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MEMORANDU

M DATE : SUBJECT : FROM : UNITE D STATE S ENVIRONMENTA LPROTECTIO N AGENCY

Offic e o fAi rQualit yPlannin g an d Standard s Researc h Triangl e Park , Nort h Carolin a 2771 1 cZh 

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Octobe r 23 , 199 2 Propose d Rulemaking y on

_Bes t Availabl e Contro l Technology(BACT- ) "

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------Ty Ne wSourc e Revie wSectio n(MD-15 ) TO : Ai r Docke t A-91-3 0 Th e attache d draf t propose d rulemaking o n BAC T wa s submitte d t o th e Offic e o f Managemen t an d Budge t o nOctobe r 2 , 199 2 fo r th e purpos e o f interagencyreview . Attachmen t

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6560-5 0 ENVIRONMENTA L PROTECTIO NAGENC Y 4 0 CF RPART S 5 1 AN D 5 2 [AD-FRL

- ] REQUIREMENT S FO RPREPARATION , ADOPTION , AN D SUBMITTA L O F IMPLEMENTATIO NPLANS ; APPROVA L AN D PROMULGATIO NO F IMPLEMENTATIO NPLAN S

AGENCY : Environmenta l Protectio nAgenc y(EPA ) ACTION : Propose d Rul e SUMMARY : T o improv e th e effectivenes s o f th e preventio no f significan t ai r qualit ydeterioratio nprogra mrequire d b y titl e I , par t C , o f th e Clea n Ai r Ac t (Act) , EP Apropose s toda y t o amen d it s rule s t o clarif yth e regulator ydefinitio no f bes t availabl e contro l technolog y(BACT ) byaddin g languag e tha t elucidate s th e lega l requirement s fo r a BAC T analysis . Th e ne w languag e specifie s tha t a BAC T analysi s mus t contai nth e followin g tw o cor e requirements : 1 ) th e determinatio n mus t conside r a representativ e grou p o f th e rang e o f availabl e contro l system s fo r th e source , an d 2 ) selectio n o f a particula r contro l syste ma s BAC T mus t b e justifie d bya compariso n o f th e candidat e contro l system s i n term s o f th e statutor ycriteri a an d supporte d byth e record . I n addition , EP Apropose s t o amen d th e regulation s definin g BAC T t o reflec t th e chang e mad e by§ 403(d ) o f titl e I V o f th e Ac t Amendment s o f 199 0 (199 0 Amendments ) t o th e statutor ydefinitio n O f BACT .P. 4

Th e EPAi s soliciting publi c commen t o n thes e propose d clarification s t o th e regulatorydefinitio no f BACT . DATES : Comment s mayb e submitte d t o EPAa t th e addres s belo wo n o r befor e [6 0 day s from dat e o f publication] . Apubli c hearin g i s schedule d fo r [ ] . Th e hearing mayb 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 th e schedule d hearing date . Writte ncomment s i nlie u o f testimon

yar e encouraged . DOCKET : Supporting informatio n use d i ndeveloping th e propose d rul e i s containe d i n Docke t No . A-91-30 . Thi s docke t i s availabl e fo r publi c inspectio n an d copying betwee n8:3 0 a.m . an d 3:3 0 p.m. , MondaythroughFriday , a t th e addres s liste d below . A reasonabl e fe e mayb e charge d fo r copying . ADDRESSES : Comment s mus t b e maile d (induplicat e i f possible ) to : Th e EPAAi r Docke t (LE-131) , Attn : Docke t No . A-91-30 , RoomM-1500 , Watersid e Mall , 40 1 MStree t SW , Washington , D.C . 20460 . Th e publi c hearin g wil l b e hel d [ ] . FORFURTHE RINFORMATIONCONTACT : Th e EPA' s Ne wSourc e Revie w Sectio n a t (919 ) 541-5591 . Person s intereste d i nattending th e hearing o r wishin g t o presen t ora l testimon yshoul d contac t Ms . JoAnn Allman , i n writing , a t th e U.S . Environmenta l Protectio n Agency , Offic e o f Ai r Qualit yPlanning an d Standards , Ai r Qualit yManagemen t Division , Mai l Drop 15 , Researc hTriangl e Park , Nort hCarolin a 27711 .P. 5

SUPPLEMENTARYINFORMATION

I . Background Majo r stationarysource s an d majo r modification s ar e subjec t t o th e preventio n o f significan t deterioratio n (PSD ) revie w requirement s o f th e Ac t (titl e I , par t C) . Asubjec t facilit y mayno t b e constructe d withou t a permi t tha t meet s th e requirement s o f § 16 5 o f th e Act . Th e curren t PS D programi s implemente d b

ytw o set s o f regulations . Th e firs t se t o f regulations , 4 0 CF R51.166 , specifie s th e minimu mrequirement s tha t a PS D ai r qualit ypermi t programunde r par t C o f th e Ac t mus t contai ni n orde r t o obtai n approva l b yEPAa s a revisio nt o a Stat e implementatio n pla n (SIP) . Th e secon d set , 4 0 CF R52.21 , delineate s th e Federa l PS D permi t program , whic hcurrentl y applie s a s par t o f th e SI P fo r State s tha t hav e no t submitte d a PS D programmeeting th e requirement s o f 4 0 CFR51.166 . Roughl y two-third s o f th e State s ar e implementing thei r ow nPS D program whic hha s bee n approve d b yEPAunde r 4 0 CFR51.166 . Th e regulation s a t 4 0 CFR,52.2 1 appl yi n th e remaining States , mos t o f whic hhav e bee n delegate d th e authorit yt o implemen t th e Federa l PS D program . Among othe r substantiv e requirements , th e facilit ymus t appl yBAC T pursuan t t o § 165(a)(4 ) [se e als o 4 0 CF R52.21(j ) (Federa l regulations) , 4 0 CFR51.166(j ) (regulation s setting fort hth e requirement s fo r SI P approva l o f aP. 6

4 Stat e PS D program) , an d 4 0 CFRpar t 52 , subpar t A- subpar t FF F (variou s SI P requirements)]. 1 Emission s limitation s reflecting th e applicatio no f th e BAC T requiremen t mus t b e se t fort hi nth e PS D permi t [se e § 165(a)(1)] . T o obtai n a PS D permit , anapplican t must , among othe r requirements , conduc t a n analysi s i naccordanc e wit hEPA regulation s t o ensur e th e applicatio no f BAC T t o eac hne wo r modifie d emission s uni t [se e § 165(a)(2 , 4)] . Th e require d analysi s mus t addres s "th e degre e o f continuou s emission s reductio n whic hcoul d b e achieve d b ysuc hfacility " [se e § 165(e)(3)(B ) an

d 4 0 CFR52.21(n ) (1 ) (3 ) ] . Th e term

"bes t availabl e contro l technology " i s define d i n th e Ac t as : a n emission s limitatio nbase d o nth e maximu mdegre e o f reductio n o f eac hpollutan t subjec t t o regulatio n unde r th e Ac t emitte d fro mo r whic hresult s fro man ymajo r emitting facility , whic hth e permitting authority , o na 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 ythrough applicatio n o f productio nprocesse s an d availabl e methods , systems , an d techniques , including fue l cleaning , clea n fuels , o r treatmen t o r innovativ e fue l combustio ntechnique s fo r contro l o f eac hsuc h pollutant . I n n o even t shal l applicatio no f "bes t availabl e contro l technology " resul t i nemission s o f an ypollutant s whic hwil l excee d th e emission s allowe d b yan yapplicabl e standard establishe d pursuan t t o § 741 1 o r 741 2 o f thi s title . Emission s froman y sourc e utilizing clea nfuels , o r an yothe r means , t o compl ywit hthi s paragraphshal l no t be.allowe d t o

*Unde r th e 199 0 Amendments , i ncertai n circumstances , BAC T i s als o a requiremen t fo r obtaining a permi t unde r Par t D o f th e Act .P. 7

increas e abov e level s tha t woul d hav e bee n require d unde r thi s paragrap ha s i t existe d prio r t o enactmen t o f th e Clea n Ai r Ac t Amendment s o f 1990 . [se e § 169(3) , a s amende d b y§ 403(d ) o f th e 199 0 Amendments] . I n determining BAC T o na case-by-cas e basis , th e reviewing authorit yevaluate s th e energy , environmental , and economi c impact s an

d othe r cost s associate d wit heac ho f th e candidat e technologie s considere d i n th e analysis . Th e reviewing authorit y the n specifie s a n emission s limitation , base d o n th e maximu m degre e o f reductio n o f eac hpollutan t subjec t t o regulation , taking int o accoun t energy , environmental , an d economi c impact s an d othe r costs , i t determine s i s achievabl e fo r suc hfacility . I n n o even t maya technologyb e selecte d tha t woul d no t mee t an y applicabl e standar d o f performanc e unde r 4 0 CFR6 0 [newsourc e performanc e standard s (NSPS) ] o r 6 1 [nationa l emissio n standard s fo r hazardou s ai r pollutant s (NESHAP)] . I n addition , i f th e reviewing authorit ydetermine s tha t ther e i s n o economically-reasonabl e o r technologically-feasibl e wayt o accuratel ymeasur e th e emissions , an d henc e t o impos e an enforceabl e emission s standard , i t mayrequir e th e sourc e t o us e design , alternativ e equipment , wor k practic e o r operationa lP. 8

standard s t o reduc e emission s o f th e pollutan t t o th e maximu m exten t [4 0 CFR52.21(b)(12) ; 4 0 CFR51.166(b)(12)] J I n January1979 , EPAissue d "Guidanc e fo r Determining BAC T Unde r PSD, " an

d i nOctobe r 199 0 issue d a "PS D Worksho p Manual " (EP A450/2-80-081) . Thes e document s outline d a napproac ht o th e BAC T analysi s i n whic hth e applican t wa s t o propos e a bas e cas e a s BACT , presen t mor e stringen t contro l alternatives , an d defend it s BAC T selectio n "demonstrating tha t eachalternativ e contro l system.. . woul d caus e unreasonabl e advers e energy , environmental , o r economi c impacts " (se e "Guidanc e fo r Determining BAC T Unde r PSD, " January4 , 1979) . Th e 197 9 guidanc e documen t note s EPA' s belie f tha t Congres s intende d tha t th e State s hav e broa d flexibilit yt o decid e o n th e relativ e weigh t t o assignt o eac ho f thes e factors . Further , BAC T wa s describe d a s a "flexibl e approac h[which ] allow s th e permitting authorit yt o conside r a numbe r o f loca l factor s (for exampl e th e siz e o f th e plant , th e amoun t o f ai r qualit yincremen t tha t woul d b e consumed , an d desire d economi c growt hi n th e area ) i ndeciding o na weighin g scheme. " Thi s methodologyi n th e 197 9 guidanc e i s commonl y referre d t o a s th e "bottom-up " approach .

2 Fo r example , i f a coa l storag e pil e emit s coa l dus t t o th e atmosphere , i t woul d mak e littl e sens e t o impos e a nemission s standard , sinc e measurin g th e amoun t o f coa l dus t rising of f th e pil e mayb e nearl yimpossible . Amuc hmor e direc t approac ht o controlling emission s is , fo r example , requiring th e owne r t o we t th e coa l pil e periodicall yo r t o totall yenclos e it . Thi s typ e o f operationa l standar d o r wor k practic e woul d b e equivalen t t o a n emission s limitatio nfo r th e purpos e o f th e BAC T requirement . I n some instances , i t mayb e appropriat e t o expres s BAC T fo r a particula r pollutan t a s anemission s limitatio n an d a wor k practic e o r operationa l standard .P. 9

7 I n Jun e 1986 , EPAestablishe d a Ne wSourc e Revie w(NSR ) Tas k Forc e t o addres s growing concern s abou t th e effectivenes s o f th e NS Rprogram s i n meetin g th e statutoryrequirements , an d t o recommend action s t o improv e EPA' s exercis e o f it s oversigh t an d enforcemen t responsibilitie s i nimplementing th e NS Rprogram . Amon g th e Tas k Forc e findings , base d o na comprehensiv e revie wo f numerou s PS D permit s issue d during th e previou s severa l years , wa s tha t PS D applicant s an d State s frequentl ywer e conducting inadequat e BAC T determinations . I n numerou s instances , applicant s woul d propos e anemission s limitatio na t o r nea r a n applicabl e NSP S unde r § 11 1 o f th e Ac t a s th e bas e case , an d provid e littl e o r n o consideratio no f mor e stringen t contro l optipn s befor e settling o nth e propose d leve l a s BACT . State s typicall ywoul d accep t thes e determination s wit hlittl e o r n o independen t analysis , thereb yfailing t o fulfil l thei r responsibilitie s unde r th e Act . Th e Tas k Forc e pointe d ou t tw o basi c solution s t o th e problem o f inadequat e BAC T analysis . On e wa s t o improv e implementatio no f th e existing metho d s o that , i n practic e a s wel l a s i n theory , th e statutoryrequirement s woul d b e fulfilled . Th e othe r optio n wa s t o cal l fo r a n alternat e approac ht o th e BAC T analyse s i nth e expectatio ntha t it s interna l dynamic s woul d achiev e mor e effectiv e implementatio n o f th e BAC T requirement s (se e generall y"NewSourc e Revie wTas k Forc e Report, " Fina l Draft , Decembe r 1986) . I n th e meantime , i n a nadjudicativ e decisio n o nappea l o f a PS D permi t fo r a municipa l wast e combusto r (MWC) , th eP.1 0

8 Administrato r hel d tha t a PS D applican t ha s th e "burde n o f demonstrating tha t significan t technica l defects , o r substantia l loca l economic , energy , o r environmenta l factor s o r othe r costs , warran t a contro l technolog yles s efficien t tha n[the mos t stringen t technologyavailable] " [se e Honolul u Resourc e Recovery Facilit y("H-Power") , PS D Appea l No . 86-8 , a t 7 (Reman d Order , Jun e 22 , 1987)] . Shortl ythereafter , EP Aissue d guidanc e calling fo r applicatio n o f th e H-Powe r holding t o al l BAC T determination s fo r MWC s ("Operationa l Guidanc e o n Contro l Technologyfo r Ne w an d Modifie d Municipa l Wast e Combustors, " Jun e 26 , 1987) . Subsequen t t o thes e events , EPAdecide d t o promot e wha t ha s com e t o b e known a s a "top-down " BAC T metho d fo r al l categorie s o f PS D sources . I n brief , th e top-dow nprocedur e provide s tha t availabl e contro l technologie s b e ranke d i n descending orde r o f contro l effectiveness . Th e PS D applican t firs t examine s th e mos t stringen t alternative . Tha t alternativ e i s establishe d a s BAC T unles s th e applican t demonstrates , an d th e permitting authorit y i n it s informe d judgmen t agrees , tha t technica l considerations , o r energy , environmental , o r economi c impact s o r othe r costs , justif ya conclusio n tha t thi s technolog yi s no t "achievable " o r appropriat e i n thi s cas e a s BACT . I f a particula r technologyi s deeme d no t t o b e BACT , the nth e nex t mos t stringen t alternativ e i s considered , an

d s o on . I n a Decembe r 1 , 198 7 memorandum , EP AHeadquarter s requeste d it s Regiona l Office s t o us e a top-dow nmetho d i nthei r ow n BAC T determinations , an d t o encourag e Stat e an d loca l PS D permittin gP.1 1

9 authoritie s t o d o s o a s wel l (se e Decembe r 1 , 198 7 memorandu m fromCrai g Potter , Assistan t Administrato r fo r Ai r an d Radiation , entitle d "Improving Ne wSourc e Review") . Th e memorandu mfurthe r directe d Regiona l Office s t o conduc t timel yreview s o f PS D application s submitte d t o Stat e permitting authorities , an d t o commen t adversel yo n propose d PS D permit s tha t faile d t o adequatel yconside r contro l option s mor e stringen t tha nNSPS , a s woul d b e require d a s a matte r o f cours e i n an yacceptabl e metho d o f determining BACT . I f fina l Stat e an d loca l permit s stil l faile d t o reflec t adequat e consideratio no f th e relevan t BAC T factors , th e Region s wer e t o conside r suc hpermit s deficien t an d conside r appropriat e enforcemen t actio n unde r § § 11 3 an d 16 7 (in th e cas e o f State-issue d permits ) o r appeal s t o th e Administrato r unde r 4 0 CF R124.1 9 (i n th e cas e o f Federa l permits ) t o remed y suc hdeficiencies . I n recommending th e us e o f th e top-dow napproach , EPAdi d no t revis e it s existing PS D regulations , no r di d i t cal l fo r revisio n o f applicabl e SIP's . Rather , i nsetting fort hthi s polic yapproach , EPArelie d upo nth e existing statutoryan d regulatorydefinition s fo r determining BACT . I ns o doing , i t wa s EPA' s vie wa t tha t tim e tha t th e top-dow napproac hannounce d i n decision s an

d memorand a constitute d a reasonabl e metho d fo r implementing th e existing provisions . Th e approac h "represent[ed ] EPA' s judgmen t tha t existing BAC T requirement s can bes t b e accomplishe d througha particula r analytica l methodology " [se e lette r fromEPAAdministrato r Willia mK . Reill yt o America nP.1 2

1 0 Pape r Institut e an

d th e Nationa l Fores t Product s Associatio n (collectivel y"API") , May12 , 1989] . I nothe r words , EPA believe d tha t utilizatio n o f th e top-dow n approac hwoul d ensur e tha t th e tw o cor e criteria , a s discusse d below , woul d b e adhere d t o b ypermitting authorities . O nMarc h29 , 198 9 (supplemente d o nMay3 an d 10 , 1989) , AP I petitione d EPAt o rescind th e top-dow npolicyan

d initiat e a rulemaking o n BAC T determinations . Th e EPAdenie d thi s reques t o n Ma y12 , 198 9 (supplemente d o nJun e 13 , 1989) , explaining tha t th e top-down approac hwa s no t a t varianc e with , no r a revisio n of , th e PS D regulations , an d tha t n o rulemaking wa s required . Subsequently , AP I file d sui t i n th e D.C . Circui t an d i n th e U.S . Distric t Cour t fo r D.C . AP I v . Reilly . D.C . Cir . No . 89-142 8 (filed 7/10/89) ; AP I v . Reilly . D.C . Cir . No . 89-203 0 (filed 7/18/89) . Aconsortiu mo f utilitie s als o filed a petitio n fo r revie wo f EPA' s actions , rAlabam a Powe r Co . v . EPA . D.C . Cir . No . 89-142 9 (filed 7/11/89) , an d th e cas e wa s consolidate d wit h th e AP I case] . Th e same consortiu mfile d anadministrativ e petitio n wit hEPAo nFebruary1 , 1990 . Finally , AP I als o challenge d th e 199 0 EPAdraf t guidanc e documen t o n top-downBACT , AP I v . Reilly . D.C . No . 90-136 4 (filed 7/13/90) . Asettlemen t agreemen t ha s bee n entere d int o fo r thes e case s (se e 5 6 FR 34202) . Th e EPAha s decide d a s a matte r o f polic yt o conduc t thi s propose d rulemaking t o facilitat e greate r publi c participatio n concerning thes e issues .P.1 3

1 1 II . Lega l Requirement s fo r a PS D Analysi s I n adopting th e PS D program , Congres s emphasize d th e importanc e o f thoroughan d publi c analyse s i nPS D decisio n making , stating tha t on e o f th e purpose s o f PS D i s t o assur e tha t an ydecisio n t o permi t increase d ai r pollutio ni nan yare a t o whic hPS D applie s i s mad e onl yafte r carefu l evaluatio no f al l th e consequence s o f suc ha decisio nan d afte r adequat e procedura l opportunitie s fo r informe d publi c participatio n i n th e decisio n makin g proces s [se e § 160(5)] . A s note d above , § 16 5 specifies , an d EPAregulation s reflect , th e requiremen t t o conduct , among othe r PS D permi t revie wrequirements , a BAC T analysis . Th e statutoryemphasi s o nprocedura l rigo r i s accompanie d b y expression s o f congressiona l inten t tha t State s hav e wid e discretio n i n setting fina l emission s limit s reflecting BACT . State s als o hav e considerabl e discretio ni nothe r aspect s o f th e PS D program , suc ha s allocatio n o f th e availabl e increment . Fo r example , State s coul d choos e t o allocat e th e incremen t o n a first-come , first-serve d basis , preserv e a portio n o f th e incremen t t o accommodat e futur e growth , o r allocat e incremen t througha market-base d approach . Th e legislativ e historyo nBAC T make s i t clea r tha t Congres s mean t th e Stat e t o mak e th e fina l substantiv e decisio no n th e appropriat e leve l o f technologyfo r th e sourc e an d are a i n question . Th e ke ypassage s o f th e Senat e repor t sho wtha t th eP. M

1 2 Stat e ha s broa d flexibilit yt o exercis e it s judgmen t i n implementing BACT . Th e repor t states :

Th e decisio n regarding th e actua l implementatio n o f bes t availabl e contro l technolog yi s a ke yone , an d th e committe e place s thi s responsibilit ywit hth e State , t o b e determine d i n a case-by-cas e judgment . I t i s t o b e recognize d tha t th e phras e ha s broad flexibilit yi nho wi t shoul d an d canb e interpreted , dependin g o n site . I n makin g thi s keydecisio non th e technologyt o b e used , th e Stat e i s t o tak e int o accoun t energy , environmental , an

d economi c impact s an d othe r cost s o f th e applicatio n o f bes t availabl e contro l technology . Th e weigh t assigne d t o suc hfactor s i s t o b e determine d b yth e State . Suc ha flexibl e approac hallow s th e adoptio n o f improvement s i ntechnolog yt o become widesprea d fa r mor e rapidl ytha n woul d occu r wit ha uniform Federa l standard (emphasi s added) . [se e S.R . 95-217 , 95t hCong. , 1s t Sess . 3 1 (1977)] . Th e Senat e repor t languag e suggest s tw o importan t bound s o nth e exercis e o f th e discretio n afforde d t o th e permitting authorit y i n determinin g BACT . First , i t i s clea r tha t i nadopting BACT , Congres s intende d PS D permitting authoritie s t o exercis e informe d discretio n t o weig henergy , environmental , an d economi c impact s i n determinin g BAC T fo r a particula r source , whil e leaving t o th e State s th e flexibilit yt o decid e o n th e relativ e weight s t oP.1 5

1 3 assign eac ho f thes e factor s i n deciding among options. 3 Second , i t i s als o clea r tha t Congres s believe d tha t on e o f th e advantage s o f Stat e flexibilit ywoul d b e t o spee d up th e adoptio n o f advance s i n contro l technology. 4 Th e exercis e o f discretio n withi nthes e bound s ca nb e fulfille d b

ymor e tha n on e metho d o f determining BACT . Regardles s o f th e specifi c methodologyuse d fo r determining BACT , b e i t top-down , th e metho d embodie d i nth e 197 9 guidance , o r otherwise , EPAinterpret s th e relevan t Ac t provision s a s embodying tw o cor e lega l criteri a tha t mus t b e satisfie d i nan y

3 "Th e decisio nregarding th e actua l implementatio no f BAC T i s a ke yone , an

d th e committe e place s thi s responsibilit ywit h th e State , t o b e determine d i na case-by-cas e judgment . I t i s recognize d tha t th e phras e ha s broad flexibilit yi nho wi t shoul d an d ca n b e interpreted , depending o n site . I n makin g thi s ke ydecisio n o nth e technolog yt o b e used , th e Stat e i s t o tak e int o accoun t energy , environmental , an d economi c impact s an d othe r cost s o f th e applicatio no f BACT . Th e weigh t assigne d t o suc hfactor s i s t o b e determine d b yth e State . Suc ha flexibl e approac hallow s th e adoptio n o f improvement s i n technologyt o becom e widesprea d fa r mor e rapidl ytha nwoul d occu r wit ha uniform

Federa l standard . Th e onl yFedera l guideline s ar e th e EPAne wsourc e performanc e an d hazardou s emission s standards , whic hrepresen t a floo r fo r th e State' s decision . Thi s directiv e enable s th e Stat e t o conside r th e siz e o f th e plant , th e incremen t o f ai r gualit ywhic hwil l b e absorbe d b yan y particula r majo r emitting facility , an d suc hothe r consideration s a s anticipate d an

d desire d economi c growt hfo r th e area . Thi s allow s th e State s an d loca l communitie s t o judg e ho wmuc ho f th e define d incremen t o f significan t deterioratio nwil l b e devote d t o an ymajo r emitting facility . If , unde r th e designwhic ha majo r facilit ypropose , th e percentag e o f th e incremen t woul d effectivel ypreven t growt hafte r th e propose d majo r facilit ywa s completed , th e Stat e o r communit ycoul d refus e t o permi t construction, . o r limi t it s size . Thi s i s strictl ya Stat e an d loca l decision " [se e Sen . Rep . No . 95-217 , 95t hCong. , 1s t Sess . 3 1 (1977)] .

4 Se e als o statemen t o f Senato r Muskie , 12 3 Cong . Rec . S917 1 (June 8 , 1977) .P.1 6

1 4 BAC T analysis. 5 First , th e permi t applican t mus t conside r a representativ e grou p o f availabl e contro l technologie s [i.e. , technologie s tha t ar e representativ e o f th e rang e o f availabl e control s tha t ar e a t leas t a s effectiv e a s th e minimu m permissibl e (NSP S limit , § 11 2 limit , o r SI P limit)] . Second , selectio no f a particula r contro l systema s BAC T mus t b e justifie d b

ya compariso no f th e candidat e contro l system s i n term s o f th e statutorycriteri a an d supporte d b

yth e recor d i n suc ha waytha t th e basi s fo r th e choic e o f BAC T fro mamong th e othe r candidat e system s i s apparen t an d consisten t wit hstatutory criteria. 6 Th e EPAi s todayproposing guidanc e consisten t wit hth e PS D regulations . Th e EPAcontinue s t o recogniz e tha t th e Ac t an d existing regulation s fo r BAC T mandat e applicatio no f th e tw o cor e Applicatio n o f EPA' s earlie r top-dow nguidanc e mayhav e had th e unintende d effec t o f constraining Stat e discretio ni n making BAC T determinations . Als o th e Administrator' s decisio ni n Unio n Count yResourc e RecoveryFacility , PS D Appea l No . 90- 1 (Nov . 28 , 1990 ) a t 8 , coul d b e improperl yconstrue d a s precluding an y compariso no f candidat e contro l technologie s i nligh t o f th e applicabl e statutoryfactors . Together , thi s mayhav e create d an undul ystrong presumptio n tha t th e mos t stringen t leve l o f contro l i s BACT .

6 I n thi s regard , t o th e exten t tha t a rational e fo r th e rejectio n o f th e nex t mor e stringen t alternativ e tha nth e on e propose d als o provide s th e basi s fo r rejectio no f othe r mor e stringen t alternatives , ther e i s n o nee d t o conduc t a separate , detaile d analysi s fo r eac hmor e stringen t option . T o giv e a n example , assume tha t afte r examining a contro l optio ni ndetail , th e permitting authorit yaccept s a napplicant' s proposa l t o rejec t a contro l optio n du e t o a n advers e economi c impac t afte r considering th e energy , environmental , an d othe r economi c impact s o f tha t option . Th e permitting authorit ynee d no t conside r th e othe r mor e stringen t contro l option s i ndetail , i f i t conclude s tha t thei r associate d energy , environmental , an d economi c impact s d o no t diffe r meaningfull yfrom th e contro l optio nrejected .P.1 7

1 5 criteri a discusse d above . Rathe r tha nfurthe r advocating adherenc e t o th e top-dow nmethodology , th e Agenc yi s instead emphasizing th e broa d flexibilit ywhic hpermitting authoritie s hav e i n conducting th e requisit e BAC T analysis . Indeed , EPAi s todayproposing t o codif yth e cor e criteri a int o it s regulatory definitio n o f BACT . A t th e same time , however , th e legislativ e historyt o th e Ac t demonstrate s tha t Congres s favore d broad flexibilit yfo r State s i n applying th e statutoryfactor s (i.e. , energy , environmental , an d economi c impacts ) i n determining BACT . Wit hthi s purpos e i n mind , EPAbelieve s tha t s o long a s th e cor e criteri a ar e applie d a s describe d herein , Congress ' interest s i n stimulating advance s i npollutio ncontro l technologyan d preservin g th e flexibilit yo f th e permitting authorit yar e bes t accomplishe d withou t requiring utilizatio no f th e top-dow n methodology . I nthi s way , permitting authoritie s ar e fre e t o develo p thei r ow

n BAC T implementatio n policie s an d conside r factor s tha t exis t fo r a propose d facilit yo na case-by-cas e basi s withi n th e statutoryan d regulatoryframewor k fo r a BAC T analysis . I n ligh t o f this , t o th e exten t th e Agency' s earlie r top
down guidanc e efforts , including th e Honolul u Powe r an d Pennsauke n Count yPS D appeals , appl ya top-dow napproac htha t coul d b e rea d t o restrai nStat e discretio n i n weighing th e statutoryfactor s an d coul d b e rea d a s being inconsisten t wit h congressiona l inten t tha t th e Stat e retai nbroad discretio nt o weighth e statutoryfactor s o r t o preclud e comparing candidat eP.1 8

1 6 control s usin g a n incrementa l impac t analysi s an d applying othe r statutorycriteria , thos e decision s n o longe r reflec t EPApolicy . A s state d above , th e primarybenefi t t o th e top-down methodology wa s tha t i t woul d ensur e applicatio no f th e BAC T cor e criteria , a s articulate d today , b ypermitting authorities . However , earlie r effort s ha d th e potentia l t o chil l th e ful l exercis e o f a State' s discretio n b ycreating a n impressio n tha t ther e wa s a n undul ystrong presumptio n i n favo r o f th e mos t stringen t pollutio n contro l alternativ e available . B yproposing t o promulgat e th e cor e criteri a (a s formulate d today ) b yregulation , EPAbelieve s i t ha s adequatel yimplemente d th e Act , including th e congressiona l inten t tha t broad discretio nremai nwit hth e permittin g authority . I n th e contex t o f earlie r appeal s t o th e Administrator , question s hav e arise n ove r Stat e discretio nt o conside r th e incrementa l ambien t an d cos t impact s associate d wit hcertai n pollutio n contro l options , relativ e t o th e othe r availabl e options , i ndetermining BAC T [se e Columbi a Gul f Transmissio nCo. . PS D Appea l No . 88-1 1 (Order , Jun e 2 1 1989) ; Worl d Colo r Press . Inc. . PS D Appea l No . 88- 4 (Reman d Order , Decembe r 13 , 1990)] . I n thos e decisions , th e Administrato r determine d tha t th e environmenta l impact s prong o f th e BAC T analysi s preclude d analysi s a s t o whethe r us e o f th e mor e stringen t contro l alternativ e woul d benefi t ambien t ai r guality , o r whethe r th e additiona l benefi t wa s wort hth e expense . However , th e Administrato r di d recogniz e that , unde r certai ncircumstances ,P.1 9

1 7 suc hconsideration s mayb e appropriat e unde r th e economi c impact s prong o f th e BAC T analysis . Underlying thes e decision s wa s th e vie wthat , unde r th e Act , ther e i s a distinctio nbetwee nBACT , whic hi s concerne d wit hpollutio ncontro l technology , an d ambien t impacts , whic hrelate s t o overal l ai r qualit y[se e 4 2 U.S.C . 7475(a)(3 ) an

d (4)] . Whil e th e EPAcontinue s t o recogniz e tha t BAC T i s primaril y directe d t o technologyselection , an d tha t thi s i s somewha t distinc t fromimpact s upo n ambien t ai r quality , EPAdoe s no t believ e th e Ac t o r implementing regulation s mandat e absolut e separatio n o f th e tw o concepts . Rather , th e selectio n o f a n appropriat e technologya s BAC T i s sufficientl yrelate d t o th e Act' s overriding concer nwit hai r qualit ytha t a permitting authorit ymay , i nit s discretio nan d a s par t o f it s overal l BAC T analysis , conside r th e relativ e ambien t impact s o f th e availabl e contro l alternatives . Althoughthi s typ e o f analysi s mayoccu r unde r eithe r th e economi c o r environmenta l pron g o f th e BAC T analysi s (thu s modifyin g th e earlie r decision s b yth e Administrator) , th e permitting authorit ymus t continu e t o conside r th e ful l rang e o f statutoryfactor s befor e issuing th e fina l permit . Thi s shif t i n polic yi s consisten t wit hth e overal l recognitio n tha t Congres s intende d tha t th e State s retai nP.2 0

1 8 maximu mdiscretio n an

d flexibilit yi nmaking BAC T determinations. 7 Eve n thoughState s hav e discretio n t o conside r incrementa l ambien t an d economi c impacts , theymus t als o conside r al l o f th e othe r statutoryfactor s i nth e BAC T analysis . Thes e can , fo r example , includ e consideratio no f sourc e specifi c factors , suc ha s locall ysensitiv e environmenta l resources ; proximit yt o Clas s I areas ; overal l incremen t management ; an d formatio no f secondarypollutants , suc ha s photochemica l smog , haze , an

d othe r form s o f visibilit yimpairment. 8 Thus , a Stat e mayno t rel ysolel yupo n pre-se t ambien t impac t o r cost
effectivenes s level s i n selecting BACT , bu t mus t justif yit s selectio n i n term s o f al l th e statutoryfactor s (althoug hsuc h level s mayb e utilize d b ya Stat e t o assis t i t i nmaking it s determination) . I n a BAC T analysis , th e representativ e grou p o f contro l technologie s initiall yconsidere d shal l includ e th e mos t

7 I n suc hcases , th e analysi s shoul d rel yo nth e mode l an d mode l input s use d i nconducting th e requisit e PS D ambien t ai r qualit yanalysi s (i.e. , th e determinatio ntha t ne wemission s wil l no t caus e o r contribut e t o a violatio no f th e applicabl e NAAQ S o r PS D increments) .

8 I n some cases , th e lac k o f comprehensiv e informatio no r modelin g tool s limit s th e applicatio n o f suc hanalyses . However , i n makin g it s fina l BAC T determination , th e Stat e i s no t constraine d b

ylimitation s t o modelin g technolog yo r th e difficult yi n assessing environmenta l impacts . I f a Stat e lack s th e abilit yt o definitivel yquantif yth e impact s upo nai r qualit y o r ai r qualit yrelate d values , o r prefer s t o no t rel yupo n suc h measures , i t nevertheles s retain s discretio nt o manag e it s ai r resource s throughrelianc e upo nqualitativ e determinatio n o r reasonabl e approximatio n i n makin g it s fina l BAC T selection .P.2 1

1 9 stringen t contro l technolog yavailable. 9 However , ther e i s n o requiremen t tha t eac halternativ e b e evaluate d i nequa l depth . Unde r th e statutorydesign , PS D permitting authoritie s fo r eac h jurisdictio n hav e broa d discretio n t o reflec t loca l condition s an d preference s i n weighing th e energy , environmental , an d economi c factor s tha t ente r int o a BAC T determination . Fo r example , State s coul d adop t a pre-screening process . An initial , limite d analysi s mayconclud e tha t certai n alternative s ar e unlikel yt o b e considere d BAC T base d upo n th e mos t recen t informatio navailabl e concerning cost , feasibility , an d othe r relevan t factor s pertaining t o thos e alternatives , an d upo n th e permittin g authority' s genera l approac ht o weighin g th e statutory factors . Suc ha screening o f potentia l BAC T option s t o identif y

'Whethe r a technologyi s "available " fo r purpose s o f BAC T i s a practical , factua l determination , using conventiona l notion s o f whethe r th e technologycanb e pu t int o us e [se e Pennsauke n County . Ne wJerse yResourc e RecoveryFacility . PS D Appea l No . 88- 8 (Reman

d Order , Nov . 10 , 1988 ) a t 8] , Th e permi t applican t shoul d refe r t o th e BACT/LAE RClearinghous e whe n identifying a representativ e grou p o f availabl e contro l technologies . Eac htyp e o f selecte d contro l system(e.g. , a baghouse , a n electrostati c precipitator , a dryscrubber , a we t scrubber , a carbo nabsorber ) o r combinatio n o f contro l system s shoul d b e analyze d a t th e technicall yachievabl e leve l o f contro l a s i t coul d b e applie d a t th e propose d facility . Majo r alternative s withi na give n typ e o f contro l system shoul d als o b e considere d whe n suc halternative s woul d produc e meaningfull y differen t energy , environmental , o r economi c impac t o r othe r cost s tha n th e initia l leve l o f contro l analyzed . O n th e othe r hand , analyse s o f numerou s mino r variation s i na contro l system (or combination s thereof ) i s no t required . I nEPA' s experience , typicall yther e ar e onl ya t mos t fou r o r fiv e BAC T option s tha t nee d b e reviewe d i ndetai l fo r an ypropose d sourc e i n orde r t o ensur e tha t a representativ e sampl e o f alternative s i s considered .2 0

th e mos t likel yand promising maysav e th e sourc e an d permitting authorit ytim e an

d mone yan

d provid e a degre e o f predictabilit y t o al l concerned . Wher e th e permitting authorit ydecide s afte r considering an y source-specifi c factor s tha t th e screened-ou t option s woul d no t b e BACT , the nth e evaluatio nproces s woul d shif t i n th e nex t step t o th e remaining "live " option s fo r furthe r analysis . Fo r example , wher e a permitting authorit yha s mad e explici t statement s throughguidelines , prio r BAC T determinations , o r otherwise , tha t base d o n th e availabilit yo f on e o r mor e technologie s an

d a weighing o f relevan t factors , a particula r emissio n rang e i s appropriat e a s a BAC T limit , an d i f source-specifi c factor s d o no t lead t o a conclusio ntha t anothe r emissio n rang e woul d b e mor e appropriate , the nth e mor e detaile d aspec t o f th e BAC T analysi s coul d b e limite d t o technologie s capabl e o f performin g i n th e initia l rang e considered . I f a Stat e decide s t o adop t a screening proces s fo r BACT , source s applying fo r a BAC T determinatio n ca n focu s analytica l attentio n o n thos e alternative s likel yt o b e considere d BAC T b ytha t authority . O f course , a s always , th e BAC T analysi s an d decisio n mus t stil l b e mad e o na case-by-cas e basis . Moreover , today' s actio n doe s no t requir e a Stat e t o followth e proces s a s discusse d above . I f thi s approac hi s followed , however , th e State' s initia l criteri a shoul d b e se t i nanope npubli c proces s an d update d regularly . Also , i nn o cas e doe s a ninitia l screening o f option s preclud e th e Administrato r o r an yothe rP.2 3

2 1 perso n from

questioning th e appropriatenes s o f th e criteri a i n genera l o r th e applicatio no f thos e criteri a i na specifi c permit . Th e tw o cor e criteri a clarifie d i ntoday' s actio nar e consisten t wit hdetermination s i nth e administrativ e appeal s decision s subsequen t t o th e H-Powe r decisio ntha t applicatio no f th e tw o cor e criteri a relating t o consideratio no f availabl e technologie s an

d t o justif yth e chose ntechnolog yunde r th e statutoryfactor s ar e essentia l reguirement s o f a BAC T analysis . Th e Administrator' s subsequen t PS D appea l decision s hav e require d tha t State s us e suc hcor e criteri a i nmaking BAC T determinations . Thus , i n Unio nCount yResourc e RecoveryFacility . PS D Appea l No . 90- 1 (11/28/90) , th e Administrato r cite d complianc e wit hth e tw o cor e criteri a i nupholding a BAC T determinatio nfo r a resourc e recoveryfacility . Th e Administrato r relie d o nth e same tw o cor e criteri a i n upholding a permi t determinatio n i n Mecklenbur g Cogeneratio n Limite d Partnership . Clarksville . VA . PS D Appea l NO . 90- 7 (12/21/90) . AlthoughEPAbelieve s tha t th e curren t statutoryan d regulatorydefinition s o f BAC T implicitl yrequir e th e consideratio n o f th e tw o cor e criteri a se t fort hi n thi s notice , a s fundamenta l t o an yadequat e BAC T determination , th e criteri a announce d i n earlie r decision s nee d t o b e clarifie d t o ensur e tha t the yd o no t restric t Stat e discretion . Th e EPAi s today proposing t o mak e thes e requirement s explici t b yinserting int o2 2

th e regulator ydefinitio no f BAC T th e followin g tw o cor e requirement s fo r a BAC T analysis : 1 ) th e determinatio nmus t conside r a representativ e grou p o f availabl e contro l system s fo r th e source , and , 2 ) selectio no f a particula r contro l syste ma s BAC T mus t b e justifie d bya compariso no f th e candidat e system s i nterm s o f th e statutor ycriteri a an d supporte d byth e record .

III . Impact s Analysi s i na BAC T PS D Determinatio n I n evaluatin g th e alternativ e candidat e contro l systems , a n applican t mus t conside r an d compar e th e expecte d energy , environmental , an d economi c impact s o f th e alternatives . Thi s sectio ndiscusse s som e specifi c impact s whic hma yaffec t th e fina l technolog yultimatel yselected , an d present s a se t o f potentia l factors , an ynumbe r o f whic hma yb e addresse d i na permi t applicatio n dependin g o n th e individua l situation . Th e energy , environmental , an d economi c impact s discusse d belo war e illustrativ e onl yan d ar e no t intende d a s a nexclusiv e lis t o f consideration s fo r BACT . Som e o f thes e factor s ma yno t b e appropriat e i n al l cases , whil e i nothe r instances , factor s whic h ar e no t include d her e ma yb e relevan t t o th e BAC T determination . Fo r example , i f a contro l syste mproduce s a know nquantit yo f soli d wast e a s a by-produc t inheren t t o it s desig nan d operatio n unde r norma l conditions , suc ha n impac t shoul d b e note d i nth e PS D permi t application . However , thi s facto r nee d no t b e analyze d i ndetail , unles s th e applican t wishe s t o us e soli dP.2 5

2 3 wast e impact s a s a n argumen t fo r o r agains t selectio no f a particula r contro l alternativ e a s BACT . Th e discussio ndoe s no t addres s th e evaluatio n o f eac hfacto r no r th e weighin g o f an y facto r relativ e t o another . Suc hdetermination s shoul d b e mad e o n a case-by-cas e basi s b yth e permitting authority . Fo r th e purpos e o f thi s discussion , th e term s "emissio ncontro l system " o r "BAC T system " refe r t o th e "applicatio no 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 techniques " [se e § 169(3) , a s amende d b y§ 403(d ) o f th e 199 0 Amendments] . I n general , th e BAC T analysi s shoul d addres s th e direc t impact s o f alternativ e contro l systems . Usually , direc t impact s ar e experience d on-sit e [e.g. , scrubbe r sludg e disposa l sites] ; however , the ycoul d als o b e off-site . Fo r example , ammoni a sli p i s no t limite d t o th e plan t boundary . Duplicativ e analyse s generall yar e no t require d i npreparing th e BAC T permi t application . An ystudie s previousl yperforme d fo r Environmenta l Impac t Statements , wate r pollutio n permits , o r othe r program s mayb e use d whe nappropriat e t o demonstrat e advers e energy , environmental , o r economi c impacts . Th e same consideration s ar e generall yapplicabl e t o bot hnew an d modifie d sources . Wher e appropriate , however , th e permi t revie wmayconside r an yspecia l economi c o r physica l constraint s whic hmigh t limi t th e applicatio no f certai ncontro l technique s t o a modifie d emission s unit , suc ha s retrofitting cost s tha t2 4

woul d no t b e born e b ya ne wunit , o r th e remaining usefu l lif e o f th e modifie d facility . Th e resul t mayb e tha t th e leve l o f contro l require d fo r a nemission s uni t undergoing modificatio n mayno t b e a s stringen t a s tha t whic hwoul d b e require d i f th e same uni t wer e being newl yconstructe d a t a n existing plan t o r a t a "greenfield " facility . Thi s observatio ni s mean t onl yt o illustrat e tha t th e BAC T decisio n mus t b e mad e o na case-by-cas e basi s b yth e permittin g authorit yconsidering th e relevan t energy , environmental , an d economi c impacts . A . Energ

yImpact s Energyimpact s shoul d addres s energ yus e i nterm s o f penaltie s o r benefit s associate d wit ha contro l systeman d th e direc t effect s o f suc henerg yus e o n th e facility . Asourc e may , fo r example , benefi t fromth e combustio n o f a concentrate d ga s strea mric hi nvolatil e organi c compounds ; o n th e othe r hand , extr a fue l o r electricit yi s frequentl yrequire d t o powe r a contro l devic e o r incinerat e a dilut e ga s stream . I f suc h benefit s o r penaltie s exist , theyshoul d b e quantifie d t o th e exten t possible . I nquantifying energ yimpacts , th e applican t coul d estimat e th e direc t energ

yimpact s o f th e contro l alternativ e i nunit s o f energ yconsumptio n a t th e sourc e (e.g. , Btu , Kwh , barrel s o f oil , ton s o f coal) . Th e energ yrequirement s o f th e contro l option s coul d b e show

ni n term s o f tota l and/o r incrementa l energycost s pe r tota l and/o r incrementa l to n o f pollutan t remove d i n compariso nt o th e nex t highe r an d lowe r contro l options . I nman yP.2 7

2 5 cases , becaus e energ ypenaltie s o r benefit s ca nusuall yb e quantifie d i nterm s o f additiona l cos t o r income t o th e source , th e energyimpact s analysi s can b e ccnverte d int o dolla r cost s and , wher e appropriate , b e factore d int o th e economi c impact s analysis . Indirec t energyimpact s (sucha s energ yt o produc e ra w material s fo r constructio no f contro l equipment ) ar e usuall yno t considered . However , i f th e permi t authorit ydetermines , eithe r independentl yo r base d o n a showing b yth e applicant , tha t a n indirec t energ

yimpac t i s unusua l o r significant , th e indirec t impac t mayb e considered . Th e energ yimpac t shoul d still , however , relat e t o th e applicatio no f th e contro l alternativ e an d no t t o a concer n ove r energ yimpact s associate d wit hth e projec t i n general . Th e energ

yimpac t analysi s mayals o addres s th e concer n ove r th e us e o f locally-scarc e fuels . Th e designatio no f a scarc e fue l mayvaryfro

m regio n t o region , bu t i n genera l a scarc e fue l i s on e whic hi s i n shor t suppl ylocall yan d ca nb e bette r use d fo r alternativ e purposes , o r on e whic hmayno t b e reasonabl y availabl e t o th e sourc e eithe r a t th e presen t tim e o r i n th e nea r future . B . Environmenta l Impacts . Th e environmenta l impact s analysi s i n th e BAC T evaluatio n proces s concentrate s o n collatera l environmenta l impact s du e t o contro l o f emission s o f th e pollutan t i nquestion , suc ha s soli d o r hazardou s wast e generation , discharge s o f pollute d wate r from2 6

a contro l device , visibilit yimpact s (e.g . visibl e stea mplume) , o r emission s o f toxi c pollutants . Th e applican t shoul d identif y an yenvironmenta l impact s associate d wit ha contro l alternativ e tha t hav e th e potentia l t o affec t th e selectio n o r rejectio n o f tha t contro l alternative . Potentiall ysignificant , secondary environmenta l impact s mus t als o b e evaluated . Scrubbe r effluent , fo r example , mayaffec t wate r qualit yan d lan d use , and , similarly , technologie s using cooling tower s mayaffec t visibility . Othe r example s o f secondaryenvironmenta l impact s coul d includ e hazardou s wast e discharges , suc ha s spen t catalyst s o r contaminate d carbon . Generally , thes e type s o f environmenta l concern s becom e importan t whe n sensitiv e site-specifi c receptor s exis t o r whe nth e incrementa l emission s reductio npotentia l o f on e contro l optio n i s onl ymarginall ygreate r tha nth e nex t mos t effectiv e option . Th e BAC T decisio n canconside r Stat e polic ydecision s regarding us e o f th e availabl e ai r qualit yincremen t fo r futur e growt han

d th e weighin g o f thi s factor . A s discusse d above , th e direc t impac t o f th e control s o n ambien t concentration s ca nals o b e identifie d an

d considere d i n th e BAC T analysis . Th e procedur e fo r conducting a n analysi s o f environmenta l impact s shoul d b e mad e base d o nconsideratio n o f site-specifi c circumstances . I n general , th e analysi s o f environmenta l impact s start s wit hth e identificatio n an d quantificatio n o f th e solid , liquid , an

d gaseou s discharge s from th e contro l devic e (orP.2 9

2 7 devices ) unde r review . Regarding secondaryeffects , a qualitativ e o r semi-quantitativ e screening ca n b e performe d t o narro wth e analysi s t o discharge s wit hpotentia l fo r causing advers e environmenta l effects . Next , th e mas s and compositio no f an ysuc hdischarge s shoul d b e assesse d an d quantifie d t o th e exten t possible , base d o nreadily-availabl e information . A s previousl ymentioned , th e analysi s nee d onl yaddres s thos e contro l alternative s wit han yenvironmenta l impact s tha t hav e th e potentia l t o affec t th e selectio n o r rejectio no f a contro l alternative . Pertinen t informatio nabou t th e publi c o r environmenta l consequence s o f releasing thes e material s shoul d als o b e assembled . Thus , th e relativ e environmenta l impact s (bot hpositiv e an

d negative ) o f th e variou s alternative s ca nb e compare d wit heac hother . Als o th e generatio n o r reductio no f toxi c an d hazardou s emission s usin g th e variou s BAC T alternatives , including compound s no t regulate d unde r th e Ac t o r th e PS D program , ar e considere d a s par t o f th e environmenta l impact s analysis . Pursuan t t o th e EPAAdministrator' s decisio ni nNort hCount y Resourc e RecoveryAssociates . PS D Appea l No.85- 2 (Reman d Order , Jun e 3,1986) , a PS D permitting authorit yshoul d tak e int o accoun t th e abilit yo f a give n contro l alternativ e fo r regulate d pollutant s t o affec t emission s o f pollutant s no t subjec t t o regulatio nunde r th e Ac t o r th e PS D progra mi n makin g BAC T decisions . Conseguently , th e affec t o f a give ncontro lP.3 0

2 8 alternativ e upo n th e emissio no f toxi c o r hazardou s ai r contaminant s mus t b e evaluate d i nconducting th e BAC T analysis . C . Economi c Impact s Thi s analysi s shoul d addres s th e economi c impact s associate d wit hth e cost s o f installing an d operating alternativ e contro l systems . Normall yth e submitta l o f verydetaile d an d comprehensiv e projec t cos t dat a i s no t necessary . I n th e economi c impact s analysis , consideratio nshoul d b e give n firs t t o quantifying th e cos t o f th e variou s contro l options . Th e revie wshoul d includ e a complet e explanatio n o f procedure s fo r assessing economi c impact s an d an ysupporting data .Onc e th e contro l technolog yalternative s an

d emission s performanc e level s hav e bee nidentified , capita l an d annua l cost s ar e developed . Th e direc t cos t fo r eac hcontro l alternativ e shoul d b e presente d bot ho n an incrementa l an d a noveral l basis . Investmen t costs , operatio n an d maintenanc e costs , an d annualize d cost s shoul d b e presente d separately . Annualize d cost s ar e operatio n an

d maintenanc e cost s plu s depreciatio nan d interes t charge s o n th e investment . Cost s shoul d b e itemize d an d explained . Credi t fo r taxincentive s shoul d b e include d along wit hcredit s fo r produc t recoverycost s an d by-produc t sale s generate d fromth e us e o f contro l systems , including th e sal e o f sulfu r dioxid e allowance s unde r th e aci d rai n program an d othe r emissio n reductio ncredits . Th e lifetime o f th e investmen t shoul d b e stated . Wher e possible , cost s shoul d b e broke n downP.3 1

2 9 int o proces s chang e cost s (cost s o f les s polluting productio n process ) an

d direc t pollutio nabatemen t cost s (cos t o f pollutio n contro l equipment) . Th e cost s o f ai r treatment , wate r treatment , an d soli d wast e disposa l shoul d b e presente d separately . Th e objectiv e o f th e analysi s i s t o provid e a realisti c estimat e o f th e cost s o f th e alternativ e technologies . A s a guid e i n determining whe n contro l cost s becom e excessive , alternativ e contro l system s canb e compare d i nterm s o f th e incrementa l cos t effectivenes s o f th e availabl e alternatives . However , a BAC T optio n canno t automaticall yb e rejecte d simpl ybecaus e i t i s mor e expensiv e o r les s "cos t effective " tha n anothe r candidat e whic hremove s mor e pollutant . State s ca n evaluat e whethe r th e incrementa l cos t effectivenes s o f a mor e stringen t optio n i s appropriat e i n ligh t o f recen t BAC T determination s an

d othe r factor s involve d i n th e BAC T decisio n an d th e State' s weighin g o f thes e factors . Incremental , cost
effectivenes s calculation s ar e generall yperforme d o n th e basi s o f ^incrementa l dollar s pe r to n o f pollutan t removed . I n additio n t o th e type s o f economi c impact s discusse d above , EPAi s todaysoliciting commen t o nwhethe r th e economi c impact s analysi s shoul d conside r a s impact s th e affordabilit yo f control s b

yth e fir

mi n respons e t o alternativ e level s o f control . Fo r example , a mor e costl yBAC T alternativ e coul d b e presente d a s altering th e economic s o f a projec t t o th e poin t wher e a decisio n woul d b e mad e t o cance l th e constructio no r expansio n o f a facility , t o relocat e a plant , t o reduc e th e scal eP.3 2

3 0 o f operation , o r t o chang e th e productio nmix . I nsuc hcases , th e loca l economi c impact s o f suc hdecision s (e.g. , loca l employmen t effects , including numbe r o f jobs , dollar s pai d i n salaries , an

d change s i n employe e skil l level s required ) woul d b e evaluate d an

d factore d int o th e economi c analysis . Comment s shoul d addres s th e reasonablenes s an d practicalit yo f including suc hconsideration s i n th e BAC T analysis .

IV . Purpos e o f th e Propose d Chang e Th e approache s se t fort hi n th e variou s EPAfina l an d draf t guidanc e document s hav e bee n intende d t o guid e permi t applicant s an d permittin g official s i n thos e area s subjec t t o th e Federa l PS D regulation s a t 4 0 CFR52.21 . The yhav e no t establishe d binding regulatoryrequirements , whic har e containe d i n th e Federa l regulation s an d SIP's . Rathe r tha nspecifying a precis e approac ht o th e BAC T analysis , EPAi s proposing todayt o clarif y tw o cor e lega l requirement s tha t ar e necessaryfo r a nadequat e BAC T analysi s unde r existing law . I nreviewing ne wo r revise d Stat e PS D rule s submitte d fo r SI P approval , th e Agenc ywil l deem th e programt o b e adeguat e i f i t specifie s tha t thes e tw o requirement s ar e necessaryfo r a n adequat e BAC T analysis . Likewise , i n fulfilling it s oversigh t an d enforcemen t responsibilities , th e Agenc ywil l continu e it s polic yo f reviewing specifi c permitting action s fo r conformit ywit hth e cor e criteria . S o long a s th e Stat e ha s carefull yevaluate d eac h candidat e system , justifie d th e choic e o f on e ove r eac ho f th eP.3 3

3 1 other s i nterm s o f th e statutorycriteria , otherwis e followe d th e procedura l norm s embodie d i nth e cor e criteria , an d ensure d th e decisio n woul d no t violat e an yobjectiv e standard s tha t mayappl y (sucha s NSP S o r SI P limits) , EPAwil l conside r a State' s BAC T analysi s t o b e adequat e an d wil l no t second-gues s th e State' s substantiv e BAC T decision . Thus , unde r today' s proposal , adherenc e t o an

yspecifi c BAC T approach , suc ha s top-downo r bottom-up , i s no t required . Rather , today' s proposa l i s intende d t o ensur e adherenc e t o th e cor e criteri a suc htha t State s mak e reasone d an

d informe d BAC T determination s i n a publicly

accountabl e manner . Further , th e State s hav e wid e discretio ni n setting th e weigh t assigne d t o eac hstatutoryfacto r (energy , environmental , economi c an d othe r costs ) i n comparing an d balancing th e relativ e effect s o f th e variou s BAC T options . Whicheve r approac hi s selected , th e BAC T analysi s shoul d includ e a complet e explanatio n o f th e procedure s use d b yth e Stat e t o asses s th e energy , environmental , an d economi c impact s an d an y supporting data . Permit s containing BAC T determination s tha t d o no t conformt o th e PS D requirement s o f th e Act , EPAregulations , an d applicabl e SIP's , a s reflecte d i nth e cor e criteria , wil l b e considere d deficien t b yEPA . Instance s o f procedura l irregularitie s o r arbitrarydecisio n making wil l remai n ground s fo r EPAaction , a s appropriate . Th e EPAi s todaysoliciting commen t o nth e propose d clarificatio n t o th e BAC T definitio nfo r th e purpos e o f clarifying an

d delineating th e regulatorystandar d b ywhic hth eP.3 4

3 2 adequac yo f a BAC T determinatio n shoul d b e judged . A s note d above , EPAalread

yrecognize s tha t ther e ar e a variet yo f permissibl e methods , including th e top-dow n method , fo r determining BACT . Stat e permitting authoritie s ar e fre e t o appl y th e cor e lega l criteri a withou t referenc e t o an yexclusiv e metho d i n makin g BAC T determination s tha t satisf yth e Act . O f course , th e BAC T analysi s an d selectio nproces s i s bu t on e par t o f a complet e PS D review , an d th e BAC T emission s limitation s mus t b e consisten t wit hal l othe r PS D requirements .

V . Clea nFuel s Th e definitio n o f BAC T i n § 169(c ) o f th e Ac t i s change d b y § 403(d ) o f th e 199 0 Amendments . T o maintai nconformit ywit hth e statutorydefinition , EPApropose s t o amen d th e regulatory definitio n o f BAC T a t 4 0 CFR52.21(b)(12 ) an d 51.166(b)(12 ) b

y inserting "clean fuels " afte r "including fue l cleaning, " an d b y adding th e following a t th e en d thereof : "Emission s froman y sourc e utilizin g clea n fuels , o r an yothe r means , t o compl ywit h thi s paragrap hshal 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 th e Clea nAi r Ac t Amendment s o f 1990. "

VI . Miscellaneou s A . Docket . Adocke t ha s bee n establishe d fo r thi s actio nunde r § 307(d)(1)(I ) an

d (N ) o f th e Act , 4 2 U.S.C . 7607(d)(1)(I ) an dP.3 5

3 3 (N) . Th e docke t i s a n organize d an d complet e fil e o f al l informatio nconsidere d i n th e developmen t o f thi s ruling . Th e docke t i s intende d t o allo wth e publi c t o identif yan 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-91-30 . B . Paperwor k Reductio n Act . N o additiona l publi c reporting burde nwil l resul t from thi s ruling . Al l informatio n collectio n requirement s o f th e Federa l NS Rregulation s hav e bee n approve d b yth e Offic e o f Managemen t an d Budge t (OMB ) unde r th e provision s o f th e Paperwor k Reductio n Act , 4 4 U.S.C . 3501 , et . seq. , an d hav e bee n assigne d OMB contro l numbe r 2060-0003 . Th e effec t o f thi s rul e woul d b e n o chang e i n paperwor k relate d t o complying wit hNS Rrequirements , sinc e thi s ruling onl yprovide s additiona l clarificatio n regarding th e regulatorydefinitio no f BACT . C . Th e E.O . 12291 . Unde r E.O . 12291 , EPAmus t judg e whethe r a rul e i s "major " an d therefor e subjec t t o th e requiremen t o f a regulatoryimpac t analysis . Thi s ruling i s no t a majo r rul e becaus e i t wil l no t chang e th e economi c cost s o f meeting th e requirement s o f th e Act . However , thi s ruling wa s submitte d t o OMB fo r review . Writte n comment s from

OMB t o EPAan

d an yEPArespons e ar e include d i n Docke t A-91- 3 0 . D . Economi c Impac t Assessment . Th e requiremen t fo r performing a n Economi c Impac t Assessmen t unde r § 31 7 o f th e Ac t (4 2 U.S.C . 7617) , doe s no t appl yt o th eP.3 6

3 4 amendment s EPAi s promulgating today . Sectio n31 7 applie s onl y t o "revision s whic hth e Administrato r determine s t o b e substantia l revisions. " Th e propose d clarifying languag e i s no t a substantia l revisio n becaus e i t doe s no t chang e curren t regulatoryburdens .

E . RegulatoryFlexibilit yAct . Thi s actio n i s no t subjec t t o th e certificatio n provision s o f § 605(b ) o f th e RegulatoryFlexibilit yAc t becaus e thi s rul e wil l no t resul t i n a chang e i nadministrativ e cost s o r a n increas e i n contro l costs , therefor e having n o significan t impac t o n industryo r smal l communities . F . Effectiv e Date . Sectio n 4(d ) o f th e Administrativ e Procedure s Act , 5 U.S.C . 553(d) , require s a 30-da ywaiting perio d befor e making a substantiv e rul e effective . Althoughth e regulatoryrevision s bein g propose d todayar e no t considere d substantive , the yar e bein g subjec t t o notice-and-commen t an d wil l becom e 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 . Lis t o f Subject s 4 0 CFRPart s 51 , 5 2 Administrativ e practice s an d procedure , Intergovernmenta l relations , Ai r pollutio n control , NSR , BACT , Sulfu r oxides , Nitroge n dioxide , Particulat e matter , Carbo nmonoxide , Hydrocarbons , Lead , Ozone , Reporting an d recordkeeping requirements , Volatil e organi c compounds , NSPS , NESHAP .P.3 7

3 5 Authority : 4 2 U.S.C . 7401(b)(1) , 7410 , 7411 , 7470-7479 , 7491 , 7501-7508 , 760 1 an d 7602 , a s amende d b yth e 199 0 Amendments , Pub . L . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) ; 402 , 409 , 41 5 o f th e Ac t a s amended , 10 4 Stat . 2399 ; 4 2 U.S.C . 7401-764 2 a s amende d b yth e 199 0 Amendments , Pub . L . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) ; 4 2 U.S.C . 7401 , 7411 , 7414 , 7416 , an d 760 1 a s amende d b yth e 199 0 Amendments , Pub . L . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) ; 402 , 409 , 41 5 o f th e Ac t a s amended , 10 4 Stat . 2399 , unles s otherwis e noted .
Dated :

William K . Reill y Administrato rP.3 8

3 6 Fo r th e reason s se t fort hi n th e preamble , Par t 5 1 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 5 1 - REQUIREMENT S FORPREPARATION , ADOPTION , AN D SUBMITTAL O F IMPLEMENTATIONPLANS . 1 . Sectio n 51.16 6 i s propose d t o b e amende d b yrevising paragraph(b)(12 ) t o read a s follows : 51.16 6 Preventio n o f significan t deterioratio no f ai r qualit y.

* * * * * (b ) * * *

, (12 ) Bes t availabl e contro l technolog ymean s anemission s limitatio n (including a visibl e emission s standard ) base d o nth e maximu mdegre e o f reductio n fo r eac hpollutan t subjec t t o regulatio n unde r th e Act , whic hwoul d b e emitte d froman y propose d majo r stationarysourc e o r majo r modificatio nwhic hth e reviewing authority , o n a case-by-cas e basis , taking int o accoun t environmental , energy , an d economi c impact s an d othe r costs , determine s i s achievabl e fo r suc hsourc e o r modificatio n through applicatio n o f productio n processe s o r availabl e methods , systems , an

d techniques , including fue l cleaning , cleanfuels , o r treatmen t o r innovativ e fue l combustio n technique s fo r contro l o f suc hpollutant . Tw o criteri a mus t b e satisfie d i n an yBAC T analysis :P.3 9

3 7 1 ) th e determinatio n mus t conside r a representativ e grou p o f th e rang e o f availabl e contro l system s fo r th e source ; an d 2 ) selectio n o f a particula r contro l syste ma s BAC T mus t b e justifie d b ya compariso no f th e candidat e contro l system s i n term s o f th e statutor ycriteri a an d supporte d byth e record . I n n o even t shal l applicatio n o f BAC T resul t i nemission s o f any pollutan t whic hwoul d excee d th e emission s allowe d byany applicabl e standar d unde r 4 0 CF R6 0 an d 61 . I f th e Administrato r determine s tha t technologica l o r economi c limitation s o nth e applicatio no f measuremen t methodolog yt o a particula r emission s uni t woul d mak e th e impositio no f a n emission s standar d infeasible , a design , equipment , wor k practice , operationa l standard , o r combinatio n thereof , ma yb e prescribe d instea d t o satisf yth e requiremen t fo r th e applicatio no f BACT . Suc h standar d shall , t o th e degre e possible , se t fort hth e emission s reductio nachievabl e b yimplementatio no f suc hdesign , equipment , wor k practice , o r operation , an d shal l provid e fo r complianc e by mean s whic hachiev e equivalen t results . Emission s fro many sourc e utilizin g clea n fuels , o r anyothe r means , t o compl ywit h thi s paragrap hshal l no t b e allowe d t o increas e abov e level s tha t woul d hav e bee nrequire d unde r thi s paragrap ha s i t existe d prio r t o enactmen t o f th e 199 0 Amendments .P.4 0

3 8 Par t 5 2 - APPROVA L AN D PROMULGATIO NO F IMPLEMENTATIO NPLANS . 1 . Sectio n52.2 1 i s propose d t o b e amende d byrevisin g paragrap h(b)(12 ) t o rea d a s follows : 51.2 1 Preventio no f significan t deterioratio no f ai r quality .

**** * (b ) * * * (12 ) Bes t availabl e contro l technolog ymean s a nemission s limitatio n(includin g a visibl e emission s standard ) base d o n th e maximu m

degre e o f reductio n fo r eac hpollutan t subjec t t o regulatio nunde r th e Ac t whic hwoul d b e emitte d fro manypropose d majo r stationar ysourc e o r majo r modificatio nwhic hth e Administrator , o na case-by-cas e basis , takin g int o accoun t environmental , energy , an d eccnomi c impact s an d othe r costs , determine s i s achievabl e fo r suc hsourc e o r modificatio nthroug h applicatio n o f productio n processe s o r availabl e methods , systems , an d techniques , includin g fue l cleaning , clea nfuels , o r treatmen t o r innovativ e fue l combustio ntechnique s fo r contro l o f suc hpollutant . Tw o criteri a mus t b e satisfie d i nanyBAC T analysis : 1 ) th e determinatio nmus t conside r a representativ e grou p o f th e rang e o f availabl e contro l system s fo r th e source ; an d 2 ) selectio n o f a particula r contro l syste ma s BAC T mus t b e justifie d bya compariso n o f th e candidat e contro l system s i n term s o f th e statutor ycriteri a an d supporte d byth e record . I n n o even t shal l applicatio no f BAC T resul t i nemission s o f anyP.4 1

3 9 pollutan t whic hwoul d excee d th e emission s allowe d b yan y applicabl e standar d unde r 4 0 CFR6 0 an d 61 . I f th e Administrato r determine s tha t technologica l o r economi c limitation s o nth e applicatio n o f measuremen t methodologyt o a particula r emission s uni t woul d mak e th e impositio n o f a n emission s standar d infeasible , a design , equipment , wor k practice , operationa l standard , o r combinatio nthereof , mayb e prescribe d instead t o satisf yth e requiremen t fo r th e applicatio no f BACT . Suc h standar d shall , t o th e degre e possible , se t fort hth e emission s reductio n achievabl e b yimplementatio n o f suc hdesign , equipment , wor k practice , o r operation , an d shal l provid e fo r complianc e b y mean s whic hachiev e equivalen t results . Emission s froman y sourc e utilizing clea n fuels , o r an yothe r means , t o compl ywit h thi s paragrap hshal 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 th e 199 0 Amendments .