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Fraas : II-F-1 7 Enclose d pleas e fin d th e fou r OMB revie wcopie s o f th e WEPC O rule . I hav e als o enclose d tw o copie s fo r CEA . Coul d yo u pleas e ge t them t o Dic k Schmalense e an d Howar d Gruenspecht ? B ymessenge r I hav e sen t a copyt o DO E and DOJ . A s I understand it , a t thi s stage , "OMB clearance " occur s i nth e for mo f a phon e cal l fromyo u t o Scot t Furlong i n OPPE . Pleas e cal l m e a t 382-558 0 i f I nee d t o d o anything els e t o ge t thi s rul e cleare d fo r th e Administrator' s signitur e today . Thanks . Nanc yKet e

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ENVIRONMENTAL PROTECTIONAGENC Y 4 0 C.F.R . Part s 51 , 52 , and 6 0

[FR L ] Requirement s fo r Preparation , Adoption , and Submitta l o f Implementatio nPlans ; Approva l an

d Promulgatio n o f Implementatio nPlans ; Standard s o f Performanc e fo r Ne wStationarySources . 

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AGENCY : Environmenta l Protectio nAgenc y(EPA) . ACTION : Notic e o f Propose d Rul e SUMMARY : Th e applicabilit yo f th e ne wsourc e requirement s o f Titl e I o f th e Clea n Ai r Ac t (CAA ) t o physica l o r operationa l change s a t electri c utilit ygenerating unit s i s a nissu e o f considerabl e interes t a t thi s time becaus e o f th e recen t passag e o f th e 199 0 Clea n Ai r Ac t Amendment s (CAAA) . Man yutilitie s wil l b e undertakin g majo r pollutio n contro l project s a t thei r unit s i n th e nex t fewyears . I nenacting Titl e IV , Congres s di d no t suspend an

yTitl e I requirement s fo r thi s work . However , th e massiv e industry-wid e undertaking s o f pollutio ncontro l project s warrant s a clarificatio n o f th e ne wsourc e revie wrequirement s o f Titl e I . I n particular , Ne wSourc e Revie w(NSR ) provision s shoul d no t inadvertentl ybia s a utilit ytoward s o r agains t an ymean s o f complyin g wit hth e aci d rai n provisions . Th e EPAbelieve s th e amendment s propose d todayan d th e clarificatio n o f it s curren t polic yunde r it s presen t NS Rregulation s provid e adequat e assurance s tha t utilitie s ca nundertak e Titl e IV pollutio n contro l project s withou t uncertaint ya s t o th e applicabilit yo f th e variou s Titl e I ne wsourc e requirements . A t th e same time ,P. 5

- 2 - the applicabilit yo f existing ne wsourc e regulation s t o modification s ha s bee n the sourc e o f tw o recen t federa l appellat e decisions , Wisconsi n Electri c Powe r Co . v . Reilly , (WEPCO) , 89 3 F.2 d 90 1 (7thCir . 1990) , an d Puert o Rica nCemen t Co . v . EPA . 88 9 F.2 d 29 2 (1s t Cir . 1989) . A s a result , EPAi s toda yproposing clarifying amendment s t o thes e regulation s an d confirming it s policie s regarding o f some o f thes e provision s a s theyappl yt o utilit yproject s pending adoptio no f the propose d amendments . Th e EPAtoda

ypropose s t o adop t a broad NS Rexclusio nfo r utilit ypollutio n contro l project s and , unti l thes e propose d regulation s ar e adopte d i nfina l form , t o adher e t o it s polic y tha t ne wsourc e regulation s alread ygenerall yexclud e coverag e o f pollutio n contro l project s undertake na t electri c utilit yunits . Similarly , EPAtoda ypropose s t o adop t an "actua l t o futur e actual " methodologyfo r determining whethe r al l othe r nonroutin e physica l o r operationa l change s a t utilitie s (othe r thanth e replacemen t o f a uni t o r additio n o f a ne wunit ) ar e subjec t t o newsourc e revie wunde r eithe r preventio no f significan t deterioratio n (PSD ) o r nonattainmen t provision s an d t o maintai n i n the interi m

tha t thi s methodolog yi s applie d wher e th e uni t ha s "begun norma l operations. " Fo r thos e utilit yproject s whic h underg o PS D ne wsourc e review , today' s notic e propose s a presumptio n tha t fo r EPA-issue d permits , "low-NOxburners " ca n satisf yth e bes t availabl e contro l technolog y(BACT ) requirements .P. 6

- 3 - I n addition , EPAals o propose s t o modif yit s regulation s implementing th e modificatio n provision s o f th e Titl e I ne w sourc e performanc e standard s (NSPS ) programt o provid e tha t a utilit ymayus e fo r it s pre-chang e baselin e the highes t hourl y emission s rat e achievabl e a t an ytime during th e 5 year s prio r t o the physica l o r operationa l change . Th e EPAals o propose s t o modif yit s regulation s t o reflec t change s mad e b yCongres s i n the 199 0 Amendment s t o the applicabilit yo f ne wsourc e requirement s t o clea n coa l technolog y(CCT ) an

d repowering projects , an d t o "ver yclean " units . DATES : Comments . Comment s o nthe revision s propose d toda y mus t b e receive d o n o r befor e (6 0 day s afte r publicatio ni n the Federa l Register) . Publi c Hearing . Apubli c hearing i s schedule d fo r 10:0 0 a.m. , Jul y, 1991 , a t th e U.S . Environmenta l Protectio nAgency , 40 1 M Street , S.W. , Washington , D.C . 20460 . Th e hearing mayb e cancele d i f n o speaker s hav e requeste d time t o presen t thei r comment s 1 5 day s prio r t o th e schedule d hearing date . Writte n comment s i n lie u o f testimon yar e encouraged . ADDRESSES : Supporting informatio nuse d i ndevelopin g thi s propose d rul e i s containe d i ndocke t A-90-06 . Thi s docke t i s availabl e fo r publi c inspectio n an d copying betwee n 8:3 0 a.m . an d 3:3 0 p.m. , weekday s a t EPA' s Ai r Docke t (LE-131) , RoomM-1500 , 40 1 MStree t S.W. , Washington , D.C . 20460 . Areasonabl e fe e ma y b e charge d fo r copying .P. 7

- 4 - FO RFURTHE

RINFORMATIO

N CONTACT : Chebryl l Edwards , Ne wSourc e Revie wSectio n (MD-15) , Offic e o f Ai r Qualit yPlanning an d Standards , Researc hTriangl e Park , Nort hCarolin a 27711 , (919 ) 541-2343 . SUPPLEMENTARYINFORMATION : I . INTRODUCTION Th e EPAtoda

ypropose s t o amen d it s regulation s implementing the variou s Titl e I newsourc e requirement s governing physica l o r operationa l change s a t electri c utilit ygenerating units . Specifically , thes e propose d change s ar e being issue d t o clarif y the coverag e o f the NSPS , PS D an d nonattainmen t preconstructio n reviewrequirement s o f Titl e I o f the Clea n Ai r Ac t t o project s undertake n a t electri c utilit ystea mgenerating units. 1 Th e EPApropose s t o amend the definitio no f "majo r modification " i n 4 0 C.F.R . Part s 5 1 an d 5 2 t o se t fort hth e condition s unde r whic hth e addition , replacemen t o r us e a t existing electri c utilit ygenerating unit s o f an ysystemo r devic e whos e primaryfunctio ni s the reductio n o f ai r pollutant s (including the switching t o a les s polluting fue l wher e th e primarypurpos e o f the switc hi s the reductio no f ai r pollutants ) wil l o r wil l no t subjec t th e sourc e t o preconstructio n review .

1 Th e propose d regulation s defin e electri c utilit ystea m generating unit s a s an ystea m electri c generating uni t tha t i s constructe d fo r the purpos e o f supplying mor e thanone-thir d o f it s potentia l electri c outpu t capacit yan d mor e than2 5 M

Wo f electrica l outpu t t o an yutilit ypowe r distributio n systemfo r sale . See , e.g. , propose d 4 0 CFR51.165(xx) .P. 8

- 5 - Specifically , EPApropose s i n PS D an d nonattainmen t area s t o adop t a regulatoryexclusio n explicating it s authorit yunde r the statutorydefinitio n o f "modification " an d confirming EPA' s curren t practic e tha t pollutio ncontro l project s whic h"d o no t rende r th e uni t les s environmentall ybeneficial " ar e no t "physica l o r operationa l changes, " an d hence , ar e no t "modifications " fo r the purpose s o f Part s C an d D o f Titl e I an

d ar e no t "majo r modifications " fo r the purpose s o f EPA' s regulation s implementing thos e provisions . Th e EPAi s toda y als o proposing t o amen d it s PS D an

d nonattainmen t ne wsourc e revie wregulation s (4 0 C.F.R . Part s 5 1 an d 52) 2 a s theyappl yt o utilitie s t o (1 ) clarif ythe NS Rbaselin e fo r determinin g whethe r a propose d physica l o r operationa l chang e wil l subjec t a utilit y t o th e preconstructio n revie wrequirement s o f thes e provisions ; (2 ) se t fort ha n actua l t o futur e actua l methodologyfo r determining whethe r a physica l o r operationa l chang e i s subjec t t o NSR ; (3 ) provid e furthe r clarificatio n o f th e existing regulatoryrequiremen t tha t onl ythos e increase s i n emission s tha t actuall yresul t fro mthe physica l chang e o r chang e i nth e metho d o f operatio n can b e considere d i ndetermining whethe r th e propose d chang e subject s the utilit yt o NS Rrequirements ; an d (4 ) implemen t section s 40 9 an d 41 5 o f Titl e IV

o f th e Clea n Ai r Ac t

Fo r the purpose s o f thi s notice , reference s t o "new sourc e review " (or "NSR" ) refe r t o the preconstructio n revie w requirement s o f bot hPar t C (PSD ) an d Par t D (nonattainment ) o f th e Clea n Ai r Act , unles s otherwis e indicated .P. 9

- 6 - Amendment s o f 199 0 whic hcreat e specia l NSP S treatmen t fo r certai n repowering project s an d limite d NS Rexemption s fo r temporaryan

d permanen t CC T projects , an d fo r certai n "ver

y clean " units . Finally , EPAi s als o proposing t o amen d it s NSP S regulation s (4 0 C.F.R . Par t 60 ) t o allo wa utilit yt o us e a s it s pre-chang e baselin e it s highes t hourl yemission s rat e achievabl e during the 5 year s prio r t o the propose d physica l o r operationa l change . T o th e exten t the propose d amendment s implemen t existing EPApolicies , EPAwil l continu e t o administe r it s regulation s i n a manne r consisten t wit hthes e policie s pending adoptio no f th e regulation s propose d today . Portion s o f th e premabl e o f today' s proposa l se t fort hEPA' s presen t policie s unde r it s curren t regulations , an

d ma yb e relie d o n a s suc hpending fina l actio n o n today' s proposal . Today' s proposa l addressing pollutio ncontro l project s an d othe r non-routin e physica l an d operationa l change s a t electri c utilit yunit s i s timel yfo r severa l reasons . First , th e 199 0 Clea n Ai r Ac t amendment s establish , i nTitl e IV , a ne wcontro l scheme fo r addressing the aci d rai n problemwhic hfocuse s exclusivel yan

d immediatel yo n utilit ypowe r plants . Titl e IV wil l forc e mos t electri c utilit ystea m generating unit s t o undertak e pollutio n contro l project s an d provide s ful l flexibilit yt o achiev e complianc e withou t a bia s toward s o r agains t an

yparticula r pollutio n contro l method . Second , th e Agenc ybelieve s it s extensiv e experienc e wit hothe r non-routin eP.1 0

- 7 - physica l an

d operationa l change s a t suc hunit s an d th e uniqu e characteristic s o f th e electri c utilit yindustry(e.g. , th e genera l similarit yo f equipmen t withi nth e categoryan d th e exten t o f publicl yavailabl e information ) suppor t a revisio n t o the ne wsourc e revie wapplicabilit ycriteri a fo r thi s sourc e category . Further , whil e Congres s di d no t mak e significan t change s i n th e NS Ran d NSP S statutorylanguag e i n 1990 , th e conferenc e committe e provide d the following guidanc e t o EPAi n it s Join t ExplanatoryStatement :

"[T]h e deletio n o f mos t provision s relating t o th e WEPC O decisio ni s no t intende d t o affec t o r prejudic e i n an ywaythe issue s o r resolutio n o f th e WEPC O matter . A t the same time , the conferee s urg e a quic k resolutio n o f the WEPC O matte r b yEPAa s appropriate. " Conferenc e Comm. , Join t ExplanatoryStatemen t o f th e Committe e o f the Conferenc e t o Accompan yS . 1630 , Rep . 101-952 , 101st . Cong. , 2n d Sess . (1990 ) pp . 344-45 . I n passing Titl e IV , Congres s di d no t suspend an

yrequirement s o f titl e I . Howeve r Titl e I an d Titl e IV

ar e clearl yintende d t o wor k i nconcert , no t conflict , an d today' s ruling i s intende d t o ensur e tha t harmony . II . BACKGROUND A . Th e Ne wSourc e Performanc e Standards , Preventio no f Significan t Deterioratio nan d Nonattainmen t Program s o f Titl e I Titl e I o f th e Clea nAi r Ac t ha s thre e program s specificall y designe d t o ensur e tha t n o ne wai r pollutio n —whethe r fromne w source s o r from

modification s t o existing source s —ca n b e emitte d unles s the sourc e complie s wit hne wsourc e requirements .P.1 1

- 8 - Th e 197 0 Clea n Ai r Ac t require d EPAtd promulgat e technology-base d ne wsourc e performanc e standard s applicabl e t o th e constructio n o r modificatio n o f stationarysource s tha t caus e o r contribut e significantl yt o ai r pollutio n whic hmayreasonabl y b e anticipate d t o endange r publi c healt ho r welfare . Clea nAi r Ac t ("CAA" ) § 111(b)(1)(A) , 4 2 U.S.C . 7411(b)(1)(A) . Th e NSP S provision s wer e "designe d t o preven t ne wai r pollutio nproblems " b yregulating newly-constructe d source s an d change s occurring a t existing source s tha t resul t i nemission s increases . Se e Nationa l Asphal t Pavemen t Assoc , v . Train , 53 9 F.2 d 775 , 78 3 (D.C . Cir . 1976) ; se e als o H.R . Rep . No . 1146 , 91s t Cong. , 2 d Sess . 3 , reprinte d i n 197 0 U.S . Cod e Cong . & Admin . New s 5356 , 5358 . Congres s define d the ter m"modification " a s "an yphysica l chang e in , o r chang e i n th e metho d o f operatio nof , a stationary sourc e whic hincrease s the amoun t o f an yai r pollutan t emitte d b y suc hsourc e o r whic hresult s i n the emissio n o f an yai r pollutan t no t previousl yemitted. " Se e CA A§ 111(a)(4) , 4 2 U.S.C . 7411(a)(4) . I n 1977 , Congres s adopte d additiona l amendment s t o the Clea n Ai r Act . Thes e change s include d preconstructio n permitting requirement s fo r majo r ne wan d modifie d source s unde r tw o programs , preventio n o f significan t deterioratio n(PSD ) an d nonattainmen t ne wsourc e revie w(respectively , Part s C an d D o f the Clea n Ai r Act) . Congres s intende d thes e program s t o appl y generall ywher e industria l change s migh t increas e pollutio ni nanP.1 2

- 9 - area . Alabama Powe r Co . v . Costle , 63 6 F.2 d 323 , 40 0 (D.C . Cir . 1979) . Congres s incorporate d i nPart s C an d D th e same definitio n o f th e ter m"modification " se t fort hi nth e NSP S provisions . Se e CA A§ 111(a)(4) , 169(2)(C) , an d 171(4) . Th e NS Rprogramfo r PS D (CA A§ § 160-169 ) applie s i n attainmen t areas , i.e. , thos e area s whic hhav e attaine d th e nationa l ambien t ai r qualit ystandard s (NAAQS) . T o receiv e a PS D permit , a prospectiv e majo r ne wsourc e o r majo r modificatio n mus t (amon g othe r things ) showtha t (1 ) i t wil l no t caus e o r contribut e t o a violatio n o f the availabl e ai r qualit y "increment " (designe d t o preven t ambien t ai r qualit yfrom deteriorating b

ymor e thancertai n specifie d levels) , (2 ) i t wil l no t caus e o r contribut e t o a violatio no f a NAAQS , an d (3 ) i t wil l us e th e "bes t availabl e contro l technolog y(BACT), " whic h mus t b e a t leas t a s stringen t a s an yapplicabl e NSP S o r hazardou s pollutan t standar d unde r sectio n11 2 o f th e Act . Par t D o f th e 197 7 Amendment s applie s t o nonattainmen t areas , i.e. , thos e area s whic hhav e no t me t th e NAAQ S unde r sectio n 109 . T o receiv e a permi t i n suc hareas , majo r ne wan d modifie d source s mus t (amon g othe r things ) (1 ) obtai nemission s offsets , thereb

yassuring tha t reasonabl e progres s towardP.1 3

-10

- attainmen t o f th e NAAQ S wil l occur , an d (2 ) compl ywit hth e "lowes t achievabl e emissio nrat e (LAER). " Se e CA A§ 171-173. 3 B . Th e Two-Ste p Tes t fo r Modification s Th e modificatio n provision s o f the NSP S an d NS Rprogram s ar e base d o n the broad NSP S definitio no f "modification " i nsectio n 111(a)(4 ) o f th e Act . Tha t sectio n contemplate s a two-step tes t fo r determining whethe r activitie s a t a nexisting facilit y constitut e a modificatio n subjec t t o ne wsourc e requirements . I n the firs t step , whic hi s largel ythe same fo r NSP S an d NSR , the reviewing authorit ydetermine s whethe r a physica l o r operationa l chang e wil l occur. 4 I f so , the reviewing authorit yproceed s i n the secon

d step t o determin e whethe r the physica l o r operationa l chang e wil l resul t i n an emission s increas e ove r baselin e levels . I n thi s secon

d step , the applicabl e rule s branc hapart , reflecting th e fundamenta l distinction s betwee n the technology

base d provision s o f NSP S an d the ai r quality-base d provision s o f NSR .

Th e 197 0 Clea n Ai r Ac t als o include d a provisio n applicabl e t o constructio n o r modificatio n o f an ystationary source . Thi s provisio n i s presentl yse t fort hi nsectio n 110(a)(2)(C) . Today' s notic e doe s no t propos e t o chang e th e scop e o f th e regulation s implementing thi s provision . Se e 4 0 CF R 5 1 .160-164 .

Thi s i s furthe r describe d i nsectio n III. H below .P.1 4

- 1 1 - Briefly , th e NSP S programexamine s maximu m hourl yemission s rates , expresse d i n kilogram s pe r hour. 5 Emission s increase s fo r NSP S purpose s ar e determine d b ychange s i n th e hourl y emission s rate s a t maximu mphysica l capacity . O nth e othe r hand , th e NS Rregulation s examin e tota l emission s t o th e atmosphere . Fo r applicabilit ydeterminatio n purposes , emission s increase s unde r NS Rar e determine d b ychange s ~in annua l emission s a s expresse d i n ton s pe r yea r (tpy). 6 C . Step One : Physica l o r Operationa l Chang e Th e EPAha s alway s recognize d tha t th e definitio no f physica l o r operationa l chang e i nsectio n 111(a)(4 ) could , standing alone , encompas s th e mos t mundan e activitie s a t an industria l facilit y(eventhe repai r o r replacemen t o f a singl e leak ypipe , o r a chang e i nth e wa ytha t pip e i s utilized) . However , EPAha s alway s recognize d tha t Congres s obviousl ydi d

An hourl yemission s rat e mayb e determine d b ya stac k tes t o r calculate d fro mth e produc t o f th e instantaneou s emission s rate , i.e. , the amoun t o f pollutio nemitte d b ya source , afte r control , pe r uni t o f fue l combuste d o r materia l processe d (sucha s pound s o f sulfu r dioxid e emitte d pe r to no f coa l burned ) time s the productio nrat e (sucha s ton s o f coa l burne d pe r hour) . Se e 4 0 C.F.R . 60.14 .

Annua l emission s mayb e calculate d a s th e produc t o f the hourl yemission s rat e time s th e utilizatio nrate , expresse d a s hour s o f operatio n pe r year , o r a s the produc t o f a nemission s facto r (e.g. , fro

mCompilatio n o f Ai r Pollutan t Emissio n Factors , AP-42 , 4t hEd . an

d subsequen t supplements ) i nunit s o f mas s emitte d pe r uni t o f proces s throughpu t time s th e annua l throughput . Se e 4 0 CF R52.21(b)(21) .P.1 5

- 1 2 - no t inten

d t o mak e everyactivit ya t a sourc e subjec t t o ne w sourc e requirements . A s a result , EPAha s define d "modification " i nth e NSP S an d NS Rregulation s t o includ e common-sens e exclusion s fromth e "physica l o r operationa l change " componen t o f th e definition . Fo r example , bot hset s o f regulation s contai nsimila r exclusion s fo r routin e maintenance , repair , an d replacement ; fo r increase s i n the hour s o f operatio n o r i n the productio n rate ; an d fo r certai n type s o f fue l switches . Se e e.g. , 4 0 C.F.R . 52.21(b)(2)(iii ) an d 60.14(e) . I naddition , wit hrespec t t o pollutio n contro l equipment , the NSP S regulation s contai nan exclusio n for :

Th e additio n o r us e o f an ysystemo r devic e whos e primaryfunctio ni s the reductio no f ai r pollutants , excep t whe na nemission s contro l systemi s remove d o r i s replace d b ya systemwhic hth e Administrato r determine s t o b e les s environmentall ybeneficial . 4 0 C.F.R . 60.14(e)(5) . A s wil l b e discussed , i nrecen t individua l applicabilit ydetermination s EPAha s exclude d pollutio n contro l project s fro mNS Rfollowing a simila r "environmentall ybeneficial " test . D . Step Two : Emission s Increase s fo r NSP S Applicabilit y Th e EPA' s NSP S regulation s defin e th e ter m "modification " a s an y"physica l o r operationa l chang e t o a n existing facilit ywhic h result s i n an increas e i nth e emissio n rat e t o th e atmospher e o f an ypollutan t t o whic ha standard applies. " Se e 4 0 C.F.R . 60. 2 an d 60.14 . Unde r curren t NSP S regulations , emission s increases ,P.1 6

- 1 3 - fo r applicabilit ypurposes , ar e calculate d b ycomparing th e hourl yemissio n rate , a t maximu mphysica l capacity , befor e an d afte r th e physica l o r operationa l change . Tha t is , t o determin e whethe r a chang e t o an existing facilit ywil l increas e th e emission s rate , th e existing NSP S regulation s authoriz e th e us e o f a n "emission s facto r analysis, " o r a material s balance , continuou s monitoring , o r manua l emission s tes t t o evaluat e emission s befor e an d afte r the change . 4 0 C.F.R . 60.14(b)(2) . Absen t th e exclusion s fro mmodification s specifie d a t 4 0 C.F.R . 60.14(e) , an yincreas e i n emission s t o th e atmospher e ove r th e previou s emission s rat e wil l subjec t th e uni t t o NSPS . Se e 4 0 C.F.R . 60.14(a ) an d (b) . I naddition , unde r th e "reconstructio n rules, " physica l o r operationa l change s whic h woul d cos t 5 0 percen t o r mor e o f the tota l cos t o f a comparabl e ne wfacilit ymayb e classifie d a s reconstruction s (se e 4 0 C.F.R . 60.15 ) an

d ar e subjec t t o NSP S a s a ne wsource , eve ni f ther e i s n o emission s increase . E . Step Two : Emission s Increase s Unde r NS RRequirement s 1 . Existing Regulation s Th e EPA' s regulation s implementing th e PS D an d nonattainmen t program s requir e preconstructio nrevie wfo r source s undertaking a "majo r modification, " i.e. , a physica l chang e o r chang e i n th e metho d o f operation s "tha t woul d resul t i na significan t ne t emission s increas e o f an ypollutan t subjec t t oP.1 7

- 1 4 - regulatio n unde r the Act. " 4 0 C.F.R . 52.21(b)(2)(i) , 52.24(f)(5). 7 A"ne t emission s increase " i s define d a s th e increas e i n "actua l emissions " from th e particula r physica l o r operationa l chang e togethe r wit han yothe r "contemporaneous " increase s o r decrease s i nactua l emissions . 4 0 C.F.R . 52.21(b)(3)(i). 8 Applicabilit yo f the Act' s ne wsourc e revie wprovision s mus t b e determine d i n advanc e o f constructio nan d i s pollutan t specific . I n case s involving existing sources , thi s require s a pollutant-by-pollutan t projectio n o f the emission s increases , i f any , tha t wil l resul t fro mthe physica l o r operationa l change . Th e curren t PS D progra mi s se t fort hi ntw o set s o f regulations . On e o f the regulation s cite d (4 0 CF R52.21 ) i s par t o f the federa l PS D permi t progra mwhic happlie s a s par t o f a Federa l implementatio n pla nfo r State s tha t hav e no t submitte d a PS D programmeeting th e regulatoryrequirement s o f 4 0 CF R51.16 6 (standard s fo r PS D provision s i n Stat e implementatio nplans) . I n mos t State s wher e the federa l requirement s apply , EPAha s delegate d th e authorit yt o implemen t the PS D programbac k t o th e State . Roughl ytwo-third s o f the State s ar e implementing thei r ow n PS D progra

mpursuan t t o a nEPA-approve d stat e implementatio n plan . Section s 52.2 1 an d 51.16 6 hav e identica l modificatio n provisions . EPA' s regulation s fo r nonattainmen t area s ar e se t fort ha t 4 0 CFR§ 51.165 , 52.2 4 an d i n Par t 51 , Appendi xS . Thes e section s contai n applicabilit yprovision s regarding modificatio n tha t ar e largel yidentica l t o thos e i nth e PS D provisions .

8 Roughl yspeaking , "contemporaneous " emission s increase s o r decrease s ar e thos e whic hhav e occurre d betwee nthe dat e five year s preceding th e propose d physica l o r operationa l chang e an d the dat e tha t th e increas e fro mthe chang e occurs . 4 0 CFR 52.21(b)(3)(ii) . Onc e a modificatio ni s determine d t o b e major , the PS D requirement s appl yonl yt o thos e specifi c pollutant s fo r whic hther e woul d b e a significan t ne t emission s increase . E.g. , 4 0 CFR52.21(j)(3 ) (bes t availabl e contro l technology) ; 4 0 CF R 52.21(m)(1)(b ) (ai r qualit yanalysis) .- 1 5 -

Specifically , t o determin e whethe r a propose d physica l o r operationa l chang e wil l resul t i nan emission s increase , th e sourc e mus t firs t determin e a baselin e leve l o f actua l emissions . Th e regulation s defin e actua l emission s o n a particula r dat e a s "th e averag e rate , i n ton s pe r year , a t whic hth e uni t actuall y emitte d th e pollutan t during a 2-yea r perio d whic hprecede s th e particula r dat e an d whic hi s representativ e o f norma l sourc e operation. " 4 0 C.F.R . 52.21(b)(21)(ii ) Th e Administrato r "shall " allo wus e o f a differen t time perio d "upo n a determinatio n tha t i t i s mor e representativ e o f norma l sourc e operation. " 1(3 . Th e EPAha s typicall yuse d th e 2 year s immediatel ypreceding the physica l o r operationa l chang e t o establis hth e baseline . Se e 4 5 Fed . Reg . 52676 , 52705 , 5271 8 (1980) . However , i t ca n allo wthe us e o f anearlie r 2-yea r perio d tha t i s mor e representativ e o f norma l sourc e operations . Fo r example , i n WEPCO , EPAfoun d the fourt han

d fift hyear s prio r t o th e modificatio n mor e representativ e o f WEPCO' s norma l operations .

Becaus e th e applicabilit ydeterminatio nmus t b e mad e i n advanc e o f construction , EPA' s NS Rregulation s provid e tha t whe n an emission s uni t "ha s no t begunnorma l operations, " actua l emission s equa l th e "potentia l t o emi t o f th e unit. " 4 0 C.F.R . 52.21(b)(21)(iv) . Thi s approac hi s referre d t o a s th e actua l t o potentia l methodology . Thi s regulatoryprovisio nmayb e overcom e

—an d ne wsourc e revie wwil l no t appl y—i f th e sourc e owne rP.1 9

- 1 6 - agrees , i n a federall yenforceabl e instrumen t —no t t o increas e it s actua l emission s abov e baselin e levels . Se e e.g. , 4 0 C.F.R . 52.21(b)(4) .

2 . Th e WEPC O an

d Puert o Rica nCemen t Decision s A s note d above , t o calculat e whethe r a physica l o r operationa l chang e "increases " emissions , EPAregulation s requir e i t t o fin

d a n increas e i n actua l emissions . 4 0 C.F.R . 52.21(b)(3)(i)(a) . Wher e the emission s uni t ha s no t "begun norma l operations, " EPAregulation s recogniz e tha t futur e actua l emission s ar e difficul t t o predic t an d employfutur e "potential " emission s a s a proxy . 4 0 C.F.R . 52.21(b)(21)(iv) . Th e linchpi n unde r the curren t regulation s fo r predicting futur e emission s afte r a modificatio n i s thu s whethe r the uni t ha s "begun norma l operations. "

Tw o recen t federa l appellat e cour t decision s hav e addresse d EPA' s interpretatio no f the phras e "begunnorma l operations. " Thes e decisions , Puert o Rica n Cemen t Co. , Inc . v . U S EPA , 88 9 F.2 d 29 2 (1s t Cir . 1989 ) an d Wisconsi nElec . Powe r Co . v . Reillv . 89 3 F.2 d 90 1 (7thCir . 1990 ) ("WEPCO") , occasio na reexaminatio n o f EPA' s interpretatio no f the phrase , an d o f the usefulnes s o f th e regulatorylanguag e itself . Th e meaning o f the phras e i s highl yfact-dependent , an d thes e decision s hav e create d uncertaint yregarding it s application ; thus , a s describe d late r i n thi s notice , EPAtoda ypropose s t o chang e it s regulation s fo rP.2 0

- 1 7 - electri c utilit ystea mgenerating unit s t o employa mor e usefu l criterion .Bot hcase s involve d physica l change s t o existing emission s units , bu t change s o f differing extent , natur e an d result . I n Puert o Rica n Cement , the owne r o f a cemen t plant 9 wit hsevera l kiln s sough t t o conver t on e "wet " kil nint o a "dry " kiln , an

d t o combin e tha t kil nwit hanothe r kiln . 88 9 F.2 d a t 293 . Th e cour t observe d tha t th e tota l productio ncapacit yo f the renovate d singl e kil n woul d excee d the combine d productio n capacit yo f th e previou s two separat e kiln s b y"abou t 35%. " Id . I t note d tha t th e renovate d singl e kil n woul d employa differen t "cement-making process " than the origina l kil nfromwhic hi t wa s "converted, " id . And i t sai d tha t th e ne wkil n woul d b e "mor e efficien t [and ] maylead th e fir mt o decid e t o increas e th e leve l o f production, " id . a t 29 7 (emphasi s i n original) . I n reviewing EPA' s interpretatio n o f "begun norma l operations, " the cour t applie d a highl ydeferentia l standard o f review , sinc e an agency' s interpretatio n o f it s ow n regulatorylanguag e i s typicall ygive n "'controlling weigh t unles s i t i s plainl y erroneou s o r inconsisten t wit hthe regulation.' " 88 9 F.2 d a t 297 , quoting Udal l v . Tallman , 38 0 U.S . 1 , 16-1 7 (1965 ) (citatio n omitted) . Th e cour t conclude d tha t o nth e fact s o f th e case ,

9 Puert o Rica n Cemen t involve d a cemen t plant , no t a n electri c utility , bu t th e court' s lega l analysi s o f th e phras e "begun norma l operations " i nthe curren t regulation s i s relevan t t o al l facilities .P.2 1

- 1 8 - EPA' s interpretatio n tha t "norma l operations " had no t begunwa s no t "arbitraryo r irrational, " id . a t 298 , an d henc e EPA' s applicatio n o f th e actual-to-potentia l tes t t o predic t futur e emission s wa s permissible .

I n WEPCO , 89 3 F.2 d 901 , the Sevent hCircui t wa s face d wit ha differen t kin d o f modification . Ther e renovation s wer e propose d fo r severa l olde r (3 5 t o 5 0 yea r old ) coal-fire d electri c utilit yboilers . Th e physica l change s involve d repai r an d replacemen t o f turbine-generators , stea mdrum s an

d othe r majo r components . Th e EPAcontended , a s i t had i nPuert o Rica n Cement , tha t thes e change s wen t beyond "norma l operations " an d thu s warrante d us e o f futur e potentia l emission s a s the tes t fo r an emission s increas e ove r pas t actua l emissions . Her e th e cour t disagree d wit hEPA' s interpretatio ntha t "norma l operations " had no t begun . Th e cour t coine d the phras e "like-kin d replacement " t o describ e th e typ e o f renovatio noccurring a t the WEPC o plant . Id . a t 917 . Th e cour t describe d a "like-kin d replacement " a s on e tha t "doe s no t 'chang e o r alter ' th e design o r natur e o f the facility . Rather , i t merel yallow s th e facilit yt o operat e agai n a s i t had befor e the specifi c equipmen t deteriorated. " .Id . a t 908 . I n determining whethe r suc ha "like-kin d replacement " had "begu n norma l operations, " .id . a t 917 , the cour t considere d whethe r a "realisti c assessmen t o f [the ] impac t [o f the change ] o n ambien t ai r qualit ylevel s i s possible.' " .Id . a t 91 7 (quoting Alabama Powe r Co . v . Costle . 63 6 F.2 d 323 , 37 9 (D.C . Cir . 1979)) .P.2 2

- 1 9 - Th e cour t sai d tha t wher e the renovation s wer e "like-kind replacements, " EPAcoul d no t reasonabl yinterpre t it s regulation s t o sa ytha t suc ha uni t wa s s o differen t tha t i t ha s no t "begun norma l operations. " Thus , i t conclude d tha t th e "actual-to

potential " tes t coul d no t b e applied , unde r EPA' s regulations , t o unit s simpl yundergoing "like-kind replacements." 1 0

Neithe r o f thes e decision s specifie d th e threshol d fo r whe n a uni t ha s "begu n norma l operations. " Base d o n thes e decisions , unde r it s curren t regulations , EPAmus t conside r the fact s o f eac hcas e an d appl yth e actual-to-potentia l tes t onl y wher e th e chang e i s sufficientl ysignifican t t o suppor t a finding tha t "norma l operations " hav e no t "begun. " A t leas t fo r change s tha t ar e "lik e kin

d replacements, " "norma l operations " hav e begun , an

d th e actual-to-potentia l tes t i s impermissible . Becaus e the "begun norma l operations " criterio ni s highl yfact-dependen t an d it s applicatio n i s inherentl ycase-by

case , i t mayb e a n uncertai nindicato r o f wha t emission s tes t wil l b e applie d i n a give n instance . However , EPA' s extensiv e experienc e wit helectri c utilities , an d th e generall ysimila r natur e o f operation s withi n thi s sourc e category , provid e EPAan adequat e basi s o n whic ht o predic t futur e actua l emission s fro m suc hunit s i n mos t cases . Consequently , a s explaine d below , EPA

1 0 O n remand , EPAemploye d anactual-to-futur e actua l test , comparing WEPCo' s representativ e actua l emission s fo r th e baselin e perio d t o estimate d futur e actua l emission s base d o n al l th e availabl e fact s i n th e record .P.2 3

- 2 0 - i s toda yproposing t o revis e it s regulation s t o appl yth e actual

to-actua l tes t o n al l physica l o r operationa l change s a t electri c utilit ystea

mgenerating unit s save thos e tha t ar e a nadditio no f a ne wuni t o r constitut e a replacemen t o f anexisting unit . Pending fina l adoptio n o f thi s ne wrule , EPAwil l continu e t o appl yan actual-to-actua l tes t t o unit s tha t undertak e "like-kin d replacements " an

d othe r unit s whic har e foun d t o hav e "begun norma l operations. " F . Th e Clea n Ai r Ac t Amendment s o f 199 0 1 . Ne wSourc e Revie wan d the Aci d Rai n Provision s Th e Clea n Ai r Ac t Amendment s o f 1990 , Pu bL . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) , mad e numerou s change s i nthe nonattainmen t provision s o f th e Clea nAi r Ac t an d adde d a ne w titl e t o addres s the problem o f aci d rain . Th e amendment s attac k nonattainmen t problem s wit ha broad arra yo f ne wrequirement s al l designe d t o bring al l area s o f the countryint o attainmen t wit h the nationa l ambien t ai r gualit ystandard s fo r al l pollutants . Thes e requirement s includ e traffi c reductio nstrategies , us e o f alternativ e clea n fuels , increase d offse t requirement s fo r stationarysources , an d change s i nthe threshol d siz e o f stationarysource s subjec t t o ne wsourc e review . Aprincipa l theme o f the legislatio n i s the establishmen t o f categorie s o f nonattainmen t area s base d o nthe severit yo f th e pollutio n problem . Th e mor e sever e th e area , the mor e control s Congres s require d b e imposed .P.2 4

- 2 1 - Th e Amendment s als o establish , i nTitl e IV , a ne wcontro l scheme fo r addressing th e aci d rai nproblem . Th e exclusiv e focu s o f thi s program

i s o n utilit ypowe r plan t emission s o f sulfu r dioxid e an

d nitroge n oxides . Th e 199 0 Amendment s requir e sulfu r dioxid e emission s fro mutilitie s t o b e reduce d b yapproximatel y 1 0 millio n ton s annuall yi ntwo phase s —th e firs t t o tak e effec t i n 1995 , th e secon d i n2000 . Atota l o f 11 1 specifi c plant s ar e targete d i n Phas e I , an d wil l b e require d t o reduc e thei r S0 2 emission s t o specifie d emission s limits . I nPhas e II , thes e plants , an

d almos t al l others , ar e subjec t t o eve n lowe r S0 2 emission s limits . Thi s reductio nprogrami s t o b e implemente d througha ne wmarket-base d system unde r whic h emission s allowance s reflecting th e require d reductio ni ncurren t emission s ar e allocate d t o existing utilit yplants . Plan t owners , wh o ar e require d t o hol d allowance s equa l t o thei r actua l emissions , ar e the n fre e t o trad e thes e allowances . Thus , the emission s o f individua l unit s mayvaryfromth e initia l allocatio n o f allowances , bu t aggregat e emission s ar e alway s hel d t o th e program' s overal l targe t level . Thi s program wil l provid e powerfu l incentive s t o source s t o undertak e pollutio ncontro l projects . Becaus e o f thes e requirements , man yo f th e plant s subjec t t o Phas e I control s mus t mak e complianc e decision s withi nth e nex t yea r i n orde r t o assur e tha t the complicate d contro l equipmen t tha t mayb e necessaryt o mee t Phas e I standard s i s i n plac e b yP.2 5

- 2 2 - the 199 5 deadline . I n enacting Titl e IV , Congres s di d no t suspen d an yTitl e I requirement s fo r thi s work . However , the massiv e industry-wid e undertaking s o f pollutio ncontro l project s warrant s a clarificatio n o f the ne wsourc e revie wrequirement s o f Titl e I . I n particular , Ne wSourc e Revie w(NSR ) provision s shoul d no t inadvertentl ybia s a utilit ytoward s o r agains t an ymean s o f complying wit hthe aci d rai n provisions . Th e EPAbelieve s the amendment s propose d toda yan d the clarificatio n o f it s curren t policyunde r it s presen t NS Rregulation s provid e adequat e assurance s tha t utilitie s can undertak e Titl e IV pollutio n contro l project s withou t uncertaint ya s t o the applicabilit yo f th e variou s Titl e I ne wsourc e requirements .

2 . Repowering an

d CC T Project s I n Titl e IV

o f the 199 0 Amendments , whic hcreate s the aci d rai n program , Congres s mad e change s i nthe applicabilit yo f ne w sourc e requirement s t o change s involving repowering an d Clea n Coa l Technology(CCT ) projects . Sectio n 40 9 grant s an extensio no f the aci d rai ncontrol s deadlin e t o source s tha t see k t o compl ywit hth e aci d rai n reduction s b

yrepowering a uni t wit hqualifying clea ncoa l technology . Sectio n 402(12 ) define s repowering as :

[The ] replacemen t o f an existing coal-fire d boile r wit hon e o f the following clea n coa l technologies : atmospheri c o r pressurize d fluidize d bed combustion , integrate d gasificatio n combine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio n fue l cells , o r a s determine d b ytheP.2 6

- 2 3 - Administrator , i nconsultatio n wit hth e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d an yothe r technolog

ycapabl e o f controlling multipl e combustio n emission s simultaneousl ywit h improve d boile r o r generatio nefficienc yan d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technolog yi n widesprea d commercia l us e a s o f the dat e o f enactmen t o f the Clea n Ai r Ac t Amendment s o f 1990 . Notwithstanding th e provision s o f sectio n 409(a) , fo r the purpos e o f thi s title , the ter

m'repowering ' shal l als o includ e an

yoi l and/o r gas-fire d uni t whic h ha s bee n awarde d clean coa l technolog y demonstratio n funding a s o f January1 , 1991 , b ythe Departmen t o f Energy . Se e CA A§ § 402(12 ) an

d 409(a) . Congres s provide d tha t repowering project s tha t qualif yfo r a Phas e I I complianc e extensio n woul d als o b e exemp t fromNSP S requirements , s o long a s the repowering "doe s no t increas e actua l hourl yemission s fo r an ypollutan t regulate d unde r th e Act. " Se e CA A§ 409(d) . A

n operato r canqualif yfo r the 3-yea r extensio n o f th e Phas e I I emission s limitatio n b ydemonstrating (b y Decembe r 31 , 1997 ) t o the permitting authorit ytha t on e o r mor e unit s wil l b e repowere d wit ha qualifying clea n coa l technology t o mee t th e Titl e IV restrictions . Th e operato r mus t provide , n o late r than January1 , 2000 , additiona l documentatio n o f th e repowering projec t including a preliminarydesignan d engineering effor t fo r th e projec t an d a binding contrac t fo r th e majorit yo f the equipmen t needed , a s wel l a s an yadditiona l informatio nth e reviewing authorit yrequires .P.2 7

- 2 4 - Today' s proposa l als o implement s a nexemptio nfro mne w sourc e requirement s fo r CC T demonstratio nproject s create d b y Congres s i n sectio n 41 5 o f Titl e IV o f the 199 0 Amendments . I n thes e provisions , CC T i s define d a s an ytechnolog

yno t i n widesprea d us e o n the dat e o f enactmen t tha t achieve s significan t reduction s i n S0 2 o r nitroge n oxide s (N0 X ) emission s associate d wit hburning coa l i n th e generatio n o f electricity , proces s steam , o r industria l products . Se e CA A§ 415(a) . ACC T "demonstratio n project " i s a projec t funde d unde r DOE' s CC T progra mo r a simila r projec t funde d b yEPA. 1 1 Repowering project s tha t ar e awarde d funding fro mth e Departmen t o f Energ y(DOE ) a s permanen t CC T demonstratio n project s (or simila r project s funde d b yEPA ) ar e exemp t fro mNSP S an d PS D requirement s s o long a s potentia l emission s (se e 4 0 C.F.R . 52.21(b)(4) ) fro mthe uni t d o no t increas e a s a resul t o f the project . CA

A§ 415(b)(3) . Thes e funde d project s maystil l b e require d t o compl ywit hthe nonattainmen t NS Rprovision s o f Titl e I o f the Act , unles s theyar e exclude d a s pollutio ncontro l projects .

1 1 Sectio n 415(b)(1 ) define s a CC T projec t a s a a projec t "using fund s appropriate d unde r the heading 'Departmen t o f Energy-Clea n Coa l Technology' , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea ncoa l technology , o r simila r project s funde d throughappropriation s fo r the Environmenta l Protectio n Agency. "P.2 8

- 2 5 - Th e installation , operation , cessation , o r remova l o f a temporaryCC T demonstratio nprojec t tha t i s operate d fo r 5 year s o r les s i s exemp t fro mNSP S an

d bot hPS D an

d nonattainmen t ne w sourc e requirements . Se e CA A415(b)(2) . However , th e facilit y stil l mus t compl ywit hth e applicabl e SI P an d othe r requirement s necessaryt o attai n an d maintai nthe NAAQS . Finally , i n sectio n 415(c) , Congres s provide d a nexemptio n fro mNSP S an

d PS D fo r th e reactivatio no f "ver yclea n units " otherwis e i n complianc e wit hthe Ac t tha t had bee nshu t dow n fo r a t leas t th e 2 year s prio r t o enactmen t o f the 199 0 Amendment s an d that , prio r t o th e shutdown , had bee nequippe d wit hpollutio n control s wit ha remova l efficiencyo f a t leas t 8 5 percen t fo r sulfu r dioxid e an

d 9 8 percen t fo r particulates , an d ha d bee n equippe d wit hlow-NOxburners . III . DISCUSSION A . Pollutio n Contro l Project s 1 . Propose d RegulatoryChange s fo r Pollutio nContro l Project s Th e EPApropose s t o amen d it s PS D an

d nonattainmen t regulation s a s theypertai nt o utilit ypollutio ncontro l project s b yexercising it s authorit yunde r the statutorydefinitio no f "modification " an

d confirming the Agency' s curren t polic ytha t suc hproject s ar e no t subjec t t o NS Runles s theyrende r the uni t les s environmentall ybeneficial . Generally , pollutio ncontro l project s a t existing stationarysource s ar e no t majo r modification s subjec t t o ne wsourc e revie wrequirement s fo r th eP.2 9

- 2 6 - simpl e reaso n tha t theyd o no t resul t i n anincreas e i n actua l emissions . I n addition , EPAha s alway s recognize d tha t Congres s di d no t inten

d tha t ever

yactivit ya t a nexisting facilit yb e considere d a physica l o r operationa l chang e fo r purpose s o f th e newsourc e review. 1 2 Th e EPAi s toda

yproposing t o adop t revision s t o it s PS D an d nonattainmen t regulation s fo r the addition , replacemen t o r us e a t an existing electri c utilit ystea m generating uni t o f an ysystem o r devic e whos e primaryfunctio ni s the reductio no f ai r pollutant s (including th e switching t o a less-polluting fue l wher e the primarypurpos e o f the switc hi s the reductio no f ai r pollutants) . Unde r today' s proposal , a utilit ypollutio ncontro l projec t wil l no t b e treate d a s a physica l o r operationa l chang e unles s th e projec t render s the uni t les s environmentall y beneficial . A s indicate d above , the keyt o thi s additio nt o th e lis t o f exclusion s fro

m the ter

mphysica l o r operationa l chang e i s EPA' s judgmen t tha t Congres s di d no t inten d tha t pollutio ncontro l project s b e considere d the typ e o f activit ytha t shoul d trigge r NSR . Th e EPAi s toda yissuing regulatorylanguag e t o explicat e an d formaliz e it s statutoryauthorit yt o exclud e pollutio n

1 2 Fo r instance , EPAha s specificall yrecognize d tha t routin e maintenance , repai r an d replacement , an

d change s i nhour s o f operatio n o r i n the productio n rat e ar e no t considere d a physica l chang e o r chang e i nthe metho d o f operation . Se e 4 0 CF R 52.21(b)(2)(iii) , 52.24(f)(5)(iii) , 51.165(a)(1)(v)(C)(1) , 51.166(b)(2)(iii) , an d 60.14(e)(1) .P.3 0

- 2 7 - contro l project s unde r the NS Rprovisions . I n 1977 , whe n Congres s enacte d the NS Rprovision s o f th e Act , i t provide d tha t the ter m "modification " i n NS Rshal l hav e the same meanin g a s the ter m"modification " unde r NSPS . Se e § § 169(2)(c) , 171(4) . A t the time , regulation s promulgate d unde r the NSP S provision s defining "modification, " provide d tha t th e ter m"modification " doe s no t include :

Th e additio n o r us e o f an ysystemo r devic e whos e primaryfunctio ni s th e reductio no f ai r pollutants , excep t whe n anemission s contro l system

i s remove d o r i s replace d b ya system whic hth e Administrato r determine s to . b e les s environmentall ybeneficial . 4 0 C.F.R . 60.14(e)(5) . I n 1978 , EPAnote d tha t "i nadding sectio n 169(2)(c ) t o the Act , Congres s indicate d tha t i t intende d t o conformth e meaning o f 'modification ' t o 'usag e i nothe r part s o f th e Act. ' 12 3 Congr . Rec . H11955 , 1195 7 (Nov . 1 , 1977). " 4 3 Fed . Reg . 2639 6 (June 19 , 1978) . Thus , jus t a s EPAha d th e statutoryauthorit yt o exclud e pollutio n contro l project s b y regulatio n fro

m NSPS , th e statutoryauthorit yexist s fo r EPAt o explicat e b

yregulatio n a n exclusio nfo r pollutio ncontro l project s from

Part s C an

d D o f Titl e I . A s discusse d i n greate r detai l i na subsequen t section , thi s exclusio n unde r NS Rreflect s th e existing regulatoryexclusio n fo r pollutio n contro l activitie s unde r NSP S regulations , an d severa l recen t case-specifi c nonapplicabilit ydetermination s unde r th e ne wsourc e revie wprograms . Th e NSP S regulatory exclusio n contain s the provis o tha t th e replacemen t o f aP.3 1

- 2 8 - pollutio n contro l systemo r devic e canno t b e les s "environmentall ybeneficial " t o qualif yfo r the exclusion . Se e 4 0 C.F.R . 60.15(e)(5) . Wit hrespec t t o ne wsourc e review , today' s proposa l adopt s a simila r regulatoryexclusio n fo r pollutio n contro l project s i nthe PS D an d nonattainmen t context . Th e majo r differenc e i n the propose d NS Rexclusio ni s tha t i t woul d appl yth e "no t les s environmentall ybeneficial " tes t t o the additio n an

d use , a s wel l a s the replacement , o f a pollutio n contro l systemo r device . Thi s chang e reflect s the distinc t ai r qualit ycomponen t o f the PS D an d nonattainmen t programs . B y focusing o n whethe r a pollutio ncontro l projec t i s a physica l o r operationa l chang e withi n th e meaning o f the ne wsourc e revie w regulations , today' s ruling avoid s the nee d t o undertak e a quantitativ e emission s increas e calculatio ni neverycase , a s woul d b e necessaryi f suc hproject s wer e deeme d t o b e physica l o r operationa l changes . Th e EPAexpect s tha t most , i f no t all , pollutio n contro l project s wil l reduc e ne t actua l emissions . Nevertheless , the Administrator' s authorit yt o conside r individua l pollutio n contro l project s provide s a nadequat e opportunit yt o determin e tha t a pollutio ncontro l projec t woul d somehowresul t i n an advers e environmenta l impac t an d thu s conclud e tha t th e projec t render s th e uni t les s environmentall y beneficial , an

d i s therefor e a physica l o r operationa l chang e tha t mayb e subjec t t o NSR .P.3 2

- 2 9 - Fo r th e purpose s o f thi s proposal , a pollutio ncontro l projec t refer s t o a projec t undertake n a t a utilit yuni t fo r purpose s o f reducing emission s fro msuc hunit . Thes e change s ar e limite d t o th e installatio no f conventiona l o r innovativ e emission s contro l equipment , including , bu t no t limite d to , installatio n o f conventiona l an d advance d flu e ga s desulfurization , sorben t injectio nfo r S0 2 an d NO xcontrols , electrostati c precipitators , an d project s undertake nt o accommodat e switching t o a les s polluting fuel , including natura l ga s o r coa l re-burning , co-firing o f natura l ga s an d othe r fuel s fo r th e purpos e o f controlling S0 2 an d NO xemissions . Likewise , an

yactivit ytha t i s necessaryt o accommodat e switching t o a les s polluting fue l i s considere d t o b e par t o f the pollutio n contro l project . I n some instances , thi s may involv e change s t o th e pollutio n generating equipmen t (e.g. , boiler) , bu t onl yi f th e change s ar e necessaryt o maintai nthe norma l operating capabilit yo f the uni t a t th e time o f th e project , wher e th e capabilit ywoul d otherwis e b e impaire d a s a resul t o f th e fue l switch . Fo r example , a nelectri c utilit y stea mgenerating uni t tha t switche s fro m a highe r sulfu r bituminou s coa l t o a low-sulfu r subbituminou s coa l ma ynee d t o mak e certai n change s t o the boile r i norde r t o avoi d derating th e unit .Change s tha t ar e intende d primaril yt o restor e origina l capacit yo r t o improv e th e operationa l efficienc yo f th e facilit yP.3 3

- 3 0 - ar e no t considere d t o b e par t o f a pollutio ncontro l projec t fo r purpose s o f thi s proposal . Suc hchange s ar e addresse d elsewher e i n thi s proposal . Also , the sourc e stil l mus t compl ywit hal l applicabl e SI P limit s an d requirements , permi t condition s an d applicabl e NAAQ S o r PS D incremen t limits . A s proposed , thi s pollutio ncontro l projec t exclusio nwil l no t extend t o sourc e categorie s othe r than electri c utilit ystea m generating units . Th e EPAha s s o limite d thi s provisio nbecause , i n contras t wit ha genera l lac k o f experienc e wit hothe r industries , EPAha s extensiv e experienc e i n addressing ne wsourc e applicabilit yissue s regarding pollutio n contro l project s i nth e utilit yindustry . Tha t experienc e ha s led EPAt o conclud e tha t pollutio n contro l project s i n the utilit yindustryar e generall y environmentall ybeneficial .

2 . Additiona l Modeling Requirement s Apropose d pollutio n contro l projec t o r physica l o r operationa l chang e canno t resul t i n a nemission s increas e tha t wil l caus e o r contribut e t o a violatio no f a nationa l ambien t ai r qualit ystandard , PS D increment , o r visibilit ylimitation . Se e CA A§ § 110(a)(2)(c) , 165 , 1.69A(b) , 173 . Th e pollutio ncontro l project s exclusio n doe s no t authoriz e an ysignifican t ne t increas e i n emission s tha t woul d hav e thi s proscribe d impact . I t i s possibl e tha t a pollutio n contro l project , whil e no t causing an yincreas e i n maximu m hourl yemissions , wil l caus e a significan t ne t increas e i nactua l emissions , whic hi nturncoul d- 3 1 -

caus e o r contribut e t o the violatio n o f a Nationa l Ambien t Ai r Qualit yStandard s (NAAQS) , incremen t o r visibilit ylimitation . Fo r thi s reason , unde r today' s proposal , the reviewing authorit y mayrequir e a sourc e t o performan ai r qualit yimpac t analysi s (modeling ) wheneve r i t ha s reaso nt o believ e tha t a propose d chang e wil l resul t i n a significan t ne t increas e i nactua l emission s o f an

ycriteri a pollutan t ove r level s use d fo r tha t sourc e i n th e mos t recen t ai r qualit yimpac t analysis . I f thi s modeling indicate s tha t thi s increas e i n emission s wil l caus e o r contribut e t o a violatio no f an yambien t standard , PS D incremen t o r visibilit ylimitation , the pollutio n contro l exclusio ndoe s no t apply . 3 . Th e EPA' s Existing PolicyRegarding Pollutio n

Contro l Project s A s note d above , generall ypollutio ncontro l project s a t existing stationarysource s ar e no t majo r modification s subjec t t o ne wsourc e revie wbecaus e theyd o no t usuall yresul t i n a n increas e i n actua l emissions , an d EPAbelieve s that , i ngeneral , pollutio n contro l project s wer e no t intende d b yCongres s t o b e considere d physica l o r operationa l change s fo r purpose s o f NSR . Th e EPAcurrentl yapplie s it s PS D regulation s i n harmon y wit hit s NSP S regulations , whic hexclud e mos t pollutio ncontro l projects . Se e 4 0 C.F.R . 60.14(e)(5) . I n1977 , Congres s incorporate d th e NSP S definitio n o f modificatio nint o th e PS D an d nonattainmen t statutes . CA A§ § 111(a)(4) , 169(a)(c) , 171(4) . I n addition , th e legislativ e historyreflect s that , a s a genera lP.3 5

- 3 2 - matter , Congres s intende d t o confor mth e meaning o f "modification " fo r PS D purpose s t o the usag e unde r th e NSP S program . Se e 12 3 Cong . Rec . H1195 7 (Novembe r 1 , 1977) . Th e EPA reiterate d thi s vie wi n 1978 . Se e 4 3 F R26396 , Jun e 19 , 1978 . Subsequently , EPAinterprete d it s NS Rregulation s t o incorporat e the NSP S pollutio n contro l projec t exclusion. 1 3 Th e EPAlate r voice d concer n abou t incorporating the precis e NSP S pollutio n contro l languag e i n th e NS Rcontex t absen t explicatio n through notice-and-commen t rulemaking largel ybecaus e o f th e ambien t ai r qualit ycomponen t o f NS Rtha t i s absen t fro m th e NSP S program. 1 4 I n recen t year s however , EPAha s consistentl yexclude d pollutio n contro l project s fro mNS Rprovide d tha t the propose d projec t woul d b e environmentall ybeneficial , taking int o accoun t ambien t ai r quality. 1 5 I n ligh t o f th e Titl e IV requirement s an

d othe r provision s o f the Clea n Ai r Ac t Amendment s o f 1990 , EPAconfirm s tha t i t wil l continu e t o conside r the overal l environmenta l

1 3 Memorandu

mfro mEdward Reich , Director , Stationary Sourc e Complianc e Divisio n an d Willia

mF . Pedersen , Actin g Associat e Genera l Counsel , Air , Noise , an d Radiatio nDivisio nt o Ally n M . Davis , Regio n IV (Apri l 21 , 1983) . 1 4 See , Memorandu mfro mGeral d A . Emison , Director , OAQPS , t o Regiona l Divisio nDirector s (July7 , 1986) .

1 5 See , Letter , Willia mG . Rosenber g Assistan t Administrator , EPA , t o Andre wAitken , Vic e President , Ne wEngland Powe r Servic e Co. , Marc h26 , 1991 ; Letter , Rosenber g t o Patric k M . McCarter , Senio r Vic e President , Publi c Servic e Co . o f Colorado , Jul y23 , 1990 ; Letters , Davi d Kee , Director , Ai r an d Radiatio n Division , EPARegio n V , t o Timoth yJ . Method , Assistan t Commissioner , Indiana Dept . o f Environmenta l Management , January 30 , 199 0 an

d Marc h8 , 1990 .P.3 6

- 3 3 - consequence s o f pollutio ncontro l project s fo r NS Rapplicabilit y o n a n interi mbasi s pending fina l actio n o nth e propose d regulatoryexclusio n fo r pollutio n contro l projects . B yit s nature , a determinatio n o f whethe r o r no t a projec t render s a uni t les s environmentall ybeneficia l involve s case-by-cas e assessmen t o f it s ne t emission s an d overal l impac t o n th e environment . I n making suc hassessments , EPAmus t conside r the overal l emission s befor e the project , a s wel l a s an yothe r relevan t environmenta l factors . B . Representativ e Actua l Annua l Emission s A s describe d above , EPApropose s t o revis e it s methodologyfo r calculating emission s increase s a t electri c utilit ystea

mgenerating sources . Th e EPApropose s t o compar e actua l emission s befor e an d afte r change s fo r al l physica l o r operationa l change s a t an existing electri c utilit ystea m generating uni t othe r thanth e additio no f a ne wuni t o r th e replacemen t o f a n existing unit . Unde r today' s action , EPA propose s t o conside r a uni t t o b e replace d i f i t woul d constitut e a reconstructe d uni t withi nthe meaning o f 4 0 C.F.R . 60.15 . Sinc e ther e i s n o relevan t operating historyfo r wholl yne wunit s an d replace d units , i t i s no t possibl e t o reasonabl yprojec t post-chang e utilizatio n fo r thes e units , an d hence , thei r futur e leve l o f "representativ e annua l actua l emissions. " Fo r othe r changes , pas t operating history , an d othe r relevan t information , provide s a basi s fo r reasonabl e projections .P.3 7

- 3 4 - A s propose d today , th e "representativ e actua l annua l emissions " methodologyrequire s the utilit yt o compar e it s baselin e emission s wit hit s futur e actua l emission s t o determin e i f th e propose d chang e wil l increas e actua l emissions . Th e EPA' s existing regulation s defin e baselin e emission s a s "the averag e rate , i n ton s pe r year , a t whic hthe uni t actuall yemitte d th e pollutan t during a 2-yea r perio d whic hprecede s th e particula r dat e an d whic hi s representativ e o f norma l sourc e operation. " See , e.g. , 4 0 C.F.R . 52.21 . Th e Administrato r "shall " allo wus e o f a differen t time perio d "upon a determinatio n tha t i t i s mor e representativ e o f norma l sourc e operation. " Jd . Althoughno t require d b

yth e regulations , EPAha s historicall yuse d th e 2 year s immediatel ypreceding the propose d chang e t o establis hth e baseline . (Se e 4 5 Fed . Reg . 52676 , 52705 , 5271 8 (1980). ) However , i n some case s i t ha s allowe d the us e o f earlie r periods . Fo r example , i n WEPCO , EPAfoun d the fourt han

d fift hyear s prio r t o th e modificatio n mor e representativ e o f WEPCO' s norma l operation s sinc e the source' s capacit ywa s reduce d du e t o physica l problems . Th e EPApropose s toda yt o retai nthi s regulatorylanguage , bu t t o adop t a ne wpresumptio nregarding it s implementation . Unde r today' s action , the Administrato r wil l presume tha t an y2 consecutiv e year s withi nthe 5 year s prio r t o the propose d chang e i s representativ e o f norma l sourc e operation s fo r a utility . Thi s presumptio n i s consisten t wit hthe 5-yea r perio dP.3 8

- 3 5 - fo r "contemporaneous " emission s increase s an d decrease s i n4 0 C.F.R . 52.21(b)(3)(i)(b). 1 6 Sourc e owner s o r operator s desirin g t o us e othe r than a 2-yea r perio d o r a baselin e perio d prio r t o the las t 5 year s maysee k the Administrator' s specifi c determinatio n tha t suc hperio d i s mor e representativ e o f norma l operations. 1 7

Th e futur e actua l projectio n i s th e produc t of : (1 ) th e hourl yemission s rate , whic hi s base d o n th e unit' s physica l an d operationa l capabilitie s following th e chang e an d federally

enforceabl e operationa l restriction s tha t woul d affec t th e hourl y emission s rat e following thi s change ; an d (2 ) projecte d capacit y utilization , whic hi s base d o n (a ) the unit' s historica l annua l utilization , an

d (b ) al l availabl e informatio nregarding th e

1 6 Thi s presumptio n doe s no t appl yt o pas t modification s a t a n emission s uni t fo r the purpos e o f determining contemporaneou s emissio n change s a t a sourc e and canno t b e use d t o extend th e five yea r perio d specifie d i n tha t provision . Se e 4 0 CF R52.21(b)(3)(1)(b) .

1 7 Th e leve l o f baselin e emission s selecte d mus t b e consisten t wit hcurren t assumption s regarding th e source' s emission s tha t ar e use d unde r the stat e implementatio nplan s (SIP ) fo r planning o r permitting purposes . Thus , th e sourc e ma y no t selec t a leve l o f baselin e emission s highe r tha ntha t use d b y the permittin g authorit yi n issuing a PS D o r othe r constructio n permi t t o a sourc e i n th e area , i f suc hhighe r leve l woul d resul t i n a NAAQ S o r incremen t violation , o r violat e a visibilit y limitation .P.3 9

- 3 6 - unit' s likel ypost-chang e capacit yutilization. 1 8 Th e projectio n o f post-chang e capacit yutilizatio nfo r applicabilit y purpose s shoul d b e base d o na projectio no f utilizatio n fo r a perio d afte r th e physica l o r operationa l change . Specifically , EPAtoda

ypropose s t o allowsource s t o bas e the projectio no f utilizatio n o n th e 2 year s afte r the change , o r a differen t consecutiv e 2-yea r perio d withi n the 1 0 year s afte r the change , wher e the Administrato r determine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations . C . Th e Causatio n Requiremen t Th e NS Rregulatoryprovision s requir e tha t the physica l o r operationa l chang e "resul t in " anincreas e i nactua l emission s i n orde r t o conside r tha t chang e t o b e a modification . Se e e.g . 4 0 C.F.R . 52.2 1 (2)(i) . I n othe r words , NS Rwil l no t appl yunles s EPAfind s tha t ther e i s a causa l lin k betwee n th e propose d chang e an d an ypost-chang e increas e i n emissions . Th e EPAtoda y propose s t o amen

d it s rule s t o clarif ythi s provisio n i nthe contex t o f modification s a t electri c utilit ystea mgenerating units . Unde r thes e propose d regulations , an yemission s increas e attributabl e t o a physica l o r operationa l change , suc ha s a

1 8 I n projecting futur e utilizatio nan d emission s factors , the permitting authorit ymayconside r the company' s historica l operationa l data , it s ow nrepresentations , filing s wit hFederal , Stat e o r loca l regulatoryauthorities , an d complianc e plan s develope d unde r Titl e IV o f th e 199 0 Amendments .P.4 0

- 3 7 - physica l o r operationa l chang e tha t significantl yalter s th e efficienc yo f th e plant , (see , Puert o Rica nCement , 88 9 F.2 d a t 297-8) , mus t continu e t o b e include d i nth e post-chang e emission s calculation . Today' s proposa l make s clea r tha t wher e increase d operation s ar e i n respons e t o independen t factors , suc ha s system-wid e demand growth , whic hwoul d hav e occurre d an d affecte d the unit' s operation s eve n i nthe absenc e o f th e physica l o r operationa l change , suc hincrease s d o no t resul t fro m th e chang e an d shal l b e exclude d fro mthe projectio no f futur e actua l emissions . Thus , i n assessing whethe r th e propose d chang e wil l resul t i n a n increas e i n actua l emissions , utilitie s nee d no t includ e i n thei r projectio n o f post-chang e utilizatio ntha t portio n o f th e increase d rat e o f utilization , i f any , du e t o factor s unrelate d t o the physica l o r operationa l change , suc ha s an increas e i n projecte d capacit yutilizatio n du e t o th e rat e o f electricit ydemand growt hfo r the utilit ysystem(o f whic htha t sourc e i s a member ) a s a whole . Unde r thi s proposal , during a representativ e baselin e perio d (se e supra) , th e plan t mus t hav e bee nabl e t o accommodat e th e projecte d demand growt hphysicall yan d legall yeve n absen t th e particula r change . Increase d operation s (an d resultan t increase s i n actua l emissions ) tha t coul d no t physicall yan d legall yb e accommodate d bu t fo r the propose d physica l o r operationa l chang e shoul d b e considere d t o resul t fro mthe change . D . RepoweringP.4 1

- 3 8 - A s previousl ymentioned , Titl e IV o f the 199 0 Amendment s grant s specia l treatmen t t o utilitie s tha t see k t o compl ywit h the mandate d aci d rai n reduction s b yrepowering a uni t wit h qualifying clea n coa l technology . 199 0 Amendment s § § 402(12) , 409(a) . Specifically , repowering project s tha t qualif yfo r a Phas e I I complianc e extensio nwil l als o b e exemp t fro m NSP S requirements , s o long a s the repowering "doe s no t increas e actua l hourl yemission s fo r an ypollutan t regulate d unde r the Act. " § 409(d) . Th e EPAinterpret s the requiremen t tha t the repowering no t lead t o a n increas e i n"actua l hourl yemissions " a s a n expressio n o f Congressiona l inten t tha t wit hrespec t t o repowering projects , EPAshoul d us e the same genera l approac ht o determining applicabilit ya s i t ha s fo r othe r physica l o r operationa l changes , discusse d above . Accordingly , EPAtoda y propose s rule s tha t provid e tha t a repowering projec t whic h result s i n an increas e ove r baselin e i na unit' s post
modificatio n hourl yemission s wil l no t b e eligibl e fo r thi s limite d NSP S exemption . Th e propose d NSP S exemptio n applie s t o repowering o f existing unit s a t existing sources , s o long a s the projec t qualifie s fo r the Phas e I I extensio n an d satisfie s the "actua l hourl yemissions " increas e test . Becaus e o f thi s provision , th e reconstructio n limitation s specifie d i n4 0 C.F.R . 60.1 5 ar e no t applicabl e t o qualifying repowering projects . However , n o specia l treatmen t ca n b e afforde d t o a ne wuni t whic hi s locate dP.4 2

- 3 9 - a t a differen t sit e than th e existing uni t i t replaces . Se e CA A § 409(d) . Pursuan t t o sectio n 409(e) , EPAwil l provid e expedite d NS R processin g fo r repowering project s an d wil l encourag e Stat e permittin g authoritie s t o d o the same . E . Clea n Coa l Technolog yDemonstratio nProject s Today' s notic e als o propose s rule s implementing th e ne wCC T exemptio n create d b yth e 199 0 Amendments . Fo r th e purpose s o f thi s proposal , temporaryCC T demonstratio nproject s ar e define d a s thos e CC T demonstratio n project s lasting 5 year s o r less . Titl e IV

give s thes e project s anexemptio nfro mNSPS , PS D an

d nonattainmen t requirements . JId. , § 415(b)(2) . However , th e facilit ywoul d stil l b e subjec t t o an yapplicabl e SI P and mus t compl ywit han

yothe r requirement s necessaryt o attai nan d maintai n NAAQS . Thi s ruling propose s t o implemen t thi s provisio n an d clarifie s tha t EPAconsider s the 5 yea r perio d a s starting o n the dat e o f startu

p (a s define d i n 4 0 C.F.R . 60.2) . Atemporary demonstratio n projec t mayb e converte d t o a permanen t statu s a t an ytime , provide d i t meet s al l th e requirement s tha t appl yt o a permanen t CC T projec t criteri a a t the time o f conversion . Further , EPApropose s tha t a t the en d o f a temporary project , th e facilit ymus t b e returne d t o pre-demonstratio n condition s an

d hourl yemissio n rate s (or lower) . Th e retur no f th e facilit yt o it s pre-demonstratio n physica l an d operationa l conditio n woul d no t resul t i nthe los s o f th e actua l emission sP.4 3

- 4 0 - margi n betwee n pre-demonstratio n actua l emission s rat e an d SIP

allowabl e emission s rate s fo r tha t facility . Rather , th e facilit ywoul d b e treate d a s i f the temporarydemonstratio n projec t had neve r occurred. 1 9 Thi s proposa l doe s no t exten d t o emission s increase s tha t ar e unrelate d t o the conduc t o f temporarydemonstratio nprojects . Th e EPAconsider s emission s increase s (above th e pre demonstratio n levels ) tha t ar e attributabl e t o physica l o r operationa l changes , othe r than thos e necessaryt o restor e tha t uni t t o it s pre-demonstratio n condition , t o b e beyond th e scop e o f th e Congressiona l exemption . Today' s actio n als o propose s t o implemen t a nexemptio nfrom NSP S an d PS D requirement s fo r repowering project s whic har e awarde d funding fro mth e DO E a s permanen t CC T demonstratio n project s (o r simila r project s funde d b yEPA ) s o long a s potentia l emission s (se e 52.21(b)(4) ) fro mthe uni t d o no t increas e a s a resul t o f th e project . § 415(b)(3) . However , repowering project s tha t qualif ya s pollutio n contro l project s wil l b e treate d a s

1 9 Thi s woul d b e th e cas e eve ni f ther e wer e smal l difference s i n th e post-demonstratio nphysica l an d operationa l condition s du e t o a technica l inabilit yt o restor e th e uni t t o it s precis e pre-demonstratio n condition , o r du e t o norma l variabilit yi n the coa l used . Thus , EPAwoul d no t see k t o appl y NSP S o r NS Rbecaus e o f a post-demonstratio n emission s increas e attributabl e solel yt o an increas e i nthe hour s o f operatio no r productio n rat e o f the uni t (subjec t t o the NSP S limitatio n tha t the productio n rat e increas e mus t b e accomplishe d withou t a capita l expenditure) .P.4 4

- 4 1 - othe r pollutio n contro l project s fo r th e purpose s o f th e nonattainmen t provision s o f Titl e I o f th e Act . Finally , today' s proposa l woul d implemen t th e statutory exemption s i n sectio n 415(c) . I n tha t section , Congres s provide d an exemptio n from

NSP S an

d PS D fo r th e reactivatio n o f "ver y clea n units " otherwis e i n complianc e wit hthe Ac t tha t had bee n shu t dow

n fo r a t leas t the 2 year s prio r t o enactmen t o f the 199 0 Amendment s an

d that , prio r t o the shutdown , had bee nequippe d wit hpollutio n control s wit ha remova l efficienc yo f a t leas t 8 5 percen t fo r sulfu r dioxid e an d 9 8 percen t fo r particulates , an d had bee n equippe d wit hlow-NOxburners . Thi s exemptio nappear s t o hav e bee n narrowl ytailore d an d i s no t expecte d t o hav e widesprea d applicability . Becaus e thes e propose d rule s merel yimplemen t straight

forward statutoryexemption s tha t wer e immediatel yeffectiv e upo n passag e o f th e 199 0 Amendments , EPAintends , a s a matte r o f statutoryinterpretation , t o followth e policie s se t fort hi n today' s proposa l pending fina l action . F . Calculatio n o f NSP S Baselin e A s discusse d i n sectio nI I o f thi s notice , "an yphysica l o r operationa l chang e t o a n existing facilit ywhic hresult s i n a n increas e i n th e emissio n rat e t o the atmospher e o f an ypollutan t t o whic ha standar d applies " i s a modificatio n fo r NSP S applicabilit ypurpose s Se e 4 0 C.F.R . § 60.14(a) . Th e NSP S regulation s implementing thi s genera l definitio nfocu s o nP.4 5

- 4 2 - increase s i n hourl yemissions , expresse d i nkilogram s o f pollutan t discharge d pe r hour . T o determin e i f anincreas e i n hourl yemission s ha s occurre d a t a unit , a pre-chang e baselin e mus t b e established . Unde r curren t regulations , the emission s rat e befor e an d afte r a physica l o r operationa l chang e i s evaluate d a t eac huni t b ycomparing th e curren t hourl y potentia l emission s a t maximu moperating capacit yt o hourl y emission s a t maximu mcapacit yafte r th e change . I nthi s calculation , th e reviewing authorit ydisregard s th e unit' s maximu mdesig n capacity. 2 0 Th e origina l design capacit yo f a unit , t o th e exten t i t differ s fro mactua l maximu

mcapacit ya t the time tha t th e baselin e i s establishe d du e t o physica l deterioratio n o f the facility , i s immateria l t o thi s calculation . TodayEPAi s proposing that , fo r an existing electri c utilit ystea

m generating unit , the pre-chang e baselin e fo r NSP S applicabilit ypurpose s shal l b e calculate d using the highes t hourl yemission s rat e achievabl e a t an ytime during the 5 year s prio r t o th e change . Thi s proposa l retain s the keyconcep t i n existing regulation s tha t the baselin e b e determine d during a perio d tha t i s roughl ycontemporaneou s wit hthe propose d chang e

2 0 Se e 3 9 Fed . Reg . 36,94 8 col . 1 (propose d rule) . I n WEPCO , the utilit ycontende d tha t baselin e capacit yfo r the purpos e o f determining whethe r an increas e i n emissio n rat e occur s fo r purpose s o f an NSP S modificatio ni s th e origina l design capacit yo f the facility . However , the cour t rejecte d WEPCO' s argumen t tha t origina l designcapacit yo r pas t "representative " capacity , n o longe r achievabl e a t the plant , had t o b e use d fo r th e baselin e emission s rate .P.4 6

- 4 3 - a t th e affecte d facility . Th e EPAbelieve s tha t thi s propose d revision , whil e modest , i s stil l necessaryt o avoi d th e curren t regulation' s undu e emphasi s o n th e physica l conditio no f th e affecte d facilit yimmediatel yprio r t o th e change . Today' s mor e flexibl e provisio n enable s unit s t o establis ha baselin e tha t i s representativ e o f it s physica l an d operationa l capacit yi n recen t years , whil e stil l precluding th e us e o f a baselin e tie d t o origina l design capacity , whic ha s note d abov e maybea r n o relationshi p t o the facility' s capacit yi n recen t years . Withou t thi s revision , the NSP S regulation s mayundul y burde n utilitie s undertaking physica l o r operationa l change s i n conjunctio n wit hthe aci d rai n program . Fo r instance , i f a uni t ha s broke n down an d i s i n nee d o f repairs , the utility' s baselin e wil l b e artificiall ylow . Th e propose d chang e wil l allo w utilitie s t o demonstrat e tha t a nearlier , highe r capacit ywa s mor e representativ e o f the unit' s maximu mhourl yemission s rate .

G . Utilit yBAC T Presumptio nfo r NO x I n today' s notice , EPApropose s t o adop t a presumptio n that , i n th e cas e o f PS D permit s issue d b yEPAunde r 4 0 C.F.R . 52.21 , bes t availabl e contro l technolog y(BACT ) fo r emission s o f nitroge n oxide s fro mexisting coal-fire d electri c utilit ystea m generating unit s undergoing a modificatio ni s th e technology require d unde r sectio n 40 7 o f th e Clea nAi r Act . I n general , thi s wil l cal l fo r the us e o f combustio n modificatio nand/o r low

-P.4 7

- 4 4 - NOxburner s o r similar , cost-effectiv e technologie s b ythos e utilitie s require d t o obtai n PS D permit s fo r NO xemission s following fina l actio n o n today' s proposal . I n brief , sectio n 40 7 require s mos t utilit yunit s subjec t t o phas e I an

d phas e I I t o mee t NOxemissio nlimitation s o n the same dat e a s the phas e I o r phas e I I S0 2 emissio n limitation s become effective . Th e Administrato r mus t establis hannua l emissio n limitation s (based o n rate s liste d i nth e section ) fo r tangentially-fixe d boiler s an d dr ybottom

wall-fire d boiler s withi n 1 8 month s o f enactment . Thes e limitation s mus t b e achievabl e wit hlow-NOxburne r technology . CA A§ 407(b)(1) . Th e Administrato r mus t promulgat e annua l emissio n limitation s fo r al l othe r boiler s b

yJanuary1 , 1997 , base d o na "bes t systemo f continuou s emissio n reductio n. . . whic hi s comparabl e t o th e cos t of " low-NOxburners . B yth e same date , th e Administrato r ma ymak e th e rate s fo r boile r type s identifie d i nsectio n 407(b)(1 ) mor e stringen t i f mor e effectiv e low-NOxburne r technolog

yi s available . CA A§ 407(b)(2) . Low-NOxburner s ar e commerciall yavailabl e an d canb e retrofitte d o n man

yboile r types , providing a highdegre e o f emission s reductio n a t relativel ylowcosts . Depending o nboile r type , low-NOxburner s ca nreduc e emission s o f NO xb y approximatel y2 0 t o 6 0 percent . Agai ndepending o n boile r typ e an d othe r factors , the cos t o f replacing conventiona l burner sP.4 8

- 4 5 - wit hthes e control s i s i nthe rang e o f $8.0 0 t o $16.0 0 pe r kilowatt . Othe r NO xcontro l technologie s ar e being develope d fo r retrofitte d us e o n a t leas t some coal-fire d electri c utilit y units , an

d thu s ca n provid e a muc hgreate r degre e o f emission s reductions . Thes e includ e selectiv e noncatalyti c reductio n(SNCR o r "therma l de-NOx" ) an d selectiv e catalyti c reductio n(SCR) . (I n addition , DO E ha s funde d two ne wtechnologie s unde r it s CC T demonstratio n programwhic har e designe d fo r th e simultaneou s remova l o f S0 2 , NOxan d particulat e matte r tha t maybecom e commerciall y"available " i n the future.) 2 1 However , SN Ran d SNCRar e no t i n us e i n thi s countrya s retrofi t technologie s fo r coal-fire d boilers , an d the DO E sponsore d project s hav e no t ye t bee n demonstrated . Curren t estimate s o f contro l cost s fo r thes e technologie s ar e muc hhighe r than fo r low-NOxburners , especiall y whe n considere d i n the contex t o f retrofitting existing units . Th e EPAha s i n th e pas t issue d guidanc e document s effectivel ycreating presumption s tha t certai ntechnologie s constitute d BAC T fo r certai nsourc e categories . Se e Memorandum , Operatio n Guidanc e o n Contro l Technolog yfo r Ne wan

d Modifie d Municipa l Wast e Combustors , fro mGeral d A . Emison , Director , Offic e o f Ai r Qualit yPlanning an d Standards , EPA , Jun e 26 , 1987 ,

2 1 On e technolog

y— lowNOx/SOxBurne r Retrofi t —i s designe d specificall yfo r cyclon e boiler s whic hcanno t b e retrofi t wit hlo wNOxburner s whil e th e othe r —th e Advance d Slagging Combusto r —i s applicabl e t o a numbe r o f boile r types .P.4 9

- 4 6 - p . 5 . Th e EPAbelieve s i t i s appropriat e t o propos e t o d o s o her e a s wel l i n the cas e o f low-NOxburner s fo r modifie d coal

fired utilit yboiler s i n ligh t o f th e strong congressiona l polic y judgmen t favoring us e o f tha t technolog yfo r aci d rai n contro l reflecte d i n sectio n 407 . Sectio n 169(3 ) o f the Act , 4 2 U.S.C . 7479(3 ) define s BAC T as : an emission s limitatio nbase d o n th e maximu m degre e o f reductio no f eac hpollutan t subjec t t o regulatio n unde r the Clea nAi r Ac t emitte d fro mo r whic hresult s fro man ymajo r emitting facility , whic hth e permitting authority , o n a case-by-cas e basis , taking int o accoun t energy , environmental , an d economi c impact s an d othe r costs , determine s i s achievabl e fo r suc hfacilit ythroughapplicatio n o f productio n processe s an d availabl e methods , systems , an

d techniques , including fue l cleaning , clean fuels , o r treatmen t o r innovativ e fue l combustio ntechnique s fo r contro l o f eac hsuc hpollutant . I n n o even t shal l applicatio no f "bes t availabl e contro l technology " resul t i n emission s o f an y pollutant s whic hwil l excee d the emission s allowe d b

yan applicabl e standar d establishe d pursuan t t o sectio n741 1 o r 741 2 o f thi s title . Emission s fro man ysourc e utilizing clea n fuels , o r an

yothe r means , t o compl y wit hthi s paragraphshal l no t b e allowe d t o increas e abov e level s tha t woul d hav e bee n require d unde r thi s paragrapha s i t existe d prio r t o enactmen t o f the Clea n Ai r Ac t Amendment s o f 1990 . Th e BAC T provisio n reflect s congressiona l inten t bot ht o gran t permitting authoritie s broad discretio nt o weighthe statutoryfactor s a s theyse e fi t i nreaching a fina l substantiv e determinatio n o n BAC T an d t o creat e a procedura l methodologytha tP.5 0

- 4 7 - woul d provid e a mechanis mfo r stimulating th e widesprea d us e o f effectiv e pollutio n contro l technologies. 2 2 Th e EP Abelieve s tha t today' s propose d presumptio ni s consisten t wit hBAC T requirement s becaus e i t doe s no t purpor t t o reliev e th e permitting authorit yo f th e obligatio nt o weighth e statutoryfactor s i n reaching BAC T determinations . Rather , i t reflect s a n exercis e o f polic yjudgmen t b yEPAwher e i t i s th e permittin g authorit ytha t i n mos t case s a BAC T analysi s o f currentl ydemonstrate d technologie s fo r retrofitting existing utilit yboiler s woul d lead t o th e selectio n o f lowNO xburner s and/o r combustio n modification s identifie d i nsectio n 407(b)(1) . AlthoughEPAha s authorit yunde r the presen t regulation s t o creat e thi s presumptio n regarding BAC T fo r NOx , EPAi s soliciting commen t prio r t o adopting suc ha presumptio ni norde r t o obtai n the view s o f th e publi c o nthe policyconclusion s discusse d above . Thi s propose d presumptio n woul d no t appl yi n State s wit hPS D program s tha t hav e bee n incorporate d int o stat e implementatio n plan s unde r regulation s promulgate d a t 4 0 C.F.R . 51.166 . However , suc hState s ar e encourage d t o adop t thi s presumptio na s a matte r o f stat e policy . H . Applicabilit yDetermination s

2 2 Se e S . Rep . No . 95-217 , 95t hCong. , 1st . Sess . 3 1 (1977) ; Statemen t o f Senato r Muskie , 12 3 Cong . Rec . 5917 1 (June 8 , 1977) .P.5 1

- 4 8 - I n mos t instances , sourc e owner s o r operator s ar e abl e t o readil yascertai n whethe r ne wsourc e revie wrequirement s appl yt o them . Consequently , i n administering thes e requirements , EPA doe s no t requir e source s t o obtai n a forma l applicabilit y determinatio n befor e proceeding wit hconstruction . I nkeeping wit htha t practice , EPAwil l no t requir e utilitie s t o see k applicabilit ydetermination s unde r eithe r the revise d regulation s propose d toda

yo r the interpretation s o f existing regulation s containe d i n thi s preamble . Utilitie s i n mos t case s ca nreadil y ascertai n ho wthi s notic e wil l affec t them . Th e EPAanticipates , however , tha t question s wil l aris e regarding certai n aspect s o f thi s proposal . Becaus e some instance s involv e discret e judgments , utilitie s maywis ht o obtai ndetermination s o f applicability . Th e EPAwil l provid e suc hdetermination s upo n request . Suc hrequest s shoul d b e submitte d togethe r wit h appropriat e documentatio nt o the appropriat e permitting authority . IV . ADMINISTRATIVE REQUIREMENT S A . Docke t Adocke t ha s bee n establishe d fo r thi s actio nunde r sectio n 307(d)(1)(I ) an

d (N ) o f the Clean Ai r Act , 4 2 U.S.C . 7607(d)( 1 )(I ) an

d (N) . Th e docke t i s a n organize d an d complet e fil e o f al l informatio n considere d i nth e developmen t o f thi s ruling . Th e docke t i s intende d t o allo wth e publi c t o identif yP.5 2

- 4 9 - an d locat e document s relate d t o thi s ruling . Th e docke t numbe r fo r thi s ruling i s A-90-06 . B . Paperwor k Reductio nAc t N o additiona l publi c reporting burde nwil l resul t from thi s ruling . Al l informatio n collectio nrequirement s o f th e Federa l NS Ran d NSP S regulation s hav e bee n approve d b yth e Offic e o f Managemen t an

d Budge t (OMB ) unde r the provision s o f th e Paperwor k Reductio n Act , 4 4 U.S.C . 3501 , et . seq. , an d hav e bee n assigne d OMB contro l number s 2060-000 3 fo r NSR , an d 2060-0023 , 2060-002 6 an d 2060-007 2 fo r NSPS . Th e effec t o f thi s rul e woul d b e a reductio n i n paperwor k relate d t o complying wit hNS Ran d NSP S requirements , sinc e thi s ruling provide s additiona l clarificatio n a s t o physica l an

d operatio nchange s tha t mayb e exclude d fro m thes e requirements . C . OM B Revie w Unde r Executiv e Orde r 1229 1 (E.O . 12291) , EPAmus t judg e whethe r a rul e i s "major " an d therefor e subjec t t o th e requiremen t o f a regulatoryimpac t analysi s (RIA) . Thi s ruling i s a majo r rule . However , EPAha s no t prepare d an RI Abecaus e i t wil l no t resul t i n an ysignificatio nadvers e environmenta l effect s an

d wil l reduc e the economi c cost s o f meetin g th e requirement s o f th e CAA . Thi s ruling wa s submitte d t o th e OMB fo r revie wa s require d b yE.O . 12291 . An

ywritte n comment s fro m OMB t o EPAan

d an yEPArespons e t o thos e comment s ar e include d i n Docke t A-90-06 .P.5C L

- 5 0 - D . Effectiv e Dat e Sectio n 4(d ) o f th e Administrativ e Procedure s Ac t (APA) , 5 U.S.C . 553(d) , require s a 30-da ywaiting perio d befor e makin g a substantiv e rul e effective . Sinc e th e regulatoryrevision s being propose d toda

yar e considere d substantive , theyar e subjec t t o the notice-and-commen t requirement s o f the APAan d wil l become effectiv e onl yafte r publi c comment s hav e bee n receive d an d considered , an

d fina l actio nha s bee ntaken . Th e portion s o f thi s notic e tha t merel yconfir mEPApolicyar e effectiv e immediately . E . RegulatoryFlexibilit yAc t Thi s actio n i s no t subjec t t o the certificatio n provision s o f sectio n 605(b ) o f the RegulatoryFlexibilit yAc t (RFA ) becaus e thi s rul e wil l resul t i n a reductio no f administrativ e cost s and n o increas e i n contro l costs , therefor e having n o significan t impac t o n industry .P.5 4

- 5 1 - Lis t o f Subject s 4 0 C.F.R . Par t 5 1 Administrativ e procedur e an d practices , intergovernmenta l relations , ai r pollutio n control , NSR , Clea nCoa l Technology projects , sulfu r oxides , nitroge ndioxide , particulat e matter , carbo n monoxide , hydrocarbons , lead . 4 0 C.F.R . Par t 5 2 Ai r pollutio n control , NSR , Clea n Coa l Technologyprojects , repowering , sulfu r oxides , particulat e matter , nitroge n dioxide , carbo n monoxide , hydrocarbons , lead . 4 0 C.F.R . Par t 6 0 Ai r pollutio n control , NSPS , Clea n Coa l Technologyprojects , repowering, , sulfu r oxides , particulat e matter , nitroge n dioxide , carbo n monoxide , hydrocarbons , lead . Dated : Jun e 4 , 199 1 WilliamK . Reilly , Administrato rP.5 5



# on _ r i ) C^k a 

# r C.F.R . ENVIRONMENTA L PROTECTIO NAGENC Y 4 0 CF RPart s 51 , 52 , an d6 0 2 " ) U5 C or U.S . C . [FR L ] vx&l«

- L*»A5 . j-\«--\.V

Requirement s fo r Preparation , Adoption , an dSubmitta l o f Implementatio nPlans ; Approva l an dPromulgatio no f Implementatio nPlans ; Standard s o f Performanc e fo r Ne wStationar ySources . AGENCY : Environmenta l Protectio nAgenc y(EPA) . ACTION : Notic e o f Propose dRul e SUMMAR Ya Tr- e applicabilit yo f th e ne wsourc e requirement s o f ftLn Titl e I o f th e Clea nAi r Ac t (CAA ) t o physica l o r operationa l change s a t electri c utilit ygeneratin g unit s i s a nissu e o f ) considerabl e interes t a t thi s tim e becaus e o f th e recen t passag e > o f th e 199 0 Clea nAi r Ac t Amendment s (CAAA) . Man yutilitie s 

## C^fif wil l b e undertakin g majo r pollutio ncontro l project s a t thei r unit s i nth e nex t fe wyears . [I nenactin g Titl e IV , Congres s di d
no t suspen dan yTitl e I requirement s fo r thi s work . However , th e massiv e industry-wid e undertaking s o f pollutio ncontro l project s S-^K J warrant s a clarificatio no f th e ne wsourc e revie wrequirement s o f / 

## Ufa Titl e I . I nparticular , Ne wSourc e Revie w(NSR ) provision s shoul dp ... , no t inadvertentl ybia s a utilit ytoward s o r agains t an ymean s o f complyin g wit hth e aci drai nprovisions . Th e EP Abelieve s th e amendment s propose dtoda yan dth e clarificatio no f it s curren t polic yunde r it s presen t NS Rregulation s provid e adequat e assurance s tha t utilitie s ca nundertak e Titl e I V pollutio n contro l project s withou t uncertaint ya s t o th e applicabilit yo f th e variou s Titl e I ne wsourc e requir-ments . A t th e sam e time ,P.5 6

- 2 - th e applicabilit yo f existing ne wsourc e regulation s t o modification s ha s bee n th e sourc e o f tw o recen t federa l appellat e decisions , Wisconsi n Electri c Powe r Co . v . Reillv , (WEPCO. , 89 3 F.2 d 90 1 (7thCir . 1990) , an d Puert o Rica nCemen t Co . v . EPA . 88 9 F.2 d 29 2 (1s t Cir . 1989) . A s a result , EPAi s todayproposin g clarifying amendment s t o thes e regulation s an d confirmin g it s policie s regarding o f some o f thes e provision s a s theyappl yt o utilit yproject s pending adoptio no f th e propose d amendments . Th e EPAtodaypropose s t o adop t a broa d NS Rexclusio nfo r utilit ypollutio n contro l project s and , unti l thes e propose d regulation s ar e adopte d i nfina l form , t o adher e t o it s polic y tha t ne wsourc e regulation s alread ygenerall yexclud e coverag e o f pollutio n contro l project s undertake n a t electri c utilit yunits . Similarly , EPAtodaypropose s t o adop t a n "actua l t o futur e actual " methodologyfo r determining whethe r al l othe r nonroutin e physica l o r operationa l change s a t utilitie s (othe r tha nth e replacemen t o f a uni t o r additio no f a ne wunit ) ar e subjec t t o ne wsourc e revie wunde r eithe r preventio no f significan t deterioratio n (PSD ) o r nonattainmen t provision s an d t o maintai n i n th e interi mtha t thi s methodologyi s applie d wher e th e uni t ha s "begun norma l operations. " Fo r thos e utilit yproject s whic h underg o PS D ne wsourc e review , today' s notic e propose s a presumptio n tha t fo r EPA-issue d permits , "low-NOxburners " ca n satisf yth e bes t availabl e contro l technology(BACT ) requirements .P.5 7

- 3 - I n addition , EPAals o propose s t o modif yit s regulation s implementing th e modificatio nprovision s o f th e Titl e I new sourc e performanc e standard s (NSPS ) programt o provid e tha t a utilit ymayus e fo r it s pre-chang e baselin e th e highes t hourl y emission s rat e achievabl e a t an ytim e during th e 5 year s prio r t o th e physica l o r operationa l change . Th e EPAals o propose s t o modif yit s regulation s t o reflec t change s mad e b yCongres s i nth e 199 0 Amendment s t o th e applicabilit yo f ne wsourc e requirement s t o clea n coa l technology(CCT ) an d repowering projects , an d t o "veryclean " units . DATES : Comments . Comment s o n th e revision s propose d today mus t b e receive d o n o r befor e ' (6 0 day s afte r publicatio ni n th e Federa l Register) . Publi c Hearing . Apubli c hearing i s schedule d fo r 10:0 0 a.m. , Jul y, 1991 , a t th e U.S . Environmenta l Protectio n Agency , 40 1 M Street , S.W. , Washington , D.C . 20460 . Th e hearin g mayb e cancele d i f n o speaker s hav e requeste d tim e t o presen t thei r comment s 1 5 day s prio r t o th e schedule d hearin g date . Writte n comment s i n lie u o f testimon yar e encouraged . ADDRESSES : Supportin g informatio nuse d i n developing thi s propose d rul e i s containe d i n docke t A-90-06 . Thi s docke t i s availabl e fo r publi c inspectio n an d copying betwee n 8:3 0 a.m . an d 3:3 0 p.m. , weekday s a t EPA' s Ai r Docke t (LE-131) , RoomM-1500 , 40 1 MStree t S.W. , Washington , D.C . 20460 . Areasonabl e fe e may b e charge d fo r copying .P.5 8

- 4 - FO RFURTHERINFORMATIO N CONTACT : Chebryl l Edwards , Ne wSourc e Revie wSectio n (MD-15) , Offic e o f Ai r Qualit yPlanning an d Standards , Researc hTriangl e Park , Nort hCarolin a 27711 , (919 ) 541-2343 . SUPPLEMENTARYINFORMATION : I . INTRODUCTION Th e EPAtodaypropose s t o amend it s regulation s implementing th e variou s Titl e I ne wsourc e requirement s governin g physica l o r operationa l change s a t electri c utilit ygeneratin g units . Specifically , thes e propose d change s ar e bein g issue d t o clarif y th e coverag e o f th e NSPS , PS D an d nonattainmen t preconstructio n revie wrequirement s o f Titl e I o f th e Clea n Ai r Ac t t o project s undertake n a t electri c utilit ystea mgeneratin g units. 1 Th e EPApropose s t o amend th e definitio n o f "majo r modification " i n 4 0 CF RPart s 5 1 and 5 2 t o se t fort hth e condition s unde r whic hth e addition , replacemen t o r us e a t existing electri c utilit ygeneratin g unit s o f an ysystemo r devic e whos e primaryfunctio ni s th e reductio no f ai r pollutant s (including th e switching t o a les s polluting fue l wher e th e primarypurpos e o f th e switc hi s th e reductio no f ai r pollutants ) wil l o r wil l no t subjec t th e sourc e t o preconstructio nreview .

1 Th e propose d regulation s defin e electri c utilit ystea m generatin g unit s a s an ystea melectri c generatin g uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha none-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n 2 5 MWo f electrica l outpu t t o an yutilit ypowe r distributio nsystemfo r sale . See , e.g. . propose d 4 0 CFR51.165(xx) .P.5 9

- 5 - Specifically , EPApropose s i nPS D an d nonattainmen t area s t o a regulatoryexclusio n explicatin g it s authorit yunde r th e statutorydefinitio n o f modificatio nan d confirmin g EPA' s curren t practic e tha t pollutio n contro l project s whic h"d o no t rende r th e / > uni t les s environmentall ybeneficial " ar e no t "physica l o r / \t if \yoperationa l changes, " an d hence , ar e no t modification s fo r th e purpose s o f Part s C an d D o f Titl e I an

d ar e no t "majo r modifications " fo r th e purpose s o f EPA' s regulation s implementing thos e provisions . Th e EPAi s todayals o proposin g t o amend it s PS D an d nonattainmen t ne wsourc e revie wregulation s (4 0 CF RPart s 5 1 and 52) 2 a s the yappl yt o utilitie s t o (1 ) clarif yth e NS R baselin e fo r determining whethe r a propose d physica l o r operationa l chang e wil l subjec t a utilit yt o th e preconstructio n revie wrequirement s o f thes e provisions ; (2 ) se t fort han actua l t o futur e actua l methodologyfo r determinin g whethe r a physica l o r operationa l chang e i s subjec t t o NSR ; (3 ) provid e furthe r clarificatio n o f th e existing regulatoryrequiremen t tha t onl y thos e increase s i n emission s tha t actuall yresul t fro mth e physica l chang e o r chang e i nth e metho d o f operatio nca nb e considere d i n determinin g whethe r th e propose d chang e subject s th e utilit yt o NS Rrequirements ; and (4 ) implemen t section s 4 0 9 an d 41 5 o f Titl e IV

o f th e Clea nAi r Ac t Amendment s o f 199 0 whic h 2 Fo r th e purpose s o f thi s notice , reference s t o "new sourc e review " (or "NSR" ) refe r t o th e preconstructio nrevie w requirement s o f bot hPar t C (PSD ) an d Par t D (nonattainment ) o f th e Clea n Ai r Act , unles s otherwis e indicated .P.6 0

- 6 - creat e specia l NSP S treatmen t fo r certai nrepowerin g project s an d limite d NS Rexemption s fo r temporaryan d permanen t CC T projects , an d fo r certai n "veryclean " units . Finally , EPAi s als o proposing t o amend it s NSP S regulation s (4 0 CF RPar t 60 ) t o allo w a utilit yt o us e a s it s pre-chang e baselin e it s highes t hourl y emission s rat e achievabl e during th e 5 year s prio r t o th e propose d physica l o r operationa l change . T o th e exten t th e propose d amendment s implemen t existing EPApolicies , EPAwil l continu e t o administe r it s regulation s i n a manne r consisten t wit hthes e policie s pending adoptio no f th e regulation s propose d today . S~ ''^ ^ v—"^-cc , J ..-,.- , ^

> \ Today' s proposa l addressing pollutio ncontro l project s and othe r non-routin e physica l an d operationa l change s a t electri c utilit yunit s i s timel yfo r severa l reasons . First , th e 199 0 Clea n Ai r Ac t amendment s establish , i n Titl e IV , a ne wcontro l scheme fo r addressin g th e aci d rai n problemwhic hfocuse s exclusivel yan

d immediatel yo n utilit ypowe r plants . Titl e IV wil l forc e mos t electri c utilit ystea mgeneratin g unit s t o undertak e pollutio n contro l project s and provide s ful l flexibilit yt o achiev e complianc e withou t a bia s toward s o r agains t an

yparticula r pollutio ncontro l method . Second , th e Agenc ybelieve s it s extensiv e experienc e wit hothe r non-routin e physica l and operationa l change s a t suc hunit s an d th e uniqu e characteristic s o f th e electri c utilit yindustry(e.g. , th e genera l similarit yo f equipmen t withi nth e categoryand th eP.6 1

- 7 - exten t o f publicl yavailabl e information ) suppor t a revisio nt o th e ne wsourc e revie wapplicabilit ycriteri a fo r thi s sourc e category . Further , whil e Congres s di d no t mak e significan t « change s i n th e NS Ran d NSP S statutorylanguag e i n 1990 , th e conferenc e committe e provide d th e following guidanc e t o EPAi n it s Join t ExplanatoryStatement :

"[T]h e deletio no f mos t provision s relating t o th e WEPC O decisio ni s no t intende d t o affec t o r prejudic e i n an ywayth e issue s o r resolutio n o f th e WEPC O matter . A t th e same time , th e conferee s urg e a quic k resolutio n o f th e WEPC O matte r b yEPAa s appropriate. " Conferenc e Comm. , Join t ExplanatoryStatemen t o f th e Committe e o f th e Conferenc e t o Accompan yS . 1630 , Rep . 101-952 , 101st . Cong. , 2n d Sess . (1990 ) pp . 344-45 . I npassing Titl e IV , Congres s di d no t suspend an

yrequirement s o f titl e I . Howeve r Titl e I and Titl e IV

ar e clearl yintende d t o wor k i n concert , no t conflict , an d today' s ruling i s intende d t o ensur e tha t harmony . o f th e preambl e o f today' s proposa l se t fort hEPA' s presen t policie s unde r it s curren t regulations , an d mayb e relie d o na s suc hpendin g fina l actio no n today' s proposal , i ^ "~~ " II . BACKGROUND A . Th e Ne wSourc e Performanc e Standards , Preventio no f Significan t Deterioratio n an d Nonattainmen t Program s o f Titl e I Titl e I o f th e Clea n Ai r Ac t ha s thre e program s specificall y designe d t o ensur e tha t n o ne wai r pollutio n — whethe r fro

mne w source s o r frommodification s t o existing source s —ca nb e emitte d unles s th e sourc e complie s wit hne wsourc e requirements .P.6 2

- 8 - Th e 197 0 Clea n Ai r Ac t require d EPAt o promulgat e technology-base d ne wsourc e performanc e standard s applicabl e t o th e constructio n o r modificatio n o f stationarysource s tha t caus e o r contribut e significantl yt o ai r pollutio nwhic hmayreasonabl y b e anticipate d t o endange r publi c healt ho r welfare . Clea nAi r Ac t ("CAA" ) § 111(b)(1)(A) , 4 2 U.S.C . 7411(b)(1)(A) . Th e NSP S provision s wer e "designe d t o preven t ne wai r pollutio nproblems " b yregulating newly-constructe d source s an d change s occurring a t existing source s tha t resul t i nemission s increases . Se e Nationa l Asphal t Pavemen t Assoc , v . Train . 53 9 F.2 d 775 , 78 3 (D.C . Cir . 1976) ; se e als o H.R . Rep . No . 1146 , 91s t Cong. , 2 d Sess . 3 , reprinte d i n 197 0 U.S . Cod e Cong . & Admin . New s 5356 , 5 3 58 . Congres s define d th e term"modification " a s "an yphysica l chang e in , o r chang e i n th e metho d o f operatio nof , a stationary sourc e whic hincrease s th e amoun t o f an yai r pollutan t emitte d b y suc hsourc e o r whic hresult s i nth e emissio no f an yai r pollutan t no t previousl yemitted. " Se e CA A§ 111(a)(4) , 4 2 U.S.C . 7411(a)(4) . I n 1977 , Congres s adopte d additiona l amendment s t o th e Clea n Ai r Act . Thes e change s include d preconstructio n permittin g requirement s fo r majo r ne wan d modifie d source s unde r tw o programs , preventio n o f significan t deterioratio n(PSD ) an d nonattainmen t ne wsourc e revie w(respectively , Part s C an d D o f th e Clea n Ai r Act) . Congres s intende d thes e program s t o appl y generall ywher e industria l change s migh t increas e pollutio ni nanP.6 3

- 9 - area . Alabama Powe r Co . v . Costle . 63 6 F.2 d 323 , 40 0 (D.C . cir . 1979) . Congres s incorporate d i nPart s C an d D th e same definitio n o f th e term "modification " se t fort hi nth e NSP S provisions . Se e CA A§ 111(a)(4) , 169(2)(C) , an d 171(4) . Th e NS Rprogramfo r PS D (CA A§ § 160-169 ) applie s i n attainmen t areas , i.e. , thos e area s whic hhav e attaine d th e nationa l ambien t ai r qualit ystandard s (NAAQS) . T o receiv e a PS D permit , a prospectiv e majo r ne wsourc e o r majo r modificatio nmus t (amon g othe r things ) sho wtha t (1 ) i t wil l no t caus e o r contribut e t o a violatio no f th e availabl e ai r qualit y "increment " (designe d t o preven t ambien t ai r qualit yfrom deterioratin g b

ymor e tha n certai nspecifie d levels) , (2 ) i t wil l no t caus e o r contribut e t o a violatio no f a NAAQS , an d (3 ) i t wil l us e th e "bes t availabl e contro l technology(BACT), " whic h mus t b e a t leas t a s stringen t a s an yapplicabl e NSP S o r hazardou s pollutan t standar d unde r sectio n11 2 o f th e Act . Par t D o f th e 197 7 Amendment s applie s t o nonattainmen t areas , i.e. , thos e area s whic hhav e no t me t th e NAAQ S unde r sectio n 109 . T o receiv e a permi t i nsuc hareas , majo r ne wan d modifie d source s mus t (amon g othe r things ) (1 ) obtai nemission s offsets , thereb

yassuring tha t reasonabl e progres s towar dP.6 4

- 1 0 - attainmen t o f th e NAAQ S wil l occur , an d (2 ) compl ywit hth e "lowes t achievabl e emissio nrat e (LAER). " Se e CA A§ 171-173. 3 B . Th e Two-Ste p Tes t fo r Modification s Th e modificatio n provision s o f th e NSP S an d NS Rprogram s ar e base d o n th e broa d NSP S definitio no f "modification " i n sectio n 111(a)(4 ) o f th e Act . Tha t sectio ncontemplate s a two-ste p tes t fo r determinin g whethe r activitie s a t a nexisting facilit y constitut e a modificatio n subjec t t o ne wsourc e requirements . I n th e firs t step , whic hi s largel yth e sam e fo r NSP S an d NSR , th e reviewing authorit ydetermine s whethe r a physica l o r operationa l chang e wil l occur. 4 I f so , th e reviewing authorit yproceed s i n th e second step t o determin e whethe r th e physica l o r operationa l chang e wil l resul t i n a n emission s increas e ove r baselin e levels . I n thi s second step , th e applicabl e rule s branc hapart , reflectin g th e fundamenta l distinction s betwee nth e technology

base d provision s o f NSP S an d th e ai r quality-base d provision s o f NSR .

3 Th e 197 0 Clea nAi r Ac t als o include d a provisio n applicabl e t o constructio no r modificatio no f an ystationary source . Thi s provisio n i s presentl yse t fort hi n sectio n 110(a)(2)(C) . Today' s notic e doe s no t propos e t o chang e th e scop e o f th e regulation s implementing thi s provision . Se e 4 0 CFR 51.160-164 .

Thi s i s furthe r describe d i n sectio nIII. H below .P.6 5

- 1 1 - Briefly , th e NSP S programexamine s maximu mhourl yemission s rates , expresse d i n kilogram s pe r hour. 5 Emission s increase s fo r NSP S purpose s ar e determine d b ychange s i n th e hourl y emission s rate s a t maximu mphysica l capacity . O nth e othe r hand , th e NS Rregulation s examin e tota l emission s t o th e atmosphere . Fo r applicabilit ydeterminatio npurposes , emission s increase s unde r NS Rar e determine d b ychange s i nannua l emission s a s expresse d i n ton s pe r yea r (tpy). 6 C . Ste p One : Physica l o r Operationa l Chang e Th e EPAha s alway s recognize d tha t th e definitio no f physica l o r operationa l chang e i nsectio n111(a)(4 ) could , standing alone , encompas s th e mos t mundan e activitie s a t an industria l facilit y(eventh e repai r o r replacemen t o f a singl e leak ypipe , o r a chang e i nth e waytha t pip e i s utilized) . However , EPAha s alway s recognize d tha t Congres s obviousl ydi d

5 An hourl yemission s rat e mayb e determine d b ya stac k tes t o r calculate d fromth e produc t o f th e instantaneou s emission s rate , i.e. , th e amoun t o f pollutio n emitte d b ya source , afte r control , pe r uni t o f fue l combuste d o r materia l processe d (sucha s pound s o f sulfu r dioxid e emitte d pe r to n o f coa l burned ) time s th e productio n rat e (sucha s ton s o f coa l burne d pe r hour) . Se e soctio n 60.14 . 4 0 £rrf*

- 6 Annua l emission s mayb e calculate d a s th e produc t o f th e hourl yemission s rat e time s th e utilizatio n rate , expresse d a s hour s o f operatio n pe r year , o r a s th e produc t o f a n emission s facto r (e.g. . fromCompilatio n o f Ai r Pollutan t Emissio nFactors . AP-42 , 4t hEd . an

d subsequen t supplements ) i n unit s o f mas s emitte d pe r uni t o f proces s throughpu t time s th e annua l throughput . Se e 4 0 CF R52.21(b)(21) .

### - 1 2 -

no t inten dt o mak e ever yactivit ya t a sourc e subjec t t o ne w sourc e requirements . A s a result , EP Aha s define d"modification " i nth e NSP S an d NS Rregulation s t o includ e common-sens e exclusion s fro mth e "physica l o r operationa l change " componen t o f th e definition . Fo r example , bot hset s o f regulation s contai nsimila r exclusion s fo r routin e maintenance , repair , an dreplacement ; fo r increase s nth e hour s o f operatio no r i nth e productio nrate ; andfo r , HO<1F ^ ^-* te + 

### certai ntype s o f fue l switches . Se e e^.^ , 52.21(b ) (2 ) (iii),-and — A4 

### 60.14(e) . I naddition , wit hrespec t t o pollutio ncontro l equipment , th e NSP S regulation s contai na nexclusio nfor :

Th e additio no r us e o f anysyste m o r devic e whos e primar yfunctio ni s th e reductio no f ai r pollutants , excep t whe na nemission s contro l syste mi s remove do r i s replace dbya syste mwhic hth e Administrato r determine s t o b e les s environmentall ybeneficial . 4 0 CF R60.14(e)(5) . A s wil l b e discussed , i nrecen t individua l applicabilit ydetermination s EP Aha s exclude dpollutio ncontro l project s fro mNS Rfollowin g a simila r "environmentall y beneficial " test . D . Ste p Two : Emission s Increase s fo r NSP S Applicabilit y Th e EPA' s NSP S regulation s defin e th e ter m"modification " a s an y"physica l o r operationa l chang e t o a nexistin g facilit ywhic h result s i na nincreas e i nth e emissio nrat e t o th e atmospher e o f an ypollutan t t o whic ha standar dapplies. " Se e 4 0 CF R60. 2 an d 60.14 . Unde r curren t NSP S regulations , emission s increases , fo r applicabilit ypurposes , ar e calculate db ycomparin g th e hourl yP.6 7

- 1 3 - emissio n rate , a t maximu mphysica l capacity , befor e an d afte r th e physica l o r operationa l change . Tha t is , t o determin e whethe r a chang e t o a n existing facilit ywil l increas e th e emission s rate , th e existing NSP S regulation s authoriz e th e us e o f a n"emission s facto r analysis, " o r a material s balance , continuou s monitoring , o r manua l emission s tes t t o evaluat e emission s befor e an d afte r th e change . 4 0 CFR60.14(b)(2) . Absen t th e exclusion s fro mmodification s specifie d a t 4 0 CFR 60.14(e) , an

yincreas e i nemission s t o th e atmospher e ove r th e previou s emission s rat e wil l subjec t th e uni t t o NSPS . Se e 4 0 CF R60.14(a ) and (b) . I naddition , unde r th e "reconstructio n rules, " physica l o r operationa l change s whic hwoul d cos t 5 0 percen t o r mor e o f th e tota l cos t o f a comparabl e ne wfacilit y mayb e classifie d a s reconstruction s (se e 4 0 CF R60.15 ) an d ar e subjec t t o NSP S a s a ne wsource , eve ni f ther e i s n o emission s increase . E . Ste p Two : Emission s Increase s Unde r NS RRequirement s 1 . Existing Regulation s Th e EPA' s regulation s implementing th e PS D an d nonattainmen t program s requir e preconstructio n revie wfo r source s undertakin g a "majo r modification, " i.e. . a physica l chang e o r chang e i n th e metho d o f operation s "tha t woul d resul t i na significan t ne t emission s increas e o f an ypollutan t subjec t t o regulatio n unde r th e Act. " 4 0 CF R52.21(b)(2)(i ) a* d (3)(1);- .P.6 8

- 1 4 " 52.24(f)(5). 7 A"ne t emission s increase " i s define d a s th e increas e i n "actua l emissions " fro mth e particula r physica l o r operationa l chang e togethe r wit han yothe r "contemporaneous " increase s o r decrease s i n actua l emissions . 4 0 CFR 52.21(b)(3)(i). 8 Applicabilit yo f th e Act' s ne wsourc e revie wprovision s mus t b e determine d i n advanc e o f constructio nan d i s pollutan t specific . I n case s involving existing sources , thi s require s a pollutant-by-pollutan t projectio n o f th e emission s increases , i f any , tha t wil l resul t fro mth e physica l o r operationa l change . Specifically , t o determin e whethe r a propose d physica l o r

7 Th e curren t PS D programi s se t fort hi ntw o set s o f regulations . On e o f th e regulation s cite d (4 0 CF R52.21 ) i s par t o f th e federa l PS D permi t programwhic happlie s a s par t o f a Federa l implementatio n pla n fo r State s tha t hav e no t submitte d a PS D program

meetin g th e regulatoryrequirement s o f 4 0 CFR51.16 6 (standard s fo r PS D provision s i nStat e implementatio n plans) . I n mos t State s wher e th e federa l requirement s apply , EPAha s delegate d th e authorit yt o implemen t th e PS D programbac k t o th e State . Roughl ytwo-third s o f th e State s ar e implementing thei r ow n PS D programpursuan t t o anEPA-approve d stat e implementatio n plan . Section s 52.2 1 an d 51.16 6 hav e identica l modificatio n provisions . EPA' s regulation s fo r nonattainmen t area s ar e se t fort ha t 4 0 CF R§ 51.165 , 52.2 4 an d i nPar t 51 , Appendi xS . Thes e section s contai n applicabilit yprovision s regarding modificatio n tha t ar e largel yidentica l t o thos e i n th e PS D provisions .

8 Roughl yspeaking , "contemporaneous " emission s increase s o r decrease s ar e thos e whic hhav e occurre d betwee n th e dat e five year s precedin g th e propose d physica l o r operationa l chang e an d th e dat e tha t th e increas e fro m th e chang e occurs . 4 0 CF R 52.21(b)(3)(ii) . Onc e a modificatio ni s determine d t o b e major , th e PS D requirement s appl yonl yt o thos e specifi c pollutant s fo r whic hther e woul d b e a significan t ne t emission s increase . E.g. , 4 0 CF R52.21(j)(3 ) (bes t availabl e contro l technology) ; 4 0 CF R 52.21(m)(1)(b ) (ai r qualit yanalysis) .P.6 9

- 1 5 - operationa l chang e wil l resul t i n a nemission s increase , th e sourc e mus t firs t determin e a baselin e leve l o f actua l emissions . Th e regulation s defin e actua l emission s o na particula r dat e a s "the averag e rate , i n ton s pe r year , a t whic hth e uni t actuall y emitte d th e pollutan t during a 2-yea r perio d whic hprecede s th e particula r dat e an d whic hi s representativ e o f norma l sourc e operation. " Th e Administrato r "shall " allo wus e o f a differen t time perio d "upo n a determinatio ntha t i t i s mor e representativ e o f norma l sourc e operation. " Id . Th e EPAha s typicall yuse d th e 2 year s immediatel ypreceding th e physica l o r operationa l chang e t o establis hth e baseline . Se e 4 5 Fed . Reg . 52676 , 52705 , 5271 8 (1980) . However , i t ca nallo wth e us e o f a nearlie r 2-yea r perio d tha t i s mor e representativ e o f norma l sourc e operations . Fo r example , i n WEPCO . EPAfoun d th e fourt han

d fift hyear s prio r t o th e modificatio n mor e representativ e o f WEPCO' s norma l operations .

Becaus e th e applicabilit ydeterminatio n mus t b e mad e i n advanc e o f construction , EPA' s NS Rregulation s provid e tha t whe n a n emission s uni t "ha s no t begun norma l operations, " actua l emission s equa l th e "potentia l t o emi t o f th e unit. " 4 0 CF R 52.21(b)(21)(iv) . Thi s approac hi s referre d t o a s th e actua l t o potentia l methodology . Thi s regulatoryprovisio n mayb e overcome

—an d ne wsourc e revie wwil l no t appl y—i f th e sourc e owne r agrees , i n a federall yenforceabl e instrumen t —no t t o increas eP.7 0

- 1 6 - it s actua l emission s abov e baselin e levels . Se e e.g. . 4 0 CF R 52.21(b)(4) .

2 . Th e WEPC O an

d Puert o Rica n Cemen t Decision s A s note d above , t o calculat e whethe r a physica l o r operationa l chang e "increases " emissions , EPAregulation s requir e i t t o fin

d a n increas e i n actua l emissions . 4 0 CF R 52.21(b)(3)(i)(a) . Wher e th e emission s uni t ha s no t "begun norma l operations, " EPAregulation s recogniz e tha t futur e actua l emission s ar e difficul t t o predic t an d employfutur e "potential " emission s a s a proxy . 4 0 CFR52.21(b)(21)(iv) . Th e linchpi n unde r th e curren t regulation s fo r predicting futur e emission s afte r a modificatio n i s thu s whethe r th e uni t ha s "begun norma l operations. "

Tw o recen t federa l appellat e cour t decision s hav e addresse d EPA' s interpretatio no f th e phras e "begun norma l operations. " Thes e decisions , Puert o Rica nCemen t Co. . Inc . v . U S EPA . 88 9 F.2 d 29 2 (1s t Cir . 1989 ) an d Wisconsi nElec . Powe r Co . v . Reillv . 89 3 F.2 d 90 1 (7thCir . 1990 ) ("WEPCO") , occasio na reexaminatio n o f EPA' s interpretatio no f th e phrase , an d o f th e usefulnes s o f th e regulatorylanguag e itself . Th e meanin g o f th e phras e i s highl yfact-dependent , an d thes e decision s hav e create d ncertaint yregarding it s application ; thus , a s describe d late r i n thi s notice , EPAtodaypropose s t o chang e it s regulation s fo r electri c utilit ystea mgeneratin g unit s t o employmor e usefu l 

# • • A criterion . »P.7 1

- 1 7 - Bot hcase s involve d physica l change s t o existing emission s units , bu t change s o f differing extent , natur e an d result . I n Puert o Rica n Cement , th e owne r o f a cemen t plant 9 wit hsevera l kiln s sough t t o conver t on e "wet " kil nint o a "dry " kiln , an

d t o combin e tha t kil nwit hanothe r kiln . 88 9 F.2 d a t 293 . Th e cour t observe d tha t th e tota l productio n capacit yo f th e renovate d singl e kil nwoul d excee d th e combine d productio n capacit yo f th e previou s tw o separat e kiln s b y"abou t 35%. " Id . I t note d tha t th e renovate d singl e kil n woul d employa differen t "cement-making process " that th e origina l kil nfro mwhic hi t wa s "converted, " id . And i t sai d tha t th e ne wkil nwoul d b e "mor e efficien t [and ] maylead th e fir m t o decid e t o increas e th e leve l o f production. " id . a t 29 7 (emphasi s i noriginal) . I nreviewin g EPA' s interpretatio n o f "begunnorma l operations, " th e cour t applie d a highl ydeferentia l standar d o f review , sinc e a n agency' s interpretatio n o f it s ow n regulatorylanguag e i s typicall ygive n '"controlling weigh t unles s i t i s plainl y erroneou s o r inconsisten t wit hth e regulation.' " 88 9 F.2 d a t 297 , quotin g Udal l v . Tallman . 38 0 U.S . 1 , 16-1 7 (1965 ) (citatio n omitted) . Th e cour t conclude d tha t o nth e fact s o f th e case , EPA' s interpretatio n tha t "norma l operations " ha d no t begunwa s no t "arbitraryo r irrational, " id . a t 298 , an d henc e EPA' s

9 Puert o Rica n Cemen t involve d a cemen t plant , no t a n electri c utility , bu t th e court' s lega l analysi s o f th e phras e "begun norma l operations " i nth e curren t regulation s i s relevan t t o al l facilities .P.7 2

- 1 8 - applicatio n o f th e actual-to-potentia l tes t t o predic t futur e emission s wa s permissible .

I n WEPCO . 89 3 F.2 d 901 , th e Sevent hCircui t wa s face d wit ha differen t kin d o f modification . Ther e renovation s wer e propose d fo r severa l olde r (3 5 t o 5 0 yea r old ) coal-fire d electri c utilit yboilers . Th e physica l change s involve d repai r an d replacemen t o f turbine-generators , stea mdrum s an

d othe r majo r components . Th e EPAcontended , a s i t ha d i nPuert o Rica n Cement . tha t thes e change s wen t beyond "norma l operations " an d thu s warrante d us e o f futur e potentia l emission s a s th e tes t fo r an emission s increas e ove r pas t actua l emissions . Her e th e cour t disagree d wit hEPA' s interpretatio n tha t "norma l operations " ha d no t begun . Th e cour t coine d th e phras e "like-kind replacement " t o describ e th e typ e o f renovatio n occurring a t th e WEPC o plant . Id . a t 917 . Th e cour t describe d a "like-kind replacement " a s on e tha t "doe s no t 'chang e o r alter ' th e desig no r natur e o f th e facility . Rather , i t merel yallow s th e facilit yt o operat e agai n a s i t ha d befor e th e specifi c equipmen t deteriorated. " Id . a t 

### ~a»'. / C

### =E. 908 . I n determinin g whethe r suc haj"like-kind replacement " ha d ~y'l "begun norma l operations, " id . a t 917 , th e cour t considere d whethe r a "realisti c assessmen t o f [the ] impac t [o f th e change ] o n ambien t ai r qualit ylevel s i s possible.' " Id . a t 91 7 (quoting Alabama Powe r Co . v . Costle . 63 6 F.2 d 323 , 37 9 (D.C . Cir . 1979)) . Th e cour t sai d tha t wher e th e renovation s wer e "like-kind A . replacements, " EPAcoul d no t reasonabl yinterpre t it s regulation sP.7 3

- 1 9 - t o sa ytha t suc ha uni t wa s s o differen t tha t i t ha s no t "begun norma l operations. " Thus , i t conclude d tha t th e "actual-to

potential " tes t coul d no t b e applied , unde r EPA' s regulations , t o unit s simpl yundergoin g "like-kind replacements." 1 0

Neithe r o f thes e decision s specifie d th e threshol d fo r whe n a uni t ha s "begun norma l operations. " Base d o nthes e decisions , unde r it s curren t regulations , EPAmus t conside r th e fact s o f eac hcas e an d appl yth e actual-to-potentia l tes t onl y wher e th e chang e i s sufficientl ysignifican t t o suppor t a finding tha t "norma l operations " hav e no t "begun. " A t leas t fo r change s tha t ar e "lik e kind replacements, " "norma l operations " hav e begun , an

d th e actual-to-potentia l tes t i s impermissible . Becaus e th e "begun norma l operations " criterio ni s highl yfact-dependen t an d it s applicatio ni s inherentl ycase-by

case , i t mayb e a n uncertai n indicato r o f wha t emission s tes t wil l b e applie d i n a give n instance . However , EPA' s extensiv e experienc e wit helectri c utilities , an d th e generall ysimila r natur e o f operation s withi nthi s sourc e category , provid e EPAa n adequat e basi s o n whic ht o predic t futur e actua l emission s from suc hunit s i n mos t cases . Consequently , a s explaine d below , EPA i s todayproposin g t o revis e it s regulation s t o appl yth e actual

to-actua l tes t o n al l physica l o r operationa l change s a t electri c

1 0 O n remand , EPAemploye d a n actual-to-futur e actua l test , comparin g WEPCo' s representativ e actua l emission s fo r th e baselin e perio d t o estimate d futur e actua l emission s base d o n al l th e availabl e fact s i n th e record .P.7 4 1

- 2 0 - ujfetflit ystea mgeneratin g unit s sav e thos e tha t ar e a nadditio no f \ ' a ne wuni t o r constitut e a replacemen t o f an existing unitfc. 1 1 Pending fina l adoptio n o f thi s ne wrule , EPAwil l continu e t o appl yan actual-to-actua l tes t t o unit s tha t undertak e "like-kind replacements " an

d othe r unit s whic har e foun d t o hav e "begun norma l operations. " F . Th e Clea n Ai r Ac t Amendment s o f 199 0



### v 1 . Ne wSourc e Revie wan d th e Aci d Rai n Provision s jPaAl, . >A

0 [0 1 - SM^ , 10

MSfcJ-r. 11°.^ Th e Clea n Ai r Ac t Amendment s o f 199 0 mad e numerou s change s /. . , r i n th e nonattainmen t provision s o f th e Clea nAi r Ac t an d adde d a l<V\o ) ne wtitl e t o addres s th e problemo f aci d rain . Th e amendment s attac k nonattainmen t problem s wit ha broa d arrayo f ne w requirement s al l designe d t o bring al l area s o f th e countryint o attainmen t wit hth e nationa l ambien t ai r qualit ystandard s fo r al l pollutants . Thes e requirement s includ e traffi c reductio n strategies , us e o f alternativ e clea n fuels , increase d offse t requirement s fo r stationarysources , an d change s i n th e threshol d siz e o f stationarysource s subjec t t o ne wsourc e review . A principa l them e o f th e legislatio ni s th e establishmen t o f categorie s o f nonattainmen t area s base d o nth e severit yo f th e pollutio n problem . Th e mor e sever e th e area , th e mor e control s Congres s require d b e imposed .

1 1 A s a n illustration , ha d thi s ne wtes t governe d th e , fact s i n WEPC o o r th e fact s i nPuert o Rica nCemen t (wjtfer e i t anv electri c unity ) , EPAwoul d hav e applie d the^efctual-to-actua l test .

X
- 

### - 1 -P.7 5

- 2 1 - Th e Amendment s als o establish , i nTitl e IV , a ne wcontro l scheme fo r addressing th e aci d rai nproblem . Th e exclusiv e focu s o f thi s program

i s o n utilit ypowe r plan t emission s o f sulfu r dioxid e an

d nitroge n oxides . Th e 199 0 Amendment s requir e sulfu r dioxid e emission s fro mutilitie s t o b e reduce d b yapproximatel y 1 0 millio n ton s annuall yi ntw o phase s —th e firs t t o tax e effec t i n 1995 , th e secon d i n 2000 . Atota l o f 11 1 specifi c plant s ar e targete d i n Phas e I , an d wil l b e require d t o reduc e thei r S0 2 emission s t o specifie d emission s limits . I nPhas e II , thes e plants , an

d almos t al l others , ar e subjec t t o eve nlowe r S0 2 emission s limits . Thi s reductio n program i s t o b e implemente d througha ne wmarket-base d systemunde r whic h emission s allowance s reflecting th e require d reductio ni ncurren t emission s ar e allocate d t o existing utilit yplants . Plan t owners , wh o ar e require d t o hol d allowance s equa l t o thei r actua l emissions , ar e the n fre e t o trad e thes e allowances . Thus , th e emission s o f individua l unit s mayvaryfro mth e initia l allocatio n o f allowances , bu t aggregat e emission s ar e alway s hel d t o th e program' s overal l targe t level . Thi s programwil l provid e powerfu l incentive s t o source s t o undertak e pollutio ncontro l projects . Becaus e o f thes e requirements , manyo f th e plant s subjec t t o Phas e I control s mus t mak e complianc e decision s withi nth e nex t yea r i n orde r t o assur e tha t th e complicate d contro l equipmen tP.7 6

- 2 2 - tha t mayb e necessaryt o mee t Phas e I standard s i s i nplac e b y th e 199 5 deadline . ^

2 . Repowerin g an

d CC T Project s I n Titl e IV

o f th e 199 0 Amendments , whic hcreate s th e aci d rai n program , Congres s mad e change s i nth e applicabilit yo f ne w / sourc e requirement s t o change s involving repowering an d G&¥ projects . Sectio n 40 9 grant s a nextensio n o f th e aci d rai ncontrol s deadlin e t o source s tha t see k t o compl ywit hth e aci d rai n reduction s b

yrepowering a uni t wit hqualifying clea ncoa l technology . Sectio n 402(12 ) define s repowering as : / *• • [The ] replacemen t o f anexisting coal-fire d boile r wit hon e o f th e following clea ncoa l technologies:atmospheri c o r pressurize d fluidize d be d combustion , integrate d v.gasificatio n combine d cycle , 1 1 V \ V magnethohydrodynamics , direc t and indirec t coal-fire d turbines , integrate d gasificatio n fue l cells , o r a s determine d b yth e Administrator , i n consultatio nwit hth e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d an yothe r technologycapabl e o f controlling multipl e combustio n emission s simultaneousl ywit h improve d boile r o r generatio n efficienc yan d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e of . technologyi n widesprea d commercia l us e a s o f th e dat e o f enactmen t o f th e Clea nAi r Ac t Amendment s o f 1990 . Notwithstandin g th e provision s o f 5<c4io n 409(a) , fo r th e purpos e o f thi s title , th e term'repowering ' shal l als o includ e an yoi l and/o r gas-fire d uni t whic hha s bee n awarde d clea n coa l technologydemonstratio nfunding a s o f January1 , 1991 , b yth e Departmen t o f Energy . Se e CAA» § § 402(12 ) an d 409(a) . w-o



# vt 

# ;P.7 7

- 2 3 - Congres s provide d tha t repowering project s tha t qualif yfo r a Phas e I I complianc e extensio n woul d als o b e exemp t fro m NSP S requirements , s o long a s th e repowering "doe s no t increas e actua l hourl yemission s fo r an ypollutan t regulate d unde r th e Act. " Se e CAA , § 409(d) . An operato r ca nqualif yfo r th e 3-yea r extensio n o f th e Phas e I I emission s limitatio nb ydemonstratin g (b y Decembe r 31 , 1997 ) t o th e permitting authorit ytha t on e o r mor e unit s wil l b e repowere d wit ha qualifying clea ncoa l technology t o mee t th e Titl e IV restrictions . Th e operato r mus t provide , n o late r tha n January1 , 2000 , additiona l documentatio no f th e repowering projec t including a preliminarydesig n an d engineering effor t fo r th e projec t an d a binding contrac t fo r th e majorit yo f th e equipmen t needed , a s wel l a s an yadditiona l informatio nth e reviewing authorit yrequires . Today' s proposa l als o implement s a nexemptio n fromne w sourc e requirement s fo r CC T demonstratio n project s create d b y Congres s i n sectio n 41 5 o f Titl e IV o f th e 199 0 Amendments . I n thes e provisions , CC T i s define d a s an ytechnologyno t i n widesprea d us e o n th e dat e o f enactmen t tha t achieve s significan t reduction s i n S0 2 o r nitroge noxide s (N0 X ) emission s associate d wit hburnin g coa l i n th e generatio no f electricity , proces s CA A steam , o r industria l products . Se e § 415(a) . ACC T 

## AP.7 8

- 2 4 - "demonstratio n project " i s a projec t funde d unde r DOE' s CC T programo r a simila r projec t funde d b yEPA. 1 2 Repowering project s tha t ar e awarde d funding fro mth e Departmen t o f Energ y(DOE ) a s permanen t CC T demonstratio n project s (or simila r project s funde d b yEPA ) ar e exemp t fro mNSP S an d PS D requirement s s o long a s potentia l emission s (se e 4 0 CF£ , A. 52.21(b)(4) ) fro mth e uni t d o no t increas e a s a resul t o f th e CAJV (3 ) project . -fdj

_§ 415(b) . Thes e funde d project s maystil l b e require d t o compl ywit hth e nonattainmen t NS Rprovision s o f Titl e I o f th e Act , unles s the yar e exclude d a s pollutio n contro l projects . Th e installation , operation , cessation , o r remova l o f a temporaryCC T demonstratio nprojec t tha t i s operate d fo r 5 year s o r les s i s exemp t fro mNSP S and bot hPS D an d nonattainmen t ne w CA/ V sourc e requirements . Se e § 415(b)(2) . However , th e facilit y l\ stil l mus t compl ywit hth e applicabl e SI P an d othe r requirement s necessaryt o attai n an d maintai n th e NAAQS . Finally , i n sectio n 415(c) , Congres s provide d a n exemptio n fro mNSP S an

d PS D fo r th e reactivatio n o f "veryclea n units " otherwis e i n complianc e wit hth e Ac t tha t ha d bee nshu t downfo r

1 2 Sectio n 415(b)(1 ) define s a CC T projec t a s a a projec t "using fund s appropriate d unde r th e headin g 'Departmen t o f Energy-Clea n Coa l Technology' , up t o a.tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r simila r project s funde d throughappropriation s fo r th e EPA^ " v lP.7 9

- 2 5 - a t leas t th e 2 year s prio r t o enactmen t o f th e 199 0 Amendment s an d that , prio r t o th e shutdown , had bee n equippe d wit hpollutio n control s wit ha remova l efficienc yo f a t leas t 8 5 percen t fo r sulfu r dioxid e an

d 9 8 percen t fo r particulates , an d had bee n equippe d wit hlow-NOxburners . III . DISCUSSION A . Pollutio n Contro l Project s 1 . Propose d RegulatoryChange s fo r Pollutio nContro l Project s Th e EPApropose s t o amend it s PS D an d nonattainmen t regulation s a s theypertai nt o utilit ypollutio ncontro l project s b yexercisin g it s authorit yunde r th e statutorydefinitio n o f "modification " an

d confirming th e Agency' s curren t polic ytha t suc hproject s ar e no t subjec t t o NS Runles s the yrende r th e uni t les s environmentall ybeneficial . Generally , pollutio ncontro l project s a t existing stationarysource s ar e no t majo r modification s subjec t t o ne wsourc e revie wrequirement s fo r th e simpl e reaso n tha t the yd o no t resul t i n an increas e i n actua l emissions . I n addition , EPAha s alway s recognize d tha t Congres s di d no t intend tha t everyactivit ya t a nexisting facilit yb e considere d a physica l o r operationa l chang e fo r purpose s o f th e ne wsourc e review. 1 3

1 3 Fo r instance , EPAha s specificall yrecognize d tha t routin e maintenance , repai r an d replacement , an

d change s i n hour s o f operatio n o r i n th e productio n rat e ar e no t considere d a physica l chang e o r chang e i n th e metho d o f operation . Se e 4 0 CF R 52.21(b ) (2 ) (iii) , 52.24(f ) (5 ) (iii) ; 5 T W ^ ^ t ^ ^ 57 . 7fc& U ) o/'; ^P.8 0

_- 2 6 - / Uj2_ a ^" " TTUKlrl n 1

1 Iii i i <Tnnrrrrr

> EPAi s todayproposin g t o adop t revision s t o it s PS D an d nonattainmen t regulation s fo r th e addition , replacemen t o r us e a t a n existing electri c utilit y stea mgenerating uni t o f an ysystemo r devic e whos e primary functio n i s th e reductio no f ai r pollutant s (including th e switching t o a less-polluting fue l wher e th e primarypurpos e o f th e switc hi s th e reductio n o f ai r pollutants) . Unde r today' s proposal , a utilit ypollutio ncontro l projec t wil l no t b e treate d a s a physica l o r operationa l chang e unles s th e projec t render s th e uni t les s environmentall ybeneficial . A s indicate d above , th e ke yt o thi s additio nt o th e lis t o f exclusion s fromth e ter mphysica l o r operationa l chang e i s EPA' s judgmen t tha t Congres s di d no t intend tha t pollutio ncontro l project s b e considere d th e typ e o f activit ytha t shoul d trigge r NSR . Th e EP Ai s todayissuing regulatorylanguag e t o explicat e an d formaliz e it s statutoryauthorit yt o exclud e pollutio n contro l project s unde r th e NS Rprovisions . I n 1977 , whe n Congres s enacte d th e NS Rprovision s o f th e Act , i t provide d tha t th e term

"modification " i nNS Rshal l hav e th e same meanin g a s th e term"modification " unde r NSPS . Se e § § 169(2)(c) , 171(4) . A t th e time , regulation s promulgate d unde r th e NSP S provision s definin g "modification, " -§—±£±- > provide d tha t th e term "modification " doe s no t include :

Th e additio n o r us e o f an ysystemo r devic e whos e primaryfunctio n i s th e reductio no f ai r pollutants , excep t whe n a nemission s contro l systemi s remove d o r i s replace d b yaP.8 1

- 2 7 - systemwhic hth e Administrato r determine s t o b e les s environmentall ybeneficial . 4 0 CFR60.14(e)(5) . I n 1978 , EPAnote d tha t "i nadding sectio n 169(2)(c ) t o th e Act , Congres s indicate d tha t i t intende d t o conformth e meanin g o f 'modification ' t o 'usag e i nothe r part s o f th e Act. ' 12 3 Congr . Rec . H11955 , 1195 7 (Nov . 1 , 1977). " 4 3 Fed . Reg . 2639 6 (June 19 , 1978) . Thus , jus t a s EPAha d th e statutoryauthorit yt o exclud e pollutio ncontro l project s b y regulatio n fro

mNSPS , th e statutoryauthorit yexist s fo r EPAt o explicat e b

yregulatio n a n exclusio nfo r pollutio n contro l project s fro

mPart s C an

d D o f Titl e I . A s discusse d i n greate r detai l i n a subsequen t section , thi s exclusio n unde r NS Rreflect s th e existing regulatoryexclusio n fo r pollutio n contro l activitie s unde r NSP S regulations , an d severa l recen t case-specifi c nonapplicabilit ydetermination s unde r th e ne wsourc e revie wprograms . Th e NSP S regulatory exclusio n contain s th e provis o tha t th e replacemen t o f a pollutio n contro l systemo r devic e canno t b e les s "environmentall ybeneficial " t o qualif yfo r th e exclusion . Se e 4 0 CF R60.15(e)(5) . Wit hrespec t t o ne wsourc e review , today' s proposa l adopt s a simila r regulatoryexclusio n fo r pollutio n contro l project s i n th e PS D an d nonattainmen t context . Th e majo r differenc e i n th e propose d NS Rexclusio ni s tha t i t woul d appl y th e "no t les s environmentall ybeneficial " tes t t o th e additio n an d use , a s wel l a s th e replacement , o f a pollutio ncontro l systemo r device . Thi s chang e reflect s th e distinc t ai r qualit yP.8 2

- 2 8 - componen t o f th e PS D an d nonattainmen t programs . B yfocusing o n whethe r a pollutio n contro l projec t i s a physica l o r operationa l chang e withi n th e meanin g o f th e ne wsourc e revie wregulations , today' s ruling avoid s th e nee d t o undertak e a quantitativ e emission s increas e calculatio ni neverycase , a s woul d b e necessaryi f suc hproject s wer e deeme d t o b e physica l o r operationa l changes . Th e EPAexpect s tha t most , i f no t all , pollutio n contro l project s wil l reduc e ne t actua l emissions . Nevertheless , th e Administrator' s authorit yt o conside r individua l pollutio n contro l project s provide s a nadequat e opportunit yt o determin e tha t a pollutio ncontro l projec t woul d someho wresul t i n a n advers e environmenta l impac t an d thu s conclud e tha t th e projec t render s th e uni t les s environmentall y beneficial , an

d i s therefor e a physica l o r operationa l chang e tha t mayb e subjec t t o NSR . Fo r th e purpose s o f thi s proposal , a pollutio n contro l projec t refer s t o a projec t undertake na t a utilit yuni t fo r purpose s o f reducing emission s fro msuc hunit . Thes e change s ar e limite d t o th e installatio no f conventiona l o r innovativ e emission s contro l equipment , including , bu t no t limite d to , installatio n o f conventiona l an d advance d flu e ga s desulfurization , sorben t injectio n fo r S0 2 an d NO xcontrols , electrostati c precipitators , an d project s undertake nt o accommodat e switchin g t o a les s pollutin g fuel , including natura lP.8 3

- 2 9 - ga s o r coa l re-burning , co-firing o f natura l ga s an d othe r fuel s fo r th e purpos e o f controlling S0 2 an d NO xemissions . Likewise , an

yactivit ytha t i s necessaryt o accommodat e switching t o a les s polluting fue l i s considere d t o b e par t o f th e pollutio n contro l project . I n some instances , thi s may involv e change s t o th e pollutio ngeneratin g equipmen t (e.g. t boiler) , bu t onl yi f th e change s ar e necessaryt o maintai n th e norma l operating capabilit yo f th e uni t a t th e tim e o f th e project , wher e th e capabilit ywoul d otherwis e b e impaire d a s a resul t o f th e fue l switch . Fo r example , a n electri c utilit y stea mgeneratin g uni t tha t switche s fro ma highe r sulfu r bituminou s coa l t o a low-sulfu r subbituminou s coa l maynee d t o mak e certai n change s t o th e boile r i n orde r t o avoi d deratin g th e 

## unit . ^^M ^ Change s tha t ar e intende d primaril yt o restor e origina l capacit yo r t o improv e th e operationa l efficienc yo f th e facilit y ar e no t considere d t o b e par t o f a pollutio ncontro l projec t fo r purpose s o f thi s proposal . Suc hchange s ar e addresse d elsewher e i n thi s proposal . Also , th e sourc e stil l mus t compl ywit hal l applicabl e SI P limit s an d requirements , permi t condition s an d applicabl e NAAQ S o r PS D incremen t limits . 7W ^ * • A s proposed , thi s pollutio ncontro l projec t •propubal. . wil l no t extend t o sourc e categorie s othe r tha nelectri c utilit ystea m generatin g units . Th e EPAha s s o limite d thi s provisio n because , i n contras t wit ha genera l lac k o f experienc e wit hothe rP.8 4

- 3 0 - industries , EPAha s extensiv e experienc e i naddressin g ne wsourc e applicabilit yissue s regarding pollutio ncontro l project s i nth e utilit yindustry . Tha t experienc e ha s led EPAt o conclud e tha t pollutio n contro l project s i nth e utilit yindustryar e generall y environmentall ybeneficial .

2 . Additiona l Modelin g Requirement s Apropose d pollutio n contro l projec t o r physica l o r operationa l chang e canno t resul t i n an emission s increas e tha t wil l caus e o r contribut e t o a violatio no f a nationa l ambien t ai r qualit ystandard , PS D increment , o r visibilit ylimitation . Se e CA A§ § 110(a)(2)(c) , 165 , 169A(b) , 173 . Th e pollutio ncontro l project s exclusio n doe s no t authoriz e an ysignifican t ne t increas e i n emission s tha t woul d hav e thi s proscribe d impact . I t i s possibl e tha t a pollutio n contro l project , whil e no t causin g an yincreas e i n maximu mhourl yemissions , wil l caus e a significan t ne t increas e i n actua l emissions , whic hi ntur n coul d caus e o r contribut e t o th e violatio n o f a Nationa l Ambien t Ai r Qualit yStandard s (NAAQS) , incremen t o r visibilit ylimitation . Fo r thi s reason , unde r today' s proposal , th e reviewing authorit y mayrequir e a sourc e t o performa nai r qualit yimpac t analysi s (modeling ) wheneve r i t ha s reaso n t o believ e tha t a propose d chang e wil l resul t i n a significan t ne t increas e i n actua l emission s o f an

ycriteri a pollutan t ove r level s use d fo r tha t sourc e i n th e mos t recen t ai r qualit yimpac t analysis . I f thi s modelin g indicate s tha t thi s increas e i nemission s wil l caus e o r- 3 1 -

contribut e t o a violatio no f an yambien t standard , PS D incremen t f;,vthth'&\ o r visibilit yviolation- , th e pollutio ncontro l exclusio ndoe s no t apply . 3 . Th e EPA' s Existing PolicyRegardin g Pollutio n

Contro l Project s A s note d above , generall ypollutio ncontro l project s a t existing stationarysource s ar e no t majo r modification s subjec t t o ne wsourc e revie wbecaus e theyd o no t usuall yresul t i n a n increas e i n actua l emissions , an d EPAbelieve s that , i n general , pollutio n contro l project s wer e no t intende d b yCongres s t o b e considere d physica l o r operationa l change s fo r purpose s o f NSR . Th e EPAcurrentl yapplie s it s PS D regulation s i nharmon y wit hit s NSP S regulations , whic hexclud e mos t pollutio ncontro l projects . Se e 4 0 CF R60.14(e)(5) . I n1977 , Congres s incorporate d th e NSP S definitio no f modificatio nint o th e PS D an d nonattainmen t statutes . CA A§ § 111(a)(4) , 169(a)(c) , 171(4) . I n zf^ S > . addition , th e legislativ e historyreflect s that , a s a genera l \(S'r matter , Congres s intende d t o conformth e meanin g o f

, , >*/• "modification " fo r PS D purpose s t o th e usag e unde r th e NSP S %E y\ ,c A'1/ program . Se e 12 3 Cong . Rec . H1195 7 (Novembe r 1 , 1977 ) . Th e EPA ^ j | v ' reiterate d thi s vie wi n 1978 . Se e 4 3 FR26396 , Jun e 19 , 1978 .

Subsequently , EPAinterprete d it s NS Rregulation s t o incorporat e

... th e NSP S pollutio n contro l projec t exclusion. 1 4 Th e EPAlate r

1 4 Memorandu

m from Edwar d Reich , Director , Stationary Sourc e Complianc e Divisio nand WilliamF . Pedersen , Actin g Associat e Genera l Counsel , Air , Noise , an d Radiatio nDivisio nt o Allyn M . Davis , Regio n I V (Apri l 21 , 1983) .P.8 6

- 3 2 - voice d concer n abou t incorporating th e precis e NSP S pollutio n contro l languag e i n th e NS Rcontex t absen t explicatio nthrough notice-and-commen t rulemaking largel ybecaus e o f th e ambien t ai r qualit ycomponen t o f NS Rtha t i s absen t fro mth e NSP S program. 1 5 I n recen t year s however , EPAha s consistentl yexclude d pollutio n contro l project s fro mNS Rprovide d tha t th e propose d projec t woul d b e environmentall ybeneficial , taking int o accoun t ambien t ai r quality. 1 6 I n ligh t o f th e Titl e IV requirement s an

d othe r provision s o f th e Clea n Ai r Ac t Amendment s o f 1990 , EPAconfirm s tha t i t wil l continu e t o conside r th e overal l environmenta l consequence s o f pollutio n contro l project s fo r NS Rapplicabilit y o n a n interi m

basi s pendin g fina l actio n o n th e propose d regulatoryexclusio n fo r pollutio n contro l projects . B . Representativ e Actua l Annua l Emission s A s describe d above , EPApropose d t o revis e it s methodologyfo r calculating emission s increase s a t electri c utilit ystea

mgeneratin g sources . Th e EPApropose s t o compar e actua l emission s befor e an d afte r change s fo r al l physica l o r operationa l change s a t a nexisting electri c utilit ystea m

1 5 See . Memorandu mfromGeral d A . Emison , Director , OAQPS , t o Regiona l Divisio n Director s (July7 , 1986) .

1 6 See . Letter , WilliamG . Rosenber g Assistan t Administrator , EPA , t o Andre wAitken , Vic e President , Ne wEngland Powe r Servic e Co. , Marc h26 , 1991 ; Letter , Rosenber g t o Patric k M . McCarter , Senio r Vic e President , Publi c Servic e Co . o f Colorado , Jul y23 , 1990 ; Letters , Davi d Kee , Director , Ai r an d Radiatio n Division , EPARegio nV , t o Timoth yJ . Method , Assistan t Commissioner , Indian a Dept . o f Environmenta l Management , January 30 , 199 0 and Marc h8 , 1990 .P.8 7

- 3 3 - generatin g uni t othe r tha nth e additio no f a ne wuni t o r th e replacemen t o f a n existing unit . Unde r today' s action , EPA propose s t o conside r a uni t t o b e replace d i f i t woul d constitut e a reconstructe d uni t withi n th e meanin g o f 4 0 CFR60.15 . Sinc e ther e i s n o relevan t operating historyfo r wholl yne wunit s an d replace d units , i t i s no t possibl e t o reasonabl yprojec t post
chang e utilizatio n fo r thes e units , an d hence , thei r futur e leve l o f "representativ e annua l actua l emissions. " Fo r othe r changes , pas t operatin g history , an d othe r relevan t information , provide s a basi s fo r reasonabl e projections . A s propose d today , th e "representativ e actua l annua l emissions " methodologyrequire s th e utilit yt o compar e it s baselin e emission s wit hit s futur e actua l emission s t o determin e i f th e propose d chang e wil l increas e actua l emissions . Th e EPA' s existing regulation s defin e baselin e emission s a s "th e averag e rate , i n ton s pe r year , a t whic hth e uni t actuall yemitte d th e pollutan t durin g a 2-yea r perio d whic hprecede s th e particula r dat e an d whic hi s representativ e o f norma l sourc e operation. " See , e.g. . 4 0 CF R52.21 . Th e Administrato r "shall " allo wus e o f a differen t tim e perio d "upo n a determinatio n tha t i t i s mor e representativ e o f norma l sourc e operation. " Id . Althoughno t require d b

yth e regulations , EPAha s historicall yuse d th e 2 year s immediatel yprecedin g th e propose d chang e t o establis hth e baseline . (Se e 4 5 Fed . Reg . 52676 , 52705 , 5271 8 (1980). ) However , i n som e case s i t ha s allowe d th e us e o f earlie r periods .P.8 8

- 3 4 - Fo r example , i n WEPCO . EPAfoun d th e fourt hand fift hyear s prio r t o th e modificatio n mor e representativ e o f WEPCO' s norma l operation s sinc e th e source' s capacit ywa s reduce d du e t o physica l problems . Th e EPApropose s todayt o retai nthi s regulatorylanguage , bu t t o adop t a ne wpresumptio nregarding it s implementation . Unde r today' s action , th e Administrato r wil l presum e tha t an y2 consecutiv e year s withi n th e 5 year s prio r t o th e propose d chang e i s representativ e o f norma l sourc e operation s fo r a utility . Thi s presumptio n i s consisten t wit hth e 5-yea r perio d fo r "contemporaneous " emission s increase s an d decrease s i n4 0 CF R 52.21(b)(3)(i)(b), 1 7 Sourc e owner s o r operator s desiring t o us e othe r tha n a 2-yea r perio d o r a baselin e perio d prio r t o th e las t 5 year s maysee k th e Administrator' s specifi c determinatio ntha t suc hperio d i s mor e representativ e o f norma l operations. 1 8

1 7 Thi s presumptio n doe s no t appl yt o pas t modification s a t a n emission s uni t fo r th e purpos e o f determinin g contemporaneou s emissio n change s a t a sourc e and canno t b e use d t o extend th e fiv e yea r perio d specifie d i ntha t provision . Se e 4 0 CF R52.21(b)(3)(1)(b) .

1 8 Th e leve l o f baselin e emission s selecte d mus t b e consisten t wit hcurren t assumption s regardin g th e source' s emission s tha t ar e use d unde r th e stat e implementatio nplan s (SIP ) fo r plannin g o r permitting purposes . Thus , th e sourc e may no t selec t a leve l o f baselin e emission s highe r tha n tha t use d b y th e permittin g authorit yi n issuing a PS D o r othe r constructio n permi t t o a sourc e i n th e area , i f suc hhighe r leve l woul d resul t i n a NAAQ S o r incremen t violation , o r violat e a visibilit y limitation .P.8 9

- 3 5 - Th e futur e actua l projectio ni s th e produc t of : (l ) th e hourl yemission s rate , whic hi s base d o n th e unit' s physica l an d operationa l capabilitie s following th e chang e an d federally

enforceabl e operationa l restriction s tha t woul d affec t th e hourl y emission s rat e following thi s change ; an d (2 ) projecte d capacit y utilization , whic hi s base d o n(a ) th e unit' s historica l annua l utilization , an

d (b ) al l availabl e informatio nregarding th e unit' s likel ypost-chang e capacit yutilization. 1 9 Th e projectio n o f post-chang e capacit yutilizatio nfo r applicabilit y purpose s shoul d b e base d o n a projectio no f utilizatio nfo r a perio d afte r th e physica l o r operationa l change . Specifically , EPAtodaypropose s t o allo wsource s t o bas e th e projectio no f utilizatio n o n th e 2 year s afte r th e change , o r a differen t consecutiv e 2-yea r perio d withi n th e 1 0 year s afte r th e change , wher e th e Administrato r determine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations . C . Th e Causatio n Requiremen t Th e NS Rregulatoryprovision s requir e tha t th e physica l o r operationa l chang e "resul t in " a nincreas e i n actua l emission s i n orde r t o conside r tha t chang e t o b e a modification . Se e e.g . 4 0 CF R52.21(2)(i) . I n othe r words , NS Rwil l no t appl yunles s EPA

1 9 I n projectin g futur e utilizatio nand emission s factors , th e permittin g authorit ymayconside r th e company' s historica l operationa l data , it s ow nrepresentations , filing s wit hFederal , Stat e o r loca l regulatoryauthorities , an d complianc e plan s develope d unde r Titl e I V o f th e 199 0 Amendments .P.9 0

- 3 6 - find s tha t ther e i s a causa l link betwee nth e propose d chang e an d an ypost-chang e increas e i nemissions . Th e EPAtodaypropose s t o amend it s rule s t o clarif ythi s provisio ni n th e contex t o f modification s a t electri c utilit ystea mgenerating units . Unde r thes e propose d regulations , an yemission s increas e attributabl e t o a physica l o r operationa l change , suc ha s a physica l o r operationa l chang e tha t significantl yalter s th e efficienc yo f th e plant , (see . Puert o Rica nCement . 88 9 F.2 d a t 297-8) , mus t continu e t o b e include d i n th e post-chang e emission s calculation . Today' s proposa l make s clea r tha t wher e increase d operation s ar e i n respons e t o independen t factors , suc ha s system-wid e demand growth , whic hwoul d hav e occurre d and affecte d th e unit' s operation s eve n i n th e absenc e o f th e physica l o r operationa l change , suc hincrease s d o no t resul t fromth e chang e an d shal l b e exclude d fro mth e projectio n o f futur e actua l emissions . Thus , i n assessing whethe r th e propose d chang e wil l resul t i n a n increas e i nactua l emissions , utilitie s nee d no t includ e i n thei r projectio n o f post-chang e utilizatio n tha t portio n o f th e increase d rat e o f utilization , i f any , du e t o factor s unrelate d t o th e physica l o r operationa l change , suc ha s a n increas e i n projecte d capacit yutilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystem(o f whic htha t sourc e i s a member ) a s a whole . Unde r thi s proposal , during a representativ e baselin e perio d (se e supra) , th e plan t mus t hav e bee nabl e t o accommodat e th eP.9 1

- 3 7 - projecte d demand growt hphysicall yan d legall yeve n absen t th e particula r change . Increase d operation s (an d resultan t increase s i n actua l emissions ) tha t coul d no t physicall yan d legall yb e accommodate d bu t fo r th e propose d physica l o r operationa l chang e shoul d b e considere d t o resul t fro mth e change . D . Repowerin g A s previousl ymentioned , Titl e IV o f th e 199 0 Amendment s grant s specia l treatmen t t o utilitie s tha t see k t o compl ywit h th e mandate d aci d rai n reduction s b yrepowering a uni t wit h qualifyin g clea n coa l technology . 199 0 Amendment s § § 402(12) , 409(a) . Specifically , repowering project s tha t qualif yfo r a Phas e I I complianc e extensio n wil l als o b e exemp t fromNSP S requirements , s o long a s th e repowering "doe s no t increas e actua l hourl yemission s fo r an ypollutan t regulate d unde r th e Act. " § 409(d) . Th e EPAinterpret s th e requiremen t tha t th e repowering no t lead t o a n increas e i n "actua l hourl yemissions " a s a n expressio n o f Congressiona l inten t tha t wit hrespec t t o repowerin g projects , EPAshoul d us e th e same genera l approac ht o determinin g applicabilit ya s i t ha s fo r othe r physica l o r operationa l changes , discusse d above . Accordingly , EPAtoday propose s rule s tha t provid e tha t a repowering projec t whic h result s i n a n increas e ove r baselin e i na unit' s post
modificatio n hourl yemission s wil l no t b e eligibl e fo r thi s limite d NSP S exemption .P.9 2

- 3 8 - Th e propose d NSP S exemptio napplie s t o repowering o f existing unit s a t existing sources , s o long a s th e projec t qualifie s fo r th e Phas e I I extensio nan d satisfie s th e "actua l hourl yemissions " increas e test . Becaus e o f thi s provision , th e reconstructio n limitation s specifie d i n 4 0 CFR60.1 5 ar e no t applicabl e t o qualifyin g repowering projects . However , n o specia l treatmen t ca n b e afforde d t o a ne wuni t whic hi s locate d a t a differen t sit e tha n th e existing uni t i t replaces . Se e CA A § 409(d ) . Pursuan t t o sectio n409(e) , EPAwil l provid e expedite d NS R processin g fo r repowerin g project s an d wil l encourag e Stat e permittin g authoritie s t o d o th e same . E . Clea n Coa l TechnologyDemonstratio nProject s Today' s notic e als o propose s rule s implementing th e ne wCC T exemptio n create d byth e 199 0 Amendments . Fo r th e purpose s o f thi s proposal , temporaryCC T demonstratio n project s ar e define d a s thos e CC T demonstratio n project s lasting 5 year s o r less . Titl e I V

give s thes e project s a n exemptio n fromNSPS , PS D and nonattainmen t requirements . Id. , § 415(b)(2) . However , th e facilit ywoul d stil l b e subjec t t o an yapplicabl e SI P an d mus t compl ywit han

yothe r requirement s necessaryt o attai nan d maintai n N.AAQS . Thi s ruling propose s t o implemen t thi s provisio n an d clarifie s tha t EPAconsider s th e 5 yea r perio d a s starting o n th e dat e o f startu p (a s define d i n 4 0 CF R60.2) . Atemporary demonstratio n projec t mayb e converte d t o a permanen t statu s a tP.9 3

- 3 9 - an ytime , provide d i t meet s al l th e requirement s tha t appl yt o a permanen t CC T projec t criteri a a t th e time o f conversion . Further , EPApropose s tha t a t th e en d o f a temporary project , th e facilit ymus t b e returne d t o pre-demonstratio n condition s an

d hourl yemissio n rate s (or lower) . Th e retur no f th e facilit yt o it s pre-demonstratio n physica l and operationa l conditio n woul d no t resul t i nth e los s o f th e actua l emission s margi n betwee n pre-demonstratio n actua l emission s rat e an d SIP

allowabl e emission s rate s fo r tha t facility . Rather , th e facilit ywoul d b e treate d a s i f th e temporarydemonstratio n projec t ha d neve r occurred. 2 0 Thi s proposa l doe s no t extend t o emission s increase s tha t ar e unrelate d t o th e conduc t o f temporarydemonstratio n projects . Th e EPAconsider s emission s increase s (above th e pre demonstratio n levels ) tha t ar e attributabl e t o physica l o r operationa l changes , othe r tha nthos e necessaryt o restor e tha t uni t t o it s pre-demonstratio n condition , t o b e beyond th e scop e o f th e Congressiona l exemption .

2 0 Thi s woul d b e th e cas e eve n i f ther e wer e smal l difference s i n th e post-demonstratio nphysica l an d operationa l condition s du e t o a technica l inabilit yt o restor e th e uni t t o it s precis e pre-demonstratio ncondition , o r du e t o norma l variabilit yi n th e coa l used . Thus , EPAwoul d no t see k t o appl y NSP S o r NS Rbecaus e o f a post-demonstratio nemission s increas e attributabl e solel yt o anincreas e i nth e hour s o f operatio n o r productio n rat e o f th e uni t (subjec t t o th e NSP S limitatio n tha t th e productio n rat e increas e mus t b e accomplishe d withou t a capita l expenditure) .P.9 4

- 4 0 - Today' s actio n als o propose s t o implemen t a nexemptio nfro m NSP S an d PS D requirement s fo r repowering project s whic har e awarde d funding fro mth e DO E a s permanen t CC T demonstratio n project s (or simila r project s funde d b yEPA ) s o long a s potentia l emission s (se e 52.21(b)(4) ) fromth e uni t d o no t increas e a s a resul t o f th e project . § 415(b)(3) . However , repowering project s tha t qualif ya s pollutio ncontro l project s wil l b e treate d a s othe r pollutio n contro l project s fo r th e purpose s o f th e nonattainmen t provision s o f Titl e I o f th e Act . Finally , today' s proposa l woul d implemen t th e statutory exemption s i n sectio n 415(c) . I n tha t section , Congres s provide d an exemptio n fromNSP S an d PS D fo r th e reactivatio no f "very clea n units " otherwis e i n complianc e wit hth e Ac t tha t had bee n shu t down fo r a t leas t th e 2 year s prio r t o enactmen t o f th e 199 0 Amendment s an

d that , prio r t o th e shutdown , ha d bee n equippe d wit hpollutio n control s wit ha remova l efficienc yo f a t leas t 8 5 percen t fo r sulfu r dioxid e an d 9 8 percen t fo r particulates , an d ha d bee n equippe d wit hlow-NOxburners . Thi s exemptio nappear s t o hav e bee n narrowl ytailore d an d i s no t expecte d t o hav e widesprea d applicability . Becaus e thes e propose d rule s merel yimplemen t straight

forwar d statutoryexemption s tha t wer e immediatel yeffectiv e upo n passag e o f th e 199 0 Amendments , EPAintends , a s a matte r o f statutoryinterpretation , t o follo wth e policie s se t fort hi n today' s proposa l pendin g fina l action .P.9 5

- 4 1 - F . Calculatio n o f NSP S Baselin e A s discusse d i n sectio nI I o f thi s notice , "an yphysica l o r operationa l chang e t o a n existing facilit ywhic hresult s i na n increas e i n th e emissio nrat e t o th e atmospher e o f an ypollutan t t o whic ha standar d applies " i s a modificatio nfo r NSP S applicabilit ypurpose s Se e 4 0 CF R§ 60.14(a) . Th e NSP S regulation s implementing thi s genera l definitio n focu s o n increase s i n hourl yemissions , expresse d i nkilogram s o f pollutan t discharge d pe r hour . T o determin e i f a nincreas e i n hourl yemission s ha s occurre d a t a unit , a pre-chang e baselin e mus t b e established . Unde r curren t regulations , th e emission s rat e befor e an d afte r a physica l o r operationa l chang e i s evaluate d a t eac huni t b ycomparing th e curren t hourl y potentia l emission s a t maximu moperating capacit yt o hourl y emission s a t maximu mcapacit yafte r th e change . I n thi s calculation , th e reviewing authorit ydisregard s th e unit' s maximu mdesig n capacity. 2 1 Th e origina l desig ncapacit yo f a unit , t o th e exten t i t differ s fro mactua l maximu

mcapacit ya t th e tim e tha t th e baselin e i s establishe d du e t o physica l deterioratio n o f th e facility , i s immateria l t o thi s calculation .

2 1 Se e 3 9 Fed . Reg . 36,94 8 col . 1 (propose d rule) . I n WEPCO , th e utilit ycontende d tha t baselin e capacit yfo r th e purpos e o f determinin g whethe r a nincreas e i n emissio nrat e occur s fo r purpose s o f a nNSP S modificatio ni s th e origina l desig n capacit yo f th e facility . However , th e cour t rejecte d WEPCO' s argumen t tha t origina l desig ncapacit yo r pas t "representative " capacity , n o longe r achievabl e a t th e plant , ha d t o b e use d fo r th e baselin e emission s rate .P.9 6

- 4 2 - TodayEPAi s proposin g that , fo r a n existin g electri c utilit ystea

mgenerating unit , th e pre-chang e baselin e fo r NSP S applicabilit ypurpose s shal l b e calculate d usin g th e highes t hourl yemission s rat e achievabl e a t an ytime durin g th e 5 year s prio r t o th e change . Thi s proposa l retain s th e keyconcep t i n existing regulation s tha t th e baselin e b e determine d during a perio d tha t i s roughl ycontemporaneou s wit hth e propose d chang e a t th e affecte d facility . Th e EPAbelieve s tha t thi s propose d revision , whil e modest , i s stil l necessaryt o avoi d th e curren t regulation' s undu e emphasi s o nth e physica l conditio n o f th e affecte d facilit yimmediatel yprio r t o th e change . Today' s mor e flexibl e provisio n enable s unit s t o establis ha baselin e tha t i s representativ e o f it s physica l an d operationa l capacit yi n recen t years , whil e stil l precluding th e us e o f a baselin e tie d t o origina l desig n capacity , whic ha s note d abov e maybea r n o relationshi p t o th e facility' s capacit yi n recen t years . Withou t thi s revision , th e NSP S regulation s mayundul y burde n utilitie s undertakin g physica l o r operationa l change s i n conjunctio n wit hth e aci d rai nprogram . Fo r instance , i f a uni t ha s broke n down and i s i n nee d o f repairs , th e utility' s baselin e wil l b e artificiall ylow . Th e propose d chang e wil l allo w utilitie s t o demonstrat e tha t a n earlier , highe r capacit ywa s mor e representativ e o f th e unit' s maximu mhourl yemission s rate .P.9 7

- 4 3 - G . Utilit yBAC T Presumptio nfo r NO x I n today' s notice , EPApropose s t o adop t a presumptio nthat , i n th e cas e o f PS D permit s issue d b yEPAunde r 4 0 CFR52.21 , bes t availabl e contro l technology(BACT ) fo r emission s o f nitroge n oxide s from

existing coal-fire d electri c utilit ysteamgenerating unit s undergoin g a modificatio n i s th e technologyrequire d unde r sectio n 40 7 o f th e Clea n Ai r Act . I ngeneral , thi s wil l cal l fo r th e us e o f combustio n modificatio n and/o r low-NOxburner s o r similar , cost-effectiv e technologie s b ythos e utilitie s require d t o obtai n PS D permit s fo r NO xemission s following fina l actio n o n today' s proposal . I n brief , sectio n 40 7 require s mos t utilit yunit s subjec t t o phas e I an

d phas e I I t o mee t NO xemissio nlimitation s o nth e same dat e a s th e phas e I o r phas e I I S0 2 emissio nlimitation s becom e effective . Th e Administrato r mus t establis hannua l emissio n limitation s (based o n rate s liste d i nth e section ) fo r tangentially-fixe d boiler s an d drybottomwall-fire d boiler s withi n 1 8 month s o f enactment . Thes e limitation s mus t b e achievabl e wit hlow-NOxburne r technology . CA A§ 407(b)(1) . Th e Administrato r mus t promulgat e annua l emissio nlimitation s fo r al l othe r boiler s byJanuar y1 , 1997 , base d o n a "bes t systemo f continuou s emissio n reductio n . . . whic hi s comparabl e t o th e cos t of " low-NOxburners . B yth e same date , th e Administrato r maymak e th e rate s fo r boile r type s identifie d i n sectio nP.9 8

- 4 4 - 407(b)(1 ) mor e stringen t i f mor e effectiv e low-NOxburne r technologyi s available . CA A§ 407(b)(2) . Low-NOxburner s ar e commerciall yavailabl e an d ca nb e retrofitte d o n man yboile r types , providing a highdegre e o f emission s reductio n a t relativel ylowcosts . Depending o n boile r type , low-NOxburner s ca nreduc e emission s o f NO xb y approximatel y2 0 t o 6 0 percent . Agai ndepending o n boile r typ e an d othe r factors , th e cos t o f replacing conventiona l burner s wit hthes e control s i s i n th e rang e o f $8.0 0 t o $16.0 0 pe r kilowatt . Othe r NO xcontro l technologie s ar e being develope d fo r retrofitte d us e o n a t leas t some coal-fire d electri c utilit y units , an

d thu s ca n provid e a muc hgreate r degre e o f emission s reductions . Thes e includ e selectiv e noncatalyti c reductio n(SNC R o r "therma l de-NOx" ) an d selectiv e catalyti c reductio n (SCR) . (In addition , DO E ha s funde d tw o ne wtechnologie s unde r it s CC T demonstratio n programwhic har e designe d fo r th e simultaneou s remova l o f S0 2 , NO xand particulat e matte r tha t maybecom e commerciall y"available " i n th e future.) 2 2 However , SN Ran d SNC Rar e no t i n us e i n thi s countrya s retrofi t technologie s fo r coal-fire d boilers , an d th e DO E sponsore d project s hav e no t ye t bee n demonstrated . Curren t estimate s o f contro l cost s fo r thes e

2 2 On e technology—lowNOx/SOxBurne r Retrofi t — i s designe d specificall yfo r cyclon e boiler s whic hcanno t b e retrofi t wit hlo wNO xburner s whil e th e othe r —th e Advance d Slaggin g Combusto r —i s applicabl e t o a numbe r o f boile r types .P.9 9

- 4 5 - technologie s ar e muc hhighe r tha n fo r low-NOxburners , especiall y whe n considere d i n th e contex t o f retrofitting existing units . Th e EPAha s i n th e pas t issue d guidanc e document s effectivel ycreating presumption s tha t certai ntechnologie s constitute d BAC T fo r certai nsourc e categories . Se e Memorandum , Operatio n Guidanc e o n Contro l Technologyfo r Ne wan d Modifie d Municipa l Wast e Combustors , fro mGeral d A . Emison , Director , Offic e o f Ai r Qualit yPlanning an d Standards , EPA , Jun e 26 , 1987 , p . 5 . Th e EPAbelieve s i t i s appropriat e t o propos e t o d o s o her e a s wel l i n th e cas e o f low-NOxburner s fo r modifie d coal

fire d utilit yboiler s i n ligh t o f th e strong congressiona l polic y judgmen t favoring us e o f tha t technologyfo r aci d rai ncontro l reflecte d i n sectio n 407 . Sectio n 169(3 ) o f th e Act , 4 2 U.S.C . 7479(3 ) define s BAC T as : an emission s limitatio nbase d o n th e maximu m degre e o f reductio no f eac hpollutan t subjec t t o regulatio n unde r th e Clea nAi r Ac t emitte d fromo r whic hresult s fro man ymajo r emitting facility , whic hth e permittin g authority , o n a case-by-cas e basis , takin g int o accoun t energy , environmental , an d economi c impact s and othe r costs , determine s i s achievabl e fo r suc hfacilit ythroughapplicatio n o f productio n processe s an d availabl e methods , systems , an

d techniques , including fue l cleaning , clea n fuels , o r treatmen t o r innovativ e fue l combustio ntechnique s fo r contro l o f eac hsuc hpollutant . I nn o even t shal l applicatio no f "bes t availabl e contro l technology " resul t i nemission s o f an y pollutant s whic hwil l excee d th e emission s allowe d b

ya n applicabl e standar d establishe d pursuan t t o sectio n 741 1 o r 741 2 o f thi s title . Emission s fro man ysourc e utilizin gp. 1

- 4 6 - clea n fuels , o r an yothe r means , t o compl y wit hthi s paragrap hshal l no t b e allowe d t o increas e abov e level s tha t woul d hav e bee n require d unde r thi s paragrap ha s i t existe d prio r t o enactmen t o f th e Clea nAi r Ac t Amendment s o f 1990 . Th e BAC T provisio n reflect s congressiona l inten t bot ht o gran t permittin g authoritie s broa d discretio n t o weig hth e statutoryfactor s a s the yse e fi t i nreaching a fina l substantiv e determinatio n o n BAC T and t o creat e a procedura l methodologytha t woul d provid e a mechanis mfo r stimulating th e widesprea d us e o f effectiv e pollutio n contro l technologies. 2 3 Th e EP Abelieve s tha t today' s propose d presumptio ni s consisten t wit hBAC T requirement s becaus e i t doe s no t purpor t t o reliev e th e permittin g authorit yo f th e obligatior^jt o eonGidcg^ r frrprrinn f nH
- i

r i I nf

- nvn i 1 nhl qITptfiririV^gifrf r antllt n weig hth e statutoryfactor s i n reachin g BAC T determinations . Rather , i t reflect s a n exercis e o f polic yjudgmen t b yEP Awher e i t i s th e permittin g authorit ytha t i n mos t case s a BAC T analysi s o f currentl ydemonstrate d technologie s fo r retrofittin g existin g utilit yboiler s woul d lea d t o th e selectio n o f lo wNO xburner s and/o r combustio n modification s identifie d i n sectio n407(b)(1) . Althoug hEP Aha s authorit yunde r th e presen t regulation s t o creat e thi s presumptio n regardin g BAC T fo r NOx , EP Ai s soliciting commen t prio r t o adoptin g suc ha presumptio ni norde r t o obtai n

2 3 Se e S . Rep . No . 95-217 , 95t hCong. , 1st . Sess . 3 1 (1977) ; Statemen t o f Senato r Muskie , 12 3 Cong . Rec . 5917 1 (Jun e 8 , 1977) .P. 2

- 4 7 - th e view s o f th e publi c o n th e polic yconclusion s discusse d above . Thi s propose d presumptio n woul d no t appl yi n State s wit hPS D program s tha t hav e bee n incorporate d int o stat e implementatio n plan s unde r regulation s promulgate d a t 4 0 CF R51.166 . However , suc hState s ar e encourage d t o adop t thi s presumptio na s a matte r o f stat e policy . H . Applicabilit yDetermination s I n mos t instances , sourc e owner s o r operator s ar e abl e t o readil yascertai n whethe r ne wsourc e revie wrequirement s appl yt o them . Consequently , i n administering thes e requirements , EPA doe s no t requir e source s t o obtai na forma l applicabilit y determinatio n befor e proceeding wit hconstruction . I nkeeping wit htha t practice , EPAwil l no t requir e utilitie s t o see k applicabilit ydetermination s unde r eithe r th e revise d regulation s propose d todayo r th e interpretation s o f existing regulation s containe d i n thi s preamble . Utilitie s i nmos t case s ca n readil y ascertai n ho wthi s notic e wil l affec t them . Th e EPAanticipates , however , tha t question s wil l aris e regarding certai n aspect s o f thi s proposal . Becaus e some instance s involv e discret e judgments , utilitie s maywis ht o obtai ndetermination s o f applicability . Th e EP Awil l provid e suc hdetermination s upo n request . Suc hrequest s shoul d b e submitte d togethe r wit h appropriat e documentatio nt o th e appropriat e permittin g authority .P. 3

- 4 8 - IV . ADMINISTRATIVE REQUIREMENT S A . Docke t Adocke t ha s bee n establishe d fo r thi s actio n unde r sectio n 307(d)(1)(I ) an

d (N ) o f th e Clea n Ai r Act , 4 2 U.S.C . 7607(d)(1)(I ) an

d (N) . Th e docke t i s a norganize d an d complet e fil e o f al l informatio n considere d i nth e developmen t o f thi s ruling . Th e docke t i s intende d t o allo wth e publi c t o identif y an d locat e document s relate d t o thi s ruling . Th e docke t numbe r fo r thi s ruling i s A-90-06 . B . Paperwor k Reductio n Ac t N o additiona l publi c reporting burde nwil l resul t fro m thi s ruling . Al l informatio ncollectio n requirement s o f th e Federa l NS Ran d NSP S regulation s hav e bee n approve d b yth e Offic e o f Managemen t an

d Budge t (OMB ) unde r th e provision s o f th e Paperwor k Reductio n Act , 4 4 U.S.C . 3501 , et . seq. , an d hav e bee n assigne d OM B contro l number s 2060-000 3 fo r NSR , an d 2060-0023 , 2060-002 6 an d 2060-007 2 fo r NSPS . Th e effec t o f thi s rul e woul d b e a reductio n i n paperwor k relate d t o complying wit hNS Ran d NSP S requirements , sinc e thi s ruling provide s additiona l clarificatio n

pr\\j.$\CeJI

a-^l OMTcxXrlff^ cA<t"V.O ^ a s t o modificatiuir btha t ma yb e exclude d fromthes e requirements . C . OM B Revie w Unde r Executiv e Orde r 1229 1 (E.O . 12291) , EPAmus t judg e whethe r a rul e i s "major " an d therefor e subjec t t o th e requiremen t o f a regulatoryimpac t analysi s (RIA) . Thi s ruling i s a majo r rule . However , EPAha s no t prepare d a nRI Abecaus e i tP. 4

- 4 9 - wil l no t resul t i n an ysignificatio nadvers e environmenta l effect s and wil l reduc e th e economi c cost s o f meetin g th e requirement s o f th e CAA . Thi s ruling wa s submitte d t o th e OM B fo r revie wa s require d b yE.O . 12291 . An

ywritte ncomment s fro m OM B t o EPAan

d an yEPArespons e t o thos e comment s ar e include d i n Docke t A-90-06 . D . Effectiv e Dat e Sectio n 4(d ) o f th e Administrativ e Procedure s Ac t (APA) , 5 U.S.C . 553(d) , require s a 30-daywaitin g perio d befor e makin g a substantiv e rul e effective . Sinc e th e regulatoryrevision s bein g propose d todayar e considere d substantive , the yar e subjec t t o th e notice-and-commen t requirement s o f th e AP Aand wil l becom e effectiv e onl yafte r publi c comment s hav e bee n receive d an d considered , an

d fina l actio nha s bee n taken . Th e portion s o f thi s notic e tha t merel yconfirm EPApolic yar e effectiv e immediately . E . RegulatoryFlexibilit yAc t Thi s actio n i s no t subjec t t o th e certificatio n provision s o f sectio n 605(b ) o f th e RegulatoryFlexibilit yAc t (RFA ) becaus e thi s rul e wil l resul t i na reductio no f administrativ e cost s an d n o increas e i n contro l costs , therefor e havin g n o significan t impac t o n industry .P. 5



### - 5 0 - Lis t o f Subject s 4 0 CF RPar t 5 1 Administrativ e procedur e an dpractices , intergovernmenta l relations , ai r pollutio ncontrol , NSR , CCT-demonstrations , sulfu r oxides , nitroge ndioxide , particulat e matter , carbo nmonoxide , hydrocarbons , lead . 4 0 CF RPar t 5 2 ? r 

### *X f<_,[&-••< co<*\AccKo l 

### Ai r pollutio ncontrol , NSR,$G€-IH3gTtiartfftrati6iffc, ( sulfu r oxides , particulat e matter , nitroge ndioxide , carbo nmonoxide , hydrocarbons , lead . 4 0 CF RPar t 6 0 . n 

### . p

### Acv^po^^' j Ai r pollutio ncontrol , NSPS , -CCT—demonstrationo , sulfu r oxides , particulat e matter , nitroge ndioxide , carbo nmonoxide , hydrocarbons , lead . Dated : Jun e 3 , 199 1 Willia mK . Reilly , Administrato rP. 6



### Fo r th e reason s se t fort hi n th e preamble , Par t 5 1 o f Chapte r I o f Titl e 4 0 o f th e cod e o f Federa l Regulation s i s propose dt o b e amende da s follows : Par t 5 1 - REQUIREMENT S FO RPREPARATION , ADOPTION , AN D8UBMITTA L O F IMPLEMENTATIO N

PLANS . 1 . Th e authorit ycitatio nfo r Par t 5 1 i s amende dt o rea d lows * A"-"^ 0 *• i ^^' • 

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### 7 , * A- - Sectio n51.16 5 i s propose dt o b e amende dt o r^a da s &<A _*.*>' follows : Ayv-.^w.-V s 51.16 5 Permi t requirements . 

### (a ) 

### * * * p- ^ WO , (1 ) * * * |v ) * * * ^ L



### - «• • (C ) Aphysica l chang e o r a chang e i n th e metho do f lo\ ~ BS ^ operatio nshal l no t include : ' **** * 1G H5-K-h2 (8 ) th e addition , replacemen t o r us e o f a pollutio ncontro l projec t a t a n existin g electri c < • ZA^-) utilit ystea mgeneratin g unit , unles s th e ^ 5^ u 

### ^ j 10 C 

### reviewin g authorit ydetermine s tha t suc haddition , /\\<f~ £ replacement , o r us e render s th e uni t les s ^
_ environmentall ybeneficial , an d except : ^r-l t JJd r

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### (l ) whe nth e reviewin g authorit yha s reaso nt o believ e tha t th e pollutio ncontro l projec t woul d c 

### \t*<* resul t i n a significan t ne t increas e i n £,,<

- representativ e actua l annua l emission s o f an y, i criteri a pollutan t ove r level s use dfo r tha t * ^ . sourc e i n th e mos t recen t ai r qualit yimpac t a»*-*<teJ(^ analysi s i n th e are a conducte dfo r th e purpos e o f • u Titl e I , i f any , an d l0 M 

### (ii ) th e reviewin g authorit ydetermine s tha t th e increas e wil l caus e o r contribut e t o a violatio n L 

### ^~) o f an yambien t standard , PS D increment , o r - visibilit ylimitation . i , . , (9 ) Th e installation , operation , cessation , o r remova l \KO\*\ 

### o f a temporar yclea ncoa l technolog ydemonstratio n project , provide dtha t th e projec t complie s with : (i ) th e Stat e implementatio npla nfo r th e Stat e i n whic hth e projec t i s located , an d- 2 - (ii ) othe r requirement s necessaryt o attai nan d maintai n th e nationa l ambien t ai r qualit ystandard s durin g th e projec t an d afte r i t i s terminated . (10 ) Th e reactivatio no f a veryclea ncoal

fire d electri c utilit ystea mgeneratin g unit . (xii ) * * * (D ) Fo r an

yemission s uni t (othe r tha n a nelectri c utilit ystea

m generatin g uni t specifie d i nparagrap h (E ) o f thi s subsection ) tha t ha s no t begunnorma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o emi t o f th e uni t o ntha t date . (E ) Fo r a n electri c utilit ystea mgeneratin g uni t (othe r tha n a ne wuni t o r th e replacemen t o f a n existin g unit ) actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e unit . (xx ) "Electri c utilit ysteamgeneratin g unit " mean s an y stea melectri c generatin g uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha n one-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n2 5 M Welectrica l outpu t t o an yutilit ypowe r distributio n systemfo r sale . Anysteam supplie d t o a stea

mdistributio n systemfo r th e purpos e o f providin g steamt o a steam-electri c generato r tha t woul d produc e electrica l energyfo r sal e i s als o considere d i ndeterminin g th e electrica l energyoutpu t capacit yo f th e affecte d facility . (xxi ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e two-yea r perio d afte r a physica l chang e o r chang e i n th e metho d o f operatio n o f a unit , (o r a differen t consecutiv e two-yea r perio d withi n 1 0 year s afte r tha t change , wher e th e permittin g authorit ydetermine s tha t suc h perio d i s mor e representativ e o f norma l sourc e operations) , considerin g th e effec t anysuc hchang e wil l hav e o nincreasin g o r decreasin g th e hourl yemission s rat e an d o nprojecte d capacit y utilization . I n projectin g futur e emission s th e permittin g authorit yshall :

(A ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s ow

nrepresentations , filing s wit hth e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r Titl e I V

o f th e Clea nAi r Act ; and 

# IP. 8

- 3 - (B ) exclude , i ncalculating an yincreas e i nemission s tha t result s fro

mth e particula r physica l chang e o r chang e i n th e metho d o f operatio na t a nelectri c utilit ystea

mgenerating unit , tha t portio no f th e unit' s emission s following th e chang e tha t i s attributabl e t o a nincreas e i nprojecte d capacit y utilizatio n a t th e uni t tha t i s unrelate d t o th e particula r change , including an yincrease d utilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystema s a whole . (xxii ) "Temporaryclea ncoa l technologydemonstratio n project " mean s a clea n coa l technologydemonstratio n projec t tha t i s operate d fo r a perio d o f five year s o r less , an d whic h complie s wit hth e Stat e implementatio npla nfo r th e Stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai n an

d maintai n th e nationa l ambien t ai r qualit ystandard s during th e projec t an d afte r i t i s terminated . (xxiii ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existing facilit ywhic h wil l achiev e significan t reduction s i nai r emission s o f sulfu r dioxid e O r oxide s o f nitroge nassociate d wit hth e utilizatio no f coa l i n th e generatio n o f electricity , o r proces s stea mwhic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (xxiv ) "Clea n coa l technologydemonstratio n project " mean s a projec t usin g fund s (1 ) appropriate d unde r th e headin g 'Departmen t o f Energy-Clea nCoa l Technology, ' up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r (2 ) simila r project s funde d through appropriation s fo r th e Environmenta l Protectio nAgency . Th e Federa l contributio n fo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio nproject . (xxv ) "Reactivatio no f a veryclea ncoal-fire d electri c utilit ysteamgeneratin g unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio n associate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit y uni t afte r a perio d o f discontinue d operatio nwher e th e unit : (i ) ha s no t bee n i n operatio n fo r th e two-yea r perio d prio r t o th e enactmen t o f th e Clea n Ai r Ac t Amendment s o f 1990 , and th e emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e tim e o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova lP. 9

- 4 - efficienc yfo r sulfu r dioxid e o f n o les s tha n 8 5 percen t and a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e time o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i ncomplianc e wit hth e requirement s o f th e Clea n Ai r Act . (xxvi)"Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t a nexistin g electri c utilit ysteam

generating uni t fo r purpose s o f reducing emission s fro msuc hunit . Suc hchange s ar e limite d to : (i ) th e installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio nfo r sulfu r dioxid e and nitroge n oxide s control s and electrostati c precipitators ; (ii ) a physica l change , o r chang e i n th e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s pollutin g tha n th e fue l i nus e prio r t o th e chang e including , bu t no t limite d t o natura l ga s o r coa l re burning , co-firing o f natura l ga s and othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea n coa l technologydemonstratio n projec t conducte d unde r Titl e II , sectio n 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sectio n 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r simila r project s funde d throug h appropriation s fo r th e Environmenta l Protectio nAgency ; o r (iv ) a permanen t clea ncoa l technologydemonstratio nprojec t tha t constitute s a repowering project .P.1 0

- 5 - 3 . Sectio n 51.16 6 i s propose d t o b e amende d t o read a s follows : 51.16 6 Preventiono f significant deterioratio no f ai r quality . **** * (b ) * * * (2 ) * * * (iii ) Aphysica l chang e o r chang e i nth e metho d o f operatio n shal l no t include : * * * * (h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t a n existing electri c utilit ystea mgenerating unit , unles s th e reviewing authorit ydetermine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentall y beneficia l an

d except : (a ) whe n th e reviewing authorit yha s reaso n t o believ e pollutio ncontro l projec t woul d resul t i na significan t ne t increas e i n representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d fo r tha t sourc e i n th e mos t recen t ai r qualit yimpac t . analysi s i n th e are a conducte d fo r th e purpos e o f Titl e I , i f any , an d (b ) th e reviewing authorit ydetermine s tha t th e increas e wil l caus e o r contribut e t o a violatio n o f an yambien t standard , PS D increment , o r visibilit ylimitation . (i ) an yphysica l chang e o r chang e i nth e metho d o f operatio n a t a nexisting electri c utilit ygeneratin g uni t (othe r tha nth e additio n o f a ne wuni t o r th e replacemen t o f a nexisting unit ) tha t woul d no t resul t i n a significan t ne t increas e i nrepresentativ e actua l annua l emission s o f a regulate d pollutan t a t th e unit . (j ) Th e installation , operation , cessation , o r remova l o f a temporaryclea ncoa l technologydemonstratio n project , provide d tha t th e projec t complie s with : (i ) th e Stat e implementatio n pla nfo r th e Stat e i n whic hth e projec t i s located ; an d (ii ) othe r requirement s necessaryt o attai n an d maintai n th e nationa l ambien t ai r qualit yP.1 1

- 6 - standard s during th e projec t an d afte r i t i s terminated . (k ) Th e installatio n o r operatio no f a permanen t clea n coa l technologydemonstratio n projec t tha t constitute s repowering , provide d tha t th e projec t doe s no t resul t i n an increas e i n th e potentia l t o emi t o f an y regulate d pollutan t emitte d b yth e unit . Thi s exemptio n shal l appl yo n a pollutant-by

pollutan t basis . (1 ) Th e reactivatio no f a veryclea n coal

fire d electri c utilit ystea mgenerating unit . (21 ) * * * (iv ) Fo r an

yemission s uni t (othe r tha n a n electri c utilit ystea

mgenerating uni t specifie d i n paragrap h (v ) o f thi s subsection ) tha t ha s no t begunnorma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o emi t o f th e uni t o ntha t date . (v ) Fo r a n electri c utilit ystea mgenerating uni t (othe r tha n a ne wuni t o r th e replacemen t o f a n existin g unit ) actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e uni t following th e physica l o r operationa l change . (30 ) "Electri c utilit ystea mgeneratin g unit " mean s an ysteam electri c generatin g uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha none-thir d o f it s potentia l electri c outpu t capacit yand mor e tha n 2 5 MWelectrica l outpu t t o an y utilit ypowe r distributio nsystemfo r sale . An ysteam supplie d t o a stea mdistributio nsystem fo r th e purpos e o f providin g steam

t o a steam-electri c generato r tha t woul d produc e electrica l energyfo r sal e i s als o considere d i n determinin g th e electrica l energyoutpu t capacit yo f th e affecte d facility . (31 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio n a t a n existing electri c utilit ysteamgeneratin g uni t fo r purpose s o f reducing emission s fromsuc hunit . Suc hchange s ar e limite d to : (i ) th e installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite dP.1 2

- 7 - t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e an d nitroge noxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i nth e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting tha nth e fue l i nus e prio r t o th e change , including bu t no t limite d t o natura l ga s o r coa l re-burning , co-firing o f natura l ga s an d othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea n coa l technologydemonstratio n projec t conducte d unde r Titl e II , sectio n 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sectio n 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r simila r project s funde d through appropriation s fo r th e Environmenta l Protectio nAgency , o r (iv ) a permanen t clea ncoa l technologydemonstratio n projec t tha t constitute s a repowering projec t (32 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e two-yea r perio d afte r a physica l chang e o r chang e i n th e metho d o f operatio n o f a unit , (or a differen t consecutiv e two
yea r perio d withi n 1 0 year s afte r tha t change , wher e th e reviewin g authorit ydetermine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations) , considerin g th e effec t an ysuc hchang e wil l hav e o n increasing o r decreasing th e hourl yemission s rat e an d o n projecte d capacit yutilization . I nprojectin g futur e emission s th e reviewing authorit yshall : (A ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s ow

n representations , filing s wit hth e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r Titl e I V

o f th e Clea n Ai r Act ; and (B ) exclude , i n calculating an yincreas e i nemission s tha t result s fro

mth e particula r physica l chang e o r chang e i n th e metho d o f operatio na t anelectri c utilit ysteamgenerating unit , tha t portio no f th e unit' s emission s following th e chang e tha t i s attributabl e t o a nincreas e i n projecte d capacit y utilizatio n a t th e uni t tha t i s unrelate d t o th eP.1 3

- 8 - particula r change , including an yincrease d utilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystema s a whole . (33 ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existing facilit ywhic h wil l achiev e significan t reduction s i n ai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hth e utilizatio n o f coa l i nth e generatio n o f electricity , o r proces s steamwhic hwa s no t i nwidesprea d us e a s o f Novembe r 15 , 1990 . (34 ) "Clean coa l technologydemonstratio n project' ' mean s a projec t usin g fund s (l ) appropriate d unde r th e heading •Departmen t o f Energy-Clea nCoa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency . Th e Federa l contributio n fo r a qualifyin g projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio n project . (35 ) "Temporaryclea n coa l technologydemonstratio nproject " mean s a clea n coa l technologydemonstratio nprojec t tha t i s operate d fo r a perio d o f five year s o r less , an d whic h complie s wit hth e Stat e implementatio npla nfo r th e Stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai n an d maintai nth e natio nambien t ai r qualit ystandard s durin g an d afte r th e projec t i s terminated . (36)(i ) "Repowering " mean s replacemen t o f a nexisting coal

fire d boile r wit hon e o f th e following clea ncoa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio n combine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio nfue l cells , o r a s determine d b

yth e Administrator , i n consultatio n wit h th e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d an yothe r technologycapabl e o f controllin g multipl e combustio n emission s simultaneousl ywit himprove d boile r o r generatio n efficienc yan

d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technologyi n widesprea d commercia l us e a s o f Novembe r 15 , 1990 . (ii ) Repowerin g shal l als o includ e an yoi l and/o r gas-fire d uni t whic ha s bee n award t clea n coa l technologyP. M

- 9 - demonstratio n funding a s o f January1 , 1991 , b yth e Departmen t o f Energy . (iii ) Th e reviewing authorit yshal l giv e expedite d consideratio n t o permi t application s fo r an ysourc e tha t satisfie s th e requirement s o f thi s subsectio n an d i s grante d a n extensio nunde r § 40 9 o f th e Clea nAi r Act . (37 ) "Reactivatio n o f a veryclea ncoal-fire d electri c utilit y steamgeneratin g unit " mean s an yphysica l chang e o r chang e i nth e metho d o f operatio n associate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio nwher e th e unit : (i ) ha s no t bee n i n operatio n fo r th e two-yea r perio d prio r t o th e enactmen t o f th e Clea nAi r Ac t Amendment s o f 1990 , an

d th e emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow nwit ha continuou s system o f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e time o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i ncomplianc e wit hth e requirement s o f th e Clea n Ai r Act .P.1 5 

### U«* ' f\,r

- 1 0 - * >

lT. 9
amende d a s follows : Par t 52-APPROVA

L AN DPROMULGATIO

N OF IMPLEMENTATIO

N PLANS Fo r th e reason s se t fort hi nth e preamble , Par t 5 2 o f Chapte r I .-.sit o f Titl e 4 0 o f th e Cod e o f Federa l Regulation s i s propose d p o b e ^9

1 . Th e authorit ycitatio n fo r Par t 5 2 i s amende d t o read a s ($

- TM c follows : . , 4 2 U.S. C ^qol-^ l £< i L\*+r**\

V» a -tw
MWt'^ ' ^ *

- ^___

—^^^

_\ -M
2 . Sectio n 52.2 1 i s propose d t o b e amende d t o read a s follows : 52.2 1 Preventio

no f significant deteriorationo f ai r quality . (b ) * (2 ) * (iii )

* * *

* * * *

Aphysica l chang e o r a chang e i nth e metho d o f operatio n shal l no t include : * * * (h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t a nexisting electri c utilit ysteam generatin g unit , unles s th e Administrato r determine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentall ybeneficial , and except : (a ) whe n th e Administrato r ha s reaso n t o believ e tha t th e pollutio n contro l projec t woul d resul t i n a significan t ne t increas e i n representativ e actua l annua l emission s o f an ycriteri a pollutan t ove r level s use d fo r tha t sourc e i n th e mos t recen t ai r qualit yimpac t analysi s i nth e are a conducte d fo r th e purpos e o f Titl e I , i f any , an d (b ) th e Administrato r determine s tha t th e increas e wil l caus e o r contribut e t o a violatio no f an y ambien t standard , PS D increment , o r visibilit y limitation . (i ) Th e installation , operation , cessation , o r remova l o f a temporaryclea ncoa l technology demonstratio n project , provide d tha t th e projec t complie s with :P.1 6

- 1 1 " (i ) th e Stat e implementatio npla n fo r th e Stat e i n whic hth e projec t i s located , an d (ii ) othe r requirement s necessaryt o attai n an d maintai nth e nationa l ambien t ai r qualit y standard s during th e projec t an d afte r i t i s terminated . (j ) Th e installatio no r operatio no f a permanen t clea ncoa l technologydemonstratio n projec t tha t constitute s repowering , provide d tha t th e projec t doe s no t resul t i n a n increas e i n th e potentia l t o emi t o f an y regulate d pollutan t emitte d b yth e unit . Thi s exemptio nshal l appl yo n a pollutant-by

pollutan t basis . (k ) Th e reactivatio no f a veryclea n coal

fire d electri c utilit ystea mgeneratin g unit . (21 ) * * * (iv ) Fo r an

yemission s uni t (othe r tha na n electri c utilit ysteamgenerating uni t specifie d i nparagrap h (v ) o f thi s subsection ) tha t ha s no t begunnorma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o emi t o f th e uni t o n tha t date . (v ) Fo r a n electri c utilit ystea mgenerating uni t (othe r tha n a ne wuni t o r th e replacemen t o f a n existing unit ) actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e unit . (31 ) "Electri c utilit ystea mgenerating unit " mean s an ysteam electri c generatin g uni t tha t i s constructe d fo r th e purpos e o f supplyin g mor e tha n one-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n2 5 MWelectrica l outpu t t o an y utilit ypowe r distributio nsystemfo r sale . An ystea m supplie d t o a steamdistributio nsystemfo r th e purpos e o f providin g steam

t o a steam-electri c generato r tha t woul d produc e electrica l energyfo r sal e i s als o considere d i n determinin g th e electrica l energyoutpu t capacit yo f th e affecte d facility . (32 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t a n existing electri cP.1 7

- 1 2 - utilit ysteamgeneratin g uni t fo r purpose s o f reducing emission s fro

msuc hunit . Suc hchange s ar e limite d to : (i ) th e installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e an d nitroge n oxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i n th e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting tha n th e fue l i nus e prio r t o th e chang e including , bu t no t limite d t o natura l ga s o r coa l re burning , co-firing o f natura l ga s and othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea ncoa l technologydemonstratio n projec t conducte d unde r Titl e II , sectio n101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sectio n 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r simila r project s funde d through appropriation s fo r th e Environmenta l Protectio nAgency ; o r (iv ) a permanen t clea n coa l technologydemonstratio n projec t tha t constitute s a repowering project . (33 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e two-yea r perio d afte r a physica l chang e o r chang e i n th e metho d o f operatio no f a unit , (or a differen t consecutiv e two-yea r perio d withi n1 0 year s afte r tha t change , wher e th e Administrato r determine s tha t suc h perio d i s mor e representativ e o f norma l sourc e operations) , considerin g th e effec t an ysuc hchang e wil l hav e o n increasing o r decreasin g th e hourl yemission s rat e an d o n projecte d capacit yutilization . I nprojectin g futur e emission s th e Administrato r shall : (i ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s own representations , filing s wit hth e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r Titl e IV

o f th e Clea n Ai r Act ; an d (ii ) exclude , i n calculating an yincreas e i nemission s tha t result s fromth e particula r physica l chang e o r chang e i n th e metho d o f operatio na t a n electri cP.1 8

- 1 3 - utilit ystea

mgeneratin g unit , tha t portio no f th e unit' s emission s following th e chang e tha t i s attributabl e t o a nincreas e i nprojecte d capacit y utilizatio n a t th e uni t tha t i s unrelate d t o th e particula r change , including an yincrease d utilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystema s a whole . (34 ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existing facilit ywhic h wil l achiev e significan t reduction s i nai r emission s o f sulfu r dioxid e o r oxide s o f nitroge nassociate d wit hth e utilizatio n o f coa l i nth e generatio n o f electricity , o r proces s stea

mwhic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (35 ) "Clean coa l technologydemonstratio nproject " mean s a projec t usin g fund s (1 ) appropriate d unde r th e headin g •Departmen t o f Energy-Clea nCoa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency . Th e Federa l contributio nfo r a qualifyin g projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio n project . (36 ) "Temporaryclea n coa l technologydemonstratio nproject " mean s a clea n coa l technologydemonstratio nprojec t tha t i s operate d fo r a perio d o f fiv e year s o r less , an d whic h complie s wit hth e Stat e implementatio n plan s fo r th e Stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai nan d maintai nth e nationa l ambien t ai r qualit ystandard s durin g th e projec t an d afte r i t i s terminated . (37)(i ) "Repowering " mean s replacemen t o f a n existing coal

fire d boile r wit hon e o f th e following clea n coa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio ncombine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio n fue l cells , o r a s determine d byth e Administrator , i nconsultatio n wit h th e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d an yothe r technologycapabl e o f controllin g multipl e combustio n emission s simultaneousl ywit himprove d boile r o r generatio n efficienc yan

d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technologyi n widesprea d commercia l us e a s o f Novembe r 15 , 1990 .P.1 9

- 1 4 - (ii ) Repowerin g shal l als o includ e an yoi l and/o r gas-fire d uni t whic hha s bee n awarde d clea n coa l technology demonstratio n funding a s o f January1 , 1991 , b yth e Departmen t o f Energy . (iii ) Th e Administrato r shal l giv e expedite d consideratio n t o permi t application s fo r an y sourc e tha t satisfie s th e requirement s o f thi s subsectio nan d i s grante d a nextensio n unde r §40 9 o f th e Clea n Ai r Act . (38 ) "Reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea

mgeneratin g unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio nassociate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio n wher e th e unit : (i ) ha s no t bee n i n operatio nfo r th e two-yea r perio d prio r t o th e enactmen t o f th e Clea n Ai r Ac t Amendment s o f 1990 , an

d th e emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow nwit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n 8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e tim e o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i n complianc e wit hth e requirement s o f th e Clea n Ai r Act .P.2 0

- 1 5 -

3 . Sectio n 52.2 4 i s propose d t o b e amende d t o read a s follows : 52.2 4 Statutor

y restrictio

nonne v sources .

**** * (f ) * * * (5 ) * * * (iii ) Aphysica l chang e o r chang e i nth e metho d o f operatio n shal l no t include :
(h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t a n existing electri c utilit ystea m generatin g unit , unles s th e Administrato r determine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentall ybeneficial , and except : (1 ) whe n th e Administrato r ha s reaso n t o believ e tha t th e pollutio ncontro l projec t Woul d resul t i n a n significan t ne t increas e i nrepresentativ e actua l annua l emission s o f an ycriteri a pollutan t ove r level s use d fo r tha t sourc e i nth e mos t recen t ai r qualit yimpac t analysi s i nth e are a conducte d fo r th e purpos e o f Titl e I , i f any , an d (2 ) th e Administrato r determine s tha t th e increas e wil l caus e o r contribut e t o a violatio n o f an yambien t standard , PS D increment , o r visibilit y limitation . (i ) Th e installation , operation , cessation , o r remova l o f a temporaryclea ncoa l technologydemonstratio n project , provide d tha t th e projec t complie s with : (1 ) th e Stat e implementatio npla nfo r th e Stat e i n whic hth e projec t i s located , an d (2 ) othe r requirement s necessaryt o attai nan d maintai n th e nationa l ambien t ai r qualit ystandard s durin g th e projec t an

d afte r i t i s terminated . (j ) Th e reactivatio no f a veryclea n coal-fire d electri c utilit ystea mgeneratin g unit .P.2 1

- 1 6 - (13 ) * * * (iv ) Fo r an

yemission s uni t (othe r tha na n electri c utilit ystea

mgeneratin g uni t specifie d i n paragrap h (v ) o f thi s subsection ) tha t ha s no t begunnorma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o emi t o f th e uni t o n tha t date . (v ) Fo r a n electri c utilit ystea mgeneratin g uni t (othe r tha n a ne wuni t o r th e replacemen t o f a n existing unit ) actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e unit . (18 ) "Electri c utilit ystea mgenerating unit " mean s an ysteam electri c generatin g uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha n one-thir d o f it s potentia l electri c outpu t capacit yan

d mor e tha n 2 5 MWelectrica l outpu t t o an yutilit y powe r distributio n systemfo r sale . An ystea msupplie d t o a stea mdistributio n system fo r th e purpos e o f providin g stea mt o a steam-electri c generato r tha t woul d produc e electrica l energyfo r sal e i s als o considere d i n determining th e electrica l energy outpu t capacit yo f th e affecte d facility . (19 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e two-yea r perio d afte r a physica l chang e o r chang e i n th e metho d o f operatio n o f a unit , (or a differen t consecutiv e two-yea r perio d withi n 1 0 year s afte r tha t change , wher e th e Administrato r determine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations) , considering th e effec t an

ysuc hchang e will " hav e o nincreasing o r decreasin g th e hourl yemission s rat e an d o n projecte d capacit yutilization . I n projectin g futur e emission s th e Administrato r shall : (i ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s ow n representations , filing s wit hth e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r Titl e IV o f th e Clea n Ai r Act ; an d (ii ) exclude , i n calculating an yincreas e i nemission s tha t result s fromth e particula r physica l chang e o r chang e i nth e metho d o f operatio n a t a nelectri c utilit ystea mgeneratin g unit , tha t portio n o f th e unit' s emission s following th e chang e tha t i s attributabl e t o a n increas e i n projecte d capacit yutilizatio n a t th e uni t tha t i s unrelate d t o th e particula r change , including an yincrease d utilizatio ndu eP.2 2

- 1 7 - t o th e rat e o f electricit ydemand growt hfo r th e utilit y systema s a whole . (20 ) "Temporaryclea n coa l technologydemonstratio n project " mean s a clea n coa l technologydemonstratio n projec t tha t i s operate d fo r a perio d o f five year s o r less , an d whic hcomplie s wit hth e Stat e implementatio n plan s fo r th e Stat e i n whic hth e projec t i s locate d an d othe r reguirement s necessaryt o attai nan d maintai n th e nationa l ambien t ai r qualit ystandard s during th e projec t an

d afte r i t i s terminated . (21 ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existing facilit ywhic hwil l achiev e significan t reduction s i n ai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hth e utilizatio n o f coa l i n th e generatio n o f electricity , o r proces s stea m whic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (22 ) "Clea n coa l technologydemonstratio nproject " mean s a projec t usin g fund s (1 ) appropriate d unde r th e headin g •Departmen t o f Energy-Clea nCoa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r (2 ) simila r project s funde d through appropriation s fo r th e Environmenta l Protectio nAgency . Th e Federa l contributio n fo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio nproject . (23 ) "Reactivatio n o f a veryclea ncoal-fire d electri c utilit ysteamgeneratin g unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio nassociate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit y uni t afte r a perio d o f discontinue d operatio nwher e th e unit : (i ) ha s no t bee n i noperatio n fo r th e two-yea r perio d prio r t o th e enactmen t o f th e Clea nAi r Ac t Amendment s o f 1990 , an

d th e emission s fromsuc huni t continu e t o b e carrie d i n the permittin g authority' s emission s inventorya t th e tim e o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n 8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e tim e o f commencemen t o f operation s following reactivation ; andP.2 3

- 1 8 - (iv ) i s otherwis e i n complianc e wit hth e requirement s o f th e Clea n Ai r Act . (24 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t a nexisting electri c utilit ystea

mgenerating uni t fo r purpose s o f reducing emission s fro msuc hunit . Suc hchange s ar e limite d to : (i ) th e installatio no f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio nfo r sulfu r dioxid e an

d nitroge n oxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i n th e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s pollutin g tha n th e fue l i n us e prio r t o th e chang e including , bu t no t limite d t o natura l ga s o r coa l re burning , co-firing o f natura l ga s an d othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea ncoa l technologydemonstratio n projec t conducte d unde r Titl e II , sectio n 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sectio n 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r simila r project s funde d through appropriation s fo r th e Environmenta l Protectio n Agency ; o r (iv ) a permanen t clea ncoa l technologydemonstratio n projec t tha t constitute s a repowering project .P.2 4



### - 1 9 - F o r th e reason s se t fort hi n th e preamble , Par t 6 0 o f Chapte r I o f Titl e 4 0 o f th e Cod e o f Federa l Regulation s i s propose dt o b e amende da s follows : PAR T 60-STANDARD S O F PERFORMANC EFO RNE W STATIONAR YSOURCE S 1 . Th e authorit ycitatio nfo r Par t 6 0 i s amende dt o rea da s follows : A l ^S-c. •^•i.^Hix.^mM , q.-M(* , «••* * q«ooi * s *~^>J~Jl

u ? 

### -IW A^or'i^

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### . ^ 2 . Sectio n60. 2 i s propose dt o b e amende db yaddin g th e , l/iat (< r 

### f^oV followin g definitions : § 

### g A02 ( 

### «o i ,~'l5 U4 

### J "Clea ncoa l technolog ydemonstratio nproject " mean s a projec t c 

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### usin g fund s appropriate dunde r th e headin g 'Departmen t o f Energy
- 4^ 4 Clea nCoa l Technology' , u p t o a tota l amoun t o f $2,500,000,00 0 * s fo r commercia l demonstration s o f clea ncoa l technology , o r c*v«.OU.ei ; 

### simila r project s funde dthroug happropriation s fo r th e ^ S-k-f . Environmenta l Protectio nAgency . 0-21* 7 — _ "Electri c utilit ystea mgeneratin g unit " mean s an ystea melectric^

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### generatin g uni t tha t i s constructe dfo r th e purpos e o f supplyin g mor e tha none-thir do f it s potentia l electri c outpu t capacit yan d "' H 

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### ' mor e tha n2 5 M Welectrica l outpu t t o an yutilit ypowe r •-v.o-W , distributio nsyste mfo r sale . An ystea m supplie dt o a stea m distributio nsyste mfo r th e purpos e o f providin g stea mt o a steam-electri c generato r tha t woul dproduc e electrica l energ yfo r sal e i s als o considere di n determinin g th e electrica l energ y outpu t capacit yo f th e affecte dfacility . "Repowering " mean s replacemen t o f a n existin g coal-fire dboile r wit hon e o f th e followin g clea ncoa l technologies : atmospheri c o r pressurize dfluidize dbe dcombustion , integrate dgasificatio n combine dcycle , magnetohydrodynamics , direc t an dindirec t coal

fire dturbines , integrate dgasificatio nfue l cells , o r a s determine db yth e Administrator , i n consultatio nwit hth e Secretar yo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an dan yothe r technolog ycapabl e o f controllin g multipl e combustio nemission s simultaneousl ywit himprove dboile r o r generatio nefficienc yan dwit hsignificantl ygreate r wast e reductio nrelativ e t o th e performanc e o f technolog yi n widesprea d commercia l us e a s o f Novembe r 15 , 1990 . Repowerin g shal l als o includ e an yoi l and/o r gas-fire duni t whic hha s bee nawarde d clea ncoa l technolog ydemonstratio nfundin g a s o f Januar y1 , 1991 , b yth e Departmen t o f Energy . "Reactivatio no f a ver yclea ncoal-fire delectri c utilit ystea m generatin g unit " mean s an yphysica l chang e o r chang e i n th e metho do f operatio nassociate dwit hth e commencemen t o fP.2 5

- 2 0 - commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio nwher e th e unit : (i ) ha s no t bee n i n operatio n fo r th e two-yea r perio d prio r t o th e enactmen t o f th e Clea nAi r Ac t Amendment s o f 1990 , an

d th e emission s fromsuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e tim e o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e time o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i n complianc e wit hth e requirement s o f th e Clea n Ai r Act . 3 . Sectio n 60.1 4 i s propose d t o b e amende d t o rea d a s follows : 60.1 4 MODIFICATION . * * * * * (h ) N o physica l change , o r chang e i n th e metho d o f operation , a t a n existing electri c utilit ysteamgeneratin g uni t shal l b e treate d a s a modificatio n fo r th e purpose s o f thi s sectio n provide d tha t suc hchang e doe s no t increas e th e maximu m hourl yemission s o f an ypollutan t regulate d unde r thi s sectio n abov e th e maximu

m hourl yemission s achievabl e a t tha t uni t during th e fiv e year s prio r t o th e change . (i ) Repowerin g project s tha t ar e awarde d funding fromth e Departmen t o f Energya s permanen t clea n coa l technology demonstratio n project s (or simila r project s funde d b yEPA ) ar e exemp t fromth e requirement s o f thi s sectio n provide d tha t suc h chang e doe s no t increas e th e maximu m hourl yemission s o f an y pollutan t regulate d unde r thi s sectio n abov e th e maximu m hourl y emission s achievabl e a t tha t uni t during th e fiv e year s prio r t o th e change . (j)(l ) Repowerin g project s tha t qualif yfo r a nextensio n unde r § 409(b ) o f th e Clea n Ai r Ac t ar e exemp t fro m th e requirement s o f thi s section , provide d tha t suc hchang e doe s no t increas e th e actua l hourl yemission s o f an ypollutan t regulate d unde r thi s sectio n abov e the^ujjtiiuui u hourl yemission s achievabl e a t tha t uni t durin g th e five wear s prio r t o th e change . 

## ac/ua ^P.2 6

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- 2 1 - (2 ) Thi s exemptio nshal l no t appl yt o an yne wuni t that : (a ) i s designate d a s a replacemen t fo r a nexisting unit ; (b ) qualifie s unde r sectio n409(b ) o f th e Clea nAi r Ac t fo r a n extensio n o f a n emissio nlimitatio n complianc e dat e unde r sectio n 40 5 o f th e Clea nAi r Act ; an d (c ) i s locate d a t a differen t sit e tha n th e existing unit . (k ) Th e installation , operation , cessation , o r remova l o f a temporaryclea n coa l technologydemonstratio n projec t i s exemp t fro mth e requirement s o f thi s section . A"temporaryclea ncoa l contro l technologydemonstratio n project" , fo r th e purpose s o f thi s sectio n i s a clea n coa l technologydemonstratio nprojec t tha t i s operate d fo r a perio d o f fiv e year s o r less , an d whic h .complie s wit hth e Stat e implementatio n pla n fo r th e Stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai n an

d maintai n th e nationa l ambien t ai r qualit ystandard s durin g th e projec t and afte r i t i s terminated . (1 ) Th e reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea

m generatin g uni t i s exemp t fro m th e requirement s o f thi s section .