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OAR Box 1778 

Prepped by Ollie Stewart 

Document Number: 

71) ll-C-13 

Docket Number: 

A-90-06 

Printed 10/28/2008 9:50:54 AM Sheet 71 of 276 
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NOTE: This item is missin g attachments. 
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a.1* 0 ST*rX 

S,^ / WASHINGTON. D.C. 20450 

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

•IGTON. D.C. 

APR I 9 1989 

THE ADMINISTRATOR 

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JUN 1 ? ®M P 

Honorable John D. Dingell 

Chairman, Subcommittee on Oversight 

and Investigations _ ,^, \\\\' 

Committee on Energy and Commerce 

House of Representatives 

Washington, D.C. 20515 I; ^:^5i©Ot£ l 

Dear Mr. Chairman: 

This is in response to your December 21, 1988 letter to Lee 

M. Thomas, former Administrator of the Environmental 

Protection Agency (EPA), regarding the applicability of the Clean 

Air Act's prevention of significant deterioration (PSD) and new 

source performance standards (NSPS) provisions to the proposed 

life extension project at the five coal-fired steam-electric 

generating units at the Port Washington power plant, which is 

owned and operated by Wisconsin Electric Power Company (WEPCO). 

On February 15, 1989, EPA issued a revised final 

determination to WEPCO regarding the applicability of the PSD and 

NSPS regulations to the Port Washington project. The revised 

determination supplements the determination set forth in EPA's 

October 14, 1988 letter to WEPCO from Lee M. Thomas on the 

subject. In it, EPA reaffirmed its initial decision on the 

question of PSD and NSPS applicability and provided a further 

detailed discussion of the issues. Consequently, a number of 

your inquiries regarding the status of EPA's position on WEPCO's 

Port Washington project are contained in the February 15, 1989 

determination. A copy is enclosed for your reference. 

Regarding WEPCO, you also asked about EPA's offer to work 

with the company in determining PSD and NSPS requirements. There 

are a variety of options available to WEPCO for legally meeting 

the PSD and NSPS requirements, some of which are likely to be 

less costly than others. In offering to discuss measures that 

could minimize the cost of compliance, EPA was simply indicating 

a willingness to expeditiously review with WEPCO the appropriateness of any options that WEPCO might want to consider for 

complying with the Clean Air Act requirements. The December 1, 

1988 date was a target for completion of these discussions based 

on WEPCO's request for a timely response; it had no other 

significance. 
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You have asked about the meaning of certain terms used to 

describe the nature of the work proposed by WEPCO. The PSD and 

NSPS regulations do not define the terms "renovation" or "life 

extension." The regulations recognize and define essentially two 

actions at an existing facility that could subject that source to 

PSD or NSPS review. These are "modification" (both the PSD and 

NSPS rules) and "reconstruction" (NSPS rule only). "Renovation" 

and "life extension" are terms which WEPCO used in referring to 

the Port Washington project, but these terms are not used in the 

Clean Air Act or EPA's regulations. A project described in these 

terms can, however, qualify as either a modification or a 

reconstruction, depending on the specific work planned. 

In your letter, you had several questions and requested 

information regarding EPA's "informal survey" of similar 

projects. Specifically, you asked for a summary of the survey, 

why some surveyed projects had not been brought to EPA's 

attention sooner, what the status of those projects was relative 

to Clean Air Act requirements, and what steps may be necessary to 

address this situation. 

The EPA conducted an informal telephone survey of the EPA 

Regional Offices last year to find out if these offices were 

aware of any modification or reconstruction projects at power 

plants, or if they had received any applications for permits or 

requests for applicability determinations for modifications or 

reconstruction projects at power plants. Seven of the ten 

Regional Offices answered affirmatively, and a total of ten 

sources with such actions were identified. The survey did not 

result in the detection of any violations. Regarding the Duke 

Power and Texas Utilities power plants, we are in the process of 

determining if permit applications were required. Memoranda have 

been sent to the Regional Offices responsible for these sources, 

instructing them to make a full investigation, but we are not 

aware of any violations at this time. The EPA was not aware of 

any projects other than those included in the survey. 

Your question about why EPA was not aware of these permits 

involves the appropriate role of States and EPA in permit reviews 

and approvals. In most cases, enforcement authority for the NSPS 

and PSD programs has been delegated or transferred to the Statej 

and the State has primary responsibility for implementing and 

enforcing these programs. The EPA acts as a partner with the 

State, giving guidance and technical and financial assistance, 

and providing oversight of the State programs. 
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Although the EPA oversees the States' review of new source 

permit applications, EPA's role is designed in such a way as not 

to duplicate the States' work. States are required to send EPA 

copies of their PSD permit applications and provide notice of 

every action related to consideration of the permit. Also, all 

proposed decisions for new major source permits are required to 

go through public notice. The EPA policy directs Regional 

Offices to review all major source permits and certain minor 

source permits issued by State and local agencies. 

The above reviews apply only to major (and certain minor) 

permits. States are not required to notify EPA of every 

construction project (e.g., most minor modifications); thus, it 

is not necessarily an "oversight" for EPA to be unaware of a 

construction project. The EPA's biannual audit of State programs 

(which includes file reviews and inspections of a portion of the 

sources already inspected by the States) provides a vehicle for 

discovering a State's failure to properly classify an action or 

initiate permitting procedures for a particular source. 

In response to the Utility Week article, it is important to 

note that the potential applicability of NSPS and PSD review to 

any type of proposed construction at a power plant (or any major 

source of air pollution) is a case-by-case determination and is a 

function of numerous factors. For example, the work (regardless 

of its timing) could be routine in nature or could result in no 

emissions increase, either of which could exempt the source from 

review. 

The Department of Energy (DOE) letter you asked for is 

enclosed. I believe EPA's position as set forth in the 

October 14, 1988 and February 15, 1989 letters to WEPCO provides 

our position on the matters addressed in the DOE letter, as well 

as the contentions raised by the Utility Air Regulatory Group in 

the Utility Week article. 

Your interest in this matter is greatly appreciated. 

Sincerely yours, 

William E.Bellly 

William K. Reilly 

2 Enclosures 

cc: General Accounting Office 

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