justify exercise of an objection by EPA to a title V

permit pursuant to section 505(b)(2) of the Act, the Petitioner

must demonstrate that the permit is not in compliance with the

requirements of the Clean Air Act, including the requirements of

the Louisiana SIP. RCRA requirements are not applicable

requirements of the Act. See 40 CFR § 70.2. Therefore, this

issue cannot be addressed as part of the petition process.

However, the emissions themselves would be regulated under

Louisiana’s Air Quality regulations and federal/state hazardous

waste requirements.

Under Louisiana Air Permit General Condition XVII, Entergy

must submit any small emissions (generally less than 5 tpy in

total) resulting from routine operations that are predictable,

expected, periodic, and quantifiable to the Louisiana Air Quality

Division for approval as authorized emissions. If the emissions

are considered non-routine, Entergy must apply for a variance

under L.A.C. 33.III.917. Thus, the emissions from the combustion

of the spent boiler cleaning solutions are regulated under

Louisiana’s air quality regulations. In addition, if the spent

boiler cleaning solution were to exhibit RCRA hazardous waste

characteristics, Entergy would be required to comply with all

applicable federal and state hazardous waste management

requirements.

VII. CONCLUSION

For the reasons set forth above, I find that the proposed

title V permit fails to assure compliance with applicable PSD

requirements set forth in the Louisiana SIP. As a result, I

partially grant the February 9, 1999 petition requesting that the

Agency object to the proposed Entergy permit, and I hereby object

to issuance of the proposed Entergy Permit. I deny the remainder

of the February 9, 1999 petition. Pursuant to section 505(b) of

the Act and 40 CFR § 70.8(d), LDEQ shall not issue the permit

unless it is revised in accordance with this Order.

Date:

Carol M. Browner

Administrator

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