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OAR Box 1796 

Prepped by Keeia Richards 

Document Number: 

43) IV-H-69 

Docket Number: 

A-90-37 

Printed 10/31/2008 4:20:37 PM Sheet 43 of 107 
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binding for a 10-year period the emissions levels used in 

projecting future actual emissions following the 

modification for all source categories; and (3) eliminated 

the demand growth exclusion for calculating a modified 

emissions unit's future actual emissions. 

Consistent with the 1996 NPRM, this alternative 

methodology would have applied to any existing emissions 

unit at a major stationary source for which you might plan a 

non-routine physical or operational change. The methodology 

would have required you first to determine which emissions 

units were being changed, or were affected by the change, 

then to calculate those units' baseline actual emissions 

based on the highest consecutive 12 months of source 

operation during the past 10 years, adjusted to reflect 

current emission factors. 

The second step involved the forecast of future 

emissions resulting from the physical or operational change. 

Under this calculation of future actual emissions, mTe would 

not have been allowed to exclude predicted capacity 

utilization increases that were due to demand growth. If 

the difference between the pre-change and post-change actual 

emissions equaled or exceeded the significant emissions rate 

defined for a particular pollutant, major NSR would have 

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Today's action amends the existing NSR regulations to 

provide you with a common applicability test for all 

existing emissions units —the "actuteri:—to projectedactual"actual-to-proiected-actual applicability test. This 

test has changed in some ways from both the 1996 NPRM and 

the 1998 NOA. As described in greater detail in sections 

II.C and II.D below, the key features of the methodology are 

as follows :' 

If you are an existing emissions unit (other than an • 

EUSGU), you will determine the pre-change (baseline) 

actual emissions by calculating an average annual 

emissions rate, in tons—perr—year tpy, using any 

consecutive 24—moiifchs2 4 months during the 10-year 

period immediately preceding the change. This rate 

must be adjusted downward to reflect any -1 eg.aJr^jyE/ 

enforceable emission limitations imposed after the 

selected baseline period. 

• We are codifying the "-2—ye ars—in—5-" 2-in-5-years" 

presumption for calculating the baseline actual 

emissions for EUSGUs. 

If you are an existing emissions unit (including 

EUSGUs), you will estimate post-change emissions 

(projected actual emissions), in tons per—ye-ar-tpy, to 

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reflect any increase in annual emissions that may 

result from the proposed change. You should exclude, 

in calculating any increase in emissions that results 

from the particular project, that portion of the unit's 

emissions following the project that an existing unit 

could have accommodated during the baseline period and 

that areis also unrelated to the particular project, 

including any increased utilization due to product 

demand growth. You must make the projection before you 

begin actual construction. When using this method, you 

must record the projection and certain other 

information in circumstances where there is a 

reasonable possibility that a change may result in a 

significant emissions increase. In addition, EUSGUs 

must send a copy of the projections and other 

information to theiryour reviewing authority before 

beginning actual construction. 

If, for a project at an existing emissions unit (other 

than an EUSGU) ..at a major stationary source, you elect 

to tr^e—the—actual—to—projected—actualoroiect your postchange emissions—te-s-t, we are also requiring you to 

maintain information on your—post—changethese 

emissions, for 5 years following a physical or 

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operational change, or in some cases for 10 years 

depending on the nature of the change. If your annual 

emissions exceed the baseline actual emissions by a 

significant amoun.t and also exceed your projection, you 

must report this information to your reviewing 

authority within 60 days after the end of the calendar 

• EUSGUs ^sing—tire—actual - to—proj acted—actual—emissions 

test laust—report—their If you project post-change 

emissions for EUSGUs, you must report these emissions 

to your reviewing authuritiesauthority within 60 days 

after the end of the calendar year without regard to 

whether such emissions exceed the baseline actual 

emissions or projected actual emissions— for a period 

of 5 year si Yolr review"£7Tq"~'aTitrroTri-fev~-ma)y reauy e you 

O y/ to reoort emissions for up vo-• 10" years fallowing? the 

change if it.-de'termines that Vhis period \is more 

• " 

rea?:^kej^&atrxvs or" normal source opgr-a-fe-i-Gai. 

Instead of projecting your post-change emissions, for 

all existing emissions units you may instead project 

post-change emissions on the basis of yottreach unit' s 

post-change potential—to switPTE. If you use this 

method, you need not trackrecord your projections or 

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retrack or report your post-change emissions. 

As discussed earlier, the current regulations provide 

that when your emissions unit, other than an electric 

utility—steam—generating—unit—(-EUSGU-)-, "has not begun normal 

operations," actual emissions equal the PTE of the unit. 

There ha-s-ve been considerable issues raised with this 

approach. For example, using potential—to emitPTE as a 

measure of post-change emissions automatically attributes 

all possible emissions increases to the change. There are 

many cases, however, where this simply is not true. 

Moreover, when the actual-to-potential test is applied^ it 

is automatically assumed that the emissions -unit has not 

begun normal operations after the change period. In many 

such cases, however, the changed unit as a practical matter 

will function essentially as it did before the change. We 

are, therefore, allowing all existing emissions units to use 

an actual-to-proj ected-actual eniissionsapplicabilitv test. 

__(__J 

Accordingly^, we are/eliminating the term "begun normal 

operations".from the determination of whether a change 

results in a significant emissions increase.17 

17 We do make use of the term "resumes regular operations" 

(as opposed to "normal operations") in the final rule- &j_ 

but that term has a very different meaning and we are using 

it for an entirely different purpose. Specifically, we are 

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For essentially the same reasons, while our 1992 rules 

did not authorize use of projections in evaluating whether 

replacement of an existing emissions unit (which we 

understood to require application of the NSPS 50 percent 

cost threshold) constitutes a major modification, upon 

reflection we have decided this exception to the 

availability of the "actual—to-projected-actual"actual-toproiected-actual applicability test is also unnecessary. In 

our 1980 rulemaking, we decided against differentiating 

between "reconstruction""reconstruction," even of entire 

sources^ and other modifications for the purposes of our PSD 

rules on the ground that^ as to existing sources that would 

not otherwise be subjected to PSD review as a major 

modification (i.e., such source would not cause a 

significant net emissions increase), in the PSD context, 

changes that had no emission consequences should not be 

viewed as modifications, regardless of their magnitude.18 

not using irtthe term for purposes of determining whether a 

change results in a significant emissions increase. Rather, 

we use it only to identify the date on which owner or 

operator must begin tracking emissions of changed units when 

using the "actual—to-projected-actual"actual-to-proi ectedactual methoil , 

18 The 1980 rulemaking also discussed that "reconstruction" 

would have only been applied on a plantwide basis and EPA 

believed that there would be few instances of plantwide 

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When you calculate the baseline actual emissions for an 

existing emissions unit (other than an EUSGU), you may 

select any consecutive 24 months of source operation within 

the past 10 years. Using the relevant source records for 

that 24-month period, including such information as the 

utilization rate of the equipment, fuels and raw materials 

used in the operation of the equipment., and applicable 

emission factors, -you must be able to calculate an average 

annual emissions rate, in tons per—yeartpy, for each 

pollutant emitted by the emissions unit that is modified, or 

is affected by the modification. 

The new requirements prohibit you from taking 

creditcounting as part of the baseline actual emissions -for 

any pollution levels that are not legally allowed under any 

leqaljry enforceable limitations and that apply at the time 

of the project. Therefore, you must identify the most 

current l^egfl^l-y enforceable limits on your emissions unit. 

If these -xL&^aririy enforceable emission limitations and 

operating restrictions are more stringent than those that 

applied during the 24-month period, you must adjust downward 

the average annual emissions rate that you calculated from 

the consecutive 24-month period to reflect these current 

restrictions. (See section II.C.5 of this preamble for 

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then you must select another consecutive 24-month period 

within the 10-year look back period for- which you have 

adequate data. 

5. For an existing unit (other than EUSGUs), when must I 

adjust my calculation of the pre-change baseline actual 

emissions? 

Today's amendments require you to adjust the average 

annual emissions rate derived from the selected 24-month 

period under certain circumstances. Specifically, you must 

adjust downward this average annual rate if any -lcgal3>y» 

enforceable emission limitations, including but not limited 

to any State or Federal requirements such as RACT, BACT, 

LAER, NSPS, and National Emission Standards for Hazardous 

Air Pollutants (NESHAPJ./ restrict the emissions unit's 

ability to emit a particular pollutant or to operate at 

levels that existed during the selected 24-month period from 

which you calculate the average annual emissions rate. For 

example, assume that during the selected consecutive 24-

month period you burned fuel oil and you were subjected to a 

sulfur limit of 2 percent sulfur (by weight). Today, you 

are only allowed to burn fuel oil with a sulfur content of 

0.5 percent or less. Consequently, you would be required to 

adjust your preliminary calculation of baseline actual 

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emissions for sulfur dioxide (SO,) (that is, substitute the 

lower sulfur limit into the emissions calculation^, yielding 

a 75 percent reduction in the emissions rate from the 

initial calculation) to reflect the current restriction 

allowing only 0.5 percent sulfur in fuel oil. The original 

average - annual utilization rate would not be adjusted unless 

a more stringent J^ejxaJr^y enforceable operational limitation 

has since been imposed that restricts that rate. 

You must also adjust for rfr&q-aTlv enforceable emission 

limitations you may have voluntarily agreed to, such as 

limits you may have taken in your permit for netting, 

emissions offsets, or the creation of Emissions—Reduction 

Credits—(-ERCs-)-. Also, you must adjust your emissions from 

the 24-month period if a raw material you used during the 

baseline period is now prohibited. For example, you may 

have used a paint with a high solvent concentration during a 

portion of the consecutive 24-month period. Today, you are 

prohibited from using that particular paint. You must then 

adjust your emissions rate to reflect the raw material 

restriction. 

6. How should I calculate the baseline actual emissions for 

emissions units (other than EUSGUs.) that use multiple fuels 

or raw materials? 

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For an emissions unit that is capable of burning more 

than one type of fuel, you must relate the current emission 

factors to the fuel or fuels that were actually used during 

the selected 24-month period. For example, when calculating 

the baseline actual emissions for an emissions unit that 

burned natural gas for a portion of the 24-month period and 

fuel oil for the remainder, you must retain that fuel 

apportionment (for example, natural gas to fuel oil ratio), 

but you must also use the current l-aq-aj^jry enforceable 

emission factors for natural gas and fuel oil, respectively, 

to calculate the baseline actual emissions. If, however, 

you are no longer allowed or able to use one of those fuel 

types, then you must make your calculations assuming use of 

the currently allowed fuel for the entire 24-month period. 

You must use the- same approach for emissions units that use 

multiple feedstock or raw materials, which may vary in use 

during the unit's ongoing production process. 

7. How should I calculate the baseline actual emissions for 

construction projects that involve multiple units? 

Today's new requirements require that you to select the 

same single consecutive 24-month period within the 10-year 

look back period to calculate the baseline actual emissions 

for all existing emissions units_ that will be changed. 

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today's revised rule? 

Today, we are amending the major NSR rules to enable 

you to use an applicability test that is similar to the 

applicability test that currently applies to EUSGU^ (that 

is, the actual-to-representative-actual-annual emissions^ 

test). The new test allows you to project the post-change 

emissions of all modified existing emissions units 

(including EUSGUs,) in the same manner. That is, under 

today's new provisions for non-routine physical or 

operational changes to existing emissions units, rather than 

basing a unit's post-change emissions on its PTE, you may 

project an annual rate, in tons per—yeartpy, that reflects 

the maximum annual emissions rate that will occur during any 

uyj<icLUrcJ3

f"^'t^'<V 

one of the 5 (or /TO) calendar—years immediately after the 

physical or operational change. -f-The first calendar year 

begins on the day the emissions unit resumes regular 

operation following the change and includes the 12-months12 

months, after this date.j— This projection of the unit's 

maximum annual emissions rate following the change is 

defined as the "projected actual emissions" (see, for 

example, §52 .21 (b) (48) ) , and will be based on your post- -/.//^ij 

change designNg^^^ma-xilm]im:--e^^e;c-tGd >4itiii action—ra-£e less any 

amount of emissions that could have been accommodated during 

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f\ *'i 

V>' ) 

the selected 24-month baseline period and is not fs—2L^^d t 

the change. Accordingly, you will calculate the unit's \_ $>y 

projected actual emissions as the product of: (1) the hourly j_o 'v' 

emissions rate, which is based on the emissions unit's s 

operational capabilities following the change (s), taking 

into account •h^a^L^venforceable restrictions that could 

rfio°f L 

affect the hourly emissions rate following the change(s); 

and (2) the projected level of utilization, which is based 

on both the emissions unit's historical annual utilization 

rate and available information regarding the emissions 

unit's likely post-change capacity utilization. In 

calculating the projected actual emissions, you should 

consider both the expected and the highest projections of 

the business activity that you expect could be achieved and 

that are consistent with information your company publishes 

for business-related purposes such as a stockholder 

prospectus, or.applications for business loans. When 

determining projected actual emissions before beginning 

actual construction, vou must project tho highest annual 

that the emissions units (including EUSGUs) that are 

being changed w^rl^achieve &fi-se4€ftey'~rocUH^""r^F^:maJ=^~" ' ~ — - ^ 

operation- From the initial calculation, you may then make 

the appropriate adjustment to subtract out any portion of 

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uni t t o los e it s Clean Unit status , the n no emission s 

increas e wil l occur. 

For new units , however, you must continu e t o calculat e 

post-chang e emission s on th e basis of a unit' s PTE. 

2 . Wil l my projectio n of projecte d actua l emission s become 

an enforceabl e emissio n limitatio n a s suggeste d i n th e 1998 

. NOA? 

No, we did not adopt such a requiremenfeU! \w i J O " 

—1.^13Ling emisTSlunj unite (infl)iH.nn ^y.p^nVitdf'^ Rather,—r£f 

you arehave an existing emissions unit other—than -a—EUGGU 

and your project results in an increase in annual emissions 

that exceeds the baseline actual emissions by a significant 

amount, and differs from your projection of post-change 

emissions that you were required to calculate and maintain 

records of, then you must report this increase to your 

reviewing authority within 60 days after the end of the 

calendar—year. Since modified EUSGUs are required to report 

annually their post-change annual emissions to the reviewing 

authority annually, any occurrence of-a significant increase 

will be covered under that report for the affected calendar 

year. See section II.D.6 of this preamble for a more 

detailed discussion of the reporting requirements. 

3. How do I determine how long my post-change emissions 

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will be tracked to ensure that my project is not a major 

modification? 

Generally, your projected actual emissions must be 

tracked against your facility's post-change emissions for 5 

years following completion of the changes whether you are an 

EUSGU or other type of existing emissions unit. We will 

presume that any increases that occur after 5 years are not 

associated with the physical or operational changes. 

However, you may be required to track emissions for a longer 

period of time under the following circumstances. If you 

are an existing emissions unit -f <n ^ h r. i- than PI^ v.n<kc*f\ and one 

of the effects of your physical or operational change(s) is 

to increase a unit's design capacity or PTE, you must track 

your emissions for a period of 10 years after the completion 

of the project. This extended period allows for the 

possibility that you could end up using the increased 

capacity more than you projected and such use might lead to 

significant emissions increases. 

4. What are the reporting and recordkeeping requirements 

for modification projects? 

Reporting and recordkeeping for a project is required 

when three criteria are met: 1) you elect to project postchange emissions rather than use PTE; 2) there is a 

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2-years—in—5—years2-in-5-years baseline method. 

Finally, today's rules provide the same method for 

EUSGUs that will exist for all other existing emissions 

units to project' post-change emissions following a physical 

or operational change to a unit. In the 1996 proposal, we 

proposed a range of options for addressing the applicability 

of changes that are made to existing emissions units, 

including the option of extending the " actual—to—future •• 

actual"actual-to-future-actual test, then available only to 

utilities, to all source categories. While we have decided 

to leave the WEPCO rules intact in most respects, we believe 

that it is reasonable and appropriate to establish a 

consistent method for sources to use for projecting the 

post-change emissions that will result from a physical or 

operational change to an existing emissions unit. 

Therefore, under today's new rules, the current method of 

basing the projection on the 2 years following the change to 

an EUSGU is being replaced with the method available to all 

other existing units, which—roquires you -fe<r project a unit's 

post-change emissions as the maximum annual rate that the 

unit will emit in any one of the 5 calendar years following 

the change. 

F. The "Hybrid" Applicability Test for Modif icati-en-r 

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Projects Theft AffectAffecting Multiple Types of Emissions 

Units 

1. When does the hybrid applicability test apply to you? 

The hybrid applicability test applies if you plan a 

modification project (or series of related projects) that 

will affect emissions units of two or more of the following 

types. 

Existing emissions units 

New emissions units 

• Clean Units 

2. How do I determine whether my project will result in a 

significant emissions increase under the hybrid test? 

For the first two types of emissions units listed above 

that are affected by the modification project, calculate the 

emissions increase as we' have discussed previously in this 

preamble. That is, use the actual-to-projected-actual 

emissionsapplicability test for existing units and the 

actual-to-potential test for new emissions units. 

Clean Units are discussed fully in section V of this 

preamble. If a given project can be constructed and 

operated at a Clean Unit without causing the emissions unit 

to lose its Clean Unit status, no emissions increase s&erlrir <>c 

be deem&d—to occur at that Clean Unit. If a given project 

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would cause the emissions unit to lose its Clean Unit 

status, then the increase in emissions should be calculated 

as if the emissions unit is not a Clean Unit. 

After you calculate the emissions increase for each 

unit f-haf will h° af f e-g^^d—bj—H*^ nv'-l-i-f i •• -•*-, -1 '-TI prnje^t; 

total the increases across all the emissions units of all 

types. If this total emissions increase equals or exceeds 

the level defined as significant for the regulated NSR 

pollutant in question, the project will result in a 

significant emissions increase for that pollutant. You'll 

find the regulatory language for determining whether a 

modification project will result in a significant emissions 

increase at ^5-3r§§ 51. 165 (a) (2) (vii) (D), 

#^51.166 (a) (7) (vi) (d) , and ^52-52.21 (a) (2) (vi) (d) . 

In section II.C.8 of this preamble, we indicate that 

the baseline actual emissions for all units that are not 

EUSGUs that are changed by a modification project must be 

calculated based on the same consecutive 24-month period 

within the previous 10 years. The same principle applies 

under the hybrid test, but it can be slightly more 

complicated if both EUSGUs and non-EUSGUs are involved. In 

this case, you must use the same baseline period for all 

emissions units affected by the modification project. This 

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