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Information Transfer and Program Integration D 

Office of Air Quality Planning and Standards 

U. S. Environmental Protection Agency \A 

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Section 51.166; Prevention of significant deterioration of 

air quality. 

**** * 

(b) * * * 

(H) The addition, replacement or use of a pollution <-*-h£j 

control project at an existing emissions unit unless the •* Q< 

pollution control project will result in a significant netP 

increase in representative actual annual emissions of any 

pollutant regulated under this g$s<:tic*tt the Act and the 

permitting authority determines that this increase will 

cause or contribute to a violation of any national ambient 

air quality standard (including visibility) or prevention of 

significant deterioration increment or will adversely impact 

any air quality related value at any Class I area. For the 

purpose of this paragraph, in lieu of the source's 

representative actual annual emissions, the emissions levels 

used for that source in the most recent air quality impact 

analysis in the area conducted for the purpose of title I, 

if any, may be used. 

**** * 

(L) Any activity undertaken at an existing emissions 

unit for which a federally enforceable emission limit has 

been established, provided that: 

(JL) The activity or project will not increase the 

maximum emissions rate, in pounds or kilograms per hour, 

above the maximum emissions rate achievable by the emission 

unit at any time during the 180 consecutive days which 

precede the date of the activity or project and the 

emissions increase is determined by: 

(i.) Material balances, continuous emission monitoring 

data, or manual emission tests using the EPA-approved 

procedures, where available, and conducted under such 

conditions as the permitting authority will specify to the 

owner or operator based on representative performance of the 

emission units affected by the activity or project including 

at least three valid test runs conducted before and at least 

three valid test runs conducted after the activity or 

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so2 . . . 

PM-10 

N02 

Annual . . 

24-Hour . . 

3-Hour . . 

Annual . . 

24-Hour . . 

Annual . . . 

0 . 1 /xg/m' 

0.2 /xg/m' 

1.0 /xg/m' 

0.2 /xg/m' 

0.3 /xg/m3 

0 . 1 /xg/m3 

1.0 /xg/m' 

5 /xg/m3 

25 /xg/m3 

1.0 /xg/m3 

5 /xg/m' 

1.0 /xg/m3 

1.0 /xg/m3 

5 /xg/m3 

25 /xg/m3 

1.0 /xg/m3 

5 /xg/m' 

1.0 /xg/m3 

(27) Indian Reservation means all land within the 

limits of any Indian Reservation under the jurisdiction of 

the United States Government, notwithstanding the issuance 

of any patent, and including rights-of-way running through 

the reservation. 

(31) Pollution control project means: 

(i) Any activity or project undertaken at an existing 

emissions unit which, as its primary purpose, reduces 

emissions of air pollutants from such unit. Such activities 

or projects do not include the replacement of an existing 

emissions unit with a newer or different unit or the 

reconstruction of an existing emissions unit and are limited 

to any of the following: 

(A) The installation of conventional and advanced flue 

gas desulfurization and sorbent injection for S02; 

(B) Electrostatic precipitators, baghouses, high 

efficiency multiclones, and scrubbers for particulate or 

other pollutants; 

(C) Flue gas recirculation, low-NOx burners, selective 

non-catalytic reduction and selective catalytic reduction 

for NOx; 

(D) Regenerative thermal oxidizers, catalytic 

oxidizers, condensers, thermal incinerators, flares and 

carbon absorbers for volatile organic compounds and 

hazardous air pollutants; 

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^/./U&)(A3/) 

10 

(E) Activities or projects undertaken to accommodate 

switching to an inherently less polluting fuel, including 

but not limited to natural gas or coal reburning, or the 

cofiring of natural gas and other inherently less polluting 

fuels for the purpose of controlling emissions, and 

including any activity that is necessary to accommodate ^ 

switching to an inherently less polluting fuel; and u$*j *, 

(F) Pollution prevention projects which are determined '» •& 

by the permitting agency, through a process which includca 0^ ' 

public notice and opportunity for public comment consistent 

with section 51.161 of this part, to be environmentally 

beneficial. Pollution prevention projects that may result 

in an unacceptable increased risk from the release of 

hazardous pollutants are not environmentally beneficial. . i 

A r ) Plo.<^_. -f*r- 6>t-9«iS Terry, ;^J; c.*Jrr>**Cf ^/>4 uit'/AJm* CX_.Mf 

**** * +ed_**Uf*s Jot'ft* J 

(38) Federal Class I area means any Federal lands 

within the United States either designated by Congress as 

Class I pursuant to section 162(a) of the Act (and which may 

not be redesignated) or redesignated as Class I pursuant to 

the provisions of paragraph (g) of this section or section 

52.21(g) of this chapter. 

(39) Federal official means the Federal official 

charged with direct responsibility for management of any 

lands within a Federal Class I area. 

(40) Air quality related value means, for purposes of 

this section, visibility or a scenic, cultural, physical, 

biological, ecological, or recreational resource, as defined 

by the Federal Land Manager for federal lands and as defined 

by a State or Indian Governing Body for nonfederal lands 

within their respective jurisdictions. 

(41) Adverse impact on air quality related values 

means, for purposes of this section, a deleterious effect, 

resulting in whole or in part from emissions from a proposed 

major source or major modification, that interferes with the 

management, protection, preservation, or enjoyment of the 

air quality related values of a Federal Class I area. 

(42) Demonstrated in practice means for the purposes 

of this section, a control technology that has been--

(i) Listed in or required by any of the following: 

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1^ 

i*r*VCx* 24 

Two cases have addressed the EPA's application of the 

actual-to-potential test, and specifically, the interpretation of 

the phrase "begun normal operations." In Puerto Rican Cement Co. 

v. EPA, 889 F.2d 292 (1st Cir. 1989), the court upheld the EPA's 

application of the actual-to-potential methodology in a case 

involving rcnovationo to conversion of a cement plant from a wet 

process to a more efficient dry process. The court upheld the 

EPA's interpretation that the words "emissions unit that has not 

begun normal operations" include modified units as well as new 

units, citing a passage from the 1980 rulemaking preamble that, 

in the court's view, made it clear that the EPA intended to apply 

the actual-to-potential test to a "new or modified unit." 889 » 

F.2d at 298 (45 FR 52676, 52677) (emphasis added by court) . }ojfA ^" 

The court noted that its endorsement of EPA's use of the "actual-pc^/j*/*^ 

f *^ > 

case was 

circumstances, the decision could have been more difficult. $fOn a related issue, the court agreed with the EPA's position 

that the regulatory exclusion for certain increases in a source's 

production rate or hours of operation applies only when such an 

increase is unaccompanied by construction or modification 

activity. See id. at 916, n.ll. The EPA is today proposing to 

make the existing exclusion explicitly clear on this point by 

inserting the phrase "standing alone" at the beginning of the 

PRELIMINARY STAFF WORKING DRAFT FOR OFFICE OF MANAGEMENT AND 

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•••October 25, 1995 [file name: Master9.17] *** 

to-potential" approach for calculating an emission change in this^ A \jf 

simplified by the facts presented, aad that under other UP'IA 
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proposal reflects the far more complex task of addressing a vast 

array of pollution control and pollution prevention projects at a 

variety of sources facing myriad federal, state and local 

environmental requirements. Specifically, today's proposal: 

o Provides a much broader definition of pollution control 

project than that adopted in the WEPCO rule and 

includes, unlike the WEPCO rule, pollution prevention 

projects; 

O Deletes the requirement that add-on controls and fuel 

switches be subject to an "environmentally beneficial" 

test; instead only pollution prevention projects are 

subject to this additional safeguard; 

o Incorporates the safeguard that no project, whether 

add-on controls, fuel switches, or pollution 

prevention, can result in an increase in actual 

emissions that will cause or contribute to a violation 

of a NAAQS or PSD increment, and extends the policy to gPA 

protection against adverse impacts of AQRVs in a Class 

I areas.15 CM*}** 

1//7 

EPA encourages commenters to address EPA's proposed decision 

to supersede the WEPCO pollution control project exclusion with a 

single exclusion applicable to all types of sources. 

15 The WEPCO rule refers specifically to "visibility 

limitation" rather than "air quality related values." However, 

EPA clearly stated in the preamble to the final rule that 

permitting agencies have the authority to "solicit the views of 

others in taking any other appropriate remedial steps deemed 

necessary to protect Class I areas.... EPA emphasizes that all 

environmental impacts, including those on Class I areas, can be 

considered...." (57 FR 32322). Further, the statutory protection 

in section 165(d) of the Act plainly are intended to protect 

against any "adverse impact on the AQRV of such [Class I] lands 

(including visibility)." Based on this statutory provision, EPA 

believes that any air quality assessment for a pollution control 

project should consider impacts on visibility and any other 

relevant AQRVs for any Class I areas that may be affected by the 

proposed project. 

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59 w S* *•£*>* 

expands the types of add-on controls covered to include other 

control projects. See proposed sections 51.165(a) (1) (xxv), 

51.166(b)(31) and 52.21(b)(31). These types of projects include: 

the installation of conventional and advanced flue gas 

desulfurization and sorbent injection for sulfur 

dioxide (S02) ; 

electrostatic precipitators, baghouses, high efficiency 

multiclones, and scrubbers for particulate or other 

pollutants; 

flue gas recirculation, low-NOx burners, selective noncatalytic reduction and selective catalytic reduction 

for N0X; and 

regenerative thermal oxidizers, catalytic oxidizers, 

condensers, thermal incinerators, flares and carbon 

absorbers for VOC and hazardous air pollutants. 

Projects undertaken to accommodate switching to a less 

polluting fuel such as natural gas when the source is burning 

coal would also qualify for the proposed,.exclusion. In some 

instances, where the emissions unit's capability would otherwise 

be impaired as a result of the fuel switch, this may involve 

certain necessary changes to the pollution generating equipment 

(e.g., boiler) in order to maintain the normal operating 

capability of the unit at the time of the project. 

(Placeholder for explanation of adding new technologies to the 

list of qualifying PCP's. 

(2) Pollution Prevention Projects 

The EPA's policy is to promote pollution prevention 

approaches and to remove regulatory barriers to sources seeking 

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62 

be required to meet the "environmentally beneficial" test.19 To 

qualify for this exemption, as for all pollution control 

projects, a "cross media" pollution control project could not 

cause or contribute to a NAAQS violation, PSD increment violation 

or adverse impact AQRVs in a Class I area. ^> . 

(3-§) The Cause or Contribute Test ' \gUj\ fl^i 

A proposed pollution control project, or any physical or 

operational change, cannot result in an emissions increase that 

will cause or contribute to a violation of a NAAQS or PSD 

increment, or adversely impact AQRVs (including visibility) in 

$<?A *5 

Class I areas. See sections 110(a)(2)(C), 165, and 173 of the A ^aA0) 

Act; see also 57 FR 32322-23. To ensure that the proposed *?//7 

pollution control project exclusion does not have this proscribed 

impact, EPA is also proposing to adopt (with some changes) the 

air quality impacts safeguard currently in place for utility 

pollution control projects. See proposed sections 

51.165(a)(1)(v)(C)(8), 51.166(b)(2)(iii)(H) and 

52.21(b)(2)(iii)(H). 

19 A "cross media" pollution control project could be 

defined as either a control technology or application to comply 

with limitations established under other Federal environmental 

laws (e.g., Safe Drinking Water Act or Clean Water Act) that 

results in emissions to the atmosphere. For example, to comply 

with an effluent limitation established under the Clean Water 

Act, a source chooses to install a control device that removes 

the pollutant from the wastewater stream and discharges it into 

the atmosphere. This type of pollution control project could 

qualify for the exclusion provide it is environmentally 

beneficial. 

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65 

However, a less-than-significant increase may be subject to a 

State's minor NSR requirements. /Afl/J -ft 

(3- |) Determination of Increase in Emissions /' 

The EPA is today proposing to use a representative actual 

annual emissions approach to determining whether a pollution 

control project will result in increased emissions. See proposed 

sections 51.165(a) (1) (v) (C) (8), 51.166(b) (2) (iii) (H) and 

52.21(b) (2) (iii) (H). This is the methodology developed in the 

WEPCO rule and is explained in detail in that rulemaking. See 57 

FR 32323. The use of this approach is premised on the EPA's 

experience and expectation that in most circumstances pollution 

control projects will not impact how the source is operated so 

that the calculation of whether a pollution control project will 

result in an emissions increase can be made through the simple 

comparison of pre-change and post-change emissions rates. Of 

course where the permitting authority expects source operations 

to change, this methodology allows the post-change emissions to 

be projected based on the new operating levels. In the case of a 

pollution control project that will not affect utilization but 

collaterally increases a non-targeted pollutant, the actual 

increase (calculated using the new emissions rate and current 

utilization pattern) would need to be analyzed to determine its 

air quality impact under today's proposal. 

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r/fM'^ 

fc/i^ Although the EPA is supportive of pollution prevention 

projects and strategies, special care must be taken in 

classifying such a project as a pollution control project and in 

evaluating a project under a pollution control project exclusion. 

Virtually every modernization or upgrade project at an existing 

industrial facility which reduces inputs and lowers unit costs 

has the concurrent effect of lowering an emissions rate per unit 

of fuel, raw material or output. Nevertheless, it is clear that 

these major capital investments in industrial equipment are the 

very types of projects that Congress intended to address in the 

new source modification provisions. See Wisconsin Electric Power 

Co. v. Reilly, 893 F.2d 901, 907-10 (7th Cir. 1990) (rejecting 

contention that utility life extension project was not a physical 

or operational change) ; Puerto Rican Cement Co., Inc. v. EPA, .j, 

889 F.2d 292, 296-98 (1st Cir. 1989) (major NSR applico to §|f| frafif* 

found to be applicable to a modernization project that decrease-sff ''' 

emissions per unit of output). Moreover, projects which 

significantly increase capacity, decrease production costs, or 

improve product marketability may dramatically increase source 

operations. In these situations, the environment may or may not 

see a reduction in overall source emissions due to the 

project.20 Nevertheless, the EPA believes that these types of 

20 This is in marked contrast to the addition of pollution 

control equipment which typically does not, in EPA's experience, 

result in any increase in the source's utilization of the 

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less well defined and should be reviewed to ensure that the 

69 

project's overall impact on the environment are beneficial.22 

4. Procedural Safeguards 

Nothing in current guidance or in today's proposal voids or 

creates an exclusion from any applicable minor NSR • 

preconstruction review requirement in any SIP that has been ,/\M 6 . 

approved pursuant to section 110(a)(2)(C) of the Act and 40 CFR 

51.160-164. See footnote 10. Accordingly, the EPA believes that *£)£ 

a pollution control project qualifying for today's proposed 

exclusion generally will be reguired by the applicable SIP to 

obtain a minor NSR permit prior to beginning construction. The 

EPA expects the minor NSR permitting process to be the mechanism 

by which the permitting agency reviews the pollution control 

project to ensure the project design is consistent with standard 

and reasonable practices, determines if a significant net 

increase in representative actual emissions will occur and, if 

22 For example, a pollution prevention project which while 

decreasing emissions of a criteria pollutant results in an 

unacceptable increased risk due to the release of air toxics 

should not be considered environmentally beneficial. However, 

the EPA expects that many pollution prevention projects will be 

for the purpose of compliance with title III MACT requirements 

and by their nature will result in reduced risk from air toxics. 

Consequently, in judging whether a pollution prevention project 

can be considered environmentally beneficial, permitting 

authorities may consider as a relevant factor whether a project 

is being undertaken to bring a source into compliance with a 

MACT, RACT, or other Act requirement. 

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*1 

70 P L>< 

applicable, resultant air quality or AQRV impacts. See 57 FR 

32322. 

In addition, as discussed above, for a pollution prevention 

project to qualify as a pollution control project the permitting 

agency must first determine that the proposed pollution \0j^ ML1) 

prevention project will be environmentally beneficial. The EPA /" > 

io propooing to require that the determination be conoiotent with g0] 

minor NSR public notice requircmento. Sec proposed acctiono 

51.165(a) (1) (xxv) (A) (G) , 51.1GG (31) (i) (F) and 52.21(b) (31)ji) (F) . 

The process should include documentation of the basis for a 

finding that a proposed pollution prevention project is 

environmentally beneficial and provide for public notice and 

comment on the decision. The EPA also solicits comment on the 

adequacy of these procedural safeguards and the need for any 

additional or alternative safeguards as appropriate. 

5. Emission Reduction Credits 

In general, certain pollution control projects approved for 

an exclusion from major NSR could result in emission reductions 

which may serve as NSR offsets or netting credits. Under today's 

proposal, all or part of the emission reductions equal to the 

difference between the pre-modification actual baseline emissions 

and post-modification potential to emit for the decreased 

pollutant may serve as credits provided that (1) the project will 

not result in a significant collateral increase in actual 

PRELIMINARY STAFF WORKING DRAFT FOR OFFICE OF MANAGEMENT AND 

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•••October 26, 1995 [file name: Master9.17] ***