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OAR Box 1790 

Prepped by Keeia Richards 

Document Number: 

214) ll-F-3 

Docket Number: 

A-90-37 

Printed 10/31/2008 12:43:16 PM Sheet 214 of 250 
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^

t 0 Sr«», 

MEMORANDUM 

DATE: 

SUBJECT: 

FROM: 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

Office of Air Quality Planning and Standards 

Research Triangle Park, North Carolina 27711 cZh 

3 

October 23, 1992 

Proposed Rulemaking yon_ Best Available Control 

Technology (BACT-) " 

.'XT--L-ftf4T\./ David Solomon f-^'^T ------Ty 

New Source Review Section (MD-15) 

TO: Air Docket A-91-30 

The attached draft proposed rulemaking on BACT was submitted 

to the Office of Management and Budget on October 2, 1992 for the 

purpose of interagency review. 

Attachment 

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5 JX U .11 \X -AJA 

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6560-50 

ENVIRONMENTAL PROTECTION AGENCY 

40 CFR PARTS 51 AND 52 

[AD-FRL- ] 

REQUIREMENTS FOR PREPARATION, ADOPTION, AND 

SUBMITTAL OF IMPLEMENTATION PLANS; APPROVAL 

AND PROMULGATION OF IMPLEMENTATION PLANS 

AGENCY: Environmental Protection Agency (EPA) 

ACTION: Proposed Rule 

SUMMARY: To improve the effectiveness of the prevention of 

significant air quality deterioration program required by 

title I, part C, of the Clean Air Act (Act), EPA proposes today 

to amend its rules to clarify the regulatory definition of best 

available control technology (BACT) by adding language that 

elucidates the legal requirements for a BACT analysis. The new 

language specifies that a BACT analysis must contain the 

following two core requirements: 

1) the determination must consider a representative group 

of the range of available control systems for the source, and 

2) selection of a particular control system as BACT must be 

justified by a comparison of the candidate control systems in 

terms of the statutory criteria and supported by the record. 

In addition, EPA proposes to amend the regulations defining BACT 

to reflect the change made by § 403(d) of title IV of the Act 

Amendments of 1990 (1990 Amendments) to the statutory definition 

Of BACT. 
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The EPA is soliciting public comment on these proposed 

clarifications to the regulatory definition of BACT. 

DATES: Comments may be submitted to EPA at the address below on 

or before [60 days from date of publication]. A public hearing 

is scheduled for [ ]. The hearing may be canceled if no 

speakers have requested time to present their comments 15 days 

prior to the scheduled hearing date. Written comments in lieu of 

testimony are encouraged. 

DOCKET: Supporting information used in developing the proposed 

rule is contained in Docket No. A-91-30. This docket is 

available for public inspection and copying between 8:30 a.m. and 

3:30 p.m., Monday through Friday, at the address listed below. A 

reasonable fee may be charged for copying. 

ADDRESSES: Comments must be mailed (in duplicate if possible) 

to: The EPA Air Docket (LE-131), Attn: Docket No. A-91-30, 

Room M-1500, Waterside Mall, 401 M Street SW, Washington, D.C. 

20460. The public hearing will be held [ ]. 

FOR FURTHER INFORMATION CONTACT: The EPA's New Source Review 

Section at (919) 541-5591. Persons interested in attending the 

hearing or wishing to present oral testimony should contact 

Ms. JoAnn Allman, in writing, at the U.S. Environmental 

Protection Agency, Office of Air Quality Planning and Standards, 

Air Quality Management Division, Mail Drop 15, Research Triangle 

Park, North Carolina 27711. 
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SUPPLEMENTARY INFORMATION 

I. Background 

Major stationary sources and major modifications are subject 

to the prevention of significant deterioration (PSD) review 

requirements of the Act (title I, part C). A subject facility 

may not be constructed without a permit that meets the 

requirements of § 165 of the Act. The current PSD program is 

implemented by two sets of regulations. The first set of 

regulations, 40 CFR 51.166, specifies the minimum requirements 

that a PSD air quality permit program under part C of the Act 

must contain in order to obtain approval by EPA as a revision to 

a State implementation plan (SIP). The second set, 40 CFR 52.21, 

delineates the Federal PSD permit program, which currently 

applies as part of the SIP for States that have not submitted a 

PSD program meeting the requirements of 40 CFR 51.166. Roughly 

two-thirds of the States are implementing their own PSD program 

which has been approved by EPA under 40 CFR 51.166. The 

regulations at 40 CFR,52.21 apply in the remaining States, most 

of which have been delegated the authority to implement the 

Federal PSD program. Among other substantive requirements, the 

facility must apply BACT pursuant to § 165(a)(4) [see also 

40 CFR 52.21(j) (Federal regulations), 40 CFR 51.166(j) 

(regulations setting forth the requirements for SIP approval of a 
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4 

State PSD program), and 40 CFR part 52, subpart A - subpart FFF 

(various SIP requirements)].1 

Emissions limitations reflecting the application of the BACT 

requirement must be set forth in the PSD permit [see 

§ 165(a)(1)]. To obtain a PSD permit, an applicant must, among 

other requirements, conduct an analysis in accordance with EPA 

regulations to ensure the application of BACT to each new or 

modified emissions unit [see § 165(a)(2, 4)]. The required 

analysis must address "the degree of continuous emissions 

reduction which could be achieved by such facility" [see 

§ 165(e)(3)(B) and 40 CFR 52.21(n) (1) (3) ]. 

The term "best available control technology" is defined in 

the Act as: 

an emissions limitation based on the maximum degree of 

reduction of each pollutant subject to regulation under 

the Act emitted from or which results from any major 

emitting facility, which the permitting authority, on a 

case-by-case basis, taking into account energy, 

environmental, and economic impacts and other costs, 

determines is achievable for such facility through 

application of production processes and available 

methods, systems, and techniques, including fuel 

cleaning, clean fuels, or treatment or innovative fuel 

combustion techniques for control of each such 

pollutant. In no event shall application of "best 

available control technology" result in emissions of 

any pollutants which will exceed the emissions allowed 

by any applicable standard established pursuant to 

§ 7411 or 7412 of this title. Emissions from any 

source utilizing clean fuels, or any other means, to 

comply with this paragraph shall not be.allowed to 

*Under the 1990 Amendments, in certain circumstances, BACT 

is also a requirement for obtaining a permit under Part D of the 

Act. 
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increase above levels that would have been required under 

this paragraph as it existed prior to enactment of the Clean 

Air Act Amendments of 1990. 

[see § 169(3), as amended by § 403(d) of the 1990 Amendments]. 

In determining BACT on a case-by-case basis, the reviewing 

authority evaluates the energy, environmental, and economic 

impacts and other costs associated with each of the candidate 

technologies considered in the analysis. The reviewing authority 

then specifies an emissions limitation, based on the maximum 

degree of reduction of each pollutant subject to regulation, 

taking into account energy, environmental, and economic impacts 

and other costs, it determines is achievable for such facility. 

In no event may a technology be selected that would not meet any 

applicable standard of performance under 40 CFR 60 [new source 

performance standards (NSPS)] or 61 [national emission standards 

for hazardous air pollutants (NESHAP)]. 

In addition, if the reviewing authority determines that 

there is no economically-reasonable or technologically-feasible 

way to accurately measure the emissions, and hence to impose an 

enforceable emissions standard, it may require the source to use 

design, alternative equipment, work practice or operational 
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standards to reduce emissions of the pollutant to the maximum 

extent [40 CFR 52.21(b)(12); 40 CFR 51.166(b)(12)]J 

In January 1979, EPA issued "Guidance for Determining BACT 

Under PSD," and in October 1990 issued a "PSD Workshop Manual" 

(EPA 450/2-80-081). These documents outlined an approach to the 

BACT analysis in which the applicant was to propose a base case 

as BACT, present more stringent control alternatives, and defend 

its BACT selection "demonstrating that each alternative control 

system... would cause unreasonable adverse energy, environmental, 

or economic impacts" (see "Guidance for Determining BACT Under 

PSD," January 4, 1979). The 1979 guidance document notes EPA's 

belief that Congress intended that the States have broad 

flexibility to decide on the relative weight to assign to each of 

these factors. Further, BACT was described as a "flexible 

approach [which] allows the permitting authority to consider a 

number of local factors (for example the size of the plant, the 

amount of air quality increment that would be consumed, and 

desired economic growth in the area) in deciding on a weighing 

scheme." This methodology in the 1979 guidance is commonly 

referred to as the "bottom-up" approach. 

2For example, if a coal storage pile emits coal dust to the 

atmosphere, it would make little sense to impose an emissions 

standard, since measuring the amount of coal dust rising off the 

pile may be nearly impossible. A much more direct approach to 

controlling emissions is, for example, requiring the owner to wet 

the coal pile periodically or to totally enclose it. This type 

of operational standard or work practice would be equivalent to 

an emissions limitation for the purpose of the BACT requirement. 

In some instances, it may be appropriate to express BACT for 

a particular pollutant as an emissions limitation and a work 

practice or operational standard. 
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7 

In June 1986, EPA established a New Source Review (NSR) Task 

Force to address growing concerns about the effectiveness of the 

NSR programs in meeting the statutory requirements, and to 

recommend actions to improve EPA's exercise of its oversight and 

enforcement responsibilities in implementing the NSR program. 

Among the Task Force findings, based on a comprehensive review of 

numerous PSD permits issued during the previous several years, 

was that PSD applicants and States frequently were conducting 

inadequate BACT determinations. In numerous instances, 

applicants would propose an emissions limitation at or near an 

applicable NSPS under § 111 of the Act as the base case, and 

provide little or no consideration of more stringent control 

optipns before settling on the proposed level as BACT. States 

typically would accept these determinations with little or no 

independent analysis, thereby failing to fulfill their 

responsibilities under the Act. The Task Force pointed out two 

basic solutions to the problem of inadequate BACT analysis. One 

was to improve implementation of the existing method so that, in 

practice as well as in theory, the statutory requirements would 

be fulfilled. The other option was to call for an alternate 

approach to the BACT analyses in the expectation that its 

internal dynamics would achieve more effective implementation of 

the BACT requirements (see generally "New Source Review Task 

Force Report," Final Draft, December 1986). 

In the meantime, in an adjudicative decision on appeal of a 

PSD permit for a municipal waste combustor (MWC), the 
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8 

Administrator held that a PSD applicant has the "burden of 

demonstrating that significant technical defects, or substantial 

local economic, energy, or environmental factors or other costs, 

warrant a control technology less efficient than [the most 

stringent technology available]" [see Honolulu Resource Recovery 

Facility ("H-Power"), PSD Appeal No. 86-8, at 7 (Remand Order, 

June 22, 1987)]. Shortly thereafter, EPA issued guidance calling 

for application of the H-Power holding to all BACT determinations 

for MWCs ("Operational Guidance on Control Technology for New 

and Modified Municipal Waste Combustors," June 26, 1987). 

Subsequent to these events, EPA decided to promote what has 

come to be known as a "top-down" BACT method for all categories 

of PSD sources. In brief, the top-down procedure provides that 

available control technologies be ranked in descending order of 

control effectiveness. The PSD applicant first examines the most 

stringent alternative. That alternative is established as BACT 

unless the applicant demonstrates, and the permitting authority 

in its informed judgment agrees, that technical considerations, 

or energy, environmental, or economic impacts or other costs, 

justify a conclusion that this technology is not "achievable" or 

appropriate in this case as BACT. If a particular technology is 

deemed not to be BACT, then the next most stringent alternative 

is considered, and so on. 

In a December 1, 1987 memorandum, EPA Headquarters requested 

its Regional Offices to use a top-down method in their own BACT 

determinations, and to encourage State and local PSD permitting 
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9 

authorities to do so as well (see December 1, 1987 memorandum 

from Craig Potter, Assistant Administrator for Air and Radiation, 

entitled "Improving New Source Review"). The memorandum further 

directed Regional Offices to conduct timely reviews of PSD 

applications submitted to State permitting authorities, and to 

comment adversely on proposed PSD permits that failed to 

adequately consider control options more stringent than NSPS, as 

would be required as a matter of course in any acceptable method 

of determining BACT. If final State and local permits still 

failed to reflect adequate consideration of the relevant BACT 

factors, the Regions were to consider such permits deficient and 

consider appropriate enforcement action under §§ 113 and 167 (in 

the case of State-issued permits) or appeals to the Administrator 

under 40 CFR 124.19 (in the case of Federal permits) to remedy 

such deficiencies. 

In recommending the use of the top-down approach, EPA did 

not revise its existing PSD regulations, nor did it call for 

revision of applicable SIP's. Rather, in setting forth this 

policy approach, EPA relied upon the existing statutory and 

regulatory definitions for determining BACT. In so doing, it was 

EPA's view at that time that the top-down approach announced in 

decisions and memoranda constituted a reasonable method for 

implementing the existing provisions. The approach 

"represent[ed] EPA's judgment that existing BACT requirements can 

best be accomplished through a particular analytical methodology" 

[see letter from EPA Administrator William K. Reilly to American 
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10 

Paper Institute and the National Forest Products Association 

(collectively "API"), May 12, 1989]. In other words, EPA 

believed that utilization of the top-down approach would ensure 

that the two core criteria, as discussed below, would be adhered 

to by permitting authorities. 

On March 29, 1989 (supplemented on May 3 and 10, 1989), API 

petitioned EPA to rescind the top-down policy and initiate a 

rulemaking on BACT determinations. The EPA denied this request 

on May 12, 1989 (supplemented on June 13, 1989), explaining that 

the top-down approach was not at variance with, nor a revision 

of, the PSD regulations, and that no rulemaking was required. 

Subsequently, API filed suit in the D.C. Circuit and in the U.S. 

District Court for D.C. API v. Reilly. D.C. Cir. No. 89-1428 

(filed 7/10/89); API v. Reilly. D.C. Cir. No. 89-2030 (filed 

7/18/89). A consortium of utilities also filed a petition for 

review of EPA's actions, rAlabama Power Co. v. EPA. D.C. Cir. 

No. 89-1429 (filed 7/11/89), and the case was consolidated with 

the API case]. The same consortium filed an administrative 

petition with EPA on February 1, 1990. Finally, API also 

challenged the 1990 EPA draft guidance document on top-down BACT, 

API v. Reilly. D.C. No. 90-1364 (filed 7/13/90). A settlement 

agreement has been entered into for these cases (see 56 FR 

34202). The EPA has decided as a matter of policy to conduct 

this proposed rulemaking to facilitate greater public 

participation concerning these issues. 
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II. Legal Requirements for a PSD Analysis 

In adopting the PSD program, Congress emphasized the 

importance of thorough and public analyses in PSD decision 

making, stating that one of the purposes of PSD is to assure that 

any decision to permit increased air pollution in any area to 

which PSD applies is made only after careful evaluation of all 

the consequences of such a decision and after adequate procedural 

opportunities for informed public participation in the decision 

making process [see § 160(5)]. As noted above, § 165 specifies, 

and EPA regulations reflect, the requirement to conduct, among 

other PSD permit review requirements, a BACT analysis. The 

statutory emphasis on procedural rigor is accompanied by 

expressions of congressional intent that States have wide 

discretion in setting final emissions limits reflecting BACT. 

States also have considerable discretion in other aspects of the 

PSD program, such as allocation of the available increment. For 

example, States could choose to allocate the increment on a 

first-come, first-served basis, preserve a portion of the 

increment to accommodate future growth, or allocate increment 

through a market-based approach. 

The legislative history on BACT makes it clear that Congress 

meant the State to make the final substantive decision on the 

appropriate level of technology for the source and area in 

question. The key passages of the Senate report show that the 
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12 

State has broad flexibility to exercise its judgment in 

implementing BACT. The report states: 

The decision regarding the actual implementation 

of best available control technology is a key one, and 

the committee places this responsibility with the 

State, to be determined in a case-by-case judgment. It 

is to be recognized that the phrase has broad 

flexibility in how it should and can be interpreted, 

depending on site. 

In making this key decision on the technology to 

be used, the State is to take into account energy, 

environmental, and economic impacts and other costs of 

the application of best available control technology. 

The weight assigned to such factors is to be determined 

by the State. Such a flexible approach allows the 

adoption of improvements in technology to become 

widespread far more rapidly than would occur with a 

uniform Federal standard (emphasis added). 

[see S.R. 95-217, 95th Cong., 1st Sess. 31 (1977)]. 

The Senate report language suggests two important bounds on the 

exercise of the discretion afforded to the permitting authority 

in determining BACT. First, it is clear that in adopting BACT, 

Congress intended PSD permitting authorities to exercise informed 

discretion to weigh energy, environmental, and economic impacts 

in determining BACT for a particular source, while leaving to the 

States the flexibility to decide on the relative weights to 
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assign each of these factors in deciding among options.3 Second, 

it is also clear that Congress believed that one of the 

advantages of State flexibility would be to speed up the adoption 

of advances in control technology.4 

The exercise of discretion within these bounds can be 

fulfilled by more than one method of determining BACT. 

Regardless of the specific methodology used for determining BACT, 

be it top-down, the method embodied in the 1979 guidance, or 

otherwise, EPA interprets the relevant Act provisions as 

embodying two core legal criteria that must be satisfied in any 

3"The decision regarding the actual implementation of BACT 

is a key one, and the committee places this responsibility with 

the State, to be determined in a case-by-case judgment. It is 

recognized that the phrase has broad flexibility in how it should 

and can be interpreted, depending on site. 

In making this key decision on the technology to be used, 

the State is to take into account energy, environmental, and 

economic impacts and other costs of the application of BACT. The 

weight assigned to such factors is to be determined by the State. 

Such a flexible approach allows the adoption of improvements in 

technology to become widespread far more rapidly than would occur 

with a uniform Federal standard. The only Federal guidelines are 

the EPA new source performance and hazardous emissions standards, 

which represent a floor for the State's decision. 

This directive enables the State to consider the size of the 

plant, the increment of air guality which will be absorbed by any 

particular major emitting facility, and such other considerations 

as anticipated and desired economic growth for the area. This 

allows the States and local communities to judge how much of the 

defined increment of significant deterioration will be devoted to 

any major emitting facility. If, under the design which a major 

facility propose, the percentage of the increment would 

effectively prevent growth after the proposed major facility was 

completed, the State or community could refuse to permit 

construction,. or limit its size. This is strictly a State and 

local decision" [see Sen. Rep. No. 95-217, 95th Cong., 

1st Sess. 31 (1977)]. 

4See also statement of Senator Muskie, 123 Cong. Rec. S9171 

(June 8, 1977). 
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BACT analysis.5 First, the permit applicant must consider a 

representative group of available control technologies [i.e., 

technologies that are representative of the range of available 

controls that are at least as effective as the minimum 

permissible (NSPS limit, § 112 limit, or SIP limit)]. Second, 

selection of a particular control system as BACT must be 

justified by a comparison of the candidate control systems in 

terms of the statutory criteria and supported by the record in 

such a way that the basis for the choice of BACT from among the 

other candidate systems is apparent and consistent with statutory 

criteria.6 

The EPA is today proposing guidance consistent with the PSD 

regulations. The EPA continues to recognize that the Act and 

existing regulations for BACT mandate application of the two core 

Application of EPA's earlier top-down guidance may have had 

the unintended effect of constraining State discretion in making 

BACT determinations. Also the Administrator's decision in Union 

County Resource Recovery Facility, PSD Appeal No. 90-1 (Nov. 28, 

1990) at 8, could be improperly construed as precluding any 

comparison of candidate control technologies in light of the 

applicable statutory factors. Together, this may have created an 

unduly strong presumption that the most stringent level of 

control is BACT. 

6In this regard, to the extent that a rationale for the 

rejection of the next more stringent alternative than the one 

proposed also provides the basis for rejection of other more 

stringent alternatives, there is no need to conduct a separate, 

detailed analysis for each more stringent option. To give an 

example, assume that after examining a control option in detail, 

the permitting authority accepts an applicant's proposal to 

reject a control option due to an adverse economic impact after 

considering the energy, environmental, and other economic impacts 

of that option. The permitting authority need not consider the 

other more stringent control options in detail, if it concludes 

that their associated energy, environmental, and economic impacts 

do not differ meaningfully from the control option rejected. 
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criteria discussed above. Rather than further advocating 

adherence to the top-down methodology, the Agency is instead 

emphasizing the broad flexibility which permitting authorities 

have in conducting the requisite BACT analysis. Indeed, EPA is 

today proposing to codify the core criteria into its regulatory 

definition of BACT. At the same time, however, the legislative 

history to the Act demonstrates that Congress favored broad 

flexibility for States in applying the statutory factors (i.e., 

energy, environmental, and economic impacts) in determining BACT. 

With this purpose in mind, EPA believes that so long as the core 

criteria are applied as described herein, Congress' interests in 

stimulating advances in pollution control technology and 

preserving the flexibility of the permitting authority are best 

accomplished without requiring utilization of the top-down 

methodology. In this way, permitting authorities are free to 

develop their own BACT implementation policies and consider 

factors that exist for a proposed facility on a case-by-case 

basis within the statutory and regulatory framework for a BACT 

analysis. 

In light of this, to the extent the Agency's earlier topdown guidance efforts, including the Honolulu Power and 

Pennsauken County PSD appeals, apply a top-down approach that 

could be read to restrain State discretion in weighing the 

statutory factors and could be read as being inconsistent with 

congressional intent that the State retain broad discretion to 

weigh the statutory factors or to preclude comparing candidate 
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controls using an incremental impact analysis and applying other 

statutory criteria, those decisions no longer reflect EPA policy. 

As stated above, the primary benefit to the top-down methodology 

was that it would ensure application of the BACT core criteria, 

as articulated today, by permitting authorities. However, 

earlier efforts had the potential to chill the full exercise of a 

State's discretion by creating an impression that there was an 

unduly strong presumption in favor of the most stringent 

pollution control alternative available. By proposing to 

promulgate the core criteria (as formulated today) by regulation, 

EPA believes it has adequately implemented the Act, including the 

congressional intent that broad discretion remain with the 

permitting authority. 

In the context of earlier appeals to the Administrator, 

questions have arisen over State discretion to consider the 

incremental ambient and cost impacts associated with certain 

pollution control options, relative to the other available 

options, in determining BACT [see Columbia Gulf Transmission Co.. 

PSD Appeal No. 88-11 (Order, June 21 1989); World Color Press. 

Inc.. PSD Appeal No. 88-4 (Remand Order, December 13, 1990)]. In 

those decisions, the Administrator determined that the 

environmental impacts prong of the BACT analysis precluded 

analysis as to whether use of the more stringent control 

alternative would benefit ambient air guality, or whether the 

additional benefit was worth the expense. However, the 

Administrator did recognize that, under certain circumstances, 
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such considerations may be appropriate under the economic impacts 

prong of the BACT analysis. Underlying these decisions was the 

view that, under the Act, there is a distinction between BACT, 

which is concerned with pollution control technology, and ambient 

impacts, which relates to overall air quality [see 42 U.S.C. 

7475(a)(3) and (4)]. 

While the EPA continues to recognize that BACT is primarily 

directed to technology selection, and that this is somewhat 

distinct from impacts upon ambient air quality, EPA does not 

believe the Act or implementing regulations mandate absolute 

separation of the two concepts. Rather, the selection of an 

appropriate technology as BACT is sufficiently related to the 

Act's overriding concern with air quality that a permitting 

authority may, in its discretion and as part of its overall BACT 

analysis, consider the relative ambient impacts of the available 

control alternatives. Although this type of analysis may occur 

under either the economic or environmental prong of the BACT 

analysis (thus modifying the earlier decisions by the 

Administrator), the permitting authority must continue to 

consider the full range of statutory factors before issuing the 

final permit. This shift in policy is consistent with the 

overall recognition that Congress intended that the States retain 
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18 

maximum discretion and flexibility in making BACT 

determinations.7 Even though States have discretion to consider 

incremental ambient and economic impacts, they must also consider 

all of the other statutory factors in the BACT analysis. These 

can, for example, include consideration of source specific 

factors, such as locally sensitive environmental resources; 

proximity to Class I areas; overall increment management; and 

formation of secondary pollutants, such as photochemical smog, 

haze, and other forms of visibility impairment.8 Thus, a State 

may not rely solely upon pre-set ambient impact or costeffectiveness levels in selecting BACT, but must justify its 

selection in terms of all the statutory factors (although such 

levels may be utilized by a State to assist it in making its 

determination). 

In a BACT analysis, the representative group of control 

technologies initially considered shall include the most 

7In such cases, the analysis should rely on the model and 

model inputs used in conducting the requisite PSD ambient air 

quality analysis (i.e., the determination that new emissions will 

not cause or contribute to a violation of the applicable NAAQS or 

PSD increments). 

8In some cases, the lack of comprehensive information or 

modeling tools limits the application of such analyses. However, 

in making its final BACT determination, the State is not 

constrained by limitations to modeling technology or the 

difficulty in assessing environmental impacts. If a State lacks 

the ability to definitively quantify the impacts upon air quality 

or air quality related values, or prefers to not rely upon such 

measures, it nevertheless retains discretion to manage 

its air resources through reliance upon qualitative determination 

or reasonable approximation in making its final BACT selection. 
P.21 

19 

stringent control technology available.9 However, there is no 

requirement that each alternative be evaluated in equal depth. 

Under the statutory design, PSD permitting authorities for each 

jurisdiction have broad discretion to reflect local conditions 

and preferences in weighing the energy, environmental, and 

economic factors that enter into a BACT determination. For 

example, States could adopt a pre-screening process. An initial, 

limited analysis may conclude that certain alternatives are 

unlikely to be considered BACT based upon the most recent 

information available concerning cost, feasibility, and other 

relevant factors pertaining to those alternatives, and upon the 

permitting authority's general approach to weighing the statutory 

factors. Such a screening of potential BACT options to identify 

'Whether a technology is "available" for purposes of BACT is 

a practical, factual determination, using conventional notions of 

whether the technology can be put into use [see Pennsauken 

County. New Jersey Resource Recovery Facility. PSD Appeal 

No. 88-8 (Remand Order, Nov. 10, 1988) at 8], The permit 

applicant should refer to the BACT/LAER Clearinghouse when 

identifying a representative group of available control 

technologies. Each type of selected control system (e.g., a 

baghouse, an electrostatic precipitator, a dry scrubber, a wet 

scrubber, a carbon absorber) or combination of control systems 

should be analyzed at the technically achievable level of control 

as it could be applied at the proposed facility. Major 

alternatives within a given type of control system should also be 

considered when such alternatives would produce meaningfully 

different energy, environmental, or economic impact or other 

costs than the initial level of control analyzed. On the other 

hand, analyses of numerous minor variations in a control system 

(or combinations thereof) is not required. In EPA's experience, 

typically there are only at most four or five BACT options that 

need be reviewed in detail for any proposed source in order to 

ensure that a representative sample of alternatives is 

considered. 
20 

the most likely and promising may save the source and permitting 

authority time and money and provide a degree of predictability 

to all concerned. 

Where the permitting authority decides after considering any 

source-specific factors that the screened-out options would not 

be BACT, then the evaluation process would shift in the next step 

to the remaining "live" options for further analysis. For 

example, where a permitting authority has made explicit 

statements through guidelines, prior BACT determinations, or 

otherwise, that based on the availability of one or more 

technologies and a weighing of relevant factors, a particular 

emission range is appropriate as a BACT limit, and if 

source-specific factors do not lead to a conclusion that another 

emission range would be more appropriate, then the more detailed 

aspect of the BACT analysis could be limited to technologies 

capable of performing in the initial range considered. If a 

State decides to adopt a screening process for BACT, sources 

applying for a BACT determination can focus analytical attention 

on those alternatives likely to be considered BACT by that 

authority. Of course, as always, the BACT analysis and decision 

must still be made on a case-by-case basis. Moreover, today's 

action does not require a State to follow the process as 

discussed above. If this approach is followed, however, the 

State's initial criteria should be set in an open public process 

and updated regularly. Also, in no case does an initial 

screening of options preclude the Administrator or any other 
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21 

person from questioning the appropriateness of the criteria in 

general or the application of those criteria in a specific 

permit. 

The two core criteria clarified in today's action are 

consistent with determinations in the administrative appeals 

decisions subsequent to the H-Power decision that application of 

the two core criteria relating to consideration of available 

technologies and to justify the chosen technology under the 

statutory factors are essential reguirements of a BACT analysis. 

The Administrator's subsequent PSD appeal decisions have required 

that States use such core criteria in making BACT determinations. 

Thus, in Union County Resource Recovery Facility. PSD Appeal 

No. 90-1 (11/28/90), the Administrator cited compliance with the 

two core criteria in upholding a BACT determination for a 

resource recovery facility. The Administrator relied on the same 

two core criteria in upholding a permit determination in 

Mecklenburg Cogeneration Limited Partnership. Clarksville. VA. 

PSD Appeal NO. 90-7 (12/21/90). 

Although EPA believes that the current statutory and 

regulatory definitions of BACT implicitly require the 

consideration of the two core criteria set forth in this notice, 

as fundamental to any adequate BACT determination, the criteria 

announced in earlier decisions need to be clarified to ensure 

that they do not restrict State discretion. The EPA is today 

proposing to make these requirements explicit by inserting into 
22 

the regulatory definition of BACT the following two core 

requirements for a BACT analysis: 

1) the determination must consider a representative group 

of available control systems for the source, and, 

2) selection of a particular control system as BACT must be 

justified by a comparison of the candidate systems in terms of 

the statutory criteria and supported by the record. 

III. Impacts Analysis in a BACT PSD Determination 

In evaluating the alternative candidate control systems, an 

applicant must consider and compare the expected energy, 

environmental, and economic impacts of the alternatives. This 

section discusses some specific impacts which may affect the 

final technology ultimately selected, and presents a set of 

potential factors, any number of which may be addressed in a 

permit application depending on the individual situation. The 

energy, environmental, and economic impacts discussed below are 

illustrative only and are not intended as an exclusive list of 

considerations for BACT. Some of these factors may not be 

appropriate in all cases, while in other instances, factors which 

are not included here may be relevant to the BACT determination. 

For example, if a control system produces a known quantity of 

solid waste as a by-product inherent to its design and operation 

under normal conditions, such an impact should be noted in the 

PSD permit application. However, this factor need not be 

analyzed in detail, unless the applicant wishes to use solid 
P.25 

23 

waste impacts as an argument for or against selection of a 

particular control alternative as BACT. The discussion does not 

address the evaluation of each factor nor the weighing of any 

factor relative to another. Such determinations should be made 

on a case-by-case basis by the permitting authority. For the 

purpose of this discussion, the terms "emission control system" 

or "BACT system" refer to the "application of production 

processes and available methods, systems, and techniques, 

including fuel cleaning, clean fuels, or treatment or innovative 

fuel combustion techniques" [see § 169(3), as amended by § 403(d) 

of the 1990 Amendments]. 

In general, the BACT analysis should address the direct 

impacts of alternative control systems. Usually, direct impacts 

are experienced on-site [e.g., scrubber sludge disposal sites]; 

however, they could also be off-site. For example, ammonia slip 

is not limited to the plant boundary. 

Duplicative analyses generally are not required in preparing 

the BACT permit application. Any studies previously performed 

for Environmental Impact Statements, water pollution permits, or 

other programs may be used when appropriate to demonstrate 

adverse energy, environmental, or economic impacts. 

The same considerations are generally applicable to both new 

and modified sources. Where appropriate, however, the permit 

review may consider any special economic or physical constraints 

which might limit the application of certain control techniques 

to a modified emissions unit, such as retrofitting costs that 
24 

would not be borne by a new unit, or the remaining useful life of 

the modified facility. The result may be that the level of 

control required for an emissions unit undergoing modification 

may not be as stringent as that which would be required if the 

same unit were being newly constructed at an existing plant or 

at a "greenfield" facility. This observation is meant only to 

illustrate that the BACT decision must be made on a case-by-case 

basis by the permitting authority considering the relevant 

energy, environmental, and economic impacts. 

A. Energy Impacts 

Energy impacts should address energy use in terms of 

penalties or benefits associated with a control system and the 

direct effects of such energy use on the facility. A source may, 

for example, benefit from the combustion of a concentrated gas 

stream rich in volatile organic compounds; on the other hand, 

extra fuel or electricity is frequently required to power a 

control device or incinerate a dilute gas stream. If such 

benefits or penalties exist, they should be quantified to the 

extent possible. 

In quantifying energy impacts, the applicant could estimate 

the direct energy impacts of the control alternative in units of 

energy consumption at the source (e.g., Btu, Kwh, barrels of oil, 

tons of coal). The energy requirements of the control options 

could be shown in terms of total and/or incremental energy costs 

per total and/or incremental ton of pollutant removed in 

comparison to the next higher and lower control options. In many 
P.27 

25 

cases, because energy penalties or benefits can usually be 

quantified in terms of additional cost or income to the source, 

the energy impacts analysis can be ccnverted into dollar costs 

and, where appropriate, be factored into the economic impacts 

analysis. 

Indirect energy impacts (such as energy to produce raw 

materials for construction of control equipment) are usually not 

considered. However, if the permit authority determines, either 

independently or based on a showing by the applicant, that an 

indirect energy impact is unusual or significant, the indirect 

impact may be considered. The energy impact should still, 

however, relate to the application of the control alternative and 

not to a concern over energy impacts associated with the project 

in general. 

The energy impact analysis may also address the concern over 

the use of locally-scarce fuels. The designation of a scarce 

fuel may vary from region to region, but in general a scarce fuel 

is one which is in short supply locally and can be better used 

for alternative purposes, or one which may not be reasonably 

available to the source either at the present time or in the near 

future. 

B. Environmental Impacts. 

The environmental impacts analysis in the BACT evaluation 

process concentrates on collateral environmental impacts due to 

control of emissions of the pollutant in question, such as solid 

or hazardous waste generation, discharges of polluted water from 
26 

a control device, visibility impacts (e.g. visible steam plume), 

or emissions of toxic pollutants. The applicant should identify 

any environmental impacts associated with a control alternative 

that have the potential to affect the selection or rejection of 

that control alternative. Potentially significant, secondary 

environmental impacts must also be evaluated. Scrubber effluent, 

for example, may affect water quality and land use, and, 

similarly, technologies using cooling towers may affect 

visibility. 

Other examples of secondary environmental impacts could 

include hazardous waste discharges, such as spent catalysts or 

contaminated carbon. Generally, these types of environmental 

concerns become important when sensitive site-specific receptors 

exist or when the incremental emissions reduction potential of 

one control option is only marginally greater than the next most 

effective option. 

The BACT decision can consider State policy decisions 

regarding use of the available air quality increment for future 

growth and the weighing of this factor. As discussed above, the 

direct impact of the controls on ambient concentrations can also 

be identified and considered in the BACT analysis. 

The procedure for conducting an analysis of environmental 

impacts should be made based on consideration of site-specific 

circumstances. In general, the analysis of environmental impacts 

starts with the identification and quantification of the solid, 

liquid, and gaseous discharges from the control device (or 
P.29 

27 

devices) under review. Regarding secondary effects, a 

qualitative or semi-quantitative screening can be performed to 

narrow the analysis to discharges with potential for causing 

adverse environmental effects. Next, the mass and composition of 

any such discharges should be assessed and quantified to the 

extent possible, based on readily-available information. As 

previously mentioned, the analysis need only address those 

control alternatives with any environmental impacts that have the 

potential to affect the selection or rejection of a control 

alternative. Pertinent information about the public or 

environmental consequences of releasing these materials should 

also be assembled. Thus, the relative environmental impacts 

(both positive and negative) of the various alternatives can be 

compared with each other. 

Also the generation or reduction of toxic and hazardous 

emissions using the various BACT alternatives, including 

compounds not regulated under the Act or the PSD program, are 

considered as part of the environmental impacts analysis. 

Pursuant to the EPA Administrator's decision in North County 

Resource Recovery Associates. PSD Appeal No.85-2 (Remand Order, 

June 3,1986), a PSD permitting authority should take into account 

the ability of a given control alternative for regulated 

pollutants to affect emissions of pollutants not subject to 

regulation under the Act or the PSD program in making BACT 

decisions. Conseguently, the affect of a given control 
P.30 

28 

alternative upon the emission of toxic or hazardous air 

contaminants must be evaluated in conducting the BACT analysis. 

C. Economic Impacts 

This analysis should address the economic impacts associated 

with the costs of installing and operating alternative control 

systems. Normally the submittal of very detailed and 

comprehensive project cost data is not necessary. 

In the economic impacts analysis, consideration should be 

given first to quantifying the cost of the various control 

options. The review should include a complete explanation of 

procedures for assessing economic impacts and any supporting 

data. 

Once the control technology alternatives and emissions 

performance levels have been identified, capital and annual costs 

are developed. The direct cost for each control alternative 

should be presented both on an incremental and an overall basis. 

Investment costs, operation and maintenance costs, and annualized 

costs should be presented separately. Annualized costs are 

operation and maintenance costs plus depreciation and interest 

charges on the investment. Costs should be itemized and 

explained. Credit for tax incentives should be included along 

with credits for product recovery costs and by-product sales 

generated from the use of control systems, including the sale of 

sulfur dioxide allowances under the acid rain program and other 

emission reduction credits. The lifetime of the investment 

should be stated. Where possible, costs should be broken down 
P.31 

29 

into process change costs (costs of less polluting production 

process) and direct pollution abatement costs (cost of pollution 

control equipment). The costs of air treatment, water treatment, 

and solid waste disposal should be presented separately. The 

objective of the analysis is to provide a realistic estimate of 

the costs of the alternative technologies. 

As a guide in determining when control costs become 

excessive, alternative control systems can be compared in terms 

of the incremental cost effectiveness of the available 

alternatives. However, a BACT option cannot automatically be 

rejected simply because it is more expensive or less "cost 

effective" than another candidate which removes more pollutant. 

States can evaluate whether the incremental cost effectiveness of 

a more stringent option is appropriate in light of recent BACT 

determinations and other factors involved in the BACT decision 

and the State's weighing of these factors. Incremental, costeffectiveness calculations are generally performed on the basis 

of ^incremental dollars per ton of pollutant removed. 

In addition to the types of economic impacts discussed 

above, EPA is today soliciting comment on whether the economic 

impacts analysis should consider as impacts the affordability of 

controls by the firm in response to alternative levels of 

control. For example, a more costly BACT alternative could be 

presented as altering the economics of a project to the point 

where a decision would be made to cancel the construction or 

expansion of a facility, to relocate a plant, to reduce the scale 
P.32 

30 

of operation, or to change the production mix. In such cases, 

the local economic impacts of such decisions (e.g., local 

employment effects, including number of jobs, dollars paid in 

salaries, and changes in employee skill levels required) would be 

evaluated and factored into the economic analysis. Comments 

should address the reasonableness and practicality of including 

such considerations in the BACT analysis. 

IV. Purpose of the Proposed Change 

The approaches set forth in the various EPA final and draft 

guidance documents have been intended to guide permit applicants 

and permitting officials in those areas subject to the Federal 

PSD regulations at 40 CFR 52.21. They have not established 

binding regulatory requirements, which are contained in the 

Federal regulations and SIP's. Rather than specifying a precise 

approach to the BACT analysis, EPA is proposing today to clarify 

two core legal requirements that are necessary for an adequate 

BACT analysis under existing law. In reviewing new or revised 

State PSD rules submitted for SIP approval, the Agency will deem 

the program to be adeguate if it specifies that these two 

requirements are necessary for an adequate BACT analysis. 

Likewise, in fulfilling its oversight and enforcement 

responsibilities, the Agency will continue its policy of 

reviewing specific permitting actions for conformity with the 

core criteria. So long as the State has carefully evaluated each 

candidate system, justified the choice of one over each of the 
P.33 

31 

others in terms of the statutory criteria, otherwise followed the 

procedural norms embodied in the core criteria, and ensured the 

decision would not violate any objective standards that may apply 

(such as NSPS or SIP limits), EPA will consider a State's BACT 

analysis to be adequate and will not second-guess the State's 

substantive BACT decision. Thus, under today's proposal, 

adherence to any specific BACT approach, such as top-down or 

bottom-up, is not required. Rather, today's proposal is intended 

to ensure adherence to the core criteria such that States make 

reasoned and informed BACT determinations in a publiclyaccountable manner. Further, the States have wide discretion in 

setting the weight assigned to each statutory factor (energy, 

environmental, economic and other costs) in comparing and 

balancing the relative effects of the various BACT options. 

Whichever approach is selected, the BACT analysis should include 

a complete explanation of the procedures used by the State to 

assess the energy, environmental, and economic impacts and any 

supporting data. Permits containing BACT determinations that do 

not conform to the PSD requirements of the Act, EPA regulations, 

and applicable SIP's, as reflected in the core criteria, will be 

considered deficient by EPA. Instances of procedural 

irregularities or arbitrary decision making will remain grounds 

for EPA action, as appropriate. 

The EPA is today soliciting comment on the proposed 

clarification to the BACT definition for the purpose of 

clarifying and delineating the regulatory standard by which the 
P.34 

32 

adequacy of a BACT determination should be judged. As noted 

above, EPA already recognizes that there are a variety of 

permissible methods, including the top-down method, for 

determining BACT. State permitting authorities are free to apply 

the core legal criteria without reference to any exclusive method 

in making BACT determinations that satisfy the Act. Of course, 

the BACT analysis and selection process is but one part of a 

complete PSD review, and the BACT emissions limitations must be 

consistent with all other PSD requirements. 

V. Clean Fuels 

The definition of BACT in § 169(c) of the Act is changed by 

§ 403(d) of the 1990 Amendments. To maintain conformity with the 

statutory definition, EPA proposes to amend the regulatory 

definition of BACT at 40 CFR 52.21(b)(12) and 51.166(b)(12) by 

inserting "clean fuels" after "including fuel cleaning," and by 

adding the following at the end thereof: "Emissions from any 

source utilizing clean fuels, or any other means, to comply with 

this paragraph shall not be allowed to increase above levels that 

would have been required under this paragraph as it existed prior 

to enactment of the Clean Air Act Amendments of 1990." 

VI. Miscellaneous 

A. Docket. 

A docket has been established for this action under 

§ 307(d)(1)(I) and (N) of the Act, 42 U.S.C. 7607(d)(1)(I) and 
P.35 

33 

(N). The docket is an organized and complete file of all 

information considered in the development of this ruling. The 

docket is intended to allow the public to identify and locate 

documents related to this ruling. The docket number for this 

ruling is A-91-30. 

B. Paperwork Reduction Act. 

No additional public reporting burden will result from this 

ruling. All information collection requirements of the Federal 

NSR regulations have been approved by the Office of Management 

and Budget (OMB) under the provisions of the Paperwork Reduction 

Act, 44 U.S.C. 3501, et. seq., and have been assigned OMB control 

number 2060-0003. The effect of this rule would be no change in 

paperwork related to complying with NSR requirements, since this 

ruling only provides additional clarification regarding the 

regulatory definition of BACT. 

C. The E.O. 12291. 

Under E.O. 12291, EPA must judge whether a rule is "major" 

and therefore subject to the requirement of a regulatory impact 

analysis. This ruling is not a major rule because it will not 

change the economic costs of meeting the requirements of the Act. 

However, this ruling was submitted to OMB for review. Written 

comments from OMB to EPA and any EPA response are included in 

Docket A-91-3 0. 

D. Economic Impact Assessment. 

The requirement for performing an Economic Impact Assessment 

under § 317 of the Act (42 U.S.C. 7617), does not apply to the 
P.36 

34 

amendments EPA is promulgating today. Section 317 applies only 

to "revisions which the Administrator determines to be 

substantial revisions." The proposed clarifying language is not 

a substantial revision because it does not change current 

regulatory burdens. 

E. Regulatory Flexibility Act. 

This action is not subject to the certification provisions 

of § 605(b) of the Regulatory Flexibility Act because this rule 

will not result in a change in administrative costs or an 

increase in control costs, therefore having no significant impact 

on industry or small communities. 

F. Effective Date. 

Section 4(d) of the Administrative Procedures Act, 

5 U.S.C. 553(d), requires a 30-day waiting period before making a 

substantive rule effective. Although the regulatory revisions 

being proposed today are not considered substantive, they are 

being subject to notice-and-comment and will become effective 

only after public comments have been received and considered, and 

final action has been taken. 

List of Subjects 40 CFR Parts 51, 52 

Administrative practices and procedure, Intergovernmental 

relations, Air pollution control, NSR, BACT, Sulfur oxides, 

Nitrogen dioxide, Particulate matter, Carbon monoxide, 

Hydrocarbons, Lead, Ozone, Reporting and recordkeeping 

requirements, Volatile organic compounds, NSPS, NESHAP. 
P.37 

35 

Authority: 42 U.S.C. 7401(b)(1), 7410, 7411, 7470-7479, 

7491, 7501-7508, 7601 and 7602, as amended by the 1990 

Amendments, Pub. L. No. 101-549, 104 Stat. 2399 (Nov. 15, 1990); 

402, 409, 415 of the Act as amended, 104 Stat. 2399; 42 U.S.C. 

7401-7642 as amended by the 1990 Amendments, Pub. L. No. 101-549, 

104 Stat. 2399 (Nov. 15, 1990); 42 U.S.C. 7401, 7411, 7414, 7416, 

and 7601 as amended by the 1990 Amendments, Pub. L. No. 101-549, 

104 Stat. 2399 (Nov. 15, 1990); 402, 409, 415 of the Act as 

amended, 104 Stat. 2399, unless otherwise noted. 

Dated: 

William K. Reilly 

Administrator 
P.38 

36 

For the reasons set forth in the preamble, Part 51 of Chapter I 

of Title 40 of the Code of Federal Regulations is proposed to be 

amended as follows: 

Part 51 - REQUIREMENTS FOR PREPARATION, ADOPTION, AND SUBMITTAL 

OF IMPLEMENTATION PLANS. 

1. Section 51.166 is proposed to be amended by revising 

paragraph (b)(12) to read as follows: 

51.166 Prevention of significant deterioration of air 

quality . 

* * * * * 

(b) * * * 

, (12) Best available control technology means an emissions 

limitation (including a visible emissions standard) based on the 

maximum degree of reduction for each pollutant subject to 

regulation under the Act, which would be emitted from any 

proposed major stationary source or major modification which the 

reviewing authority, on a case-by-case basis, taking into account 

environmental, energy, and economic impacts and other costs, 

determines is achievable for such source or modification through 

application of production processes or available methods, 

systems, and techniques, including fuel cleaning, clean fuels, or 

treatment or innovative fuel combustion techniques for control of 

such pollutant. Two criteria must be satisfied in any BACT 

analysis: 
P.39 

37 

1) the determination must consider a representative group 

of the range of available control systems for the source; and 

2) selection of a particular control system as BACT must be 

justified by a comparison of the candidate control systems in 

terms of the statutory criteria and supported by the record. 

In no event shall application of BACT result in emissions of any 

pollutant which would exceed the emissions allowed by any 

applicable standard under 40 CFR 60 and 61. If the Administrator 

determines that technological or economic limitations on the 

application of measurement methodology to a particular emissions 

unit would make the imposition of an emissions standard 

infeasible, a design, equipment, work practice, operational 

standard, or combination thereof, may be prescribed instead to 

satisfy the requirement for the application of BACT. Such 

standard shall, to the degree possible, set forth the emissions 

reduction achievable by implementation of such design, equipment, 

work practice, or operation, and shall provide for compliance by 

means which achieve equivalent results. Emissions from any 

source utilizing clean fuels, or any other means, to comply with 

this paragraph shall not be allowed to increase above levels that 

would have been required under this paragraph as it existed prior 

to enactment of the 1990 Amendments. 
P.40 

38 

Part 52 - APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS. 

1. Section 52.21 is proposed to be amended by revising 

paragraph (b)(12) to read as follows: 

51.21 Prevention of significant deterioration of air 

quality. 

**** * 

(b) * * * 

(12) Best available control technology means an emissions 

limitation (including a visible emissions standard) based on the 

maximum degree of reduction for each pollutant subject to 

regulation under the Act which would be emitted from any proposed 

major stationary source or major modification which the 

Administrator, on a case-by-case basis, taking into account 

environmental, energy, and eccnomic impacts and other costs, 

determines is achievable for such source or modification through 

application of production processes or available methods, 

systems, and techniques, including fuel cleaning, clean fuels, or 

treatment or innovative fuel combustion techniques for control of 

such pollutant. Two criteria must be satisfied in any BACT 

analysis: 

1) the determination must consider a representative group 

of the range of available control systems for the source; and 

2) selection of a particular control system as BACT must be 

justified by a comparison of the candidate control systems in 

terms of the statutory criteria and supported by the record. 

In no event shall application of BACT result in emissions of any 
P.41 

39 

pollutant which would exceed the emissions allowed by any 

applicable standard under 40 CFR 60 and 61. If the Administrator 

determines that technological or economic limitations on the 

application of measurement methodology to a particular emissions 

unit would make the imposition of an emissions standard 

infeasible, a design, equipment, work practice, operational 

standard, or combination thereof, may be prescribed instead to 

satisfy the requirement for the application of BACT. Such 

standard shall, to the degree possible, set forth the emissions 

reduction achievable by implementation of such design, equipment, 

work practice, or operation, and shall provide for compliance by 

means which achieve equivalent results. Emissions from any 

source utilizing clean fuels, or any other means, to comply with 

this paragraph shall not be allowed to increase above levels that 

would have been required under this paragraph as it existed prior 

to enactment of the 1990 Amendments.