P.1 

OAR Box 1802 

Prepped by Charmelle Mathews 

Document Number: 

20) IV-E-15 

Docket Number: 

A-90-37 

Printed 11/4/200811:57:59 AM Sheet 20 of 117 
July 20,1998 ^ 1 '--jE> I ^ 

MEMORANDUM 

SUBJECT: Summary- Meeting Clean Air Act Advisory Committee Subcommittee on 

Permits/NSR/Toxic Integration 

To: Air Docket A-90-37 

From: Dennis Crumpler, NSR Reform Team Leader, Integrated Implementation group, 

ITPID 

Attached is a summary of a meeting ofthe aforenamed Subcommittee on the evening of 

Tuesday February 17,1998 from 5:00 p.m. - 7:00 p.m. Certain elements ofthe NSR Refrom 

were discussed in this meeting. The summary includes an attendee list. Also attached is a copy 

of overhead transparencies that Mr. David Solomon used to present basic material on NSR 

Reform. 

EL2_ 

n 
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CLEAN AIR ACT ADVISORY COMMITTEE 

SUBCOMMITTEE ON PERMITS/NSR/TOXIC INTEGRATION 

Meeting Summary 

Tuesday February 17,1998 

5:00 p.m. -7:00 p.m. 

ACTION ITEMS 

• The subcommittee will reconvene to discuss the New Source Review (NSR) reform 

proposal. 

MEETING SUMMARY 

Lydia Wegman of OAQPS began the meeting with introductions. She then explained the 

agenda for the meeting: 

• Discuss the NSR reform proposal and its relationship to the draft NSR concepts 

for transitional areas. 

• Discuss offset pools and transitional nonattainment areas. 

NSR Reform Proposal: 

Ms. Wegman began the discussion by explaining that EPA is trying to pull together 

various pieces of NSR that have been moving in different directions. Ms. Wegman described 

three issues to consider in light ofthe current rulemaking activities: 

(1) The 1996 proposed NSR reform rule was an Agency initiative that responded to 

stakeholder concerns regarding the existing program. 

(2) The WEPCO litigation was a result of a 1992 EPA rulemaking that affected utilities' 

actual to future actual test and included a demand growth exclusion. The litigation was 

stayed until recently. One party is seeking a briefing schedule, and litigation is moving 

forward again. Ms. Wegman noted that many concepts in place in 1992 have changed or 

are changing with utility restructuring and deregulation. Thus, work on the reform 

proposal related to WEPCO should be reconsidered in light of these changes. The 

briefing schedule provides time to rethink this issue. 

(3) The NSR "transitional"area rulemaking was discussed at the last subcommittee 

meeting (November 6,1997) in a "Concept Paper on Implementing the New Source 

Review Program in Transitional Areas Under the 8-hour Ozone Standard" that was 

distributed at that meeting. The concept paper set forth ideas for using reductions 

achieved under the regional strategy to meet the offset requirements, through offset pools. 

For the technology component, the paper proposed an enhanced-Best Available Control 
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Permits/NSR/Toxic Integration PAGE 2 

Technology (BACT) option for nonattainment NSR. This enhanced-BACT concept was 

not strongly supported. 

Ms. Wegman described the key elements ofthe reform rule: 

• First, the basic result ofthe proposed applicability test is that fewer sources will be 

subject to review. The applicability test for modifications include an actual to future 

actual, potential to potential, and a clean unit test. 

• Second, the rule includes new procedures to address Class I area impacts. This issue has 

been controversial; particularly, many industry members believe Class I analyses are 

burdensome. 

• Third, the reform rule includes broader exclusions including pollution control projects 

and plant wide applicability limits (PALs). 

• Fourth, the reform rule should streamline the permit review process. 

Greg Foote, EPA OGC, discussed the status ofthe WEPCO litigation. The parties filed a 

joint motion in court on Friday (February 13,1998) that asks for a briefing schedule to which 

petitioners opening briefs would be filed no earlier than next October. Internal milestones are 

included in this briefing schedule. Mr. Foote expects oral arguments to begin May 1999 or 

thereafter. 

Ms. Wegman explained that EPA is investigating two approaches: (1) Proposing an NSR 

reform package that would serve as a substitute for a different approach to technology in 

transitional areas; or (2) Moving forward with the reform package and having it finalized by 

December 1998 along with whatever option is decided upon for transitional areas. EPA 

originally hoped to follow the former approach; however, it does not seem as if consensus can be 

reached on this option. David Solomon of OAQPS has helped develop a new idea for 

transitional areas. Ms. Wegman expressed her main concern that EPA move forward with a 

reform package that a majority ofthe community can agree upon. Ms. Wegman added that some 

subcommittee members, at an earlier meeting, proposed to reconvene the subcommittee on NSR 

Reform. 

The discussion moved to Class I areas. Molly Ross, DOIFWP, provided a brief 

background on Prevention of Significant Deterioration (PSD) Class I issues to set the context of 

the discussion on the Federal Land Manager (FLM)'s approach. Ms. Ross explained that CAA 

Section 165(d) deals with FLMs responsibilities and roles in preconstruction review and the 

potential for a Class I area impact. The legislative history on Section 165(d) states that the FLM 

should be aggressive and should protect the established values of these Class I areas. FLMs roles 

are distinguished from others' roles, including EPA, whose role is more reserved in this area. 

Ms. Ross described key legislation related to defining and protecting established values or air 
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Permits/NSR/Toxic Integration PAGE 3 

quality related values (AQRVs). Ms. Ross noted that the Park Organic Act at 16 USC 1 directs 

the Secretary ofthe Interior to conserve the resources of parks unimpaired (e.g., scenery, 

wildlife, historic objects, natural systems). The Wilderness Act at 16 USC 1131 protects areas in 

their natural conditions. Further, enabling legislation exists for each park and wilderness area, 

which basically refers back to the broad acts (e.g., Organic Act and the Wilderness Act) that 

protect current and future values. Many reports indicate air pollution has significantly 

contributed to the loss of these values. 

Ms. Ross summarized EPA's implementation ofthe CAA involving FLMs review of new 

sources. The sections ofthe 1979-1980 PSD regulations, basically repeat the statutory language 

and leave many issues open to interpretation. The history of practice has been consistent with 

the statutory authority. During the past 20 years, FLMs and EPA have been working together. 

For example, the DOI has a permit application guidance document for new air pollution sources 

that is given to states to distribute to new sources. EPA has interpreted Class I issues in the 

visibility rules promulgated in the 1980s and has published manuals, guidelines, and memoranda 

addressing Class I issues. Problems do exist, however, and the FLMs are requesting that EPA 

clarify and articulate implementation. 

Ms. Ross put Class I issues in perspective by noting that the National Park Service (Park 

Service) and Fish and Wildlife Service (FWS) have 69 Class I areas between them and have 

reviewed over 500 PSD permits that may affect DOI Class I areas. Only 50 of these 500 cases 

received written comments. Only 12 ofthe 50 cases have led to adverse impact determinations 

or requests for permit denials. Of these 12 cases, only three have been appealed. The remainder 

have been dropped or settled. 

Ms. Ross emphasized that work from the NSR reform committee has contributed to a 

proposed rule that increases expediency, provides uniformity across jurisdictions, and clarifies 

roles. In particular, the proposed rule recognizes FLMs as experts regarding park and wilderness 

area AQRVs. This role is appropriate because FLMs know the values and purposes for which 

the Class I areas were established and are managed, and they have biologists and visibility 

experts to address AQRVs, whereas permitting authorities typically do not. 

Ms. Ross applauded the proposed regulation's allocation ofthe ofthe information 

burden. The proposed rule requests applicants provide FLMs with analyses addressing impacts 

from their sources on Class I areas. FLMs should provide sources early in the application 

process with relevant information they have from the national and site-specific research 

monitoring and data base programs, utilizing the particular source characteristics consistent with 

other required analyses that are within the applicant's knowledge and responsibility. In response 

to comments that FLMs should perform all analyses for sources requesting permits in Class I 

areas, Ms. Ross commented that the Central Office for the Park Service and FWS would be 

unable to staff or finance these analyses. Ms. Ross also questioned whether the task of 

performing such analyses for all such prospective sources was an appropriate or sound use of 

taxpayer dollars 
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Permits/NSR/Toxic Integration PAGE 4 

Ms. Ross summarized the comments received regarding the proposed rule. Many 

comments requested FLMs identify and provide AQRVs. In the proposed rule, EPA uses the 

definition FLMs have used (i.e., AQRVs are any Class I resources ranging from scenic views to 

specific fauna, that may be affected by air quality). In the permit, FLMs will focus on AQRV of 

concern (i.e., indicators of air pollution problems). For each Class I area there are a handful of 

these AQRVs of concern (e.g., specific types of vegetation). As part of NSR, FLMs will identify 

specific sensitive indicator AQRVs to help applicants focus their analyses. Once the AQRVs of 

concern are identified, the critical load levels need to be identified. The Forest Service has 

developed a yellow-red-green line approach that summarizes the impacts from cumulative 

pollution levels. Further, the FWS, Park Service, and Forest Service have formed an FLM Air 

Quality Related Workgroup (FLAG) to develop consistent procedures to address AQRV and 

pollution issues. 

Ms. Ross noted that FLMs do use guideline and specifically approved models to assess 

AQRVs of concern and critical load levels. She described the most difficult scenario: a new 

source up for permit review in a polluted area. She asked, rhetorically, when does this source 

have to take responsibility for adverse impacts it imposes. FLMs are considering using de 

minimis levels or size distance criteria to identify sources of greatest concern. She described an 

FLM effort in Tennessee that includes screening-level values in the permitting procedures. 

FLMs would request in return, an enhanced monitoring program in Class I areas that would 

allow FLMs to watch impacts on resources they are statutorily bound to protect. Monitoring 

would help determine if all the regional air pollution programs are adequately addressing Class I 

area problems. If conditions in Class I area are found to be deteriorating, or not improving, 

mechanisms to adjust and adapt (e.g., tighten NSR policies) must exist. Ms. Ross proposed 

another alternative — a SEP approach to address documented adverse impacts, an idea discussed 

with EPA in 1996 correspondence. Monitoring might be required of individual sources or might 

be supported through a fund that partly draws upon permit fees. 

Ms. Ross concluded her presentation by noting that NSR only affects a small percentage 

ofthe sources in Class I areas. These sources are important, however, because they will be the 

future long-term sources. NAAQS are not adequate enough to protect Class I areas. The ozone 

and PM regulations have left much ofthe park and wilderness resources subject to damage. 

FLMs are willing to identify specific sensitive and indicator AQRVs. However, FLMs believe 

listing all possible AQRVs is a poor use of resources. FLMs need support from EPA. 

Donna Lamb, USDA Forest Service, added that the Forest Service manages 88 Class I 

areas and has a $4 million budget: one-third is used for monitoring; one-third is used for 

coordinating with states; and one-third is used to support PSD analyses. The Forest Service is 

seriously considering the subcommittee's recommendations and is trying to develop a list of 

AQRVs using databases and websites and is identifying previous situations where adverse 

impact calls were made. Ms. Lamb commented that the Forest Service Class I areas involve 

wilderness areas. The Forest Service is attempting to translate universal air quality concerns into 

indicators that are more specific and measurable (e.g., water quality). The existing scientific 
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Permits/NSR/Toxic Integration PAGE 5 

data need to be updated. The flag color approach should move this process forward and make 

the data more consistent across regions. Ms. Lamb noted that one strength ofthe PSD program 

is that it allows for and recognizes differences across regions. Ms. Lamb confirmed that the flag 

process is currently an internal project that involves the Park Service, Forest Service, FWS, and 

EPA. A draft report regarding Phase I of this project (i.e., available information that consensus 

has been reached on including issues such as AQRVs, levels of concern, threshold values) should 

be available for public review late this summer. Currently, it seems as if the flag process will be 

region specific as opposed to national AQRVs. 

A subcommittee member asked if any consideration has been given to ensure that this 

process will not delay permitting of sources. Ms. Ross answered that early notification is key. 

Similar to industry, FLMs do not want delays. Industry and the states have more control ofthe 

timing than FLMs. 

A member commented that Ms. Ross appropriately classified FLMs as statutorily more 

aggressive than EPA and emphasized industry's concern that FLMs will use this statutory 

mandate to involve themselves with a sources' completeness determination. Leslie Ritts, Hogan 

&Hartson for NED A/CARP, commented that much of industry's concern arises from the Buena 

Vista decision. Ms. Ross confirmed her belief that under EPA's proposed regulation, the state 

makes the call for completeness. She added that the FLM would not challenge a permit if the 

FLM did not have adequate data. She confirmed that FLMs intend to publish as much as 

possible to provide sources with information on AQRVs, critical loadings, and significance 

levels to give sources an idea of potential issues. However, within reasonable limits, FLMs do 

wish to reserve the right to reflect new scientific understandings in their determinations of air 

pollution effects on the nationally significant resources in Class I areas. PSD review under 

Section 165 is a case by case review. To increase an applicant's certainty, FLMs could probably 

commit to sticking with the criteria set early in the case for the remainder of that particular case. 

Bill Lewis, Morgan, Lewis, and Bockius, requested FLMs provide as much information as 

possible, because sources are generally investing substantial amounts of resources even prior to 

the permit application process. 

Ms. Ritts and Ms. Wegman suggested the FLMs and EPA examine a specific case against 

the proposed rule to see where the rule may be clarified or modified. 

Pat Raher, Hogan & Hartson, asked about pre-construction or pre-permit air quality 

monitoring (i.e., if this issue arises, is there a possibility of post-construction monitoring?). Ms. 

Lamb responded that monitoring is important to FLMs over time but that specific issues will 

need to be addressed case by case. In general, FLMs need help with monitoring to determine 

other programs' effects on ecosystems. The more effective other programs and existing sources 

are in controlling air pollution and preserving AQRVs, the more leeway FLMs can provide to 

new source in Class I areas. Ms. Ross clarified that FLMs are unlikely to publish new AQRVs 

during the early stages of an application. The AQRVs are basically published and known. 

Negotiations would involve FLMs identifying the specific AQRVs of concern. 
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Permits/NSR/Toxic Integration PAGE 6 

Ms. Wegman suggested the subcommittee reconvene once more before proposing the 

mie. She also reminded the subcommittee that the elements contained in the NSR package are 

summarized in the handout. 

Offset Pools and Transitional Nonattainment Areas: 

David Solomon, OAQPS, reminded the subcommittee ofthe "Concept Paper on 

Implementing the New Source Review Program in Transitional Areas Under the 8-hour Ozone 

Standard" distributed and discussed at the last subcommittee meeting (November 6,1997). The 

concept paper set forth ideas for using reductions achieved under the regional strategy to meet 

the offset requirements, through offset pools. Mr. Solomon distributed a handout summarizing 

his presentation on offset pools and began by discussing the basic assumptions of offset pools: 

• Offsets cannot be otherwise required by the Act. 

• Use of a pool must not interfere with RFP and attainment. 

• Offsets for a pool must be real, permanent, quantifiable, enforceable, and 

geographically correct. 

He explained that offset pools may come from SIP-required reductions if growth is built 

into a NOx budget. States also can include additional growth if it's part ofthe attainment 

demonstration. The maximum size ofthe pool cannot exceed the growth projection. 

Mr. Solomon explained the offset calculation: actual emissions minus emissions at the 

new allowable (full capacity). This calculation is consistent with the historic approach; ensures 

reductions are real, quantifiable, permanent and enforceable; acts as the most conservative 

estimate of reductions; and could limit available offsets. Mr. Solomon clarified that offsets are 

voluntary and that any nonattainment area may participate in this approach. This structure was 

primarily designed to address transitional areas and NOx, although and it may be applied to other 

pollutants. 

Mr. Solomon summarized the basic approach and current staff thinking: 

2000 SIP Submittal; 

• State quantifies emissions from new source growth; 

• Creditable reductions from specific source(s) identified and quantified; 

• SIP-required reductions are OK. 

• Use cannot interfere with RFP and attainment. 

• Creditable reductions allocated to offset pool; 

• Periodic Reconciliation; 

• Validate offsets, debit pool, ensure geographic requirements are met. 
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A subcommittee member asked whether offsets consider seasonal conditions. Mr. 

Solomon responded that the Act requires annual tonnage. Under the cap and trade program, EPA 

is examining how this seasonal program will be reconciled with annual tonnage. In examining 

the OTAG SIP call, EPA explicitly requests comments on this issue. He added that these offsets 

are different than a cap and trade program and are unrelated to seasonality. Mr. Solomon 

clarified that states are examining reductions they will achieve, some may be seasonal and some 

may be permanent. Regardless, the state will examine the individual source to determine, based 

on strategies built into the SIP, the amount of credit the source will generate. If the source is 

only generating credits for six months, than these credits would be quantified for six months. 

Mr. Solomon explained that these offsets are different than the traditional emission 

reduction credit program in that the state is pre-programmed up-front (i.e., it already has a bank 

of offsets set aside). The state is taking a portion of all the reductions that will be achieved and 

applying a portion of these reductions to allocate to new sources, thereby demonstrating that 

these reductions are not necessary to meet attainment in the standard. These are reductions that 

would otherwise be required as part ofthe SIP call. 

Ms. Wegman noted that the initial pool EPA considered in developing these offset pools 

would come from the reductions from the NOx SIP call to reduce interstate transport. The 

purpose ofthe NOx SIP call is to reduce significant contribution to interstate transport, although 

many transitional areas will come into attainment. Transitional areas are nonattainment areas. 

Mr. Solomon confirmed that the reductions in the SIP call that account for growth beyond what's 

required for attainment are not considered to be legally required by EPA. These reductions are 

not RACT or statutorily-mandated requirements but are reductions required by the SEP. Ms. 

Wegman clarified that the SIP call is based on work from the OTAG, which included growth 

margins. Mr. Solomon added that the states have a preapproved pool of offsets that they can 

draw from to allocate to new sources. States have many options available to them in allocating 

these offsets. The states can determine where the reductions come from and can choose to go 

with no growth, as long as they meet the budget. 

Mr. Solomon explained that the geographic requirement involves a specific 173 

requirement under the Subpart 2 designation for serious or severe nonattainment areas. Periodic 

reconciliation must be done in the aggregate to ensure that new emissions have not shifted into 

the severe or serious nonattainment areas. 

Mr. Solomon summarized the pros of offset pools: 

Up front demonstration that reductions are surplus; 

Similarity to current offset approach; 

Conservative estimates; 

Offsets are real, permanent and enforceable; 

Certainty to applicant and state that offsets are available and acceptable. 
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The cons of offset pools are that the pools are fixed (i.e., pools cannot be larger than what 

is in the attainment pool). Offsets single out individual sources for offsets. Further, initial 

demonstrations may present a burden to the state in deciding what reductions they may draw 

from in creating the offset pool. 

Mr. Solomon presented some implementation questions: 

(1) Must source specific reductions be identified up front? (Perhaps the reductions can be 

identified on an as-needed basis.) 

(2) What is the baseline year for offset calculation? When the pool is set, should sources 

be examined to determine what the reductions are that they are otherwise going to 

achieve? 

(3) Can offsets be generated on an "actual" basis? (One subcommittee member expressed 

his interest in having offsets generated from an allowable basis.) 

(4) Can "cap and trade" sources be in an offset pool? (Mr. Solomon explained that 

offsets will automatically be generated for sources that enter a cap and trade program, 

although there is a question with seasonal trade programs and annual tonnage. The main 

question is if reductions from sources in the cap and trade program can be put into an 

offset pool to fund other sources that are not in a cap and trade program.) 

(5) How to address the geographic requirements of 173? 

(6) What happens to a pool if timely attainment ofthe standard does not occur? 

Mr. Solomon briefly presented an alternative approach that was developed in response to 

significant negative stakeholder comments to the enhanced-BACT approach. This approach 

considers allowing BACT as an alternative to the Lowest Achievable Emissions Rate (LAER) 

under the following conditions: 

• The area is designated "transitional;" 

• The source acquires offsets under a cap and trade program; and 

• The cap and trade program is mass emission based. 

Mr Solomon asked the subcommittee to consider if it makes sense to allow sources in 

these areas to go with BACT. Mr. Solomon noted that if BACT does not equal LAER, it will be 

fairly close in terms of technology. He presented some considerations regarding this approach: 

• Contains a technology forcing component; 

• Differences between BACT and LAER limits will be offset; 

• Creates an incentive for mass based cap and trade program; 
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Permits/NSR/Toxic Integration PAGE 9 

• Provides a more level permitting playing field between attainment and transitional 

areas; 

• Maintains consistency with the Presidential Directive; and 

• Has not been endorsed by the Office of General Council. 

Ms. Wegman clarified that EPA has not required a mass based emission cap but the 

Agency is strongly encouraging it. Allocations would be by tonnage versus emission rate 

standards. 

Mr. Solomon noted that offset pools have been presented to the states. The states did not 

express immediate disapproval ofthe offset pools and are currently examining the proposal. 

Enhanced BACT has not been introduced to them. He requested subcommittee members' 

feedback. 

The meeting was adjourned at 7:30 p.m. 
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CLEAN AIR ACT ADVISORY COMMITTEE 

SUBCOMMITTEE ON PERMITS/NSR/TOXIC INTEGRATION 

Tuesday February 17,1998 

ATTENDANCE LIST 

Lea Anderson, EPA/OGC 

Barbara Bankoff, Eli Lilly & Co. 

Bill Becker, STAPPA/ALAPCO 

Karen Blanchard, EPA/OAQPS 

Terry Bowers, DOD 

Vince Brisini, GPU Genco 

Ray Carwile, Alkoa 

Dennis Crumpler, EPA/OAQPS 

Tom Curran, EPA/OAQPS 

John Devine, EPA/OGC 

Larry Feldcamp, Baker & Botts 

Greg Foote, EPA OGC 

Stephen Fotis, Van Ness Feldman 

Jerry B. Fulmer, Alcoa 

Julie Hatcher, Latham & Watkins 

Dave Hawkins, NRDC 

Pete Jonker, Southern California Gas Company 

Amy Kreiger, Swidler & Berlin 

Donna Lamb, USDA Forest Service 

Bill Lewis, Morgan, Lewis & Bockius, LLP 

Ann McCabe, Amoco 

Tim Mohin, Intel Corp. 

L. Neuworth, Latham & Watkins 

Judy Odoulamy, DOE/GC 

Mark Owens, Eli Lilly & Co. 

Clara, Poffenberger, Barker & Botts, LLP 

Patrick Raher, Hogan & Hartson, LLP 

Leslie Ritts, Hogan & Hartson for NED A/CARP 

Molly Ross, DOI/Assistant Secretary's Office (FWP) 

Chris Shaver, DOI/NPS 

Michael Smith, Eli Lilly & Co. 

David Slaughter, Thompson Publishing Group 

David Solomon, EPA 

Debbie Stackhouse, EPA 

Scott Walsu, JSC 

Lydia Wegman, EPA 

Holly Wilson, EPA/OAQPS 

Ann Marie Wood EPA/OPAR 

Eva Wong, ICF 
* • 

ft f 

r 7-

1 

Current NSR Rulemaking 

Activities 

• NSR Reform rule proposed 1996 

-Agency initiative 

- Responds to stakeholder concerns over 

existing program 

• WEPCO litigation 

- Result of 1992 rulemaking 

- Tied to reform 

• NSR "transitional" areas rulemaking 

- NSR program under new air quality 

standards 

- Presidential Directive - December 1998 deadline 

WEPCO Litigation 

• Special applicability test for utilities 

-Actual to future actual (excludes emissions 

due to increases in demand) 

• Industry - Test shoul

d not be limited to utilities 

• Environmental groups - Test is not enforceable 

-Demand growth exclusion illegal 

• Court has asked for a briefing schedule 

• WEPCO rule did not foresee utility 

deregulation 

• EPA raised WEPCO issues in Reform 

proposal 

Key Elements of Reform Rule 

• Applicability test for modifications 

-Actual to future actual 

- Potential to potential 

-Clean unit test 

- Fewer sources subject to review 

• New procedures to address Class I area 

impacts - Ensure timel

y Federal Land Manager 

coordination & input 

- Balances package 

• Broader exclusions (pollution control projects, ozone 

depleting substances, plantwide applicability limits) 

• Streamlining of the permit review process 

NSR Transitional Rule 

• Provide incentives to states 

• Level the playing field 

• 10/97 Concept Paper 

- Offset Pools 

• Can be used in all nonattainment areas 

• Agency still developing details 

• Stakeholders are interested 

- Enhanced BACT 

• Negative comments from all 

stakeholders 

• Proposal scheduled for April 1998 
The Major Questions 

• Does it make sense to have different 

NSR rules for "transitional" areas? 

• Is finalizing the NSR reform rule the 

best way to address "transitional" area 

concern? 

• In addition to, or instead of, NSR 

reform, what type of NSR (or other) 

incentives would be meaningful and 

statutorily permissible for "transitional" 

areas? 

An Alternative Approach to LAER? 

• Significant negative stakeholder response on enhanced BACT 

• Is it reasonable to allow BACT as an alternative to LAER 

where: 

-(1) the area is designated "transitional", and 

- (2) the source acquires offsets under a cap-and-trade 

program, and 

- (3) cap-and-trade program is mass emissions based. 

- Include a "top-down" approach to BACT? 

• Considerations 

- Contains a technology forcing component 

-Any difference between BACT and LAER limits must be 

offset 

-An incentive for mass based cap-and-trade programs 

- More level permitting playing field between attainment and 

transitional areas 

- Consistent with Presidential Directive 

- Has not been endorsed by OGC 

The Major Questions 

• Should adverse impacts on air quality 

related value (AQRVs) in Class I areas 

be addressed through the SIP by the 

control of existing sources? 

• With limited resources what should be 

the #1 priority for the NSR program?