NACWA Letter to Administrator Jackson May 24, 2011 Page 1 of 2

EXECUTIVE COMMITTEE

PRESIDENT Jeff Theerman

Executive Director Metropolitan St. Louis

Sewer District
Saint Louis, MO

VICE PRESIDENT
David R. Williams Director of Wastewater East Bay Municipal Utility District Oakland, CA

TREASURER

Suzanne E. Goss Government Relations Specialist JEA (Electric, Water & Sewer)

Jacksonville, FL

SECRETARY Julius Ciaccia, Jr.

Executive Director Northeast Ohio Regional

Sewer District Cleveland, OH

PAST PRESIDENT
Kevin L. Shafer

Executive Director Milwaukee Metropolitan Sewerage District Milwaukee, WI

EXECUTIVE DIRECTOR

Ken Kirk May 24, 2011

Honorable Lisa P. Jackson Administrator U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460

Ms. Gina McCarthy Assistant Administrator, Office of Air and Radiatio n U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460

Mr. Peter Tsirigotis Director, Sector Policies and Programs Division Office of Air Quality Planning and Standards U.S. Environmental Protection Agency Research Triangle Park, NC 27711

Richard Ossias, Esq. Associate General Counsel for the Air and Radiation Law Office Office of General Counsel (Mail Code 2344A) U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460

Re: Petition for Reconsideration a Petition for Reconsideration a Petition for Reconsideration and Stay of the Standa rds of Performance for nd Stay of the Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Sewage Sludge Incineration Units; Final Rule, 76 Fed

. Reg . 15372 . 15372-

- 15454 (March 21, 2011) (March 21, 2011)

Dear Administrator Jackson:

Please find enclosed the above-referenced petition by the National Association of Clean Water Agencies (NACWA) for reconsideration an d stay of the newly promulgated emission limitations and other requirem ents under Clean Air Act § 129 applicable to sewage sludge incineration unit s.NACWA Letter to Administrator Jackson May 24, 2011 Page 2 of 2

Without action by EPA to correct the flaws in these new regulations, the emission limitations and othe r requirements affecting sewage sludge incinerators w ill have unjustified and substantial negative impac ts on the municipalities and public clean water authorities w ho rely on incineration as the most economically an d environmentally sound alternative for managing bios olids in numerous cities and towns across the Unite d

States.

Please contact me or Mr. Chris Hornback at (202) 83 3-9106 or chornback@nacwa.org to discuss any questions regarding the enclosed petition.

Sincerely,

Ken Kirk
Executive Director

Encl.

cc: Nancy Stoner, U.S. Environmental Protection Ag ency

### U.S. ENVIRONMENTAL PROTECTION AGENCY

I N RE : P ETITION FOR R ECONSIDERATION AND S TAY OF THE S TANDARDS OF P ERFORMANCE

FOR N EW S TATIONARY S OURCES AND E MISSION G UIDELINES FOR E XISTING S OURCES : S EWAGE S LUDGE I NCINERATION U NITS ; F INAL R ULE 76 F EDERAL R EGISTER 15372-15454 (M ARCH 21, 2011)
D OCKET N O

. EPA-HQ-OAR-2009-0559

I. INTRODUCTION

Pursuant to section 307(d)(7)(B) of the Clean Air Act (“CAA”), 42 U.S.C. § 7607(d)(7)(B), the National Association of Clean Water Agencies (“NACWA”) petitions the U.S. Environmental Protection Agency (“EPA” or “Agency”) to reco nsider the final Agency action titled “Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Sewage Sludge Incineration Units,” 76 Fed. Reg. 15372 (Mar. 21, 2011), establishing emission limitations and other requirements under CAA § 129 applicable to sewage sludge incinerators (“SSI”) (the final rule is referenced herein as the “SSI Rule”). NACWA also requests that EPA stay implementation of the SSI Rule pending th e reconsideration proces s and promulgation of regulations replacing the SSI Rule.

NACWA is a voluntary, non-prof it association whose curren t membership includes 270 municipalities and public clean water authoritie s. NACWA’s members operate nearly 1,000 of the nation’s publicly-owned treatment works (“POTW s”), which collectively serve the majority of the sewered population of the United St ates. NACWA’s members own and operate approximately 110 – roughly half – of the SSIs affected by the SSI Rule.

For over 40 years, NACWA has maintained a leadersh ip role in legal and policy issues affecting the public authorities responsible for cleaning the nation’s wastewater. NACWA is at the forefront of the development and implementation of scientifically base d, technically sound, and cost-effective environmental programs for pr otecting public and ecosystem health.

NACWA and its members have long been advoc ates for maintaining the flexibility local communities need to choose the biosolids management approaches (namely incineration, land application or landfilling) that work best within the economic and environmental constraints unique to each locality. Congress’ intention to recognize and encourage that flexibility is expressly embodied in § 405(e) of the Federa l Water Pollution Control Act, 33 U.S.C. § 1345 (“CWA”) (“The determination of the manner of disposal or use of sludge is a local determination”). However, EPA’s approach to regulating biosolids in cineration under the SSI Rule gives no attention to the st atutory factors required to be cons idered in order to balance CAA regulation with maintaining inci neration as an environmentally beneficial and economically viable option for these communities.As detailed in this petition, the CAA § 129 standa rds: (1) exceed EPA’s authority to regulate SSIs under the CAA, (2) fail to satisfy the f undamental achievability test under both CAA §§ 112 and 129 for establishing a maximum achie vable control technology (“MACT”) floor level of control, (3) lack a rational basis in th e rulemaking record, and (4) fail to consider and respond to numerous significant comments and critici sms of the standards. As a result, the final rule imposes numerous unlawful and unjustified standards, including:

• imposing overly stringent MACT floors for all SSIs without regard to their major source
or area source classification as would be required under CAA § 112;

• imposing MACT floor controls on non-HAP pollu tants without the statutory authority to require such controls;

• failing to establish subcategories recognizi ng fundamental class and use differences among SSIs, such as infrequently used backup units; and

• ignoring data showing variability in biosolids feed characteri stics that aff ect the overall performance of each individual SSI – and thus affecting the overall achievability of the
standards.

For the reasons explained below, EPA has not given NACWA meaningful opportunity to comment on, and therefore opportunity to influen ce the outcome of, many issues that are of central relevance to the SSI Rule, including th e Agency’s rationale for regulating SSIs under CAA § 129, the critical impact of biosolids fuel ch aracteristics in determining SSI emissions, and
revised standards that were not included in the proposed rule. Because the flaws in the SSI Rule are fundamental and pervasive – implicating the legal authority for the rulemaking, the selection of pollutants for which standards may be estab lished, the selection of SSI subcategories, and numerous other aspects of the ru le – it is impossible to carve-out and maintain segments of the
SSI Rule that are not infected with serious le gal and technical errors. If EPA initiates the requested reconsideration process, it will necessarily touch on esse ntially every aspect of the SSI Rule by potentially eliminating standards for non- HAP pollutants, altering the subcategorization
scheme for MACT floor calculati ons, and including significantly more and more representative data in the standard setting process.

Given the magnitude of these problems, NACWA re quests reconsideration and stay of the entire SSI Rule, so that we can work with EPA to co rrect errors through an appropriate and legally defensible notice-and-comment rulemaking proce ss. NACWA also requests that EPA initiate this reconsideration process to address potentially inconsiste nt, overlapping and unnecessary requirements from and among the SSI Rule a nd Part 503 regulations. Rationalizing and streamlining the differing sets of requirements a pplying to SSIs is essential to provide regulatory clarity and reduce burdens on municipalities a nd clean water agencies and should not wait until some unspecified future rulemaking. See 76 Fed. Reg. at 15376/2-3.

Page 2 of 25II. STANDARDS FOR RECONSIDERATION AND STAY OF THE SSI RULE

Under CAA § 307(d)(7)(B), EPA mu st convene a proceeding for reconsideration of a final Agency action if a person raising an objection can demonstrate that it was “impracticable to raise the objection” within the period fo r public comment and the “objecti on is of central relevance to the outcome of the rule.” The rulemaking requ irements under § 307(d) apply to the SSI Rule.
See CAA § 307(d)(1)(C) and (D). EPA also has i ndependent and inherent authority under both §§ 129 and 112 to initiate a rulemaking to address le gal and technical errors in the SSI Rule, and
to re-set the effective date to allow ti me to promulgate a corrected rule.

EPA has included new provisions and new major le gal interpretations in the final SSI Rule. These changes violate administrative law princi ples of notice-and-comment rulemaking unless EPA can show that the changes are a “logi cal outgrowth” of the proposed rule – i.e. , that the public “should have anticipated th at the change was possible, a nd thus reasonably should have filed their comments on the subject du ring the notice-and-comment period.” Environmental Integrity Project v. EPA , 425 F.3d 992, 996 (D.C. Cir. 2005).

In addition to initiating a recons ideration process, NACWA also requests that EPA stay the SSI Rule pending review and promulgation of re placement regulations. Section 307(d)(7)(B) contains authority for EPA to stay the effective date of an action for up to three months during the reconsideration process. In addition, § 705 of the Administrative Pr ocedure Act (“APA”), 5 U.S.C. § 705, provides independent authority for EPA to postpone the effective date of a rulemaking when the Administrator “finds that ju stice so requires.” Similarly, §§ 129(a)(5) and 301(a) of the CAA give EPA authority to undertak e a process of correcting the SSI Rule and to establish a parallel stay where the stay is necessary to preserve the status quo so as to ensure that the correction is a complete cure, especially to keep communities from wasting scarce public resources attempting to comply with a defective rule.

The issues raised in this petition meet the standa rds for reconsideration a nd stay of the SSI Rule under both CAA § 307(d)(7)(B) and APA § 705, as well as CAA §§ 129(a)(5) and 301(a). Therefore, NACWA urges EPA to take all necessary action to stay the SSI Ru le and to initiate a new rulemaking to develop replacement regul ations addressing NACWA’s objections.

III. GROUNDS FOR RECONSIDERATION

A. EPA’s Rulemaking Process

Pursuant to an order entered in Sierra Club v. Johnson , 444 F. Supp. 2d 46 (D.D.C. 2006), the
District Court for the District of Columbia esta blished a series of deadlines by which EPA was to complete certain duties under CAA §§ 112(c)(3), (c )(6) and (k)(3), includ ing adopting standards for SSIs. Prior to the comment period on the SSI Rule, the deadline fo r taking action under the District Court’s order was extended to January 16, 2011 to allow EPA additional time to develop
the SSI Rule.

Page 3 of 25Through pre-proposal meetings a nd written submissions to EPA, NACWA and several of its members submitted a wide range of informati on on POTWs and SSIs, including, critically for this petition, information regarding the region al, seasonal and daily variability of biosolids composition as evidenced by metals concentration data available th rough the CWA Part 503 program, the effect such variability has on emissions from biosolids incineration, and
information on the technical limitations of a pplying add-on control devices to SSIs.

After EPA issued its proposed SSI rule, 1 NACWA submitted additional information during the comment period reinforcing its earlier submissions to the Agency and raising numerous objections and recommendations for improveme nts. NACWA’s comments on the proposed SSI rule totaled about 500 pages, including over 200 pa ges of narrative comments and approximately 300 pages of technical support.

Several NACWA members, including the followi ng POTWs and municipalities, also submitted
detailed comments and data on the proposed rule:

• Northeast Ohio Regional Sewer District (“NEORSD”)

• City of Palo Alto (CA)

• Central Contra Costa (CA) Sanitary District

• Metropolitan St. Louis (MO) Sewer District

• City of Greensboro (NC)

• Green Bay (WI) Metropolitan Sewerage District

• City of Indianapolis (IN)

• City of Columbus (OH)

• Hampton Roads (VA) Sanita tion District (“HRSD”)

• City of Vancouver (WA)

Together, NACWA and its members submitted over 750 pages of information and analysis demonstrating numerous legal, procedural and technical fl aws in the proposed rule.

1 See “Proposed Standards of Performance for New Stationary Sources and Emission Guidelines for Existing

Sources: Sewage Sludge Incineration Units,” 75 Fed. Reg. 63260 (Oct. 14, 2010).

Page 4 of 25Eight days later, on December 7, 2010, EPA filed a motion asking the District Court to extend the deadline for completing the SSI Rule to Ju ly 15, 2011. EPA’s initial and reply memoranda and the declarations submitted in support of EPA’s motion 2 demonstrated the Agency’s belief that it could not produce defensib le rules for SSI units any soone r than July 15, 2011. To support its claim, EPA pointed to the over 80 individual substantive comments received on the SSI rule
and the need to review and res pond to all of these comments. See Declaration of Panagiotis E. Tsirigotis (“Tsirigotis Decl.”) ¶¶32 and 48 (Encl. A, Exh. 6).

NACWA, as an intervenor in the Sierra Club case, supported EPA’s motion, arguing that EPA
needed at least the addi tional time requested in order to cons ider and respond to comments and to deal with the implicatio ns of those comments in revisions to the proposed rule. While EPA
noted in its December 7 motion th at it did not currently plan to re-propose the SSI rule, see EPA Memo pp. 3-4 (Encl. A) and Tsirigotis Decl. ¶ 48 (Encl. A, Exh. 6), that “plan” was clearly formulated before any review, or at least any serious review, of all comments on the SSI Rule.
See Supplemental Declaration of Panagiotis E. Tsir igotis (“Tsirigotis Supp. Decl.”) ¶32 (Encl. B) (EPA had reviewed “some” comments on the SSI Rule as of January 3, 2011, the date Mr. Tsirigotis’ supplemental declaration was signed). Ultimately, the District Court extended the deadline for action on the final SSI Rule approx imately one month – to February 21, 2011.

B. EPA’s Final SSI Rule

Likely due in part to the fact that EPA had less than 12 weeks from the end of the comment period to finalize the SSI Rule, the SSI Rule and EPA’s preamble and response to comments document inadequately responded – and in several instances did not respond at all – to critical issues raised by NACWA. The preamble to the SSI Rule also contains a new and surprising explanation of EPA’s thinking on the central legal issue of whether SSIs ar e subject to regulation under CAA § 129.

While we recognize that EPA might have corrected such errors given more time, the SSI Rule nonetheless contains demonstrably unlawful requirem ents that cannot withst and judicial review. Granting NACWA’s petition would allow the additiona l time needed for EPA to develop a better understanding of this sector and the manner in which Congr ess intended for biosolids incineration to be regulated by overlapping CAA and CWA programs. Furthermore, EPA can still fully and fairly meet its obligations under CAA §§ 112(c)(3 ) and (c)(6) by regulating SSIs under § 112(d).

2 See enclosed “EPA’s Memorandum in Support of Motion to Amend Order of March 31, 2006” (“EPA Memo”)

and exhibits thereto (Encl. A), and “EPA’s Reply Memorandum in Support of Motion to Amend Order of March 31, 2006” (“EPA Reply Memo”) and exhibits thereto (Encl. B).

Page 5 of 25The issues that are the subject of this petition fu ndamentally affect the legal defensibility and the implementability of the SSI Rule, as well as the impact the SSI Rule will have on NACWA’s members and other owners and operators of SSIs.

NACWA has timely filed a petition for review challenging the SSI Rule. 3 In addition, NACWA seeks EPA reconsideration of the following specific aspects of the SSI Rule:

1. EPA’s new rationale for regulating SSIs under CAA § 129 instead of CAA § 112
is invalid.

In pre-proposal submissions and in commen ts on the proposed rule, NACWA raised a comprehensive set of arguments as to why EPA is required under CAA § 112(e)(5) to establish emission standards for SSIs under § 112 instead of § 129. These arguments can be summarized
as follows:

• Section 112(e)(5) requires EPA to promulga te standards under § 112( d) applicable to “publicly owned treatment works (as defined in title II of the Federal Water Pollution Control Act [33 U.S.C.A. § 1281 et seq .]).”

• The broad definition of “treatment works” in Title II of the CWA (and in EPA’s implementing regulation) includes “any devices and systems used in the ... treatment, recycling, and reclamation of municipal sewage” and incl udes “any works ... used for ultimate disposal of residues resulting from such treatment” and, thus, encompasses SSIs
at POTWs.

• NACWA provided examples of SSIs constructed and upgraded using CWA Title II construction grants, for which federal funding would have been illegally authorized by
EPA were SSIs not within the CWA definition of “treatment works.”

• SSIs are physically and operationally integrat ed into the specific POTWs they serve and are an essential part of the solids treatment process. Without their SSIs, these POTWs could not continue to operate unless they switch to another biosolids management option, which is a major undertaking involving physical changes to the POTWs.

• EPA has repeatedly taken the position that SSI s as a source category are to be regulated under CAA § 112. Our comments provided refere nces to such statements (formal and informal) from 1992 through 2002.

3 See enclosed Petition for Review and Rule 26.1 Disclosure Statement (Encl. C) filed on May 6, 2011 with the

U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”).

Page 6 of 25In the proposed rule, the sum tota l of EPA’s statements on this t opic was that it “has taken the position in its regulation of POTW under the Clean Air Act that section 112(e)(5) does not apply to SSI units and for this reason did not regula te them in its POTW section 112(d) emission standards.” 75 Fed. Reg. at 63264. EPA offered nothing more than this single conclusory sentence, and similarly failed to provide any elaboration on the issue when it promulgated regulations under § 112(d) for POTWs. Thus , it goes without saying that nothing in the proposed rule fairly put NACWA or other interested parties on notice that EPA was developing a new legal interpretation – to be unveiled with the final SSI Rule – for why it believes SSIs must be regulated under § 129.

In the final SSI Rule, EPA for the first time grounded regulation of SSIs under § 129 on a reading of the CAA that: (1) § 112(e)(5) is merely a scheduling pr ovision that “simply identifies the date by which EPA must issue emissions st andards for POTW,” (2) that the decision in
NRDC v. EPA , 489 F.3d 1250 (D.C. Cir. 2007) “preclud es” EPA from regulating SSIs under § 112(d), and (3) that EPA “does not have the discretion” to regulate SSIs except under § 129.
See 76 Fed. Reg. at 15383/2-3. This rationale is fundamentally different from the rationale suggested by EPA’s statement at the proposal stage that it “has taken the position” that § 112(e)(5) “does not apply” to SSIs and that EPA is proposing a § 129 based rule “for this reason.” The final SSI Rule is apparently the fi rst time EPA has asserted such an interpretation of the statute, and EPA certainly failed to put the interested public on notice of this novel reading in the proposed rule. EPA’s failure to explain wh at it believed to be the legal basis for its proposed standards deprived commenters of the ability to engage the Agency on its faulty reading of § 112(e )(5) and of the NRDC decision in order to achiev e a different outcome in this rulemaking.

Furthermore, EPA nowhere explains (1) how its new interpretation squares with the clear directive in § 112(e)(5) for the Administrator to set emission st andards under § 112(d), (2) how it implicitly reached the conclusion that SSIs are no t covered by the expansive CWA definition of “treatment works” incorporated into CAA § 112(e )(5), (3) how its new interpretation is legally possible in light of the numerous SSIs built a nd improved using CWA Title II funds, nor (4) how EPA’s new interpretation squares with the ex amples NACWA provided of previous Agency rulemakings and policy statements. EPA’s failu re to address these and many other comments also violates the requirement under CAA § 307(d)(6 )(B) to include in the SSI Rule “a response to each of the significant comments, criticisms, and new data submitted” in order to establish a complete record on judicial review.

EPA’s view that it was compe lled to promulgate standards for SSIs under § 129 is undoubtedly
of central relevance to the outcome of the SSI Rule. It resulted in, for example, imposition of
MACT floor level standards for all SSIs wit hout regard to major/ar ea source distinctions, emission standards for pollutants not subject to regulation under § 112, and in other requirements ( e.g ., siting analyses and operato r training) which are manda tory under § 129 and not under § 112. EPA is obligated unde r § 307(d)(7)(B) to grant r econsideration under these circumstances, and we believe there is a substant ial likelihood that changes will be made to the SSI Rule if EPA takes the opportunity to engage these issues.

Page 7 of 252. EPA failed to collect sufficient data to reliably determine the MACT floors.

NACWA submitted comments pointing out several ways in which EPA’s rulemaking process was fundamentally flawed from the outset. St arting with EPA’s decision to circumvent the Paperwork Reduction Act and Office of Mana gement and Budget review by limiting its information collection to only nine of the rough ly 118 POTWs operating SSIs, the Agency’s fast track approach to rulemaking ensured that EPA would not have sufficient data for its rulemaking. The sizes of the SSI subcategories dictate that the existing source MACT floors would reflect the performance of the best eight fluidized bed inci nerators (“FBIs”) and the best 18 multiple hearth incinerators (“MHIs”). See Revised MACT Floor An alysis for the Sewage Sludge Incinerator Source Categor y (January 2011) (“Revised MACT Floor Memo”) at 6. Even after collecting additional data fr om state agencies, EPA had data from only six FBIs and some of those units were not tested for all pollutants. The MHI database also lacked data from 12 percent of the MHI units for seve n of the nine pollutants to be regulated. Thus, even assuming the improbable, that all of the data collected came from the top performing 12 percent of the subcategory, EPA’s truncated data collection effort fell short of generating the emissions information necessary to calculate the MACT floors.

The quality and quantity of the data that EPA us ed to set the MACT st andards are of central relevance to the development of the final SSI Rule. NACWA commented on the inadequate database and provided significant additional data for EPA to consider during the rulemaking process. Thus, NACWA was surprised when EP A’s Revised MACT Floor Memo indicated in January 2011 after the close of the public comment period that the final emission standards were
established based on data from as few as four and no more than six of the 60 FBIs identified by
EPA. MHI units had emission lim itations based on data from less than 4 percent of the 144 units in that subcategory. Section 129 of the CAA does not allow EPA to stop short of collecting sufficient emissions information. As EPA acknowledges:

While Congress adopted identical la nguage describing the MACT floor calculation in section 129(a )(2) as it did in section 112(d)(3), the latter section includes a provision stating that the fl oor for existing sources cannot be less stringent than “the average emission lim itation achieved by th e best performing 12 percent of the existing sources (for which the Administrator has emissions information)[.]” Section 129, however, simp ly states that the existing source floor cannot be less stringent than the averag e emission limitation achieved by the best performing 12 percent of the existing sour ces in the category. Therefore, while EPA believes Congress intended for th e MACT floor calculation under each section of the Act to be the same, this difference in the text of the two provisions requires us to establish the MACT floor for section 129 source categories based on the best performing 12 percen t of sources in the category . Because EPA does not have that data at this time, the sta tistical technique described below is the only
manner in which we can establish the existing source floor on that basis.

See Revised MACT Floor Memo at 8 (emphasis adde d). In view of this critical difference in statutory language, EPA must take the additional time necessary to collect sufficient data to set
MACT standards. This is not a case where EPA tried and failed to collect the requisite data.

Page 8 of 25Instead, EPA decided not to obtai n stack test data from the re quired minimum number of SSIs based on expediency. EPA’s rush through rulema king also resulted in the Agency disregarding data provided by NACWA and its members that woul d have helped fill some of these data gaps if the Agency had taken the time to evaluate the data and made reasonable requests for supporting information. This is a violation not only of the data base requirements established by § 129 for making MACT floor determinations, as acknowledged by EPA, but also of the fundamental requirement underlying § 129 for rational decisionmaking. See CAA § 307(d)(9), 42 U.S.C. § 7607(d)(9); Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855, 861-62 (D.C. Cir. 2001). See generally NRDC v. EPA, 194 F.3d 130, 136 (D.C. Cir. 1999). Reconsideration is an appropriate administrative step to facilitate the collection and review of all available data to fill the gaps in EPA’s database.

3. EPA failed to use data from EPA’s 40 C. F.R. Part 503 program and from stack tests outside of the limited data gathered from only nine POTWs in early 2010.

EPA has additional data in its possession that should be used to determine the emission rates achieved by the best performing sources under the full range of operating conditions. EPA relies solely on stack test data to set standards for a source category that does not have a significant
amount of historic stack test data for the relevant pollutants. As a resu lt, EPA’s database relies heavily on data from the 17 stack tests performe d over a few months in early 2010 in response to its information collection request to nine SSI facilities. These data cannot represent the emission profiles of the large population of SSIs – or even the profiles of the tested units themselves –
over time since a handful of stack tests from a single time period do not reflect the intense geographic variability in biosolids charac teristics among POTWs nor do they account for seasonal and daily variability of biosolids characteristics within a POTW. Thus, EPA’s approach fails both the test of rationality, see Cement Kiln Recycling Coalition

, 255 F.3d at 861-62, and the test of achievability underg irding § 129, as explained below.

a. Failure to engage in rati onal decisionmaking.

NACWA in its comments urged EPA to look at all of the available data – particularly biosolids
concentration data available for all POTWs under EPA’s Part 503 regulations – to understand that variability and to incorporate an anal ysis of Part 503 data into the MACT floor determinations. We pointed out th at POTWs are required to track a nd report metals data in their biosolids year-round and dur ing all periods of operation and, therefore, EPA already had all the
Part 503 data it needs to examine va riability for metals. As an il lustration of the magnitude of variability encountered by PO TWs, NACWA’s comments include d the following example of monthly average metals concentrations from two facilities owned by NEORSD showing that average metal concentrations with in a single plant varied by a fact or of three or more over this 12-month period:

Page 9 of 252009 Monthly Average Biosolids Concentrations (mg/dry kg) (NEORSD Southerly and Westerly POTWs)

Cadmium Lead Mercury Southerly Westerly Southerly Westerly Southerly Westerly January 7.95 13.25 62.23 97.00 0.68 0.44 February 8.45 11.95 75.60 123.10 0.77 0.41
March 8.90 14.46 84.94 141.20 0.69 0.34 April 9.11 14.96 67.93 123.00 0.84 0.37 May 10.40 12.97 87.16 145.95 0.78 0.36

June 4.60 7.94 99.54 204.30 1.24 0.77 July 4.46 7.92 123.15 218.55 1.24 0.92 August 4.78 9.08 114.10 188.23 3.12 0.59 September 5.13 8.12 103.41 183.93 2.08 0.87
October 3.99 7.19 94.33 129.27 0.98 0.63
November 4.14 6.22 82.78 104.81 0.91 0.58
December 3.80 5.97 74 .66 97.55 1.38 0.40

In response to these concerns, EPA reached the utterly implausible conc lusion that single stack
tests in the winter of 2010 from nine different facilities in ni ne different states “represents sufficient variation in regions, cl imates, and populations that ade quately incorporates variability in wastewater treatment systems across the U.S. ” 76 Fed. Reg. at 15391/2-3. This conclusion is indefensible on its face, and is in obvious tensio n with representations EPA made to the District
Court in the Sierra Club case. In its memoranda supporting its motion for additional time, EPA stated that in order to complete the SSI rulemaking it must address several new issues raised during the comment period, including vari ability of sludge ch aracteristics. See EPA Reply Memo at 21. Mr. Tsirigotis’ supplemental declar ation elaborated that, with respect to the variability issue:

[EPA] would need to make appropriat e revisions to the proposed emissions standards, including re-eva luating the regulatory imp act analysis, variability analyses, and the levels of the standards th emselves. In particular, we would plan to analyze information rega rding the variability of sludge content, determine whether that analysis warrants any revisions to the variability incorporated into the proposed standards, and calculate re vised MACT floors, as appropriate.

Tsirigotis Supp. Decl. ¶34b. However, in the SS I Rule EPA does not even attempt to reconcile this conclusion with the large quan tity of Part 503 data available to it. Instead, EPA states that “there is not enough information to determine wh ether it would be appropr iate to incorporate variability in sludge feed into the rule,” and attempts to defend its failure to analyze Part 503 data by saying that EPA requested additional data “but did not receive adequate sampling data from the best performing sources.” Id. at 15391/3.

If EPA was claiming that it did not receive sludge metals concentration data from the POTWs it contends are the best performing sources, then EP A’s claim simply is not true. If, instead, EPA was merely claiming that commenters did not enclose their Part 503 data in their comments

, then the obvious explanation is that POTWs already routinely submit these data to EPA and so commenters did not reasonably expect to have to resubmit data already in EPA’s possession. If EPA tried and had difficulty retrieving data from Agency files, the proper response would have

Page 10 of 25been to contact commenters to reques t additional copies of these data. See Tsirigotis Supp. Decl. ¶34a (justifying an extension until July 15, 2011 because, among other things, EPA needs to contact commenters to get additional information on data submitted during the comment period). That did not happen.

As part of this reconsiderati on request, NACWA enclos es a summary and analysis of data from January 2005 to as late as December 2010 showing monthly biosolids metals (Cd, Pb and Hg) characteristics from 25 POTWs using SSIs. 4 Fifteen of these POTWs operate SSIs that EPA considers to be among the best performing units – including the City of Greensboro (NCTZ Osborne), Allegheny County (PA) Sanitary Auth ority, Upper Blackstone (MA) Water Pollution Abatement District, Central Contra Costa (CA) San itary District, Metropolitan District Hartford (CT), Ypsilanti (MI) Community Utilities Authority, Wayne Township (NJ) Sewer Authority, Indianapolis (IN) Sewer Aut hority, two POTWs operated by th e Metropolitan Council (MN) Environmental Services, and fi ve POTWs operated by HRSD.

Cadmium in Biosolids (mg/dry kg) (2005-2009)

POTW 25 th

Percentile Minimum Median Maximum 75 th

Percentile CCCSD (CA) ND ND ND ND ND Wayne Twp. (NJ) 1.6 1.1 2.2` 17.3 2.8 Hartford (CT) 2.0 0.3 2.6 8.0 3.1 Greensboro (NC) 2.4 1.3 5.6 22.1 7.7 Upper Blackstone (MA) 5.3 3.2 6.0 11.0 6.8 ALCOSAN (PA) 0.5 0.0 0.7 19.1 1.3 St. Paul Metro MCES (MN) 1.2 0.8 1.5 32.2 2.7 Williamsburg HRSD (VA) 1.0 0.5 1.5 5.0 3.0 Army Base HRSD (VA) 2.8 1.0 4.0 8.0 5.0 Boat Harbor HRSD (VA) 3.0 1.0 3.0 9.0 4.0 Chesapeake Elizabeth HRSD (VA) 1.5 0.5 2.0 5.0 3.0 Virginia Initiative HRSD (VA) 1.5 0.5 3.0 5.0 3.0 Seneca MCES (MN) 0. 4 0.2 0.7 46.0 1.3 Belmont Indianapolis (IN) 1.4 1.0 1.8 4.1 2.4 Ypsilanti (MI) 3.5 2.0 5.3 15.0 6.1 NOTE: For monthly data below the detection limit, one-h alf the detection limit was used in calculations. ND is used when over 90 percent of the data are below th e detection limit and the artificial value would significantly distort actual variability.

4 All of the enclosed data were generated pursuant to th e Part 503 regulations and were previously submitted to the

POTWs’ respective permitting authorities. Enclosure D contains example Part 503 reports for NEORSD’s Southerly and Westerly POTWs in the same form as or iginally submitted to the permitting authorities.

Page 11 of 25Lead in Biosolids (mg/dry kg) (2005-2009)

POTW 25 th

Percentile Minimum Median Maximum 75 th

Percentile CCCSD (CA) 0.8 0.3 8.6 54.9 15.1 Wayne Twp. (NJ) 31.9 25.8 39.0 82.4 45.6 Hartford (CT) 57.6 30.0 69.2 194.0 80.6 Greensboro (NC) 17.9 6.4 24.5 39.1 30.6 Upper Blackstone (MA) 48.0 31.0 58.0 160.0 70.0 ALCOSAN (PA) 52.0 15.0 66.2 233.0 79.1 St. Paul Metro MCES (MN) 27 .3 19.2 30.4 97.1 37.4 Williamsburg HRSD (VA) 15.0 6.0 18.5 49.0 23.3 Army Base HRSD (VA) 36.8 22.0 46.0 130.0 67.8 Boat Harbor HRSD (VA) 37.0 17.0 42.0 184.0 49.3 Chesapeake Elizabeth HRSD (VA) 19.0 11.0 26.0 137.0 36.3 Virginia Initiative HRSD (VA) 39.5 12.0 45.0 84.0 54.0 Seneca MCES (MN) 4. 0 3.0 4.8 20.0 5.7 Ypsilanti (MI) 9.2 0.0 15.9 73.6 23.8 NOTE: For monthly data below the detection limit, one -half the detection limit was used in calculations.

Mercury in Biosolids (mg/dry kg) (2005-2009)

POTW 25 th

Percentile Minimum Median Maximum 75 th

Percentile CCCSD (CA) 0.61 0.40 0.75 14.65 1.09 Wayne Twp. (NJ) 0.40 0.05 0.71 3.40 0.96 Hartford (CT) ND ND ND ND ND Greensboro (NC) 0.20 0.03 0.36 1.70 0.68 Upper Blackstone (MA) 0.71 0.60 0.87 1.80 1.37 ALCOSAN (PA) 1.00 0.74 1.13 2.31 1.42 St. Paul Metro MCES (MN) 0.35 0.19 0.50 3.49 0.64 Williamsburg HRSD (VA) 0.30 0.10 0.30 0.70 0.50 Army Base HRSD (VA) 0.60 0.30 0.70 6.40 0.90 Boat Harbor HRSD (VA) 0.40 0.20 0.50 0.90 0.60 Chesapeake Elizabeth HRSD (VA) 0.70 0.30 0.85 1.90 1.00 Virginia Initiative HRSD (VA) 0.40 0.30 0.50 1.90 0.63 Belmont Indianapolis (IN) 0.03 0.01 0.04 0.60 0.05 Ypsilanti (MI) 0.43 0.03 0.59 1.80 0.78 NOTE: For monthly data below the detection limit, one -half the detection limit was used in calculations. ND is used when over 90 percent of the data are below th e detection limit and the artificial value would significantly distort actual variability.

Page 12 of 25These data and the monthly average data summar ized in Enclosure D strongly illustrate the significant variability in metals concentrations among PO TWs and within a POTW over relatively short time periods. 5 For example, the enclosed monthly Part 503 data show:

• Average metals concentrations in biosolids f eed vary significantly at all these POTWs. The data show average Cd concentrations ra nging from a minimum of 0.2 mg/dry kg to a maximum of 46 mg/dry kg at the Seneca (M N) POTW, from 1.3 up to 22.1 mg/dry kg at the Greensboro (NC) POTW, and from 0.1 up to 33.1 mg/dry kg at th e Metropolitan St. Louis Sewer District Bissell Point POTW. By way of example, an FB I (Unit ID ES-1) at the Greensboro POTW was selected by EPA as the best performing unit to set the NSPS MACT floor for Cd and was among the units used in calculating the MACT floor for existing sources. Yet this POTW experienced among the most significant variability in Cd concentrations in biosolids during the period 2005-2009, as demonstrated by the enclosed Part 503 data. Furthermore, Cd concentrations nearest the time when Greensboro performed its stack te sting in response to EPA’s I CR were close to the lowest levels recorded over the five years of m onthly data (i.e., at or less than the 25 th percentile concentration). Yet EPA did not consider th is variability at all in its MACT floor calculations nor in setting the le vel of the final standards.

• Average Pb concentrations ranged from 6.4 up to 39.1 mg/dry kg at the Greensboro POTW and from 31 up to 160 mg/dry kg at th e Upper Blackstone (M A) POTW, both of which operate the SSIs used by EPA to set the NSPS MACT floor for Pb. Yet based on
the available Part 503 data both of th ese POTWs were at or below the 25 th percentile average concentration for Pb during the pe riod leading up to the ICR stack testing.

• Average Hg concentrations ranged from a lo w of 0.4 up to 14.65 mg/dry kg at the Central Contra Costa (CA) POTW, which was used to set both the new and existing source MACT floors for Hg. Yet again, the average Hg concentrations were approaching the five-year minimum and were less than one-half of the 75 th percentile average in the period before stack testing took place. Looking at other POTWs, average Hg concentrations vary by a factor of 56 at the Greensboro POTW and by more than 90 times at the Metropolitan St. Loui s Sewer District LeMay POTW.

• Biosolids characteristics are unique to a POTW even within the same geographic region – for example, the Metropolit an St. Louis LeMay plant re gistered its highest Cd concentration over a five-year period (2005-2009) in the same month (April 2008) that the Metropolitan St. Louis Bissell Point plant registered its lowest Cd value over the same five-year period.

5 This variability is evident even thou gh the monthly averages generated from Part 503 data necessarily mask even

more significant short term variability.

Page 13 of 25• Biosolids characteristics vary significantly based on seasonal events and even day-to-day activities within the POTW – by example, th e HRSD Boat Harbor plant registered its lowest Pb value (17 mg/dry kg) over a five -year period in Octobe r 2009 and its highest value (184 mg/dry kg) one month later.

As with the Part 503 data, EPA also refused to consider stack test data submitted by commenters who provided summaries of test results demonstr ating that the proposed emission limits were not supported by sound data. EPA did not use thes e data simply because commenters did not include a complete stack test re port in their comment submission. Id. at 15387/2-3. Again, the proper response from EPA would have been to contact the commenter s to obtain the backup report information so EPA could verify the data that was submitted. See Tsirigotis Supp. Decl. ¶34a. Taking this step is even more important under circumstances such as these where EPA is attempting to set MACT floors using such an inadequate database.

Moreover, NACWA has verified th at some (and maybe most) of th e nine facilities targeted by EPA’s ICR submitted their stack test results using EPA’s electronic reporting system, and thus never submitted the stack test reports. It is clear ly improper for the Agency to use only the data it wants and to disregard contrasting informati on by selectively applying more stringent data validation requirements.

We request that EPA use all available data to expand the MACT floor dataset to include the statutorily mandated minimum number of units within each subcategory and to account for the inherent variability in biosolids characteristics as revealed in the Part 503 data. EPA’s failure to use such a significant amount of data showing the variability and the likely impact on SSI
emissions is irrational and undoubt edly affected the level of both the new and existing source
emission standards.

b. Failure to satisfy the achie vability requirement of CAA § 129.

The failure to use adequate data had a profound im pact on EPA’s ability to demonstrate that the
SSI standards are in fact ach ieved by the best performing units over all expected operating conditions. For example:

• It appears that all of the MHIs operated by HRSD will not achieve one or more existing source standards, despite being selected as among the top performing units for several pollutants, due to variable condi tions that affect inlet biosol ids concentrations and similar
factors not accounted for in EPA’s database. These problems include trying to achieve the NOx emission limitations for existing sources without add- on pollution control devices, which have never been demonstrated as effective for MHIs. 6 HRSD observes
that the need to find a workable solution fo r controlling NOx emissions for the MHIs at

6 See Declaration of Mr. Norman E. LeBlanc, Director of the Department of Water Quality for the Hampton Roads

Sanitation District, Para. 5 (“HRSD Declaration”) (Encl. E).

Page 14 of 25its Boat Harbor POTW is anomalous since this SSI is considered by EPA to be among the best performing sources for both NOx and CO . HRSD Declaration ¶5. In addition, HRSD predicts that th e MHIs at its Virginia Initiativ e POTW cannot reliably achieve the standards for Cd, Pb, and dioxins/furans. Id.

• Four FBIs among the “best performing” units used to set the NSPS MACT floors either do not achieve or barely achieve the existing source standard for dioxins/furans. These include an FBI operated by the City of Greensboro and three FBIs operated by Metropolitan Council Environmental Services. The achievability of the existing source standard is highly suspect since these units do not employ controls for dioxin/furan
emissions.

• EPA adopted a significantly revised MACT floor standard for Hg after correctly concluding that the proposed be yond-the-floor standard was fl awed in several respects. However, despite EPA’s assumption that all ex isting FBIs will be able to achieve the MACT floor Hg limits without additional c ontrols, NACWA has iden tified at least two
utilities that believe their units cannot ach ieve the 0.037 mg/dscm Hg standard without add-on carbon controls (carbon adsorption or activated carbon injection [“ACI”]), technologies that EPA has ag reed are unproven on SSIs and present serious operational problems such as corrosion and plugging/fouling. See 76 Fed. Reg. at 15393/2-3.

NACWA and several other commente rs objected to EPA’s stringent pollutant-by-pollutant floor setting approach. We explained that the flaws in EPA’s approach are most evident when considering the inverse relationship between CO and NOx emissions. EPA’s only response to
this issue was to observe that “... it is incumbent upon the SSI facility to determine whether combustion conditions can be adjusted to meet bot h standards and, if not, install NOx controls as necessary ... .” 76 Fed. Reg. at 15386/2. EPA ad mits that there are only limited data on SSIs with FGR, that no SSIs currently use SNCR or SCR, and that ther e are reasons to believe that such controls may not be effective or reliable for SSIs. However, EPA never attempts to deal with this issue and merely concludes that the Agency:

... [does] not know of [a] technical reas on why [these NOx control technologies]
could not be used. Given the limited da ta available on SSI units with FGR, we could not definitely determine how e ffective the technology was on SSI units. However, we also do not know of a techni cal reason why they could not be used, if necessary, to meet NOx limits, and commenters did not provide any reasons they could not be used.

Id. To the contrary, NACWA commented on the di fficulties experienced by th e two utilities that use add-on controls for Hg, where both experi enced severe abrasion and corrosion problems shortly after installation. In a ddition, for ACI to be effective, the high exhaust gas temperatures leaving the incinerator must be cooled to roughl y 350 degrees F with heat exchangers and waste heat boilers, and a contact chamber is required to ensure sufficient time for adsorption. On the

Page 15 of 25other hand, since carbon adsorption units are lo cated after the wet scr ubber, the exhaust gas temperature have high moisture content that must be dried (by incr easing the exhaust gas temperature) to ensure adsorption. We believe these same conditions present efficiency and reliability problems for other types of add-on c ontrols (including NOx controls) and EPA should fairly consider whether such controls have been demonstrated for SSIs. The “achievability” mandate in both CAA §§ 112 and 129, and fundame ntal principles of rational rulemaking, require EPA to demonstrate that there are methods available for well-operate d SSIs to achieve all applicable standards simultaneously and under the full range of normal operating conditions.
This is clear from an examination of the text and purpose of CAA § 129.

Congress intended the regulatory mandate of § 129(a) to operate so as to : (1) identify those
forms of emission control that have been de monstrated to produce maximum reductions in emissions of HAPs and other § 129 pollutants when applied to particular units; (2) press all new and existing units of the same type fr om the standpoint of basic design ( i.e. , within each subcategory) to achieve at least the same redu ced level of emissions; and (3) preserve, protect and enhance the economic vitality of the nati onal economy. To carry out that mandate, EPA must calculate MACT floors based on emission test data from the requisite number of best performing units and also reasonably determine th at the resulting MACT floor is not merely
indicative of some inherent emission feature of the units deemed best performing, which feature cannot be replicated by other un its in the subcategory. EPA can make such a demonstration by showing that some technically feasible means of achieving the floor is gene rally available to the units within the subcategory, as demonstrated by actual use within the subcategory. Otherwise,
if as is the case here EPA were to base the fl oors only on a tiny amount of test data, without fully examining inherent variability in emission ch aracteristics and the limitations of control technologies, it could produce standards which ma ny units in the subcategory – even the units used to set the MACT floors – have no hope of achieving with in-use demonstrated control technology. This approach may pressure POTWs to abandon incinerati on, contrary to the congressional vision for (1) MACT-based technol ogy standards, which is to identify and spread
the use of best controls within a category or subcategory, not to interfere with fundamental design choices, and (2) maximizing the prerogatives of local communities to choose the form of sludge disposal best suited to their local circumstances, as required by CWA § 405(e).

Section 129 provides strong textual evidence that Congress authorized EPA to set a floor only at
a level which units within a sub category generally have some m eans of achieving as a technical matter, as demonstrated by act ual usage within the subcateg ory. In implementing § 129, EPA must give full effect to that textual evidence. See Whitman v. American Trucking Association,

Inc. , 531 U.S. 457, 485 (2001) (“EPA may not construe the statute in a way that completely nullifies textually applicable provisions meant to limit its discretion”). A key piece of such evidence is § 129(a)(3), which in relevant part requires EPA to base standards on “methods and technologies for removal or destruction of pollutants before, during or after combustion ... .” Not mentioned, or even suggested, are changes to the basic design of the “unit” in question.

Page 16 of 25Similarly, § 129(a)(2) is also an expression of this mandate, in th at it requires EPA to set the
floor for new units at the level re presenting the “degree of reduction in emissions” that is not less stringent than the emissions control that is “ach ieved in practice by the best controlled similar unit ... .” The phrases “degree of reduction in emissions,” “achieved in practice,” and “best controlled similar unit” all sugge st the application of control measures to pollutant-emitting equipment. For existing units the floor is to be set at the average level ac tually “achieved” by the “best performing” 12 percent of “units.”

In crafting the § 129 standard-setting process, Congress took sources, such as SSIs, as a given and envisioned that the standards EPA generate d would stimulate the ap plication of “methods and technologies for removal or destruction of pollutants” from such sources, without mandating changes to the fundamental design of the “unit. ” In other words, C ongress sought to control § 129 emissions by forcing the application of pol lution control measures without upsetting the basic choice as to the design of the pollution sour ce. If EPA, however, were to base a floor only on emission data, without examining the features that drive emissi on performance of units within the subcategory and the availability of demonstr ated control technology for the types of units to be regulated, it could end up se tting a floor which would opera te to force changes in the fundamental design of equipment and the systems of which they are a part. That would be contrary to the textual thrust of § 129(a).

Section 129(a) follows a fundamental conceptual orientation on the part of Congress which is universal to all of the technology- based standard-setting processes dictated by the CAA. Several provisions other than § 129 call for the establishment of technol ogy-based emission standards for stationary sources, namely: § 111 (NSPS), § 112 (NESHAP), § 165 (Best Available Control Technology for certain new construction project s), § 172(c)(1) (Reasonabl y Available Control Technology for existing sources as control by St ate Implementation Plans), and § 173 (Lowest
Achievable Emission Rate for certain new constr uction projects). In each case, the basic approach is to set a benchmark based on the app lication of available and “demonstrated” control technology, without fundamentally compromising the freedom to choose the basic design of their purpose-serving equipment – here incinerators for biosolids management. There is no sign in the CAA that Congress intended § 129 to operate diffe rently or to authorize EPA in setting § 129 standards to encroach fundamentally on that ba sic freedom. Furthermore, § 101(b)(1) declares that an overarching purpose of the entire CAA is “to protect and enhance the quality of the Nation’s air resources so as to promote the public health and welfare a nd the productive capacity of its population.” If EPA were to set floors under § 129 solely on the basis of limited emissions data, without regard to the cau se-and-effect relationship between available proven controls and emission rates, inevitably that approach would defeat that purpose by compromising the Nation’s productive capacity.

Finally, no court decision has addressed square ly whether EPA may set a floor solely on the basis of emission data, without regard to the exis tence of a proven means of achieving the floor.
The D.C. Circuit in Sierra Club v. EPA, 479 F.3d 875 (D.C. Cir. 2007) (“ Brick MACT”), did not

Page 17 of 25address that issue squarely. As characterized by EPA in its June 2010 Boiler MACT proposal,
the closest the court came to a ddressing that issue was to rule that “[f]loors for existing sources must reflect the average emission limitation achieved by the best-performing 12 percent of existing sources, not levels EPA considers to be achievable by all sources.” 75 Fed. Reg. at 32009-10 (emphasis added). That is a different issue. An individual source within a particular subcategory may not be able to ach ieve a floor, for cost or other reasons not directly germane to setting the floor, even when a proven means of control is available to it from a technological standpoint. The Brick MACT case does not call into question EP A’s obligation to demonstrate that a proven means of control is available and th at the floor is a reasonable expression of the performance of that means of control.

In the SSI Rule, EPA set the floors on such a limited snapshot of data – data that do not even represent the performance of the “best performi ng” units or “best controlled” unit over time –
and failed to demonstrate that there are proven technologies av ailable to SSIs for achieving the floors. This does not inevitably lead, as EPA claims, to setting standards based on a lowest common denominator. Rather, if EPA were to dete rmine that there are no such means of control, it would have to subcategorize further in order to group units with similar biosolids characteristics or, if that is not practicable, base the standard on an engineering or work practice.

Here, EPA failed to look beyond the scanty emissi on data it used to identify the “method [or] technology” of emissions control that expresse s the true emission performance of the best performing units. As the Part 503 data reveal, the emission limitations in the SSI Rule reflect snapshots of particular points in the oscillations of all the fact ors – in particular the composition of inlet biosolids – that determine emission pe rformance and not the av erage performance of identifiable control “methods [or] techniques.” Thus the SSI Rule floors are based on numerical happenstance at the moment one of 17 stack test s was performed, as opposed to statisticallysound averages of the actual performance of control technologies, taki ng variability of known
factors into account.

c. Summary and conclusion.

In sum, EPA has not taken into account the la rge amount of available data showing that the limited floor database is not representative of va riations in biosolids feed characteristics and foreseeable SSI operations. A lthough NACWA pointed out inherent difficulties of using add-on controls on SSIs, EPA has failed to identify any demonstrated path to compliance for the utilities that must treat wastewater flows containing el evated metals and for utilities that cannot simultaneously achieve the CO and NOx standards through combustion adjustments alone.
NACWA and its members are still studying these issues and fully expect to identify additional SSIs that cannot achieve the standards using contro ls that have been demonstrated for SSIs.

EPA is obligated to grant reconsideration in order to consider all of the available data and to
ensure that each of the fina l standards is achievable by the best performing units under all reasonably foreseeable op erating conditions.

Page 18 of 254. The SSI Rule does not consider subcat egories other than FBIs and MHIs.

EPA’s proposed and final rules address emissi on limits for only two subcategories of SSIs – FBIs and MHIs – based on incinerator design. After the public comment period closed, NACWA learned of a stoker/grate ty pe design that is also being us ed at some POTWs. Based on the information NACWA has gathered, this type of design has previously been used in Europe and has recently been selected at a limited number of POTWs in the United States. This type of
unit consists of a stoker bin f eed system, combustion chamber, reciprocating grates, under- and overfire air fans and ash removal system. It requi res a significantly drier biosolids – typically 90 percent solids compared to the 25-40 percent so lids combusted in MHIs and FBIs. A convection belt dryer is used to dry the dewatered biosolids feed. At least one application of this stoker/grate design also has a he at recovery system that provi des 70-80 percent of the energy necessary to operate the sludge f eed dryer and other systems.

The stoker/grate type design has a nu mber of features that affect em ission characteristics and that differ significantly from the MHI and FBI designs . Unlike MHIs, the stoker/grate type design has under- and overfire systems and does not in corporate a drying zone in a combustion chamber. Because the stoker/grate design uses a mu ch drier biosolids material, it is likely that these designs require less auxiliary fuel than MHIs and that operating temperatures would be more stable making the stoker/grate design less se nsitive to variations in moisture content and other fuel characteristics. Because the stoker/gr ate applications of which we are aware include a biosolids drying process, there would also be significantly less moisture in the exhaust gas stream. FBIs, on the other hand, have air injectio n zones that increase combustion efficiencies and reduce particulate emissions, and many have internal afterburning zones that increase residence time to reduce CO, HC, and PM emissi ons. Stoker/grate designs do not share these
characteristics.

NACWA was not aware of the stoker/ grate design at the proposal stage. EPA also apparently was not aware of this technology, since the propo sed rule does not discuss it and there are no emission data on this type of incinerator in th e rulemaking docket. Absent EPA’s consideration of this design, there is considerable uncertainty as to whether stoker/grate designs are or will become subject to emission limitations under the SSI Rule. This uncertainty creates a difficult environment for the POTWs who are already us ing this technology a nd for many more POTWs who may wish to evaluate this technology for future use.

5. EPA’s new source standards for MHIs were neither proposed nor subject to public review and comment, and may not be achievable using proven technology.

As discussed above, EPA’s proposed rule recognized two subcategories based on incinerator design. However, EPA initially abandoned all sub categorization in proposing emission limits for new SSIs. Instead, EPA proposed that the MACT floor for all new and modified SSIs would be based on the top performing FBI unit. As a re sult, EPA did not calculate MACT floors or

Page 19 of 25propose standards based on the best performing MHI. NACWA and other commenters objected, pointing out that EPA’s approach failed to recognize differences in emission performance that are inherent in the design of MHIs and would effectively subj ect new and modified MHIs to
unachievable emission limitations.

EPA reversed course in the SSI Rule and pr omulgated separate new source performance standards for MHIs and FBIs. However, in do ing so EPA never made the suite of emission limits for new MHIs available for public review and comment. This means that public review and input was not available for EPA’s choice of th e five SSIs that were used to set the MACT floors, nor was the public given the opportunity to comment on th e data and calculations EPA
used to set the floors.

The failure to provide adequate notice and comme nt on the new source standards is not merely objectionable as to process. Based on study by utilities since the fina l rule was published, it appears that many new/modified MHIs, particular ly those with elevated and variable metals concentrations in biosolids, will have trouble achieving the NSPS for some pollutants without
add-on controls that are not demonstrated for us e on MHIs. For example, NEORSD predicts that its existing MHIs, if modified as defined under the SSI Rule, could not achieve the new source Hg limits without employing ACI. EPA has agre ed that ACI is not a proven technology on MHIs and that the only known a pplications on other incinerator types have experienced serious operational and reliability problems. Here agai n, EPA’s failure to provide for public comment ( e.g. , through a notice of data ava ilability and supplemental comment period) and failure to consider data on variability has produced no know n means for these SSIs to comply with the SSI
Rule.

6. The MACT floor database for dioxin/furan emissions is dominated by stack test
measurements that are too low for EPA to establish defensible numerical
standards.

After the SSI Rule was promulgated, EPA issued its notice of proposed ru lemaking to establish emission standards under § 112(d) for the coal- and oil-fire d utility sectors. 7 In its preamble to the Utility MACT proposal, EPA proposes to use work practice standards, instead of numeric emission limits, for non-dioxin/furan and dioxin/fu ran organic HAP because the majority of the
test measurements in EPA’s MACT floor data base were at or below the EPA test method detection limit (“MDL”). Due to the uncertainty obtaining accurate measurements of emissions at such low levels, EPA concl uded that it “considers it impr acticable to reliably measure emissions from these units.” 76 Fed. Reg. at 25040/1.

7 See “National Emission Standards for Hazardous Air Pollut ants From Coal- and Oil-Fired Electric Utility Steam

Generating Units and Standards of Performance for Foss il-Fuel-Fired Electric U tility, Industrial-CommercialInstitutional, and Small Industrial-Commercial-Institutional Steam Generating Units; Proposed Rule,” 76 Fed. Reg. 24976 (May 3, 2011) (“Utility MACT”).

Page 20 of 25To support its approach EPA noted that 1,552 of th e 2,334 (67 percent) test runs for dioxin/furan organic HAP from electric utility steam genera ting units (“EGUs”) contained data below the MDL for one or more congeners. For the non-dioxin/furan organic HAP, EPA noted that between 57-89 percent of the test data containe d values below the MDL. Finally, EPA pointed out that in several cases, all of the data for a test run were below the MDL and in only a few
instances were all the data above the MDL. Id. at 25040/1-2. EPA also looked at whether the low dioxin/furan test measurements can be expl ained by the presence of sulfur, noting that formation of dioxins/furans may be inhibited when the sulfur-to-chlorine ratio in flue gas is greater than 1.0. Id. at 25023/3.

EPA’s approach to standard set ting in the Utility MACT context raises important new reasons to
reconsider the dioxin/furan limits in the SSI Rule. EPA established numeric dioxin/furan emission limitations for SSIs based on a dramatically less robust dataset, with significantly greater measurement uncertainty than is exhibite d by the Utility MACT database. For example,
data from five of the six test r uns (83 percent) in the database used to set the dioxin/furan floor for new SSIs were below the MDL. Thus, in light of EPA’s recent response in the Utility MACT to data below detection limits, the MACT fl oor database for new MHIs does not contain any data that are not obscured by unacceptable measurement uncertainty, while the database for new FBIs
contains at most one test run that produced usable data . The database backing the existing source standards is nearly equally flawed. Data from 20 of the 30 (66.7 percent) test runs in the existing source MACT floor database were below the MDL, including 11 of the 15 (73 percent) FBI test runs for FBIs and 9 of the 15 (60 percen t) test runs for MHIs, resulting in a grand total of 10 test runs producing data above the MDL.

It also appears that, as with utility EGUs, elevat ed sulfur-to-chlorine ra tios may explain the very
low levels of dioxin/furan emissions from SSIs. For example, biosolids managed at the POTWs owned by NEORSD typically exhibit a sulfur-to-ch lorine ratio much grea ter than 1-1, with a ratio as high a 10-1 having been reported. The el evated sulfur-to-chlorine relationship is also exhibited in the flue gases from the six MH Is serving these POTWs, with SO2 emissions generally exceeding HCl emissions from these SSIs by several orders of magnitude.

Based on the foregoing, EPA should reconsider the dioxin/furan standards to address the acknowledged measurement error and should consider using a work practice standard in lieu of
numerical emission limits.

7. The SSI Rule contains new performance test specifications that likely cannot be achieved by some SSIs.

EPA originally proposed operational requirements related to sludge feed rates but eliminated those requirements in the final SSI Rule base d on comments that the feed rates would not be achievable for some SSIs, would artificially chan ge permitted feed rates and would force some SSIs to conduct performance tests at nearly 100 percent of the unit’s ra ted capacity. However, EPA added a new requirement that SSIs must be operated at 85 per cent of their maximum permitted capacity during each compliance test run.

Page 21 of 25The new performance test specification is not achievable for POTWs that do not generate
sufficient biosolids on a continuous basis and th at do not have adequate storage capacity to maintain a sufficient quantity of biosolids to meet the 85 percent permitted capacity requirement. This problem is particularly acut e for longer test runs, such as th e four hour tests required under
the dioxin/furan standards. If EPA were to maintain the 85 percent capacity requirement, utilities will have to extend their performance testing over multiple days, at greater costs, in order to conduct the required number and duratio n of tests at such a high capacity. EPA should reconsider this test requirement and allow utiliti es to select lower feed rates for performance testing.

IV. GROUNDS FOR STAY

The Administrator has clear aut hority under CAA § 307(d)(7)(B) to postpone the effective date of the SSI Rule for an initial three month period if reconsideration is gr anted. Such a stay is appropriate based upon the same grounds underlying EPA’s decision to grant reconsideration.

In addition, EPA may further po stpone the effective date of the SSI Rule under APA § 705 where “justice so requires” to allow for judicial review. NACWA has timely filed a petition for review with the D. C. Circuit challenging th e SSI Rule; and, as detailed below, fundamental principles of justice and of sound governme nt strongly support granting a stay.

Furthermore, as mentioned above, CAA §§ 129(a)(5) and 301(a) give EPA au thority at any point in time to undertake a process of co rrecting a § 129 rule and to esta blish a parallel stay where the stay is necessary to preserve the status quo so as to ensure that the correction is a complete cure, especially to keep communities from wasting re sources in complying with a legally defective rule. Section 301(a) authorizes EPA to issue such rules as are necessary to carry out its CAA functions, one of which is to ensure that th e standards are lawful and that the regulated community is not forced to comply with unlawful requirements. See, e.g. , 76 Fed. Reg. 4780, 4800/3 (Jan. 26, 2011) (implying that § 301(a) is a s ource of stay authority, but concluding that the exercise of that authority wa s not appropriate in the case at ha nd). Here, a stay is necessary to assure a complete correction of the legal defects in the SSI rulemaking and to avoid the potential for irreversible impacts on POTWs that incinerate biosolids.

First , there is a very real risk that refusal to stay the SSI Rule will lead to significant environmental harm. Because several of the emission limitations ( e.g. , the NSPS/EG for Hg and dioxins/furans) are so stringent and EPA has so far failed to account for the inherent variability of biosolids characteristics, some municipalities predict that no vi able control tec hnologies exist that will allow them to incinerate in compliance w ith the rule. Other POTWs predict that they do not have the space and other facilities to retr ofit their MHIs. Wit hout an assurance of reconsideration and a stay of the SSI Rule, these municipalities may be forced to make a choice
now whether to abandon incineration a nd start the conversio n to landfilling.

The impacts of switching away from incineration are practically irreversible and are magnified precisely because landfilling is not an envir onmentally or economically attractive option for utilities who currently incinera te. Utilities who choose to swit ch are extremely unlikely to switch back if EPA later promulgates a defensible SSI rule because they will have eliminated

Page 22 of 25their incineration systems and invested millions in new treatment equipment, biosolids storage, and truck loading facilities. See HRSD Declaration ¶8. As po inted out in NACWA’s comments,
the increased diesel exhaust emissions from t housands of new daily truck trips travelling, in some cases, more than 100 miles one-way to the nearest landfill will exceed emissions from
incineration and are far more diffi cult and costly to monitor and c ontrol. The harm is magnified when one also considers the resulting methane emissions from landfills, increased consumption of fuel for transportation, additional traffic c ongestion, wear and tear on city streets and other impacts on communities. EPA failed to consid er these impacts during the rulemaking, and failure now to grant a stay may irretrievably commit some communities to higher costs for less environmentally beneficial biosolids management options.

Second , absent a stay, a legal interpretation adop ted and defended recently by EPA will operate to cause additional irreparable and unjustifiable harm, even if EPA or the D.C. Circuit ultimately agrees with NACWA that the SSI Rule is legally defective. At the same time that EPA signed and published the SSI Rule, it also signed a nd published § 129 standards for commercial and industrial solid waste incineration units (“CISWI”). See 76 Fed. Reg. 15704 (Mar. 21, 2011). In the preamble to its CISWI rule, EPA res ponded to comments on the so-called “MACT-onMACT” issue – i.e. , whether EPA may lawfully include in newly promulgated MACT floor
calculations the emission levels th at incinerators were forced to achieve by virtue of unlawful predecessor MACT standards that the D.C. Ci rcuit had remanded in response to EPA’s confession of error. In the CISWI preamble, EPA contended that it must use the MACT-onMACT approach by virtue of the literal language of § 129. Id. at 15721-22. While NACWA disagrees with EPA’s position, that position no netheless sets the st age for a profound and irreversible impact on POTWs with SSIs

. If EPA refuses to stay the SSI Rule, inevitably some POTWs will install the add-on control technology necessary to come into compliance with the SSI Rule standards, assuming compliance is possi ble at all. If ultimately EPA repeals those standards during reconsideration (o r if the D.C. Circuit vacates a nd remands the SSI Rule back to EPA), then, according to EPA’s current interpreta tion of § 129, the performance of SSIs that installed new controls will be part of the MACT floor database when it comes time to reestablish the MACT standards. The fact that these controls were a dded solely due to the previous unlawful standards is apparently i rrelevant in the Agency’s view of § 129. For example, new and modified units that were fo rced to install controls to achieve illegal new source standards could become the factual predicate for setting the floors for existing sources. There is an obvious irreversible impact arising from the ra tcheting down of future MACT standards by virtue of a prior unlawful rulemaking. Aside from the question of whether the text of the CAA supports EPA’s MACT-on-MACT inte rpretation or whether Congress intended such an unjust outcome, EPA plainly has the power under APA § 705 and CAA §§ 129(a)(5) and 301(a) to keep it from happening by i ssuing a stay pending reconsideration.

Third , a large number of municipalities and public clean water authorities will suffer significant economic harm unless a stay is granted. Retr ofitting SSIs with the necessary add-on control equipment is a costly and time-consuming proc ess. Many POTWs are being forced to start planning and procurement activi ties immediately in order to identify compliance gaps, locate capital project funding sources, acqu ire the necessary engineering serv ices and equipment, and to

Page 23 of 25complete the major infrastructure and control e quipment installations required for most FBIs and many MHIs. New sources must comply with the SSI Rule essentially upon startup, and existing sources have up to five years to complete capital planning, co nstruction of new building space and acquisition/installation of seve ral new types of add-on control e quipment. Municipalities, as governmental entities, face the added challenge of longer-term financial planning requirements and uncertain financing options as state and local budgets and jobs are cut in the current
economic environment.

Even by EPA’s own estimation, dozens of municipali ties and public authorit ies will be forced to start spending public funds and committing other scarce resources to planning, engineering and procurement of additional building space, add-on c ontrol devices and other equipment in order to try to meet the present emission standards. Like many others, HRSD has already started incurring significant costs in an effort to comply with the SSI Rule. They have estimated that it will cost at least $60 million in capital costs alon e to retrofit the five primary MHIs at its
POTWs. See HRSD Declaration ¶7. This estimate a ssumes that all five POTWs will eliminate their current ‘backup’ MHI units because it is no t possible to upgrade these units given space and
financial constraints.

As the other examples provided throughout this petition illustrate, we believe EPA has greatly overestimated the number of SSIs that can comply with the SSI Rule without substantial new investments, and therefore has greatly underestimated the economic impact of the SSI Rule.

It is indisputable that EPA ha s the authority to stay the SSI Rule pending reconsideration even after it takes effect. First, the last senten ce of § 307(d)(7)(B) assume s that EPA would first decide to reconsider and then, either simultaneous ly or subsequently, issu e a three month stay. EPA’s decision to reconsider, however, could occu r after the rule in que stion takes effect. Implicitly, therefore, EPA may issue a stay of eff ectiveness after the initial effective date. Once the stay is in place, the SSI Ru le would no longer be in effect, and then EPA could use its powers under APA § 705 and under CAA §§ 129(a)(5) and 301(a), individually or collectively, to postpone the new effective date. Indeed, EPA has had no trouble following this procedure in recent years in situations where the initial effective date has passed. See, e.g. , 76 Fed. Reg. 17548 (Mar. 30, 2011) (see also several Federal Register notices cited therein all related to rules for inclusion of fugitive emissions in PSD/N SR applicability determinations for plant modifications); 76 Fed. Reg. 13514 (Mar. 14, 2011) (relating to CAA § 112 standards for chemical manufacturing area sources).

Alternatively or in combinati on with the statutory authority above, EPA has the authority upon
reconsideration to re-set the initial effective date of the SSI Rule as improvidently established in the first place. This could be implemente d as a direct final ru le soon after granting reconsideration to avoid the consequences discus sed above and a new effective date promulgated in the same rulemaking that adopts replacement regulations for SSIs.

Page 24 of 25V. CONCLUSION

For the foregoing reasons, NACWA urges EPA to rec onsider the SSI Rule a nd to stay or re-set the effective date and implementation of the SSI Rule pending completion of the reconsideration process and promulgation of replacement regulati ons. If the issues raised by NACWA are not addressed in changes to the SSI Rule, it will lead to very significant unintended and unjustifiable impacts on the cities and towns that rely upon incineration as the most viable means for managing biosolids and on those municipalities that have invested in ener gy recovery using this important renewable energy source.

NACWA and its members appreciate EPA’s serious reconsideration of these issues, and we look forward to assisting the Agency in m eaningful reform to the SSI Rule.

May 24, 2011

Respectfully submitted,

N ATIONAL A SSOCIATION OF C LEAN W ATER A GENCIES 1816 Jefferson Place, NW Washington, DC 20036

Jeffrey A. Knight Peter H. Wyckoff
P ILLSBURY W INTHROP S HAW P ITTMAN LLP 2300 N Street, NW Washington, DC 20037 (202) 663-9152 jeffrey.knight@pillsburylaw.com

Page 25 of 25