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# / R Incorporated Providing Environmental Technical Support Since 1989

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- 0122 MEMORANDUM

TO: Docket EPA

- HQ

- OAR

- 2009

- 0734

FROM: Jill Mozier, EC/R Inc.

DATE: February 3, 2014

SUBJECT: Notes from the Small Business Roundtable on January 31, 2014, with Gil Wood

as presenter

The Assistant Chief Council for the Office of Advocacy at the Small Business Administration (SBA), David Rostker, requested this roundtable presentation and post

- presentation Q & A
session with EPA’s Gil Woo d. Participants from government, trade groups, and manufacturers were present in the room and on the phone. David kicked off the meeting noting that participants should look at this roundtable as just a beginning and should not just discuss their initial

c omments and questions during the roundtable but should also officially submit their full comments, data, and recommendations to the docket.

Gil emphasized that the NSPS only affects new sources /heaters , not existing sources/heaters and began the slide presentation (attached) by emphasizing that it was “ a good faith effort to represent the proposal as signed on January 3, 2014 ” and that “a ny differences are unintentional and do not supersede the official proposal. ” Gil also asked that comments be e

- maile d to the

official docket at: a

- and

- r

- docket@epa.gov

, Attention Docket ID No. EPA

- HQ

- OAR

- 2009

- 0734

. Gil noted that the proposed rule will be published in the Federal Register on February 3 rd so public comments are due by May 5 th , but the earlier comments are submitted the better and the sooner EPA will start considering them.

The following topics (summarized and paraphrased) were discussed after the slide presentation:

 John Crouch of the He arth, Patio, and Barbecue Association (HPBA), commented that

this sector is almost all small business es. John expressed the c oncern

– particulary for the warm air furnace / forced air furnace (FAF) manufacturers

– that manufacturers would

not know whether they must meet the rule 60 days after signature or whether EPA might

address such concerns and allow a sell

- through period.

 Frank Moore, a hydronic heater (HH) manufacturer, expressed the concern that there are differences in the proposed Step 1 test met hod versus the test method used to qualify a HH at Phase 2 in the voluntary program (differences beyond the 7.5 g/hr versus 18 g/hr cap). Such differences, according to Frank, would result in manufacturers not being able to sell even units meeting the Step 1 emission limit (via the Phase 2 test method) and thus2

also result in manufacturers not having money for further R& D. Gil noted that there should not be a mismatch between the Step 1 NSPS certification test method and the

current test method used to qualify Phase 2 HH in the EPA voluntary program except for the difference in the cap (and that over 50% of the Phase 2 qualified HH already meet this more stringent cap )

.

 Gil requested that Frank submit details to Gil /EPA regarding where he sees a mismatch

between the proposed Step 1 test method and the current Phase 2 voluntary test method

. Gil explained that EPA’s intent in the proposal was not for a HH manufacturer to have to

re

- do Phase 2 testing

– rather merely that these same test results /report could be

submitted as part of the application for certification under Step 1 . Gil offered to set up a

follow

- up conference for Frank to describe his concern over the mismatch in more detail to Mike Toney, Amanda Aldridge, and Gil so that EPA could better understand where

sp ecifically he thinks the test methods differ. Frank thanked Gil.

 David Rostker of SBA asked if there was something preventing EPA from merely adopting the Phase 2 level and test protocal for Step 1 under the NSPS. Gil explained that EPA, state and local jurisdictions, and neighbors of HH owners have concern s that

emissions from even Phase 2 qualified HH are too high; hence the proposed 7.5 g/hr cap.

 John Crouch of HPBA noted that FAF manufacturers include some very small businesses and they are essentially “staring down the barrel of a gun” regarding the possibility that they will h ave 60 days after the final rule is published to face a manufacturing and retail deadline. They appreciate that EPA is taking comments on the proposal but this will not help if they have to pull units off the [retail] floor. John noted that he had thought EPA

would allow more time

– a transition period

– for FAF manufacturers. Gil noted that EPA is proposing to allow 5 years between Steps 1 and 2, that Step 1 is the current Canadian consensus standard, and furthermore that Step 1 won’t take affect until a y ear from now.

 John further noted that EPA’s Office of Enforcement and Compliance Assurance (OECA) will not accept an application for furnace certification now because they have no process in place yet [pre final rule]. So between final rule signature and 60 days after, OECA will have to process all of the applications, which will result in a tremendous logjam at OECA. Gil noted that manufacturers do not have to wait until the rule is final to test, that testing can happen now, especially since it is highly unlikely that the test method for FAF will change. Gil noted that he is not aware of anyone working on a test

metdod for FAF different from the CSA B415.1

- 10 test method for FAF.

 David Rostker commented that he is always uncomfortable whenever EPA has to potentially “go downstream” and start pulling products off the [retail] shelf. Gil noted that EPA’s expectation is that because manufacturers would be required to use ISO

accredited laboratories and ISO

- accredited certifying bodies prior to ap plying to EP A for EPA certification, that the number of instances of disagreement would be approximately zero and the EPA processing time would be shortened dramatically versu s the current

1988 NSPS.3

 Gil explained that the Office of General Counsel (OGC) advised that an immediate limit (i.e., 60 days after signature) is legally required under section 111 of the Clean Air Act, while for example a 2

- year delay after signature for a limit to become effective is legally problematic.

 David Rostker asked EPA to consider if there was something EPA could allow short of formal certification during a transition period while awaiting formal certification. David again noted that 60 days is a very small window and asked that EPA think creatively about how to keep commerce going. G il noted that he was open to thinking about it and discussing it with OGC and OECA but that he did not have a solution off the top of his head. David again summarized the issue as: how can EPA help manufacturers with the problem of having products that sho uld be allowed for sale on day one (i.e., are clean enough) that just don’t yet have all their paperwork in order?

 Gil noted that the potential certification logjam point was valid but that this time (compared to the 1988 rule) EPA was hopeful that OECA w ould develop an electronic reporting and calculation review system. John and David noted that manufacturers are concerned about needing affirmative notice from OECA before heaters can leave the manufacturer’s loading dock. Gil noted that in the 1988 rule a provision was incorporated stating that EPA will each month determine if there is an “undue certification delay” [greater than 6 months on average]. EPA never failed to meet the 6 month average. If one were to have existed, the manufacturers would have be en allowed to apply for an alternative certification that would have taken effect in 30 days and last for 1 year unless EPA denied the certification within the 30 days.

 John Crouch noted that there will be a logjam this time around because of proposed changes in the lab process including an application going to third party certifying bodies prior to even going to OECA. He further noted that right now OECA is 6 weeks out on certifying applications under the 1988 rule, a rule which has been in place for 2 5 years. Thus when all of these new applications hit OECA there is no way there won’t be a logjam. He further noted that it’s illegal to even ship products without a certificate in hand. John concluded that he’s sorry OGC took the position they did [regard ing the need for an immediate emission limit], given that there are so many changes in the proposal and that consequently this “looks to us like an incredible train wreck.” Finally, John noted that OECA has recently had a change in personnel and that this all boils down to
one part

- time person at OECA. The potential jeopardy [to manufacturers] is immense.

 David Rostker suggested EPA consider issuing a hold harmless date while OECA catches up on all the paperwork. He elaborated that EPA could provide some kind of “ship at your own risk” clause in the rule if OECA can’t keep up with the applications. David noted that in the long

- term the third party certification is a good thing due to the potential for logjam at OECA, but the transition period is the proble m.4

 John Crouch noted that there are elements in the original AAA regarding logjams that they [HPBA] will recommend since they don’t see another solution. Gil asked John to submit his ideas and noted he agreed that looking back at the 1988 rule regarding avoidance of logjams might be helpful. Gil again noted that he thinks OECA is hoping

that ISO

- accreditation will give OECA the confidence they need to approve a model line for certification in an expedited application process.

 Gil noted that during the S BREFA Panel process, SBA had informally suggested that EPA explore a fleet average concept like EPA uses for automobiles, but the legislative authority for automobliles is different than for NSPS (Section 111) and OGC could not find a legal rationale to al low it under Section 111.

 David Rostker suggested that EPA consider allowing longer compliance time for 2nd, 3rd, 4th models, etc., when the manufacturer has demonstrated progress resulting in a

certifiable heater , to allow sale of other models, not just compliant models. Gil noted that U.S. Stove, one of the Small Entity Representatives, had requested longer compliance deadlines because they not only have multiple models but they also have multiple types

of heater s. Gil said that he would discuss this with his management.

 David Rostker recommended that small business manufacturers officially comment regarding the interpretation of Section 111 and use precedent and case law to make a case for grandfathering.

 David Rostker again requested that any and all comments should be submitted to the

docket ASAP

– regarding any issue of concern that EPA considered or didn’t consider in the proposal.