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# OAR Box 1778 Prepped by Ollie Stewart



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# 78 ) ll-C-2 0

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O n Januar y19 , 1990 , th e Unite d State s Cour t o f Appeal s fo r th e Sevent h Circui t i n Wisconsi n Electri c Powe r Co

. v . Reilly

. Nos

. 88-326 4 an d 89-1339 , issue d it s decisio n regardin g a challeng e b yWisconsi n Electri c Powe r Compan y(WEPCO ) t o tw o fina l determination s issue d b yth e Environmenta l Protectio n Agenc y(EPA)

. I n thes e determinations , EP Aconclude d tha t WEPCO' s propose d renovation s t o it s Por t Washingto n powe r plan t woul d b e subjec t t o ne w sourc e performanc e standard s (NSPS ) an d preventio n o f significan t deterioratio n (PSD ) requirements

. I n it s decision , th e cour t uphel d all ' bu t on e o f th e position s advance d byEP Ai n th e NSP S an d PS D applicabilit y determinations

. However , th e cour t rejecte d EPA' s positio n o n th e issu e o f whethe r th e "actual-to-potential " method—referre d t o b yth e cour t a s th e "potentia l t o emi t concept"—shoul d b e use d t o calculat e emission s increase s fo r PS D purpose s i n thi s case . Consequently , th e Sevent h Circui t vacate d an d remande d th e PS D determinatio n t o EP Afo r furthe r actio n consisten t wit h th e court' s decision

. A s yo u know , EP Adecided t o acquiesc e i n th e court' s holdin g rathe r tha n see k rehearing

. Thi s lette r constitute s EPA' s revise d PS D applicabilit ydeterminatio n i n respons e t o th e court' s reman d order

. Th e Agenc ybelieve s tha t th e court' s principa l instruction — tha t EP Aconside r pas t operatin g condition s a t th e plan t whe n addressin g modification s tha t involv e "like-kin d replacements" — ca n b e reasonabl yaccommodate d withi n th e presen t regulator y framewor k withou t furthe r litigatio n i n thi s case . Th e ne t resul t o f th e court' s rulin g i s th e recognitio n o f a subcategor y o f "like-kin d replacements " unde r th e "majo r modification " definitio n o f EPA' s ne w sourc e revie wprovisions

. A s explaine d below , EP Awil l emplo ya n "actual-to-actual " metho d t o calculat e emission s increase s fo r WEPCO' s propose d , renovation s t o it s Por t Washingto n powe r plant

. Th e outcom e i n thi s cas e i s tha t WEPC O wil l no t b e subjec t t o PS D revie wfo rP. 3

sulfur dioxid e (SO,) , particulat e matte r (PM) , carbo nmonoxide , or hydrocarbons . However , ther e wil l b e a significan t ne t increas e i n actua l emission s o f nitrogen oxide s (N0 X ) , an d WEPC O mus t obtai n a PS D permi t fo r tha t pollutant . I . BACKGROUN

D
A . Factua l Background . Th e WEPC O own s an

d operate s fiv

e coal-fired , steam generatin

g unit s a t it s Por t Washingtonfacility nea r Milwaukee . Al l unit s had a

n origina l desig

ncapacit y

o f 8 0 megawatt s whe n they wer e place d i n servic e between193 5 an d 1950 . However , du e t o age-related deteriorationan d los s o f efficiency , bot hth e physica l capabilit y an d actua l utilizationo f the plan t have declined ove r time . Uni t 5 wa s shu t dow ncompletel y

due t o a cracked rea r stea

m drum . Consequently , b y 1987 , WEPCO wa s face d wit hremovin

g th e unit s fro

m servic e a s the

y reached thei r planned retiremen t date s beginnin g i nth

e earl y 1990's , unles s i t undertoo k a costl y "lif e extension " progra m t o restor e the physica l an

d economi c viabilit y o f the unit s an

d exten d thei r usefu l lif e fo r approximatel y 2 0 years . Th e WEPC O propose d suc h a lif e extensiont o include replacemen t o f th e stea m drums , ai r heaters , an

d othe r majo r capita l improvement s totalin g ove r $8 0 million . I t shoul d b e note d tha t thi s progra m i s no t a pollution contro l pro j ec t (i.e. , i t i s no t intended t o ad d on o r improv

e pollutioncontro l system s eve n thoug hmodes t improvement s t o the particulat e matte r contro l device s ar e a par t o f the program) . I n a serie s o f applicability determination s i n198 8 an d 1989 , EP

A ruled tha t the renovation s planned unde r WEPCO' s lif e extension progra

m woul d constitut e a "modification " for purpose s o f the NSP S provision s o f th e Clea nAi r Ac t (Act) , an d a "majo r modification " unde r th e PS D provision s o f th e Act . Thus , WEPC O woul d have had t o instal l som e leve l o f contro l equipmen t o r physica l capacit y

restrictio

nt o avoi d NSP S coverag e for thre e o f the fiv e unit s proposed t o be renovated . A s t o PSD , the compan y woul d have had t o accep t operationa l restriction s o r lowe r emission s rate s t o "ne t out " o f review . Regardin g SO, , for example , WEPC O coul d have almos t doubled it s projected leve l o f futur e operation s withou t triggerin g PS D review . However , WEPC O di d no t wan t t o b e constrained b y ne w sourc e requirements , an d s o sough t revie

w i nthe Sevent hCircui t Cour t o f Appeals . B . Th e Court' s Decision . 1 . Physica l Change . The cour t unequivocall y agree d wit hEP

A tha t the replacemen t o f stea m drums , ai r heaters , an d othe r majo r component s wa s a nonroutin e "physica l change, " an d thu s me t the firs t o f tw o test s for a modification unde r NSP S an d PSD . The Agency foun d tha t theP. 4

renovation s proposed b y WEPCO wer e exactl y th e type o f industria l change s tha t wer e mean t -. o b e addressed b

y the NSP S an

d PS D programs . I nupholdin g EPA' s findin

g tha t a physica l chang e woul d occur , the cour t strongl y endorsed EPA' s readin g o f the basi c congressiona l inten t i n adoptin g th e modification provision s o f the NSP S an d PS D programs , becaus e t o rul e otherwis e "woul d open vista s o f indefinit e immunit y fro m th e provision s o f NSP S an d PSD " (sli p op . a t 11) . The cour t als o relied o

n the reasonablenes s o f EPA' s consideratio n o f the magnitude , purpose , frequency , an d cos t o f the work i nupholdin g EPA' s findin

g tha t the renovation s ar e no t "routine " (sli p op . a t 14-18) . I n addition , the cour t rejected WEPCO' s argumen t tha t th e renovation s coul d no t be deemed a modificationfor NSP S purpose s becaus e the y di d no t constitut e a "reconstruction " unde r 4 0 CF R 60.1 5 (Slip op . a t 18-20) . 2 . NSP S Emission s Increase . The cour t uphel d EPA' s decisio ntha t ther e woul d b e an increas e i n hourl y

emission s a t thre e o f the units , an d thu s for thos e thre e units , WEPCO me t the secon d tes t for NSP S applicability . Th e Agency ha d argue d tha t the regulation s requir e NSP S emission s increase s t o be determined b y comparin

g the curren t (pre-change ) hourl y emission s capacity o f each affected facilit y

wit hthe post-renovationhourl y emission s capacity

o f eac hunit . The Sevent hCircui t agreed , an d rejected WEPCO' s argumen t tha t origina l desig n capacit y

o r pas t "representative " capacit y n o longe r achievabl e a t the plan t shoul d b e used for th e baseline emission s rat e (slip op . a t 20-25) . 3 . PS D Emission s Increase . The regulator

y preambl e t o th

e PS D regulation s provide s tha t the se t o f emission s unit s tha t hav e "no t begu

nnorma l operations " include s bot h"ne w o r modified " unit s (4 5 F R52676 , 52677 , 52718 ) (1980) . Consequently , EP A used the "actual-to potential " calculu s in evaluatin g WEPCO' s lif e extensio n project . Th e cour t rejected thi s methodolog y i nthe cas e o f WEPCO' s "like
kin d replacement, " assertin g tha t EPA' s reasonin g wa s circula r (sli p op . a t 28) . [In addition , the cour t hel d (sli p op . at 2 7 n . 11 ) tha t th e exemptio ni n 4 0 CF

R52.21(b)(2)(iii)(f ) fo r emission s increase s du e t o expanded operation s di d no t apply , becaus e WEPCO' s increased operation s wer e directl y tied t o th e lif e extensionproject. ] Instead , the cour t ruled tha t EP A shoul d recalculat e post-chang e emission s considerin g pas t operatin

g condition s wher e i t i s possibl e t o mak e a mor e realisti c assessmen t o f futur e emission s (sli p op . a t 29-31) . Alternatively , the cour t state d tha t EP

A coul d conduc t ne

w rulemakin

g t o explicitl y

appl y the "actual-to-potential " calculu s t o "like-kin

d replacements " (slip op . a t 30) .P. 5

II . TH E WEPC O DECISIO N I N TH E CONTEXT O

F TH E PS D PROVISION S Th e Sevent hCircui t hel d tha t EP A coul d no t wholl y

disregard pas t operatin

g histor

y an d automaticall y

appl y th e actual-to potentia l methodolog y for determinin

g PS D applicability t o WEPCO' s "like-kin

d replacements. " I ndescribin g the WEPCO change s a s "like-kin d replacements " an d limitin

g it s decisiont o suc hchanges , the cour t di d no t disput e th e correctnes s o f EPA' s application o f the actual-to-potentia l tes t t o the ful l spectru m o f ne w an d modified source s no t covered b y thi s subcategor

y o f change . Th e recen t decisio ni nPuert o RicanCemen t Co . v . EPA . 88 9 F.2 d 29 2 (1s t Cir . 1989) , explicitl y uphel d EPA' s position tha t th e actual-to-potentia l concep t shoul d b e applied t o "modified " emission s units . The Firs t Circui t cas e involved the modernization an

d reconfiguratio

n o f existin

g emission s unit s • [see 88 9 F.2 d a t 29 3 (compan y planned t o "conver t kil nNo . 6 fro m a 'wet ' t o a 'dry ' cement-makin g process , an

d t o combine tha t wit hKil nNo . 3")] . A ke y issue wa s whethe r EP A properly.hel d tha t the "modified " unit s had "no t begu n norma l operation " an d therefor e the actual-to-potentia l concep t applied i n calculating emission s increases . The Firs t Circui t affirmed EPA' s position tha t the actual-to-potentia l concep t shoul d b e applied t o the company' s "modified " units . Puert o Rican Cement . 88 9 F.2 d a t 297 . Consequently , the cour t foun d tha t bot hth e languag e an d expressed purpos e o f th e regulation s indicat e tha t EP A applied th e regulation s properl y in usin

g the actual-to-potentia l tes t fo r a propose d modification . The Sevent hCircui t i n WEPCO di d no t disput e the correctnes s o f EPA' s applicationo f the actual to-potentia l tes t t o th e ful l spectru

m o f change s no t covered b y th e subcategor

y o f change s (like-kin d replacements ) created b y th e court. 1 Therefore , i n the cas e o f nonroutine physica l o r

1 EP A wil l leav

e t o futur e cas e b

y cas e applicabilit y determinations , wha t i s a "like-kin d replacement. " But fo r guidanc e o f the parties , EP A presentl y

consider s tha t onl y fo r project s tha t ar e genuine "like-kin d replacements " canfutur e emission s projection s b e calculated usin g "estimated futur e actua l emissions " i n lie u o f potentia l t o emit . EP A doe s no t conside r "like-kin d replacements " t o mea nthe entir e replacemen t (o r reconstruction ) o f a nexistin

g emission s uni t wit ha n identica l nev

on e o r one simila r i n desig no r function . Rather , EPA consider s "like-kin d replacements " t o encompas s the replacemen t o f component s a t a n emission s uni t wit hth e sam e (o r functionall y

similar ) components . Unde r thi s interpretation o f th e term , ne

w component s tha t perfor m essentiall y

the sam

e function a s ol d one s wil l b e viewed a s "like-kin d replacements. " I n addition , even i f the desig n o r purpos e o f a ne w componen t i s identica l t o tha t o f a n ol d one , i f the ne w componen t i s par t o f a projec t tha t wil l fundamentall y chang e the productionproces s a t a n existin

g stationar

y source , thi s woul d b e beyon d the scope o f a "like-kin

d replacement. " Unde r eithe r o f thos eP. 6

operationa l change s a t a nexistin

g majo r sourc e whichar e no t specificall y

"like-kin

d replacements " i

nnature , EP

A wil l continue t o appl y

the actual-to-potentia l tes t fo r PS D applicabilit y

purposes . III . THE AGENCY' S RESPONS E T O TH E COURT' S REMAN D ORDE R

A . The PS D Baseline Emissions . Determinin

g the "baseline " leve l o f actua l emission s befor e a physica l o r operationa l chang e i s a necessar y firs t step t o determin e i f emission s increas e a s a resul t o f th e physica l change . Th e Agency' s regulation s defin e the baseline for PS D purposes , a s follows : I n general , actua l emission s a s o f a particula r dat e shal l equa l the average rate , i ntons-per-yea r (tpy) , a t whic hthe uni t actuall y

emitte d th e pollutan t durin

g a 2-year period whic hprecede s th

e particula r dat e an d whichi s representativ

e o f norma l sourc e operation . The Administrato r shal l allo w the us e o f a differen t tim e period upon a determinatio ntha t i t i s mor e representativ e o f norma l sourc e operation . Actua l emission s shal l b e calculated usin

g th e unit' s actua l operatin g hours , production rates , an d type s o f material s processed , stored , o r combusted durin

g th e selected tim

e perio d [se e 4 0 CF R 52.21(b)(21)(ii)] . Th e purpos e o f the definition i s t o establis ha baselin e tha t i s "representative " o f "normal " sourc e operation s prio r t o the change . The Agency historicall y

ha s followe

d a presumptio

n

circumstances , i t woul d b e unreasonabl e t o rel y o npre modification usag e pattern s t o estimat e futur e level s o f capacity utilization . Instead , insuchcases , EP A believe s tha t i t i s reasonabl e t o assum e tha t i n the absenc e o f federally-enforceabl e limit s o

nhour s o f operatio n o r production rates , the ne w component s ma

y resul t in a substantia l increas e ove r historica l level s o f utilization o f the emission s uni t followin g modification [se

e Puert o RicanCement , supra . 88 9 F.2 d a t 29 7 (" a firm' 8 decision t o introduc e new , mor e efficien t machiner y ma y lea d the fir

m t o decide t o increas e the leve l o f production") ] an d wil l compar e pre-modification actua l emission s t o post modificationpotentia l emissions . I nadditio nt o thi s circumstance , ther e ar e case s i nwhic hsource s tha t underg o change s tha t qualify a s add-o

ncontro l system

s would , unde r certai n circumstances , b e exemp t fro m ne w sourc e review . Se e Lette r t o Timoth

y J . Method , Assistan t Commissioner , Indian a Departmen t o f Environmenta l Management , fro m Davi d Kee , EP

A Region V , Januar

y 30 , 1990 .P. 7

tha t th e mos t recen t 2 year s shoul d b e used , bu t ha s allowed anothe r period wher e the sourc e demonstrate s tha t recen t operation s ar e abnorma l [se e 4 0 CFR52.21(b)(21)(ii) ; se e als o 4 5 F R 52676 , 5271 8 (1980)] . Th e WEPC O baselin e perio d i s an exampl e o f this . I n thi s instance , plan t utilizationwa s disrupte d b

y physica l problems tha t le d t o nonroutine physica l change s t o remed

y thos e problems . Consequently , EP A determined tha t a period prio r t o th e onse t o f suc hproblems wa s representative o f norma l operations , an d a s required b

y it s regulations , used thi s perio d t o establis hth e baseline . Th e period use d wa s als o withi nthe contemporaneou s perio d specified i n 4 0 CFR 52.21(b)(3)(ii) . I t shoul d b e emphasized that , i nthe WEPC O case , th e partie s an d the cour t agreed tha t 1983-8 4 (prio r t o discover

y o f stea

m dru m cracks ) shoul d b e th e baselin e year s (sli p op . a t 26) ; thes e year s had anaverag e 2 9 percen t utilization rate . W e continue t o believe thi s i s the appropriat e baselin e period fo r the Por t Washingtonrenovation .
B . Calculatin g Post-Chang e Emission s Unde r PSD . The cour t concluded tha t "EPA' s relianc e o na nassumed continuou s operatio na s a basi s for findin g an emission s increas e i s no t properl y

supported " (sli p op . a t 30) . Althoug hth e cour t hel d tha t EP

A cannot , inthi s case , wholl y disregard pas t operating condition s a t the plant , i t als o hel d tha t EP A coul d no t reasonabl y

rel y o n the company' s ow n unenforceabl e projection o f operating condition s (slip op a t 29) . Th e cour t remanded th e question o f PS D applicability t o EP A for furthe r proceeding s no t inconsisten t wit hit s decision . Befor e th e cour t remanded EPA' s determination , i t attempted t o ascertai nwhether , i nfact , the proposed projec t woul d b e a majo r modification evenusin g the assumption s leas t likel y t o resul t i n anemission s increase . The cour t fel t (an d we agree ) tha t suc ha "best " case , scenari o for WEPCO woul d assum e tha t the "presen t hour s an

d conditions " woul d no t chang e a t al l followin g th e renovation s (despite , o f course , WEPCO' s ow n estimate s o f a t leas t tripling o f utilizatio nove r curren t levels ) (sli p op . a t 31 , n . 14) . Th e court , however , lacke d the dat a t o mak e thi s calculation , s o i t coul d no t determine whethe r a majo r modificatio n woul d resul t usin g a se t o f assumption s mos t favorabl e t o WEPCO . Therefore , the cour t remanded th e determinationt o EP A for furthe r consideration .

s A conceivabl e interpretatio n o f the court' s opinion i s tha t EPA mus t calculat e WEPCO' s post-modification emission s increase s base d on "presen t hour s an d conditions. " However , for the reason s discusse d below , EP A believe s tha t thi s interpretation i s incorrect . Unde r sucha ninterpretation , EP A woul d determin e WEPCO' s post-renovationannua l emission s i n ton s pe r yea r (tpy) , b y simpl y projectin

g int o the futur e the hour s o f operationand ' condition s (i.e. , hourl y emission s rate ) tha t existed jus t befor eP. 8

the renovations . Thi s i s the interpretatio n urged b

y WEPCO i

n a Februar y 9 , 199 0 lette r t o EPA . Sucha calculu s wil l alway s resul t in exactl y

the sam

e leve l o f emission s befor e an d afte r the physica l change , an d thu s woul d alway s exemp t "like-kin d replacements " fro

m PS D review . I n addition , calculatin g emission s increase s usin g thi s assumptio

nwoul d flatly

contradic t the recor

d i n thi s case . The WEPCO ha s stated tha t i t wil l greatl y increas e capacity utilizationove r bot hcurren t level s an d the baselin e level s used inthe previou s determinations . Capacit y

utilization interm s o f hea t input t o th e plan t (base d o n nameplat e capacity ) durin g 1978-197 9 wa s abou t 4 0 percen t (Recor d ite m 7.4 , WEPCO Submission , Apri l 19 , 198 8 meeting wit h EPA) . Durin

g the 1983-198 4 baseline period , i t wa s approximatel y 2 7 percent . ____[. I t ha s sinc e declined t o les s than1 0 percen t (1988-198 9 data) . 1^ . The WEPCO ha s advised the Stat e o f Wisconsi ntha t i t intend s t o retur nt o a forecasted 4 2 percen t utilization leve l in the year s followin g renovation , wit han uppe r maximu

m forecas t o f 5 0 percen t [Letter fro m Walte r Woelfle , WEPCO , t o Dal e Zeige , Wisconsi nDepartmen t o f Natura l Resources , Marc h29 , 1990 , Tabl e 7 (enclosed)] . I t woul d b e wrong t o assum e tha t uni t 5 woul d no t b e operated a t al l i nth e futur e whe nan explici t purpos e o f th e renovatio

ni s t o bring the uni t bac k o n line a t it s origina l desig ncapacity ; moreover , uni t 5 i s presentl y

inoperative . Mos t importantly , thi s methodolog y i s no t fairl y discernibl e fro

m an y readin g o f the curren t regulations . I n addition , usin

g "presen t hour s an d conditions " woul d disregard planne d change s a t WEPCO tha t wil l affec t th e post-renovation hourl y emission s rat e [e.g. , increase d capacity , lowerin g o f sulfur content , an d enhancemen t o f the electrostati c precipitator s (ESP)] . Th e cour t uphel d EPA' s positio n tha t increased utilization i n the futur e tha t i s linke d t o constructiono r modification activit y

shoul d no t b e exclude d i n determinin

g post-renovation emissions . Nevertheless , the cour t tol d EP A no t t o automaticall y assum e 10 0 percen t utilizatio n i n the futur e whe n historica l dat a ar e available . The WEPCO ha s definit e plan s t o return the plan t t o historica l level s o f utilizatio ntha t ar e wel l abov e baseline level s o f utilization , an d whichcoul d no t b e physicall y or economicall y

attained bu t for the renovatio nproject . Accordingly , EP

A believe s i t i s consisten t wit hthe cour t decision fo r EP

A t o bas e it s reman

d decisiononthes e fact s an d no t rel y

on th e presen t hour s an d condition s a s conclusiv e o f post-renovationemissions . Afte r a thoroug hrevie w o f the possibilities , EP

A ha s conclude

d tha t th

e cour t intended tha t estimate s o f futur e emission s fo r WEPCO' s "like-kin d replacements " shoul d conside r histori c pre-renovationoperatin g hour s an

d production rates , a s wel l a s othe r relevan t factors , in estimatin

g futur e utilization levels , an d shoul d als o conside r the increased capacity , switchin g t o lower-sulfur fuel , an d othe r change s affectin

g the hourl y

emission s rat e for PS D purposes . Consequently , for WEPCO' s "like-kin d replacements, " EP A wil lP. 9

8
compar e representativ e actua l emission s for th e baseline perio d t o estimated futur e actua l emission s based o nal l th

e availabl e fact s in th e record . Specifically , i n calculatin g post renovationactua l emissions , thi s approac htake s int o accoun t 1 ) physica l change s an d operationa l restriction s tha t woul d affec t the hourl y

emission s rat e followin g the renovation , 2 ) WEPCO' s pre-renovation capacity utilization , an

d 3 ) factor s affectin g WEPCO' s likel y

post-renovationcapacit y utilization . T o quantif y

WEPCO' s estimated futur e actua l emission s afte r the propose d change s EP A relied heavil y

o nprojected an

d historica l operationa l dat a (e.g. , fue l consumption , MMBT U consumed ) representativ e o f the source . Specifically , the Agency considered availabl e informatio n regardin

g (1 ) projected post chang e capacit y

utilization file

d wit hpubli c utilit y commissions ; (2 ) Federa l an d Stat e regulator

y filings ; (3 ) the source' s ow

n representations ; an d (4 ) the source' s historica l operatin

g data . A s described below , EP A determined a

n appropriat e utilization factor for futur e operation s an d combine

d thi s wit hpost-chang e emission s factor s (t o the exten t the

y ar e o r wil l b e mad e federall y enforceable ) t o estimat e a futur e leve l o f annua l emission s for th e purpos e o f determinin g whethe r the proposed physica l an d operationa l change s woul d be considered a majo r modification for PS D purposes . Wher e a significan t emission s increas e i s projected t o occur , WEPC O coul d voluntaril y agre e t o federally-enforceabl e limit s onan y aspec t o f it s futur e operation(includin g physica l capacit y an d hour s o f operation ) t o ensur e tha t n

o significan t emission s increas e wil l occur . IV . TH E AGENCY' S REVISE D PS D APPLICABILITYDETERMINATIO N
A . Estimated Futur e Actua l Emissions . The Agenc y

ha s revised it s Octobe r 14 , 198 9 PS D applicabilit y

determinationfor WEPCO' s proposed Por t Washington renovation based o n a "representativ e actual " t o "estimated futur e actua l emissions " compariso n (as outlined above) . A s previousl y

discussed , estimated futur e actua l emission s projection s tak e int o accoun t the likelihoo d tha t the plan t wil l operat e i nth e futur e a s i t ha s i nthe past . Th e stated purpos e o f WEPCO' s renovation s i s t o refurbis h the powe r plan t unit s t o an"as-new " conditioni nterms o f thei r capacity , efficiency , an d availability . Consequently , EP A ha s used actual , historical , operationa l dat a representativ e o f the plant' s pas t operations , approximatin g an"as-new " configuration , t o calculat e "estimate d futur e actua l emissions. " Th e Agency ha s verifie d thes e dat a b y compariso

nt o WEPCO' s ow

n projection s o f post-renovation capacit y utilizationan

d industr

y averages . A s t o th e emission s factor s used t o calculat e futur e emissions , EP

A ha s used WEPCO' s ow n emission s factor s for futur eP.1 0

hourl y emission s rates . Thes e emission s factor s ar e based o n WEPCO' s ow

n assumption s regardin g futur e sulfur i

nfue l an

d contro l technolog

y performanc e levels . However , sinc e thes e assumption s g o beyon d curren t Stat e implementatio nplan (SIP ) requirements , the

y mus t be mad e federall y enforceabl e for EP A t o continu e t o conside r the m for PS D applicability purposes . Operationa l dat a (i.e. , hea t input ) fro m th e year s 1978-197 9 sho w a capacit y

utilizatio

n factor o f 4 2 percent . Thes e dat a point s represen t the closes t projection o f WEPCO' s operationa l characteristics , approximatin g a n"as-new " state , a s currentl y availabl e t o EPA . Th e dat a currentl y availabl e t o u s regardin g WEPCO' s pas t operationa l level s ar e limite d t o a 10-yea r period . Th e Agenc y

believe s tha t thes e historica l level s o f operationar e representative o f the plant' s pas t operation s i n an "as-new " condition . I n addition , the 1978-7 9 dat a point s appea r consisten t wit hWEPCO' s ow n projectio

no f futur e operation s for the yea r 201 0 (as submitted t o the Wisconsi n Departmen t o f Natura l Resource s o n Marc h29 , 1990 ) an d commo n capacit y

level s for the utilit y

industry , in general , for ne w units . However , b y thi s letter , EP

A i s requestin

g tha t WEPCO submi t operationa l dat a fro m previou s year s (i.e. , pre-1978) , i f suc hdat a sho

w hea t inpu t level s notabl y highe r tha

n the 1978-197 9 levels . A s previousl y

mentioned , t o calculate ' futur e emission s level s fo r eac hpollutant , EP A assumed tha t th e amoun t o f futur e coa l consumed i n term s o f hea t input t o the plan t woul d b e comparabl e t o WEPCO' s annua l averag e 1978-197 9 coal-consumption figure . On Marc h29 , 1990 , WEPCO submitte d t o the Wisconsi n Departmen t o f Natura l Resource s informatio nwhic hcontained estimate s o f futur e emission s for differen t level s o f coa l an d hea t inpu t t o the plant . The Agency use d thes e estimate s t o establis hfutur e emission s based o n 1978-197 9 heat-inpu t values . Again , i t i s important t o not e tha t EPA' s calculationo f "estimated futur e actua l emissions " i s based o nWEPCO' s projectiono f contro l technolog y performanc e level s and/o r fue l sulfu r conten t for post-renovatio n operations . Consequently , EPA' s PS D applicability determinatio

ni s vali d onl y

t o the exten t tha t th e emission s factor s (base d o n contro l technolog y performanc e level s an d sulfu r i n fuel ) used t o calculat e futur e emission s ar e mad e federall y enforceable . Otherwise , th e calculatio no f estimated futur e actua l emission s for eac h pollutan t wil l need t o be revised b y EP A based o

nexistin

g federally-enforceabl e limit s (i.e. , applicabl e SIP , NSPS) . Th e us e o f current , federally-enforceabl e emission s i nth e curren t SI P woul d resul t i n highe r projected futur e emission s tha n assumed i n EPA' s calculation s and , consequently , coul d affec t the indicated PS D applicability finding .P.1 1

1 0
B . Revise d Findin

g
I n sum , EP

A ha s considered pas t operation s a t WEPCO' s Por t Washington plan t i nestimatin g futur e actua l emissions . Specifically , EP

A ha s relie

d o n the 4 2 percen t utilizationleve l (i n terms o f hea t input ) durin g 1978-1979 . The Agency believe s thi s i s a reliabl e indicato r o f futur e utilization becaus e i t i s consisten t bot hwit hWEPCO' s ow n projection s o f post-renovation operation s an

d typica l industr

y usage . The Agenc y ha s als o considered post-renovatio nemission s rate s o n the assumptio n tha t the y wil l b e mad e federall y enforceable . Compared t o the 1983 - 198 4 baselin e period , thos e hourl y rate s ar e lowe r for S0 2 an d PM , an d unchanged for NO x . The 4 2 percen t estimated post renovation capacity utilizationi s substantiall y highe r than the 2 9 percen t utilization leve l durin g the baselin e period . However , in calculatin g tota l annua l actua l emissions , tha t increased usag e i s offse t for S0 2 an d P M b y the decreased hourl y emission s rate s resultin g fro m improvement s t o contro l systems an d the us e o f lo

w sulfur coal . Consequently , WEPCO i s no t subjec t t o PS D revie w for thos e pollutants . I n th e cas e o f NO„ , ther e wil l b e a direc t correlation betwee n increase

d utilization resultin g fro m the renovation s an d increased actua l emissions . Hence , WEPCO i s subjec t t o revie w for tha t pollutan t an d mus t obtai na PS D permit . The compan y shoul d contac t th

e Wisconsi n Departmen t o f Natura l Resource s regardin

g the processin

g o f a permi t applicationfor NO x . Due t o insufficien t source-specifi c informatio nregardin

g emission s factors , PS D applicability for PM-10 , lead , an d noncriteri a pollutant s liste

d a t 4 0 CF

R 52.2 1 (b)(23)(i ) an d (ii ) canno t be determined a t thi s time . The PS D applicabilit y for thes e pollutant s shoul d als o be based o n the "actual-to-actual " emission s tes t described herein . Thi s PS D applicability determinatio

napplie s t o WEPCO' s currentl y

planned renovation s t o unit s 1- 5 (se e Enclosur e A) , or , i f WEPC O no longe r wishe s t o proceed wit hrenovatin g uni t 5 , onl y the renovationo f unit s 1- 4 (se e Enclosur e B) . However , a decision t o cance l the currentl y planned renovation s t o uni t 5 coul d resul t i n a PS D revie w for tha t uni t shoul d WEPC O reconside r renovatin g i t som

e tim e i n the future . I t i s our understandin g tha t WEPCO propose s t o avoi d triggering NSP S for SO , an d P M a t unit s 1 an

d 4 b y using dr

y sorben t injectio

n an d improvin

g the existin

g ESP' s t o offse t the potentia l emission s increase s o f thes e pollutants . T o the exten t tha t the control s ar e federall y enforceable , an

d no increas e i n hourl y emission s woul d occur a t maximu m capacity , WEPC O canus e thes e option s t o avoi d triggerin g NSP S for P

M an d SO , a t unit s 1 an d 4 . However , the tw o unit s ar e stil l subjec t t o the NSP S requirement s for NO x . Uni t 5 cannot , however , avoi d triggeringP.1 2

1 1
NSP S for an

y pollutan t and , therefore , i s subjec t t o the NSP S requirement s for NO x , S0 2 , an d PM . Sincerely ,

ftTfiam

G" . Rosentter

g Assistan t Administrato r for Ai r an

d Radiation 3 Enclosure sTabl e 7 03/29/9 H

PORT UASHINGTO

N POUE R PLAN T MA Y178 9 FORECAS T Unit s 1- 5 PORT UASHINGTO N POUE R PLAN T UPPE R MAXIMU

M FORECAS T Unit s 1 - 5

YEA R

199 5 199 6 199 7 199 B 199 9 200 0 ZO O I 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 MEGAUAT T

HOUR S GENERATE D

825.28 8 941,77 9 1,081.00 2 1.114.31 3 1,247.29 6 1.349.32 9 1.391.88 2 1.481,46 4 1,420,12 0 1,432,12 2 1,431,41 2 1,460,47 1 1,488,12 4 1,481,42 3 1,463,98 1 CAPACIT Y

FACTO R

0.2 4 0.2 7 0.3 1 0.3 2 0.3 6 0.3 8 0.4 0 0.4 2 0.4 1 0.4 1 0.4 1 0.4 2 0.4 2 0.4 2 0.4 2 FUE L

COA L CONSUMPTIO N (13Z0 D Btu/lb ) BURNE D TON S

, , 365,54 8 415,33 2 475,62 4 490,86 8 546,54 6 589,56 9 608,62 1 646.41 7 620,15 3 625,17 4 624,90 4 637,51 9 649,13 3 646,90 9 638,75 0 YEA R

199 5 199 6 199 7 199 8 199 9 200 0 200 1 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 MEGAUAT T

HOUR S GENERATE D 1,074,95 7 1,202,46 0 1,341,07 4 1,390.47 0 1.501,58 4 1.600.50 0 1,651,93 0 1,748,04 6 1,690.00 0 1.690,00 0 1.690.00 0 1.710.00 0 1,720.00 0 1.720.00 0 1.695.00 0 CAPACIT Y

FACTO R

0.3 1 0.3 4 0.3 8 0.4 0 0.4 3 0.4 6 0.4 7 0.5 0 0.4 8 0.4 8 0.4 8 0.4 9 0.4 9 0.4 9 0.4 8 FUE L

COA L CONSUMPTIO N (1320 0 Btu/lb ) BURNE O TON S

473.98 1 528.83 8 587.41 2 609,23 7 654,71 8 696.4B 3 718,25 2 760.00 0 735.00 0 734.00 0 734,00 0 741,00 0 748,00 0 747,OD O 737,00 0

T JP. M

Enclosur e A Revise dPS O Applicabilit y Determinatio n Por t Washingto nPowe r Plan t Renovatio no f Unit s 1- 5 (al l emission s calculation s ar e in ton s pe r year )

Pollutan t Particulat e utte r (4 ) (5 ) Actua l

Emission s Baselin e (1 )
32 8

Sulfu r dioxid e (4 ) 24,236 Nitroge noxide s (5 ) 2,59 2 Carbo naonoxld e 14 4 Hydrocarbo n 1 7 Estimate d Futur e Actua l

32 3

15,91 9 3,40 5 21 7 2 5 Ne t PS O Subjec t Emission s Significanc e t o PS O 

### Chang e Leys ! Revie wfa )

- 5

-8,31 7 81 3 7 3 2 5

4 0 4 0 10 0 4 0 no

n o
ye s

n o

n o Othe r Regulate dPollutants : Du e t o Insufficien t source-specifi c informatio n regardin g emissio nfactors , PS O applicabilit y fo r PM-10 , leadan

dnoncrlteri a pollutant s liste da t 4 0 CF RSectio n52.2 1 (b)(23)(1 ) an d(11 ) canno t b e determine d a t thi s time . 1 ) Averag e actua l Mission s fo r 2-yea r perio ddefine db y calenda r year s 196 3 and1964 . 2 ) Calculate dby

CP A baae do nth e following Informationsubmitte db y IfPCf e

e . Th e averag e histori c firing rat e (approximatel y 17x19 At e pe r yaar ) fo r th e 2-yea r perio ddefine d by calenda r year s 197 S an

d1979 . b . Th e Mission s estleate s fo r th e renovate dunit s base do nfutur e coa l characteriatIc e (e.g. . sulfu r andhea t content ) an

dactua l emission s afte r pollutio ncontrol s fo r particulate . c . Sulfu r dioxid e control s applie dt o uni t S a t 7 5 percen t sulfu r dioxid e rwova l t o compl y wit hKSP S Subpar t 0a . Sulfu r dioxid e remova l o f 2 2 and1 3 percen t a t unit s 1 an d4 . respectively , t o exclud e thes e unit s from

NSP S roquir-ament s fo r greate r contro l o f sulfu r dioxide . 3 ) I f M M

dat a indicat e tha t annual . historic-firing rate * a t th e Por t Washingto nfaci l It y exceede dhistori c 197 8 and197 9 levels , th e indicatedapplicabilit y determinatio ncoul dchange . 4 ) Th e calculatio no f estlmsted . future , actua l emission s fo r thi s pollutan t I s base do nWEPCO' s projectiono f contro l technology

performanc e level s and/o r fue l sulfu r conten t fo r post-renovatio noperations . Consequently . EPA' s PS O applicabilit y determinatio ni s vali donl y t o th e exten t tha t th e specifi c particulat e andsulfu r dioxid e emission s factor s use dfo r unit s 1- 5 t o calculat e futur e emission s (basedo nparticulat e andSO,contro l technology

performanc e level s an dfue l sulfu r andhea t content ) ar e mad e federall y enforceable . Otherwise , th e calculatio no f estimated , future , actua l emission s fo r thi s pollutan t wil l b e revise db y EPA . base do nexistin g federally-enforceabl e limit s (i.e. , applicabl e SIP . USPS) . Th e us e o f current , federally-enforceabl e emission s factor s woul dresul t f a higher , projected , futur e amission s and . consequently , coul daffec t th e indicatedPS O applicabilit y

finding . 5 ) Baselin e emission s (actua l emission s fo r 2-yea r perio ddefine db y calenda r year s 198 3 an d1984 ) hav e bee n revise dbase do nadditiona l Informationsubmitte db y WEPCO .P.1 5

Enclosur e B Revise dPS O Applicabilit y Determinatio n Por t Washingto nPowe r Plan t Renovatio no f Unit s 1- 4 (al l emission s calculation s ar e 1 nton s pe r year )

Pollutan t Particulat e utte r (4 ) (5 ) Actua l

Emission s Estimate d

Futur e Actua l Baselin e (1 ) Emission s (2 ) Chang e 32 8 33 9 1 1

Ne t PS O Subjec t Emission s Significanc e t o PS O 

## Leii L

Sulfu r dioxid e (4 ) 24,23 6 Nitroge noxide s (5 ) 2,59 2 Carbo naonoxld e 14 4 Hydrocarbo n 1 7 18,50 5 3,39 6 21 7 2 5 -5,73 1

80 4
7 3 2 5

4 0 4 0 10 0 4 0 Review

m

no

no
yes .

n o

n o Othe r Regulate dPollutants : Ou e t o Insufficien t sourc e specifi c Informatio n regardin g emissio nfactors , PS O applicabilit y fo r PM-10 , lea dan

dnoncriteri a pollutant s liste da t 4 0 CF RSectio n52.2 1 (b)(23)(1 ) and (11 ) canno t b e determine d a t thi s time . 1 ) Averag e eetua l amission s fo r 2-yea r perio ddefine db y calenda r year s 198 3 an d 1984 . Z) Calculate db y

CP A base de nth e followin g informatio nsubmitte db y WEPCO :

a . Th e average , historic-firin g rat e (approximatel y 17x1 9 Ifet

upe r year ) fo r th e 2-yea r perio ddefine d b y calenda r year * 197 8 an d 1979 . b . Th e emission s estimate s fo r th s renovate dunit s base do n futur e coa l characteristic s (e.g. . sulfu r andhea t content ) and actua l emission s afte r pollutio ncontrol s fo r particulate .
c . Uni t S inoperative . Sulfu r dioxid e remova l o f 2 2 an d 1 3 percen t a t wit s 1 and 4 , respectively , t o exclud e thes e unit s fro m »SP S requirement s fo r greate r contro l o f sulfu r dioxide . histori c 3 ) I f ne

wdat a Indicat e tha t annual

. historic-firin g rate * a t th * PortWashlngto * facilit y 1978 an d 197

9 levels , th * Indicate d applicabilit y determinatio n coul d change

. 4 ) Th e calculatio n o f estimate , futur*

. actua l emission , fo r thi s P^f"**** ^ *2' ' r£2£Slv f contro l technolog y performanc e level s and/o r fue l •""«'••**?*/• ' f'E/ES J r«^£laS'and^lft r * ' EPA'a PS O too l icabilit y determinatio n i s vali d onl y t o th * exten t tha t th * •9*TM particulat e an a auyu r dl«1<^ 2 « f-*torTus* d fo r unit s 1- 4 t o cafculat * futur e -1»»«on s (baie d o n par t leuat e an d SO , contro l ISiScZ SrfSrmL^Uvlluai d fue l sulfu r en d heat conten t ar e rtn'^JJ?^ bJ?Tj5kl 5 Mi«ihM«Mr f M( <M(> I futur * actua l amission s fo r thi s pollutan t *1 U be revise d b y tr*

. base

d o n existin g factor * woul d r*«u1 t I n hightr

. pr*J*et*d

. futur m amission * and

. consequently , coul d affec t tn * indicate d no applicabilit y finding

. 5 ) Bas*l1n e amission s (actua l emission , fo r 2-yea r perio d defined b y calenda r year * 198 1 an d 1984 ) hav e bee n revise d base

d o n additiona l Informatio n submitte d b y WEPCO

.