ATLANTA AUSTIN BANGKOK BRUSSELS CHARLOTTE DALLAS HONG KONG KNOXVILLE LONDON McLEAN MIAMI NEW YORK NORFOLK RALEIGH RICHMOND SINGAPORE WASHINGTON www.hunton.com HUNTON & WILLIAMS LL P 1900 K STREET, N.W. WASHINGTON, D.C. 200 06

- 1109
TEL 202 • 955 • 1500 FAX 202 • 778 • 2201

August 24, 2005 LAUREN E. FREEMAN DIRECT DIAL: 202

- 778

- 2248 EMAIL: lfreeman@hunton.com FILE NO: 31531.20000 1

VIA E
- DOCKET

Joh n M. Mooney, Chief Criteria Pollutant Section (AR

- 18J) U.S. Environmental Protection Agency Region 5 77 West Jackson Boulevard Chicago, Illinois 60604 Comments of the Utility Air Regulatory Group on EPA’s Proposed Disapproval of Revisions to the Ohio Imp lementation Plan for Particulate Matter (Docket R05
- OAR
- 2005
- OH
- 0002) Dear Mr. Mooney: The following comments are submitted on behalf of the Utility Air Regulatory Group (“UARG”) in response to EPA’s proposed disapproval of particulate mater rule revisio ns submitted by Ohio for inclusion in its State Implementation Plan (“SIP”). 70 Fed. Reg. 36901 (June 27, 2005). UARG is a voluntary, nonprofit association of electric generating companies and organizations, and four national trade associations. UARG’s purpose is to participate on behalf of its members collectively in EPA rulemakings and other Clean Air Act (“CAA”) proceedings that affect the interests of electric generators, and in litigation arising from those proceedings. Although comments on the pr oposal were initially due by July 27, 2005, EPA reopened the comment period until Aug. 24, 2005. 70 Fed. Reg. 49526 (Aug. 24, 2005). UARG’s comments focus on EPA’s conclusion that Ohio must perform modeling because its revised rule would provide a “less stringent set of opacity limits” than the existing SIP

- approved rule. 70 Fed. Reg. at 36903. As UARG stated in its recent comments in response to EPA’s “Request for Comments on Potentially Inadequate Monitoring in Clean Air Act Applicable Requirements a nd on Methods to Approve Such Monitoring” (70 Fed. Reg. 7905; Feb. 16, 2005), UARG believes that by establishing unreasonable hurdles for states’ demonstrations to show that their proposed revisions are consistent with the requirements of CAA § 110, EPA is missing a significant opportunity to improve compliance monitoring forJohn M. Mooney, Chief

August 24, 2005 Page 2 opacity. See UARG ANPR Comments, OAR

- 2003

- 0180

- 0051 (June 17, 2005) at 39

- 40 (relevant excerpts from those comments are provided in Attachment A). EPA’s proposed disapproval of Ohio’ s request for a SIP revision designed to allow use of continuous opacity monitoring systems (“COMS”) to determine compliance is another illustration of that lost opportunity, and the reasoning upon which EPA bases its proposed disapproval is seriously flaw ed. Ohio’s current SIP

- approved opacity rule establishes a limit of 20 percent opacity over a six

- minute average, but exempts one six

- minute average per hour between 20 percent and 60 percent opacity. Rule 3745

- 17

- 07. 1 Like many other states’ SIP

- approve d rules, Ohio’s SIP

approved rule designates Method 9 of Appendix A to 40 C.F.R. Part 60 as the sole method for determining compliance. Rule 3745

- 17

- 03

- (B)(1). Although many SIP sources monitor and report opacity using data from COMS under 40 C.F.R. Part 51, Appendix P, those data are not used to determine compliance with the standard directly unless the applicable state rule provides for that use. Appendix P allows states to decide how best to use the data. Ohio has implemented Appendix P in Rule 3745

- 1 7

- 03(C), which simply requires that the excess emissions data be reported along with information regarding the magnitude of excess emissions, cause and corrective action taken. In states where Method 9 is specified as the compliance method, but COMS also a re required, COMS data generally are used by the source to monitor performance of the control device and by regulators to trigger further investigation and testing. This is the model set out in EPA’s New Source Performance Standards (“NSPS”). See UARG AN PR Comments, Attachment A, at 15

- 18. Ohio presumably uses COMS data for these purposes. Limitations on the use of COMS data are necessary in states like Ohio, because the state did not evaluate the achievability of the opacity standard using the control equipment upon which the standard was based, if enforced with COMS data (as opposed to Method 9). See, id., at 7

- 14, 18

- 24 (explaining the standard setting process and why compliance methods in rules can only be changed through rulemaking).

1 Although the rule also provides exemptions for startup, shutdown, malfunction, uncombi ned water and certain other conditions, those exemptions are not at issue in the SIP revision request.John M. Mooney, Chief

August 24, 2005 Page 3 Ohio’s revised opacity rule provides certain sources the option of an alternative compliance procedure that relies on COMS as the method for determining compliance. 2 Ohio was able to specify COMS as the compliance method for the alternative procedure because, unlike th e current SIP

- approved rule, the state established the procedure by examining COMS data to determine the achievability of the limit with COMS (as opposed to Method 9). Specifically, Ohio analyzed ten years of COMS data from the source category to which th e alternative procedure applies and set the level of allowed excess emissions based on the 95 th percentile of that database ( i.e., the point at which 95 percent of the source data would be in compliance based on COMS data). See Ohio Responsiveness Summary at 17. 3 This data set represents the level of performance actually achieved by sources subject to the current SIP

approved rule. Use of the 95 th percentile of that database is consistent with the statistical procedures EPA used to establish the opacity standards in the NSPS at 40 C.F.R. Part 60. See Ajax, “The Effect of Compliance Test Frequency on the Stringency of Technology Based Standards (Mar. 13, 1995) at 5

- 7 (Attachment B); see also UARG ANPR Comments, Attachment A, at 14. Under Ohio’s alternativ

e limit, sources are allowed additional excess emissions between 20 and 60 percent opacity for up to 1.10 percent of the operating time in a calendar quarter (referred to as nonexempt values), as long as the total number of hours of exempt and nonexempt ex

cess emissions periods (not including startup, shutdown, and malfunction) does not exceed 10 percent of the operating time in a quarter. OAC 3745

- 17

- 03(B)(1)(b). Ten percent of operating time is equivalent to the sum of all of the one per hour six

- minute periods allowed under the SIP

- approved rule. As a result, the sole difference between the alternative compliance procedure and the existing rule is that the alternative procedure does not restrict the excess emissions that occur to one per hour. EPA ar gues that the alternative procedure is a relaxation because it allows excess opacity on occasions that excess emissions are currently prohibited “without any compensating prohibitions.” 70 Fed. at Reg. 36903. As an example, EPA says that a source that “r outinely has 1 full hour of excess opacity and then 9 subsequent hours of no excess opacity” would comply with the alternative procedure “but would clearly violate the existing SIP rule.” Id.

2 Ohio’s alternative limit applies to coal

- fired boilers with heat input greater than 250 mmBtu/hr that are controlled with either a baghouse or an elect rostatic precipitator. OAC 3745

- 17

- 03.

3 Although Ohio was asked to extend the option to a wider range of source categories, Ohio specifically limited its rule to those sources for which the appropriate statistical analysis had been done. Ohio Responsive ness Summary at 16.John M. Mooney, Chief

August 24, 2005 Page 4 EPA then concludes that because Ohio’s alternative compliance procedure is not an adequate substitute for the SIP

- approved rule, Ohio must perform modeling to show that that the revised rule “would not interfere with attainment or other applicable requirements.” 70 Fed. Reg. at 36903. EPA bases that conclusion on CAA § 110(l), which prohibits EPA from approving “a revision of a [state implementation] plan if the revision would interfere with any applicable requirement concerning attainment . . . or any other applicable requirement of this Act.” EPA is wrong on bot h points. First , as described above, under a Method 9

- enforced limit, COMS data are only used to determine, based on the source’s overall level of excess emissions ( e.g. , the total percent of time of excess emissions), whether the source and its emission controls are being operated properly. If the overall level of excess emissions is reasonable, the source would to be deemed in compliance with the existing rule and no action would be taken. If the overall level is not reasonable, the state (or EPA) lik ely would conduct an inspection and/or order performance of Method 9 tests as required under the rule. As a result, the sort of routine emissions EPA described in its example would be unlikely to result in any violation of Ohio’s SIP

- approved opacity rule , unless the total number of excess emissions over the quarterly reporting period were deemed unacceptable. Thus, although an opacity limit enforced with COMS data that excuses excess emissions based on percent of time sets fewer restrictions on when exce ss emissions can occur, it more than compensates for that difference by automatically designating all excess emissions over the allowed percentage as measured by the COMS (that are not otherwise exempt under the rule) as violations. 4 The only theory und er which EPA could conclude that a COMS

- enforced limit like Ohio’s alternative procedure is a relaxation would be to assume that the COMS already could be used to establish violations. Although EPA asserts in the preamble to its proposed disapproval of Oh

io’s rule that “[c]urrently, COMS data may be used as credible evidence of violations” (70 Fed. Reg. 36903), EPA is wrong. For one, in Ohio’s case, Ohio has never adopted a “credible evidence” rule. And, EPA’s “credible evidence” rule is not self

impleme nting. Clean Air Implementation Project v. EPA, 150 F.3d 1200, 1207 (D.C. Cir. 1998) ( CAIP ). Moreover, even in a state that has adopted a “credible evidence” rule, the

4 EPA’s concern that sources would routinely operate with a full hour of excess emissions under the new rule is also overblown. Other applicable regulatory requirements, like the Compliance Assurance Monitoring (CAM) rule at 40 C.F.R. Part 64 and the NSPS “general duty” in 40 C.F.R. § 60.11(d), impose enforceable duties to respond to excess emissions (even when those excess emissions are otherwise allowed) that would make routine operation as described in EPA’s example unlikely.John M. Mooney, Chief

August 24, 2005 Page 5 existence of a “credible evidence” rule does not by itself convert COMS data into the compliance method. Even according to EPA, a “credible evidence” rule like the one EPA adopted does not change the compliance method, but merely allows its use as evidence in a judicial proceeding in which a judge or jury would be the “ultimate, independe nt arbitrator of the evidence’s admissibility and credibility.” 62 Fed. Reg. 8314, 8317. And, to the extent that EPA or a state attempted to enforce a Method 9

- based opacity limit with COMS data, the affected source would be entitled to a determination b y that judge or jury of the lawfulness of that application before a violation could be established. CAIP, 150 F.3d at 1205. It is for these reasons that EPA has agreed that sources cannot be compelled to use COMS data when certifying their compliance sta

tus with respect to Method 9

- enforced standards. Natural Resources Defense Council, Inc. v. EPA, 194 F.3d 130, 138 (D.C. Cir. 1999). In other words, it is not reasonable for EPA to interpret an opacity limit, which on its face identifies Method 9 as the sole method for determining compliance, as automatically allowing for the use of COMS to establish violations even if a “credible evidence” rule has been adopted by the state, let alone do so in a state where no “credible evidence” rule exists. When eva luating a state’s conclusion that an alternative compliance procedure based on COMS is not less stringent than an existing Method 9

- enforced opacity limit, EPA must evaluate the Method 9

- enforced limit consistent with its inherent limitations and not as if it allowed use of COMS to establish violations. This is particularly true where the state itself interprets its SIP

- approved rules as imposing restrictions on the use of COMS data. EPA has no authority to override a state’s interpretation of its own SI P. See., e.g., Fla. Power & Light Co. v. Costle, 650 F.2d 579 (5 th Cir. 1981). When evaluated under the appropriate criteria, it is clear that Ohio’s alternative compliance procedure will provide equivalent or greater emission reductions than the existi ng SIP. Because Ohio has substituted a measure that is at least as stringent as the existing procedures, Ohio’s SIP revision request must be approved. Second , even if a state’s alternative opacity limit were not as stringent as its existing SIP

- approved r ule, modeling would only be required to support a SIP revision if the state relied upon the existing opacity rule in its demonstration of compliance with the particulate matter National Ambient Air Quality Standard (NAAQS). CAA § 110(l) is not an anti

- bac ksliding provision, but a requirement to assure that states continue to meet requirements for attainment and maintenance of the NAAQS, despite changes in its SIP. EPA has made clear in other contexts that modeling is not needed to satisfy § 110(l) when th e state did not rely on the measures being changed to show attainment of the applicable air quality standard in its existing SIP. See 70 Fed. Reg. 39413, 39421 (July 8, 2005). In short, EPA has no basis to require modeling to support a SIP revision to re move restrictions on how many excess emissions of opacity occur in an hour, and to provide an alternative percent of time compliance procedure inJohn M. Mooney, Chief

August 24, 2005 Page 6 its place, unless the state relied upon that restriction to comply with the particulate matter NAAQS. EPA sim ilarly has no authority to base its evaluation of a SIP revision on the existence of COMS as “credible evidence” of a violation of the opacity limit, unless the state relied upon the use of COMS data as “credible evidence” of a violation (as opposed to evi dence to trigger further action) in the existing SIP. In this case, there is no evidence that Ohio relied upon sources’ compliance with the one per hour restriction on excess emissions or the use of COMS as “credible evidence” under the existing SIP

- approv

ed opacity regulation to show attainment of the particular matter NAAQS. 5 Although EPA might prefer that states, like Ohio, adopt a more stringent opacity standard by retaining the one

- per hour restriction on excess emissions and imposing COMS as the comp liance method, EPA has no authority to compel that result. Congress’ intended that states retain flexibility in carrying out their responsibilities for pollution control. 70 Fed. Reg. at 39422. * * * * * In sum, EPA has no basis under CAA § 110(l) t o disapprove Ohio’s submittal for SIP approval of its alternative opacity compliance procedure. EPA should re

- examine the criteria upon which it based its review of this request, and other similar SIP revision requests, and propose approval. Approval of this request, and other similar SIP revision requests would benefit regulators, sources, and the public by providing for more direct use of COMS data to assure compliance without unlawfully altering the underlying particulate matter control requirement. Please contact me if you have any questions about these comments. Sincerely,
/ s /
Lauren E. Freeman Attachments

5 An d, as noted above, application of the CAM rule at 40 C.F.R. Part 64 to the sources eligible for the alternative opacity compliance procedure should be sufficient to ensure that the applicable particulate matter limits are enforced consistent with attainmen t of the NAAQS, without regard to the opacity standard itself.

## ATTACHMENT ABEFORE THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

) Request for Comments on Potentially ) Inadequate Monitoring in Clean Air Act ) Docket OAR
- 2003
- 0180 Applicable Requirements and on Methods ) To Approve Such Monitoring ) ) 70 Fed. Reg. 7905 ) )

COMMENTS OF THE UTILITY AIR REGULATORY GROUP

Counsel: Lauren Freeman HUNTON & WILLIAMS LLP 1900 K Street, N.W. Washington, D.C. 20006
- 1109 (202) 955
- 1500 lfreeman@hunton.com
Dated: June 17, 2005TABLE OF CON TENTS

I. EPA Was Correct To Exclude Post

- 1990 NSPS/NESHAPs From Its Notice

.................... 2 II. EPA Has Already Addressed Monitoring For Pre

- 1990 Stand ards Through The Compliance Assurance Monitoring (CAM) Rule and “Periodic Monitoring”

................... 4 III. Any New Monitoring Requirements Can Only Be Imposed Though Rulemaking

............ 7 A. The Importance Of Rulemaking On The Standard

................................ ...................... 9 1. The CAA And The Standard Setting Process

................................ ......................... 9 2. Use Of “Excess Emissions” Monitoring

................................ ............................... 15 3. Changing Compliance Monitoring Methods

................................ ........................ 18 B. Consideration Of Costs And Burde ns ................................ ................................ ........ 23 IV. PM CEMS Currently Are Not A Reasonable Option For Compliance Monitoring

......... 24 A. Available Data Do Not Support Use Of PM CEMS Technology

.............................. 25 B. PS 11 Will Not Ensure That PM CEMS Data Are Sufficient For Compliance Purposes

................................ ................................ ................................ ..................... 29 C. Application Of PM CEM S Would Require Review Of PM CEMS Data In Relation To The Applicable Standard And Evaluation Of The Costs Associated With PM CEMS

................................ ................................ ...................... 34 V. Additional Steps EPA Can Take To Improve Monitoring

................................ ................ 37 A. Improve Procedures for Streamlining

................................ ................................ ........ 37 B. Approve Revisions To Provide “Percent Of Time” And Other Exclusions For Sources Usin g Continuous Monitoring

................................ ................................ ...... 39 C. Exempt “Excess Emissions” And Control Device Monitoring Regimes From Application Of “Credible Evidence” Rules

................................ ............................... 41 VI. Comments On EPA’s “Categories Of Potential Monitoring Inadequacies”

..................... 43Comments of the Utility Air Regulatory Group (UARG) in Response to EPA’s

Request for Comment on “Potentially Inadequate Monitoring in Clean Air Act Applicable Requirements and on Methods to Improve Such Monitoring” These comments are filed on behalf of the Utility Air Regulatory Group (UARG) in response to EPA’s advance noti ce of proposed rulemaking (“ANPR”) with “Request for Comment on Potentially Inadequate Monitoring in Clean Air Act Applicable Requirements and on Methods to Improve Such Monitoring,” 70 Fed. Reg. 7905 (Feb. 16, 2005). 1 UARG is a voluntary, nonprofit assoc iation of electric generating companies and organizations and four national trade associations (the Edison Electric Institute, the American Public Power Association, the National Rural Electric Cooperative Association and the National Mining Association). UARG’s purpose is to participate on behalf of its members collectively in EPA rulemakings and other Clean Air Act (“CAA” or “the Act”) proceedings that affect the interests of electric generators and in litigation arising from those proceedings.
As EPA know, UARG supports EPA’s January 2004 final action (69 Fed. Reg. 3202) committing to address any improvements in monitoring that go beyond imposition of “periodic monitoring” or Compliance Assurance Monitoring (“CAM”) under Part 64 through notice and

comm ent rulemaking, rather than allowing permitting authorities to revise monitoring requirements case

- by

- case in permitting proceedings. UARG believes that position is the only one that is consistent with the CAA, and EPA’s previous commitment to use rulemak ing to make any needed improvements to Federal standards. See 57 Fed. Reg. 32250, 32278 (1992). 2 As

1 On April 15, 2005, EPA published notice that the comment period was extended to June 17, 2005. 70 Fed. Reg. 19914.

2 UARG’s interpretation of the statute and Part 70 regulations addressing Title V monitoring requirements is set out in the Joint Brief of Intervenors in Support of Respondent, in Environmental Integrity Project, et al., v. EPA , Case No. 04

- 1083 (and consolidated case No. 04

- 1243) (D.C. Cir. filed May 16, 2005).- 2

-

described below, rulemaking proceedings are necessary when making any significant change to emissions monitoring requirements in order to evaluate the co sts imposed and the effect on the achievability of the standard, and to ensure consistency between sources. UARG also applauds EPA’s decision to issue this ANPR and appreciates the opportunity to provide comments. Although EPA could have simply proceeded on its own, UARG believes that EPA’s actions will be better informed following its review of comments on the status of monitoring in various regulations, and the types of issues that will need to be examined in the course of any future rulemakings. UARG b elieves that EPA already has met its statutory duty under Title V and the “enhanced monitoring” provision of § 114 through promulgation of the “periodic monitoring” rule and the CAM rule. However, UARG also believes that there are steps that EPA and state s could take that would improve monitoring without imposing new costs or making existing standards unachievable. As described below, those steps include the streamlining of inconsistent and redundant monitoring requirements to make monitoring results

more consistent and understandable, creating percent of time and other exclusions for sources choosing to use continuous monitors to demonstrate compliance with “periodic” standards, and creating exclusions from the “credible evidence” rules to encourage use o f new technologies and better parameter monitoring methods as “indicator” or “excess emissions” monitoring.
I. EPA Was Correct To Exclude Post
- 1990 NSPS/NESHAPs From Its Notice EPA states that it is not seeking comments on or otherwise reopening New Source Performance Standards (“NSPS”) and National Emission Standards for Hazardous Air Pollutants (“NESHAP”) promulgated after 1990 because they were already required to meet the improved monitoring requirements of the 1990 Clean Air Act Amendments and are unli kely to contain inadequate monitoring. 70 Fed. Reg. at 7908. This has been EPA’s position since at least 1992. In the Preamble to Part 70, for example, although EPA agreed to conduct rulemakings for any- 7

-

III. Any New Monitoring Requirements Can Only Be Imposed Though Rulemaking EPA requests comment on what kinds of “programmatic or other changes” should be used to make improvements in inadequate monitoring. According to EPA, options include “conducting rulemaking to revise emis sion standards, issuing guidance or policy, or other approaches.” To the extent EPA identifies any inadequate monitoring, UARG believes that EPA has already articulated numerous policy reasons for proceeding by rulemaking. 69 Fed. Reg. 3202. Those reaso ns include reduction in burdens on sources and permitting authorities, consistency in monitoring requirements, broader public input, better consideration of economic impact and other burdens, and greater clarity for sources. Id. UARG agrees with those po licy

reasons. UARG also strongly believes, however, that new monitoring methods can only legally be imposed through rulemaking ( e.g., under CAA § 504(b)) and that new direct compliance monitoring methods can only legally be imposed using the same procedure that was used to establish the original compliance method. For example, EPA’s CAM Rule did not require rulemaking on each standard because it did not impose a direct compliance monitoring method that could impact the achievability of the standard. It di d, however, require rulemaking, which was important to assess the costs and burdens of the additional requirements and ensure consistency. Similarly, streamlining of emission monitoring methods does not require rulemaking because it is adopted at the sour ce’s option. On the other hand, specification of new direct compliance methods in Federal rules can only be accomplished in rulemaking conducted by EPA on the applicable standard, and new direct compliance methods in SIP rules can only be- 8

-

accomplished in rulemakings conducted by the state on the applicable standard. 3 While policy and guidance documents may have some use in providing technical information, like EPA has provided in parts of its CAM Technical Guidance Document, they cannot be used to establi sh substantive requirements. UARG believes that rulemaking on the standard is necessary in order to evaluate the impact of the new compliance method on the stringency or achievability of the existing standard, and to comply with CAA requirements. Such rulemakings may result in adjustments to the standard’s averaging time or level to account for previously unevaluated emissions variability. They also may require addition of exceptions to the standard for startup, shutdown or malfunction, or for other pe riods, since those periods may not have been evaluated when the standard was set. Rulemaking also is necessary in order to consistently address other issues, such as feasibility of the method, and any concerns about its accuracy and precision. Finally,

r ulemakings are necessary in order to comply with other regulatory review requirements intended to ensure that rules do not impose unreasonable costs or burdens on those affected by them. As for EPA’s request for comment on the type of revisions to monitori ng EPA should consider ( e.g., more frequent monitoring using existing monitoring methods or the collection of data that is more representative of control device operation or of the industrial process), UARG believes that

if monitoring is going to be change d, the best approach can only be determined in a rulemaking that considers the issues listed above and described below. 70 Fed. Reg. at 7909.

3 Although EPA’s “periodic monitoring” rule al lows permitting authorities to specify periodic monitoring in Title V permit proceedings, under UARG’s interpretation of that rule the permit authority is limited to specifying a reasonable frequency for performing the promulgated compliance method and tha t new methods ( e.g., use of a CAM

- like monitoring method) to satisfy the “periodic monitoring” requirement could only be required at the source’s option.- 9

-

A. The Importance Of Rulemaking On The Standard UARG anticipates that the primary focus of comments submitted in res ponse to this ANPR will be on standards that rely on “periodic” methods for demonstrating compliance ( e.g., periodic stack tests) and discussion of whether those standards should be revised to require use of “continuous” direct compliance methods. Some so urces using “periodic” compliance methods already are (or will be) required to collect other data, either under the CAM rule or under “excess emissions” monitoring requirements, that provide continuous data but that are not used as a direct measure of comp liance. Other sources are not required to collect other data ( e.g., source not subject to CAM or an NSPS). As a result, UARG anticipates that EPA will receive comments suggesting that all sources should collect continuous data and that those data should be used as a direct measure of compliance. Imposing a new “continuous” compliance method or converting CAM or “excess emissions” monitoring into a direct measure of compliance would be a significant revision to an emission standard that could only be acco mplished through a rulemaking on the standard. UARG (and others) discussed at length the importance of such rulemakings in their comments on the original “enhanced monitoring” proposal, 58 Fed. Reg. 54648 (1993), which EPA later abandoned in favor of CAM. Because the concepts addressed in those comments are relevant to the questions EPA has asked, UARG is including a discussion of them here.

1. The CAA And The Standard Setting Process Each CAA emission standard adopted by EPA (or a state) must satisfy e xpress statutory criteria that are separate and independent from the authority to require monitoring or testing. For example, each NSPS adopted by EPA under § 111 must be established at a level consistent with “best demonstrated technology” (“BDT”)

–a cr iterion that, by requiring consideration of a number of factors, ensures that the NSPS do not impose unreasonable costs. CAA § 111(a)(1).- 10

-

To ensure that revised NSPS are only applied to new sources, § 111 also provides that each NSPS can only be applied to sources that commence construction after the publication date of the proposed standard. Id. §§ 111(a)(2) and (b)(1)(B). NESHAPs, on the other hand, are governed by substantive criteria in § 112. Although NESHAPs are not limited to new sources, revisi ons to § 112 in 1990 established new criteria that must be satisfied whenever a pre

- 1990 NESHAP is revised. Id. § 112(q). Promulgation and revision of the NSPS and NESHAPs are also governed by the procedural requirements in § 307(d), including a requirem ent that EPA provide data to support the proposed standard. Id. § 307(d). Moreover, because they are part of federally uniform programs, only EPA (and not the states) has the authority to promulgate or revise the NSPS and pre

- 1990 NESHAPs. Id. §§ 111(b) (1)(B) and (c) (delegation to states limited to implementation and enforcement of existing requirements) and 112(b) and (d). State emission standards designed to ensure attainment and maintenance of national ambient air quality standards are similarly prom ulgated pursuant to state administrative procedures and incorporated into SIPs following approval by EPA. Id. §§ 110(a)(1) and (k). Many SIP standards are based, like the NSPS and NESHAPs, upon control technology identified by EPA, or a state, as satisfy ing certain statutory criteria. 4 By definition, "technology

- based" standards, like the NSPS, NESHAPs, and most SIP standards, must be established at levels that reflect the performance of, and are achievable with, the underlying emission control technolo gy. For example, if EPA identified a particular technology as BDT, the numerical NSPS based on that BDT will be valid only if it is reliably and consistently achievable with that BDT. In making a judgment of achievability, EPA must

4 Most pre

- 1990 NESHAPs are based on “best available control technology,” see Natural Resources Defens e Council v. EPA , 824 F.2d 1146, 1148, 1157 (D.C. Cir. 1987), and many SIP limits are based on technologies identified by EPA under the NSPS.- 11

-

either evaluate, or ma ke assumptions about, the variability in (1) the source’s emissions, (2) the performance of the installed control technology, and (3) the test method used to measure emissions. The importance of variability to standard

- setting, and the Agency’s long

- time practice for addressing variability in NSPS, are described in detail in a paper by Robert Ajax, a former Chief of the Emission Standards Development Branch in EPA’s Office of Air Quality Planning and Standards, who oversaw development of the NSPS. 5 As Aja x explains, over the years, EPA has developed two types of NSPS: (1) periodic
test

- based standards

-- where performance of the source and the proposed technology is determined based on projections from limited “snapshots” of emissions collected using short

term tests (hereinafter referred to as “periodic” standards); and (2) continuous monitoring

- based standards

-- where the performance of the source and the proposed technology is determined from continuous monitoring data collected during all operating con ditions (hereinafter referred to as “continuous” standards). The primary characteristic of “periodic” standards is the limited amount of data used in their development. Those data generally consist of between one and ten short

- term emission tests that w

ere typically done at steady

- state, full load conditions with control equipment that was nearly new or in optimum condition. 6 The result of this limited data collection is that the data supporting “periodic” standards (1) are not themselves sufficient to identify the actual short

and long

- term variability that would be seen if all emissions were measured over an extended

5 See Ajax, “The Effect of Compliance Test Frequency on the Stringency of Technology Based Standards” (Mar. 9, 199 5) (“Ajax Paper”). A former Director of the OAQPS Division that oversees the work of the ESD Branch agreed with the concepts outlined in the Ajax paper. See Farmer Letter (Mar. 13, 1995) (attached to the Ajax paper).

6 Ajax Paper 3. The actual length o f the test was usually determined by the time it took to conduct the EPA test method, which could be anywhere from 6 minutes (for an opacity test) to 3 hours (for an SO 2 stack test). Id.- 12

-

period of time, (2) are too limited to allow for meaningful statistical analyses to assess this variability, and (3) do not evaluate all operating conditions associated with the unit or its control technology. Ajax Paper 2

- 8, 10

- 11. In 1979, contemporaneous with the promulgation of the first “continuous” NSPS, the Subpart Da NSPS for utility boilers, EPA observed:

Almost all emission lim itations to date have not been based upon continuous monitoring data. The majority of existing stationary source emission limitations are based upon manual stack tests which in most cases represent the ability to control emissions under the best possible circumstances. This is true for both State regulations and emission limits established by EPA for new sources. A reevaluation of many emission limitations may result as a by

- product of implementation of the proposed program which would provide a means of measuring continual compliance. 7 In other words, most standards were “periodic” standards. In contrast to “periodic” standards, “continuous” standards are established based on long

term, continuous emissions data or continuous operating parameter data. Such data allow actual short

- and long

- term emissions variability to be evaluated and considered in setting the standard, and allow meaningful statistical analyses to assess the numerical level that can be achieved over a specific averaging time. Ajax Pa per 11

- 13. By this route, the Agency has been able, for “continuous” standards, to identify and specify averaging times of sufficient length (usually 30

- day rolling averages) to smooth out short

- term emissions variability (or create percent of time except ions if a shorter averaging time is imposed), and to choose a numerical standard level that

7 Pearson, “Development Plan for Implementation of Continuous Monito ring of Air Pollution Sources” 9 (Jan. 17, 1979).- 13

-

can be achieved continuously over the relevant period ( e.g., no more than one predicted exceedance in ten years) with the chosen technology. See Id. 11

- 14; 8
The c ompliance methods specified for numerical standards generally are the same as the methods used in establishing the standards. Thus, because short

- term stack tests were used to collect the data for “periodic” standards, the specified compliance method for such standards was the same periodic test performed under “representative” (but not all) operating conditions. See,
e.g., 40 C.F.R. § 60.46, Subpart D. Similarly, because continuous data were used to develop “continuous” standards, that method was specif ied for determining compliance with those standards. See, e.g., 40 C.F.R. § 60.48a, Subpart Da. The standard and compliance method were proposed as part of the same rulemaking to allow for public notice and comment on the effect that any difference betwe en the methodology used to set the standard and the methodology used to enforce the standard might have on the validity of the standard. Use of the same method ( i.e., the same test, performed at the same frequency, and under the same conditions) is often n ecessary to ensure achievability of standards. For example, in some cases, use of a different test method or procedure can lead to fundamental differences in results, due to differences in analytical method, data reduction, or measurement location. 9 Even if the same (or a comparable) method is used, testing under conditions different from, or conducted more frequently than, the testing considered in setting the standard can reveal operating variability that was unknown or ignored when the standard was set

.

8 See also 54 Fed. Reg. 34008, 34014, (1989); 50 Fed. Reg. 46464, 46465 (1985) (explaining that a 7

- day average, and not a 3

- hour average, was chosen for the FCCU NSPS to ensure that exceedances would not o ccur due to normal FCCU or control system variability).

9 See, e.g., 52 Fed. Reg. 9778, 9779, 9781 (1987) (acknowledging cases where in

- stack opacity readings with a COM and stack outlet readings with Method 9 may differ, and that most problems with COMs o perations result in positive biases that are detrimental to the source).- 14

-

The frequency of testing can significantly impact a standard, due to variability in emissions and testing. 10 For a “periodic” standard set at the 90 percent probability level, properly operated and maintained control technology would be expected to “fail ” a performance test only once every 10 years when tests are performed annually. See Ajax Paper 7

- 8. 11 That frequency would increase to an expected failure of 36 tests per year , if testing were performed on a daily basis. Id. 7

- 8. An exponentially great er number of failures would be expected if compliance were evaluated every three hours. The U.S. Court of Appeals for the D.C. Circuit recognized the integral relationship between numerical standards and compliance methods in Portland Cement Association v. Ruckleshaus , which involved a challenge to the NSPS for portland cement plants. After finding that the methods for sampling in the final rule were different from those used in the tests to establish the standards, this Court explained that “a significant difference between techniques used by the agency in arriving at standards, and requirements presently prescribed for determining compliance with standards, raises serious questions about the validity of the standard,” and remanded the rule to EPA for furt her action. 12 Courts have relied on this

10 See, e.g., 45 Fed. Reg. 44202 (1980) (amending the primary aluminum reduction plant NSPS to allow excursions above the standard level to account for emissions variability, in conjun ction with a new requirement to conduct monthly performance tests); see also Ajax Paper 7

- 8, 13

- 14 (explaining the relationship between the probability of exceedance and testing frequency in determining the achievability of a standard).

11 An expected fai

lure rate of one in 10 years (99.99 percent confidence level) is typically used by EPA in setting “continuous” standards. See, e.g., 43 Fed. Reg. 42154, 42159 (1978).

12 486 F.2d 375, 396 (D.C. Cir. 1973 ); see also Amoco Oil v. EPA, 501 F.2d 722, 743 (D.C . Cir. 1974); Essex Chemical Corp. v. Ruckelshaus , 486 F.2d 427, 436 (D.C. Cir. 1973.- 15

-

fundamental principle to reject attempts by EPA to use methods other than the specified test method to determine compliance, without undertaking rulemaking on the standard

. 13

2. Use Of “Excess Emissions” Monitoring The fundamental design principle underlying “technology

- based standards” is that any source that properly installs and operates the required technology will be in compliance with the standard. 14 To determine whether the reference technology is in place, source s conduct technology “performance tests” under “representative” (but not all) operating conditions, consistent with the “snapshot” data on which these standards were based. See, e.g., 40 C.F.R. § 60.8(c). Performance tests must be conducted after start

- u p and then periodically, but infrequently, thereafter. 15 To ensure that the technology continues to be properly operated and maintained, the NSPS and NESHAPs include a “general duty” to “maintain and operate any affected facility including associated air pollution control equipment in a manner consistent with good air pollution control practice for minimizing emissions.” See 40 C.F.R. §§ 60.11(d), § 61.12(c). Thus, even though compliance with the numerical element of “periodic” standards is evaluated thr ough short

- term tests conducted under limited operating conditions, the “general duty” requirement provides an independent and fully enforceable assurance that emissions will be

13 See Donner Hanna Coke Corp. v. Costle , 464 F. Supp. 1295, 1304 (W.D.N.Y. 1979); see also Appalachian Power Co. v. EPA, 208 F.3d 1015 (D.C. Cir. 2000).

14 See 38 Fed. R

eg. 28564, 28565 (1973) (explaining how the combination of performance testing and the “general duty” requirement ensure compliance with the NSPS); see also Goodwin, “NSPS Policy Regarding Excess Emissions During Start

- Up, Shutdown, Malfunction and Mainten ance” (Aug. 30, 1976) [hereinafter “Goodwin Letter”]. 15 40 C.F.R. §§ 60.8(a); see also Ajax 11 (discussing the role of frequency of testing in the NSPS standard

- setting process). The NESHAPs have similar testing requirements. 40 C.F.R. § 61.13(a) and (b)

.- 16

-

controlled between performance tests in a manner consistent with the performan ce obligation of the standard. 16 Some NSPS, NESHAPs, and SIP standards specify additional “indicator monitoring” requirements that are independent of the specified compliance testing method. Ajax Paper 10. In some cases, the additional monitoring requir ement was promulgated along with the original standard and compliance method. In other cases, it was added later. Where additional monitoring is required, the rule usually identifies a purpose for that data. For example, many NSPS and NESHAPs, and some SIP standards, require use of continuous monitors or continuous operating parameter monitoring (e.g., temperature measurements) and reporting of “excess emissions” based on such monitoring. 17 However, the rules make clear that these “excess emissions” dat a are not to be used to assess compliance with the numerical emission limitations, unless the individual standard specifically authorizes that

use. 18 EPA has consistently reiterated this position both in Federal Register publications, 19 and in EPA enforceme nt guidance. 20

16 The NSPS and NESHAPs provide that compliance with the “general duty” can be based on “ information available to the Administrator which may include, but is not limited to, monitoring results, opacity observations, review of operating and maintenance pr ocedures, and inspection of the source.” 40 C.F.R. §§ 60.11(d), 61.12(c) (emphasis added). Failure to identify a specific compliance method or procedure for the “general duty” requirement is reasonable, because that requirement does not depend upon a par ticular data set for its justification. 17 See, e.g., 40 C.F.R. §§ 60.45(g), 60.49a(h), 60,73(e), 60.105(e), 60.284(d). 18 See, e.g., 38 Fed. Reg. 10820 (1973) (explaining the intent of 40 C.F.R. §§ 60.11(a) and (d) and promising that if EPA in the future required that compliance be determined using CEMS, the Agency would revise the applicable standard to reflect the change). 19 See, e.g., 52 Fed. Reg. 36440 n.1 (1987) (“Emission data measured by [CEMS] can be either excess emission data or direct compliance information depending on how the use of the [CEMS] is defined in the applicable subpart. The applicable subpart must specify the [CEMS] as the compliance method for the emission data measured by the [CEMS] to be direct (continued...)- 17

-

In recognition of the fact that these “excess emissions” data were not the direct compliance method, EPA guidance described the appropriate uses for the data. For the NSPS and NESHAPs, the primary purpose of “indicator monitoring” is to as sess compliance with the “general duty” requirement. 21 Other uses of excess emissions data include:

(1) to screen a source’s compliance status (with both emission limitations and O&M requirement); (2) to select which sources should be inspected or compli ance (stack) tested; (3) to document the severity (e.g., duration, magnitude, and frequency) of a source’s excess emissions; and (4) to document that a compliance test was performed during “non

- representative” operating conditions. 22 EPA even issued guidanc e establishing recommended follow

- up actions based on these “excess emissions” data, 23 and in some cases added “percent of time” exceptions directly to the “excess emissions” provision in the standard. 24

(continued from prior page) compliance information.”). EPA rei terated this position in 1996. See 61 Fed. Reg. 47840, 47844 (1996).

20 See, e.g., Bennett, “Guidance Concerning EPA’s Use of Continuous Emission Monitoring Data” (Aug. 12, 1982) (making clear that CEMS would be used for compliance determinations only wh

en they have been promulgated or approved by the Agency as the official compliance method).

21 See, e.g., Enclosure to Goodwin Letter (explaining that data from CEMS required to be installed under the NSPS will be used by EPA to determine compliance with th e general duty requirement under § 60.11.(d)); Memorandum from DSSE, “NSPS Policy Regarding Excess Emissions During Malfunction” (July 25, 1977) .

22 Id.; see also Emison, “Transmittal of Reissued OAQPS CEMs Policy” (Mar. 31, 1988). 23 See, e.g., Seitz, “Tra nsmittal of SO 2 Continuous Compliance Strategy” (July 5, 1988); Pfaff Letter to State and Local Air Program Directors attaching Region IV CEM Enforcement Plan (May 5, 1989).

24 See, e.g., 40 C.F.R. § 60.285 (establishing allowable excess emissions periods f or purposes of determining compliance with the “general duty” under the NSPS for kraft pulp mills, Subpart BB).- 18

-

EPA’s CAM Rule is based on the same concept as “exce ss emissions” monitoring but adds an enforceable requirement for follow

- up investigation and corrective action by the source (without waiting for a request from EPA or the state agency) whenever a trigger level is exceeded. In this manner, the CAM rule en sures that the “general duty” is enforced and that required emission controls are continuously operated at the level necessary to comply with the standard. As discussed above, UARG believes that this monitoring under CAM is more than “adequate.” 3. Changing Compliance Monitoring Methods If EPA were to decide that a change in a compliance method was appropriate, the CAA and states’ laws would require that specific procedures be used. For example, under §§ 111 and 307(d), before EPA can revise a compliance met hod in an NSPS, EPA must develop a rulemaking record that compares the level of control required by the NSPS as revised with the level of control required by the BDT on which the standard was based. A revision to an existing NSPS that makes that NSPS more stringent is not authorized by § 111. Otherwise, sources that have already installed technology consistent with the original BDT determination might be required to abandon that technology or incur costs never contemplated when the NSPS was promulgated.
T his principle is best illustrated by a rule change that would convert a “periodic” test

based NSPS to a “continuous” monitoring

- based NSPS. Revising a standard based on snapshot data from a periodic stack test method, to a “continuous” standard that asses ses compliance during all operating conditions ( e.g., with CEMS or COMS data), requires that the Agency evaluate the variability of emissions that will be measured by the new continuous compliance method. As this Court observed in National Lime Ass'n v. E PA, in setting NSPS, “due consideration must be given to the possible impact on emissions of recognized variations in- 19

-

operations and some rationale offered for the achievability of the promulgated standard given the tests conducted and the relevant variabl es identified .” 627 F.2d 416, 434 (D.C. Cir. 1980) (emphasis added). As a result, to evaluate the impact on BDT of converting an existing “periodic” NSPS to a “continuous” NSPS enforced over the same short

- term period required to conduct a stack test ( e .g., a 3

- hour averaging time), EPA would have to (1) identify the BDT evaluated in the original rulemaking ( e.g., low sulfur coal, low NO x burners, precipitators, or scrubbers); (2) evaluate short

- term ( e.g., 3

- hour) data collected using the new compliance method ( e.g., CEMS) at units using these BDTs; and (3) perform a statistical analysis of emissions variability to demonstrate that affected units could still achieve the standard using the original BDT with a new compliance method that continuously measur es compliance on a short

- term basis ( e.g., over every 3 hour period). If this statistical analysis indicates that the original BDT could not achieve the standard on a short

- term continuous basis, § 111 would require EPA to modify the averaging time or inc rease the numerical limit to assure that the standard can be continuously achieved using the BDT, when enforced using the new continuous method. Prior rulemakings undertaken by EPA for utility and industrial boilers illustrate these points. EPA proposed NSPS for SO 2 and NO x emissions from such boilers in 1971 ( i.e., the Subpart D NSPS). 36 Fed. Reg. 24876 (1971). EPA based the 1971 Subpart D NSPS for SO 2 and NO x on a limited amount of data collected using EPA Test Method 6 and 7 (stack testing procedure s with a minimum sampling time of approximately 3 hours) and on 1971 technology. The variability of SO 2 and NO x emissions was unknown when these standards were adopted, because there were no continuous emission data collected over extended periods. Becau se Subpart D was established based on limited, periodic reference method test data, EPA made clear- 20

-

that compliance would be determined using the Method 6 and 7 reference method tests run periodically under “representative” conditions. 40 C.F.R. § 60.46; 4 8 Fed. Reg. 48960 (1983). In 1978, EPA proposed to revise this NSPS (for utility boilers only) based on continuous data and better control technology that had become available after 1971. 43 Fed. Reg. 42154 (1978). Because of the variability that those c ontinuous data disclosed, EPA recognized that even with improvements in technology since 1971, EPA could not require CEMS compliance with NO x or SO 2 limits in the same numerical range as the Subpart D limits using 3

- hour CEMS data. 25 As a result, EPA initi ally proposed a 24

- hour average continuous compliance standard for SO 2 and NO x (43 Fed. Reg. 42154) and then in 1979 adopted a 30

- day average in the final Subpart Da NSPS for SO 2 and NO x (which only applies to units constructed or modified after the Subpar t Da proposal). 44 Fed. Reg. 33580 (1979). This 30

- day average was largely based on CEMS data collected at units subject to the 1971 Subpart D standards, 26 thus underscoring the unachievability of a 3

- hour CEMS standard using the 1971 Subpart D BDT. 27
In 1 986

- 87 and 1990, EPA again revised the boiler NSPS, establishing Subpart Db and Dc NSPS for industrial and smaller utility boilers, which were similar to the Subpart Da SO 2 and
NO x NSPS. 28 EPA again analyzed continuous data and reached the same conclusions it had in

25 EPA’s 1978 proposal included limitations for SO 2 and NO x that were equivalent to the numerical limits in Subpart D as applied to units burning high sulfur coal (SO 2 ) and lignite coal (NO x ). 26 Although Methods 6 and 7 were the Subpart D compliance methods, Subpart D also required installation of CEMS and reporting of “excess emissions” on a 3

- hour average basis, in order to evaluate compliance with the independent “general duty” requirement under 40 C.F.R. § 60.11(d).

27 See Sierra Club v. EPA, 657 F.2d 298, 364 (D.C. Cir. 1981) (affirming EPA’s 1979 revisions to Subpart D establishing the new standard

-- Subpart Da

-- based on a prediction of t he capabilities of 1978 scrubber technology).

28 51 Fed. Reg. 42768 (1986); 52 Fed. Reg. 47826 (1987); 55 Fed. Reg. 37674 (1990).- 21

-

1978 regarding the numerical level of the standard and the need for a 30

- day average for these “continuous” NSPS to be achievable with then

- available BDT. 29 Any “improvements” in monitoring that would allow determinations of compliance using 3

- hour SO 2 and NO x CEMS data collected at Subpart D units, would convert the Subpart D SO 2 and NO x standards into 3

- hour “continuous” standards, thus requiring sources subject to the 1971 Subpart D NSPS to install technology was not even available when the l ater Subpart Da, Db, and Dc standards were developed, let alone when the 1971 standards became applicable. 30 This point was recognized by EPA in 1979, shortly before it promulgated the Subpart Da “continuous” NSPS, and is dramatically illustrated by a rule making EPA began in 1983 to change the compliance method for the 1971 Subpart D SO 2 standard from a “periodic” standard to a “continuous” standard. 48 Fed. Reg. 48960 (1983). Before issuing its proposal to revise the Subpart D NSPS compliance method in 1 983, EPA did an extensive analysis to determine whether use of SO 2 CEMS data, in lieu of periodic stack test data, to determine compliance was consistent with the Agency’s 1971 BDT determination. Based on that analysis, EPA’s proposal, consistent with its conclusions in the 1978 Subpart Da rulemaking, expressly rejected use of 3

- hour average SO 2 CEMS data (even though those data were most similar in length to the stack test data) in favor of a 30

- day rolling average of the SO 2 CEMS data. 31

29 49 Fed. Reg. 25102, 25137; 51 Fed. Reg. 22384, 22413 (1986); 54 Fed. Reg. 24792, 24804 (1989).

30 As a result of emission red uctions made under other programs, such as the Acid Rain Program, many Subpart D sources probably can comply with that more stringent standard as a practical matter even if they could not be required to under the NSPS. However, that is not true for all so urces or for other standards.

31 See 48 Fed. Reg. 48961 (1983) (“The proposed revision would make Subpart D consistent with the intent and anticipated effect at the time it was adopted and does not make it a (continued...)- 22

-

EPA’s proposal was based on its finding that use of the 3

- hour averaging period on a continuous basis would preclude use of the low

- sulfur coal upon which EPA had based the standard, and would be unachievable with SO 2 scrubbers installed to comply with the standards
at u nits using high

- sulfur coals. See 48 Fed. Reg. 48960

- 61 (1983). In short, EPA concluded a
3

- hour averaging time was not consistent with the Agency’s 1971 BDT determination that defined the compliance obligation of Subpart D sources, and thus would make t he numerical limit more stringent. EPA never completed the 1983 Subpart D rulemaking. Thus, the Subpart D NSPS is a “periodic” standard and the method specified in the subpart for determining compliance with that standard remains a stack test (and not a CEM). 40 C.F.R. §§ 60.46(b)(4) and (5). This detailed discussion of the boiler NSPS is but one illustration of the dramatic impact “improvements” in monitoring could have on all technology

- based standards, including the NSPS, NESHAPs, and SIP standards. UARG is confident that many other standards would show problems, particularly if the improvements transformed “periodic” based standards into “continuous” based standards. For example, EPA’s own statistical analysis of excess emissions data from EPA Regi

on V suggests that few sources could achieve the “periodic” NSPS for opacity if it were transformed into a “continuous” standard enforced using COMs rather than data from Method 9 tests (the compliance test method for most “periodic” test based opacity

(continued from prior page) more stringent regulation with which to comply... . [T]he proposal provides an averaging time [30

- day rolling] that is consistent with the capability of the control technology.”).- 23

-

sta ndards). 62 Fed. Reg. 8319. This is because even well operated sources experience “excess emissions” some small percentage of the time ( e.g., 1

- 2 percent per year). 32 In sum, without a proper evaluation by EPA or state, the impact of a change in the

mon itoring method on any particular standard cannot be known. Accordingly, in order to impose new monitoring methods (particularly those that convert “periodic standards” into “continuous standards”), EPA and states will have to conduct standard specific rul emakings to examine the impact or limit the use of the new method to the sole election of the source owner. 33
B. Consideration Of Costs And Burdens Rulemaking also is necessary to fulfill the requirements of Executive Order 12866 (for “significant” regulatory actions), the Paperwork Reduction Act, the Regulatory Flexibility Act, and other regulatory review requirements. Policy or guidance specifying requirements for state review and specification of new monitoring could result in imposition of significant cost s on sources and/or permitting authorities without complying with these important requirements. For example, because installation and certification of some direct monitoring technologies (like PM CEMS) could cost a single source hundreds of thousands of d ollars in a single year, an action that resulted in use of that technology could easily be deemed a “significant” action. Parameter

32 See Region 5 Opacity Excess Emissions Reports; 62 Fed. Reg. 8325. Notably, this percentage of time is also much greater th an that used by the Agency to define the achievability of NSPS ( e.g., no more than one predicted exceedance in ten years).

33 EPA took this approach when it EPA amended the Part 60 general provisions in 1985 to allow the use of COMs to evaluate compliance d uring “performance testing,” in lieu of the existing compliance method, EPA did not conduct standard specific rulemakings. Instead, EPA only authorized the use of COMs for compliance purposes at the option of the source owner . 52 Fed. Reg. 9778 (1987), a mending 40 C.F.R. § 60.11(e). Responding to commenters’ concerns about future use of the COMS data for determining compliance, EPA even clarified the rule to say that the owner could revoke the option at any time simply by notifying the Administrator. Id

. 9780. Unfortunately, EPA’s “credible evidence” rule has effectively eliminated the safeguards this provision was designed to provide.- 24

-

monitoring can also be expensive (in 1997, EPA estimated the total cost of implementing CAM would be $50 million a year). Even increasing the frequency of periodic stack testing can result in significant costs that may not be warranted for some units. Rulemaking, including compliance with any regulatory review requirements, is the only means by which the costs and benefits o f additional monitoring can be fully and consistently addressed. IV. PM CEMS Currently Are Not A Reasonable Option For Compliance Monitoring EPA asks whether opacity is an effective means of determining compliance with PM limits in pre

- 1990 applicable require ments or whether other approaches or technologies, such as PM CEMS, would be more cost

- effective and reliable. 70 Fed. Reg. at 7909. As UARG has previously commented, UARG does not believe that PM CEMS technology is sufficiently developed for use as a co mpliance method. The primary problem with the use of PM CEMS to determine compliance with PM emission limits is the limitations of the technology. Current PM CEMS technologies cannot measure PM concentration or mass directly, but instead provide only

an indirect measure by calibrating the monitor’s response to a short term EPA test method (such as EPA Method 5). Although there are other technologies, EPA has determined that only two of the “commercially available” technologies, the light scattering devic es and beta ray attenuation devices (called beta gauges), could meet the correlation criteria in EPA’s performance specification (discussed below), and are suitable for long term application. See Status of Particulate Matter Continuous Emission Monitoring Systems for Application to Electric Utility Steam Generating Units (Sept. 7, 2004), OAR

- 2005

- 0031

- 0057 (“Status Report on PM CEMS”)
at 1

- 6. In its recently Proposed Standards of Performance for Electric Steam Generating Units, which proposes revisions to 40 C.F.R. Part 60, Subparts Da, EPA asserted based on analysis of

“ available data, [that] there is no technical reason that PM CEMS cannot be installed and- 37

-

V. Additional Steps EPA Can Take To Improve Monitoring EPA asks whether there are other ca tegories of “potential monitoring inadequacies” in SIPs or Federal rules that EPA should address. 70 Fed. Reg. 7908

- 9. Although new compliance methods can only be imposed through rulemaking, UARG believes that there are other steps EPA and states can tak e (and have taken) to improve monitoring and EPA that should support those efforts. Among those efforts are streamlining of emission monitoring requirements, quick approval of SIP revisions intended to facilitate use of continuous monitoring, and exemptio ns from the “credible evidence” rules. A. Improve Procedures for Streamlining UARG has identified at least two circumstances under which emissions monitoring requirements being incorporated into Title V permits could be improved by streamlining. First,

ma ny sources seeking Title V permits are subject to multiple emission standards for a single pollutant, each of which specifies its own monitoring method. For example, many sources subject to SO 2 or NO x standards under an NSPS also are subject to SO 2 or N O x standards under SIP rules or preconstruction permits. In some cases, imposition of a more recent standard will result in source emissions that are significantly below an older standard, such that demonstrating compliance with one effectively ensures co mpliance with the other. For example, a PSD BACT limit for NO x for a combustion turbine may be significantly more stringent than the applicable NSPS limit under Subpart GG. Second, even if the emission standards themselves are such that individual compli ance determinations are necessary, those standards may have monitoring methods that are redundant and/or conflicting. For example, many states automatically specify use of Part 60 CEMS certification and QA/QC requirements for demonstrating compliance with
pre - construction emission limits (in addition to the NSPS standards to which they automatically apply), which are both redundant of and inconsistent with Part 75 CEMS requirements with- 38

-

which electric utilities must comply under the Acid Rain (and in some cases the NO x Budget Program). In 1996, EPA issued guidance on streamlining multiple applicable requirements in White Paper Number 2 for Improved Implementation of the Part 70 Operating Permits Program (March 5, 1996). Although that guidance was inten ded to address the two circumstances above by allowing the source at its option to subsume less stringent requirements into more stringent requirements (whether they be emission limits or monitoring requirements), the guidance was so complex and the analys is so time

- consuming that few sources were able to take advantage of it. In some cases, permitting authorities faced with complying with the guidance simply refused to consider streamlining because the source failed to request it in the initial permit app lication submittal. In other cases, the analysis was not done simply because it was too complex to complete. Thus many permits were issued without any streamlining. In the past, EPA regions have issued source specific applicability determinations when

re quested, but that process is time consuming and can lead to inconsistent results. EPA recently has taken, or proposed to take, regulatory action to address some of the conflicts between Part 60 and Part 75 CEMS requirement by authorizing use of Part 75 in lieu of Part 60. EPA has done this both in individual NSPS and in a recent proposal to revise Part 60. See, e.g., 70 Fed. Reg. 9706 (February 28, 2005). However, much more could be done. Although UARG agrees that such streamlining can only be impleme nted at the source’s option , UARG encourages EPA to facilitate streamlining by allowing states more latitude in making practical determinations regarding the relative stringency of emission limits and emission monitoring requirements (subject to the Part 7 0 public and EPA review process) and by taking a more proactive role in identifying regulatory solutions. Streamlining of duplicative and- 39

-

inconsistent requirements benefits all stakeholders by reducing burdens and clarifying compliance procedures.
B. Approv e Revisions To Provide “Percent Of Time” And Other Exclusions For Sources Using Continuous Monitoring As discussed above, most NSPS and many SIP limits established prior to 1980 (and almost all opacity standards) specify an EPA test method as the complianc e method ( e.g., Method 9 for opacity) but also require the reporting of “excess emissions” monitoring with a CEMS or continuous opacity monitoring system (“COMS”) to evaluate compliance with the “general duty” under § 60.11(d) and similar SIP rules. Over the years, EPA and states developed guidance for evaluating “excess emissions” reports and policies establishing “percent of unit operating time” triggers to determine whether follow

- up action should be taken. See, supra n.23; EPA “Handbook for the Revie w of Excess Emission Reports,” EPA

- 340/1

- 86

- 011 (May 1986). Most policies considered excess emissions less than 2 percent of operating time to be good performance and only required stack testing if excess emission exceeded 5 percent of operating time.
W hen EPA promulgated the “credible evidence” rules, EPA also cited opacity excess emissions of 2 percent at NSPS sources as evidence that the standards are achievable. EPA then suggested that any source that believes that a standard cannot be met “across s ome meaningful range of normal operating conditions,” or that exemptions beyond those already provided are proper ( e.g., beyond startup, shutdown, and malfunction for the NSPS), petition for amendment of the standard at issue or “propose more specific per mit conditions so that the matter can be fully assessed and addressed through the regulatory process.” 62 Fed. Reg. 8314, 8326. Although UARG is not aware of any source petitions, a number of states have attempted to improve monitoring by formally codif ying their 2 percent of time exemption for any source- 40

-

that chose to use its COMS as a compliance method rather than merely for “excess emissions” monitoring. Other states that did not have “startup, shutdown, and malfunction” exceptions to their opacity s

tandards, also have attempted to revise their SIPs to incorporate such exceptions. Although EPA has approved one state’s limited startup/shutdown exemption (Ohio), EPA has either not responded to or responded unfavorably to other state’s attempts to use t his mechanism to improve compliance monitoring consistent with the original standard. And, although EPA recently proposed to approve a “percent of time” SIP revision for North Carolina, EPA significantly limited the exception the state had originally adop ted even though it was well below the historical 2 percent of operating time exception for “excess emissions.” UARG believes that EPA is missing a significant opportunity to improve compliance monitoring for opacity by establishing unreasonable hurdles fo r states’ demonstrations to show that their proposed revisions are consistent with the requirements of CAA § 110. EPA should approve these SIP revisions without requiring overly burdensome demonstrations and should consider conducting rulemaking to provid e similar exclusions in Federal rules. At least two Courts have already found a two percent of operating time exception to be reasonable. See National Parks Conservation Ass’n v. TVA, 175 F.Supp.2d 1071 (E.D. Tenn. 2001) (upholding as reasonable the stat

e’s conversion of the standard from Method 9 to COMS with a 2 percent exception); Sierra Club v. TVA, Memorandum Opinion, Case No. 02

- CV

- 2279 (N.D. AL Sept. 24, 2004) (upholding the state’s interpretation of its regulation as including a 2 percent exceptio n).- 41

-

C. Exempt “Excess Emissions” And Control Device Monitoring Regimes From Application Of “Credible Evidence” Rules As discussed above, EPA has long distinguished between “excess emissions” monitoring and direct compliance monitoring. When EPA promulgate d its 1997 “credible evidence” rules in 40 C.F.R. §§ 60.11(g ) (NSPS), 61.12 (NESHAPS) and issued a SIP

- call to require similar state rules under 40 C.F.R. §§ 51.212 and 52.12, EPA eliminated that important distinction by allowing use of “excess emissions” data to establish violations of emission limitations in enforcement proceedings under certain circumstances. 38 UARG believes that EPA’s “credible evidence” rules created significant impediments to improvements in monitoring by creating huge disincentives for sources to gather and report information from methods other than the specified compliance method, to agree to “excess emissions” monitoring using new technologies (like PM CEMS), or to develop correlations of control device parameters to emission limit s where direct monitoring is not used. So

- called “credible evidence” rules also interfere with Title V compliance certifications by injecting a level of complexity to such determinations that results in inconsistency between sources and can make certifica tions difficult to interpret. Historically, EPA used “excess emissions” monitoring regimes under the NSPS as a means of taking advantage of continuous monitoring technology in those cases where it was not appropriate to employ them as a direct complianc e method. Examples include (1) use of SO 2 and NO x CEMS as “excess emissions” monitors under Subpart D, when those monitors were relatively new technology that had not been sufficiently demonstrated and no CEMS data was

38 Although UARG (and others) challenged the legality of the “credible evidence” rule, the U.S. Court of Appeals for the D.C. Circuit refused to rule on its legality, finding instead that the effect of the rule in any particular case was not yet clear and therefore the rul e itself was not “ripe” for review. See Clean Air Implementation Project v. EPA , 150 F.3d 1200 (D.C. Cir. 1998).- 42

-

available to set the standard, (2) u se of COMS as “excess emissions” monitors for opacity when the standard was established with only a few Method 9 tests during controlled particulate matter testing, and (3) use of water/steam

- to

- fuel ratios to report “excess emissions” for combustion turbi nes when the standard was set with stack test data and use of NO x CEMS was not considered cost

- effective or feasible. By eliminating the clear distinction between direct compliance methods and “excess emissions” monitoring in the “credible evidence” rule, EPA has effectively eliminated these uses of “excess emissions” monitoring in future rules (and created potential liability for sources subject to existing rules that still employ excess emissions monitoring regimes). See Comments of the Utility Air Regu latory Group on Proposed Standards of Performance for Stationary Combustion Turbines, Docket OAR

- 2004

- 0490

- 0195 at 28

- 32. In UARG’s view, since EPA promulgated the “credible evidence” rule, EPA’s options for using continuous data as a compliance tool are limited. EPA must either establish a “continuous standard” based on a thorough evaluation of continuous data with the proposed compliance method ( e.g., CEMS or COMS), or make clear in the applicable rule that continuous data cannot be used to establish v

iolations of the applicable emission limit ( i.e., that they cannot be used as “credible evidence”). Use of continuous parameter data (like those collected under the CAM rule) to directly enforce standards also should be prohibited not only because the sta ndard likely was set using “periodic” data, but also because there are insufficient data to show that a change in the parameter sufficient to be recorded as an “excess emission” is necessarily enough to demonstrate that the emission limit was not met.
As a result, UARG believes that elimination of the “credible evidence” rules in these types of applications would further the advancement of new monitoring technologies (which are not ready to be used as compliance monitors), allow EPA and states additional f lexibility in the- 43

-

standard setting process by allowing standards to be set without exhaustive collection of continuous emissions monitoring data, and create incentives for sources to develop better correlations between control device and other operating pa rameters and applicable emission limits. VI. Comments On EPA’s “Categories Of Potential Monitoring Inadequacies” To “focus analysis and comment,” EPA provided in its notice a list of what it called “categories of potential monitoring inadequacies.” 70 Fed. R eg. at 7908. UARG has the following comments on those categories.

• “No monitoring of any kind is required” or “Monitoring is specified for certain units, but no monitoring is required for other units.” As an initial matter, EPA’s description is misleading . UARG does not believe there are any Federal standards that do not specify a monitoring or measurement method or require testing when specified by the Administrator. And, although there may be SIP standards that do not, EPA’s own rules identify EPA’s re ference methods as the default for such SIP standards and allow EPA to require testing. As a result, this category is likely limited to those rules that would fall under EPA’s “periodic monitoring” rule because there is no frequency specified directly in the rule. UARG understands that EPA plans to solicit comment on the handling of “periodic monitoring” requirement later this summer. UARG also believes that there are cases where “no ongoing monitoring” is appropriate. For example, in some cases permit ting authorities will establish limits for pollutants solely for the purposes of performance testing upon startup to confirm the applicability or accuracy of some assumption regarding the level of emissions. In such cases, once testing confirms the
assump tion it may be appropriate not to require any further testing. In other cases, EPA has acknowledged (in its own standards and in Part 51, Appendix P) that ongoing monitoring is not

## ATTACHMENT B