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OAR Box 1787 

Prepped by Ollie Stewart 

Document Number: 

25) ll-B-10 

Docket Number: 

A-90-37 

Printed 11/4/2008 10:22:19 AM Sheet 25 of 147 
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TI-6-/0 

* A -o UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

^S_fc^ 5 Office of Air Quality Planning and Standards 

:-4w^ / Research Triangle Park, North Carolina 27711 

2 5 ' ;LL; 

3f • 

MEMORANDUM 

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'.. If > " 

SUBJECT: Huntsville Incinerator - Determining Best Available Control 

Technology (BACT) 

FROM: Gary McCutchen, Chief / / ^/i/I^Z^/w^ 

New Source Review Section, CPDD (MD-15) /C^w* 1 ^ 

<zz x 

TO: Bruce P. Miller, Chief 

Air Programs Branch, Region IV 

This is in response to your March 30, 1987, memorandum regarding 

the BACT determination made by the Alabama Department of Environmental 

Management (ADEM) for the proposed Huntsville incinerator facility. 

It is difficult to provide a detailed response to the significant.and 

complex questions and issues you have raised within the relatively short 

turn-around time that you have specified. However, our initial review of 

the information submitted indicates that the Region's^ position (i.e., the 

use of acid gas scrubbing as BACT for municipal ;waste incinerators) is 

consistent with emerging national policy and current BACT analysis for 

similar facilities. 

We have reviewed the arguments presented by the applicant and 

ADEM. Although certain of the criteria used in the BACT decision are 

acceptable, many of the reasons given for not requiring acid gas controls 

are unacceptable—even within the context of a case-by-case analysis. 

Specifically: 

1) The fact that the new source performance standard (NSPS) for this 

source category (40 CFR 60, Subpart Db, June 19, 1986) does not require 

sulfur dioxide (SO2) scrubbing should not influence the BACT analysis. 

In a BACT analysis! an NSPS simply defines a minimal level of control. The 

fact that a technology was not selected for .the NSPS (or that a pollutant 

is not regulated by the NSPS) is in no way indicative of the qualifications 

of a technology as a BACT candidate. The only reason for comparing 

control options to an NSPS-is to determine whether the control option 

would result in an emissions level less stringent than the NSPS. If so, 

that option is unacceptable. 
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2) It is not correct to factor into the BACT analysis the contention 

that the proposed facility would be less polluting than any coal-fired 

boiler Redstone Arsenal would contemplate building if steam were not 

available from the proposed facility. Any emitting facility constructed 

by Redstone Ars£nal would be a separate source and would be required to 

comply with all applicable environmental regulations. If the Redstone 

Arsenal were to constuct a coal-fired facility or its own incinerator, it 

would also have to apply BACT. In fact, BACT for a coal-fired boiler 

might result in lower emissions than would a steam-producing incinerator. 

3) In regard to ADEM's argument that the Huntsville plant would 

produce steam which is a less valuable commodity than the electricity 

produced at other similar plants, it is difficult to determine the validity 

of the argument without a detailed economic assessment. Even though 

electricity may be a more valuable product than steam (for some municipal 

waste incinerators), steam is cheaper to produce both from the point of 

capital and annualized costs. Depending on the purchase price of the 

steam, it may even be a more profitable alternative for those facilities 

where a buyer for the steam is on hand. 

The ADEM has indicated that since the steam purchase agreements are 

already signed it is not possible for the applicant to consider raising 

the purchase price ot the steam to defray the increased tipping cost that 

the applicant contends would result from the cost of SO2 controls. In 

most cases, this type of argument should be ignored. A reviewing agency 

is'no more bound by an applicant's unfounded assumption regarding what 

level of control will constitute BACT than a bank is bound by an assumption 

of a certain interest rate on the applicant's loan or a supplier by an 

assumption on the applicant's part regarding the costs of materials or 

equipment. This is one case where it it acceptable tor a BACT determination 

to make it uneconomical for a source to construct. 

The EPA has no choice other than -to ignore such arguments. If 

financial agreements like this were taken into account, applicants could 

simply sign contracts based on meeting the NSPS or even using no control 

whatsoever, then use those contracts to justify the level of control 

that they preselected. 

In further response to the specific questions raised in your memo: 

1) The document titled "Guidelines for Determining Best Available 

Control Technology (BACT)," dated December 1978, was issued for the 

purpose of providing the framework for a consistent approach in determining 

BACT. The document, however, is general in its attempt at defining the 

BACT process, and at best focuses on specifying the parameters which 

should be considered in the BACT analysis. 

In October 1980, EPA published the "Prevention of Significant 

Deterioration Workshop Manual." This document, in the hopes of bringing 

greater consistency to the BACT review process, presented an analytical 

format for the BACT analysis. Although the document recognizes the need 
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for evaluating BACT on a case-by-case basis, it does provide more specific 

guidance than the 1978 document in defining how economic, energy, and 

environmental factors are to be evaluated. If applied correctly, the 

methodology described in the workbook should result in a BACT determination 

consistent with the definition of BACT and acceptable to EPA. 

Probably the best method of determining BACT, an approach that 

assesses BACT starting from the most effective control option available, 

is being successfully implemented by some State and local agencies. This 

approach, in conjunction with the PSD workshop manual, can be used to 

evaluate the State's proposed BACT decision. For further information on 

the implementation of this approach, contact Wayne A. Blackard, Chief, 

New Source Section, EPA Region IX (FTS 454-8249). 

2) As you have pointed out, States are to decide how their 

environmental resources (such as increments) are used. A State may, for 

example, decide that a proposed source would consume too much increment 

and therefore prevent that source from being built or allow it to be 

built only if increment consumption is further reduced. 

The BACT determination, however, is made totally independent ot the 

amount of increment or air resources available. The environmental impact 

aspect of BACT is designed to ensure that a more costly control system 

will; result in a decreased environmental impact (e.g., fewer emissions, 

smaller impact area, lower maximum ground level concentration, etc.). 

This environmental assessment should not be confused with the concept of 

using up the increment by "relaxing" BACT, a concept that EPA does not • 

accept. 

Once determined, BACT can only be made more stringent (not less) by 

environmental considerations. Examples include cases where BACT is not 

stringent enough to prevent exceedances of a national ambient air quality 

standard (or an increment) or where the State will not accept the level 

of control selected as BACT and demands more stringent controls to preserve 

increment. In both cases, the source has a choice of locating elsewhere 

or reducing either its emissions or its impact. Efforts to reduce emissions 

bring about the "technology-forcing" aspect of BACT and lowest achievable 

emission rate that Congress envisioned as part of a system designed to 

hold new emissions to an absolute minimum. If it works, the "forced" 

technology will likely become the new.BACT level of control. 

Possible grounds for overturning a BACT decision include an 

inappropriate review (e.g., BACT procedures not correctly followed, BACT 

decision not correctly justified), an incomplete review, a review based 

on false or misleading information, or a permit which is not enforceable 

as a practical matter. This is not a complete list; these are just some 

of the most common problems. 

3) The PSD Workshop Manual also addresses tm s point by recognizing 

that "additional financing required for an alternative control strategy 

may jeopardize the financing of the entire project." However, the 

workshop manual also points out that "information is available on the 
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value of various emissions reductions that EPA and affected industries 

generally agree are reasonable." Since an applicant can bias the economics 

of a proposed project towards a less stringent control option, it is best 

in nearly all cases to evaluate the costs of controls against established 

norms. Many State and local agencies currently evaluate BACT proposals 

against dollars^per ton criteria or against acceptable control costs for 

the category of source in question. This helps to ensure that the applicant 

does not bias the economics of the project against an otherwise acceptable 

control option. These types of approaches help to bring nationwide 

consistency to the BACT determinations while.still allowing for a case-by-case 

determination. 

The burden of proof always rests on the applicant to demonstrate why 

a generally accepted and established control option is unacceptable for 

the proposed project. The demonstration deserves special scrutiny when 

the applicant claims that an established control option would prevent the 

source from being constructed. It should be noted that the reason for 

applying economics to the source category overall and then requiring 

extensive justification for less stringent control for an individual 

facility is that EPA cannot be placed in the position of allowing less 

stringent (or no) controls simply because an applicant cannot afford what 

similar sources are required to use. 

Economic considerations will vary from project to project, but 

within the same general source category, construction and operation costs 

should not vary to the extent .that the requirement to apply an established 

control option can stop a project. This type of argument generally is 

not acceptable. In most cases, a source simply should not be granted a 

permit if financing is inadequate for proper controls. 

The caveat in existing BACT guidance about stopping a project is 

intended to prevent BACT determinations by a reviewing agency that are so 

much more expensive than the norm that a typical source could not reasonably 

be built. Examples might include requirements for a series of two or 

more baghouses or a control system whose cost greatly exceeds that of the 

base facility. 

4) The Region's nonacceptance of the "alternative build scenario" appears 

appropriate in this case. 

If you have any questions regarding this matter, please feel free to 

contact me at FTS 629-5592, or have your staff contact David Solomon at 

FTS 629-5375. 

cc: NSR contacts