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OAR Box 1787 

Prepped by Ollie Stewart 

Document Number: 

20) ll-B-5 

Docket Number: 

A-90-37 

Printed 11/4/2008 10:22:19 AM Sheet 20 of 147 
,^osr. 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

RESEARCH TRIANGLE PARK. NC 27711 

A-<ti)-

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February 9, 1994 OFFICE OF 

AIR QUALITY PLANNING 

ANO STANDARDS 

NOTE 

TO: New Source Review (NSR) Reform Subcommittee 

Members and Participating Federal Officials 

As you are aware, at the January 1994 meeting of the NSR Reform 

Subcommittee, the group was informed that EPA was in the process of preparing 

a memorandum concerning the applicability of major NSR review to pollution 

control projects at existing sources. The intent of the memorandum is to 

provide interim guidance for permitting authorities on the approvability of 

these projects pending EPA's final action on a formal.regulatory exclusion. 

The New Source Review Section has prepared an initial staff draft memorandum 

on the issue. As the Agency more fully develops its final position on the 

issue, we would appreciate any comments or suggestions you have on the 

positions discussed in the draft. 

Please note that the attached draft document has not been reviewed by 

EPA management. It is a "staff working draft" and does not, nor is it 

intended to, represent official EPA policy on the.issues discussed therein. 

If you have any questions, please feel free to contact me at 

(919) 541-5375 or Dennis Crumpler of my staff at (919) 541-0871. I would 

appreciate receiving your comments (in writing) by March 4, 1994. 

Thank you again for your continued participation in, and support of, the 

NSR reform effort. 

Attachment 

cc: L. Wegman 

IJ/ ^^^cyyuV] 

David Solomon 

Chief 

^^Ne w Source Review Section 

< * % 

7 \ 
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February 8, 1994 <PCP.11> 

MEMORANDUM 

SUBJECT: Pollution Control Projects and New Source Review (NSR) 

Applicability 

FROM: John S. Seitz, Director 

Office of Air Quality Planning and Standards (MD-10) 

TO: Addressees 

This memorandum and attachment address issues involving the 

Environmental Protection Agency's (£PA's) new source review (NSR) 

rules and guidance concerning the applicability of major NSR 

review to pollution control projects at existing sources. The 

attachment provides a full discussion of the issues and this 

policy, including illustrative examples. 

For several years, EPA has had a policy of excluding certain 

pollution control projects from the NSR requirements of Parts C 

and D of Title I of the Clean Air Act on a case-by-case basis. 

In 1992, EPA adopted an explicit pollution control project 

exclusion for electric utility generating units [see 57 FR 32314 

(the "WEPCO rule" or the "WEPCO rulemaking")]. At the time, EPA 

indicated that it would, in a subsequent rulemaking, consider 

adopting a formal pollution control project exclusion for other 

source categories [see 57 FR 32332]. In the interim, EPA stated 

that individual pollution control projects involving source 

categories other than utilities could continue to be excluded 

from new source review by permitting authorities on a case-bycase basis [see 57 FR at 32320]. At this time, EPA expects to 

complete a rulemaking on extending the pollution control project 

exclusion by January 15, 1996. This memorandum and attachment 

provide interim guidance for permitting authorities on the 

approvability of these projects pending EPA's final action on a 

formal regulatory exclusion. 
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The attachment to this memorandum outlines in greater detail 

the type of projects that may qualify for an exclusion from NSR 

as a pollution control project, the safeguards that are to be 

applied, and the procedural steps that permitting authorities 

should follow in issuing an exclusion. Pollution control 

projects eligible for an exclusion include the installation of 

conventional or innovative emissions control equipment and 

projects undertaken to accommodate switching to an inherently 

less polluting fuel, such as natural gas. Under this guidance, 

States may also exclude as pollution control projects some 

material and process changes (e.g., the switch to a less 

polluting coating, solvent, or refrigerant) and some other types 

of pollution prevention projects. However, the replacement of an 

existing emissions unit with a newer or different one (albeit 

more efficient and less polluting) or the reconstruction of an 

existing emissions unit would not qualify as a pollution control 

project. 

It is EPA's experience that most bona fide pollution control 

projects are not subject to major NSR requirements for the simple 

reason that they result in a reduction in annual emissions at the 

source. In this way, most pollution control projects are outside 

major NSR coverage in accordance with the general rules for 

determining applicability of NSR to modifications at existing 

sources. However, some pollution control projects could result 

in significant potential or actual increases of some pollutants 

even though, on balance, they are environmentally beneficial. 

The EPA believes that such projects should be excluded from at 

least some of the NSR requirements that would otherwise apply. 

It is this subcategory of pollution control projects that can 

benefit from this guidance. However, in order to assure that air 

quality concerns with these types of projects are adequately 

addressed, there are two safeguards which should be followed by 

permitting authorities reviewing projects proposed for exclusion. 

First, the permitting authority must determine that the 

proposed pollution control project, after consideration of the 

reduction in the targeted pollutant and any collateral effects, 

will be environmentally beneficial. At a minimum, this 

"environmental beneficial" standard requires that the permitting 

authority ensure that any adverse collateral environmental 

impacts from the project are identified, minimized, and where 

appropriate mitigated. For example, the source or the State must 

secure offsetting reductions in the case of a project which will 

result in a significant increase in a nonattainment pollutant. 

Second, nothing in this guidance authorizes any emissions 

increase that would cause or contribute to a violation of a 

National Ambient Air Quality Standard (NAAQS), PSD increment or 

air quality related value (AQRV) in a Class I area. Therefore, 
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where a significant collateral increase in actual emissions is 

expected to result from a pollution control project, the 

permitting authority must also assess whether the increase could 

adversely affect any national ambient air quality standard, PSD 

increment or Class I AQRV. 

In addition to these substantive safeguards, EPA is also 

specifying two procedural safeguards which are to be followed. 

First, since this interim exclusion is only available on a caseby-case basis, sources seeking exclusion from major NSR 

requirements in accordance with this guidance must, prior to 

beginning construction, obtain a determination by the permitting 

authority that a proposed project qualifies as a pollution 

control project. Second, in considering that request, the 

permitting authority must afford the public an opportunity to 

review and comment on the source's application for this exclusion 

and the permitting authority's proposed disposition of the 

application. It is also important to note that any project 

excluded from major new source review as a pollution control 

project must still comply with all otherwise applicable 

requirements of the state Implementation Plan (SIP), including 

minor source permitting. 

This guidance document does not supersede existing Federal 

or State regulations or approved SIPs. The policies set out in 

this memorandum and attachment are intended solely as guidance 

during the interim period until EPA takes action to revise its 

NSR rules and do not represent final Agency action. This policy 

statement is not ripe for judicial review. Moreover, it is not 

intended, nor can it be relied upon, to create any rights 

enforceable by any party in litigation with the United States. 

Agency officials may decide to follow the guidance provided in 

this memorandum, or to act at variance with the guidance, based 

on an analysis of specific circumstances. The EPA also may 

change this guidance at any time without public notice. The EPA 

presently intends to address further the matters discussed in 

this document in a forthcoming NSR rulemaking regarding proposed 

changes to the program resulting form the NSR Reform process and 

will take comment on these matters as part of that rulemaking. 

As noted above, a full discussion of the types of projects 

eligible for an exclusion from NSR as a pollution control project 

as well as the safeguards such projects must meet to qualify for 

the exclusion are discussed in detail in the attachment to this 

memorandum. The Regional Offices should send this memorandum 

with the attachment to States within their jurisdiction. 

Questions concerning specific issues and cases should be directed 

to the appropriate EPA Regional Office. Regional Office staff 
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may contact Mr. David Solomon, Chief, New Source Review Section, 

at (919) 541-5375, if they have any questions. 

Attachment 

Addressees 

Director, Air, Pesticides and Toxics, Regions I, IV and VI 

Director, Air and Waste Management, Region II 

Director, Air, Radiation and Toxics Division, Region III 

Director, Air and Radiation Division, Region V 

Director, Air and Toxics Division, Regions VII, VIII, IX and X 

cc: Air Branch Chief, Regions I-X 

bcc: NSR Contacts 

L. Wegman 

K. Berry 

S. Hitte 

E. Lillis 

D. Solomon 

NSRS 

Section file 
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Attachment 

GUIDANCE ON EXCLUDING POLLUTION CONTROL PROJECTS FROM NEW SOURCE 

REVIEW (NSR) 

I. Purpose 

At this time, EPA expects to complete a rulemaking on an 

exclusion from major NSR for pollution control projects by 

January 15, 1996. In the interim, certain types of projects 

(involving source categories other than utilities) may qualify, 

on a case-by-case basis, for an exclusion from major NSR review 

as pollution control projects. Pending EPA's final action on a 

formal regulatory exclusion, this attachment provides interim 

guidance for permitting authorities on the types of projects that 

may be excluded on a case-by-case basis from NSR as pollution 

control projects, including the substantive and procedural 

safeguards which apply. 

II. Background 

The new source review (NSR) provisions of parts C 

[(Prevention of Significant Deterioration (PSD)] and Part D 

(Nonattainment Requirements) of title I of the Clean Air Act 

apply to both the construction of major new sources and the 

modification of existing major sources.1 The modification 

provisions of the NSR programs in parts C and D are based on the 

broad definition of modification in section 111(a)(4) of the CAA. 

That section contemplates a two-step test for determining whether 

activities at an existing facility constitute a modification 

subject to new source requirements. In the first step, the 

reviewing authority determines whether a physical or operational 

change will occur. In the second step, the question is whether 

1 The EPA's regulations for nonattainment areas are set 

forth at 40 CFR 51.165, 52.24 and in part 51, Appendix S. The 

current PSD program is set forth in two sets of regulations. One 

set of regulations (40 CFR 52.21) is part of the Federal PSD 

permit program which applies as part of a Federal implementation 

plan for States that have not submitted a PSD program meeting the 

regulatory requirements of 40 CFR 51.166 [standards for PSD 

provisions in State implementation plans (SIP)]. Roughly twothirds of the States are implementing their own PSD program 

pursuant to an EPA-approved SIP. In most of the remaining 

States, EPA has delegated the authority to implement the PSD 

program back to the individual States. Sections 52.21 and 51.166 

have identical modification provisions. 
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the physical or operational change will result in any increase in 

emissions of any pollutant. 

The definition of physical or operational change in section 

111(a)(4) could, standing alone, encompass the most mundane 

activities at an industrial facility (even the repair or 

replacement of a single leaky pipe, or a change in the way that 

pipe is utilized). However, EPA has recognized that Congress did 

not intend to make every activity at a source subject to new 

source requirements under parts C and D. As a result, EPA has by 

regulation limited the reach of the modification provisions of 

parts C and D to only major modifications. Under NSR, a "major 

modification" is generally a physical change or change in the 

method of operation of a major stationary source which would 

result in a significant net emissions increase in the emissions 

of any pollutant regulated under the Clean Air Act [see, e.g., 40 

CFR 52.21(b)(2)(i)]. A "net emissions increase" is defined as 

the increase in "actual emissions" from the particular physical 

or operational change together with any other contemporaneous 

increases or decreases in actual emissions. See 40 CFR 

52.21(b)(3)(i). In order to trigger major new source review, the 

net emissions increase must exceed specified "significance" 

levels. See 40 CFR 52.21(b)(2)(i) and 40 CFR 52.21(b)(23). EPA 

has also adopted common-sense exclusions* from the "physical or 

operational change" component of the definition of "major 

modification." For example, EPA's regulations contain exclusions 

for routine maintenance, repair, and replacement; for increases 

in the hours of operation or in the production rate; and for 

certain types of fuel switches [see, e.g., 40 CFR 

52.21(b)(2)(iii)]. 

In the 1992 "WEPCO" rulemaking (see 57 FR 32314), EPA 

amended its PSD and nonattainment regulations as they pertain to 

utilities by adding pollution control projects to the list of 

activities excluded from the definition of physical or 

operational changes. In taking that action, EPA stated it was 

largely formalizing an existing policy under which it had been 

excluding individual pollution control projects where it was 

found that the project "would be environmentally beneficial, 

taking into account ambient air quality." [57 FR at 32320; see 

also id., n. 15]. 

Because the WEPCO rulemaking was aimed at the utility 

industry which faced "massive industry-wide undertakings of 

pollution control projects" to comply with the acid rain 

provisions of the Clean Air Act (57 FR 32314), EPA limited the 

types of projects eligible for the exclusion to add-on controls 

and fuel switches at utilities. Thus, pollution control projects 

under the rule are defined as: 
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"any activity or project undertaken at an 

existing electric utility steam generating 

unit for purposes of reducing emissions from 

such unit. Such activities or projects are 

limited to: 

(i) The installation of conventional or 

innovative pollution control technology, 

including but not limited to[,] advanced flue 

gas desulfurization, sorbent injection for 

sulfur dioxide and nitrogen oxides controls 

and electrostatic precipitators; 

(ii) An activity or project to accommodate 

switching to a fuel which is less polluting 

than the fuel in use prior to the activity or 

project . . .." [40 CFR 51.165(a)(1)(xxv) 

(emphasis added)]. 

The exclusion also applies to permanent clean coal technology 

demonstration and repowering projects. Id. 

The EPA built two safeguards into the exclusion in the 

rulemaking. First, a project that meets* the definition of 

pollution control project will not qualify for the exclusion 

where the "reviewing authority determines that (the proposed 

project) renders the unit less environmentally beneficial . . .." 

[see, e.g., 51.165(a)(1)(v)(C)(8)]. In the WEPCO rule, EPA did 

not provide any specific definition of the environmentally 

beneficial standard, although it did indicate that the pollution 

control project provision "provides for a case-by-case assessment 

of the pollution control project's net emissions and overall 

impact on the environment" [57 FR 32321]. Also, this provision 

is buttressed by a second safeguard that requires permitting 

authorities to evaluate the air quality impacts of pollution 

control projects that could — through collateral emissions 

increases or changes in utilization patterns — adversely impact 

local air quality [see 57 FR 32322]. This provision generally 

requires sources to model emissions increases associated with a 

pollution control project. Id. More fundamentally, it 

explicitly states that no pollution control project under any 

circumstances can cause or contribute to violation of a NAAQS, 

PSD increment, or air quality related value in a Class I area. 

Id.2 

2 The WEPCO rulemaking mentions "visibility limitation" 

rather than "air quality related values." However, the statutory 

protections in section 165(d) plainly are intended to protect 
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As noted, the WEPCO rulemaking was explicitly limited to 

existing electric utility steam generating units [see, e.g., 40 

CFR 51.165(a)(l)(v)(C)(8) and 51.165(a)(1)(xx)]. The EPA 

indicated it would consider adopting a formal NSR pollution 

control project exclusion for other source categories as part of 

a separate NSR rulemaking. The rulemaking in question is now 

expected to be finalized by January 15, 1996. On the other hand, 

the WEPCO rulemaking also noted that EPA's existing policy was, 

and would continue to be, to allow permitting authorities to 

exclude pollution control projects in other source categories on 

a case-by-case basis. 

III. Case-By-Case Pollution Control Project Determinations 

The following sections describe the type of projects that 

may be considered by permitting authorities for exclusion as 

pollution control projects and two safeguards that permitting 

authorities should use in evaluating qualifying projects — the 

environmentally beneficial test and an air quality impact 

assessment requirement. To a large extent, these requirements 

are drawn from the WEPCO rulemaking. However, because the WEPCO 

rule was designed for a single source category, electric 

utilities, it cannot serve as a complete template for this 

guidance. Therefore, the following descriptions expand upon the 

WEPCO rule in the scope of qualifying projects and in the 

specific requirements inherent in the safeguards. These changes 

reflect the far more complicated task of identifying and 

facilitating pollution control projects at a variety of sources 

facing a myriad of Federal, State and local clean air 

requirements. 

A. Types of Projects Covered 

1. Add-On Controls and Fuel Switches 

In the WEPCO rulemaking, EPA found that both add-on 

emissions control projects and fuel switches to less polluting 

fuels could be considered to be pollution control projects. For 

the purposes of today's guidance, EPA agrees that these types of 

projects are appropriately included as candidates for a case-bycase exclusion. These types of projects include: 

against any "adverse impact on the air quality related values of 

such [Class I] lands (including visibility)." Because of this 

provision, EPA believes that the proper focus of any air quality 

assessment needed for a pollution control project should be on 

visibility and any other relevant air quality related values for 

any Class I areas that may be affected by the facility. 
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- the installation of conventional and advanced flue gas 

desulfurization and sorbent injection for sulfur dioxide 

(S02); 

- electrostatic precipitators, baghouses, high efficiency 

multiclones, and scrubbers for particulate; 

- flue gas recirculation, low-NO„ burners, selective noncatalytic reduction and selective catalytic reduction for 

N0X; and 

- regenerative thermal oxidizers, condensers, thermal 

incinerators and carbon adsorbers for VOC and toxic air 

pollutants. 

Projects undertaken to accommodate switching to an 

inherently less polluting fuel such as natural gas can also 

qualify as a pollution control project. Any activity that is 

necessary to accommodate switching to a inherently less polluting 

fuel is considered to be part of the pollution control project. 

In some instances, where the emissions unit's capability would 

otherwise be impaired as a result of the fuel switch, this may 

involve certain necessary changes to the pollution generating 

equipment (e.g., boiler) in order to maintain the normal 

operating capability of the unit at the time of the project. 

These types of accompanying changes*can be considered part of the 

pollution control project but only to the extent they are 

undertaken to maintain the currently used capacity of the unit at 

the time the fuel switch is implemented. 

2. Pollution Prevention Projects 

It is EPA's policy to promote pollution prevention 

approaches and to remove regulatory barriers to sources seeking 

to develop and implement pollution prevention solutions to the 

extent allowed under the Clean Air Act. For this reason, besides 

add-on controls and fuel switches to less polluting fuels, 

permitting authorities may apply this exclusion to switches to 

inherently less polluting raw materials or processes and other 

types of "pollution prevention" projects.3 For instance, many 

VOC users will be making switches to water-based or powder paint 

3. For purposes of this guidance, pollution prevention 

projects are projects that through process changes or product 

recovery improvements eliminate or reduce the formation of air 

contaminants and other pollutants, leading to inherently lower 

"smokestack" emissions [see Pollution Prevention Act of 1990 

section 6602(b) and section 6603(5)(A) and (B)] 
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application systems as a strategy for meeting reasonably 

available control technology (RACT) or switching to a non-toxic 

VOC to comply with maximum achievable control technology (MACT) 

requirements. 

Accordingly, under today's guidance, permitting authorities 

may consider excluding raw material substitutions, process 

changes and other pollution prevention strategies where the 

pollution control aspects of the project are clearly evident and 

will result in substantial emissions reductions per unit of 

output for one or more pollutants. In judging whether a project 

can be considered a pollution prevention project, permitting 

authorities may also consider whether a project is being 

undertaken to bring a source into compliance with a MACT, RACT or 

other Clean Air Act requirement. 

Although EPA is supportive of pollution control and 

prevention projects and strategies, special care must be taken in 

classifying projects as a pollution control project and in 

evaluating projects under a pollution control project exclusion. 

Virtually every modernization or upgrade project at an existing 

industrial facility which reduces inputs and lowers unit costs, 

has the concurrent effect of lowering emissions rate per unit of 

fuel, raw material or output. Nevertheless, it is clear that 

these major capital investments in industrial equipment are the 

very types of projects that Congress intended to address with the 

new source modification provisions. [see Wisconsin Electric 

Power Co. v. Reilly. 893 F.2d 901, (7th Cir. 1990) 

(rejecting contention that utility life extension project was not 

a physical or operational change); Puerto Rican Cement Co.. Inc. 

v. EPA; 889 F.2d 292, (1st Cir. 1989) (NSR applies to 

modernization project that decreases emissions per unit of 

output, but increases economic efficiency such that utilization 

may increase and result in net increase in actual emissions)]. 

Likewise, the replacement of an existing emissions unit with a 

newer or different one (albeit more efficient and less polluting) 

or the reconstruction of an existing emissions unit would not 

qualify as a pollution control project. Adopting a policy that 

automatically excludes from NSR any project that, while lowering 

operating costs or improving performance, coincidentally lowers a 

unit's emissions rate, would exclude almost all modifications to 

existing emissions units, including those that are likely to 

increase utilization and therefore result in overall higher 

levels of emissions. 

In order to limit this exclusion only to those subset of 

pollution prevention projects that will in fact lower annual 

emissions at a source, permitting authorities should not exclude 

as pollution control projects any pollution prevention project 
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that can reasonably be expected to increase the utilization of 

the affected emissions unit(s). For example projects which 

significantly increase capacity, decrease production costs, or 

improve product marketability can be expected to affect 

utilization patterns. With these changes, the environment may or 

may not see a reduction in overall source emissions; it all 

depends on the source's operations after the change which EPA 

does not believe can be predicted with any certainty.4 This is 

not to say that these types of projects are necessarily subject 

to federal new source review requirements, only that they should 

not be excluded as pollution control projects. 

B. Safeguards 

1. Environmentally Beneficial Test 

Even projects that meet the definition of a pollution 

control project outlined above may cause collateral emissions 

increases or have other adverse impacts. For instance, a large 

VOC incinerator, while substantially eliminating VOC emissions, 

may generate sizeable NOx emissions well in excess of 

significance levels. To protect against these sorts of problems, 

EPA in the WEPCO rule required an assessment of the overall 

environmental impact of the project and the specific impact, if 

any, on air quality. Again, EPA believes that this safeguard is 

appropriate here as well. 

In making a determination as to whether a project is 

environmentally beneficial, the permitting authority must 

consider the overall emissions before and after the project, as 

well as any other relevant environmental factors. While it is 

not possible to list all factors which should be considered in 

any particular case, several concerns can be noted. 

First, pollution control projects which result in increases 

in non-targeted pollutants should be reviewed to determine that 

the collateral increases have been minimized and will not result 

in environmental harm. This could mean, for instance, that a 

low-NOx burner project is subject to temperature and other 

appropriate combustion standards so that CO emissions are kept to 

a minimum. 

4 This is in marked contrast to the addition of pollution 

control equipment which typically does not, in EPA's experience, 

result in any increase in the source's utilization of the 

emission unit in question. In the few instances where this 

presumption is not true, the safeguards discussed in the next 

section should provide adequate environmental protections. 
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Second, nothing in this guidance countenances a pollution 

control project which causes or contributes to a NAAQS violation 

[see 57 FR 32322]. Thus, in the case of nonattainment areas, the 

State or the source must provide offsetting emissions reductions 

for any significant increase in a nonattainment pollutant from 

the pollution control project. In other words, if a significant 

collateral increase of a nonattainment pollutant resulting from a 

pollution control project is not offset (on at least a one-to-one 

basis) then the pollution control project would not qualify as 

environmentally beneficial. 

Finally, a project which would result in an unacceptable 

increased risk due to the release of air toxics should not be 

considered environmentally beneficial. 

2. Additional Air Quality Impacts Assessments 

(a) General 

Nothing in the Clean Air Act or EPA's implementing 

regulations would allow a permitting authority to approve a 

pollution control project which results in an emissions increase 

that will cause or contribute to a violation of a NAAQS, PSD 

increment, or adversely affect visibility or other air quality 

related value (AQRV) in a Class I area [see CAA 

sections 110(a)(2)(c), 165, 169A(b)*, 173]. This being the case, 

this guidance is not intended to allow any project to violate any 

of these air quality standards. 

As discussed above, it is possible that a pollution control 

project — either through increases in emissions rates of 

collateral pollutants or through changes in utilization — will 

cause an increase in actual emissions, which in turn could cause 

or contribute to the violation of a NAAQS, increment or air 

quality related value (AQRV). For this reason, the WEPCO rule 

required a source to analyze air quality impacts whenever 1) the 

proposed change would result in a significant net increase in 

actual emissions of any criteria pollutant over levels used for 

that source in the most recent air quality impact analysis and 2) 

the permitting authority has reason to believe that such an 

increase would cause or contribute to a violation of a NAAQS, 

increment or visibility limitation.5 If this analysis indicates 

5 Generally, unless the reviewing authority has 

specifically analyzed the air quality impacts of similar changes 

to the emissions profile of the source, the permitting authority 

should require a source to provide data on the air quality 

impacts of any pollution control project that will result in a 
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that the increase in emissions will cause or contribute to a 

violation of any ambient standard, PSD increment or AQRV, the 

pollution control exclusion does not apply. 

EPA believes that this safeguard should be applied here as 

well. Thus, where a pollution control project will result in a 

significant increase in emissions and that increased level has 

not been previously analyzed and raises the possibility of a 

NAAQS, increment or AQRV violation, the permitting authority 

should require the source to provide an air quality analysis 

sufficient to demonstrate the impact of the project. The EPA 

will not necessarily require that the increase be modeled (as is 

the case with a significant net emissions increase under the 

WEPCO rule), but the source must provide sufficient data to 

satisfy the permitting authority that the new levels of emissions 

will not cause a NAAQS or increment violation and will not 

adversely impact the AQRVs of nearby Class I areas. 

(b) Determination of Increase in Emissions 

The question of whether a proposed project will result in an 

emissions increase is both complicated and contentious. It is a 

question that is currently being debated by the New Source Review 

Reform Subcommittee of the Clean Air Act* Advisory Committee and 

is expected to be revisited by EPA in the same rulemaking that 

will consider adopting a pollution control project exclusion. 

Because of this, in the interim EPA is adopting a simplified 

approach to determining whether a pollution control project will 

result in increased emissions. 

The approach is premised on the fact that EPA does not 

expect the vast majority of these projects to change established 

utilization patterns at the source. As discussed in the previous 

section, it is EPA's experience that add-on controls do not 

impact utilization and pollution prevention projects that could 

have this affect may not be excluded as pollution prevention 

projects under this guidance. Therefore, in most cases it will 

be very easy to calculate the emissions after the change: it is 

the product of the new emissions rate times the existing 

utilization rate. In the case of a pollution control project 

that collaterally increases a non-targeted pollutant, the actual 

increase (calculated using the new emissions rate and current 

utilization pattern) would need to be analyzed to determine its 

air quality impact. 

significant emissions increase. 
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The permitting authority may presume that projects meeting 

the definition outlined in section 111(A)(1) will not change 

utilization patterns. However, the permitting authority is to 

reject this presumption where there is evidence that the project 

could result in debottlenecking, loadshifting to take advantage 

of the control equipment or cause other meaningful deviations 

from the past pattern of use of the emissions unit at issue. In 

those cases where the pollution control project is reasonably 

likely to lead to an increased utilization of the source, the 

permitting authority should require the source to provide for the 

record a creditable demonstration of the level of utilization 

that is projected to be maintained following the change. Where 

the project will increase utilization and emissions, the 

associated emissions increases are calculated based on a 

reasonable estimate of the source's actual operational level 

following the pollution control project. In such cases the 

permitting agency should consider the projected increase in 

emissions as collateral to the project and confirm that, 

notwithstanding the emissions increases, the project is still 

considered environmentally beneficial and meets all other 

applicable safeguards. 

III. Procedural Safeguards 

* 

Because this pollution control project exclusion must be 

granted on a case-by-case basis, the exclusion cannot be selfexecuting. Instead, sources must receive individual approval for 

projects from the permitting authority pursuant to a minor new 

source review permitting process, State non-applicability 

determination or similar process. (Nothing in this guidance 

should be seen as voiding any applicable minor source 

preconstruction review requirement in any SIP that has been 

approved pursuant to the requirements of section 110(a)(2)(C) and 

40 CFR 51.160-164.) This process should also require that the 

application for the exclusion and the permitting agency's 

proposed decision thereon, must be subject to public notice and 

the opportunity for public and EPA written comment. 

IV. Illustrative Examples 

The following examples illustrate some of the guiding 

principles and safeguards discussed above in reviewing proposed 

pollution control projects for an NSR exclusion. 

Example 1 

PROJECT DESCRIPTION: A chemical manufacturing facility in an 

attainment area for all pollutants is proposing to install a 

regenerative thermal oxidizer to reduce VOC emissions (including 
P.17 

11 

THIS DOCUMENT IS A PRELIMINARY STAFF WORKING DRAFT AND DOES NOT 

REPRESENT OFFICIAL EPA POLICY ON THE ISSUES DISCUSSED 

emissions of some hazardous pollutants) at the plant by about 

3000 tons per year. The emissions reductions from the RTO are 

currently voluntary, but may be necessary some time in the future 

for title III MACT compliance. Although the RTO has been 

designed to minimize NOx emissions, it will produce 200 tons per 

year of new NOx emissions. Aside from the NOx increase there are 

no other environmental impacts known to be associated with the 

project. 

EVALUATION: As a qualifying add-on control device, the 

project may be considered a pollution control project and may be 

considered for an exclusion. The permitting agency should verify 

that the NOx increase has been minimized to the extent 

practicable, 2) confirm (through modeling or other appropriate 

means) that the actual significant increase in NOx emissions will 

not violate the applicable National Ambient Air Quality 

Standard6, PSD increment, or adversely impact any air qualityrelated value and 3) apply all otherwise applicable SIP and 

requisite minor source permitting requirements, including 

opportunity for public notice and comment requirements. 

Example 2 

PROJECT DESCRIPTION: A source proposes to replace an 

existing coal fired boiler with a gas-fired turbine as part of a 

cogeneration project. The new turbine is an exact replacement 

for the energy needs supplied by the existing boiler and will 

emit less of all pollutants on an hourly basis than the boiler 

did. 

EVALUATION: The replacement of an existing emissions unit 

with a new unit (albeit more efficient and less polluting) does 

not qualify as a PCP. The company can, however, use any 

otherwise applicable netting credits from the removal of the 

existing boiler to net the new unit out of review. 

Example 3 

PROJECT DESCRIPTION: A source plans to physically renovate 

and upgrade an existing process line by making certain changes to 

the existing process, including emissions units. The resultant 

changes will increase the efficiency of the line and expand its 

ability to manufacture and market new or improved products. The 

6 If the source had been located in a area in which 

nonattainment review applied to NOx emissions increases, 200 tons 

of NOx offsets credits would be required to allow for an 

exclusion. 
P.18 

12 

THIS DOCUMENT IS A PRELIMINARY STAFF WORKING DRAFT AND DOES NOT 

REPRESENT OFFICIAL EPA POLICY ON THE ISSUES DISCUSSED 

renovated line will be less polluting on a per product basis than 

the original configuration. 

EVALUATION: The change is not a pollution control project. 

The resultant decrease in the per product emissions rate (or 

factor) is incidental to the project and not the primary 

objective. Rather it is a physical change or change in the method 

of operation for the purpose of increasing efficiency and 

productivity. 

Example 4 

PROJECT DESCRIPTION: In response to the phaseout of CFCs 

under title VI of the Clean Air Act, a source is proposing to 

substitute a less ozone-depleting substances (e.g. HCFC-141b) for 

one that has a greater ozone depleting potential (e.g., CFC-11). 

No other changes are proposed. 

EVALUATION: The project may be considered a pollution 

control project and may be considered for an exclusion. The 

permitting agency should verify that 1) emissions of HCFC-141b 

after the proposed switch will cause less stratospheric ozone 

depletion than current annual emissions of CFC-11, 2) the 

proposed switch will not change utilization patterns or increase 

emissions of any other pollutant which would impact a National 

Ambient Air Quality Standard, PSD increment, or air qualityrelated value and that the proposed switch will not cause any 

cross-media harm, including any unacceptable increased risk 

associated with toxic air pollutants and 3) apply all otherwise 

SIP and requisite minor source permitting requirements, including 

opportunity for public notice and comment requirements. 
P.19 

Industry 

1. Ernie Rosenberg 

2. Michael Barr 

3. Vivian Mclntire 

4. Leslie Ritts 

5. David Aldorfer 

6. Bill Pedersen 

7. Bill Lewis 

8. Andrea Bear Field 

Henr-| N,xM 

9. Mark Carney 

10. Pat Raher 

11. Jacqueline Bogart 

12. David McAvoy 

13. Barbara Bankoff 

14. Chuck Knauss 

15. Larry Feldcamp 

16. William Bumpers 

17. Richard Zbur 

Representing 

Occidental Petroleum / Chemical Manufacturers Assoc. 

Piilsbury, Madison & Sutro7 National Association of 

Manufacturers 

Eastman Chemical Co. 

Chadbornne & Parke / NEDA-CARP 

General Motors 

Perkins Coie / Council for Clean Air Implementation 

Morgan, Lewis & Bockius 

Hunton & Williams / Utility Air Regulatory Group 

Electric Generation Association 

Hogan & Hartson 

Intel 

Eli Lilly 

Siemens 

Swindler & Berlin / Pharmaceutical Manufacturers 

Assoc. 

Baker & Botts 

Howery & Simon 

Latham & Watkins 
P.20 

Environmental Oraanizations 

18. David Hawkins 

19. Chris Shaver 

20. David Carr 

State/local Aqencies 

21. Praveen Amar 

22. John Paul 

23. William Becker 

24. Bob Beasley 

25. Donald Thieler 

26. David Bradley 

27. John Ruscigno 

28. Tom Micai 

29. Ray Menebroker 

30. John Trout 

Federal Aqencies 

31. Rich Fisher 

32. Karen Malkin 

33. John Bunyak 

34. Robert Nordhaus 

35. Christopher Wolz 

ReDresentina 

Natural Resources Defense Council 

Environmental Defense Fund 

Southern Environmental Law Center 

Reoresentina 

Northeast States for Combined Air Use Management 

Montgomery Co., Ohio, Regional Air Pollution Control 

Agency (NSR Committee Chairperson for ALAPCO) 

STAPPA/ALAPCO 

Virginia Dept. of Air Pollution Control 

Wisconsin Dept. of Natural Resources 

Washington Dept. of Ecology 

Oregon Dept. of Environmental Quality 

New Jersey Dept. of Environmental Protection & 

Energy 

California Air Resources Board 

Jefferson County Air Pollution Control District, 

Kentucky 

ReDresentina 

USDA Forest Service 

National Park Service 

National Park Service 

Department of Energy 

Office of Management and Budget 

2 
P.21 

EPA 

36. Lydia Wegman 

37. Kent Berry 

38. Ed Lillis v39. David Solomon 

40. Bill Lamason 

4 1 . Larry Elmore 

42. Mike Sewell 

43. Dan deRoeck 

44. Dennis Crumpler 

45. Bruce Polkowsky 

46. Bob Blaszczak 

47. Clara Poffenberger 

48. Christoper Knopes 

49. Bill Tyndall 

50. Mark Kataoka 

51. Vickie Patton 

52. Lynn Hamjian 

53. Eileen Glen 

54. Marcia Spinks 

55. Bruce Miller 

56. Ron Van Mersbergen 

57. Dave Bray 

Representing 

Office of Air Qua 

Office of Air Qua 

Office of Air Qua 

Office of Air Qua 

Office of Air Qua 

Office of Air Qua 

Office of Air Qua 

Office of Air Qua 

Office of Air Qua 

Office of Air Qua 

Office of Air Qua 

Office of Air Qua 

ity Planning & Standards 

ity Planning & Standards 

ity Planning & Standards 

ity Planning & Standards 

ity Planning & Standards 

ity Planning & Standards 

ity Planning & Standards 

ity Planning & Standards 

ity Planning & Standards 

ity Planning & Standards 

ity Planning & Standards 

ity Planning & Standards 

Office of Policy, Planning, and Evaluation 

Office of Policy Analysis & Review 

Office of General Counsel 

Office of General Counsel 

Region I 

Region III 

Region III 

Region IV 

Region V 

Region X 
P.22 

New Source Review EPA Regional Office Contacts 

Region I 

Lynne Hamjian 

Cheryl Aloi 

Region II 

Frank Jon 

Ken Eng 

Region III 

Eileen Glen 

Cynthia Stahl 

Region IV 

Gregg Worley 

Scott Southwick 

Region V 

Ron Van Mersbergen 

Region VI 

Stanley Spruiell 

Region VII 

John Knodel 

Region VIII 

John Dale 

Vickie Stamper 

Region IX 

Matt Haberr 

Kelly Fortin 

Region X 

Dave Bray 

Ray Nye 
_. P.23 

01/23/84 13:15 ©919 541 5509 AQMD-PFB ©00 1 

W R PROGRAMS BRANCHES 

James Owens, Chief 

Air Planning & Implementation Branch 

EPA, Region I (APS 2310) 

J.F.K. Federal Building 

Boston, MA 02203-2211 

William S. Baker, Chief 

Air Programs Branch 

KPA, Region II (Room 1005) 

26 Federal Plaza 

New York, NY 10278 

Marcia Spink, Chief 

Air Programs Branch 

EPA, Region III (3AT10) 

841 Chestnut Building 

Philadelphia, PA 19107 

Doug E. Neeley, Chief 

Air Programs Branch 

EPA, Region IV 

345 Courtland Street, N.E. 

Atlanta, GA 30365 

Stephen H. Rothblatt, Chief 

Regulation Development Branch 

EPA, Region V (5AR-26) 

77 west Jackson Street 

chicagc, il 60604 

Gerald Pontenot, Chief, (APB) 

Air Programs Branch 

EPA, Region VI (6T-A) 

1445 Ress Avenue 

Dallas, TX 75202-2733 

Gale Wright, Chief 

Air Branch 

EPA, Region VII 

726 Hir.nesota Avenue 

Kansas City, Kansas 66101 

Douglas M. Skie, Chief, (APB) 

EPA, Region VIII (8AT-AP) 

999 18th Street 

Denver Place - Suite 500 

Denver, CO 80202-2405 

David Calkins, Chief 

Air Plsjining Branch 

EPA, Reigion IX (A-2) 

75 Hawthorne Street 

San Frziicisco, CA 94105 

Phil Mi 11am, Chief 

Air & fiadiation Bcrandh 

EPA, Region X (AT-092) 

1200 Sixth Avenue 

Seattle;, WA 98101