P. 1 

# OAR Box 

# 1802 Prepped by Charmelle Mathews



### Document

Number: 

# 65 ) IV-E-5 9 Docket Number: 

# A-90-3 7

Printed 11/4/200811:57:59 AM

Sheet 65 of 117P. 2

MEETIN G SUMMAR

Y EP A MEETIN G WITH ENVIRONMENTAL GROUPJ S NS RSECTOR-BASE

D APPROACH April 04, 2000 Th e meetin g wa s hel d vi aatelephon e conference . The meetin g bega n a t approximately 9:00 a man d close d a t approximatel

y 11:2 0 am . Attache di s alis t

o f attendees . Als o attache d ar e th e meetin g agend aan

d handout . Kare n Blanchar

d opened th e meeting b

y welcoming everyone . Sh e gav e abrie f

overvie w ofth e sector-base d approach an d solicite dcomment s fromth e environmenta l groups . Sh e the n introduce d Kath

y Kaufma n to presen

t th e details . INTRODUCTION Ms . Kaufma

n presente d th e concept

ofth e sector-base dapproach (firs t pag e ofth e meetin g handout

title d "New Sourc e Review Sector-BasedApproach") . Sh e explaine dtha

t th e sector-base d approach i s being designe da s avoluntar y progra mfo r utilitie s an

dwoul db e th e sam e or bette r tha n NS Rwhil e "catching " th e existin g coal-firedunits . Sh e furthe r explaine d tha t unde r thi s approach , th e new unit s wil l g o throug h NS Ran dBACT/LAE

Ranalysis , and th e existin g unit s wil l b e subject to BACT/LAE

Rdepending upon th e potential-to-potentia l test . The existin g unit s mus t

also , i n aggregate , mee

t acertai n target

emissio n level resultin g i n emissio n reduction s ove

r time . Thi s progra

mwil l cove

r NOx , S02 , C O andPM-10 . Also , only th e coal-fired unit s would b e covered . A questio n wa s raise d by a n environmenta

l grou p representativ e a s to wha

t th e incentiv e i s fo r asourc e t o joi n in . Ms . Kaufma n replie dtha

t th e incentiv e woul db e tha t th e sourc e woul d avoi d permittin g an

d hav e certainty . Th

e sourc e coul dmak

e an y change s without

triggerin g NS Ra s lon g a s ther

e i s onl y a n increas e i n actua

l emission s but

no increas e i n potentia

l emission s an

d a s lon g a s specific , lowe

r an dlowe r target level s ar e met ove r time . I t als o help s companie s in investmen

t planning . Davi d Hawkin s asked i f

th e facilit y took a n enforceable ca

p a t current baseline , i.e. , actual s cap , woul d i t

no t achiev e th e sam

e certaint y a s thi s approach , i.e. , the y coul dstil l mak e an y modification s unde

r th e cap . He explaine dtha

t unde r th e bas e program , source s coul d choos e actual s ca

p and operat

e wit h les s constraint

andles s expens e tha

n thi s approach . Mr . Hawkin s agreed wit

h th e requiremen

t to reduc e emissions , bu

t di dno t understan dwh

y a sourc e woul d choos e thi s sector-base dapproach ove r PALs . Ann aWoo dsai dtha t Joe l Bluestei n ha d indicate d tha

t utilitie s wil l likely no t

utiliz e PALs . Carol Holme s indicate dtha t th e utilitie s ha d no t expresse d an

y comment s thu s fa

r on th e sector-base dapproach . Gre g Foot e agree d wit

h Mr . Hawkins , i.e. , wh

y woul d asourc e choos e thi s approach which require s NS Ran dBAC T on ne w source s whe

n unde r a n actual s ca

p th e sourc e wouldno t

trigge r NS Ra s lon g a s th e ca

p i s no t exceeded . Ms . Kaufma

n sai d tha t EP A di dno t hav e an y specifi c example s o f

who woul d 

## IP. 3

utiliz e thi s approach . Mr . Hawkin s suggestedt o evaluat e who coul dbenefit

fromthi s approac h an d wha t tha t benefi t is . Catherin e Morri s sai d tha

t sh e wa s unde

r th e impressio n tha

t thi s approac h wil l replac e PALs , and aske d i f

it coul d b e configuredsuc

h tha t utilitie s ar e no t offere dPALs . Ms . Kaufma

n sai d tha t i t wa s no t intende d to replac e PALs , but indicate dtha

t utilitie s ha

dshow n lack

o f interes t fo r PALs . Mr . Hawkin s commentedtha t alikely reaso n fo

r PAL s to b e les s attractiv e t o utilitie s i s tha

t their unit s hav e "hug e chunks " of emission s an

dtherefor e they hav e les s abilit

y to "mi x and match. " NOx and S0 2 LEVEL S Ms . Kaufma

n presente d target

range s tha

t EP A wa s considerin g fo

r NO x andS02 , i.e. , 0.1-0.1 5 lb/MMBt

u fo r NO x and 0.25-0.6 0 Ib/MMBt u fo r S02 . Sh e indicate dtha

t th e level s woul d hav e to b e met

o n acompany-wid

e averag e basi s b y th e endofth e program . Mr . Hawkin s aske d fo

r clarificatio n o n whethe

r thes e level s woul db e converte dt o annua l tonnag e cap s an s a

t wha t operatin g rate . Ms . Kaufma n replie dtha

t the y wil l b e converte dt o tonnag e cap s usin g th e firs t yea r of progra ma s th e operatin g rate . Mr . Hawkin s aske dfo r furthe r clarificatio n o n whethe

r it woul d b e calculate dby multiplyin g th e operatin g hour s o r utilizatio n fo r yea r 200 0 (i f enterin g i n yea

r 2001 ) time s th e lb/MMBt

u rate . Ms . Kaufma

n concurred . Ms . Holme s sai d tha

t it woul d b e afloating average , i.e. , a t th e endofeac h yea

r th e sourc e wil l us e it s Bt u burnt and th e targe t

leve l fo r tha t year . An y exces s or

deficit coul db e sol do r

bought . Mr . Hawkin s aske d tha

t i f thi s i s afloating activit

y level , wil l ther

e b e aca p o n actua l capacity . Ms . Kaufma

n replie d tha

t EP A ha s no t though t abou t that . Regardin g S0 2 level , Mr . Hawkin s askedwha t wa s 0.6 0 lb/MMBt

u base don . Ms . Kaufma

n replie d tha

t 0.2 5 lb/MMBt

u wa s base do n BACT level andth e 0.6 0 lb/MMBt u wa s hal f of th e aci d rai n level . Whe

n askedb y Davi dWoole

y whethe r scrubber s ca

n do muc h bette

r tha n thes e levels , Ms . Kaufma n replie dye s but

explaine dtha

t th e level s woul dhav e t o b e met base d o n a n averag e acros s th e company . Mr . Hawkin s sai dtha t 0.6 0 lb/MMBt

u wa s to o lenient , an d tha t amor e reasonabl e company-wid e averag e i s neede dbecaus e there ar e companie s whos e averag e i s alread

y belo w 0.6 0 lb/MMBtu . Furthermore , 0.60 lb/MMBt u canno t b e justifie d t o mee t BACT/LAE

Rwhic h i s th e goa

l of NSR . Mr . Woole

y andMichael Fiorentin o agreed . Mr . Denne argue d tha

t i f th e leve l i s tie dt o BACT , n o on e wil l op t in . Mr . Hawkin s agree d tha t it would b e adisincentive , but th e threshol dquestio n need s to b e resolved . UARG' s PROPOSA L Ther e wa s abrie f

discussio n on th e UARG' s proposal . Mr . Hawkin s thought tha t it wa s a goo d ide at o set

date s and target s fo

r th e utilities , bu t

preferre dth e date s andtarget s bein g considere d b y EP

A becaus e they ar

e mor e environmentally beneficial . H e aske di f EP A ha d th e 

# 2 -P. 4

authorit y to adopt such aregulation . H

e suggestedtha

t EP A shoul das k

wha t tiie utilitie s thin

k abou t EPA' s authorit

y to adopt their (UARG's ) approach . Ms . Blanchar

d asked if anyone wa s intereste di n receivin g acopy ofth e UAR G proposal . Mr . Woole

y and Ms . Wood replie d yes . OUTPUT-BASE

D TARGET S Ms . Kaufina

n asked if th e level s shoul db e input

- o r output-based , an

di f output-based , how they shoul d b e measured . Mr . Hawkin s sai dtha t th e curren t datacollectio n system supporte d a

n input-base d targets . Fo

r output-base dtargets , ther

e currently ar

e n o reportin g requirements , but

in futur e ther e coul dbe , suc

h a s MW H productio n etc . He preferre da n output base d system . Ms . Morri s thought

tha t th e industr

y wouldprefe

r a n output-base dsystem , but acknowledged tha

t such asyste

mwoul drequir

e th e industr

y t o repor t thei r output information . Sh e wa s surprise d when Ms . Blanchar dindicate dtha

t utilitie s comment s wer

e tha t th e output information coul d no t

b e readily submitted . Mr . Hawkin s sai dtha t it coul db e becaus e of confidentialit

y reasons . TIMEFRAM

E Ms . Kaufina

n sai d tha t EP A wa s considerin g a10-yea r lengt h ofth e progra

mandtha t th e progra mwoul d begi n "right

away. " Mr . Hawkin s sai dtha t NRD C wa s currently supportin g a legislatio n t o requir

e industry-wide cap s by th e yea r 2005 . A tighte

r dat e woul db e adisincentiv e to op t in . Whe n aske d b y Ms . Kaufman , Mr . Hawkin s replie dtha t th e targe t level s fo r tha t ca p wer e i n th e orde

r of 0.1 5 lb/MMBt

u fo r NO x an d0.3 0 lb/MMBt

u fo r S02 . Whe

n askedb y Ms . Kaufma

n i f thos e target s wer

e achievabl e b y 2005 , Mr . Hawkin s replie dtha t 0.1 5 lb/MMBt

u wa s achievabl e fo

r NO x in 2 2 state s durin g summe r b y 2003 , an

dtha t i t coul db e extende d to all state s by 2005 . Ms . Kaufina

n aske d i f ashorte r timefram e tha n 1 0 year s wa s reasonabl e an dwhethe r ther e shoul d b e intermediat

e targets . Mr . Hawkin s advocate dintermediat e targets , andals o supporte d annua

l reduction , such a s arollin g 2-yea r average , rather

tha n astep reduction . Fo r

a shorte r period , sa y 5 years , ste

p reductio n woul dno t

b e aproblem , but

fo r 1 0 year s aste

p reductio n woul d prevent

th e environmen

t to see abenefi

t unti l th e endof

tha t intermediat

e period . Ms . Morri s definitel y supporte dintermediat

e target s unde

r a10-yea r timeframe , but would als o likely suppor

t it unde r a5-yea r program . Ms . Morri s aske d i f

ove r th e 5

- o r 10-yea r timefram e an y new regulation s woul d superced e thi s program . Ms . Blanchar dreplie dtha

t an y ne w regulation s miis t

b e met , i.e. , whateve r i s mos t stringen t woul d apply .P. 5

Mr . Denn e commented tha t thi s progra

mcoul dresult

i n cheape r electricity . UNIT S COVERED Ms . Kaufma

n sai d tha t EP A wa s considerin g limitin g thi s approach to coal-fire dunits . Sh e sai d tha t industr y wanted to includ

e oi l an dga s unit s a s well . A compellin g argumen t wa s tha t cleane r unit s woul d b e penalize d by no t allowin g themto op t

in . Sh e aske dho w th e progra mgoal s woul d b e me

t whil e allowing oi l andga s unit s to b e covered . Mr . Hawkin s commented tha t allowin g oi l an

dga s unit s woul dcreat

e awindfall of

credi t producers , and tha

t separat e target level s wouldb e neede dfo

r such units , i.e. , separat

e BACT/LAE

Rlevels . Meliss aMcCullough sai dtha t anothe r alternativ e wa s to giv e eac h compan y aseparat

e target level based upon thei r

units , i.e. , atarget

fo r eac h fue l woul db e use d to calculat e th e company-wid

e averag e target

dependin g upo n th e percentag e o f coal , oi l and ga s unit s th e compan

y ha d a t th e star t ofth e program . Mr . Hawkin s asked ho w th e sellin g of unit s woul daffec

t th e program . Ms . Kaufma n sai d tha t EP A wa s stil l evaluatin g that . Ms . Holme s sai dtha t afacilit y woul dstil l hav e t o participate i n th e progra

meven i f it i s sol d to anothe

r compan y tha t ma y o r ma y no t b e i n th e program . Th e new owne r woul d no t

hav e to brin g i n it s othe

r facilities , but

woul dhav e t o kee

p thi s facilit

y i n th e program . Ms . Wood sai d tha t anothe r ide awa s tha

t auni t shoul db e allowe dt o b e sol di f i t ha d BACT/LAER , or

maintai n it

in th e progra

ma t th e level a

t whic h i t lef t andcompensat

e fo r i t wit h th e othe r unit s remainin g i n th e program . Ms . Kaufma

n sough t comment s o n when differen t owner s ar

e represente da

t th e sam e facility . Mr . Hawkin s asked ho w acompan y tha t opt s i n all of

it s units , woul dop t

i n auni t i n which i t only ha d 30 % ownership , saying tha t thi s need s to b e discussed . In a n output-base d system , i.e. , lb/MWH , ther

e coul d b e a

n allocatio n fo

r th e company , but

unde r tonnage-base d systemi t woul d b e har

d t o determine . Whe

n aske dby Ms . Woodwh

y th e tw o wer

e differen t fo r allocation , h e sai d tha

t he wa s no t

sure , but tha t it ma y b e du e to th e leakag e concern . Ms . Blanchar

d aske d th e participant s to provide thei r writte n comment s withi n tw o weeks . OPTIN G IN INDIVIDUA L UNIT S Mr . Hawkin s aske d if

acompan y coul dop t

i n plant-by-plant

indicatin g tha

t companie s woul d lik e tha t flexibility. Ms . Kaufina

n replie dtha

t i t wa s a n open issu e andEP

A wa s seekin g commen t o n it . Ms . Wood sai d tha

t utilitie s wante dunit-by-uni t op t in . Mr . Hawkin s sai dtha

t "cherry-picking " woul d b e problembecaus e it woul dallo w strategi c participatio n t o allo w shifting emission s fromone uni t to another . Ms . Woo daske di f there wa s apossibilit

y tha t a compan y woul d hav e to op t

i n a"bad " uni t

i f a"good " on e wa s opte din . Mr . Hawkin s replie d tha t i t woul d b e complicated , but ther e i s anee dt o evaluat

e option s t o addres s thi s potentia l 

# HP. 6

proble mwithou t

givin g u p environmenta l integrity . A n EP A representative sai d tha t ther e wer e als o concern s abou t

ho w t o defin e acompan y for purpose s o f

thi s program . Ms . Morri s sai d tha t i f th e targe t level s ar e les s stringen t

tha n BACT , the n th e whol e compan y shoul d b e require d t o op t in . Ms . Kaufina n sai d tha t currentl y th e approac h i s designe d for company-wid e opt

in . Ms . Kaufina n sai d tha t

EPA' s curren t

thinkin g wa s t o no t

allo w individua l unit s t o op t in . Ms . Morri s initiall y agree d tha t ther e woul d b e n o way t o work asyste mi f

individua l unit s wer e allowe d t o opt

in . Bu t sh e als o inquire da s t o whethe r auni t coul d b e allowe d t o opt

i n bu t woul d hav e t o surrende r

al l thei r allowances , i.e. , i t

woul d not

b e allowe d t o trade . Sh e explaine d tha t th e benefi t

fo r th e uni t woul d b e tha t

somewha t

les s tha n BAC T leve l contro l coul d b e installe d t o mee t th e targe t

(assumin g tha t

th e targe t i s les s tha n BACT) . Mr . Hawkin s sai d tha t i t woul d becom e complicate d i f

ther e wer e lot s o f

options . H e sai d tha t

th e progra mneed s som e basi c principles , an d acknowledge d tha t i t canno t solv e everyone' s problems . Th e EP A shoul d no t attemp t t o solv e th e proble mo f

individua l unit s optin g in . Simplicity "trumps " flexibility . TRADIN G Ti mDenn e aske d i f

th e compan y woul d b e allowe d t o trad e outsid e th e compan y fo r aci d rain . Mr . Hawkin s aske d wha t woul d b e th e ne t

environmenta l benefi t

i f th e differenc e betwee n th e targe t leve l unde r

thi s approac h an dth e aci d rai n progra mcoul d b e sol d t o anothe r compan y tha t ha s no t opte d in . Ms . Blanchar d agree d tha t ther e need s t o b e asafeguar d agains t tha t occurring . Ther e wa s abrie f discussio n o n whethe r

th e emissio n reduction s woul d b e surpluse s for nettin g a s the y ar e fo r

offsets . Whe n indicate d b y Ms . Kaufina n tha t th e progra ma s currentl y designe d di d no t hav e tonnag e limits , Mr . Hawkin s aske d ho w th e target s woul d b e measure d an d wha t woul d asourc e bank . Ms . Kaufina n replied tha t EP A was stil l considerin g whethe r bankin g woul d b e allowed , but tradin g etc . woul d b e don e o n a n annua l basi s b y multiplyin g th e activit y leve l b y th e targe t level . Ms . Kaufma n aske d i f i t woul d b e reasonabl e t o allo w tradin g wit h acompan y no t i n th e program . Mr . Hawkin s sai d tha t regardles s o f

whethe r tradin g i s wit h th e sam e o r differen t owner , i t mus t tak e int o accoun t

loca l ai r qualit y issues , e.g. , increments , FL M provision s etc . H e woul d lik e t o se e thos e safeguard s whe n tradin g fromplan t t o plant . Ms . Kaufina n pointe d ou t tha t unde r thi s progra mpotential increase s ar e not allowed , bu t

actua l emissio n increase s woul d requir e modeling . Sh e sai d tha t th e industr y ha d complaine d abou t thi s provisio n an d asked fo r comment s fromth e participants . Mr . Hawkin s aske d woul d th e modification s an d significan t

emissio n increase s not

b e "caught " unde r

bas e NSR , an d sai d tha t

th e sam e shoul d appl y unde r

thi s program , i.e. , significan t emissio n increase s shoul d no t b e allowe d withou t

an ai r qualit y review . Ms . Kaufman sai d tha t EP A was tryin g t o determin e ho w man y source s woul d b e "caught " unde r bas e NS Rversu s thi s program . Sh e agree d tha t eve n thoug h alo t

o f ne w source s hav e neve r

modele d an d bas e NS Rwoul d not "catch " som e o f

thes e sources , thi s progra mneed s t o hav e loca l ai r quality safeguards .P. 7

Ms . Kaufma

n aske d i f tradin g o r averagin g i s allowe dfo

r PM-10 , ho w complianc e woul d b e ensured . When asked b y Mr . Hawkin s whethe r PM-1 0 wa s bein g single dout becaus e o f

loca l air qualit y concerns , Ms . Kaufina

n replie dyes . Mr . Hawkin s sai dtha t loca l air qualit y wa s als o a concer n fo r NO x and S02 . H e sai d tha t ther e ma y b e mor e scenario s fo

r PM-10 , but

emissio n increase s fo

r an y pollutant

rais e ai r qualit y concerns . He aske di f

EP A wa s talkin g about

havin g amechanis mfo

r establishin g regulation s fo r PM-10 , such a s th e SI

P cal l fo r NOx . Ms . Morri s aske d i f tradin g coul d b e disallowe d fo r PM-1 0 an dCO . Ms . Kaufma

n replie dtha

t i t wa s stil l a

n optio n bein g considered . SHUTDOWN S an d FUE L SWITCHE S Ms . Kaufma

n aske d whethe

r ther e shoul db e an

y credit fo r shutdowns . EP

A i s currentl y thinkin g o f

assignin g th e targe t

rate , an dno t zero , a s th e level to th e shutdow n unit . Mr . Hawkin s sai d tha

t ashutdow n uni t

i s alway s replace dsomewher e els e in th e utilit

y sector whethe r i n th e sam

e compan y or elsewhere . Therefore , allowin g credit fo r shutdown s woul d shif t emission s t o anothe

r plac e and result

i n leakage . Ther

e i s aprecedent

fo r i t i n th e aci drai n program . He supporte d th e assignmen t ofth e company-wid

e averag e t o th e shutdow n unit . Ms . Morri s asked i f

EP A wa s thinkin g abou

t providin g incentive s to allo w mor e shutdown s o

r whethe r it wa s afairnes s issue . Ms . Kaufma n sai dtha t EP A wa s no t thinkin g o f incentives . Ms . Morri s aske d i f areplacemen

t woul db e handle ddifferentl y from astraight shutdown . Ms . Kaufma

n wa s no t sure . Ms . Blanchar

daske dfo r suggestions . Ms . Morri s sai d tha t sh e neede d to thin

k about it more , but woul dlik e to see incentive s t o shutdow n mor e and mor e units . Sh

e di d no t suppor t allowin g th e sourc e to trad e emission s fromshutdowns . Ms . Kaufina

n asked whethe

r fue l switche s fromcoa

l t o ga s t o b e treate dth e sam e a s shutdown , and whethe

r th e credi t shoul db e down t

o th e ga s level o

r th e targe t level . Mr . Hawkin s sai d tha

t i f th e progra

mapplie duniforml

y to th e entir

e utilit y sector , the n there woul d b e no problemi n allowin g credi t down t o th e ga s level . H e sai dtha t allowin g mor

e credit to fue l switchin g tha

n control s i s ok

sinc e fue l switching als o reduce s other pollutant s whil e control s only reduc e one pollutant . Lyn n Hutchinso n indicate dtha

t aconcer n wit h allowin g ful

l credi t t o th e ga s leve l istha t

i t woul d b e adisincentiv e t o promot e goo dcontro l technology . SUPERIO RENVIRONMENTAL PERFORMANCE Ms . Kaufma

n aske d ho w to define superior environmenta

l performance , andwhethe r specifi c project s ca

n b e allowe d t o participate . Sh e sai dtha t it ma y provid e additiona

l certainty , bu t tha t meetin g wit

h th e State s fo

r acase-by-cas e determinatio n ma y b e a"killer " becaus e ofth e bureaucrac y issue . Ms . Blanchar d indicate dtha

t Bo b Pereiasep e wante dasuperio r environmenta

l performanc e projec t

t o b e defined . Ms . Morri s suggeste d t o integrat e i t into th e targe t

levels . Sh

e als o talke dabout

ho w t o desig n aC0 2 cap . Ms . Blanchar d reminde deveryone to kee p i n mindth e Kyot

o an dth eP. 8

Nolenber g Amendments , i.e. , no t

to violat e them . Mr . Hawkin s pointe dto th e Ri o Treat y - reduc e C O t o 199 0 level s - and tha t it di dnot touc h on eithe

r th e Kyot o Protoco l or

th e Nolenber g Amendment . Ms . Blanchar dacknowledgedMr . Hawkin s comment . Ms . Morri s asked wha

t type s of project s EP

A wa s considering . Sh

e sai dtha t th e ide ai s t o hav e acarbo n cap . A voluntar y ca p wouldencourag e retirin g plant s or replac e wit

h ga s without puttin g o n controls . EN D O F PROGRAM Ms . Kaufma

n asked wha

t wouldhappe

n a t th e endofth e program , i.e. , a t yea r 5 or 10 . Mr . Hawkin s replie d tha

t a n increas e in emissio n rat

e shoul dno t

b e allowe da

t th e end . H e favored areiteratio n ofth e process , i.e. , evaluat e i f target s ca n b e improved . H e realize dtha t th e compan y woul d hav e th e optio n o f not optin g i n again , in which cas e EP A neede dto conside

r othe r options . Mr . Pau l suggeste d tha

t auni t tha t meet s th e backu

p numbe r coul dget th e clea n uni t exemptio n a

t th e end . Mr . O'Sulliva

n sai dth e he woul dprefe

r anew targe t

level a t th e end , i.e. , anumbe r tha t i s achievabl e a

t tha t time . Therefore , i f

aunit tha t jus t sign s up a

t th e endo f th e 1 0 years , the n the y mus t

mee t th e ne w level , but

thos e tha t ar e alread y i n th e progra

mshoul db e o

k fo r th e next 1 0 years . Mr . Paul agree dtha t BACT shoul db e re-analyze da t th e en dofth e program . H e als o sai d tha

t they suppor

t th e "30-yea

r concept, " andanythin g tha t support s tha

t concept woul d b e preferable . Mr . Hawkin s asked i f

EP A wa s plannin g to prepar

e apackag e soo n fo

r revie w by th e EP A Assistant

Administrator s (AA) . Ms . Blanchar dreplie dtha

t EP A wa s plannin g to meet

wit h STAPPA/ALAPC O late

r i n th e wee

k andthen hol dmor

e discussion s internally . Th e goa l wa s to prepar e apackag e fo

r A A revie w withi n afe

w week s andt o hol dameetin g wit h Mr . Pereiasepe . Mr . Hawkin s suggeste d tha t it woul d b e helpfu

l to provide Mr . Pereiasep e wit h a n accompanyin g documen t tha t explain s th e complexitie s an dho w aca

p coul dresolv e issues . Mr . Hawkin s appreciate d EPA' s efforts . Ms . Blanchar dthanke deveryone fo

r attendin g th e meetin g and reminde d everyon e to provide comment s to Ms . Kaufina n withi n 2 weeks . Th e meetin g wa s the n adjourned .

>P. 9

ATTENDEE S EP A MEETING WITH ENVIRONMENTAL GROUPS NS RSECTOR-BASE

D APPROAC H April 4, 2000 Name Jo e Gossma

n Ti mDenne Michael Fiorentin o Davi d Hawkin s Catherin e Morri s Larr y Shapir o Davi d Woole

y Don Toensin g Kare n Blanchar

d Greg Foot e Caro l Holme s Lyn n Hutchinso n Kath y Kaufina n Meliss aMcCulloug h Pa mSmit h Ann aMari e Woo d Mala y Jinda l Valeri e Everett

e Affiliatio n Environmenta

l Defens e Fund Cente r fo r Clea n Air Polic y Clea n Ai r Counci l NRD C Cente r fo r Clea n Air Polic y Environmenta

l Enforcemen

t Projec t Clea n Ai r Tas k Forc e EP A Regio n VI

I EPA/OAQP S EPA/OG C EPA/OECA EPA/OAQP S EPA/OAQP S EPA/OAQP S EPA/OAQP S EPA/OPA R PE S (EP A Contractor

) PE S (EP A Contractor

)

%P.1 0

NE W SOURC E REVIE W SECTOR-BASE D APPROAC H DISCUSSIO N WIT H PUBLI C INTERES T GROUP S

APRI L 4,200 0 AGEND A (Pleas e note : time s give n for eac h discussio n elemen t

ar e approximate. ) 9:0 0 - 9:1 0 Introductions an d purpos e o f meetin g 9:1 0 -10:0 0 Basi c progra melements an d rational e for progra mgoa l Wha t shoul d b e th e basi s for

emissio n rat e target s for

NOx , S02 , an d P M 10 ? e.g . (a ) brin g all source s t o BACT/LAE Rlevels ? o r (b ) achiev e emissio n reduction s equivalen t t o wha t NSR/PS D woul d hav e achieved ? Ho w ca n thes e level s b e estimated ? Eithe r way , wha t

ar e th e BACT/LAE Rlevel s tha t shoul d b e used ? Shoul d the y b e inpu t

o r outpu t based ? I f outpu t based , ho w woul d thi s b e measured ? Emissio n level s o r

cap s coul d b e reduce d annuall y ove r th e program , o r

a t se t interval s (e.g . every fe w years) . What ar e th e advantages / disadvantage s o f

eac h method ? 10:00-10:1 5 Unit s covered .

I f th e progra mals o covere d existin g oil

- o r gas-fire d units , ho w coul d th e emissio n rat e target s b e se t u p t o accommodat e thos e units ? Wha t ar e th e pro s an d con s o f

allowin g individua l facilitie s t o op t in ? 10:1 5 -10:4 5 Averagin g o r trading ? Ho w woul dallowin g tradin g affec t th e structur e ofth e program , timing , an demissio n limits ? Wha t woul d b e th e effec t

o f allowin g sit e t o sit e trading , tradin g acros s companies , o r tradin g wit h facilitie s wh o op t in ? I f averagin g o r

tradin g i s allowe d for

PM10 , ho w shoul d complianc e b e determine d an d demonstrated ? 10:4 5 -11:1 5 Restriction s o n averagin g o r tradin g Ho w ca n asyste mb e se t

u p t o accommodat e differen t geographi c distribution s o f

emissions , an d t o protec t existin g tradin g programs ?P.1 1

If asourc e increase s emission s mor e tha n they hav e previousl y modeled , woul d it hav e to ensur

e tha t ther e ar e no advers e effect s o n Clas s I areas , or localize d advers e ambien

t impacts ? How ca n th e syste maccommodat

e shutdown units ? Ho w coul d facilitie s which switch to ga s b e use dto meet th e caps ? If acompan y increase dit s actua

l emission s i n anonattainment area , mus t i t stil l obtai n offsets ? 11:1 5 -11:4 0 Superior environmenta

l performanc e How d o w e incorporat

e th e goa l of performanc e superior

to th e bas e program ? Requir e asuperior

environmenta

l performanc e projec t

t o b e propose d o n a case-by-cas e basis ? o

r Requir e aspecific typ e of

project ? If

aprojec t coul dinvolv e non-criteri a pollutants , wha

t wouldb e th e lega

l rationale ? 11:40 -11:5 0 Wha t happen s a t th e en dofth e program ? Rever t to bas e NS Rprogram , or Reset ane w declinin g ca

p or ne w emissio n level s fo

r anothe r x x years , or Put of f th e decisio n unti l w e assess , sometim e later , ho w Wel

l th e progra

m i s working . 11:5 0 -12:0 0 Wrap-u p



### / 0P.1 2

FOR DISCUSSION

PURPOSES

ONLY DOES NOT REPRESENT

EPA POLICY

OR POSITION NE W SOURCE REVIE

W SECTOR-BASE

D APPROACH Goal : To develop a

n approach tha

t wouldhav e a

n en dresult of ensurin g tha

t existin g powe

r plant s ar e well controlled , whil e providin g maximu mflexibility an

dcertaint y unde r NS Rfo r existin g units . Thi s voluntar y of f ram p t o th e NS Rprogra

mwouldachiev e environmenta l result s tha t ar e superior to th e existin g program . Th e Bi g Picture : Th e program : Overall requirements : A voluntar y progra mfo r th e utilit y industry , base do n declinin g averag e emissio n rate s fo

r existin g coal-firedunits .

Wh o i s covered : Which pollutants : Ne w facilitie s o r units , mus t

appl y BACT o r LAER , an

dmeet other norma l NS Rrequirement s whe

n the y construct . All modification s to existin g unit s tha t trigge r apotentia l t o potentia

l emission s tes t

mus t apply BACT or

LAER . All existin g unit s covere dunde r thi s approach woul db e free t o mak e an y and al l physica

l o r operationa

l change s without

triggerin g aPS D or

NS R revie w i f their potentia l emission s d

o no t increase . However , existin g unit s must , i n th e aggregate , achiev e emissio n reduction s equivalen

t to specifi c target

level s b y th e progra

menddate . Ther e woul d als o b e som

e intermediat

e target o r targets . An y utilit y compan y wit h coal-fire dunits , on a

n opt-i n basis . NOx , S02 , CO , an

d PMIO



## WFOR DISCUSSION PURPOSES

ONLY DOES NOT REPRESENT

EPA POLICY

OR POSITION Rational e fo r progra

m goa l Wha t woul d b e reasonabl e target s fo r NO x an dS02 ? Th e basi s fo

r emissio n rat

e target s fo

r NOx , an dS0 2 i s t o brin g al l source s t o level s of performanc e greate

r tha n curren t levels , e.g. , averag e o f

aroun d0. 1 t o 0.1 5 lbs/MMBt

u NO x and0.2 5 t o 0. 6 lbs/MMBt u S02. 1 Wha t woul d b e areasonabl e target fo r PMIO ? For PMIO , ou r target coul db e asystemwid

e averag e i n th e rang e of

aroun d0.0 3 lbs/MMBtu , which i s th e NSP S level , to 0.01 5 lbs/MMBtu , whic h represent s som e BAC T determination s tha t hav e bee n made . Wha t woul d b e areasonabl e targe t fo r CO ? W e believ e goo d combustio n practice s represent s bes t contro l fo r CO , an dwoul d b e areasonabl e target . Ar e output-base d target s realistic ? Ho w woul dthey b e measured ? W e ar e currently investigatin g developin g output-base dtargets , bu t w e hav e no t develope d a

n understandin g of

ho w they wouldb e measured . Wha t woul d b e areasonabl e tim e frame i n whic h t o expec t al l units , a s asystemwide average , t o achiev e thes e emissio n rates ? Ou r preliminar

y thought s ar

e tha t perhap s 1 0 year s ma

y b e areasonabl e expectatio n a s atime-fram

e in whic h to achiev e thes e emissio n rate s systemwide . Should ther

e b e intermediat

e target s ove

r th e lif e ofth e program ? W e believ e there shoul db e one o r tw o intermediat

e targets . Wha

t woul db e a reasonabl e basi s fo

r determinin g wha

t thos e target s shoul dbe ?

coal . 1 Not

e tha t S0 2 level s i n th e Wes t

perhap s shoul db e lowe

r base do n us e o f

lo w sulfu rP.1 4

FOR DISCUSSION

PURPOSES

ONLY DOES NOT REPRESENT

EPA POLICY

OR POSITION Unit s covere d Workin g assumption : al l coal-fire d unit s at acompany woul d b e covered . I f th e progra mals o covere d existin g oil

- o r gas-fire d units , ho w coul d th e emissio n rat e target s b e se t

u p t o accommodat e thos e unit s whil e stil l achievin g th e overal l progra m goa l o f superio r environmenta l results ? Likewise , i f

companie s coul d opt-i n individua l facilities , ho w coul d th e emissio n rat e target s b e se t

u p t o accommodat e thos e unit s a s well , an d at th e sam e tim e preserv e overal l reduction s acros s th e industry ? Ou r curren t thinkin g i s not

t o allo w companie s t o opt-i n individua l units , becaus e i t woul db e difficul t

t o allo w thi s an d at

th e sam e tim e achiev e th e overal l progra mgoal . Averagin g o r trading ? Ho w woul d allowin g source s t o trad e affec t th e structur e ofth e program , timing , an d emissio n limits ? Wha t

woul d b e th e effec t

o f allowing :

- sit e t o site tradin g

- tradin g acros s companie s

- tradin g wit h facilitie s whic h op t i n Ou r curren t thinkin g i s t o allo w tradin g acros s site s an d acros s participatin g companies , bu t no t t o allo w companie s t o opt-i n individua l unit s (a s indicate d above) . I f averagin g o r

tradin g i s allowe d for

PMIO , ho w coul d complianc e b e determine d an d demonstrated ? Restriction s o n averagin g o r tradin g Ho w ca n asyste mb e se t

u p t o accommodat e differen t geographi c distribution s o f emissions ? e.g . W e nee d t o protec t

existin g tradin g program s (OTR/Regiona l NO x Strategy , Gran d Canyo n Visibilit y Commissio n progra munde r development) . I f asourc e increase s emission s mor e tha n the y hav e previousl y modeled , w e believ e i t woul d b e appropriat e t o tak e step s t o protec t agains t advers e effect s i n Clas s I area s and/o r

localize d advers e ambien t impacts . 

# 1 3P.1 5

FOR DISCUSSION

PURPOSES

ONLY DOES NOT REPRESENT

EPA POLICY

OR POSITION Likewise , i f

acompan y increase dit s actua

l emission s i n anonattainment area , w e believ e i t mus t stil l obtain offsets . How ca n th e systemaccommodat

e shutdown unit s or

facilitie s whic h switc h t o ga s ? W e believ e tha

t unit s which shutdown o

r switch t o ga s durin g th e lif e ofth e progra mcoul d b e counted . Wha

t specifi c emissio n rat

e coul db e assigne dto them ? W

e coul d assig n each uni t

a n emissio n rat

e equivalen

t to th e progra

m goal . Wha t happen s when aparticipatin g compan y sell s afacilit

y to anon-participatin g company ? W e believ e tha

t th e emissio n rat

e th e facilit

y ha s been carryin g unde

r th e progra

m shoul d accompan

y th e facilit

y a s par t ofth e sale . The sellin g compan y woul d the n recalculat

e it s cap . Superio r environmenta

l performanc

e Give n ou r pla n t o mak e thi s voluntar

y offram p t o th e NS Rprogra

msomethin g tha

t woul d achiev e superior

environmenta

l results , ho w shoul dw e incorporat e th e goa l o f performanc e superior

to th e bas e program ? Requir e asuperior

environmenta

l performanc e projec t

t o b e propose do n acase by-cas e basis ? o

r Requir e aspecifi c typ e o

f project ? I f aprojec t coul dinvolv e non-criteri a pollutants , how coul d thi s b e accepte dlegally ? Wha thappen s a

tth e end o

f th e program ? Rever t to th e bas e NS Rprogra

m(wit h availabilit

y of clea n uni t exclusion) , or Reset ane w declinin g ca

p o r new emissio n level s fo

r anothe r 1 0 year s base d o n wha t i s achieveabl e a

t tha t time , or Dela y th e decisio n unti l w e assess , sometim e later , ho w wel l th e progra mi s working . 

# N