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OAR Box 1790 

Prepped by Keeia Richards 

Document Number: 

213) ll-F-2 

Docket Number: 

A-90-37 

Printed 10/31/2008 12:43:16 PM Sheet 213 of 250 
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June 24, 1991 

Note to Art Fraas 

Attached is a revised draft of the BACT rulemaking proposal. 

The draft includes responses to the April 19, 1991 comments as well 

as some other minor wording changes from our Office of General 

Counsel. Please let me know if you have any additional comments. 

We would like to proceed with publication in the Federal Register 

as soon as possible. 

Please distribute the package to the other interested parties 

as you normally would. . 

.SdfiA. j£c^—^. ftMike -Shapiro 

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June 25,1991 

Note to Howard Gruenspecht 

Enclosed is a revised draft of the BACT rulemaking proposal. 

Ae indicated in the attached note, we are giving the proposal to 

Art Fraas for distribution. 

Mike Shapiro 
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file:BACTRULE.7 

ENVIRONMENTAL PROTECTION AGENCY 

40 C F R Parts 51, and 52 

Requirements for Preparation, Adoption, and 

Submittal of Implementation Plans; Approval 

and Promulgation of Implementation Plans 

AGENCY: ENVIRONMENTAL PROTECTION AGENCY (EPA) 

ACTION: PROPOSED RULE 

SUMMARY: To improve the effectiveness of the prevention of 

significant air quality deterioration program required by 

Title I, Part C of the Clean Air Act (Act), EPA proposes today to 

amend its rules to clarify the regulatory definition of best 

available control technology (BACT) by adding language that 

elucidates the legal requirements for a BACT analysis. The new 

language specifies that a BACT analysis must contain the 

following two core requirements: 

1) the determination must consider a representative group 

of available control systems for the source, including the most 

stringent alternative available, and 

2) selection of a particular control system as BACT must be 

justified in terms of the statutory criteria and supported by the 

record, and must explain the basis for the rejection of the other 

candidate systems. 

In addition, EPA proposes to amend the regulations defining BACT 

to reflect the change made by § 403(d) of Title IV of the Act 

Amendments of 1990 to the statutory definition of BACT. 

The EPA is soliciting public comment on the proposed changes 

to the regulatory definition of BACT. 

DATES: Comments may be submitted to EPA at the address below on 

or before [60 days from date of publication]. A public hearing 

is scheduled for .... The hearing may be canceled if no speakers 

have requested time to present their comments 15 days prior to 

the scheduled hearing date. Written comments in lieu of 

testimony are encouraged. 

DOCKET: Supporting information used in developing the proposed 

rule is contained in Docket No. A-91-30. This docket is 
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available for public inspection and copying between 8:30 a.m. and 

3:30 p.m. Monday through Friday, at the address listed below. A 

reasonable fee may be charged for copying. 

ADDRESSES: Comments must be mailed (in duplicate if possible) 

to: EPA Air Docket (LE-131) , Attn: Docket No. A-91-30, room M1500, Waterside Mall, 401 M Street SW., Washington DC 20460. The 

public hearing will be held .... 

FOR FURTHER INFORMATION CONTACT: David Solomon at (919) 541-5375. 

Persons interested in attending the hearing or wishing to present 

oral testimony should contact Ms. JoAnn Allman in writing at the 

U.S. Environmental Protection Agency, Office of Air Quality 

Planning and Standards, Air Quality Management Division, Mail 

Drop 15, Research Triangle Park, North Carolina, 27711. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Major stationary sources and major modifications are subject 

to the prevention of significant deterioration (PSD) review 

requirements of the Act (Title I, Part C). A subject facility 

may not be constructed without a permit that meets the 

requirements of § 165 of the Act. The current PSD program is 

implemented by two sets of regulations. The first set of 

regulations, 40 CFR 51.166, specifies the minimum requirements 

that a PSD air quality permit program under Part C of the Act 

must contain in order to obtain approval by EPA as a revision to 

a State implementation plan (SIP). The second set, 40 CFR 52.21, 

delineates the Federal PSD permit program, which currently 

applies as part of the SIP for States that have not submitted a 

PSD program meeting the requirements of 40 CFR 51.166. Roughly 

two-thirds of the States are implementing their own PSD program 

which has been approved by EPA under 40 CFR 51.166. The 

regulations at 40 CFR 52.21 apply in the remaining States, most 

of which have been delegated the authority to implement the 

Federal PSD program. Among other substantive requirements, the 
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facility must apply BACT pursuant to § 165(a)(4) [see also 

40 CFR 52.21(j) (Federal regulations), 40 CFR 51.166(j) 

(regulations setting forth the requirements for State 

implementation plan (SIP) approval of a State PSD program), and 

40 CFR Part 52, Subpart A - Subpart FFF (various SIP 

requirements)].* 

Emissions limitations reflecting the application of BACT 

must be set forth in the PSD permit [§ 165(a)(1)]. To obtain a 

PSD permit, an applicant must, among other requirements, conduct 

an analysis in accordance with EPA regulations to ensure the 

application of BACT to each new or modified emissions unit 

[§ 165(a)(2, 4)]. The required analysis must address "the degree 

of continuous emissions reduction which could be achieved by such 

facility" [§ 165(e)(3)(B) and 40 CFR 52.21(n)(1)(3)]. 

The term "best available control technology" is defined in 

the Act as: 

an emissions limitation based on the maximum degree of 

reduction of each pollutant subject to regulation under 

the Clean Air Act emitted from or which results from 

any major emitting facility, which the permitting 

authority, on a case-by-case basis, taking into account 

energy, environmental, and economic impacts and other 

costs, determines is achievable for such facility 

through application of production processes and 

available methods, systems, and techniques, including 

fuel cleaning, clean fuels, or treatment or innovative 

fuel combustion techniques for control of each such 

pollutant. In no event shall application of "best 

available control technology" result in emissions of 

any pollutants which will exceed the emissions allowed 

by any applicable standard established pursuant to 

section 7411 or 7412 of this title. Emissions from any 

source utilizing clean fuels, or any other means, to 

comply with this paragraph shall not be allowed to 

increase above levels that would have been required 

1Under the Clean Air Act Amendments of 1990, in certain 

circumstances BACT is also a requirement for obtaining a permit 

under Part D of the Act. 
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under this paragraph as it existed prior to enactment 

of the Clean Air Act Amendments of 1990. 

[§ 169(3), as amended by § 403(d) of the Clean Air Act Amendments 

of 1990]. 

In determining BACT on a case-by-case basis, the reviewing 

authority evaluates the energy, environmental, and economic 

impacts and other costs associated with each of the candidate 

technologies considered in the analysis. The reviewing authority 

then specifies the emissions limitation for the source that 

reflects the maximum degree of reduction of each pollutant 

regulated under the Act, determined to be achievable taking into 

account the energy, environmental, and economic impacts and other 

costs. In no event may a technology be selected that would not 

meet any applicable standard of performance under 40 CFR Parts 60 

(new source performance standards) or 61 (national emission 

standards for hazardous air pollutants). 

In addition, if the reviewing authority determines that 

there is no economically-reasonable or technologically-feasible 

way to accurately measure the emissions, and hence to impose an 

enforceable emissions standard, it may require the source to use 

design, alternative equipment, work practice or operational 

standards to reduce emissions of the pollutant to the maximum 

extent [40 CFR 52.21(b)(12); 40 CFR 51.166(b)(12)].2 

In January 1979, EPA issued "Guidance for Determining BACT 

under PSD," and in October 1980 issued a "PSD Workshop Manual" 

(EPA 450/2-80-081). These documents outlined an approach to the 

2For example, if a coal storage pile emits coal dust to the 

atmosphere, it would make little sense to impose an emissions 

standard, since measuring the amount of coal dust rising off the 

pile may be nearly impossible. A much more direct approach to 

controlling emissions is, for example, requiring the owner to wet 

the coal pile periodically or to totally enclose it. This type 

of operational standard or work practice would be equivalent to 

an emissions limitation for the purpose of the BACT requirement. 
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BACT analysis in which the applicant was to propose a base case 

as BACT, present more stringent control alternatives, and defend 

its BACT selection "demonstrating that each alternative control 

system... would cause unreasonable adverse energy, environmental, 

or economic impacts" (see "Guidance for Determining BACT under , 

PSD," January 4, 1979, at 5-6). 

In June 1986, EPA established a New Source Review Task Force 

to address growing concerns about the effectiveness of the new 

source review (NSR) programs in meeting the statutory 

requirements, and to recommend actions to improve EPA's exercise 

of its oversight and enforcement responsibilities in implementing 

the NSR program. Among the Task Force findings, based on a 

comprehensive review of numerous PSD permits issued during the 

previous several years, was that PSD applicants and States 

frequently were conducting inadequate BACT determinations. In 

numerous instances, applicants would propose an emissions 

limitation at or near an applicable new source performance 

standard (NSPS) under § 111 of the Act as the base case, and 

provide little or no consideration of more stringent control 

options before settling on the proposed level as BACT. States 

typically would accept these determinations with little or no 

independent analysis, thereby failing to fulfill their 

responsibilities under the Act. The Task Force pointed out two 

basic solutions to the problem of inadequate BACT analysis. One 

was to improve implementation of the existing method so that, in 

practice as well as in theory, the statutory requirements would 

be fulfilled. The other option was to call for an alternate 

approach to the BACT analyses in the expectation that its 

internal dynamics would achieve more effective implementation of 

the BACT requirements [see generally "New Source Review Task 

Force Report," Final Draft, December 1986, at 25-28]. 

In the meantime, in an adjudicative decision on appeal of a 

PSD permit for a municipal waste combustor (MWC), the 
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Administrator held that a PSD applicant has the "burden of 

demonstrating that significant technical defects, or substantial 

local economic, energy, or environmental factors or other costs 

warrant a control technology less efficient than [the most 

stringent technology available]." Honolulu Resource Recovery 

Facility ("H-Power"). PSD Appeal No. 86-8, at 7 (Remand Order, 

June 22, 1987). Shortly thereafter, EPA issued guidance calling 

for application of the H-Power holding to all BACT determinations 

for MWCs ("Operational Guidance on Control Technology for New 

and Modified Municipal Waste Combustors," June 26, 1987). 

Subsequent to these events, EPA decided to promote what has 

come to be known as a "top-down" BACT method for all categories 

of PSD sources. In brief, the top-down process provides that 

available control technologies be ranked in descending order of 

control effectiveness. The PSD applicant first examines the most 

stringent alternative. That alternative is established as BACT 

unless the applicant demonstrates, and the permitting authority 

in its informed judgment agrees, that technical considerations, 

or energy, environmental, or economic impacts or other costs, 

justify a conclusion that this technology is not "achievable". 

If a particular technology is deemed not to be achievable, then 

the next most stringent alternative is considered, and so on. 

In a December 1, 1987 memorandum, EPA Headquarters requested 

its Regional Offices to use a top-down method in their own BACT 

determinations, and to encourage State and local PSD permitting 

authorities to do so as well (see December 1, 1987 memorandum 

from Craig Potter, Assistant Administrator for Air and Radiation, 

entitled "Improving New Source Review"). The memorandum further 

directed Regional Offices to conduct timely reviews of PSD 

applications, and to comment adversely on proposed PSD permits 

that failed to adequately consider control options more stringent 

than NSPS, as would be required as a matter of course in any 

acceptable method of determining BACT. If final State and local 
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permits still failed to reflect adequate consideration of the 

relevant BACT factors, the Regions were to consider such permits 

deficient and consider appropriate enforcement action under §§ 

113 and 167 (in the case of State-issued permits) or appeals to 

the Administrator under 40 CFR 124.19 (in the case of Federal 

permits) to remedy such deficiencies. In the spring of 1990, EPA 

made available to the public a draft document, entitled "Top-down 

Best Available Control Technology Guidance Document," detailing 

the top-down BACT method. 

In recommending the use of the top-down approach, EPA did 

not change the existing PSD regulations, nor did it alter the 

BACT requirements for any source. The definition of BACT in the 

statute, EPA regulations, and SIPs remained the same. The 

top-down approach simply represented one acceptable approach for 

carrying out the existing statutory and regulatory requirements 

in order to assure that they would be fully effectuated. 

On March 29, 1989 (supplemented on May 3 and 10, 1989), the 

American Paper Institute and the National Forest Products 

Association (collectively "API") petitioned EPA to rescind the 

top-down policy and initiate a rulemaking on BACT determinations. 

The EPA denied this request on May 12, 1989 (supplemented on 

June 13, 1989), explaining that the top-down approach was not at 

variance with, nor a revision of, the PSD regulations, and that 

no rulemaking was required. Subsequently, API filed suit in the 

D.C. Circuit and in the U.S. District Court for D.C. API v. 

Reilly. D.C. Cir. No. 89-1428 (filed 7/10/89); 

API v. Reillv. D.C. Cir. No. 89-2030 (filed 7/18/89). A 

consortium of utilities also filed a petition for review of EPA's 

actions, Alabama Power Co. v. EPAf D.C. Cir. No. 89-1429 (filed 

7/11/89), and the case was consolidated with the API case. The 

same consortium filed an administrative petition with EPA on 

February 1, 1990. Finally, API also challenged the 1990 EPA 

draft guidance document on top-down BACT, API v. Reillyf D.C. 
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No. 90-1364 (filed 7/13/90). Settlement negotiations currently 

are underway regarding these cases. The EPA has decided as a 

matter of policy to conduct this proposed rulemaking to 

facilitate greater public participation concerning these issues, 

notwithstanding EPA's position that it is not legally required to 

do so. 

II. Legal Requirements for a PSD Analysis 

In adopting the PSD program, Congress emphasized the 

importance of thorough and public analyses in PSD decisionmaking, 

stating that one of the purposes of PSD is to assure that any 

decision to permit increased air pollution in any area to which 

PSD applies is made only after careful evaluation of all the 

consequences of such a decision and after adequate procedural 

opportunities for informed public participation in the decisionmaking process. As noted above, § 165 specifies, and EPA 

regulations reflect, the requirement to conduct a BACT analysis. 

The statutory emphasis on procedural rigor is accompanied by 

expressions of congressional intent that States have wide 

discretion in setting final emissions limits reflecting BACT. 

States also have considerable discretion in other aspects of the 

PSD program, such as allocation of the available increment. For 

example, States could choose to allocate the increment on a 

first-come first-served basis, preserve a portion of the 

increment to accommodate future growth, or allocate increment 

through a market based approached. 

The legislative history on BACT makes it clear that Congress 

meant the State to make the final substantive decision on the 

appropriate level of technology. The key passages of the Senate 

report show that the State has broad flexibility to exercise its 

judgment in implementing BACT. The report states: 

The decision regarding the actual implementation 

of best available control technology is a key one, and 

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the committee places this responsibility with the 

State, to be determined in a case-by-case judgement. 

It is to be recognized that the phrase has broad 

flexibility in how it should and can be interpreted, 

depending on site. 

In making this key decision on the technology to 

be used, the State is to take into account energy, 

environmental, and economic impacts and other costs of 

the application of best available control technology. 

The weight assigned to such factors is to be determined 

by the State. Such a flexible approach allows the 

adoption of improvements in technology to become 

widespread far more rapidly than would occur with a 

uniform Federal standard (emphasis added). 

[S Rep. No. 95-217, 95th Cong., 1st Sess. 31 (1977)] 

The Senate Report language suggests two important bounds on the 

exercise of the discretion afforded to the permitting authority 

in determining BACT. First, it is clear that in adopting BACT, 

Congress intended PSD permitting authorities to exercise informed 

discretion to weigh energy, environmental, and economic impacts 

in determining BACT for a particular source. Second, it is also 

clear that Congress intended one of the advantages of State 

flexibility to be to speed up the adoption of advances in control 

technology.3 

The exercise of discretion within these bounds can be 

fulfilled by more than one method of determining BACT. 

Regardless of the specific methodology used for determining BACT, 

be it top-down, the method embodied in the 1979 guidance, or 

otherwise, EPA has consistently interpreted the relevant Act 

3 See also statement of Senator Muskie, 123 Cong. Rec. S9171 

(June 8, 1977). 
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provisions as embodying two core legal criteria that must be 

satisfied in any BACT analysis. First, the permit applicant must 

consider a representative group of available control 

technologies, i.e., technologies that are representative of the 

range of available controls that are more effective than the 

minimum permissible ( NSPS limit, section 112 limit, or SIP 

limit), including the most stringent alternative available.4 

The permit applicant should refer to the BACT/LAER Clearinghouse 

when identifying a representative group of available control 

technologies. Second, selection of a particular control system 

as BACT must be justified in terms of the statutory criteria and 

supported by the record, and the basis for the rejection of the 

other candidate systems must be explained.6 

4 Whether a technology is "available" for purposes of BACT is 

a practical, factual determination, using conventional notions of 

whether the technology can be put into use [see Pennsauken County. 

New Jersey Resource Recovery Facility, PSD Appeal No. 88-8 (Remand 

Order, Nov. 10, 1988) at 8]. 

^ Each type of available control system (e.g., a baghouse, an 

electrostatic precipitator, a dry scrubber, a wet scrubber, a 

carbon absorber) or combination of control systems should be 

analyzed at the maximum level of control technically achievable for 

the control system or combination of control systems as it could be 

applied at the proposed facility in question. Major alternatives 

within a given type of control system should also be considered 

when such alternatives would produce meaningfully different energy, 

environmental, or economic impact or other costs than the initial 

level of control analyzed. On the other hand, analyses of numerous 

minor variations in a control system (or combinations thereof) is 

not required. 

6 In this regard, to the extent that a rationale for the 

rejection of the next more stringent alternative than the one 

proposed also provides the basis for rejection of other more 

stringent alternatives, there is no need to conduct a separate 

detailed analysis for each more stringent option. To give an 

example, after examining a control option in detail, the permitting 

authority accepts an applicants proposal to reject a control option 

due to an adverse economic impact after considering the energy, 

environmental, and other economic impacts of that option. The 

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These two core criteria are consistent with determinations 

in the administrative appeals decisions subsequent to the H-Power 

decision as being the essential requirements of a BACT analysis. 

Thus, in Union County Resource Recovery Facility, PSD Appeal 

No. 90-1 (11/28/90) at 8, the Administrator cited compliance with 

the two core criteria in upholding a BACT determination for a 

resource recovery facility. The Administrator relied on the same 

two core criteria in upholding a permit determination in 

Mecklenburg Cogeneration Limited Partnership, Clarksville. VA. 

PSD Appeal No. 90-7 (12/21/90) at 6. 

Although EPA believes that the current statutory and 

regulatory definitions of BACT implicitly require the 

consideration of these two core criteria as fundamental to any 

adequate BACT determination, the EPA is today proposing to make 

this requirement explicit by inserting into the regulatory 

definition of BACT the following two core requirements for a BACT 

analysis: 

1) the determination must consider a representative group 

of available control systems for the source, including the most 

stringent alternative available, and 

2) selection of a particular control system as BACT must be 

justified in terms of the statutory criteria and supported by the 

record, and must explain the basis for the rejection of the other 

candidate systems. 

III. Impacts Analysis in a PSD Determination 

In order to reject an alternative control system an 

applicant must demonstrate the adverse impacts which would result 

from the selection of that alternative system. This section 

lists some specific energy, environmental, and economic impacts 

permitting authority need not consider the other more stringent 

control options in detail, if it concludes that their associated 

energy, environmental, economic impacts do not differ meaningfully 

from the control option rejected. 

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which may be addressed in this impacts analysis and explains the 

data requirements for documenting an adverse impact. 

Not every factor discussed below needs to be addressed in 

every permit application. Rather, this discussion presents a set 

of potential factors, any number of which may be addressed in a 

permit application depending on the individual situation. For 

example, if a control system produces a known quantity of solid 

waste as a by-product inherent to its design and operation under 

normal conditions, such an impact should be noted in the PSD 

permit application . However, this factor need not be analyzed 

in detail unless the applicant wishes to use solid waste impacts 

as an argument for or against selection of a particular control 

alternative as BACT. 

In general, the BACT analysis should address the direct (onsite) impacts of alternative control systems. Indirect energy or 

environmental impacts are usually difficult to assess, so are not 

required but may be considered where such impacts are found to be 

significant and quantifiable. Indirect energy impacts include 

such impacts as energy to produce raw materials for construction 

of control equipment, increased use of imported oil, or increased 

oil use in the utility grid. Indirect environmental impacts 

include, such considerations as pollution at an off-site 

manufacturing facility which produces materials needed to 

construct or operate a proposed control system. Indirect impacts 

generally will not be considered in the BACT review since the 

complexity of consumption patterns in the economy makes those 

impacts difficult to quantify. For example, since manufacturers 

purchase capital equipment and supplies from many suppliers, who 

in turn purchase goods from other suppliers, accurate assessment 

of indirect impacts may not be possible. Raw materials may be 

needed to operate control equipment, and suppliers of these 

resources may change over time. Similarly, it generally will not 

be possible to determine specific power stations and fuel sources 

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which would be used to satisfy demand over the lifetime of a 

control device. 

Duplicative analyses generally are not required in preparing 

the BACT permit application. Any studies previously performed 

for Environmental Impact Statements, water pollution permits, or 

other programs may be used when appropriate to demonstrate 

adverse energy, environmental, or economic impacts. The same 

considerations are generally applicable to both new and modified 

sources. Where appropriate, however, the permit review may 

consider any special economic or physical constraints which might 

limit the application of certain control techniques to a modified 

emissions unit, such as retrofiting costs that would not be borne 

by a new unit, or the remaining useful life of the modified 

facility. The result may be that the level of control required 

for an emissions unit undergoing modification may not be as 

stringent as that which would be required if the same unit were 

being constructed at a "greenfield" facility. Such findings, 

however, must be made on a case-by-case basis by the permitting 

authority considering the relevant energy, environmental and 

economic impacts. 

The energy, environmental, and economic impacts, discussed 

below are illustrative only and are not intended as an exclusive 

list of considerations for BACT. Some of these factors may not 

be appropriate in all cases, while in other instances, factors 

which are not included here may be relevant to the BACT 

determination. The discussion does not address the evaluation of 

each factor nor the weighing of any factor relative to another. 

Such determinations should be made on a case-by-case basis by the 

permitting authority. For the purpose of this discussion, terms 

such as "emission control system" or "BACT system" refer to 

design, equipment, or operating standards and inherently less 

polluting processes as well as add-on control equipment. 

A. Energy Impacts 

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Energy impacts should address energy use in terms of penalties or 

benefits associated with a control system and the direct effects 

of such energy use on the facility. A source may, for example, 

benefit from the combustion of a concentrated gas stream rich in 

volatile organic compounds; on the other hand, extra fuel or 

electricity is frequently required to power a control device or 

incinerate a dilute gas stream. If such benefits or penalties 

exist, they should be quantified. 

In quantifying energy impacts, the applicant could estimate 

the direct energy impacts of the control alternative in units of 

energy consumption at the source ( e.g., Btu, kWh, barrels of 

oil, tons of coal). The energy requirements of the control 

options could be shown in terms of total and/or incremental 

energy costs per ton of pollutant removed. In many cases, 

because energy penalties or benefits can usually be quantified in 

terms of additional cost or income to the source, the energy 

impacts analysis can be converted into dollar costs and, where 

appropriate, be factored into the economic impacts analysis. 

Indirect energy impacts (such as energy to produce raw 

materials for construction of control equipment) are usually not 

considered. However, if the permit authority determines, either 

independently or based on a showing by the applicant, that an 

indirect energy impact is unusual or significant, the indirect 

impact may be considered. The energy impact should still, 

however, relate to the application of the control alternative and 

not to a concern over energy impacts associated with the project 

in general. 

The energy impact analysis may also address the concern over 

the use of locally scarce fuels. The designation of a scarce 

fuel may vary from region to region, but in general a scarce fuel 

is one which is in short supply locally and can be better used 

for alternative purposes, or one which may not be reasonably 

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available to the source either at the present time or in the near 

future. 

B. Environmental Impacts 

The environmental impacts analysis concentrates on 

collateral environmental impacts due to control of emissions of 

the pollutant in question, such as solid or hazardous waste 

generation, discharges of polluted water from a control device, 

visibility impacts, or emissions of toxic pollutants. 

The applicant should identify any environmental impacts 

associated with a control alternative that have the potential to 

affect the selection or rejection of that control alternative. 

Some control technologies may have potentially significant 

secondary environmental impacts. Scrubber effluent, for example, 

may affect water quality and land use, and, similarly, 

technologies using cooling towers may affect visibility. Other 

examples of secondary environmental impacts could include 

hazardous waste discharges, such as spent catalysts or 

contaminated carbon. Generally, these types of environmental 

concerns become important when sensitive site-specific receptors 

exist or when the incremental emissions reduction potential of 

one control option is only marginally greater than the next most 

effective option. The procedure for conducting an analysis of 

environmental impacts should be made based on a consideration of 

site-specific circumstances. In general, the analysis of 

environmental impacts starts with the identification and 

quantification of the solid, liquid, and gaseous discharges from 

the control device or devices under review. Initially, a 

qualitative or semi-quantitative screening can be performed to 

narrow the analysis to discharges with potential for causing 

adverse environmental effects. Next, the mass and composition of 

any such discharges should be assessed and quantified to the 

extent possible, based on readily available information. As 

previously mentioned, the analysis need only address those 

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control alternatives with any environmental impacts that have the 

potential to affect the selection or rejection of a control 

alternative. Pertinent information about the public or 

environmental consequences of releasing these materials should 

also be assembled. 

Thus, the relative environmental impacts (both positive and 

negative) of the various alternatives can be compared with each 

other. The generation or reduction of toxic and hazardous 

emissions, including compounds not regulated under the Clean Air 

Act or the PSD program, are considered as part of the 

environmental impacts analysis. Pursuant to the EPA 

Administrator's decision in North County Resource Recovery 

Associates. PSD Appeal No.85-2 (Remand Order, June 3,1986), a PSD 

permitting authority should take into account the ability of a 

given control alternative for regulated pollutants to affect 

emissions of pollutants not subject to regulation under the Clean 

Air Act or the PSD program in making BACT decisions. 

Consequently, the ability of a given control alternative to 

control toxic or hazardous air contaminants must be considered in 

the BACT analysis. 

C. Economic Impacts 

This analysis should address the economic impacts associated 

with the costs of installing and operating alternative control 

systems. Normally the submittal of very detailed and 

comprehensive project cost data is not necessary. 

In the economic impacts analysis, primary consideration 

should be given to quantifying the cost of control and not the 

economic situation of the individual source. Consequently, 

applicants generally should not propose elimination of control 

alternatives on the basis of economic parameters that provide an 

indication of the affordability of a control alternative relative 

to the source. The review should include a complete explanation 

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of procedures for assessing economic impacts and any supporting 

data. 

Once the control technology alternatives and emissions 

performance levels have been identified, capital and annual costs 

are developed. The direct cost for each control alternative 

should be presented both on an incremental and an overall basis. 

Investment costs, operation and maintenance costs and annualized 

costs should be presented separately. Annualized costs are 

operation and maintenance costs plus depreciation and interest 

charges on the investment. Costs should be itemized and 

explained. Credit for tax incentives should be included along 

with credits for product recovery costs and by-product sales 

generated from the use of control systems. The lifetime of the 

investment should be stated. Where possible, costs should be 

broken down into process change costs (costs of less polluting 

production process) and direct pollution abatement costs (cost of 

pollution control equipment). The costs of air treatment, water 

treatment and solid waste disposal should be presented 

separately. The analysis should also include the total 

investment cost of the new facility. As a guide in determining 

when control costs become excessive, alternative control systems 

can be compared in terms of certain cost effectiveness ratios 

such as incremental cost effectiveness. 

IV. Purpose of the Proposed Change 

The approaches set forth in the various EPA final and draft 

guidance documents have been intended to guide permit applicants 

and permitting officials in those areas subject to the Federal 

PSD regulations at 40 CFR 52.21. They have not established 

binding regulatory requirements, which are contained in the 

Federal regulations and SIP's. Rather than specifying a precise 

approach to the BACT analysis, EPA is proposing today to set out 

the two core legal requirements necessary for an adequate BACT 

analysis. In reviewing new or revised State PSD rules submitted 

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for SIP approval, the Agency will deem the program to be adequate 

if it specifies that these two requirements are necessary for an 

adequate BACT analysis. Likewise, in fulfilling its oversight 

and enforcement responsibilities, the Agency will continue its 

policy of reviewing specific permitting actions for conformity 

with the core criteria. So long as the State follows the 

procedural norms embodied in the core criteria and does not 

violate any objective standards that may apply (such as NSPS or 

SIP limits), EPA will consider a State's BACT analysis to be 

adequate and will not second-guess the State's substantive BACT 

decision. Thus, adherence to any specific BACT approach is not 

required. Further, the States have wide discretion in setting 

the weight assigned to each statutory factor (energy, 

environmental, economic and other costs) in comparing and 

balancing the relative effects of the various BACT options. On 

the other hand, permits containing BACT determinations that do 

not conform to the PSD requirements of the Act, EPA regulations, 

and applicable SIP's, as reflected in the core criteria, will be 

considered deficient by EPA. Instances of procedural 

irregularities or arbitrary decisionmaking will remain grounds 

for enforcement action or permit appeals, as appropriate. 

As an example, a BACT analysis focusing on a comparison of 

the incremental impacts (energy, environmental, and economic) 

would be appropriate as long as the State had carefully evaluated 

and justified in terms of the statutory criteria the basis for 

the rejection of the other candidate systems. Such an analysis 

could be presented in the form of the incremental impact of 

alternative control systems relative to the system proposed as 

BACT in the permit application. In this example the economic 

portions of the analysis could address the economic impact 

associated with the incremental costs of installing and operating 

alternative control systems above the economic impact associated 

with the system proposed as BACT. As a guide in determining when 

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control costs become excessive, alternative control systems can 

be compared in terms of certain cost effectiveness ratios such as 

incremental cost per unit of pollution removed. The analysis of 

energy impacts would be done in a similar manner. The 

environmental component of the analysis would evaluate the net 

environmental impact associated with each alternative system. 

Both beneficial impacts (e.g. reduced emissions attributed to a 

control system) and adverse impacts (creation or exacerbation of 

another pollution problem through use of a control system) should 

be quantified. The incremental difference in environmental 

impacts relative to the proposed system would then be evaluated 

for any meaningful difference between the environmental impacts 

of the proposed system and the other alternatives. The analysis 

should include a complete explanation of the procedures used to 

assess the economic, environmental, and energy impacts and any 

supporting data. 

The EPA is today soliciting comment on the proposed change 

to the BACT definition for the purpose of clarifying and 

delineating the regulatory standard by which the adequacy of a 

BACT determination should be judged. As noted above, EPA already 

recognizes that there are a variety of permissible methods, 

including the top-down method, for determining BACT. Applicants 

and State permitting authorities are free to apply the core legal 

criteria without reference to any exclusive method in making BACT 

determinations that satisfy the Clean Air Act. 

V. Clean Fuels 

The definition of BACT in § 169(c) of the Act is changed by 

§ 403(d) of the 1990 Amendments. To maintain conformity with the 

statutory definition, EPA proposes to amend the regulatory 

definition of BACT at 40 CFR 52.21(b)(12) and 51.166(b)(12) by 

inserting "clean fuels" after "including fuel cleaning," and by 

adding the following at the end thereof: "Emissions from any 

source utilizing clean fuels, or any other means, to comply with 

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this paragraph shall not be allowed to increase above levels that 

would have been required under this paragraph as it existed prior 

to enactment of the Act Amendments of 1990." 

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Proposed change to BACT definition in regulatory language at 

51.166(b)(12) and 52.21(b)(23) 

"Best Available Control Technology" means an emissions 

limitation (including a visible emission standard) based on the 

maximum degree of reduction for each pollutant subject to 

regulation under the Clean Air Act which would be emitted from 

any proposed major stationary source or major modification which 

the Administrator,7 on a case-by-case basis, taking into account 

energy, environmental, and economic impacts and other costs, 

determines is achievable for such source or modification through 

application of production processes or available methods, 

systems, and techniques, including fuel cleaning, clean fuels, or 

treatment or innovative fuel combustion techniques for control of 

such pollutant. Two criteria must be satisfied in any BACT 

analysis: 11 the determination must consider a representative 

group of available control systems for the source, including the 

most stringent alternative available, and 21 selection of a 

particular control system as BACT must be justified in terms of 

the statutory criteria and supported by the record, and must 

explain the basis for the rejection of the other candidate 

systems. In no event shall application of BACT result in 

emissions of any pollutant which would exceed the emissions 

allowed by any applicable standard under 40 CFR Parts 60 and 61. 

If the Administrator determines that technological or economic 

limitations on the application of measurement methodology to a 

particular emissions unit would make the imposition of an 

emission standard infeasible, a design, equipment, work practice, 

operational standard, or combination thereof, may be prescribed 

instead to satisfy the requirement for the application of best 

7The term "reviewing authority" will be used for definition of 

BACT at 51.166(b)(12) 

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available control technology. Such standard shall, to the degree 

possible, set forth the emissions reduction achievable by 

implementation of such design, equipment, work practice or 

operation, and shall provide for compliance by means which 

achieve equivalent results. Emissions from any source utilizing 

clean fuels, or any other means, to comply with this paragraph 

shall not be allowed to increase above levels that would have 

been required under this paragraph as it existed prior to 

enactment of the Clean Air Act Amendments 1990. 

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