P.1 9

Uniie d Slate s Communication s An d Environmenta l Protectio n , Publi cAffair s Agency(A-107 ) 

# A-qo-o„ HT-A- I 

# SEP ANot e t o Correspondent s

THURSDAY , JUN

E 6 , 199 1

EPAi s announcing todaypropose d rule s clarifying th e Agenc yf s polic yconcerning change s mad e a t electri c utilit ypowe r plants . Th e proposa l wil l resul t i n •.utilitie s havin g mor e confidenc e i n determinin g how ' t o mee t th e aci d rai n reductio n goal s o f th e ne w Clea n Ai r Act . Th e ne wla

wrequire s utilitie s t o reduc e sulfu r dioxid e emission s b

y1 0 millio n ton s fro m198 0 level s b

yth e yea r 2000 . Consequently , man

yutilitie s wil l b e undertakin g majo r pollutio n contro l projects , a s wel l a s othe r physica l o r operationa l changes , a t thei r plant s i n th e nex t fewyears . A s illustrate d i n a recen t cour t decisio n (Wisconsi n Electri c Power ) and a cour t cas e (Puert o Rica n Cemen t Co . v . EPA ) , utilitie s hav e bee n concerne d tha t pollutio n contro l project s coul d subjec t thei r unit s t o time

consuming preconstructio n permi t requirements
. Th e comple xproposa l announce d todayaddresse s th e issu e o f whethe r pollutio n contro l project s an d othe r physica l an d operationa l change s a t existing utilitie s ar e considere d "majo r modifications. " Th e Ac t state s tha t "modifications " a t existing utilitie s may_b e considere d a s "new " source s o f pollution
. A s a resul t the ywoul d b e subjecte d t o toughe r standards . Thi s process , whic hi s calle d "newsourc e review, " applie s t o facilitie s locate d i n bot hclea n an

d dirt yai r areas . Today' s proposa l woul d exclud e pollutio n contro l project s a t electri c utilit ypowe r plant s fro m "newsourc e review, " unles s EPA determine s tha t th e project s woul d no t b e environmentall y beneficial
. I n addition , othe r physica l an d operationa l changes , apar t frompollutio n contro l projects , wil l als o b e exclude d from "new sourc e review " unles s theycaus e an increas e i n emissions
. Today' s proposa l include s a methodologyfo r estimatin g emissio n increases
. R-10 1 (more )P.2 0

-2

- Th e proposa l wil l appea r soo n i n th e Federa l Register
. Fo r mor e information , reporter s ca n contac t Dav e Rya n o f EPA' s Pres s Offic e a t 202-382-2981 . John Kasper , Directo r Pres s Service s Divisio n 202-382-435 5

R-10 1p_2± 

# A-QO-Ofa

ENVIRONMENTAL PROTECTIONAGENC Y 4 0 C.F.R . Part s 51 , 52 , an d 6 0 [FRL ) 'irement s fo r Preparation , Adoption , Submitta l o f Implementatio n Plans ; Approva l an

d Promulgatio n o f Implementatio n Plans ; Standard s o f Performanc e fo r Ne wStationarySources . AGENCY : Environmenta l Protectio n Agenc y(EPA) . ACTION : Notic e o f Propose d Rul e SUMMARY : Th e applicabilit yo f the ne wsourc e requirement s o f Titl e I o f the Clea n Ai r Ac t (CAA ) t o physica l o r operationa l change s a t electri c utilit ygenerating unit s i s an issu e o f considerabl e interes t a t thi s time becaus e o f the recen t passag e o f th e 199 0 Clea n Ai r Ac t Amendment s (CAAA) . Man yutilitie s wil l b e undertaking majo r pollutio n contro l project s a t thei r unit s i n the nex t fewyears . I n enacting Titl e IV , Congres s di d
no t suspen

d an yTitl e I reguirement s fo r thi s work . However , the massiv e industry-wid e undertaking s o f pollutio n contro l project s warrant s a clarificatio n o f the ne wsourc e revie wrequirement s o f Titl e I . I n particular , Ne wSourc e Revie w(NSR ) provision s shoul d
no t inadvertentl ybia s a utilit ytoward s o r agains t an ymean s o f complying wit hth e aci d rai n provisions
. Th e EPAbelieve s th e amendment s propose d toda yan d the clarificatio n o f it s curren t polic yunde r it s presen t NS R regulation s provid e adequat e assurance s tha t utilitie s ca n undertak e Titl e I V pollutio n contro l project s withou t uncertaint ya s t o th e applicabilit yo f the variou s Titl e I ne wsourc e requirements
. A t th e same time ,P-2 2

- 2 - the applicabilit yo f existing ne wsourc e regulation s t o modification s ha s bee n the sourc e o f tw o recen t federa l appellat e decisions , Wisconsi n Electri c Powe r Co . v . Reillv , (WEPCO) , 89 3 F.2 d 90 1 (7thCir
. 1990) , an d Puert o Rica n Cemen t Co . v . EPA , 88 9 F.2 d 29 2 (1s t Cir
. 1989) . A s a result , EPAi s todayproposin g clarifying amendment s t o thes e regulation s an d confirmin g it s policie s regarding o f some o f thes e provision s a s theyappl yt o utilit yproject s pendin g adoptio n o f the propose d amendments . Th e EPAtoda

ypropose s t o adop t a broad NS R exclusio n fo r utilit ypollutio n contro l project s and , unti l thes e propose d regulation s ar e adopte d i n fina l form , t o adher e t o it s polic y tha t ne wsourc e regulation s alread ygenerall yexclud e coverag e o f pollutio n contro l project s undertake n a t electri c utilit yunits
. Similarly , EP Atoda ypropose s t o adop t a n "actua l t o futur e actual " methodologyfo r determining whethe r al l othe r nonroutin e physica l o r operationa l change s a t utilitie s (othe r tha n th e replacemen t o f a uni t o r additio n o f a ne wunit ) ar e subjec t t o ne wsourc e revie wunde r eithe r preventio n o f significan t deterioratio n (PSD ) o r nonattainmen t provision s and t o maintai n i n th e interi mtha t thi s methodologyi s applie d wher e th e uni t ha s "begun norma l operations. " Fo r thos e utilit yproject s whic h underg o PS D ne wsourc e review , today' s notic e propose s a presumptio n tha t fo r EPA-issue d permits , "low-NOxburners " can satisf yth e bes t availabl e contro l technology(BACT ) requirements
.P.23

- 3 - I naddition , EP

A als o propose s t o modif y it s regulation s implementin

g th e modificationprovision s o f th e Titl e I ne

w sourc e performanc e standard s (NSPS ) progra m t o provide tha t a utility ma y us e for it s pre-change baseline th e highes t hourl y emission s rat e achievabl e at an y tim e durin g th e 5 year s prior t o th e physica l o r operationa l change . The EP A als o propose s t o modify it s regulation s t o reflec t change s mad e b y Congres s i nthe 199 0 Amendment s t o th e applicability

o f ne w sourc e requirement s t o clea ncoa l technolog

y (CCT ) an

drepowerin

g projects , an

dt o "ver y clean " units . DATES : Comments . Comment s o n the revision s propose d toda y mus t b e receive d o n o r befor e Augus t 19 , 1991 . Publi c Hearing
. Apubli c hearing i s schedule d fo r 10:0 0 a.m. , Jul y19 , 1991 , a t th e U.S . Environmenta l Protectio n Agency , 40 1 M Street , S.W. , Washington , D.C . 20460 . Th e hearing ma yb e cancele d i f n o speaker s hav e requeste d time t o presen t thei r comment s 1 5 day s prio r t o the schedule d hearin g date . Writte n comment s i n lie u o f testimon yar e encouraged . Fo r furthe r informatio n contac t JoAnn Allma n a t (919 ) 541-5591 . ADDRESSES : Supporting informatio n use d i n developing thi s propose d rul e i s containe d i n docke t A-90-06 . Thi s docke t i s availabl e fo r publi c inspectio n an d copying betwee n 8:3 0 a.m . an d 3:3 0 p.m. , weekday s a t EPA' s Ai r Docke t (LE-131) , RoomM-1500 , 40 1 MStree t S.W. , Washington , D.C . 20460 . Areasonabl e fe e ma y b e charge d fo r copying
.P.2 4

•?-

- 4 - 40 1 MStree t S.W. , Washington , D.C . 20460 . Areasonabl e fe e ma y | b e charge d fo r copying
. iFOR FURTHE R INFORMATIONCONTACT : Chebryl l Edwards , Ne wSourc e IReviewSectio n (MD-15) , Offic e o f Ai r Qualit yPlanning an d 'standards , Researc hTriangl e Park , Nort hCarolin a 27711 , (919 ) 1541-2343 . ^SUPPLEMENTAR

Y INFORMATION : I . INTRODUCTION Th e EPAtodaypropose s t o amen d it s regulation s implementing th e variou s Titl e I ne wsourc e reguirement s governin g physica l o r Dperationa l change s a t electri c utilit ygenerating units
. Specifically , thes e propose d change s ar e bein g issue d t o clarif y ;h e coverag e o f the NSPS , PS D an d nonattainmen t preconstructio n

i revie wreguirement s o f Titl e I o f th e Clea n Ai r Ac t t o project s i undertake n a t electri c utilit ystea mgenerating units. 1 Th e EPApropose s t o amen d the definitio n o f "majo r rrodification " i n 4 0 C.F.R . Part s 5 1 an d 5 2 t o se t fort hth e condition s unde r whic hthe addition , replacemen t o r us e a t existing electri c utilit ygenerating unit s o f an ysystemo r devic e whos e primaryfunctio n i s th e reductio n o f ai r pollutant s (including th e switching t o a les s pollutin g fue l wher e th e

1 Th e propose d regulation s defin e electri c utilit ystea m generatin g unit s a s an ystea melectri c generatin g uni t tha t i s constructe d fo r the purpos e o f supplying mor e than one-thir d o f it s potentia l electri c outpu t capacit yan d mor e than 2 5 MWo f electrica l outpu t t o an yutilit ypowe r distributio n systemfo r saXe . See , e.g. , propose d 4 0 CF R 51.165(xx) .P.2 5

- 5 - primarypurpos e o f the switc hi s the reductio n o f ai r pollutants ) wil l o r wil l no t subjec t th e sourc e t o preconstructio n review
. Specifically , EPApropose s i n PS D an d nonattainmen t area s t o adop t a regulatoryexclusio n explicating it s authorit yunde r the statutorydefinitio n o f "modification " an d confirming EPA' s curren t practic e tha t pollutio n contro l project s whic h"d o no t rende r th e uni t les s environmentall ybeneficial " ar e no t "physica l o r operationa l changes, " an d hence , ar e no t "modifications " fo r the purpose s o f Part s C an d D
- o f Titl e I an

d
ar e no t "majo r modifications " fo r the purposes.o f EPA' s regulation s implementing thos e provisions
. Th e EPAi s toda y als o proposing t o amen d it s PS D an

d nonattainmen t ne wsourc e revie wregulation s (4 0 C.F.R . Part s 5 1 an d 52) 2 a s theyappl yt o utilitie s t o (1 ) clarif ythe NS R baselin e fo r determining whethe r a propose d physica l o r operationa l chang e wil l subjec t a utilit y t o the preconstructio n revie wrequirement s o f thes e provisions ; (2 ) se t fort ha n actua l t o futur e actua l methodologyfo r determining whethe r a physica l o r operationa l chang e i s subjec t t o NSR ; (3 ) provid e furthe r clarificatio n o f the existing regulatoryrequiremen t tha t onl ythos e increase s i n emission s tha t actuall yresul t fromthe physica l chang e o r chang e i n the metho d o f operatio n ca n b e considere d i n determinin g whethe r th e

2 Fo r the purpose s o f thi s notice , reference s t o "ne w sourc e review " (o r "NSR" ) refe r t o th e preconstructio n revie w requirement s o f bot hPar t C (PSD ) an d Par t D (nonattainment ) o f the Clea n Ai r Act , unles s otherwis e indicated
.P.2 6

- 6 - propose d chang e subject s the utilit yt o NS R requirements ; an d (4 ) implemen t section s 40 9 an d 41 5 o f Titl e I V

o f the Clea n Ai r Ac t Amendment s o f 199 0 whic hcreat e specia l NSP S treatmen t fo r certai n repowering project s an d limite d NS R exemption s fo r temporaryand permanen t CC T projects , an d fo r certai n "very clean " units
. Finally , EPAi s als o proposing t o amend it s NSP S regulation s (4 0 C.F.R . Par t 60 ) t o allo wa utilit yt o us e a s it s pre-chang e baselin e it s highes t hourl yemission s rat e achievabl e during the 5 year s prio r t o the propose d physica l o r operationa l change . T o the exten t the propose d amendment s implemen t existing EPApolicies , EPAwil l continu e t o administe r it s regulation s i n a manne r consisten t wit hthes e policie s pending adoptio n o f the regulation s propose d today . Portion s o f the premabl e o f today' s proposa l se t fort hEPA' s presen t policie s unde r it s curren t regulations , an

d mayb e relie d o n a s suc hpending fina l actio n o n today' s proposal . Today' s proposa l addressing pollutio n contro l project s an d othe r non-routin e physica l an d operationa l change s a t electri c utilit yunit s i s timel yfo r severa l reasons . First , th e 199 0 Clea n Ai r Ac t amendment s establish , i n Titl e IV , a ne wcontro l scheme fo r addressing the aci d rai n problemwhic hfocuse s exclusivel yan

d immediatel yo n utilit ypowe r plants . Titl e IV wil l forc e mos t electri c utilit ystea m generating unit s t o undertak e pollutio n contro l project s an d provide s ful l flexibilit yt o achiev e complianc e withou t a bia s toward s o rP.2 7

- 7 - agains t an

yparticula r pollutio n contro l method . Second , the Agenc ybelieve s it s extensiv e experienc e wit hothe r non-routin e physica l an

d operationa l change s a t suc hunit s and th e uniqu e characteristic s o f the electri c utilit yindustry(e.g. , th e genera l similarit yo f equipmen t withi n the categoryan d the exten t o f publicl yavailabl e information ) suppor t a revisio n t o the ne wsourc e revie wapplicabilit ycriteri a fo r thi s sourc e category . Further , whil e Congres s di d no t mak e significan t change s i n the NS R an d NSP S statutorylanguag e i n 1990 , the conferenc e committe e provide d th e following guidanc e t o EPAi n it s Join t ExplanatoryStatement :

"[T]h e deletio n o f mos t provision s relating t o the WEPC O decisio n i s no t intende d t o affec t o r prejudic e i n an ywa yth e issue s o r resolutio n o f the WEPC O matter . A t the same time , the conferee s urg e a quic k resolutio n o f the WEPC O matte r b yEPAa s appropriate. " Conferenc e Comm. , Join t ExplanatoryStatemen t o f th e Committe e o f the Conferenc e t o Accompan yS . 1630 , Rep . 101-952 , 101st . Cong. , 2n d Sess . (1990 ) pp . 344-45 . I n passing Titl e IV , Congres s di d
no t suspend an

yrequirement s o f titl e I . Howeve r Titl e I an d Titl e IV

ar e clearl yintende d t o wor k i n concert , no t conflict , and today' s rulin g i s intende d t o ensur e tha t harmony . II . BACKGROUND A . Th e Ne wSourc e Performanc e Standards , Preventio n o f Significan t Deterioratio n an d Nonattainmen t Program s o f Titl e I Titl e I o f the Clea n Ai r Ac t ha s thre e program s specificall y designe d t o ensur e tha t n o ne wai r pollutio n - - whethe r fromne wP.2 8

- 8 - source s o r fro

mmodification s t o existing source s - - ca n b e emitte d unles s the sourc e complie s wit hne wsourc e requirements
. Th e 197 0 Clea n Ai r Ac t require d EPAt o promulgat e technology-base d ne wsourc e performanc e standard s applicabl e t o th e constructio n o r modificatio n o f stationarysource s tha t caus e o r contribut e significantl yt o ai r pollutio n whic hmayreasonabl y b e anticipate d t o endange r publi c healt ho r welfare . Clea n Ai r Ac t ("CAA" ) § 111(b)(1)(A) , 4 2 U.S.C . 7411(b)(1)(A) . Th e NSP S provision s wer e "designe d t o preven t ne wai r pollutio n problems " b yregulating newly-constructe d source s an d change s occurring a t existing source s tha t resul t i n emission s increases
. Se e Nationa l Asphal t Pavemen t Assoc , v . Train , 53 9 F.2 d 775 , 78 3 (D.C . Cir
. 1976) ; se e als o H.R . Rep . No . 1146 , 91s t Cong. , 2d Sess . 3 , reprinte d i n 197 0 U.S . Cod e Cong . & Admin
. New s 5356 , 5358 . Congres s define d the ter m"modification " a s "an yphysica l chang e in , o r chang e i n the metho d o f operatio n of , a stationary sourc e whic hincrease s the amoun t o f an yai r pollutan t emitte d b y suchsourc e o r whic hresult s i n the emissio n o f an yai r pollutan t
no t previousl yemitted. " Se e CA A§ 111(a)(4) , 4 2 U.S.C . 7411(a)(4) . I n 1977 , Congres s adopte d additiona l amendment s t o th e Clea n Ai r Act . Thes e change s include d preconstructio n permittin g requirement s fo r majo r ne wan d modifie d source s unde r two programs , preventio n o f significan t deterioratio n (PSD ) an d nonattainmen t ne wsourc e revie w(respectively , Part s C an d D o fP.2 9

- 9 - th* ; Clean Ai r Act) . Congres s intende d thes e program s t o appl y j generall ywher e industria l change s migh t increas e pollutio n i n an area . Alabama Powe r Co . v . Costle , 63 6 F.2 d 323 , 40 0 (D.C . Cir
. 19.9) . Congres s incorporate d i n Part s C an d D the same i definitio n o f th e ter m"modification " se t fort hi n th e NSP S provisions
. £e e CA A§ 111(a)(4) , 169(2)(C) , an d 171(4) . Th e NS R progra

mfo r PS D (CA

A§ § 160-169 ) applie s i n attainmen t areas , i.e. , thos e area s whic hhav e attaine d the nationa l ambien t ai r qualit ystandard s (NAAQS) . T o receiv e a PS D permit , a prospectiv e majo r ne wsourc e o r majo r modificatio n mus t (aron g othe r things ) showtha t (1 ) i t wil l no t caus e o r i contribut e t o a violatio n o f the availabl e ai r qualit y "increment " (designe d t o preven t ambien t ai r qualit yfro m deteriorating b

ymor e than certai n specifie d levels) , (2 ) i t wil l
not caus e o r contribut e t o a violatio n o f a NAAQS , an d (3 ) i t wil l us e the "bes t availabl e contro l technolog y(BACT), " whic h
mus t b e a t leas t a s stringen t a s an yapplicabl e 1 3P S o r hazardou s pollutan t standar d unde r sectio n 11 2 o f the Act . Par t D o f the 197 7 Amendment s applie s t o nonattainmen t ar«as , i.e. , thos e area s whic hhav e no t me t the NAAQ S unde r sec-tio n 109 . T o receiv e a permi t i n suc hareas , majo r ne wan d i moc'ifie d source s mus t (amon g othe r things ) (1 ) obtai n emission s offsets , thereb

yassuring tha t reasonabl e progres s towar dP.3 0

- 1 0 - attainmen t o f the NAAQ S wil l occur , an d (2 ) compl ywit hthe "lowes t achievabl e emissio n rat e (LAER). " Se e CA A§ 171-173. 3 B . Th e Two-Ste p Tes t fo r Modification s Th e modificatio n provision s o f the NSP S an d NS R program s ar e base d o n the broad NSP S definitio n o f "modification " i n sectio n 111(a)(4 ) o f the Act . Tha t sectio n contemplate s a two-ste p tes t fo r determining whethe r activitie s a t an existing facilit y constitut e a modificatio n subjec t t o ne wsourc e requirements
. I n the firs t step , whic hi s largel ythe same fo r NSP S an d NSR , the reviewing authorit ydetermine s whethe r a physica l o r operationa l chang e wil l occur / I f so , the reviewing authorit yproceed s i n the secon

d step t o determin e whethe r the physica l o r operationa l chang e wil l resul t i n an emission s increas e ove r baselin e levels . I n thi s secon

d step , the applicabl e rule s branc hapart , reflecting th e fundamenta l distinction s betwee n th e technology

base d provision s o f NSP S an d the ai r quality-base d provision s o f NSR .

3 Th e 197 0 Clean Ai r Ac t als o include d a provisio n applicabl e t o constructio n o r modificatio n o f an ystationary source . Thi s provisio n i s presentl yse t fort hi n sectio n 110(a)(2)(C) . Today' s notic e doe s no t propos e t o chang e the scop e o f the regulation s implementing thi s provision
. Se e 4 0 CF R 51.160-164 .

Thi s i s furthe r describe d i n sectio n III. H below .P.3 1

- 1 1 - Briefly , th e NSP S progra mexamine s maximumhourl yemission s rates , expresse d i n kilogram s pe r hour. 5 Emission s increase s fo r NSP S purpose s ar e determine d bychange s i n th e hourl y emission s rate s a t maximu mphysica l capacity
. O n th e othe r hand , th e NS R regulation s examin e tota l emission s t o th e atmosphere . Fo r applicabilit ydeterminatio n purposes , emission s increase s unde r NS R ar e determine d bychange s i n annua l emission s a s expresse d i n ton s pe r yea r (tpy). 6 C . Ste p One : Physica l o r Operationa l Chang e Th e EP Aha s alway s recognize d tha t th e definitio n o f physica l o r operationa l chang e i n sectio n 111(a)(4 ) could , standin g alone , encompas s th e mos t mundan e activitie s a t a n industria l facilit y(eve n th e repai r o r replacemen t o f a singl e leak ypipe , o r a chang e i n th e wa ytha t pip e i s utilized)
. However , EP Aha s alway s recognize d tha t Congres s obviousl ydi d

5 A n hourl yemission s rat e ma yb e determine d bya stac k tes t o r calculate d fro mth e produc t o f th e instantaneou s emission s rate , i.e. , th e amoun t o f pollutio n emitte d b ya source , afte r control , pe r uni t o f fue l combuste d o r materia l processe d (suc ha s pound s o f sulfu r dioxid e emitte d pe r to n o f coa l burned ) time s th e productio n rat e (suc ha s ton s o f coa l burne d pe r hour) . Se e 4 0 C.F.R . 60.14 .

6 Annua l emission s ma yb e calculate d a s th e produc t o f th e hourl yemission s rat e time s th e utilizatio n rate , expresse d a s hour s o f operatio n pe r year , o r a s th e produc t o f a n emission s facto r (e.g. , fro m Compilatio n o f Ai r Pollutan t Emissio n Factors , AP-42 , 4t hEd . an d subsequen t supplements ) i n unit s o f mas s emitte d pe r uni t o f proces s throughpu t time s th e annua l throughput . Se e 4 0 CF R 52.21(b)(21) .P.3 3

- 1 2 - no t Inten

d t o mak e ever

yactivit ya t a sourc e subjec t t o ne w i sourc e requirements
.

t •As a result , EPAha s define d "modification " i n th e NSP S an d NS R Regulation s t o includ e common-sens e exclusion s fro mthe i "physica l o r operationa l change " componen t o f the definition
. Fo r -example , bot hset s o f regulation s contai n simila r exclusion s fo r routine maintenance , repair , an d replacement ; fo r increase s i n t'-i e hour s o f operatio n o r i n the productio n rate ; an d fo r certai n type s o f fue l switches
. Se e e.g. , 4 0 C.F.R . 52.2;(b)(2)(iii ) an d 60.14(e) . I n addition , wit hrespec t t o pollutio n contro l equipment , the NSP S regulation s contai n a n exc l :.sio

n for :

. Th e additio n o r us e o f an ysystemo r devic e whos e primaryfunctio n i s the reductio n o f ' ai r pollutants , excep t whe n a n emission s contro l systemi s remove d o r i s replace d b ya systemwhic hthe Administrato r determine s t o b e les s environmentall ybeneficial
. 4 0 C ; F.R . 60.14(e)(5) . A s wil l b e discussed , i n recen t individua l applicabilit ydetermination s EPAha s exclude d i pollutio n contro l project s fro m NS R following a simila r "environmentall ybeneficial " test . !D . Ste p Two : Emission s Increase s fo r NSP S Applicabilit y j ;Th e EPA' s NSP S regulation s defin e the ter m"modification " a s i an y"physica l o r operationa l chang e t o a n existing facilit ywhic h result s i n a n increas e i n the emissio n rat e t o the atmospher e o f
an yj'.ollutan

t t o whic ha standard applies. " Se e 4 0 C.F.R . 60. 2 an d ( 0.14 . Unde r curren t NSP S regulations , emission s increases ,P.3 4

- 1 3 - fo r applicabilit ypurposes , ar e calculate d b ycomparing the hourl yemissio n rate , a t maximu mphysica l capacity , befor e an d afte r the physica l o r operationa l change . Tha t is , t o determin e whethe r a chang e t o an existing facilit ywil l increas e the emission s rate , th e existing NSP S regulation s authoriz e the us e o f a n "emission s facto r analysis, " o r a material s balance , continuou s monitoring , o r manua l emission s tes t t o evaluat e emission s befor e an d afte r the change . 4 0 C.F.R . 60.14(b)(2) . Absen t the exclusion s fro mmodification s specifie d a t 4 0 C.F.R . 60.14(e) , an yincreas e i n emission s t o the atmospher e ove r the previou s emission s rat e wil l subjec t the uni t t o NSPS . Se e 4 0 C.F.R . 60.14(a ) an d (b) . I n addition , unde r th e "reconstructio n rules, " physica l o r operationa l change s whic h woul d cos t 5 0 percen t o r mor e o f the tota l cos t o f a comparabl e ne wfacilit yma

yb e classifie d a s reconstruction s (se e 4 0 C.F.R . 60.15 ) an

d ar e subjec t t o NSP S a s a ne wsource , eve n i f ther e i s n o emission s increase
. E . Ste p Two : Emission s Increase s Unde r NS R Reguirement s 1 . Existing Regulation s Th e EPA' s regulation s implementing the PS D an d nonattainmen t program s requir e preconstructio n revie wfo r source s undertaking a "majo r modification, " i.e. , a physica l chang e o r chang e i n th e metho d o f operation s "tha t woul d resul t i n a significan t ne t emission s increas e o f an ypollutan t subjec t t oP.3 5

- 1 4 - regulatio n unde r the Act. " 4 0 C.F.R . 52.21(b)(2)(i) , 52.24(f)(5). 7 A"ne t emission s increase " i s define d a s the increas e i n "actua l emissions " fro mthe particula r physica l o r operationa l chang e togethe r wit han yothe r "contemporaneous " increase s o r decrease s i n actua l emissions
. 4 0 C.F.R . 52.21(b)(3)(i). 8 Applicabilit yo f the Act' s ne wsourc e revie wprovision s mus t b e determine d i n advanc e o f constructio n an d i s pollutan t specific
. I n case s involving existing sources , thi s require s a pollutant-by-pollutan t projectio n o f the emission s increases , i f any , tha t wil l resul t fro mthe physica l o r operationa l change .

7 Th e curren t PS D progra mi s se t fort hi n two set s o f regulations
. On e o f the regulation s cite d (4 0 CF R 52.21 ) i s par t o f the federa l PS D permi t progra mwhic happlie s a s par t o f a Federa l implementatio n plan fo r State s tha t hav e no t submitte d a PS D progra

m meeting the regulatoryrequirement s o f 4 0 CF R 51.16 6 (standard s fo r PS D provision s i n Stat e implementatio n plans) . I n mos t State s wher e the federa l requirement s apply , EPAha s delegate d the authorit yt o implemen t the PS D progra mbac k t o the State . Roughl ytwo-third s o f the State s ar e implementing thei r ow n PS D progra

mpursuan t t o an EPA-approve d stat e implementatio n plan . Section s 52.2 1 an d 51.16 6 hav e identica l modificatio n provisions
. EPA' s regulation s fo r nonattainmen t area s ar e se t fort ha t 4 0 CFR § 51.165 , 52.2 4 an d i n Par t 51 , Appendi xS . Thes e section s contai n applicabilit yprovision s regarding modificatio n tha t ar e largel yidentica l t o thos e i n the PS D provisions
.

8 Roughl yspeaking , "contemporaneous " emission s increase s o r decrease s ar e thos e whic hhav e occurre d betwee n th e dat e five year s preceding th e propose d physica l o r operationa l chang e an d the dat e tha t the increas e fro mthe chang e occurs . 4 0 CF R 52.21(b)(3)(ii)
. Onc e a modificatio n i s determine d t o b e major , th e PS D requirement s appl yonl yt o thos e specifi c pollutant s fo r whic hther e woul d b e a significan t ne t emission s increase
. E.g. , 4 0 CF R 52.21(j)(3 ) (bes t availabl e contro l technology) ; 4 0 CFR 52.21(m)(1)(b ) (ai r qualit yanalysis)
.P.3 6

- 1 5 - Specifically , t o determin e whethe r a propose d physica l o r operationa l chang e wil l resul t i n an emission s increase , th e sourc e mus t firs t determin e a baselin e leve l o f actua l emissions
. Th e regulation s defin e actua l emission s o n a particula r dat e a s "th e averag e rate , i n ton s pe r year , a t whic hth e uni t actuall y emitte d the pollutan t during a 2-yea r perio d whic hprecede s the particula r dat e an

d whic hi s representativ e o f norma l sourc e operation. " 4 0 C.F.R . 52.21(b)(21)(ii ) Th e Administrato r "shall " allo wus e o f a differen t time perio d "upo n a determinatio n tha t i t i s mor e representativ e o f norma l sourc e operation. " Id . Th e EPAha s typicall yuse d the 2 year s immediatel ypreceding the physica l o r operationa l chang e t o establis hth e baseline
. Se e 4 5 Fed . Reg . 52676 , 52705 , 5271 8 (1980) . However , i t can allo wthe us e o f a n earlie r 2-yea r perio d tha t i s mor e representativ e o f norma l sourc e operations
. Fo r example , i n WEPCO , EPAfoun d the fourt han

d fift hyear s prio r t o the modificatio n mor e representativ e o f WEPCO' s norma l operations
.

Becaus e the applicabilit ydeterminatio n mus t b e mad e in advanc e o f construction , EPA' s NS R regulation s provid e tha t whe n an emission s uni t "ha s no t begun norma l operations, " actua l emission s equa l th e "potentia l t o emi t o f th e unit. " 4 0 C.F.R . 52.21(b)(21)(iv)
. Thi s approac hi s referre d t o a s th e actua l t o potentia l methodology . Thi s regulatoryprovisio n mayb e overcom e

- - an d ne wsourc e revie wwil l no t appl y- - i f th e sourc e owne rP.3 7

- 1 6 - agrees , i n a federall yenforceabl e instrumen t - - no t t o increas e it s actua l emission s abov e baselin e levels . Se e e.g. , 4 0 C.F.R . 52.21(b)(4) .

2 . Th e WEPC O an

d Puert o Rica n Cemen t Decision s A s note d above , t o calculat e whethe r a physica l o r operationa l chang e "increases " emissions , EPAregulation s requir e i t t o fin

d an increas e i n actua l emissions
. 4 0 C.F.R . 52.21(b)(3)(i)(a)
. Wher e the emission s uni t ha s no t "begu n norma l operations, " EPAregulation s recogniz e tha t futur e actua l emission s ar e difficul t t o predic t an d employfutur e "potential " emission s a s a proxy . 4 0 C.F.R . 52.21(b)(21)(iv)
. Th e linchpi n unde r the curren t regulation s fo r predicting futur e emission s afte r a modificatio n i s thu s whethe r the uni t ha s "begun norma l operations. "

Tw o recen t federa l appellat e cour t decision s hav e addresse d EPA' s interpretatio n o f the phras e "begun norma l operations. " Thes e decisions , Puert o Rica n Cemen t Co. , Inc . v . U S EPA , 88 9 F.2 d 29 2 (1s t Cir
. 1989 ) an d Wisconsi n Elec . Powe r Co . v . Reillv , 89 3 F.2 d 90 1 (7thCir
. 1990 ) ("WEPCO") , occasio n a reexaminatio n o f EPA' s interpretatio n o f th e phrase , an d o f the usefulnes s o f the regulatorylanguag e itself
. Th e meanin g o f the phras e i s highl yfact-dependent , an d thes e decision s hav e create d uncertaint yregarding it s application ; thus , a s describe d late r i n thi s notice , EP Atoda ypropose s t o chang e it s regulation s fo rP.3 8

- 1 7 - electrf- c utilit ystea m generating unit s t o employa mor e usefu l criterion
.

t Bot hcase s involve d physica l change s t o existing emission s units , bu t change s o f differing extent , natur e an d result" . I n Puert o Rican Cement , the owne r o f a cemen t plant 9 wit hsevera l kiln s sough t t o conver t on e "wet " kil n int o a "dry " kiln , .an

d t o combin e tha t kil n wit hanothe r kiln
. 88 9 F.2 d a t 293 . 't'h

e cour t observe d tha t the tota l productio n capacit yo f the renovate d singl e kil n woul d excee d the combine d productio n capacit yo f the previou s two separat e kiln s b y"abou t 35%. " Id . I t note d tha t th e renovate d singl e kil n woul d employa differen t "cement-making process " than the origina l kil n fro mwhic hi t wa s "converted, " .id
. An d i t sai d tha t the ne wkil n woul d b e "mor e efficien t [and ] ma

ylead the fir

mt o decid e t o increas e the leve l
o f pro-'uction, " id
. a t 29 7 (emphasi s i n original)
. I n reviewing EPA' s :nterpretatio n o f "begu n norma l operations, " the cour t applie d a highl ydeferentia l standard o f review , sinc e an agency; s interpretatio n o f it s ow n regulatorylanguag e i s typicall ygive n "'controlling weigh t unles s i t i s plainl y erronec.i s o r inconsisten t wit hth e regulation.' " 88 9 F.2 d a t

l 297 , gilotin

g Udal l v . Tallman , 38 0 U.S . 1 , 16-1 7 (1965 ) (citatio n omitted)
. Th e cour t conclude d tha t o n the fact s o f the case ,

9 j Puert o Rica n Cemen t involve d a cemen t plant , no t a n electri c utility , bu t th e court' s lega l analysi s o f th e phras e "begun 'norma l operations " i n the curren t regulation s i s relevan t t o al l ^facilities
.P.3 9

- 1 8 - EPA' s interpretatio n tha t "norma l operations " had no t begun wa s no t "arbitraryo r irrational, " .id
. a t 298 , an d henc e EPA' s applicatio n o f the actual-to-potentia l tes t t o predic t futur e emission s wa s permissible
.

I n WEPCO , 89 3 F.2 d 901 , th e Sevent hCircui t wa s face d wit ha differen t kind o f modification
. Ther e renovation s wer e propose d fo r severa l olde r (3 5 t o 5 0 yea r old ) coal-fire d electri c utilit yboilers
. Th e physica l change s involve d repai r an d replacemen t o f turbine-generators , stea mdrum s an

d othe r majo r components . Th e EPAcontended , a s i t ha d i n Puert o Rica n Cement , tha t thes e change s wen t beyond "norma l operations " an d thu s warrante d us e o f futur e potentia l emission s a s th e tes t fo r an emission s increas e ove r pas t actua l emissions
. Her e th e cour t disagree d wit hEPA' s interpretatio n tha t "norma l operations " had
no t begun . Th e cour t coine d the phras e "like-kin d replacement " t o describ e the typ e o f renovatio n occurring a t th e WEPC o plant . Id . a t 917 . Th e cour t describe d a "like-kind replacement " a s on e tha t "doe s no t 'chang e o r alter ' th e desig n o r natur e o f the facility
. Rather , i t merel yallow s th e facilit yt o operat e agai n a s i t ha d befor e the specifi c equipmen t deteriorated. " .Id . a t 908 . I n determinin g whethe r suc ha "like-kind replacement " ha d "begun norma l operations, " id
. a t 917 , the cour t considere d whethe r a "realisti c assessmen t o f [the ] impac t [o f th e change ]
o n ambien t ai r qualit ylevel s i s possible.' " Id. a t 91 7 (quoting Alabama Powe r Co . v . Costle , 63 6 F.2 d 323 , 37 9 (D.C . Cir
. 1979)) .P.4 0

- 1 9 - Th e cour t sai d tha t wher e the renovation s wer e "like-kin d replacements, " EPAcoul d no t reasonabl yinterpre t it s regulation s t o sa ytha t suc ha uni t wa s s o differen t tha t i t ha s no t "begu n norma l operations. " Thus , i t conclude d tha t the "actual-to

potential " tes t coul d no t b e applied , unde r EPA' s regulations , t o unit s simpl yundergoing "like-kin d replacements." 1 0 Neithe r o f thes e decision s specifie d th e threshol d fo r whe n a uni t ha s "begun norma l operations. " Base d o n thes e decisions , unde r it s curren t regulations , EPAmus t conside r the fact s o f eac hcas e an d appl ythe actual-to-potentia l tes t onl y wher e the chang e i s sufficientl ysignifican t t o suppor t a finding tha t "norma l operations " hav e no t "begun. " A t leas t fo r change s tha t ar e "lik e kin

d replacements, " "norma l operations " hav e begun , and th e actual-to-potentia l tes t i s impermissible
.

Becaus e the "begun norma l operations " criterio n i s highl yfact-dependen t an d it s applicatio n i s inherentl ycase-by

case , i t ma

yb e an uncertai n indicato r o f wha t emission s tes t wil l b e applie d i n a give n instance
. However , EPA' s extensiv e experienc e wit helectri c utilities , an d th e generall ysimila r natur e o f operation s withi n thi s sourc e category , provid e EPAan adequat e basi s o n whic ht o predic t futur e actua l emission s fro m suc hunit s i n mos t cases . Consequently , a s explaine d below , EPA

1 0 O n remand , EPAemploye d a n actual-to-futur e actua l test , comparing WEPCo' s representativ e actua l emission s fo r the baselin e perio d t o estimate d futur e actua l emission s base d o n al l the availabl e fact s i n the record .P.4 1

- 2 0 - i s toda yproposin g t o revis e it s regulation s t o appl yth e actual

to-actua l tes t o n al l physica l o r operationa l change s a t electri c utilit ystea mgeneratin g unit s sav e thos e tha t ar e a n additio n o f
a ne wuni t o r constitut e a replacemen t o f a n existin g unit
. Pendin g fina l adoptio n o f thi s ne wrule , EP Awil l continu e t o appl ya n actual-to-actua l tes t t o unit s tha t undertak e "like-kin d replacements " an d othe r unit s whic har e foun d t o hav e "begu n
norma l operations. " F . Th e Clea n Ai r Ac t Amendment s o f 199 0 1 . Ne wSourc e Revie wan d th e Aci d Rai n Provision s Th e Clea n Ai r Ac t Amendment s o f 1990 , Pu bL . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) , mad e numerou s change s i n th e nonattainmen t provision s o f th e Clea n Ai r Ac t an d adde d a ne w titl e t o addres s th e proble mo f aci d rain
. Th e amendment s attac k nonattainmen t problem s wit ha broa d arra yo f ne wrequirement s al l designe d t o brin g al l area s o f th e countr yint o attainmen t wit h th e nationa l ambien t ai r qualit ystandard s fo r al l pollutants . Thes e requirement s includ e traffi c reductio n strategies , us e o f alternativ e clea n fuels , increase d offse t requirement s fo r stationar ysources , and change s i n th e threshol d siz e o f stationar ysource s subjec t t o ne wsourc e review
. Aprincipa l them e o f th e legislatio n i s th e establishmen t o f categorie s o f nonattainmen t area s base d o n th e severit yo f th e pollutio n problem . Th e mor e sever e th e area , th e mor e control s Congres s require d b e imposed
.P^42
_

- 2 1 - Th e Amendment s als o establish , i n Titl e IV , a ne wcontro l schem e fo r addressin g th e aci d rai n problem . Th e exclusiv e focu s
o f thi s progra mi s o n utilit ypowe r plan t emission s o f sulfu r dioxid e an d nitroge n oxides
. Th e 199 0 Amendment s reguir e sulfu r dioxid e emission s fro mutilitie s t o b e reduce d byapproximatel y 1 0 millio n ton s annuall yi n tw o phase s - - th e firs t t o tak e effec t i n 1995 , th e secon d i n 2000 . Atota l o f 11 1 specifi c plant s ar e targete d i n Phas e I , an d wil l b e require d t o reduc e thei r S0 2 emission s t o specifie d emission s limits
. I n Phas e II , thes e plants , an d almos t al l others , ar e subjec t t o eve n lowe r S0 2 emission s limits
. Thi s reductio n progra mi s t o b e implemente d throug ha ne wmarket-base d syste munde r whic h emission s allowance s reflectin g th e require d reductio n i n curren t emission s ar e allocate d t o existin g utilit yplants . Plan t
owners , wh o ar e reguire d t o hol d allowance s equa l t o thei r actua l emissions , ar e the n fre e .t o trad e thes e allowances . Thus , th e emission s o f individua l unit s ma yvar yfro mth e initia l allocatio n o f allowances , bu t aggregat e emission s ar e alway s hel d t o th e program' s overal l targe t level . Thi s progra mwil l provid e powerfu l incentive s t o source s t o undertak e pollutio n contro l projects
. Becaus e o f thes e requirements , man yo f th e plant s subjec t t o Phas e I control s mus t mak e complianc e decision s withi n th e nex t yea r i n orde r t o assur e tha t th e complicate d contro l equipmen t tha t ma yb e necessar yt o mee t Phas e I standard s i s i n plac e b yP.4 3

- 2 2 - i the 199 5 deadline
. I n enacting Titl e IV , Congres s di d no t

i suspen d ei yTitl e I requirement s fo r thi s work . However , the massiv e ipdustry-wid e undertaking s o f pollutio n contro l project s warrant s i

a clarificatio n o f the ne wsourc e revie wrequirement s o f i Titl e I . jl

n particular , Ne wSourc e Revie w(NSR ) provision s shoul d
i no t inadvertentl ybia s a utilit ytoward s o r agains t an ymean s o f complying wit hth e aci d rai n provisions
. Th e EPAbelieve s the amendment.- ; propose d toda yan d the clarificatio n o f it s curren t policyurde r it s presen t NS R regulation s provid e adequat e assurance s tha t utilitie s can undertak e Titl e I V pollutio n contro l project s withou t uncertaint ya s t o the applicabilit yo f the varic'us Titl e I ne wsourc e requirements
.

! 2 . Repowering an d CC T Project s I n Titl e I

V o f the 199 0 Amendments , whic hcreate s the aci d rai n pro<.x-am , Congres s mad e change s i n the applicabilit yo f ne w sourc e requirement s t o change s involving repowering an d Clea n i Coa l Technology(CCT ) projects
. Sectio n 40 9 grant s a n extensio n o f the aci d rai n control s deadlin e ,t

o source s tha t see k t o compl ywit hthe aci d rai n reduction s b

yrepowering a uni t wit hqualifyin g clea n coa l technology . Sectio n 402(12 ) define s repowering as :

i ; [The ] replacemen t o f an existing coal-fire d i boile r wit hon e o f the following clea n coa l technologies : atmospheri c o r pressurize d j fluidize d be d combustion , integrate d ; gasificatio n combine d cycle , \ magnetohydrodynamics , direc t an d indirec t ! coal-fire d turbines , integrate d gasificatio n ! fue l cells , o r a s determine d b ytheP.44- ,

- 2 3 - Administrator , i n consultatio n wit hth e Secretar yo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d an yothe r technolog ycapabl e o f controllin g multipl e combustio n emission s simultaneousl ywit h improve d boile r o r generatio n efficienc yan d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technolog yi n widesprea d commercia l us e a s o f th e dat e o f enactmen t o f th e Clea n Ai r Ac t Amendment s o f 1990 . Notwithstandin g th e provision s o f sectio n 409(a) , fo r th e purpos e o f thi s title , th e ter m'repowering ' shal l als o includ e an yoi l and/o r gas-fire d uni t whic h ha s bee n awarde d clea n coa l technolog y demonstratio n fundin g a s o f Januar y1 , 1991 , b yth e Departmen t o f Energy . Se e CA A§ § 402(12 ) an d 409(a) . Congres s provide d tha t repowerin g project s tha t qualif yfo r
a Phas e I I complianc e extensio n woul d als o b e exemp t fro mNSP S requirements , s o lon g a s th e repowerin g "doe s no t increas e actua l hourl yemission s fo r an ypollutan t regulate d unde r th e Act. " Se e CA A§ 409(d) . A n operato r ca n qualif yfo r th e 3-yea r extensio n
o f th e Phas e I I emission s limitatio n b ydemonstratin g (by Decembe r 31 , 1997 ) t o th e permittin g authorit ytha t on e o r mor e unit s wil l b e repowere d wit ha qualifyin g clea n coa l technolog y t o mee t th e Titl e I V restrictions
. Th e operato r mus t provide , n o late r tha n Januar y1 , 2000 , additiona l documentatio n o f th e repowerin g projec t includin g a preliminar ydesig n an d engineerin g effor t fo r th e projec t an d a bindin g contrac t fo r th e majorit yo f th e equipmen t needed , a s wel l a s an yadditiona l informatio n th e reviewin g authorit yrequires
.P.4 5

- 2\ - Today' s proposa l als o implement s an exemptio n fromnew sourc e requirement s fo r CC T demonstratio n project s create d b y Congres s i n sectio n 41 5 o f Titl e IV o f the 199 0 Amendments . I n thes e provisions , CC T i s define d a s an ytechnolog

yno t i n widespread us e o n the dat e o f enactmen t tha t achieve s significan t reduction s i n S0 2 o r nitroge n oxide s (N0 X ) emission s associate d wit hburning coa l i n the generatio n o f electricity , proces s steam , o r industria l products . Se e CA A§ 415(a) . ACC T "demonstratio n project " i s a projec t funde d unde r DOE' s CC T progra mo r a simila r projec t funde d b yEPA. 1 1 Repowering project s tha t ar e awarde d funding fro mthe Departmen t o f Energ y(DOE ) a s permanen t CC T demonstratio n project s (o r simila r project s funde d b yEPA ) ar e exemp t fro mNSP S
an d PS D requirement s s o lon g a s potentia l emission s (se e 4 0 C.F.R . 52.21(b)(4) ) fro mthe uni t d o no t increas e a s a resul t o f th e project
. CA

A§ 415(b)(3) . Thes e funde d project s maystil l b e require d t o compl ywit hthe nonattainmen t NS R provision s o f Titl e I o f the Act , unles s theyar e exclude d a s pollutio n contro l projects
.

1 1 Sectio n 415(b)(1 ) define s a CC T projec t a s a a projec t "using fund s appropriate d unde r the headin g 'Departmen t o f Energy-Clea n Coa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r simila r project s funde d throughappropriation s fo r the Environmenta l Protectio n Agency. "P.4 6

- 2 5 - Th e installation , operation , cessation , o r remova l o f a temporar

yCC T demonstratio n projec t tha t i s operate d fo r 5 year s o r les s i s exemp t fro mNSP S an

d bot hPS D an

d nonattainmen t ne w sourc e requirements
. Se e CA A415(b)(2) . However , th e facilit y stil l mus t compl ywit hthe applicabl e SI P an d othe r requirement s necessaryt o attai n an d maintai n the NAAQS . Finally , i n sectio n 415(c) , Congres s provide d an exemptio n fro mNSP S an

d PS D fo r the reactivatio n o f "ver yclea n units " otherwis e i n complianc e wit hth e Ac t tha t ha d bee n shu t down fo r a t leas t the 2 year s prio r t o enactmen t o f the 199 0 Amendment s an d that , prio r t o th e shutdown , had bee n equippe d wit hpollutio n control s wit ha remova l efficienc yo f a t leas t 8 5 percen t fo r sulfu r dioxid e an

d 9 8 percen t fo r particulates , an d had bee n equippe d wit hlow-NOxburners . III . DISCUSSION A . Pollutio n Contro l Project s 1 . Propose d RegulatoryChange s fo r Pollutio n Contro l Project s Th e EPApropose s t o amen d it s PS D an

d nonattainmen t regulation s a s theypertai n t o utilit ypollutio n contro l project s b yexercising it s authorit yunde r the statutorydefinitio n o f "modification " and confirming the Agency' s curren t polic ytha t
suc hproject s ar e no t subjec t t o NS R unles s theyrende r the uni t les s environmentall ybeneficial
. Generally , pollutio n contro l project s a t existing stationarysource s ar e no t majo r modification s subjec t t o ne wsourc e revie wrequirement s fo r the

### PAL

- 2 6 - simpl e reaso n tha t theyd o no t resul t i n a n increas e i n actua l emissions
. I n addition , EPAha s alway s recognize d tha t Congres s di d no t inten

d tha t everyactivit ya t an existing facilit yb e considere d a physica l o r operationa l chang e fo r purpose s o f the ne wsourc e review. 1 2 Th e EP Ai s todayproposing t o adop t revision s t o it s PS D an d nonattainmen t regulation s fo r the addition , replacemen t o r us e a t
a n existing electri c utilit ystea mgeneratin g uni t o f an ysystem o r devic e whos e primaryfunctio n i s the reductio n o f ai r pollutant s (including th e switching t o a less-polluting fue l wher e the primarypurpos e o f the switc hi s th e reductio n "o f ai r pollutants) . Unde r today' s proposal , a utilit ypollutio n contro l projec t wil l no t b e treate d a s a physica l o r operationa l chang e unles s th e projec t render s th e uni t les s environmentall y beneficial
. A s indicate d above , th e keyt o thi s additio n t o th e lis t o f exclusion s fromthe ter mphysica l o r operationa l chang e i s EPA' s judgmen t tha t Congres s di d no t inten d tha t pollutio n contro l project s b e considere d the typ e o f activit ytha t shoul d trigge r NSR . Th e EPAi s toda yissuing regulatorylanguag e t o explicat e and formaliz e it s statutoryauthorit yt o exclud e pollutio n

1 2 Fo r instance , EPAha s specificall yrecognize d tha t routin e maintenance , repai r an d replacement , and change s i n hour s o f operatio n o r i n th e productio n rat e ar e no t considere d a physica l chang e o r chang e i n th e metho d o f operation
. Se e 4 0 CF R 52.21(b)(2)(iii) , 52.24(f)(5)(iii) , 51.165(a)(1)(v)(C)(1) , 51.166(b)(2)(iii) , an d 60.14(e)(1) .j - 2 7 -

contro l prefect s unde r the NS R provisions
. I n 1977 , whe n Congres s erecte d th e NS R provision s o f the Act , i t provide d tha t the ter m"iredification " i n NS R shal l hav e the same meanin g a s the ter m"modification " unde r NSPS . Se e § § 169(2)(c) , 171(4) . A t the time , regulation s promulgate d unde r th e NSP S provision s defining "modification, " provide d tha t the ter m"modification " doe s no t include :

Th e additio n o r us e o f an ysystemo r devic e wiiose primaryfunctio n i s the reductio n o f a 1

. r pollutants , excep t whe n an emission s cmtro l systemi s remove d o r i s replace d b ya s/ste mwhic hthe Administrato r determine s t o b ^ les s environmentall ybeneficial
. 4 0 C.F.R . 6:>.14(e)(5) . I n 1978 , EPAnote d tha t "i n adding sectio n 169j.2)(c ) t o the Act , Congres s indicate d tha t i t intende d t o confor

m:h e meanin g o f 'modification ' t o 'usag e i n othe r part s o f the Act. ' 12 3 Congr . Rec . H11955 , 1195 7 (Nov . 1 , 1977). " 4 3 Fed . Reg . 2'..39

6 (June 19 , 1978) . Thus , jus t a s EPAhad the statutoryauthorit yt o exclud e pollutio n contro l project s b y regulatio n .fro

mNSPS , th e statutoryauthorit yexist s fo r EPAt o explicat e hi]regulatio n a n exclusio n fo r pollutio n contro l project s frc. m

Part s C an

d D o f Titl e I . A s disciusse

d i n greate r detai l i n a subsequen t section , thi s exclusio n urde r NS R reflect s the existing regulatoryexclusio n

i fo r pollutio n contro l activitie s unde r NSP S regulations , an d
severa l recen t case-specifi c nonapplicabilit ydetermination s unde r th e ne.-*

/ sourc e revie wprograms . Th e NSP S regulatory exclusio n contain s the provis o tha t the replacemen t o f aP.49 .

- 2 8 - pollutio n contro l syste mo r devic e canno t b e les s "environmentall ybeneficial " t o qualif yfo r th e exclusion
. Se e 4 0 C.F.R . 60.15(e)(5) . Wit hrespec t t o ne wsourc e review , today' s proposa l adopt s a simila r regulator yexclusio n fo r pollutio n contro l project s i n th e PS D an d nonattainmen t context . Th e majo r differenc e i n th e propose d NS R exclusio n i s tha t i t woul d appl yth e "no t les s environmentall ybeneficial " tes t t o th e additio n an d use , a s wel l a s th e replacement , o f a pollutio n contro l syste m

o r device
. Thi s chang e reflect s th e distinc t ai r qualit ycomponen t o f th e PS D an d nonattainmen t programs . B y focusin g o n whethe r a pollutio n contro l projec t i s a physica l o r operationa l chang e withi n th e meanin g o f th e ne wsourc e revie w regulations , today' s rulin g avoid s th e nee d t o undertak e a quantitativ e emission s increas e calculatio n i n ever ycase , a s woul d b e necessar yi f suc hproject s wer e deeme d t o b e physica l o r operationa l changes . Th e EP Aexpect s tha t most , i f no t all , pollutio n contro l project s wil l reduc e ne t actua l emissions
. Nevertheless , th e Administrator' s authorit yt o conside r individua l pollutio n contro l project s provide s a n adequat e opportunit yt o determin e tha t a pollutio n contro l projec t woul d someho wresul t i n a n advers e environmenta l impac t an d thu s conclud e tha t th e projec t render s th e uni t les s environmentall y beneficial , an d i s therefor e a physica l o r operationa l chang e tha t ma yb e subjec t t o NSR .

## p m

- 2 9 - Fo r the purpose s o f thi s proposal , a pollutio n contro l projec t refer s t o a projec t undertake n a t a utilit yuni t fo r purpose s o f reducing emission s fro msuc hunit
. Thes e change s ar e limite d t o th e installatio n o f conventiona l o r innovativ e emission s contro l eguipment , including , bu t no t limite d to , installatio n o f conventiona l an d advance d flu e ga s desulfurization , sorben t injectio n fo r S0 2 and NO xcontrols , electrostati c precipitators , an d project s undertake n t o accommodat e switching t o a les s polluting fuel , including natura l ga s o r coa l re-burning , co-firing o f natura l ga s an d othe r fuel s fo r the purpos e o f controlling S0 2 an d NOxemissions
. Likewise , an

yactivit ytha t i s necessaryt o accommodat e switching t o a les s polluting fue l i s considere d t o b e par t o f th e pollutio n contro l project
. I n some instances , thi s may involv e change s t o the pollutio n generating equipmen t (e.g. , boiler) , bu t onl yi f th e change s ar e necessaryt o maintai n the norma l operatin g capabilit yo f the uni t a t the time o f th e project , wher e th e capabilit ywoul d otherwis e b e impaire d a s a resul t o f the fue l switch
. Fo r example , a n electri c utilit y stea mgeneratin g uni t tha t switche s froma highe r sulfu r bituminou s coa l t o a low-sulfu r subbituminou s coa l maynee d t o mak e certai n change s t o the boile r i n orde r t o avoi d deratin g the unit
.Change s tha t ar e intende d primaril yt o restor e origina l capacit yo r t o improv e th e operationa l efficienc yo f th e facilit yP-5 1

- 3 0 - ar e no t considere d t o b e par t o f a pollutio n contro l projec t fo r purpose s o f thi s proposal . Suc hchange s ar e addresse d elsewher e i n thi s proposal . Also , th e sourc e stil l mus t compl ywit hal l applicabl e SI P limit s an d requirements , permi t condition s and applicabl e NAAQ S o r PS D incremen t limits
. A s proposed , thi s pollutio n contro l projec t exclusio n wil l
no t exten d t o sourc e categorie s othe r tha n electri c utilit ystea m generatin g units
. Th e EP Aha s s o limite d thi s provisio n because , i n contras t wit ha genera l lac k o f experienc e wit hothe r industries , EP Aha s extensiv e experienc e i n addressin g ne wsourc e applicabilit yissue s regardin g pollutio n contro l project s i n th e utilit yindustry
. Tha t experienc e ha s le d EP At o conclud e tha t pollutio n contro l project s i n th e utilit yindustr yar e generall y environmentall ybeneficial
.

2 . . Additiona l Modelin g Requirement s Apropose d pollutio n contro l projec t o r physica l o r operationa l chang e canno t resul t i n a n emission s increas e tha t wil l caus e o r contribut e t o a violatio n o f a nationa l ambien t ai r qualit ystandard , PS D increment , o r visibilit ylimitation
. Se e CAA§ § 110(a)(2)(c) , 165 , 169A(b) , 173 . Th e pollutio n contro l project s exclusion'doe s no t authoriz e anysignifican t ne t increas e i n emission s tha t woul d hav e thi s proscribe d impact
. I t i s possibl e tha t a pollutio n contro l project , whil e no t causin g
anyincreas e i n maximu mhourl yemissions , wil l caus e a significan t ne t increas e i n actua l emissions , whic hi n tur n coul dP.5 2

- 3 1 - caus e o r contribut e t o the violatio n o f a Nationa l Ambien t Ai r Qualit yStandard s (NAAQS) , incremen t o r visibilit ylimitation
. Fo r thi s reason , unde r today' s proposal , th e reviewing authorit y mayreguir e a sourc e t o perfor ma n ai r qualit yimpac t analysi s (modeling ) wheneve r 1 ) i t ha s reaso n t o believ e tha t a propose d chang e wil l resul t i n a significan t ne t increas e i n actua l emission s o f an

ycriteri a pollutan t ove r level s use d fo r tha t
sourc e i n the mos t recen t ai r qualit yimpac t analysi s an d 2 ) i t ha s reaso n t o believ e tha t suc ha n increas e woul d caus e o r contribut e t o a violatio n o f a NAAQS , incremen t o r visibilit y limitation
. I f thi s modeling indicate s tha t thi s increas e i n emission s wil l caus e o r contribut e t o a violatio n o f an yambien t standard , PS D incremen t o r visibilit ylimitation , the pollutio n contro l exclusio n doe s no t apply .

3 . Th e EPA' s Existing PolicyRegarding pollutio n Contro l Project s A s note d above , generall ypollutio n contro l project s a t existing stationarysource s ar e no t majo r modification s subjec t t o ne wsourc e revie wbecaus e theyd o no t usuall yresul t i n an increas e i n actua l emissions , an d EPAbelieve s that , i n general , pollutio n contro l project s wer e no t intende d b yCongres s t o b e considere d physica l o r operationa l change s fo r purpose s o f NSR . Th e EPAcurrentl yapplie s it s PS D regulation s i n harmon y wit hit s NSP S regulations , whic hexclud e mos t pollutio n contro l projects
. £e e 4 0 C.F.R . 60.14(e)(5) . I n 1977 , Congres s incorporate d the NSP S definitio n o f modificatio n int o the PS D an dP.5 3

- 3 2 - nonattainment|statutes
. CA A§ § 111(a)(4) , 169(a)(c) , 171(4) . I n addition , the legislativ e histor yreflect s that , a s a genera l matter , Cong r "modificatio n s s intende d t o confor mthe meaning o f fo r PS D purpose s t o the usag e unde r th e NSP S program . Se e 12 3 Cong . Rec . H1195 7 (Novembe r 1 , 1977) . Th e EPA reiterate d thi s vie wi n 1978 . Se e 4 3 FR 26396 , Jun e 19 , 1978 . Subsequently , EPAinterprete d it s NS R regulation s t o incorporat e j the NSP S pollutio n contro l projec t exclusion. 1 3 Th e EPAlate r voice d concer > abou t incorporating the precis e NSP S pollutio n contro l languag e i n the NS R contex t absen t explicatio n through notice-and-coi : .ment rulemaking largel ybecaus e o f th e ambien t ai r qualit ycomponen t o f NS R tha t i s absen t fromthe NSP S program. 1 4 I n recen t ye a ;:s however , EP Aha s consistentl yexclude d pollutio n contro l project s fro mNS R provide d tha t th e propose d projec t woul d b e environmentall ybeneficial , taking int o accoun t ambien t ai r quality. 15

. I n ligh t o f the Titl e I V requirement s an

d othe r

1 3 Memorandu

m fro mEdwar d Reich , Director , Stationary Sourc e Complianc e Divisio n an d William

F . Pedersen , Acting Associat e Genera l Counsel , Air , Noise , an d Radiatio n Divisio n t o Ally n M . Davif , Regio n I V (Apri l 21 , 1983) . i 1 4 See l Memorandu mfro mGeral d A ; Emison , Director , OAQPS , t o Regiona l Divisio n Director s (July7 , 1986) .

1 5 See , tetter , WilliamG . Rosenber g Assistan t Administrator ! EPA , t o Andre wAitken , Vic e President , Ne wEngland Powe r Servic e Co. , Marc h26 , 1991 ; Letter , Rosenber g t o Patric k M . McCarter , Senio r Vic e President , Publi c Servic e Co . o f Colorado , Ju l > 23 , 1990 ; Letters , Davi d Kee , Director , Ai r an d Radiatio n Division , EPARegio n V , t o Timoth yJ . Method , Assistan t Commissioner,•Indian a Dept . o f Environmenta l Management , January 30 , 199 0 an

d I-larc h8 , 1990 .P.5 4

- 3 3 - provision s o f the Clea n Ai r Ac t Amendment s o f 1990 , EPAconfirm s tha t i t wil l continu e t o conside r the overal l environmenta l consequence s o f pollutio n contro l project s fo r NS R applicabilit y o n a n interi m

basi s pending fina l actio n o n the propose d regulatoryexclusio n fo r pollutio n contro l projects
. B yit s nature , a determinatio n o f whethe r o r no t a projec t render s a uni t les s environmentall ybeneficia l involve s case-by-cas e assessmen t o f it s ne t emission s an d overal l impact , o n the environment
. I n making suc hassessments , EPAmus t conside r the overal l emission s befor e an d afte r the project , a s wel l a s an y othe r relevan t environmenta l factors . A s a result , n o singl e facto r ca n b e identifie d i n advanc e fo r purpose s o f makin g thi s determination
. B . Representativ e Actua l Annua l Emission s A s describe d above , EPApropose s t o revis e it s methodolog

yfo r calculating emission s increase s a t electri c utilit ystea

m generating sources . Th e EPApropose s t o compar e actua l emission s befor e an d afte r change s fo r al l physica l o r operationa l change s a t a n existing electri c utilit ystea m generating uni t othe r than the additio n o f a ne wuni t o r the replacemen t o f an existing unit
. Under-today' s action , EPA propose s t o conside r a uni t t o b e replace d i f i t woul d constitut e a reconstructe d uni t withi n the meaning o f 4 0 C.F.R . 60.15 . Sinc e ther e i s n o relevan t operating historyfo r wholl yne wunit s an d replace d units , i t i s no t possibl e t o reasonabl yprojec tP.5 5

- 3 4 - post-chang e utilizatio n fo r thes e units , an d hence , thei r futur e leve l o f "representativ e annua l actua l emissions. " Fo r othe r changes , pas t operating history , an d othe r relevan t information , provide s a basi s fo r reasonabl e projections
. A s propose d today , the "representativ e actua l annua l emissions " methodologyrequire s the utilit yt o compar e it s baselin e emission s wit hit s futur e actua l emission s t o determin e i f the propose d chang e wil l increas e actua l emissions
. Th e EPA' s existing regulation s defin e baselin e emission s a s "the averag e rate , i n ton s pe r year , a t whic hthe uni t actuall yemitte d the pollutan t during a 2-yea r perio d whic hprecede s the particula r dat e an d whic hi s representativ e o f norma l sourc e operation. " See , e.g. . 4 0 C.F.R . 52.21 . Th e Administrato r "shall " allo wus e o f a differen t time perio d "upon a determinatio n tha t i t i s mor e representativ e o f norma l sourc e operation. " .Id . Althoughno t require d b

ythe regulations , EPAha s historicall yuse d the 2 year s immediatel ypreceding the propose d chang e t o establis hth e baseline
. (Se e 4 5 Fed . Reg . 52676 , 52705 , 5271 8 (1980). ) However , i n some case s i t ha s allowe d th e us e o f earlie r periods
. Fo r example , i n WEPCO , EPAfoun d the fourt han

d fift hyear s prio r t o th e modificatio n mor e representativ e o f WEPCO' s norma l operation s sinc e the source' s capacit ywa s reduce d du e t o physica l problems . Th e EPApropose s toda yt o retai n thi s regulatorylanguage , bu t t o adop t a ne wpresumptio n regarding it s implementation
.P.5 6

- 3 5 - Unde r today' s action , the Administrato r wil l presume tha t
an y2 consecutiv e year s withi n the 5 year s prio r t o the propose d chang e i s representativ e o f norma l sourc e operation s fo r a utility
. Thi s presumptio n i s consisten t wit hthe 5-yea r perio d fo r "contemporaneous " emission s increase s an d decrease s i n 4 0 C.F.R . 52.21(b)(3)(i)(b), 1 6 Sourc e owner s o r operator s desiring t o us e othe r than a 2-yea r perio d o r a baselin e perio d prio r t o the las t 5 year s ma ysee k the Administrator' s specifi c determinatio n tha t suc hperio d i s mor e representativ e o f norma l operations. 1 7

Th e futur e actua l projectio n i s the produc t of : (1 ) the hourl yemission s rate , whic hi s base d o n the unit' s physica l an d operationa l capabilitie s following the chang e an d federally

enforceabl e operationa l restriction s tha t woul d affec t the hourl y emission s rat e following thi s change ; an d (2 ) projecte d capacit y utilization , whic hi s base d o n (a ) the unit' s historica l annua l

1 6 Thi s presumptio n doe s no t appl yt o pas t modification s a t a n emission s uni t fo r th e purpos e o f determinin g - contemporaneou s emissio n change s a t a sourc e an d canno t b e use d t o extend th e five yea r perio d specifie d i n tha t provision
. Se e 4 0 CF R 52.21(b)(3)(D(b) .
a f

1 7 Th e leve l o f baselin e emission s selecte d mus t b e consisten t wit hcurren t assumption s regarding the source' s emission s tha t ar e use d unde r th e stat e implementatio n plan s (SIP ) fo r planning o r permitting purposes . Thus , th e sourc e ma y no t selec t a leve l o f baselin e emission s highe r than tha t use d b y the permitting authorit yi n issuing a PS D o r othe r constructio n permi t t o a sourc e i n th e area , i f suc hhighe r leve l woul d resul t i n a NAAQ S o r incremen t violation , o r violat e a visibilit y limitation
.P.5 7

- 3 6 - utilization , an

d (b ) al l availabl e informatio n regarding the unit' s likel ypost-chang e capacit yutilization. 1 8 Th e projectio n o f post-chang e capacit yutilizatio n fo r applicabilit y purpose s shoul d be base d o n a projectio n o f utilizatio n fo r a perio d afte r the physica l o r operationa l change . Specifically , EPAtoda

ypropose s t o allo wsource s t o bas e th e projectio n o f utilizatio n o n the 2 year s afte r the change , o r a differen t consecutiv e 2-yea r perio d withi n th e 1 0 year s afte r the change , wher e the Administrato r determine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations
. C . Th e Causatio n Requiremen t Th e NS R regulatoryprovision s requir e tha t th e physica l o r operationa l chang e "resul t in " a n increas e i n actua l emission s i n orde r t o conside r tha t chang e t o be a modification
. Se e e.g . 4 0 C.F.R . 52.21(2 ) (i)
. I n othe r words , NS R wil l no t appl yunles s EPAfind s tha t ther e i s a causa l lin k betwee n the propose d chang e an d an ypost-chang e increas e i n emissions
. Th e EPAtoda y propose s t o amend it s rule s t o clarif ythi s provisio n i n th e contex t o f modification s a t electri c utilit ystea mgenerating units
.

1 8 I n projecting futur e utilizatio n an d emission s factors , the permitting authorit yma yconside r the company' s historica l operationa l data , it s ow n representations , filing s wit hFederal , Stat e o r loca l regulatoryauthorities , an d complianc e plan s develope d unde r Titl e I V o f the 199 0 Amendments .P.5 8

- 3 7 - i Unde r these ' propose d regulations , an yemission s increas e attributabl e t o a physica l o r operationa l change , suc ha s a i physica l o r operationa l chang e tha t significantl yalter s the efficiencyo f thi

s plant , (see , Puert o Rica n Cement , 88 9 F.2 d a t 297-8) , mus t continu e t o b e include d i n the post-chang e emission s calculation
. Today' s proposa l make s clea r tha t wher e increase d operation s ar e i n respons e t o independen t factors , suc ha s system-wid e dem

a d growth , whic hwoul d hav e occurre d an d affecte d the unit' s operation s eve n i n the absenc e o f th e physica l o r operationa l change , suc hincrease s d o no t resul t fro m the chang e an d shal l b e exclude d fro mthe projectio n o f futur e actua l emissions
. Thus' , i n assessing whethe r the propose d chang e wil l resul t i n an increas e i n actua l emissions , utilitie s nee d no t includ e i n their ' projectio n o f post-chang e utilizatio n tha t portio n o f the increase d rat e o f utilization , i f any , du e t o factor s unrelate d t o the physica l o r operationa l change , suc ha s i an increas e i n projecte d capacit yutilizatio n du e t o the rat e o f electricit ydemc j -

d growt hfo r the utilit ysystem(o f whic htha t
sourc e i s a memt'sr ) a s a whole . i Unde r thi s proposal , during a representativ e baselin e perio d

! (se e supra) . the ! plan t mus t have bee n abl e t o accommodat e the i projecte d demand 1 growt hphysicall yan d legall yeve n absen t the particula r chance . Increase d operation s (an d resultan t increase s i n actua l emissions ) tha t coul d no t physicall yan d legall yb eP.5 9

- 3 8 - accommodate d bu t fo r the propose d physica l o r operationa l chang e shoul d b e considere d t o resul t fro m the change . D . Repowering A s previousl ymentioned , Titl e I V o f the 199 0 Amendment s grant s specia l treatmen t t o utilitie s tha t see k t o compl ywit h the mandate d aci d rai n reduction s b yrepowering a uni t wit h qualifying clea n coa l technology . 199 0 Amendment s § § 402(12) , 409(a) . Specifically , repowering project s tha t qualif yfo r a Phas e I I complianc e extensio n wil l als o b e exemp t fro mNSP S requirements , s o long a s the repowering "doe s no t increas e actua l hourl yemission s fo r an ypollutan t regulate d unde r the Act. " § 409(d) . Th e EPAinterpret s the requiremen t tha t the repowering no t lead t o a n increas e i n "actua l hourl yemissions " a s a n expressio n o f Congressiona l inten t tha t wit hrespec t t o repowering projects , EPAshoul d us e the same genera l approac ht o determining applicabilit ya s i t ha s fo r othe r physica l o r operationa l changes , discusse d above . Accordingly , EPAtoda y propose s rule s tha t provid e tha t a repowering projec t whic h result s i n a n increas e ove r baselin e i n a unit' s post
modificatio n hourl yemission s wil l no t b e eligibl e fo r thi s limite d NSP S exemption
. Th e propose d NSP S exemptio n applie s t o repowering o f existing unit s a t existing sources , s o long a s the projec t qualifie s fo r th e Phas e I I extensio n and satisfie s th e "actua l hourl yemissions " increas e test . Becaus e o f thi s provision , theP.6 0

- 3 9 - reconstructio n limitation s specifie d i n 4 0 C.F.R . 60.1 5 ar e no t applicabl e t o qualifying repowering projects
. However , n o specia l treatmen t can b e afforde d t o a ne wuni t whic hi s locate d
a t a differen t sit e than the existing uni t i t replaces . Se e CA A § 409(d) . Pursuan t t o sectio n 409(e) , EPAwil l provid e expedite d NS R processing fo r repowering project s an d wil l encourag e Stat e permitting authoritie s t o d o the same . E . Clea n Coa l Technolog yDemonstratio n Project s Today' s notic e als o propose s rule s implementing the ne wCC T exemptio n create d b ythe 199 0 Amendments . Fo r the purpose s o f thi s proposal , temporar yCC T demonstratio n project s ar e define d
a s thos e CC T demonstratio n project s lasting 5 year s o r less . Titl e IV

give s thes e project s a n exemptio n fro

mNSPS , PS D an

d nonattainmen t requirements
. Id. , § 415(b)(2) . However , the facilitywoul d stil l b e subjec t t o an yapplicabl e SI P an d mus t compl ywit han

yothe r requirement s necessaryt o attai n an d maintai n NAAQS . Thi s ruling propose s t o implemen t thi s provisio n an d clarifie s tha t EPAconsider s the 5 yea r perio d a s starting o n th e dat e o f startu

p (a s define d i n 4 0 C.F.R . 60.2) . Atemporary demonstratio n projec t ma yb e converte d t o a permanen t statu s a t
an ytime , provide d i t meet s al l the requirement s tha t appl yt o a permanen t CC T projec t criteri a a t the time o f conversion
. Further , EPApropose s tha t a t the en d o f a temporary project , th e facilit ymus t b e returne d t o pre-demonstratio nP.6 1

- 4 0 - condition s an d hourl yemissio n rate s (o r lower) . Th e retur n o f th e facilit yt o it s pre-demonstratio n physica l an d operationa l conditio n woul d no t resul t i n th e los s o f th e actua l emission s margi n betwee n pre-demonstratio n actua l emission s rat e an d SIP

allowabl e emission s rate s fo r tha t facility
. Rather , th e facilit ywoul d b e treate d a s i f th e temporar ydemonstratio n projec t ha d neve r occurred. 1 9 Thi s proposa l doe s no t exten d t o emission s increase s tha t
ar e unrelate d t o th e conduc t o f temporar ydemonstratio n projects
. Th e EP Aconsider s emission s increase s (abov e th e pre demonstratio n levels ) tha t ar e attributabl e t o physica l o r operationa l changes , othe r tha n thos e necessar yt o restor e tha t uni t t o it s pre-demonstratio n condition , t o b e beyon d th e scop e
o f th e Congressiona l exemption
. Today' s actio n als o propose s t o implemen t a n exemptio n fro m NSP S an d PS D requirement s fo r repowerin g project s whic har e awarde d fundin g fro mth e DO E a s permanen t CC T demonstratio n project s (o r simila r project s funde d b yEPA ) s o lon g a s potentia l emission s (se e 52.21(b)(4) ) fro mth e uni t d o no t increas e a s a

1 9 Thi s woul d b e th e cas e eve n i f ther e wer e smal l difference s i n th e post-demonstratio n physica l an d operationa l condition s du e t o a technica l inabilit yt o restor e th e uni t t o it s precis e pre-demonstratio n condition , o r du e t o norma l variabilit yi n th e coa l used . Thus , EP Awoul d no t see k t o appl y NSP S o r NS R becaus e o f a post-demonstratio n emission s increas e attributabl e solel yt o a n increas e i n th e hour s o f operatio n o r productio n rat e o f th e uni t (subjec t t o th e NSP S limitatio n tha t th e productio n rat e increas e mus t b e accomplishe d withou t a capita l expenditure)
.P.6 2

€ •

- 4 1 - resul t o f th e project
. § 415(b)(3) . However , repowering project s tha t qualif ya s pollutio n contro l project s wil l b e treate d a s othe r pollutio n contro l project s fo r the purpose s o f the nonattainmen t provision s o f Titl e I o f th e Act . Finally , today' s proposa l woul d implemen t the statutory exemption s i n sectio n 415(c) . I n tha t section , Congres s provide d
an exemptio n fro

mNSP S an

d PS D fo r the reactivatio n o f "ver y clean units " otherwis e i n complianc e wit hthe Ac t tha t had bee n shu t dow

n fo r a t leas t the 2 year s prio r t o enactmen t o f the 199 0 Amendment s an

d that , prio r t o the shutdown , had bee n equippe d wit hpollutio n control s wit ha remova l efficienc yo f a t leas t 8 5 percen t fo r sulfu r dioxid e an d 9 8 percen t fo r particulates , an d ha d bee n equippe d wit hlow-NOxburners . Thi s exemptio n appear s t o have bee n narrowl ytailore d an d i s no t expecte d t o hav e widespread applicability
. Becaus e thes e propose d rule s merel yimplemen t straight

forward statutoryexemption s tha t wer e immediatel yeffectiv e upo n passag e o f th e 199 0 Amendments , EPAintends , a s a matte r o f statutoryinterpretation , t o followthe policie s se t fort hi n today' s proposa l pending fina l action
. F . Calculatio n o f NSP S Baselin e A s discusse d i n sectio n I I o f thi s notice , "an yphysica l o r operationa l chang e t o an existing facilit ywhic hresult s i n a n increas e i n th e emissio n rat e t o th e atmospher e o f an ypollutan t t o whic ha standar d applies " i s a modificatio n fo r NSP SP.6 3

\ - 4 2 - applicabilit ypurpose s Se e 4 0 C.F.R . § 60.14(a) . Th e NSP S i regulation s implementing thi s genera l definitio n focu s o n

i increase s i n hourl yemissions , expresse d i n kilogram s o f pollutan t discharge d pe r hour . T o determin e i f an increas e i n hourl yemission s ha s occurre d a t a unit , a pre-chang e baselin e

I mus t b e established
. Unde r curren t regulations , the emission s ra t -

s befor e an

d afte r a physica l o r operationa l chang e i s evaluate d a t eac huni t b ycomparing the curren t hourl y potentia l emission s a t maximu moperating capacit yt o hourl y
i i emission s a t maximu mcapacit yafte r the change . I n thi s i calculation , th e reviewing authorit ydisregard s the unit' s maximu mdesign capacity. 2 0 The origina l design capacit yo f a unit , t o the exten t i t differ s fro mactua l maximu

m capacit ya t the time tha t the ; baselin e i s establishe d du e t o physica l deterioratio n o f the facility , i s immateria l t o thi s calculatio n TodayEPAis ; proposing that , fo r an existing electri c utilit ystea

mgenerating unit , the pre-chang e baselin e fo r NSP S

r applicabilit ypurpose s shal l b e calculate d using th e highes t hourl yemission s jrat e achievabl e a t an

ytime during the 5 year s prio r t o th e charge . Thi s proposa l retain s the ke yconcep t i n

2 0 Se e 3 9 Fed . Reg . 36,94 8 col . 1 (propose d rule) . I n WEPCO , th e utilit ycontende d tha t baselin e capacit yfo r the purpos e o f deterr.;"nin g whethe r an increas e i n emissio n rat e occur s fo r purpose s o f a n NSP S modificatio n i s th e origina l design capacit yc f the facility
. However , the cour t rejecte d WEPCO' s argumen t [tha t origina l design capacit yo r pas t "representative " papacity , n o longe r achievabl e a t th e plant , ha d t o be use d fc r the baselin e emission s rate .P.6 4

- 4 3 - existing regulation s tha t the baselin e be determine d during a perio d tha t i s roughl ycontemporaneou s wit hthe propose d chang e a t the affecte d facility
. Th e EPAbelieve s tha t thi s propose d revision , whil e modest , i s stil l necessaryt o avoi d the curren t regulation' s undu e emphasi s o n the physica l conditio n o f the affecte d facilit yimmediatel yprio r t o th e change . Today' s mor e flexibl e provisio n enable s unit s t o establis ha baselin e tha t i s representativ e o f it s physica l an d operationa l capacit yi n recen t years , whil e stil l precluding the us e o f a baselin e tied t o origina l design capacity , whic ha s note d abov e ma ybea r n o relationshi p t o the facility' s capacit yi n recen t years . Withou t thi s revision , the NSP S regulation s ma yundul y burde n utilitie s undertaking physica l o r operationa l change s i n conjunctio n wit hthe aci d rai n program . Fo r instance , i f a uni t ha s broke n dow

n an d i s i n nee d o f repairs , th e utility' s baselin e wil l b e artificiall ylow . The propose d chang e wil l allo w utilitie s t o demonstrat e tha t an earlier , highe r capacit ywa s mor e representativ e o f the unit' s maximu mhourl yemission s rate .

G . Utilit yBAC T Presumptio n fo r NOx I n today* s notice , EPApropose s t o adop t a presumptio n that , i n the cas e o f PS D permit s issue d b yEPAunde r 4 0 C.F.R . 52.21 , bes t availabl e contro l technolog y(BACT ) fo r emission s o f nitroge n oxide s fromexisting coal-fire d electri c utilit ystea m generating unit s undergoing a modificatio n i s the technolog yP.6 5

- 4 4 - require d unde r sectio n 40 7 o f the Clean Ai r Act . I n general , thi s wil l cal l fo r the us e o f combustio n modificatio n and/o r low

NOxburner s o r similar , cost-effectiv e technologie s b ythos e utilitie s require d t o obtai n PS D permit s fo r NOxemission s following fina l actio n o n today' s proposal . I n brief , sectio n 40 7 require s mos t utilit yunit s subjec t t o phas e I an

d phas e I I t o mee t NOxemissio n limitation s o n the same dat e a s the phas e I o r phas e I I S0 2 emissio n limitation s become effective
. Th e Administrato r mus t establis hannua l emissio n limitation s (based o n rate s listed i n the section ) fo r tangentially-fixe d boiler s an d dr ybottomwall-fire d boiler s withi n 1 8 month s o f enactment . Thes e limitation s mus t b e achievabl e wit hlow-NOxburne r technology. ' CA A§ 407(b)(1) . Th e Administrato r mus t promulgat e annua l emissio n limitation s fo r al l othe r boiler s b

yJanuary1 , 1997 , base d o n a "bes t systemo f continuou s emissio n reductio n . . . whic hi s comparabl e t o the cos t of " low-NOxburners . B ythe same date , the Administrato r ma ymak e the rate s fo r boile r type s identifie d i n sectio n 407(b)(1 ) mor e stringen t i f mor e effectiv e low-NOxburne r technolog

yi s available
. CA A§ 407(b)(2) . Low-NOxburner s ar e commerciall yavailabl e an d ca n b e retrofitte d o n man

yboile r types , providing a highdegre e o f emission s reductio n a t relativel ylowcosts . Dependin g o n boile r type , low-NOxburner s can reduc e emission s o f NOxb y approximatel y2 0 t o 6 0 percent . Agai n depending o n boile r typ eP.6 6

- 4 5 - an d othe r factors , th e cos t o f replacing conventiona l burner s wit hthes e control s i s i n the rang e o f $8.0 0 t o $16.0 0 pe r kilowatt
. Othe r NO xcontro l technologie s ar e being develope d fo r retrofitte d us e o n a t leas t some coal-fire d electri c utilit y units , an

d thu s can provid e a muc hgreate r degre e o f emission s reductions
. Thes e includ e selectiv e noncatalyti c reductio n (SNC R
o r "therma l de-NOx" ) an d selectiv e catalyti c reductio n (SCR) . (In addition , DO E ha s funde d two ne wtechnologie s unde r it s CC T demonstratio n progra mwhic har e designe d fo r the simultaneou s remova l o f S0 2 , NOxan d particulat e matte r tha t ma ybecome commerciall y"available " i n the future.) 2 1 However , SN R an d SNCR ar e no t i n us e i n thi s countr ya s retrofi t technologie s fo r coal-fire d boilers , an d the DO E sponsore d project s hav e no t ye t bee n demonstrated . Curren t estimate s o f contro l cost s fo r thes e technologie s ar e muc hhighe r than fo r low-NOxburners , especiall y whe n considere d i n the contex t o f retrofitting existing units
. Th e EPAha s i n the pas t issue d guidanc e document s effectivel ycreating presumption s tha t certai n technologie s constitute d BAC T fo r certai n sourc e categories
. Se e Memorandum , Operatio n Guidanc e o n Contro l Technology

- fo r Ne wan d Modifie d Municipa l Wast e Combustors , fro mGeral d A . Emison , Director ,

2 1 On e technolog

y—lowNOx/SOxBurne r Retrofi t —i s designe d specificall yfo r cyclon e boiler s whic hcanno t b e retrofi t wit hlo wNO xburner s whil e the othe r - - th e Advance d Slagging Combusto r —i s applicabl e t o a numbe r o f boile r types .P.6 7

- 4 6 - Offic e o f Ai r Qualit yPlanning an d Standards , EPA , Jun e 26 , 1987 , p . 5 . Th e EPAbelieve s i t i s appropriat e t o propos e t o d o s o her e a s wel l i n the cas e o f low-NOxburner s fo r modifie d coal

fired utilit yboiler s i n ligh t o f the strong congressiona l policy judgmen t favoring us e o f tha t technolog yfo r aci d rai n contro l reflecte d i n sectio n 407 . Sectio n 169(3 ) o f the Act , 4 2 U.S.C . 7479(3 ) define s BAC T . as : an emission s limitatio n base d o n the maximu m degre e o f reductio n o f eac hpollutan t subjec t t o regulatio n unde r the Clea n Ai r Ac t emitte d fro mo r whic hresult s fro man ymajo r emitting facility , whic hthe permitting authority , o n a case-by-cas e basis , taking int o accoun t energy , environmental , an d economi c impact s an d othe r costs , determine s i s achievabl e fo r suc hfacilit ythroug happlicatio n o f productio n processe s an d availabl e methods , systems , an

d techniques , including fue l cleaning , clean fuels , o r treatmen t o r innovativ e fue l combustio n technique s fo r contro l o f eac hsuchpollutant . I n n o even t shal l applicatio n o f "bes t availabl e contro l technology " resul t i n emission s o f an y pollutant s whic hwil l excee d the emission s allowe d b

yan applicabl e standard establishe d pursuan t t o sectio n 741 1 o r 741 2 o f thi s title
. Emission s fro man ysourc e utilizing . . _ . _— clea n fuels , o r an

yothe r means , t o compl y wit hthi s paragraphshal l no t b e allowe d t o increas e abov e level s tha t woul d hav e bee n require d unde r thi s paragrapha s i t existe d prio r t o enactmen t o f the Clea n Ai r Ac t Amendment s o f 1990 . Th e BAC T provisio n reflect s congressiona l inten t bot ht o gran t permitting authoritie s broad discretio n t o weighthe statutoryfactor s a s theyse e fi t i n reaching a fina l substantiv e determinatio n o n BAC T an d t o creat e a procedura l methodologytha tP.6 8

- 4 7 - woul d provid e a mechanis mfo r stimulating the widesprea d us e o f i effectiv e pollutio n contro l technologies. 2 2 Th e EPAbelieve s tha t today' s propose d presumptio n i s consisten t wit hBACT J requirement s becaus e i t doe s no t purpor t t o i relieve the permitting authorit yo f the obligatio n t o weighthe statutor

yfactor s in ; reaching BAC T determinations
. Rather , i t reflect s an exercis e o f policyjudgmen t b yEPAwher e i t i s the permitting authority ' tha t i n mos t case s a BAC T analysi s o f currentl ydemonstrate d technologie s fo r retrofitting existing utilit yboiler s woul d lea d t o the selectio n o f lowNOxburner s and/o r combustio n mc;3ification s identifie d i n sectio n 407(b)(1) . AlthoughEPAhak authorit yunde r the presen t regulation s t o creat e thi s presumpt.io n regarding BAC T fo r NOx , EPAi s soliciting commen t prio r to ' adopting sucha presumptio n i n orde r t o obtai n the view s o f the publi c o n the polic yconclusion s discusse d above . i Thi s propose d presumptio n woul d no t appl yi n State s wit hPS D program s tha t hav e bf.e n incorporate d int o stat e implementatio n plan s unde r regulation s promulgate d a t 4 0 C.F.R . 51.166 . However , suc hStates ^ ar e encourage d t o adop t thi s presumptio n a s i a matte r o f stat e policy
. H . Applicabilit yDetermination s

2 2 Se e S . Rep'; . No . 95-217 , 95t hCong. , 1st . Ses* . 3 1 (1977) ; Statemen t of ; Senato r Muskie , 12 3 Cong . Rec . 5917 1 (June 8 , 1977) .P.6 9

- 4 8 - I n mos t instances , sourc e owner s o r operator s ar e abl e t o readil yascertai n whethe r ne wsourc e revie wrequirement s appl yt o them . Consequently , i n administering thes e requirements , EPA doe s no t requir e source s t o obtai n a forma l applicabilit y determinatio n befor e proceeding wit hconstruction
. I n keeping wit htha t practice , EPAwil l no t requir e utilitie s t o see k applicabilit ydetermination s unde r eithe r th e revise d regulation s propose d toda

yo r the interpretation s o f existing regulation s containe d i n thi s preamble . Utilitie s i n mos t case s can readil y ascertai n ho wthi s notic e wil l affec t them . Th e EPAanticipates , however , tha t question s wil l aris e regarding certai n aspect s o f thi s proposal . Becaus e some instance s involve discret e judgments , utilitie s ma ywis ht o obtai n determination s o f applicability
. Th e EPAwil l provid e suc hdetermination s upo n request . Suc hrequest s shoul d b e submitte d togethe r wit h appropriat e documentatio n t o the appropriat e permitting authority
. IV . ADMINISTRATIVE REQUIREMENT S A . Docke t Adocke t ha s bee n establishe d fo r thi s actio n unde r sectio n 307(d)(1)(I ) an

d (N ) o f the Clean Ai r Act , 4 2 U.S.C . 7607(d)(1)(I ) an

d (N) . Th e docke t i s a n organize d an d complet e fil e o f al l informatio n considere d i n th e developmen t o f thi s ruling
. Th e docke t i s intende d t o allo wthe publi c t o identif yP.7 0

- 4 9 - an d locat e document s relate d t o thi s ruling
. Th e docke t numbe r fo r thi s ruling i s A-90-06 . B . Paperwor k Reductio n Ac t N o additiona l publi c reporting burde n wil l resul t fro m thi s ruling
. Al l informatio n collectio n requirement s o f the Federa l NS R an d NSP S regulation s hav e bee n approve d b ythe Offic e o f Managemen t an

d Budge t (OMB ) unde r the provision s o f the Paperwork Reductio n Act , 4 4 U.S.C . 3501 , et . seq. , an d hav e bee n assigne d OMB contro l number s 2060-000 3 fo r NSR , an d 2060-0023 , 2060-002 6 . an d 2060-007 2 fo r NSPS . The effec t o f thi s rul e woul d b e a reductio n i n paperwor k relate d t o complying wit hNS R an d NSP S requirements , sinc e thi s ruling provide s additiona l clarificatio n a s t o physica l an

d operatio n change s tha t ma yb e exclude d fro

m thes e requirements
. C . OMB Revie w Unde r Executiv e Orde r 1229 1 (E.O . 12791) , EPAmus t judg e whethe r a rul e i s "major " an d therefor e subjec t t o the requiremen t o f a regulatoryimpac t analysi s (RIA) . Thi s ruling i s a majo r rule . However , EPAha s no t prepare d an RI Abecaus e i t wil l no t resul t i n an ysignificatio n advers e environmenta l effect s and wil l reduc e th e economi c cost s o f meetin g th e requirement s o f th e CAA . Thi s ruling wa s submitte d t o th e OM B fo r revie wa s require d b yE.O . 12291 . An

ywritte n comment s fro m OMB t o EPAan

d an yEPArespons e t o thos e comment s ar e include d i n Docke t A-90-06 .P.7 1

- 5 0 - D . Effectiv e Dat e Sectio n 4(d ) o f the Administrativ e Procedure s Ac t (APA) , 5 U.S.C . 553(d) , require s a 30-da ywaiting perio d befor e making a substantiv e rul e effective
. Sinc e the regulatoryrevision s being propose d toda

yar e considere d substantive , theyar e subjec t t o the notice-and-commen t requirement s o f the APAan d wil l become effectiv e onl yafte r publi c comment s hav e bee n receive d an d considered , an

d fina l actio n ha s bee n taken . Th e portion s o f thi s notic e tha t merel yconfir mEPApolicyar e effectiv e immediately
. E . RegulatoryFlexibilit yAc t Thi s actio n i s no t subjec t t o the certificatio n provision s o f s t .io

n 605(b ) o f the RegulatoryFlexibilit yAc t (RFA ) becaus e thi s rul e wil l resul t i n a reductio n o f administrativ e cost s an d
n o increas e i n contro l costs , therefor e having n o significan t impac t o n industry
.P.7 2

- 5 1 - Lis t o f Subject s 4 0 C.F.R . Par t 5 1 Administrativ e procedur e an d practices , intergovernmenta l relations , ai r pollutio n control , NSR , Clea n Coa l Technology projects , sulfu r oxides , nitroge n dioxide , particulat e matter , carbo n monoxide , hydrocarbons , lead . 4 0 C.F.R . Par t 5 2 Ai r pollutio n control , NSR , Clea n Coa l Technologyprojects , repowering , sulfu r oxides , particulat e matter , nitroge n dioxide , carbo n monoxide , hydrocarbons , lead . 4 0 C.F.R . Par t 6 0 Ai r pollutio n control , NSPS , Clea n Coa l Technologyprojects , repowering, , sulfu r oxides , particulat e matter , nitroge n dioxide , carbo n monoxide , hydrocarbons , lead . Dated : Jun e 4 , 199 1
Wiiliam-R- i Reilly , A^Administrato rPJ3^

Fo r the reason s se t f^rthi n the preamble , Par t 5 1 o f Chapte r I o f Titl e 4 0 o f the coye o f Federa l Regulation s i s propose d t o be amende d a s follows : j Par t 5 1 - REQUIREMENT S FO R PREPARATION , ADOPTION , AND SUBMITTA L O F IMPLEMENTATIONPLA^S . t 1 . Th e authorit ycitatio n fo r Par t 5 1 i s amende d t o read a s follows : Authority : 4 2 u's.C . 7401(b)(1) , 7410 , 7411 , 7470-7479 , 7491 , 7501-7508 , 7601;an d 7602 , a s amende d b yth e Clea n Ai r Ac t Amendment s o f 1990 , Pii bL . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) ; 402 , 409 , 415!o f th e Clea n Ai r Ac t a s amended , 10 4 Stat . 2399 , unles s otherwis e noted . 2 . Sectio n 51.' , 6 5 i s propose d t o b e amende d t o read a s follows : 51.16 5 Permi t

requirements
. (a ) * * * I (1 ) * * * I (v ) * * * j (C ) Aphysica l chang e o r a chang e i n the metho d o f operatio n sJ'al l no t include : * * * * ! * i i (8 ) the add:.tion , replacemen t o r us e o f a pollutio n contro l projec t a t a n existing electri c utilit yste^ mgenerating unit , unles s the reviewing authorit ydetermine s tha t suc haddition , replacement, ; o r us e render s the uni t les s environmentall ybeneficial , an d except : (i ) whe' n the reviewing authorit yha s reaso n t o believe ; tha t the pollutio n contro l projec t woul d resul t ji

n a significan t ne t increas e i n representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d fo r tha t sourc e Ji

n th e mos t recen t ai r qualit yimpac t " ~ " analysi s i n the are a conducte d fo r th e purpos e o f Titl e 1 , i f any , an d (ii ) thje reviewing authorit ydetermine s tha t th e increas e wil l caus e o r contribut e t o a violatio n o f an y-ambien

t standard , PS D increment , o r visibilit ylimitation
.

i (9 ) Th e installation , operation , cessation , o r remova l o f a tempor e yclean coa l technolog ydemonstratio n project , provide d tha t th e projec t complie s with :P.7 4

- 2 - (i ) the Stat e implementatio n plan fo r the Stat e i n whic hthe projec t i s located , an d (ii ) othe r requirement s necessaryt o attai n an d maintai n the nationa l ambien t ai r qualit ystandard s during th e projec t an d afte r i t i s terminated
. (10 ) Th e reactivatio n o f a veryclean coal

fire d electri c utilit ystea mgenerating unit
. (xii ) * * * (D ) Fo r an

yemission s uni t (othe r than a n electri c utilit ystea

mgenerating uni t specifie d i n paragraph (E ) o f thi s subsection ) tha t ha s no t begun norma l operation s o n a particula r date , actua l emission s shal l equa l the potentia l t o emi t o f the uni t o n tha t date . (E ) Fo r an electri c utilit ystea mgenerating uni t (othe r than a ne wuni t o r th e replacemen t o f a n existing unit ) actua l emission s o f the uni t following the physica l o r operationa l chang e shal l equa l the representativ e actua l annua l emission s o f the unit
. (xx ) "Electri c utilit ystea mgenerating unit " mean s an y stea melectri c generating uni t tha t i s constructe d fo r the purpos e o f supplying mor e than one-thir d o f it s potentia l electri c outpu t capacit yan d mor e than 2 5 M

Welectrica l outpu t t o an yutilit ypowe r distributio n systemfo r sale . An ystea m supplie d t o a stea

m distributio n systemfo r the purpos e o f providing stea

mt o a steam-electri c generato r tha t woul d produc e electrica l energ

yfo r sal e i s als o considere d i n determining the electrica l energ

youtpu t capacit yo f the affecte d facility
. (xxi ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r the two-yea r perio d afte r a physica l chang e o r chang e i n the metho d o f operatio n o f a unit , (or a differen t consecutiv e two-yea r perio d withi n 1 0 year s afte r tha t change , wher e the permitting authorit ydetermine s tha t suc h perio d i s mor e representativ e o f norma l sourc e operations) , considering the effec t an ysuc hchang e wil l hav e o n increasing o r decreasing th e hourl yemission s rat e an d o n projecte d capacit y utilization
. I n projecting futur e emission s the permitting authorit yshall :

(A ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th ePJ5_

- 3 - company' s ow

n representations , filing s wit hthe Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r Titl e I

V o f the Clea n Ai r Act ; an d (B ) exclude , i n calculating an yincreas e i n emission s tha t result s fro

mthe particula r physica l chang e o r chang e i n the metho d o f operatio n a t a n electri c utilit ystea

mgenerating unit , tha t portio n o f th e unit' s emission s following the chang e tha t i s attributabl e t o an increas e i n projecte d capacit y utilizatio n a t the uni t tha t i s unrelate d t o the particula r change , including an yincrease d utilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystema s a whole . (xxii ) "Temporaryclean coa l technolog ydemonstratio n project " mean s a clea n coa l technolog ydemonstratio n projec t tha t i s operate d fo r a perio d o f five year s o r less , an d whic h complie s wit hthe Stat e implementatio n plan fo r the Stat e i n whic hthe projec t i s locate d an d othe r reguirement s necessaryt o attai n an

d maintai n the nationa l ambien t ai r qualit ystandard s during th e projec t an d afte r i t i s terminated
. (xxiii ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t the precombustion , combustion , o r pos t combustio n stage , a t a newo r existing facilit ywhic h wil l achiev e significan t reduction s i n ai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hthe utilizatio n o f coa l i n the generatio n o f electricity , o r proces s stea mwhic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (xxiv ) "Clean coa l technolog ydemonstratio n project " mean s a projec t using fund s (1 ) appropriate d unde r th e heading 'Departmen t o f Energy-Clea n Coa l Technology, ' up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clean coa l technology , o r (2 ) simila r project s funde d through_. _ appropriation s fo r the Environmenta l Protectio n Agency . Th e Federa l contributio n fo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f the demonstratio n project
. (xxv ) "Reactivatio n o f a ver yclean coal-fire d electri c utilit ysteamgenerating unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio n associate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit y uni t afte r a perio d o f discontinue d operatio n wher e the unit : (i ) ha s no t bee n i n operatio n fo r the two-yea r perio d prio r t o the enactmen t o f the Clea n Ai r Ac t Amendment s o f 1990 , and th e emission s fromsuc huni t continu e t oP.7 6

- 4 - b e carrie d i n th e permitting authority' s emission s inventorya t the time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s than 8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s than 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o the time o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i n complianc e wit hthe requirement s o f th e Clea n Ai r Act . (xxvi)"Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , at'an existing electri c utilit ystea

m generating uni t fo r purpose s o f reducing emission s fro msuc hunit
. Suc hchange s ar e limite d to : (i ) the installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e an

d nitroge n oxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i n the metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting than the fue l in us e prio r t o the chang e including , bu t no t limite d t o natura l ga s o r coa l re burning , co-firing o f natura l ga s an d othe r fuel s fo r the purpos e o f controlling emissions ; (iii ) a permanen t clean coa l technolog ydemonstratio n projec t conducte d unde r Titl e II , sectio n 101(d ) o f the Furthe r Continuing Appropriation s Ac t o f 198 5 (sectio n 5903(d ) o f titl e 4 2 o f the Unite d State s Code) , o r subsequen t appropriations , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r simila r project s funde d through appropriation s fo r the Environmenta l Protectio n Agency ; o r (iv ) a permanen t clean coa l technolog ydemonstratio n projec t tha t constitute s a repowering project
.P^ 7

- 5 - 3 . Sectio n 51.16 6 i s propose d t o be amende d t o read a s follows : 51.16 6 Preventio n o f significan t deterioratio n o f ai r quality
. **** * (b ) * * * (2 ) * * * (iii ) Aphysica l chang e o r chang e i n th e metho d o f operatio n shal l no t include : * * * * (h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t a n existing electri c utilit ystea mgenerating unit , unles s the reviewing authorit ydetermine s tha t suc haddition , replacement , o r us e render s the uni t les s environmentall y beneficia l an

d except : (a ) whe n the reviewing authorit yha s reaso n t o believ e pollutio n contro l projec t woul d resul t i n a significan t ne t increas e i n representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d fo r tha t sourc e i n the mos t recen t ai r qualit yimpac t analysi s i n the are a conducte d fo r the purpos e o f Titl e I, ' i f any , an d (b ) the reviewing authorit ydetermine s tha t the increas e wil l caus e o r contribut e t o a violatio n o f an yambien t standard , PS D increment , o r visibilit ylimitation
. (i ) an yphysica l chang e o r chang e i n the metho d o f operatio n a t a n existing electri c utilit ygenerating uni t (othe r than the additio n o f a ne wuni t o r the replacemen t o f a n existing unit ) tha t woul d no t resul t i n a significan t ne t increas e i n representativ e actua l annua l emission s o f a regulate d pollutan t a t the unit
. (j ) Th e installation , operation , cessation , o r remova l o f a temporaryclean coa l technolog ydemonstratio n project , provide d tha t the projec t complie s with : (i ) the Stat e implementatio n pla n fo r the Stat e i n whic hthe projec t i s located ; an d (ii ) othe r requirement s necessaryt o attai n and maintai n the nationa l ambien t ai r qualit yP.7 8

! * 6" standard; ; during the projec t an d afte r i t i s terminated
.

i (k ) Th e installatio n o r operatio n o f a permanen t clee n coa l technolog ydemonstratio n projec t tha t constitute s repowering , provide d tha t the projec t doe s no t resul t i n an increas e i n tl\e potentia l t o emi t o f an y regulate d pollutan t emitte d b yth e unit
. Thi s exemptior ; shal l appl yo n a pollutant-by

pollutan t basi.s
.



### j (1 ) Th e reactivatio n o f a ver yclean coal

fire d electri c utilit ystea mgenerating unit
.
(21 ) * * * ! (iv ) Fo r an

yemission s uni t (othe r than an electri c utilit ystea

mgenerating uni t specifie d i n paragraph (v ) o f thi s subsection ) tha t ha s no t begun norma l operation s o n a particula r date , actua l emission s shal l equa l the potential ; t o emi t o f th e uni t o n tha t date . (v ) Fo r a

n electric ; utilit ystea mgenerating uni t (othe r than a ne wu . i t o r the replacemen t o f a n existing unit ) act u 1 emission s o f the uni t following the physica l o r ope ' ationa l chang e shal l equa l th e representativ e act u . 1 annua l emission s o f th e uni t following the physica l o r operationa l change . (30 ) "Electri c utilit ys;..ea mgenerating unit " mean s an ystea m electri c generatin g uni t tha t i s constructe d fo r the purpos e o f supplying mor e t;.a n one-thir d o f it s potentia l electri c outpu t capacit yand ; mor e than 2 5 M Welectrica l outpu t t o any _ utilit ypowe r distributio n systemfo r sale . An ystea m supplie d t o a steam ] distributio n system fo r th e purpos e o f providing stea

mt o £ steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determinin g the eleltrica l energ youtpu t capacit yo f the affecte d facility
. !



### i (31 ) "Pollutio n contro l hroject " mean s an yphysica l chang e o r chang e i n the methof . o f operatio n a t a n existing electri c utilit ystea

mgener.-tin

g uni t fo r purpose s o f reducing emission s fro

m suchunit
. Suc hchange s ar e limite d to : (i ) the installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite dP.7 9

- 7 - t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e an d nitroge n oxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i n the metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting than the fue l i n us e prio r t o the change , including bu t no t limite d t o natura l ga s o r coa l re-burning , co-firing o f natura l ga s an d othe r fuel s fo r the purpos e o f controlling emissions ; (iii ) a permanen t clea n coa l technolog ydemonstratio n projec t conducte d unde r Titl e II , sectio n 101(d ) o f the Furthe r Continuing Appropriation s Ac t o f 198 5 (section 5903(d ) of.titl e 4 2 o f the Unite d State s Code) , o r subsequen t appropriations , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r simila r project s funde d throug h appropriation s fo r the Environmenta l Protectio n Agency , o r (iv ) a permanen t clean coa l technolog ydemonstratio n projec t tha t constitute s a repowering projec t (32 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hthe sourc e i s projecte d t o emi t a pollutan t fo r the two-yea r perio d afte r a physica l chang e o r chang e i n the metho d o f operatio n o f a unit , (or a differen t consecutiv e two
yea r perio d withi n 1 0 year s afte r tha t change , wher e the reviewing authorit ydetermine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations) , considering the effec t an ysuc hchang e wil l hav e o n increasing o r decreasing the hourl yemission s rat e an d o n projecte d capacit yutilization
. I n projecting futur e emission s th e reviewing authorit yshall : - - — (A ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , the company' s own representations , filing s wit hth e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r Titl e IV

o f th e Clea n Ai r Act ; and (B ) exclude , i n calculating an yincreas e i n emission s tha t result s fro

mthe particula r physica l chang e o r chang e i n th e metho d o f operatio n a t a n electri c utilit ystea

mgenerating unit , tha t portio n o f the unit' s emission s following th e chang e tha t i s attributabl e t o an increas e i n projecte d capacit y utilizatio n a t th e uni t tha t is
. unrelate d t o theP.8 0

- 8 - particula r change , including an yincrease d utilizatio n du e t o the rat e o f electricit ydeman d growt hfo r the utilit ysystema s a whole . (33 ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t the precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existing facilit ywhic h wil l achiev e significan t reduction s i n ai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hthe utilizatio n o f coa l i n the generatio n o f electricity , o r proces s stea

mwhic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (34 ) "Clean coa l technolog ydemonstratio n project " mean s a projec t using fund s (1 ) appropriate d unde r the heading 'Departmen t o f Energy-Clean Coa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clean coa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r the Environmenta l Protectio n Agency . Th e Federa l contributio n fo r a qualifying projec t shal l be a t leas t 2 0 percen t o f the tota l cos t o f the demonstratio n project
. (35 ) "Temporaryclean coa l technolog ydemonstratio n project " mean s a clean coa l technolog ydemonstratio n projec t tha t i s operate d fo r a perio d o f five year s o r less , an d whic h complie s wit hthe Stat e implementatio n plan fo r the Stat e i n whic hthe .projec t i s locate d an d othe r requirement s necessaryt o attai n an d maintai n the natio n ambien t ai r qualit ystandard s during an d afte r th e projec t i s terminated
. (36)(i ) "Repowering " mean s replacemen t o f an existing coal

fire d boile r wit hon e o f the following clea n coa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio n combine d cycle ,

—magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio n fue l cells , o r a s determine d b

ythe Administrator , i n consultatio n wit h th e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d an yothe r technolog

ycapabl e o f controlling multipl e combustio n emission s simultaneousl ywit himprove d boile r o r generatio n efficienc yand wit hsignificantl ygreate r wast e reductio n relativ e t o the performanc e o f technolog yi n widesprea d commercia l us e a s o f Novembe r 15 , 1990 . (ii ) Repowering shal l als o includ e an yoi l and/o r gas-fire d uni t whic ha s bee n awarde d clea n coa l technolog yP.8 1

- 9 - demonstratio n fundin g a s o f Januar y1 , 1991 , byth e Departmen t o f Energy . (iii ) Th e reviewin g authorit yshal l giv e expedite d consideratio n t o permi t application s fo r anysourc e tha t satisfie s th e requirement s o f thi s subsectio n an d i s grante d a n extensio n unde r § 40 9 o f th e Clea n Ai r Act . (37 ) "Reactivatio n o f a ver yclea n coal-fire d electri c utilit y stea mgeneratin g unit " mean s anyphysica l chang e o r chang e i n th e metho d o f operatio n associate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio n wher e th e unit : (i ) ha s no t bee n i n operatio n fo r th e two-yea r perio d prio r t o th e enactmen t o f th e Clea n Ai r Ac t Amendment s o f 1990 , an d th e emission s fro msuc huni t continu e t o b e carrie d i n th e permittin g authority' s emission s inventor ya t th e tim e o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s syste mo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n 8 5 percen t an d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NO xburner s prio r t o th e tim e o f commencemen t o f operation s followin g reactivation ; an d (iv ) i s otherwis e i n complianc e wit hth e requirement s o f th e Clea n Ai r Act .P.8 2

- 1 0 - Fo r the reason s se t fort hi n the preamble , Par t 5 2 o f Chapte r I o f Titl e 4 0 o f the Cod e o f Federa l Regulation s i s propose d t o b e amende d a s follows : Par t 52-APPROVAL AND PROMULGATIONO F IMPLEMENTATIONPLAN S 1 . Th e authorit ycitatio n fo r Par t 5 2 i s amende d t o read a s follows : Authority : 4 2 U.S.C . 7401-764 2 a s amende d b ythe Clea n Ai r Ac t Amendment s o f 1990 , Pu bL . No . 101-549 , 10 4 Stat , 239 9 (Nov . 15 , 1990) , unles s otherwis e noted . 2 . Sectio n 52.2 1 i s propose d t o b e amende d t o read a s follows : 52.2 1 Preventio n o f significan t deteriora t * ^ n o f ai r quality
.
(b ) * * * (2 ) * * * (iii ) Aphysica l chang e o r a chang e i n the metho d o f

operatio n shal l no t include : * * * * * (h ) the addition , replacemen t o r us e o f a pollutio n contro l projec t a t an existing electri c utilit ystea m generating unit , unles s the Administrato r determine s tha t suc haddition , replacement , o r us e render s the uni t les s environmentall ybeneficial , an d except : -(a ) whe n the Administrato r ha s reaso n t o believ e - tha t the pollutio n contro l projec t woul d resul t i n a significan t ne t increas e i n representativ e actua l annua l emission s o f an ycriteri a pollutan t ove r level s use d fo r tha t sourc e i n the mos t recen t ai r qualit yimpac t analysi s i n th e are a conducte d fo r the purpos e o f Titl e I , i f any , an d (b ) th e Administrato r determine s tha t th e increas e

. wil l caus e o r contribut e t o a violatio n o f an y ambien t standard , PS D increment , o r visibilit y limitation
. (i ) Th e installation , operation , cessation , o r remova l o f a temporaryclean coa l technolog yP.8 3

- 1 1 - demonstratio n pioject , provide d tha t the projec t complie s with : j i (i ) the Stc.t

e implementatio n pla n fo r the Stat e i n whic hthe projec t i s located , and

j (ii ) othe r jreguirement s necessaryt o attai n an d maintai n the nationa l ambien t ai r qualit y standard s curing th e projec t an d afte r i t i s terminate d J

i (j ) Th e installatio n o r operatio n o f a permanen t clea n icoa l technolog

ydemonstratio n projec t tha t constitute s repowering , provide d tha t the project ; doe s no t resul t i n an increas e i n the potentia l t o emi t o f an y regulate d pollutan t emitte d b yth e unit
. Thi s exemptio n s'.all appl yo n a pollutant-by

pollutan t basis. ; i (k ) Th e reactivc-i
. ion o f a veryclea n coal

fire d electri c utilit ystea mgenerating unit
.
(21 ) * * * I (iv ) Fo r an

yemission ^ uni t (othe r than a n electri c utilit ystea

mgenerating uni t specifie d i n paragrap h (v ) o f thi s subsection ) tha t ha s no t begun norma l operation s o n a parti;ula r date , actua l emission s shal l equa l the potentia l t e emi t o f th e uni t o n tha t date .



### i (v ) Fo r an electri c utilit ystea mgenerating uni t (othe r than a ne wuni 1 : o r the replacemen t o f a n existing unit ) actual'emission s o f th e uni t following - • - th e physica l o r operationa l chang e shal l equa l th e representativ e actua l .annua l emission s o f the unit
. i (31 ) "Electri c utilit yste^ mgenerating unit " mean s an ystea m electri c generating u. : \ t tha t i s constructe d fo r th e purpos e o f supplying mor e thar . one-thir d o f it s potentia l electri c outpu t capacit yan

d mdi-e than 2 5 MWelectrica l outpu t t o an y utilit ypowe r distributio n systemfo r sale . An ystea m supplie d t o a stea

mdistributio n systemfo r th e purpos e o f providing stea

mt o a £ team-electri c generato r tha t woul d produc e electrica l enejrg yfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility
.P.8 4

- 1 2 - (32 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t a n existing electri c utilit ystea

mgenerating uni t fo r purpose s o f reducing emission s fromsuc hunit
. Suc hchange s ar e limite d to : (i ) the installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limited t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e an d nitroge n oxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i n the metho d o f operation , t o accommodat e switching t o a fue l whic hi s • les s polluting than the fue l i n us e prio r t o the chang e including , bu t no t limite d t o natura l ga s o r coa l re burning , co-firing o f natura l ga s an d othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clean coa l technolog ydemonstratio n projec t conducte d unde r Titl e II , sectio n 101(d ) o f the Furthe r Continuing Appropriation s Ac t o f 198 5 (section

5903(d ) o f titl e 4 2 o f the Unite d State s Code) , o r subsequen t appropriations , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r simila r project s funde d through appropriation s fo r the Environmenta l Protectio n Agency ; o r (iv ) a permanen t clean coa l technolog ydemonstratio n projec t tha t constitute s a repowering project
. (33 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hthe sourc e i s projecte d t o emi t a pollutan t fo r the two-yea r perio d afte r a physica l chang e o r chang e i n the metho d o f operatio n o f a unit , (or a differen t consecutiv e two-yea r perio d withi n 1 0 year s after_ , tha t change , wher e the Administrato r determine s tha t suc h perio d i s mor e representativ e o f norma l sourc e operations) , considering the effec t an ysuc hchang e wil l hav e o n increasing o r decreasing the hourl yemission s rat e an d o n projecte d capacit yutilization
. I n projecting futur e emission s the Administrato r shall : (i ) no t compan y___ t , „ _ o r Federa l regulatoryauthorities , an d complianc e plan s unde r Titl e IV

o f the Clea n Ai r Act ; an dP.8 5

- 1 3 - (ii ) exclude , i n calculating an yincreas e i n emission s tha t result s fro

mthe particula r physica l chang e o r chang e i n the metho d o f operatio n a t an electri c utilit ystea

mgenerating unit , tha t portio n o f th e unit' s emission s following the chang e tha t i s attributabl e t o a

n increas e i n projecte d capacit y utilizatio n a t the uni t tha t i s unrelate d t o the particula r change , including an yincrease d utilizatio n du e t o the rat e o f electricit ydemand growt hfo r the utilit ysystema s a whole . (34 ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t the precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existing facilit ywhic h wil l achiev e significan t reduction s i n ai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hthe utilizatio n o f coa l i n the generatio n o f electricity , o r proces s stea

mwhic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (35 ) "Clean coa l technolog ydemonstratio n project " mean s a projec t using fund s (1 ) appropriate d unde r th e headin g 'Departmen t o f Energy-Clea n Coa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r the Environmenta l Protectio n Agency . Th e Federa l contributio n fo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f the tota l cos t o f the demonstratio n project
. (36 ) "Temporaryclean coa l technolog ydemonstratio n project " mean s a clean coa l technolog ydemonstratio n proj-
. t tha t i s operate d fo r a perio d o f five year s o r less , an d whic h complie s wit hthe Stat e implementatio n plan s fo r the Stat e i n whic hthe projec t i s locate d an d othe r requirement s necessaryt o attai n an d maintai n th e nationa l ambien t air
. _ _ qualit ystandard s during the projec t an d afte r i t i s terminated
. (37)(i ) "Repowering " mean s replacemen t o f an existing coal

fire d boile r wit hon e o f the following clea n coa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio n combine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio n fue l cells , o r a s determine d b

ythe Administrator , i n consultatio n wit h th e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d an yothe r technolog

ycapabl e o f controlling multipl e combustio n emission s simultaneousl ywit himprove d boile r o r generatio nP.8 6

- 1 4 - efficienc yan

d wit hsignificantl ygreate r wast e reductio n relativ e t o the performanc e o f technolog yi n widesprea d commercia l us e a s o f Novembe r 15 , 1990 . (ii ) Repowering shal l als o includ e an yoi l and/o r gas-fire d uni t whic hha s bee n awarde d clea n coa l technolog y demonstratio n funding a s o f January1 , 1991 , b yth e Departmen t o f Energy . (iii ) Th e Administrato r shal l giv e expedite d consideratio n t o permi t application s fo r an y sourc e tha t satisfie s the requirement s o f thi s subsectio n an

d i s grante d an extensio n unde r §40 9 o f the Clean Ai r Act . (38 ) "Reactivatio n o f a ver yclean coal-fire d electri c utilit ystea

mgenerating unit " mean s an yphysica l chang e o r chang e i n the metho d o f operatio n associate d wit hthe commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d of ' discontinue d operatio n wher e the unit : (i ) ha s no t bee n i n operatio n fo r the two-yea r perio d prio r t o th e enactmen t o f the Clea n Ai r Ac t Amendment s o f 1990 , an

d the emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t the time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficiencyfo r sulfu r dioxid e o f n o les s than 8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s than 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o the time o f commencemen t o f operation s following ._._... _ reactivation ; an

d (iv ) i s otherwis e i n complianc e wit hthe requirement s o f th e Clea n Ai r Act .P.8 7

- 1 5 -

3 . Sectio n 52.2 4 i s propose d t o b e amende d t o read a s follows : 52.2 4 Statutoryrestrictio n o n ne wsources . **** * ( f ) * * * (5 ) * * * (iii ) Aphysica l chang e o r chang e i n the metho d o f operatio n shal l no t include :
(h ) the addition , replacemen t o r us e o f a pollutio n contro l projec t a t a n existing electri c utilit ystea m generating unit , unles s the Administrato r determine s tha t suc haddition , replacement , o r us e render s the uni t les s environmentall ybeneficial , an d except : (1 ) whe n the Administrato r ha s reaso n t o believ e tha t the pollutio n contro l projec t woul d resul t i n a n significan t ne t increas e i n representativ e actua l annua l emission s o f an ycriteri a pollutan t ove r level s use d fo r tha t sourc e i n the mos t recen t ai r qualit yimpac t analysi s i n the are a conducte d fo r th e purpos e o f Titl e I , i f any , and (2 ) th e Administrato r determine s tha t the increas e wil l caus e o r contribut e t o a violatio n o f an yambien t standard , PS D increment , o r visibilit y limitation
. „.._... . —- (i ) Th e installation , operation , cessation , o r remova l o f a temporaryclea n coa l technolog ydemonstratio n project , provide d tha t the projec t complie s with : (1 ) th e Stat e implementatio n pla n fo r th e Stat e i n whic hth e projec t i s located , an d (2 ) othe r requirement s necessaryt o attai n an d maintai n th e nationa l ambien t ai r qualit ystandard s durin g the projec t an

d afte r i t i s terminated
. (j ) Th e reactivatio n o f a veryclea n coal-fire d electri c utilit ystea mgenerating unit
.P.8 8

• - 1 6 -

* * * * * j (13 ) * * * (iv ) Fo r an

yemission s uni t (othe r than an electri c utilit ystea

mgenerating uni t specifie d i n paragraph (v ) o f thi s subsection ) tha t ha s no t begun norma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o i^mi t o f th e uni t o n tha t date . (v ) Fo r an electri c utilit ystea mgenerating uni t (othe r than a ne wuni t o r the replacemen t o f a n existing unit ) actua l emission s o f th e uni t following the physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f the unit
. (18 ) "Electri c utilit ystea Agenerating unit " mean s an ystea m electri c generating uni t tha ? ; i s constructe d fo r the purpos e o f supplying mor e than one-thirc * o f it s potentia l electri c outpu t capacit yan

d mor e than 2 5 MW ; electrica l outpu t t o an yutilit y powe r distributio n systemfoi ; sale . An ystea msupplie d t o a stea mdistributio n systemfoi l the purpos e o f providing , stea mt o a steam-electri c generato r tha ^ woul d produc e electrica l energ yfo r sal e i s als o considere d i n determining the electrica l energ y outpu t capacit yo f the affecte d facility
. 1 (19 ) "Representativ e actua l cinnual emissions " mean s the averag e rate, , i n ton s pe r year , a t whic hthe sourc e i s projecte d t o emi t a pollutan t fo r the two-yea r perio d afte r a physica l chang e o r chang e i n the metho d o f operatio n o f a unit , (or a differen t consecutiv e two-yea r perio d v.-ithi n 1 0 year s afte r tha t change , wher e the Administrato r determine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations) , considerin g the effec t an

ysuc hchang e wil l hav e o n increasing o r decreasing the hourl yemission s rat e an d o n projecte d capacit yutilization
. I n projecting futur e emission s tjh e Administrato r shall : - - (i ) conside r al l relevc'n t information , including bu t no t limite d to , historica l operationa l data , the company' s ow n representations , filing s wit hthe Stat e o r Federa l regulatoryauthorities , 'an d complianc e plan s unde r Titl e I V o f the Clea n Ai r Act ; ari d 

### i (ii ) exclude , i n calculating an yincreas e i n emission s tha t result s fromth e particula r physica l chang e o r chang e i n th e metho d o f operatio n a t c n electri c utilit ystea mgenerating unit , tha t portio n o f the unit' s emission s following the chang e tha t i s attributabl e t o an increas e i n projecte d capacit yutilizatio n a t Ith e uni t tha t i s unrelate d t o the particula r change , including an yincrease d utilizatio n du eP.8 9

- 1 7 - t o the rat e o f electricit ydemand growt hfo r the utilit y systema s a whole . (20 ) "Temporaryclean coa l technolog ydemonstratio n project " mean s a clea n coa l technolog ydemonstratio n projec t tha t i s operate d fo r a perio d o f five year s o r less , an d whic hcomplie s wit hthe Stat e implementatio n plan s fo r the Stat e i n whic hthe projec t i s locate d an d othe r requirement s necessaryt o attai n an d maintai n th e nationa l ambien t ai r qualit ystandard s during the projec t and afte r i t i s terminated
. (21 ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t the precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existing facilit ywhic hwil l achiev e significan t reduction s i n ai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hthe utilizatio n o f coa l i n the generatio n o f electricity , o r proces s stea mwhic hwa s no t i n widespread us e a s o f Novembe r 15 , 1990 . (22 ) "Clean coa l technolog ydemonstratio n project " mean s a projec t using fund s (1 ) appropriate d unde r the heading 'Departmen t o f Energy-Clea n Coa l Technology' , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r (2 ) simila r project s funde d through appropriation s fo r the Environmenta l Protectio n Agency . Th e Federa l contributio n fo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f the tota l cos t o f the demonstratio n project
. (23 ) "Reactivatio n o f a ver yclean coal-fire d electri c utilit ystea

mgenerating unit " mean s an yphysica l chang e o r chang e i n the metho d o f operatio n associate d wit hthe commencemen t o f commercia l operation s b ya coal-fire d utilit y uni t afte r a perio d o f discontinue d operatio n wher e the unit : (i ) ha s no t bee n i n operatio n fo r th e two-yea r perio d prio r t o the enactmen t o f the Clea n Ai r Ac t Amendment s * o f 1990 , an

d th e emission s from suc huni t continu e t o b e carrie d i n the permitting authority' s emission s inventorya t th e time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n 8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s than 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o the time o f commencemen t o f operation s following reactivation ; an

dP.9 0

- 1 8 - (iv ) i s otherwis e i n complianc e wit hthe requirement s o f the Clea n Ai r Act . (24 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t a n existing electri c utilit ystea

mgenerating uni t fo r purpose s o f reducing emission s fromsuc hunit
. Suc hchange s ar e limite d to : (i ) th e installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e and nitroge n oxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i n the metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting than the fue l i n us e prio r t o the chang e including , bu t no t limite d t o natura l ga s o r coa l re burning , co-firing o f natura l ga s an d othe r fuel s fo r the purpos e o f controlling emissions ; (iii ) a permanen t clean coa l technolog ydemonstratio n projec t conducte d unde r Titl e II , sectio n 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sectio n 5903(d ) o f titl e 4 2 o f the Unite d State s Code) , o r subsequen t appropriations , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r simila r project s funde d through appropriation s fo r the Environmenta l Protectio n Agency ; o r (iv ) a permanen t clean coa l technolog ydemonstratio n projec t tha t constitute s a repowering project
.P.9 1

- 1 9 - Fo r th e reason s se t fort hi n th e preamble , Par t 6 0 o f Chapte r I o f Titl e 4 0 o f th e Cod e o f Federa l Regulation s i s propose d t o b e amende d a s follows : PAR T 60-STANDARD S O F PERFORMANC E FO R NE WSTATIONAR Y SOURCE S 1 . Th e authorit ycitatio n fo r Par t 6 0 i s amende d t o rea d a s follows : Authority : 4 2 U.S.C . 7401 , 7411 , 7414 , 7416 , an d 760 1 a s amende d byth e Clea n Ai r Ac t Amendement s o f 1990 , Pub . L . 101

- 549 , 10 4 Stat . 239 9 (Nov . 15 , 1990 ; 402 , 409 , 41 5 o f th e Clea n Ai r Ac t a s amended , 10 4 Stat . 2399 , unles s otherwis e noted . 2 . Sectio n 60. 2 i s propose d t o b e amende d b yaddin g th e followin g definitions : "Clea n coa l technolog ydemonstratio n project " mean s a projec t usin g fund s appropriate d unde r th e headin g 'Departmen t o f Energy
Clea n Coa l Technology' , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstration s o f clea n coa l technology , o r simila r project s funde d throug happropriation s fo r th e Environmenta l Protectio n Agency . "Electri c utilit ystea m generatin g unit " mean s anystea melectri c generatin g uni t tha t i s constructe d fo r th e purpos e o f supplyin g mor e tha n one-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n 2 5 M Welectrica l outpu t t o anyutilit ypowe r distributio n syste m fo r sale . Anystea msupplie d t o a stea m distributio n syste mfo r th e purpos e o f providin g stea mt o a steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determinin g th e electrica l energ y outpu t capacit yo f th e affecte d facility
. "Repowering " mean s replacemen t o f a n existin g coal-fire d boile r wit hon e o f th e followin g clea n coa l technologies : -atmospheri c - - o r pressurize d fluidize d be d combustion , integrate d gasificatio n combine d cycle , magnetohydrodynamics , direc t an d indirec t coal

fire d turbines , integrate d gasificatio n fue l cells , o r a s determine d byth e Administrator , i n consultatio n wit hth e Secretar yo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d anyothe r technolog ycapabl e o f controllin g multipl e combustio n emission s simultaneousl ywit himprove d boile r o r generatio n efficienc yan d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technolog yi n widesprea d commercia l us e a s o f Novembe r 15 , 1990 . Repowerin g shal l als o includ e anyoi l and/o r gas-fire d uni t whic hha s bee n awarde d clea n coa l technolog ydemonstratio n fundin g a s o f Januar y1 , 1991 , b yth e Departmen t o f Energy .P.9 2

- 2 0 - "Reactivatio n o f a veryclean coal-fire d electri c utilit ystea m generating unit " mean s an yphysica l chang e o r chang e i n the metho d o f operatio n associate d wit hthe commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio n wher e the unit : (i ) ha s no t bee n i n operatio n fo r the two-yea r perio d prio r t o th e enactmen t o f the Clean Ai r Ac t Amendment s o f 1990 , an

d the emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t the time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s than 8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s than 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o the time o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i n complianc e wit hthe requirement s o f th e Clea n Ai r Act . 3 . Sectio n 60.1 4 i s propose d t o b e amende d t o rea d a s follows : 60.1 4 MODIFICATION . **** * (h ) N o physica l change , o r chang e i n the metho d o f operation , a t an existing electri c utilit ystea mgeneratin g uni t shal l b e treate d a s a modificatio n fo r the purpose s o f thi s sectio n provide d tha t suc hchang e doe s no t increas e the maximu m hourl yemission s o f an ypollutan t regulate d unde r thi s sectio n abov e the maximu

mhourl yemission s achievabl e a t tha t uni t durin g the five year s prio r t o the change . (i ) Repowering project s tha t ar e awarde d funding fromthe Departmen t o f Energya s permanen t clean coa l technolog y demonstratio n project s (or simila r project s funde d b yEPA ) ar e exemp t fromth e requirement s o f thi s sectio n provide d tha t suc h chang e doe s no t increas e th e maximu mhourl yemission s o f an y pollutan t regulate d unde r thi s sectio n abov e th e maximu mhourl y emission s achievabl e a t tha t uni t during th e five year s prio r t o the change . (j)(1 ) Repowerin g project s tha t qualif yfo r a n extensio n unde r § 409(b ) o f th e Clea n Ai r Ac t ar e exemp t fromth e requirement s o f thi s section , provide d tha t suc hchang e doe s no tP.9 3

- I 2 1 - increas e th e actua l hourl yemission s o f an ypollutan t regulate d unde r thi s sectio n abov e the a ' tua l hourl yemission s achievabl e a t tha t uni t during the five year s prio r t o the change .

(2 ) Thi s exemptio n :jhal l no t appl yt o an yne wuni t that : . (a ) i s designate d a s a replacemen t fo r a n existing unit ; | (b ) qualifie s unde r sectio n 409(b ) o f the Clea n Ai r Ac t fo r a n extensio n o f a n emissio n limitatio n complianc e dat e unde r sectio n 40 5 o f the Clea n Ai r Act ; an d (c ) i s locate d a t a differen t sit e tha n th e existing unit
.

a (k ) Th e installation , operation , cessation , o r remova l o f a temporar

yclea n coa l technolog ydemonstratio n projec t i s exemp t fro mthe requirement s o f thi s section
. A"temporaryclea n coa l contro l technolog

ydemonstratio n project" , fo r the purpose s o f thi s sectio n i s a clea n coa l technolog ydemonstratio n projec t tha t i s operate d fo r a perio d o f five year s o r less , and whic h complie s wit hthe Stat e implementatio n pla n fo r the Stat e i n whic hthe projec t i s locate d au d othe r requirement s necessaryt o attai n an

d maintai n the nationa l ambien t ai r qualit ystandard s during the projec t an d afte r i;
. i s terminated
. i (1 ) Th e reactivatio n o f • * ver yclean coal-fire d electri c utilit ystea

m generating uni t :l s exemp t fro

mthe requirement s o f thi s section
. !