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# OAR Box 1778 Prepped by Ollie Stewart



### Document

Number: 

# 273)IV-C-1 9 Docket Number: 

# A-90-06

Printed 10/28/20089:51:04

AM Sheet 273 of 276P. 2 IV-C-|* |



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76560-5 0

ENVIRONMENTAL PROTECTIONAGENC Y

4 0 CFRPart s 51 , 52 , an d 6 0 REQUIREMENT S FORPREPARATION , ADOPTION , AN

D SUBMITTAL O F IMPLEMENTATION PLANS ; APPROVAL AND PROMULGATIONO F IMPLEMENTATIONPLANS ; STANDARD S O F PERFORMANC E FORNE WSTATIONARYSOURCE S

AGENCY : Environmenta l Protectio n Agenc y(EPA) . ACTION : Fina l Rule . 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 n issu 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 CA AAmendment s (199 0 Amendments) . Man

yutilitie s wil l b e undertakin g majo r pollutio n contro l project s a t thei r unit s i nth e nex t few years . I n enacting titl e IV , Congres s di d no t suspend an y titl e I requirement s fo r thi s work . However , th e massiv e industry-wid e undertaking s o f pollutio n contro l project s warrant s a clarificatio n o f th e ne wsourc e revie w(NSR ) requirement s o f titl e I . I nparticular , NS Rprovision s shoul d no t inadvertentl ybia s a utilit ytoward s o r agains t an ymean s o f complying wit hth e aci d rai n provisions . Th e EPAbelieve s th e amendment s adopte d todayan d th e clarificatio n o f it s curren t polic yunde r it s presen t NS RP. 4

1 i regulation s provid e adequat e assurance s tha t utilitie s ca n •< undertak 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 , 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 . Reilly . (WEPCO) , 89 3 F.2 d 90 1 (7thCir . 1990) , an d Puert o Rica n Cemen t Co . v . EPA . 88 9 F.2 d 29 2 (1s t Cir . 1989) . A s a result , EPAi s todayadopting clarifying amendment s t o thes e regulation s tha t confirme d policie s regarding some o f thes e provision s a s the yappl yt o utilit yprojects . Th e EPAtodayadopt s a broad NS Rexclusio nfo r utilit y pollutio n contro l projects , adhering t o it s polic ytha t ne w sourc e regulation s alread ygenerall yexclud e coverag e o f pollutio n contro l project s undertake na t electri c utilit y units . Similarly , EPAi s todayadopting 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 n th e replacemen t o f a uni t o r additio no f a ne w unit ) ar e subjec t t o NS Runde r eithe r preventio no f significan t deterioratio n (PSD ) o r nonattainmen t provisions . Fo r thos e utilit yproject s whic hunderg o PS D NSR , EPA propose d a presumptio ntha t fo r EPA-issue d permits , "low-NOx burners " ca n satisf yth e bes t availabl e contro l technology (BACT ) requirements . Th e EPAha s determine d no t t o adop t thi s presumption .P. 5

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I n addition , EPAi s als o modifying it s regulation s implementing th e modificatio nprovision 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 yma yus e fo r it s pre-chang e baselin e th e highes t hourl yemission 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 . I n addition , EPAi s modifying it s regulation s t o reflec t change s mad e b

yCongres s i n th e 199 0 Amendment s t o th e applicabilit yo f ne wsourc e requirement s t o clea ncoa l technology(CCT ) an d repowering projects , an d t o "very clean " units . DATES : Thi s rul e take s effec t o n (dat e o f publicatio ni n FEDERAL REGISTER) . Unde r § 307(b)(1 ) o f th e CAA , petition s fo r judicia l revie wmus t b e file d o n o r befor e (6 0 day s afte r th e dat e o f publication ) i nth e U.S . Cour t o f Appeal s fo r th e D.C . Circuit . ADDRESSES : Materia l relevan t t o thi s rulemaking mayb e found i n Publi c Docke t A-90-06 . Thi s docke t i s locate d i n U.S . EPA' s Centra l Docke t Sectio n(LE-131) , Watersid e Mall , M-1500 , 40 1 MStree t SW , Washington , D.C . 20460 . Th e docke t mayb e inspecte d betwee n8:0 0 a.m . an d 3:0 0 p.m . o n weekday s an

d a reasonabl e fe e mayb e charge d fo r copying . FORFURTHE RINFORMATIONCONTACT : Mr . Davi d A . Solomo na t (919 ) 541-537 5 o r Mr . LarryElmor e a t (919 ) 541-5433 , Ne w Sourc e Revie wSectio n(MD-15) , Offic e o f Ai r Qualit yP. 6

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d Standards , U.S . EPA , Researc hTriangl e Park , Nort hCarolin a 27711 . SUPPLEMENTARYINFORMATION : Th e following outlin e reflect s th e organizatio n o f today' s notice : I . Introductio n 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 B . Th e Two-Ste p Tes t fo r Modification s C . Step One : Physica l o r Operationa l Chang e D . Ste p Two : Emission s Increase s fo r NSP S Applicabilit y E . Step Two : Emission s Increase s Unde r NS RRequirement s 1 . Existing Regulation s 2 . Th e WEPC O an

d Puert o Rica n Cemen t Decision s F . Th e Clea n Ai r Ac t Amendment s o f 199 0 1 . Ne wSourc e Revie wan d th e Aci d Rai nProvision s 2 . Repowerin g an

d Clea n Coa l TechnologyProject s III . Discussio n o f Fina l Actio no n Proposa l A . Pollutio n Contro l Project s 1 . RegulatoryChange s fo r Pollutio n Contro l Project s 2 . Additiona l Modeling Requirement s B . Representativ e Annua l Emission s C . Th e Causatio n Requiremen t D . Repowerin gP. 7

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- E . Clea n Coa l TechnologyDemonstratio nProject s an d Very Clea n Unit s F . Calculatio n o f NSP S Baselin e G . Utilit yBAC T Presumptio n H . Applicabilit yDetermination s I . Limitatio n o f Proposa l t o Electri c Utilitie s III . Miscellaneou s A . Executiv e Orde r (E.O. ) 1229 1 B . Paperwor k Reductio n Ac t C . Economi c Impac t Assessmen t D . RegulatoryFlexibilit yAc t Certificatio n E . Effectiv e Dat e F . Federalis m

Implication s

I . Introduction . Th e EPAtodayamend s it s regulation s implementing th e variou s titl e I ne wsourc e requirement s governing physica l o r operationa l change s a t electri c utilit ygeneratin g units . Specifically , thes e change s ar e being issue d t o clarif yth 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 CA At o project s undertake n a t electri c utilit ystea mgeneratin g units.

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1 Th e regulation s defin e electri c utilit ystea m generatin g unit s a s an ystea melectri c generating 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 megawatt s (MW ) o f electrica l outpu t t o an yutilit y powe r distributio n systemfo r sal e [se e e.g. , propose d 4 0 CF R51.165(XX)] .-6

- Th e EPAtodayamend s th e definitio no f "majo r modification " i n 4 0 CF Rpart 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 th e reductio no f ai r pollutant s (including th e switching t o a les s pollutin g fue l wher e th e primarypurpos e o f th e switc hi s th e reductio n o f ai r pollutants ) wil l o r wil l no t subjec t th e sourc e t o preconstructio n review . Specifically , EPAi s adopting i n PS D an d nonattainmen t area s a regulatoryexclusio n explicating it s authorit yunde r th e statutorydefinitio no f "modification " and confirming EPA' s curren t practic e tha t pollutio n contro l project s whic h"do 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 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 amending it s PS D an d nonattainmen t NS Rregulation s (4 0 CF R part s 5 1 an

d 52) 2 a s the yappl yt o utilitie s t o (1 ) clarif y th e NS Rbaselin 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 )

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 n revie wrequirement s o f bot hpar t C (PSD ) an d par t D (nonattainment ) o f th e CAA , unles s otherwis e indicated .P. 9

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se t fort ha n actual-to-future-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 no f th e existing regulatoryrequiremen t tha t onl ythos e increase s i n emission s tha t actuall yresul t fromth e physica l chang e o r chang e i n th e metho d o f operatio n ca n b e considere d i n determining whethe r th e propose d chang e subject s th e utilit y t o NS Rrequirements ; an d (4 ) implemen t § § 40 9 an d 41 5 o f titl e IV

o f th e 199 0 Amendment s whic hcreat e specia l NSP S treatmen t fo r certai nrepowering project s and limite d NS R exemption s fo r temporaryan d permanen t CC T projects , an d fo r certai n "veryclean " units . Finally , EPAi s als o amending it s NSP S regulation s (4 0 CF Rpar 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 th e 5 year s prio r t o th e propose d physica l o r operationa l change . Today' s rul e addressing pollutio n contro 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 Amendment s establish , i n titl e IV , a ne w contro l scheme fo r addressing th e aci d rai n proble m whic h focuse s exclusivel yan d immediatel yo n utilit ypowe r plants , titl e IV

wil l forc e mos t electri c utilit ystea mgenerating 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 ncontro l method .-8

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Second , th e Agenc ybelieve s it s extensiv e experienc e wit h othe r non-routin e physica l an d operationa l change s a t suc h unit s an

d th e uniqu e characteristic s o f th e electri c utilit y industry(e.g. , th e genera l similarit yo f equipmen t withi n th e categoryand th e exten t o f publicl yavailabl e information ) suppor t a revisio n t o th e NS Rapplicabilit y criteri 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 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 y wayth 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 no 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 . 16 3 0 , Rep . 101-952 , 101st . Cong. , 2n d Sess . (1990 ) pp . 344-45 . I n passin g 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 I V

ar e clearl y intende d t o wor k i n concert , no t conflict , and today' s rulin g i s intende d t o ensur e tha t harmony . I n taking th e action s announce d today , EPAha s relie d o n th e writte n comment s provide d t o th e docke t i n thi s matte r a s wel l a s testimon yprovide d a t a publi c hearin g o n th e propose d rul e conducte d b yEPAo nJul y14 , 1991 .P.1 1

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- Th e publi c commen t period , originall yschedule d t o clos e o n Augus t 19 , 1991 , wa s extende d unti l Septembe r 18 , 199 1 (5 6 FR40843 , Augus t 16 , 1991 ) t o receiv e additiona l comments . Th e commen t perio d wa s late r reopene d o n Novembe r 25 , 199 1 (se e 5 6 F R59238 ) fo r 2 week s t o receiv e comment s o n th e informatio ncontaine d i nth e transcrip t o f a congressiona l hearing conducte d b yth e Subcommitte e o n Healt han

d th e Environmen t o f th e Hous e Committe e o nEnerg y and Commerc e o n Jul y22 , 1991 , an d othe r relate d information . I n respons e t o severa l request s t o extend th e commen t period , th e commen t perio d wa s extende d fo r a n additiona l 7 days , making th e fina l deadlin e fo r comment s Decembe r 17 , 199 1 (se e 5 6 FR65203) .

II . Background A . Th e Ne wSourc e Performanc e Standards , Preventio n o f Significan t Deterioratio n an d Nonattainmen t Program s o f Titl e I Titl e I o f th e CA

Aha 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 m ne wsource s o r frommodification s t o existing source s —can b e emitte d unles s th e sourc e complie s wit hne wsourc e requirements . Th e 197 0 CA

Arequire d EPAt o promulgat e technology

base d NSP S applicabl e t o th e constructio n o r modificatio no f stationarysource s tha t caus e o r contribut e significantl yt o ai r pollutio n whic hmayreasonabl yb e anticipate d t oP.1 2

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- endange r publi c healt ho r welfar e [se e CA A§ 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 n problems " b y regulatin g newly-constructe d source s an d change s occurring a t existing source s tha t resul t i n emission s increase s (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 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 n of , a stationarysourc e whic hincrease s th e amoun t o f an yai r pollutan t emitte d b ysuc hsourc e o r whic hresult s i n th e 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 th e CAA . Thes e change s include d preconstructio npermittin 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 NS R(respectively , part s C an d D o f th e CAA) . Congres s intende d thes e program s t o appl ygenerall ywher e industria l change s migh t increas e pollutio ni na narea . 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 sam e definitio n o f th e term "modification " se t fort hi n th e NSP S provision s [se e CA A§ 111(a)(4) , 169(2)(C) , an d 171(4)] .P.1 3

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- 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 no f th e availabl e ai r qualit y"increment " (designed t o preven t ambien t ai r qualit y fromdeterioratin g b ymor e tha n certai n specifie d levels) , (2 ) i t wil l no t caus e o r contribut e t o a violatio n o f a NAAQS , an

d (3 ) i t wil l us e th e "BACT, " whic hmus 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 § 11 2 o f th e CAA . 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 § 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 n emission s offsets , thereb yassuring tha t reasonabl e progres s towar d attainmen t o f th e NAAQ S wil l occur , an d (2 ) compl y wit hth e "lowes t achievabl e emissio nrat e (LAER) " (se e CA A § 171-173 ) . 3

3 Th e 197 0 CA

Aals o include d a provisio n applicabl e t o constructio n o r modificatio n o f an ystationarysource . Thi s provisio n i s presentl yse t fort hi 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 provisio n(se e 4 0 CF R51.160

- 164 ) .-12

- B . Th e Two-Ste p Tes t fo r Modification s Th e modificatio nprovision s o f th e NSP S an d NS R program s ar e base d o n th e broa d NSP S definitio no f "modification " i n § 111(a)(4 ) o f th e CAA . Tha t sectio n contemplate s a two-ste p tes t fo r determining whethe r activitie s a t a n existing facilit yconstitut 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 same 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 nemission s increas e ove r baselin e levels . I n thi s second step , th e applicabl e rule s branc hapart , reflecting th e fundamenta l distinction s betwee n th e technology-base d provision s o f NSP S an d th e ai r quality-base d provision s o f NSR . Briefly , th e NSP S programexamine s maximu mhourl y emission s rates , expresse d i nkilogram s pe r hour. 5 Emission s increase s fo r NSP S purpose s ar e determine d b y

4 Thi s i s furthe r describe d i nsectio nIII. H below .

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 no 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 4 0 CF R 60.14) .P.1 5

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- change s i n th e hourl yemission s rate s a t maximu mphysica l capacity . O n th e othe r hand , th e NS Rregulation s examin e tota l emission s t o th e atmosphere . Fo r applicabilit y determinatio n purposes , 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 . Step One : Physica l o r Operationa l Chang e Th e EPAha s alway s recognize d tha t th e definitio n o f physica l o r operationa l chang e i n § 111(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 n th e waytha t pip e i s utilized) . However , EPAha s alway s recognize d tha t Congres s obviousl ydi d no t inten d t o mak e everyactivit ya t a sourc e subjec t t o ne wsourc e requirements . A s a result , EPAha s define d "modification " i n th e NSP S an d NS Rregulation s t o includ e common-sens e exclusion s fro m th 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 n simila r exclusion s fo r routin e maintenance , repair , and replacement ; fo r increase s i nth e hour s o f operatio n o r i n

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 no f Ai r Pollutan t Emissio n Factors . AP-42 , 4t hEd . and 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 throughpu t [se e 4 0 CF R 52.21(b)(21)] .P.1 6

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- th e productio n rate ; an d fo r certai ntype s o f fue l switche s [se e e.g. , 4 0 CF R52.21(b)(2)(iii ) an d 60.14(e)] . I n addition , wit hrespec t t o pollutio ncontro l equipment , th e NSP S regulation s contai na nexclusio nfor :

Th e additio n o r us e o f an ysystemo r devic e whos e primaryfunctio n i s th e reductio n o f ai r pollutants , excep t whe n a n emission 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 CF R60.14(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 fromNS 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 term "modification " a s an y"physica l o r operationa l chang e t o an existing facilit ywhic hresult s i n anincreas e i n th e emissio n rat e t o th e atmospher e o f an ypollutan t t o whic ha standar d applies " (se e 4 0 CFR60. 2 an d 60.14) . Unde r curren t NSP S regulations , emission s increases , fo r applicabilit ypurposes , ar e calculate d b ycomparing th e hourl yemissio n rate , a t maximu m physica l capacity , befor e and 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 aP.1 7

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- 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 chang e [se e 4 0 CF R60.14(b)(2)] . Absen t th e exclusion s frommodification s specifie d a t 4 0 CF R60.14(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 NSP S [se e 4 0 CF R60.14(a ) an d (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 ymayb 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 n i f ther e i s n o emission s increase . E . Step Two : Emission s Increase s Unde r NS R Requirement 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 n a significan t ne t emission s increas e o f an y pollutan t subjec t t o regulatio nunde r th e CAA " [se e 4 0 CF R 52.21(b)(2)(i) , 52.24(f)(5)]. 7 A"ne t emission s increase "

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 progra mwhic happlie s a s par t o f a Federa l implementatio npla nfo 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 CF R51.16 6 [standard s fo r PS D provision s i nStat e (continued... )P.1 8

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- i s define d a s th e increas e i n "actua l emissions " fromth e particula r physica l o r operationa l chang e togethe r wit han y othe r "contemporaneous " increase s o r decrease s i n actua l emission s [se e 4 0 CF R52.21(b)(3)(i)]. 8 Applicabilit yo f th e CAA' s NS Rprovision 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 fromth e physica l o r operationa l change . Specifically , t o determin e whethe r a propose d physica l o r operationa l chang e wil l resul t i n a n 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

7 (...continued ) implementatio n plan s (SIP)] . I nmos t State s wher e th e Federa l requirement s apply , EPAha s delegate d th e authorit y t o implemen t th e PS D programbac k t o th e State . Roughl y two-third s o f th e State s ar e implementing thei r ow n PS D program pursuan t t o anEPA-approve d SIP . Section s 52.2 1 an d 51.16 6 hav e identica l modificatio nprovisions . Th e 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 5 year s preceding th e propose d physica l o r operationa l chang e an d th e dat e tha t th e increas e fromth e chang e occur s [se e 4 0 CFR52.21(b)(3)(ii)] . Onc e a modificatio n i 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 increas e [se e e.g. , 4 0 CF R52.21(j)(3 ) (bes t availabl e contro l technology) ; 4 0 CF R52.21(m)(1)(b ) (ai r qualit yanalysis)] .P.1 9

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- regulation s defin e actua l emission s o na particula r dat e a s "th e averag e rate , i n tpy , 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 " [se e 4 0 CF R52.21(b)(21)(ii)] . Th e Administrato r "shall " allo wus e o f a differen t tim e 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 baselin e [se e 4 5 F R52676 , 52705 , 5271 8 (1980)] . However , i t ca nallo w th e us e o f a n earlie 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 , EPAfound 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 begunnorma l operations, " actua l emission s equa l th e "potential-to-emi t o f th e unit " [se e 4 0 CFR52.21(b)(21)(iv)] . Thi s approac h i s referre d t o a s th e actual-to-potentia l methodology . Thi s regulatoryprovisio nmayb e overcome —an d NS Rwil l no t appl y—i f th e sourc e owne r agrees , i na federally

enforceabl e instrumen t —no t t o increas e it s actua l-18

-

emission s abov e baselin e leve l [se e e.g. , 4 0 CF R52.21(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 find a nincreas e i n actua l emission s [se e 4 0 CF R52.21(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 employ futur e "potential " emission s a s a prox y[se e 4 0 CF R52.21(b)(21)(iv)] . Th e linchpi nunde 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 n o 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 n a reexaminatio no f EPA' s interpretatio n o 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 , and thes e decision s hav e create d uncertaint yregardin g it s application ; thus , a s describe d late r i nthi s notice , EPA todayt o change s it s regulation s fo r electri c utilit ystea m generatin g unit s t o employa mor e usefu l criterion .P.2 1

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- 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 nCement , 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 n int o a "dry " kiln , an d t o combin e tha t kil nwit hanothe r kil n (se e 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 nwoul d employa differen t "cement makin g process " tha nth e origina l kil nfromwhic 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 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 no f "begun norma l operations, " th e cour t applie d a highl ydeferentia l standar d o f review , sinc e a n agency' s interpretatio no f it s ow n regulatorylanguag e i s typicall ygive n"'controlling weigh t unles s i t i s plainl yerroneou s o r inconsisten t wit h th e regulation' " [se e 88 9 F.2 d a t 297 , quoting Udal l v . Tallman . 38 0 U.S . 1 , 16-1 7 (1965 ) (citationomitted)] . Th e cour t conclude d tha t o n th e fact s o f th e case , EPA' s interpretatio n tha t "norma l operations " ha d no t begun wa 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.2 2

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- 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 , th e Sevent hCircui t wa s face d wit ha differen t kind 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 m drum s an

d othe r majo r components . Th e EPAcontended , a s i t ha d i n Puert 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 a n emission s increas e ove r pas t actua l emissions . Her e th e cour t disagree d wit h EPA' s interpretatio ntha 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 noccurring 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 n o r natur e o f th e facility . Rather , i t merel yallow s th e facilit yt o operat e agai na s i t ha d befor e th e specifi c equipmen t deteriorated. " Jd . a t 908 . I n determinin g whethe r suc ha "like-kin d replacement " ha d "begunnorma l operations, " £d . 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 9P.2 3

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- (D.C . Cir . 1979)] . Th e cour t sai d tha t wher e th e renovation s wer e "like-kin d 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 "begunnorma 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 y undergoin g "like-kin d 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 n thes 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 ywher 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 "begu

nnorma l operations " criterio ni s highl yfact-dependen t an d it s applicatio n i s inherentl y case-by-case , i t mayb e anuncertai nindicato r o f wha t emission s tes t wil l b e applie d i na give ninstance . 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 EPAa nadequat e basi s o n whic ht o

1 0 On 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 4

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- predic t futur e actua l emission s fro msuc hunit s i n mos t cases . Consequently , a s explaine d below , EPAi s today revisin g 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 y steamgeneratin 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 a n existing unit . F . Th e Clea n Ai r Ac t Amendment s o f 199 0 1 . Ne wSourc e Revie wan d th e Aci d Rai n Provision s Th e 199 0 Amendments , PubL . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) , mad e numerou s change s i nth e nonattainmen t provision s o f th e CA Aan d adde d a ne wtitl e t o addres s th e proble m o f aci d rain . Th e amendment s attac k nonattainmen t problem s wit ha broad arrayo f ne wrequirement s al l designe d t o brin g 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 nstrategies , us e o f alternativ e clea n fuels , increase d offse t requirement s fo r stationarysources , an d change s i nth e threshol d siz e o f stationarysource s subjec t t o NSR . Aprincipa l them e o f th e legislatio n i 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 . Th e Amendment s als o establish , i n titl e IV , a ne w contro l schem e fo r addressing th e aci d rai nproblem . Th e exclusiv e focu s o f thi s programi s o nutilit ypowe r plan tP.2 5

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- 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 fromutilitie s t o b e reduce d b

yapproximatel y1 0 millio nton s annuall yi n tw o phase s —th e firs t t o tak e effec t i n 1995 , th e second 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 , and 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 n curren 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 may varyfromth 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 n contro 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 n th e nex t yea r i n orde r t o assur e tha t th e 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 yth e 199 5 deadline . I nenacting titl e IV , Congres s di d no t suspen d an ytitl e I requirement s fo r thi s work . However , th e massiv e industry-wid eP.2 6

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- undertaking s o f pollutio ncontro l project s warrant s a clarificatio n o f th e NS Rrequirement s o f titl e I . I n particular , NS Rprovision 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 promulgate d todayan d th 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 IV pollutio n contro l project s withou t uncertaint ya s t o th e applicabilit y o f th e variou s titl e I ne wsourc e requirements . 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 wsourc e requirement s t o change s involving repowering an d Clea nCoa l Technology(CCT ) projects . Sectio n 40 9 grant s a nextensio n o f th e aci d rai n control 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 hqualifyin g clea n coa l technology . Sectio n 402(12 ) define s repowerin g as : [The ] 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 nfue l cells , o r a s determine d b

yth e Administrator , i n consultatio nwit hth e Secretaryo fP.2 7

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- 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 himprove d boile r o r generatio nefficienc yan d wit h significantl ygreate r wast e reductio n relativ e t o th e performanc e o f technologyi nwidesprea d commercia l us e a s o f th e dat e o f enactmen t o f th e Clea n Ai r Ac t Amendment s o f 1990 . Notwithstanding th e provision s o f sectio 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 nawarde d clea ncoa l technologydemonstratio n funding a s o f January1 , 1991 , b

yth e 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 y fo 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 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 CA A§ 409(d)] . Anoperato r ca n qualif y fo r th e 3-yea r extensio no f th e Phas e I I emission s limitatio n b

ydemonstrating (b yDecembe r 31 , 1997 ) t o th e permittin g authorit ytha t on e o r mor e unit s wil l b e repowere d wit ha qualifying clea n coa l technologyt 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 nan 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 y additiona l informatio nth e reviewing authorit yrequires .P.2 8

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- Today' s amendment s als o implemen t a nexemptio n fromne w sourc e requirement s fo r CC T demonstratio nproject s create d b yCongres s i 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 nS0 2 o r nitroge n oxide s (NOJ emission s associate d wit hburning coa l i n th e generatio no f electricity , proces s steam , o r industria l product s [se e CA A § 415(a)] . ACC T "demonstratio nproject " i s a projec t funde d unde r DOE' s CC T program o r a simila r projec t funde d b yEPA. 1 1 Repowerin g project s tha t ar e awarde d funding fromth e Departmen t o f Energy(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 m NSP S an d PS D requirement s s o long a s potentia l emission s (se e 4 0 CF R52.21(b)(4) ) from th e uni t d o no t increas e a s a resul t o f th e projec t [se e CA A§ 415(b)(3)] . 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 CAA , unles s the yar e exclude d a s pollutio ncontro l projects .

11 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 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 nAgency. "P.2 9

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- Th e installation , operation , cessation , o r remova l o f a temporaryCC T demonstratio n projec t tha t i s operate d fo r 5 year s o r les s i s exemp t fromNSP S an d bot hPS D an

d nonattainmen t ne wsourc e requirement s [se e CA A415(b)(2)] . However , th e facilit ystil l mus t compl ywit hth e applicabl e SI P and othe r requirement s necessaryt o attai nan d maintai n th e NAAQS . Finally , i n § 415(c) , Congres s provide d a n exemptio n fromNSP S an

d PS D fo r th e reactivatio no f "ver yclea n units " otherwis e i n complianc e wit hth e CA Atha t ha d bee n shu t dow n 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 and that , prio r t o th e shutdown , had bee n equippe d wit hpollutio n control s wit ha remova l efficienc y o 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 . Discussio n o f Fina l Actio n o nProposal . A . Pollutio n Contro l Projects . 1 . RegulatoryChange s fo r Pollutio nContro l Projects . a . Background . Th e EPApropose d t o amen d it s PS D an

d nonattainmen t regulation s a s the ypertai nt o utilit ypollutio n contro l project s b

yexercising it s authorit yunde r th e statutory definitio 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 R unles s the yrende r th e uni t les s environmentall ybeneficial .P.3 0

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- Generally , pollutio n contro l project s a t existing stationary source s ar e no t majo r modification s subjec t t o NS R requirement s fo r th e simpl e reaso n tha t the yd o no t resul t i n a n 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 every activit ya t a n existing facilit yb e considere d a physica l o r operationa l chang e fo r purpose s o f th e NSR. 1 2 Th e EPApropose d 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 ystea mgeneratin g uni t o f an ysystemo r devic e whos e primaryfunctio n i s th e reductio n o f ai r pollutant s (including th e switching t o a less

pollutin g 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 th e proposal , a utilit ypollutio n contro l projec t woul d 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 . Th e ke yt o thi s additio n t o th e lis t o f exclusion s fro m th e termphysica 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 th e typ e o f activit ytha t shoul d trigge r NSR . Th e EPApropose d regulatorylanguag e t o explicat e an d

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 n hour s o f operatio n o r i n th e productio nrat e ar e no t considere d a physica l chang e o r chang e i nth e metho d o f operatio n [se e 4 0 CF R52.21(b)(2)(iii) , 52.24(f)(5)(iii) , 51.165(a)(1)(v)(C)(1) , 51.166(b)(2)(iii) , and 60.14(e)(1)] .P.3 1

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- formaliz e it s statutoryauthorit yt o exclud e pollutio n contro l project s unde r th e NS Rprovisions . I n1977 , whe n Congres s enacte d th e NS Rprovision s o f th e CAA , 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 NSP S [se e § § 169(2)(c) , 171(4)] . A t th e time , regulation s promulgate d unde r th e NSP S provision s defining "modification, " provide d tha t th e term

"modification " doe s no t include : Th e additio no r us e o f an ysystemo r devic e whos e primaryfunctio ni s th e reductio n o f ai r pollutants , excep t whe n a n emission 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 . [se e 4 0 CFR60.14(e)(5)] . I n 1978 , EPAnote d tha t "i n adding § 169(2)(c ) t o th e CAA , Congres s indicate d tha t i t intende d t o conformth e meanin g o f 'modification ' t o 'usag e i n othe r part s o f th e Act ' [se e 12 3 Congr . Rec . H11955 , 1195 7 (Nov . 1 , 1977) " als o se e 4 3 FR2639 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 yregulatio nfromNSPS , th e statutoryauthorit yexist s fo r EPAt o explicat e b y regulatio n a n exclusio n fo r pollutio n contro l project s fro m part s C an

d D o f titl e I . Thi s exclusio n unde r NS Rreflect s th e existing regulatoryexclusio nfo r pollutio ncontro l activitie s unde r NSP S regulations , an d severa l recen t case-specifi c nonapplicabilit ydetermination s unde r th e NS Rprograms . Th eP.3 2

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- NSP S regulatoryexclusio ncontain s th e provis o tha t th e replacemen t o f a pollutio ncontro l systemo r devic e canno t b e ies s "environmentall ybeneficial " t o qualif yfo r th e exclusio n [se e 4 0 CF R60.15(e)(5)] . Wit hrespec t t o NSR , th e proposa l adopte d a simila r regulatoryexclusio nfo 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 n i s tha t i t woul d appl yth e "no t les s environmentally

beneficial " tes t t o th e additio nan d use , a s wel l a s th e replacement , o f a pollutio n contro l systemo r device . Thi s chang e reflect s th e distinc t ai r qualit ycomponen t o f th e PS D an d nonattainmen t programs . B yfocusing o nwhethe 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 NS Rregulations , th e proposa l avoid s th e nee d t o undertak e a quantitativ e emission s increas e calculatio n i 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 ncontro 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 nadvers 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 ybeneficial , 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 3

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- A s proposed , a pollutio n contro 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 n o 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 sulfu r dioxid e (S0 2 ) and N0 Xcontrols , electrostati c precipitators , an d project s undertake n t 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 N0 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 mayinvolv e change s t o th e pollutio ngenerating equipmen t (e.g. , 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 ystea mgenerating uni t tha t switche s froma 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 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 eP.3 4

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- facilit yar e no t considere d t o b e par t o f a pollutio n contro l projec t fo r purpose s o f today' s rule . 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 . A s proposed , thi s pollutio ncontro l projec t exclusio n di d no t extend t o sourc e categorie s othe r tha nelectri c utilit ystea

mgenerating units . Th e EPAs o limite d thi s provisio n because , 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 regardin g pollutio n contro l project s i nth e utilit y industry . Tha t experienc e led EPAt o conclud e tha t pollutio n contro l project s i nth e utilit yindustryar e generall yenvironmentall ybeneficial . A s note d above , generall ypollutio n contro l project s a t existin g stationarysource s ar e no t majo r modification s subjec t t o NS Rbecaus e theyd o no t usuall yresul t i na 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 y Congres s t o b e considere d physica l o r operationa l change s fo r purpose s o f NSR . Th e EPAapplie s it s PS D regulation s i nharmon ywit hit s NSP S regulations , whic hexclud e mos t pollutio n contro l project s [se e 4 0 CF R60.14(e)(5)] . I n1977 , Congres s incorporate d th e NSP S definitio n o f modificatio nint o th eP.3 5

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- PS D an d nonattainmen t statute s [se e CA A§ § 111(a)(4) , 169(a)(c) , 171(4)] . I naddition , th e legislativ e history reflect s that , a s a genera l 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 program[se e 12 3 Cong . Rec . HI195 7 (Novembe r 1 , 1977)] . Th e EPAreiterate d thi s vie wi n 197 8 (se e 4 3 FR26396 , Jun e 19 , 1978) . Subsequently , EPA interprete d it s NS Rregulation s t o incorporat e th e NSP S pollutio n contro l projec t exclusion. 1 3 Th e EPAlate r 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 n throughnotice-and-comraen 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 fromth e NSP S program. 1 4 I n recen t year s however , EPAha s consistentl yexclude d pollutio ncontro l project s fromNS R provide d tha t th e propose d projec t woul d b e environmentall y beneficial , taking int o accoun t ambien t ai r quality. 1 5 I n

13 Memorandu

m fro mEdward Reich , Director , Stationary Sourc e Complianc e Divisio nan d William

F . Pedersen , Acting Associat e Genera l Counsel , Air , Noise , an d Radiatio n Divisio n t o Allyn M . Davis , Regio nI V (Apri l 21 , 1983) . 1 4 Se e Memorandu

mfromGeral d A . Emison , Director , OAQPS , t o Regiona l Divisio nDirector s (July7 , 1986) .

15 Se e Letter , WilliamG . Rosenber g Assistan t Administrator , EPA , t o Andre wAitken , Vic e President , Ne w England 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 , January30 , 199 0 an d Marc h8 , 1990 .P.3 6

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- ligh t o f th e titl e I V requirement s an

d othe r provision s o f th e 199 0 Amendments , 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 Rapplicability . Byit 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 nth e environment . I n makin g suc hassessments , EPAmus t conside r th e overal l emission s befor e an d afte r th e project , a s wel l a s an yothe r relevan t environmenta l factors . A s a result , n o singl e facto r ca nb e identifie d i n advanc e fo r purpose s o f makin g thi s determination . b . Comment s Generall yFavoring th e EPAProposal . I n general , comment s fromindustrysupporte d th e proposa l t o exclud e pollutio n contro l projects . Commenter s supporting th e provisio n note d tha t th e exclusio ni s consisten t wit hth e CA Aan d EPA' s earlie r determination s regardin g suc hprojects . Indeed , severa l commenter s expresse d th e vie wtha t n o chang e i nEPA' s rule s wa s necessary . On e commente r note d tha t Congres s indicate d it s inten t no t t o appl yNSP S o r NS Rrequirement s t o pollutio n contro l project s b yadopting th e NS Rdefinitio no f "modification. " Anothe r commente r pointe d ou t tha t becaus e o f th e numbe r o f project s tha t wil l shortl yb e spawne d b yth e aci d rai n provision s o f th e CAA , i f permitting wer e require d fo rP.3 7

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- everyutilit yoperato r tha t plan s a fue l switc ho r th e installatio n o f pollutio ncontro l equipment , EPAwoul d b e overwhelme d wit happlications . Thi s coul d affec t th e reliabilit yo f th e electri c utilit yindustryan d delay complianc e wit htitl e IV . On e commente r note d tha t a utilit yshoul d no t b e prevente d fro mqualifying fo r th e pollutio n contro l exclusio n i f tha t utilit ytake s step s t o restor e diminishe d capacit yo f a powe r plan t a t th e same tim e tha t th e utilit yundertake s a pollutio ncontro l projec t suc ha s repowering . Severa l commenter s supporte d flexibilit yfo r utilitie s o n strategie s fo r S0 2 control . Tw o commenter s note d tha t i f th e nationa l S0 2 emission s cap i s maintained , plan t modification s tha t mayincreas e S0 2 emission s a t on e uni t shoul d no t trigge r NS Ro r NSP S requirements . Anothe r commente r suggeste d tha t i nligh t o f th e S0 2 emission s caps , utilitie s shoul d b e permitte d t o undertak e pollutio ncontro l project s o r mak e nonroutin e changes , eve nthoughsuc h change s increas e S0 2 emissions , withou t being force d t o instal l technology(sucha s scrubbers ) t o contro l S0 2 . c . Comment s Generall yOpposing th e EPAProposal . Commenter s oppose d t o th e exclusio n o f pollutio n contro l project s fro mNS Rprovision s dispute d EPA' s authorit yt o creat e suc h"exemptions " an d disagree d tha t Congres s intende d t o exclud e pollutio n contro l project s fro m NSR . On e commente r state d tha t th e pollutio n contro lP.3 8

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- projec t exclusio n i s illega l an d conflict s wit h§ 182(e)(2 ) o f th e CAA , noting tha t whil e § 182(e)(2 ) provide s limite d NS Rrelie f fo r some pollutio n contro l projects , i t i s no t a blanke t "exemption " fromNSR , becaus e th e requiremen t t o achiev e th e lowes t achievabl e emissio nrat e (LAER ) remain s effective , whic hdemonstrate s congressiona l inten t t o preven t EPAfromgranting broade r exclusions . Opponent s t o th e exclusio n fo r pollutio ncontro l project s als o pointe d ou t tha t effort s b yutilitie s t o reduc e on e pollutan t ca n ofte n increas e emission s o f another . Suc hefforts , a s wel l a s project s tha t reduc e pollutio n i n on e are a bu t increas e i t i n another , shoul d no t b e "exempted " fromNS Ro r PS D provisions . Severa l commenter s provide d example s o f ho winstallatio n o f pollutio n contro l equipmen t o r fue l switching aime d a t reductio n o f S0 2 als o had th e effec t o f increasing emission s o f N0 Xan

d particulat e matter , an d ho winstallatio no f low

N0 Xburner s increase d VO C emissions . Some opponent s t o th e exclusio nfo r pollutio ncontro l project s sai d tha t th e definitio n o f pollutio n contro l projec t i s overl ybroad , an d tha t EPAlack s authorit yt o appl ysuc ha broa d definition . d . Comment s Suggesting Revision s t o th e Proposal . Severa l commenters , bot hfo r an d agains t th e exclusion , suggeste d specifi c regulatorychange s t o th e pollutio n contro l exclusion . Fo r instance , numerou s commenter sP.3 9

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- requeste d a clarificatio n o f th e environmentall ybeneficia l test . I naddition , th e followin g suggestion s wer e mad e wit h regar d t o th e definitio n o f "pollutio ncontro l project" : (1 ) includ e anyupgrad e o f th e pollutio ncontro l efficiencie s o f existin g devices ; (2 ) includ e "pollutio n prevention " change s suc ha s lea k detectio n an d repai r program s an d th e attendan t sit e changes ; (3 ) clarif ytha t th e pollutio n contro l projec t nee d no t b e a permanen t change ; (4 ) includ e boile r alteration s involvin g natura l ga s cofiring , reburn , o r rebur n wit hsorben t injectio neve n thoug hther e ar e benefit s othe r tha npollutio ncontrol ; an d (5 ) includ e impact s o n othe r Clas s I are a ai r qualit y relate d value s a s wel l a s visibilit yi ndeterminin g whethe r a projec t tha t woul d increas e emission s i s nevertheles s environmentall ybeneficial . e . Th e EP AAnalysis . Base d o na revie wo f th e comments , EP Aha s determine d t o adop t a forma l pollutio ncontro l projec t exclusio nfo r electri c utilit ystea mgeneratin g units . Thu s EP Ai s toda y adoptin g 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 nexistin g electri c utilit ystea m

generatin g uni t o f anysyste mo r devic e whos e primar yfunctio n i s th e reductio no f ai r pollutant s (includin g th e switchin g t o a less-pollutin g fue l wher e th eP.4 0

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- primarypurpos e o f th e switc hi s th e reductio no f ai r pollutants) . Unde r th e regulation s a s adopte d today , a utilit yundertakin g a projec t qualifying fo r th e pollutio n contro l projec t exclusio n wil l no t b e subjec t t o NS Runde r eithe r PS D o r nonattainment . I n th e propose d rule , EPAdi d no t provid e an yspecifi c definitio n o f th e environmentall ybeneficia l standard . Numerou s commenter s note d th e lac k o f a specifi c standar d fo r th e environmentall ybeneficia l tes t an d requeste d tha t EPAprovid e a definitio n fo r thi s ne wter man d guidanc e a s t o ho wi t wil l b e applied . O f course , a s note d above , pollutio n contro l project s a t existing stationarysource s ar e generall yno t subjec t t o NS Rrequirement s fo r th e simpl e reaso n tha t the yd o no t usuall yresul t i na n increas e i n actua l emissions . I naddition , a s als o note d above , EPAha s determine d tha t Congres s di d no t inten d tha t pollutio n contro l project s b e considere d th e typ e o f activit ytha t shoul d trigge r NSR . O n th e othe r hand , severa l commenter s pointe d ou t tha t a projec t tha t reduce s on e pollutan t shoul d no t b e allowe d t o increas e emission s o f anothe r pollutan t i f tha t increas e wil l caus e o r exacerbat e a differen t pollutio nproblem . Mor e specifically , a nenvironmenta l commente r suggeste d tha t EPAha d endorse d a t th e Congressiona l hearing a vie wtha t increase s woul d no t b e allowe d i nnonattainmen t area s absen t a "compelling showing. "P.4 1

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- First , a s discussed , nothing i ntoday' s actio n authorize s an

yemission s increas e tha t woul d caus e o r contribut e t o a violatio n o f th e NAAQS , PS D incremen t o r visibilit ylimitation. 1 6 Second , th e propose d an d fina l rul e provid e a n appropriat e wayo f enabling utilitie s t o undertak e pollutio n contro l project s i n a n expeditiou s manne r whil e protecting ai r quality . Althougha pollutio n contro l projec t coul d theoreticall ycaus e a smal l collatera l increas e i n some emissions , i t wil l substantiall yreduc e emission s from

othe r pollutants . I n recognitio no f this , th e rul e provide s fo r a case-by-cas e assessmen t o f th e pollutio n contro l project' s ne t emission s an d overal l impac t o n th e environment . Third , a s discusse d i nth e following section , th e permitting authorit ycanrequir e additiona l modelin g unde r certai ncircumstance s t o evaluat e th e ai r qualit yimpac t o f a pollutio ncontro l project , thereb y helpin g t o assur e protectio no f ai r quality . Th e EPA

16 Th e NS Rregulation s defin e a "majo r modification " subjec t t o revie wa s an yphysica l o r operationa l chang e a t a majo r stationarysourc e tha t woul d resul t i n a "significan t ne t emission s increase " i n an yregulate d pollutan t [se e e.g. , 51.166(a)(1)(v)(A)] . I n nonattainmen t area s "significant, " i n referenc e t o a ne t emission s increase , i s define d a s a rat e o f emission s tha t woul d equa l o r excee d a specifie d amount . Fo r example , unde r th e curren t regulation s a rat e o f 4 0 tpyo r mor e i s "significant " fo r S0 2 . Thi s doe s no t addres s th e questio n o f whethe r a significan t increas e i n emission s wil l caus e o r contribut e t o a violatio n o f th e NAAQS , PS D incremen t o r visibilit y limitation .P.4 2

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- consider s thes e safeguard s t o b e adequat e t o addres s ai r qualit yconcern s i n bot hattainmen t an d nonattainmen t areas . Severa l commenter s challenge d th e nee d fo r a regulatory exclusion , noting tha t EPAha d alread yexclude d numerou s individua l pollutio n contro l project s pursuan t t o it s existin g regulatoryauthority . However , whil e EPAha s i n fac t mad e case-by-cas e determination s excluding pollutio n contro l project s fro mNSR , i t ha s neve r provide d a comprehensiv e statemen t o f it s polic yi nthi s regar d no r formall yinclude d thi s exclusio n i nit s NS Rregulation s governin g SIP' s o r it s ow nNS Rregulations . Becaus e o f th e enormou s surg e i n project s tha t utilitie s ca nb e expecte d t o undertak e i n respons e t o th e aci d rai nprovisions , EPA believe s tha t a forma l rulemaking spelling ou t th e exac t parameter s o f th e exclusio n i s necessary . A t leas t on e commente r cautione d EPAagains t requiring source s t o submi t "applications " t o secur e th e pollutio n contro l projec t exclusion , les t source s fac e excessiv e paperwor k burden s an d length

ydelay s everytim e the ychang e thei r pollutio n contro l equipment . Unde r today' s rule , an d consisten t wit hth e othe r NS Rapplicabilit ydecisions , source s remai n responsibl e i nth e firs t instanc e fo r determinin g wha t permitting requirement s appl yt o thei r activities . Beyond issuing an yconstructio n o r operating permit s tha t mayb e needed , th e permitting authorit yi s no t necessaril yinvolve d unles s a sourc e seek s a determinatio nP.4 3

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- o f NS Rapplicabilit yo n it s ow no r a modelin g analysi s i s required . Severa l commenter s requeste d tha t thi s exclusio n b e extende d t o nonroutin e repair s tha t ar e undertake nb yth e utilit yi n conjunctio nwit hth e pollutio ncontro l project . However , titl e IV' s overal l nationa l S0 2 ceiling an d emissio n trading progra md o no t allo wEPAt o simpl yignor e th e loca l ai r qualit yimpac t o f S0 2 increase s a t individua l titl e IV-covere d facilities . Th e nationa l emission s cap s establishe d b

ytitl e IV

ar e no t designe d t o protec t plant

specifi c consideration s o f loca l ai r quality , th e focu s o f titl e I' s NS Rrequirements . Thi s argumen t i s als o refute d b yth e plai n languag e o f titl e IV whic hb

yit s term s doe s no t supersed e titl e I [se e § § 403(f ) an d (g) , 413] . Severa l opponent s o f th e exclusio n poin t ou t tha t certai n pollutio n contro l technologie s can actuall yincreas e emission s o f othe r pollutant s an d tha t th e installatio no f a pollutio n contro l projec t mayresul t i n increase d utilizatio n o f th e unit , an d thereb

yresul t i n a nincreas e i n actua l emissions . A s note d above , EPAexpect s tha t pollutio n contro l project s wil l decreas e actua l emissions . Moreover , eve n thoughemission s increase s ar e possibl e i n som e cases , EPAi s no t preclude d fromcreating thi s exclusion . Th e mer e fac t o f a n emission s increase , standing alone , doe s no t rende r th e exclusio ninconsisten t wit hth e CAA . Fo r instance , EPAregulation s hav e long exclude dP.4 4

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- emission s increase s associate d wit hroutin e maintenanc e repair s an

d replacement , a s wel l a s increase s i nth e operation s o f a uni t i n respons e t o fluctuation s i nth e marke t [see , e.g. , 4 0 CF R52.21(b)(2)(iii)(a) , (f)] . Give n th e modelin g safeguar d an d th e overal l benefi t t o th e environmen t o f pollutio ncontro l project s a s wel l a s th e relevan t statutoryprovisions , EPAi s confiden t tha t th e regulatoryclarificatio n o f thi s exclusio ni s a lawfu l an d appropriat e exercis e o f it s powers . I t wa s als o suggeste d tha t th e pollutio n contro l projec t exclusio n i s inconsisten t wit h§ 182(e)(2 ) o f th e CAA . Sectio n 182(e)(2 ) provide s tha t i nextreme ozon e nonattainmen t area s (th e Lo s Angele s are a i s th e onl yone) , an yphysica l o r operationa l chang e "whic hresult s i nan y increas e i n emissions " wil l b e considere d a modification . Th e sourc e ca n avoi d th e offse t requirement s (bu t no t th e res t o f NSR ) b

yinternall yoffsetting (i.e. , netting ) an y increas e i n emission s a t a rati o o f a t leas t 1. 3 t o 1 . Th e provisio n als o provide s tha t th e extreme are a offse t provision s (bu t agai nno t th e res t o f NSR ) d o no t appl yt o th e installatio n o f equipmen t require d t o compl ywit h"th e applicabl e implementatio n plan , permit , o r thi s Act. " Th e EPAdoe s no t agre e tha t thi s nonattainmen t provision , whic happlie s t o onl yon e area , someho wpreclude s EPAfromadopting a n exclusio n t o it s genera l NS Rrule s regardin g pollutio n contro l projects . Whil e ther e mayb eP.4 5

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- some overlap (i.e. , utilit ycomplianc e project s undertake n i n th e Lo s Angele s are a tha t qualif yunde r thi s rul e a s pollutio n contro l projects) , i ngenera l th e tw o provision s ar e quit e different . Today' s rul e i s limite d t o utilitie s bu t applie s t o al l area s o f th e country , whil e § 182(e)(2 ) applie s t o al l sourc e categorie s bu t onl yt o th e Lo s Angele s area . Sectio n 182(e)(2 ) als o appear s t o appl yt o a broade r categoryo f changes . Ther e i s n o evidenc e tha t Congres s intende d thi s limite d provisio n t o preemp t EPAfromadopting a broa d pollutio n contro l projec t exclusion . O nth e othe r hand , th e CA

Aconferee s di d specificall ydirec t EPAt o fin d a n administrativ e resolutio n o f th e WEPC O issue s (se e 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 . 101-951 , 101s t Cong . 2n d Sess . (1990 ) pp . 344-45) . Fo r thes e reasons , EPAdoe s no t believ e tha t § 182(e ) directl y o r indirectl ylimit s EPA' s authorit yhere . 2 . Additiona l Modeling Requirements . a . Background . Apropose d pollutio n contro l projec t o r physica l o r operationa l chang e canno t resul t i nan emission s increas e tha t wil l caus e o r contribut e t o a violatio n o f a NAAQS , PS D increment , o r visibilit ylimitatio n[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 dP.4 6

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- impact . I t i s possibl e tha t a pollutio ncontro l project , whil e no t causing an yincreas e i nmaximu m hourl yemissions , wil l caus e a significan t ne t increas e i n actua l emissions , whic hi n tur n coul d caus e o r contribut e t o th e violatio n o f a NAAQS , incremen t o r visibilit ylimitation . Fo r thi s reason , a s proposed , th e reviewing authorit ymayrequir e a sourc e t o perform

anai r qualit yimpac t analysi s (modeling ) wheneve r 1 ) 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 analysi s and 2 ) i t ha s reaso n t o believ e tha t suc ha nincreas e woul d caus e o r contribut e t o a violatio n o f a NAAQS , incremen t o r visibilit ylimitation . 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 n o f an

yambien t standard , PS D incremen t o r visibilit ylimitation , th e pollutio n contro l exclusio ndoe s no t apply . b . Comment s o nth e EPAProposal . Man ycommenter s viewe d th e modeling requiremen t a s ensuring tha t th e pollutio n contro l projec t exclusio nwil l no t hav e a n advers e impac t o nloca l ai r qualit ybecaus e source s mus t stil l compl ywit hal l applicabl e emissio n limit s necessaryt o protec t NAAQS , PS D increments , an d visibility .P.4 7

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- However , severa l commenter s expresse d concer nove r th e adequac yo f EPA' s ai r qualit yimpac t analysi s requiremen t a s a safeguar d du e t o th e methodologypropose d t o calculat e actua l emissions . Specifically , a n environmenta l grou p pointe d ou t tha t using increase s i n"representativ e actua l annua l emissions " a s th e tes t fo r determining whethe r a pollutio n contro l projec t result s i nunacceptabl e impact s o n ai r qualit yca n exclud e rea l emission s increase s (e.g. , du e t o demand growth) , an d thu s fail s t o accoun t fo r th e ful l impac t o f th e project . Thi s commente r asserte d tha t increase s i n "actua l emissions " shoul d b e th e ke yt o us e o f th e pollutio n contro l projec t exclusion . Some commenter s als o objecte d du e t o th e fac t tha t th e proposa l relie s o n Stat e an d loca l agencie s t o b e awar e o f th e projec t an

d reques t th e analysis . On e commente r adde d tha t i t i s unclea r ho wa violatio no f th e NAAQ S ca nb e avoide d befor e th e fac t an d ho wth e permitting agenc ycoul d requir e a n ai r qualit yanalysi s i f th e pollutio ncontro l projec t i s no t subjec t t o NSR . Finally , a governmen t agenc yquestione d wh yth e safeguar d provisio n protecte d "visibilit ylimitations " whe n th e PS D programi s designe d t o protec t al l "ai r qualit y relate d values " i n Clas s I areas . Anenvironmenta l grou p commente d tha t th e propose d rul e doe s no t provid e fo r notificatio n t o Federa l Land Manager s s o tha t the yca n fulfil l thei r responsibilitie s t o protec t Clas s I areas .P.4 8

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- c . Th e EPAAnalysis . Afte r carefu l revie wo f th e proposa l an d th e comments , EPAha s determine d t o promulgat e th e modelin g provisio na s proposed . Th e EPAdoe s no t believ e th e objection s t o thi s provisio n t o b e well-founded . Althoughth e proposa l doe s no t explicitl yrequir e source s t o infor mth e permittin g authorit yo f pollutio ncontro l projects , EPAanticipate s tha t i n most , i f no t all , circumstance s involving pollutio n contro l projects , permitting authoritie s wil l b e awar e o f th e source' s intentions . Fo r instance , Stat e permittin g requirement s mayrequir e th e sourc e t o bring th e projec t t o th e permittin g authorit yo r th e sourc e maywis ht o d o s o t o secur e emissio n reductio n credit s fo r pollutant s tha t wil l b e decreased . I n addition , mos t project s a t utilitie s ar e typicall ysubjec t t o publi c scrutin yi na variet yo f forum s a s a resul t o f filing s mad e wit hPubli c Utilit yCommission s an d othe r local , Stat e o r Federa l agencies . Consequently , i t i s unlikel ytha t a utilit ycoul d procee d wit ha pollutio n contro l projec t withou t some typ e o f revie wregardin g CA Ao r othe r requirements . Thi s wil l b e especiall ytru e o f pollutio n contro l project s undertake nfo r th e purpos e o f complianc e wit htitl e IV . Th e EPAdisagree s wit hth e environmenta l group commen t tha t i t i s inappropriat e t o hing e us e o f th e pollutio n contro l projec t exclusio no n increase s i n "representativ e actua l annua l emissions " rathe r tha nincrease s i n "actua lP.4 9

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- emissions. " Nothin g i ntoday' s rule s woul d authoriz e pollutio n contro l project s tha t resul t i n a violatio no f a NAAQS , PS D incremen t o r visibilit ylimitation . Th e commente r i s correc t tha t th e rul e a s propose d woul d i n certai n circumstance s no t subjec t t o revie wsignifican t increase s i n actua l emission s froma sourc e tha t follo w completio n o f th e pollutio n contro l project . However , th e rul e i s clea r tha t thi s coul d occu r onl ywher e th e increas e i n questio n i n fac t doe s no t resul t fro mth e pollutio n contro l project , bu t rathe r fro man independen t facto r such a s demand growth . A s discusse d above , i t i s no t th e purpos e o f th e NS Rprogram

t o subjec t al l emission s increase s t o permitting requirements , onl yincrease s tha t resul t froma nonroutin e chang e a t a n existing plant . Th e Stat e may alway s revis e it s SI P t o correc t NAAQ S violation s tha t i t conclude s ar e cause d b yincrease d utilizatio nbu t d o no t resul t from

a pollutio n contro l projec t a t tha t plant. 1 7 Th e governmen t agencycommente r i s correc t tha t PS D permittin g requirement s ar e intende d t o preven t a majo r ne w sourc e o r majo r modificatio n fromcausing a n advers e impac t o n ai r qualit yrelate d value s i n Clas s I areas . However , th e agenc yignore s th e fac t that , i ngeneral , existing

1 7 I n part , commenters ' objection s t o us e o f th e representativ e actua l annua l emission s methodologyt o determin e i f th e pollutio ncontro l projec t wil l resul t i na significan t ne t emission s increas e i s grounde d i na concer n wit hth e reliabilit yo f it s methodology . Thes e concern s ar e addresse d i n th e following section .P.5 0

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- facilitie s tha t hav e no t bee nmodifie d ar e no t subjec t t o ambien t requirement s relate d t o ai r qualit yrelate d values . Th e EPAbelieve s tha t today' s rul e wil l allo wreveiwin g authoritie s sufficien t flexibilit yt o protect , t o th e exten t require d unde r existing law , Clas s I area s from possibl e advers e impact s frompollutio n contro l projects . A s note d above , pollutio n contro l project s reduc e emission s o f targete d pollutants . Whil e emission s o f othe r pollutant s coul d i n theoryincreas e i na fewcases , EPAdoe s no t expec t thi s t o resul t i n significan t impact s o nClas s I areas . Wher e prospectiv e project s mayb e caus e fo r concern , permittin g agencie s hav e th e authorit yt o requir e modelin g t o preven t incremen t o r visibilit yviolations , an d likewis e ma ysolici t th e view s o f other s i ntaking an yothe r appropriat e remedia l step s deeme d necessaryt o protec t Clas s I areas . I n deciding t o adop t th e rul e a s proposed , EPAemphasize s tha t al l enviornmenta l impacts , including thos e o n Clas s I areas , ca nb e considere d i n evaluatin g whethe r a utilit yuni t i s "les s environmentall ybeneficial " afte r control s tha n i t wa s befor e controls . Accordingly , th e fina l rul e allow s consideratio no f al l environmenta l impact s —beneficia l an d advers e —i nmakin g a determination .

B . Representativ e Actua l Annua l Emissions , a . Background .P.5 1

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- Th e EPApropose d t o revis e it s methodologyfo r calculating emission s increase s a t electri c utilit ystea m generatin g sources . Th e EPApropose d 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 n existing electri c utilit ystea m generating 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 . Th e EPApropose d 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 nth e meaning o f 4 0 CF R60.15 . Sinc e ther e i s n o relevan t operating historyfo r wholl yne w unit s an

d replace d units , i t i s no t possibl e t o reasonabl y projec t post-chang e utilizatio nfo 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 . A s proposed , 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 tpy , a t whic hth e uni t actuall yemitte d th e pollutan t during a 2-yea r perio d whic h precede 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 dP.5 2

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- "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 ypreceding th e propose d chang e t o establis hth e baselin e [se e 4 5 F R52676 , 52705 , 5271 8 (1980)] . However , i n some case s i t ha s allowe d th e us e o f earlie r periods . 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 operation s sinc e th e source' s capacit ywa s reduce d du e t o physica l problems . Th e EPApropose d t o retai nthi s regulatorylanguage , bu t t o adop t a ne wpresumptio n regardin g it s implementation . Unde r th e propose d action , th e Administrato r woul d presum e tha t an

y2 consecutiv e year s withi nth 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 n 4 0 CF R52.21(b)(3)(i)(b). " Sourc e owner s o r operators , desirin g 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

1 8 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 nchange s a t a sourc e an d canno t b e use d t o extend th e 5 yea r perio d specifie d i n tha t provisio n [se e 4 0 CF R52.21(b)(3)(1)(b)] .P.5 3

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- Administrator' s specifi c determinatio ntha t suc hperio d i s mor e representativ e o f norma l operations. 1 9 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 nth 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 yemission s rat e following thi s change ; an d (2 ) projecte d capacit yutilization , 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. 2 0 Th e projectio no f post chang e capacit yutilizatio n fo r applicabilit ypurpose s shoul d b e base d o n a projectio no f utilizatio n fo r a perio d afte r th e physica l o r operationa l change . Specifically , EPA propose d t o allo wsource s t o bas e th e projectio n o f utilizatio n o n th e 2 year s afte r th e change , o r a differen t

1 9 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 th e SI P fo r planning o r permitting purposes . Thus , th e sourc e mayno t selec t a leve l o f baselin e emission s highe r tha ntha t use d b yth e permittin g authorit yi nissuing 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 ylimitation .

2 0 I n projecting futur e utilizatio n an d emission s factors , th e permitting authorit ymayconside r th e company' s historica l operationa l data , it s ow n representations , filing s wit hFederal , Stat e o r loca l regulatoryauthorities , and complianc e plan s develope d unde r titl e IV o f th e 199 0 Amendments .P.5 4

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- 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 . b . Comment s Generall yFavoring th e EPAProposal . Severa l commenter s favore d th e expansio no f th e tim e perio d fo r establishing th e pre-chang e emission s baseline . Suggestion s included : (1 ) allo wth e us e o f an y2 consecutiv e year s withi n th e las t 5 year s o f operatio nt o allo wfo r a mor e representativ e baselin e fo r unit s tha t hav e bee nshu t down ; (2 ) allo wutilitie s t o reques t t o us e period s o f representativ e highutilizatio n outsid e th e 5 yea r tim e period ; (3 ) ad d th e "an

y2 ou t o f th e prio r 5 yea r baselin e period " discusse d i nth e preambl e t o 4 0 CF Rpart s 51 , 52 , and 60 ; (4 ) allo wutilitie s t o us e th e maximu mutilizatio ni n an y1 yea r withi n a t leas t th e las t 1 0 years , sinc e 1 0 year s i s a mor e relevan t capacit yinvestmen t plannin g horizo ntha n 5 years ; (5 ) clarif ytha t th e sourc e wil l b e abl e t o selec t th e relevan t 2-yea r perio d wit happrova l o f th e reviewin g authorit yrequire d onl ywhe nth e pre-chang e baselin e i s outsid e o f th e 5-yea r perio d proceeding th e change ; (6 ) expand th e baselin e calculatio nperio d from 5 year s t o 1 0 year s t o b e consisten t wit hth e after-chang eP.5 5

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- calculatio n perio d an d t o addres s a mor e representativ e tim e period ; (7 ) allo wth e us e o f any2 year s (rathe r tha n consecutiv e years ) du e t o lon g reserv e shutdown s an d becaus e maintenanc e plannin g require s tha t utilit yboiler s b e operate d i n"abnormal " condition s fo r lon g durations ; an d (8 ) requir e source s t o bac k u p th e choic e o f whic h 2 year s t o us e wit ha short-ter mstandar d usin g a nhourl y rate , us e th e sam e 2-yea r perio d fo r determinin g th e shor t ter man d annua l rates , an d codif yth e 2 year s use d fo r th e limit . Severa l comment s tha t recommende d expandin g th e proposa l t o includ e industria l source s i nth e NS Rexemptio n als o note d tha t a "5-yea r window " i s no t satisfactor yfo r industria l source s whic hd o no t alway s hav e representativ e period s o f emission s immediatel ybefor e a physica l change . On e industria l commente r suggeste d th e us e o f an y2-yea r perio d b e allowed . Commenter s i n favo r o f th e futur e actua l emission s calculatio nmetho d note d tha t i t wil l alleviat e uncertaint y fo r nonroutin e repair , replacement , an d maintenanc e project s whil e stil l protectin g loca l ai r quality ; th e future-actua l metho d reduce s speculatio nan d allow s mor e relianc e o n factua l data ; an d th e actual-to-future-actua l emission s compariso ni s mor e appropriat e t o loo k a t th e operatin g histor yan d projecte d capacit yo f a n existin g uni t t oP.5 6

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- determin e whethe r a chang e wil l increas e emissions . On e commente r state d tha t th e actual-to-potentia l metho d discourage d environmentall ybeneficia l modifications , bu t suggeste d tha t th e mos t appropriat e polic ywoul d b e t o adop t a potential-to-potentia l test . On e commente r note d tha t th e actual-to-future-actua l tes t woul d en

d wha t wa s fel t t o b e th e "unlawfu l an d unfai r practice " o f usin g th e NS Rprogramt o "arbitraril yreduc e allowabl e hour s o f operatio no r rate s o f productio n fo r existin g sources. " Countering th e argumen t tha t th e actual

to-future-actua l tes t coul d creat e publi c healt hproblems , tw o commenter s note d tha t utilitie s mus t comply.wit hal l Federal , Stat e and loca l ai r qualit yrestriction s regardles s o f th e test s used . Als o supporting th e actual-to-future

actua l test , on e commente r pointe d ou t tha t sourc e owner s wil l b e motivate d b yincentive s i nth e CAA , propose d regulations , an

d marke t force s t o financ e an d enginee r economi c an

d efficien t physica l an d operationa l change s a t plant s s o a s t o achiev e excellen t environmenta l control . On e commente r favore d calculating futur e emission s ove r a representativ e 2-yea r perio d withi na 5-yea r perio d afte r th e change . c . Comment s Generall yOpposing th e EPAProposal . On e opponen t o f th e propose d method s state d tha t emissio n increase s a t powe r plant s woul d no wb e fostere dP.5 7

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- sinc e th e proposa l wil l allo wutilitie s t o choos e thei r ow n definition s fo r whe n emission s hav e increased . I n general , opponent s o f th e proposa l regarding th e pre-chang e baselin e note d tha t th e chang e i s arbitraryan d capriciou s an

d tha t ther e i s n o analysi s i n th e docke t suggesting tha t an

y2-yea r perio d i s mor e representativ e o f pre-chang e maximu

memissions . Commenter s note d tha t unde r th e proposal , source s coul d selec t th e year s i nwhic hthey ha d th e highes t emission s i n a n attemp t t o minimiz e th e appearanc e o f a n increas e an d escap e NSR . On e commente r note d tha t th e chang e i n baselin e calculatio n methodology woul d giv e utilitie s suc hflexibilit yi nrefurbishing , repowering , an

d lif e extensio n project s a s t o bia s competitiv e powe r market s toward s th e continue d us e o f existing ol d unit s rathe r tha n th e constructio n o f ne wones . Opponent s t o th e us e o f futur e actua l emission s state d tha t ther e i s n o reasone d basi s fo r an unenforceabl e representativ e actua l emission s approach , an d applicatio n o f thi s tes t t o electri c utilitie s i s no t consisten t wit hEPA' s establishe d polic ytoward othe r sources . Othe r comment s contende d tha t th e futur e actua l tes t ignore s al l pas t precedent s an

d that , i n determining whethe r a chang e trigger s NSR , EPAshoul d compar e actua l emission s fo r th e curren t uni t t o potentia l emission s fromth e altere d source ; th e futur e actua l tes t doe s no t guar d agains t artificiall y lowestimate s mad e b ysource s t o escap e NSR , no r doe s i tP.5 8

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- protec t agains t substantia l increase s mad e immediatel yafte r th e 2-yea r period ; an d th e futur e actua l emission s calculatio n procedur e amount s t o self-regulatio n an d i s easil ysubjec t t o abuse . Stat e an

d loca l ai r agencie s generall yoppose d th e futur e actua l metho d o f calculating post-chang e emissions . On e note d tha t th e appropriat e emissio nincreas e tes t shoul d b e determine d o n a case-by-cas e basis . On e agenc ynote d tha t th e actual-to-futur e actua l approac hresult s i na significan t relaxatio no f titl e I NS Rrequirement s an d woul d allo wutilitie s t o upgrad e equipmen t whic hmayhav e los t significan t generating capacit ywithou t th e equipmen t being subjec t t o NSR , hampering loca l ai r qualit yattainmen t an d maintenanc e efforts . Ther e wer e severa l comment s tha t futur e emission s canno t b e reasonabl ydetermine d solel yo n pas t operating history . On e Stat e note d tha t directio ni s neede d o n ho wactua l versu s potentia l emission s ar e estimated . Afe wcommenter s addresse d th e 2-yea r perio d afte r th e propose d chang e whic hi s th e basi s fo r calculatin g th e futur e actua l emissions . Opponent s o f th e futur e actua l concep t state d tha t us e o f suc ha provisio nwoul d resul t i n unrealisticall ylowfutur e emission s projection s and shiel d a compan

yagains t effort s t o enforc e NS Rrequirement s a t a sourc e tha t increase d emission s 3 year s afte r makin g physica l changes .P.5 9

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- A n environmenta l grou p an d severa l Stat e agencie s note d tha t th e projecte d post-chang e emission s shoul d becom e a n enforceabl e permi t conditio ni n orde r t o commi t a sourc e t o limi t it s futur e emission s t o a specifi c amoun t an d t o provid e assuranc e tha t thes e projection s ar e reasonabl e estimate s o f expecte d emissions . I f a sourc e wil l no t accep t suc ha permi t condition , the n th e sourc e shoul d hav e t o us e potentia l post-chang e emissions . d . Comment s Suggestin g Revision s t o th e Proposal . Thre e commenter s suggeste d a mor e flexibl e tes t fo r ascertainin g S0 2 increase s fo r determinin g applicabilit yo f NS Ran d NSP S requirements , namel ya measur e o f pollutio n pe r uni t o f electrica l output . Commenter s mad e th e followin g specifi c suggestion s fo r change s surroundin g th e futur e actua l calculatio nmethod : (1 ) develo p guideline s t o assis t State s i nmakin g like-kin d determinations ; (2 ) requir e like-kin d replacement s t o us e th e representativ e actua l annua l emission s fo r calculatio no f actua l emissions ; (3 ) defin e "like-kin d replacement " t o includ e complet e replacemen t o f a nexistin g emission s unit ; (4 ) defin e "routin e repai r an d replacement; " (5 ) appl yth e actual-to-actua l tes t t o like-kin d replacemen t o f a nentir e emittin g unit ;P.6 0

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- (6 ) allo wne wunit s o r greenfiel d plant s t o rel yo n futur e actua l emission s i f the yca nreliabl yprojec t futur e emissions ; and (7 ) conside r a n alternativ e wayt o mak e th e NS R accountin g systemconsistent , suc ha s basing i t o npas t allowabl e t o futur e allowabl e emissions . Othe r suggestion s include d th e following : (1 ) provid e guidanc e o n routin e repai r an d replacemen t and maintenanc e activitie s t o includ e placing unit s o ncol d reserv e an

d bringin g thembac k o nline , an d (2 ) us e a 2-yea r perio d othe r tha nimmediatel yafte r th e chang e onl ywhe nth e EPAcanno t clearl ydemonstrat e tha t th e 2-yea r perio d immediatel yfollowing th e chang e i s no t representative . e . Th e EPAAnalysis . Th e EPAha s decide d t o promulgat e th e propose d "representativ e actua l annua l emissions " methodologyfo r calculating emission s change s a t electri c utilit ystea m generatin g unit s wher e th e change s d o no t involv e th e constructio n o f a new , "greenfield " uni t o r th e replacemen t o f a n existing one . Afte r a thoroughrevie wo f th e comments , EPAconclude s tha t th e compariso n o f "actua l emission s before " t o a projectio no f "actua l emission s after " a physica l o r operationa l chang e a t a nexisting utilit ystea

mgenerating uni t i s workabl e and , wit hth eP.6 1

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- adde d safeguar d discusse d below , i s th e mos t suitabl e metho d fo r evaluating emission s change s a t suc hsources . Man ycommenter s questione d EPA' s propose d presumptio n tha t source s mayuse , a s th e baseline , emission s from an y2 consecutiv e year s withi nth e 5 year s prio r t o th e propose d chang e withou t regar d t o norma l sourc e operations . A s discusse d i n th e proposal , thi s presumptio n i s consisten t wit hEPA' s decisio n i nWEPC O an d th e 5-yea r perio d fo r "contemporaneous " emission s increase s an d decrease s i n 4 0 CF R52.21(b ) (3 ) (i ) (b ) . 2 1 Moreover , EPAi s no t reading "norma l sourc e operations " ou t o f th e regulatio n a s charged . Rather , th e presumptio n recognize s th e natur e o f utilit yoperation s withou t compromising th e existing regulatorylanguag e whic hrequire s tha t th e pre-chang e 2-yea r perio d use d i ndefining baselin e emission s b e representativ e o f "normal " operations . Fo r example , a s a systema utility' s "normal " operation s mean s directl yresponding t o a demand fo r electricity . Acol d winte r o r ho t summe r wil l resul t i n highlevel s o f "normal " operation s whil e a relativel ymil d yea r wil l produc e lowe r "normal " operations . B ypresumabl yallowing a utilit yt o us e an y2 consecutiv e year s withi nth e pas t 5 , th e rul e bette r take s int o consideratio ntha t electricit ydemand an d

2 1 A s discussed , thi s presumptio n doe s no t appl yt o pas t modification s a t a nemission s uni t fo r th e purpos e o f determining contemporaneou s emissio nchange s a t a sourc e an d canno t b e use d t o exten d th e 5-year perio d specifie d i ntha t provisio n [se e 4 0 CFR52.21(b)(3)(i)(b)] .P.62 ^

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- resultan t utilit yoperation s fluctuat e i nrespons e t o variou s factor s suc ha s annua l variabilit yi nclimati c o r economi c condition s tha t affec t demand , o r change s a t othe r plant s i n th e utilit ysystem tha t affec t th e dispatc ho f a particula r plant . B yexpanding a baselin e fo r a utilit yt o an yconsecutiv e 2 i nth e las t 5 years , thes e type s o f fluctuation s i n operation s ca n b e mor e realisticall y considered , wit hth e resul t being a presumptiv e baselin e mor e closel yrepresentativ e o f norma l sourc e operation . Th e EPAdisagree s wit hcomment s seeking t o allo wth e us e o f an

y2 consecutiv e year s withi nth e las t 5 year s o f a unit' s "operation " rathe r withi ntha nth e 5 year s directl y precedin g th e propose d change . Ashifting o f th e 5-yea r perio d woul d b e difficul t t o harmoniz e wit hdefinition s o f contemporaneou s containe d i nth e regulation s [see , e.g. , 4 0 CF R§ 52.21(b)(3)(iii)] . Thi s typ e o f open-ende d provisio n woul d eve n credi t a uni t whic hha s bee n inoperativ e fo r 2 0 o r 3 0 year s o r longe r wit ha highleve l o f emissions . Th e EPAnotes , however , tha t a s ha s alway s bee n th e cas e unde r th e prio r regulations , an ysourc e owne r o r operato r ma yreques t a determinatio ntha t anothe r baselin e perio d i s mor e representativ e o f th e unit' s "normal " operations . Severa l commenter s opposing today' s regulatorychange s charge d tha t withou t appropriat e assurance s utilitie s coul d deliberatel yunderestimat e futur e operation s (an d thu sP.6 3

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- emissions ) fo r th e purpos e o f avoiding revie wo r tha t eve n wher e a forthrigh t estimat e i s made , th e forecas t mayprov e inaccurate . Th e EPAi s concerne d tha t withou t appropriat e safeguard s increase s i n futur e actua l emission s tha t i nfac t resulte d fromth e physica l o r operationa l chang e coul d g o unnotice d an

d unreviewed . Fo r thi s reason , EPAha s adde d th e safeguar d explaine d below . Th e EPAdoe s not , however , agre e wit hcomment s tha t post-chang e emission s estimate s mus t alway s b e mad e int o permanen t federally-enforceabl e permi t conditions . T o d o s o woul d permanentl yrestric t a utility' s legall yallowabl e emissio n limit s t o it s pre-chang e actua l emission s leve l unles s i t subsequentl yunderwen t NSR , an d woul d fai l t o accoun t fo r th e veryrea l possibilit ytha t emission s migh t increas e ove r baselin e level s i n th e futur e fo r reason s unrelate d t o th e physica l o r operationa l chang e i nquestion . A s discusse d mor e full yi n th e following section , NS R applie s onl ywher e th e emission s increas e i s cause d b yth e change . Thu s th e issu e shoul d b e viewe d mor e a s on e o f tracking an

d monitoring post-chang e utilizatio n and/o r emission s level s a t th e uni t t o confirmtha t baselin e emissio n level s ar e no t exceede d a s a resul t o f th e change . T o guar d agains t th e possibilit ytha t significan t increase s i n actua l emission s attributabl e t o th e chang e may occu r unde r thi s methodology , EPAi s clarifying i nth e fina l regulation s tha t an yutilit ywhic hutilize s th eP.6 4

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- "representativ e actua l annua l emissions " methodologyt o determin e tha t i t i s no t subjec t t o NS Rmus t submi t fo r 5 year s afte r th e chang e sufficien t record s t o determin e i f th e chang e resulte d i na nincreas e i nrepresentativ e actua l annua l emissions. 2 2 Utilitie s mayus e continuou s emission s monitorin g data , operationa l levels , fue l usag e data , sourc e tes t result s o r an yothe r readil yavailabl e dat a o f sufficien t accurac yfo r th e purpos e o f documenting a unit' s post-chang e actua l annua l emissions . Wher e th e chang e doe s no t increas e th e unit' s emission s factor , i.e. , th e amoun t o f pollutio nemitte d b ya sourc e afte r contro l pe r uni t o f fue l combuste d (sucha s pound s o f S0 2 emitte d pe r to n o f coa l burned) , th e utilit ymaysubmi t annua l utilizatio n data , rathe r tha n emission s data , a s a metho d o f tracking post-chang e emissions . I f annua l utilizatio n dat a sho wtha t th e uni t increase d utilizatio n abov e baselin e levels , th e permitting authorit yshoul d determin e whethe r th e increas e resulte d fromth e change . Wher e a causa l link exist s betwee n th e chang e an d th e increas e i n utilization , th e permitting authorit yshoul d the n determin e whethe r emission s hav e als o increase d a s a resul t o f th e change .

2 2 Thi s i s th e onl ysubstantiv e chang e from th e regulation s a s proposed . However , EPAha s als o mad e mino r change s t o th e wordin g o f some o f th e regulation s t o addres s problem s wit hclarit yan d syntax . Sinc e thes e change s ar e no t intende d t o alte r th e meaning o f th e regulations , the y ar e no t individuall ydiscusse d i n thi s preamble .P.6 5

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- Change s tha t coul d increas e a unit' s emission s facto r typicall yinvolv e change s t o th e boile r itself . (Such change s d o no t includ e activitie s tha t qualif ya s pollutio n contro l project s unde r today' s rule. ) Wher e thes e type s o f change s exist , th e utilitie s shoul d submi t annua l emission s dat a t o th e permitting authority . I f thi s dat a suggest s tha t th e utilit yha s increase d annua l emission s ove r baselin e levels , th e permitting authorit yshoul d inquir e whethe r th e increas e resulte d fro mth e physica l o r operationa l change . Th e utilit ymaydemonstrat e tha t an y increas e wa s cause d b ya nindependen t factor , suc ha s demand growth . Appropriat e record s ar e t o b e submitte d t o th e permitting agenc yo na nannua l basi s fo r a perio d o f 5 year s fromth e dat e th e uni t begin s regula r operation s (i.e. , post-chang e operatio n afte r a n initia l shakedow n period) . A longe r period , no t t o excee d 1 0 years , mayb e require d b y th e permitting agenc ywher e i t ha s determine d tha t n o perio d withi n th e firs t 5 year s following th e chang e i s representativ e o f sourc e operations . Sinc e i t i s expecte d tha t utilitie s wil l submi t th e same dat a normall yuse d t o repor t emission s o r operationa l level s unde r existing Federal , Stat e o r loca l ai r pollutio n contro l agenc yrequirements , EPAdoe s no t expec t tha t documentatio n o f post-chang e actua l annua l emission s wil lP.6 6

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- impos e an

yadditiona l dat a collectio nburde no n th e par t o f a utility . Th e purpos e o f thi s provisio ni s t o provid e a reasonabl e mean s o f determining whethe r a significan t increas e i n representativ e actua l annua l emission s resulting froma propose d chang e a t a nexisting utilit yoccur s withi n th e 5 year s following th e change . Thu s th e inten t i s t o confirmth e utility' s initia l projection s rathe r tha n annuall yrevisiting th e issu e o f NS Rapplicability . If , however , th e reviewing authorit ydetermine s tha t th e source' s emission s hav e i n fac t increase d significantl yove r baselin e level s a s a resul t o f th e change , th e sourc e woul d becom e subjec t t o NS Rrequirement s a t tha t time . Th e EPA ha s adopte d thi s approac han d th e time perio d becaus e i t believe s that , i n mos t cases , an yemission s increas e resultin g froma physica l o r operationa l chang e a t a utilit y uni t woul d occu r withi n th e firs t 5 year s o f norma l operatio n o f th e uni t afte r th e change . Thus , EPAwil l presum e tha t an

yincreas e i n emission s level s mor e tha n 5 year s afte r th e chang e ha s occurre d i s no t relate d t o th e physica l o r operationa l change . I n respons e t o comment s regarding "like-kind " replacements , EPAnote s tha t today' s regulation s recogniz e n o distinctio n betwee n"like-kind " replacement s and othe r nonroutin e physica l o r operationa l change s a t a utilit y steamgeneratin g unit . Th e "actual-to-future-actual "P.6 7

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- methodologypromulgate d todayfo r calculating emission s change s applie s t o al l type s o f change s a t utilit yunits , including th e replacemen t o f "like-kind " component s a t a n existing unit . However , th e "like-kind " replacemen t o f a whol e uni t i s fo r al l practica l purpose s a replacemen t uni t and , therefore , i s treate d a s a ne wunit . Althoughsevera l commenter s suggeste d tha t EPAshoul d expand th e representativ e actua l emission s tes t t o ne wan d reconstructe d units , EPAha s decide d no t t o d o so . Sinc e ther e i s n o relevan t operating historyfo r ne wo r reconstructe d units , i t woul d no t b e possibl e t o accuratel y projec t operation s o r emission s fo r thes e units . Consequently , th e EPAha s lef t unchange d th e regulation s whic hrequir e tha t fo r an yuni t whic hha s no t begunnorma l operations , actua l emission s ar e considere d equa l t o th e unit' s potential-to-emit . Afewcommenter s requeste d tha t EPAdefin e o r provid e guidanc e o n "routin e repair , replacemen t an d maintenance " activities . Th e Jun e 1 4 proposa l di d no t dea l wit hthi s aspec t o f th e regulations , no r d o th e regulatorychange s promulgate d today . However , th e issu e ha s a n importan t bearin g o n today' s rul e becaus e a projec t tha t i s determine d t o b e routin e i s exclude d b yEPAregulation s fromth e definitio n o f majo r modifications . Fo r thi s reason , EPA plan s t o issu e guidanc e o n thi s subjec t a s par t o f a NS R regulatoryupdat e packag e whic hEPApresentl yintend s t oP.6 8

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- propos e b

yearl ysummer . I n th e meantime , EPAi s today clarifying tha t th e determinatio n o f whethe r th e repai r o r replacemen t o f a particula r itemo f equipmen t i s "routine " unde r th e NS Rregulations , whil e mad e o na case-by-cas e basis , mus t b e base d o nth e evaluatio no f whethe r tha t typ e o f equipmen t ha s bee n repaire d o r replace d b ysource s withi n th e relevan t industria l category .

C . Th e Causatio nRequirement . a . Background . Th e NS Rregulatoryprovision s requir e tha t th e physica l o r operationa l chang e "resul t in " anincreas e i n actua l emission s i n orde r t o conside r tha t chang e t o b e a modificatio n [se e e.g. , 4 0 CF R52.21(2)(i)] . I nothe r words , NS Rwil l no t appl yunles s EPAfind s tha t ther e i s a causa l link betwee n th e propose d chang e an d an ypost-chang e increas e i n emissions . Th e EPApropose d t o amend it s rule s t o clarif ythi s provisio n i n th e contex t o f modification s a t electri c utilit ystea mgenerating units . Unde r th 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 . Th e proposa l clarifie d tha t wher e increase d operation s ar e i nrespons e t o independen t factors , suc ha s system-wid e demand growth , whic hwoul d hav e occurre dP.6 9

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- an d 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 fromth e projectio n o f futur e actua l emissions . Thus , i nassessing whethe r th e propose d chang e wil l resul t i na n increas e i n actua l emissions , utilitie s nee d no t includ e i nthei 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 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 th e utilit ysystem(o f whic htha t sourc e i s a member ) a s a whole . Unde r today' s rule , 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 nactua l emissions ) tha t coul d no t physicall yan d legall yb e accommodate d during th e representativ e baselin e perio 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 fromth e change . b . Comment s Generall yFavoring th e EPAProposal . Severa l utilit yrepresentative s supporte d th e propose d demand growt hexclusio nan d th e causatio nrequirement . Man y commenter s requeste d clarificatio n o f certai npoint s o r expansio n o f certai nprovisions . On e commente r note d tha tP.7 0

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- ther e shoul d b e a specifi c exclusio nfo r emission s increase s a t a generatin g statio nresulting from generatio nshift s an d decrease d plan t efficiencie s cause d b yoperatio n o f pollutio n contro l systems . Anothe r note d tha t th e discussio n o f th e criteri a fo r recognizing "factor s unrelate d t o th e physica l o r operationa l change " shoul d b e improve d upo n becaus e th e propose d requirement s tha t a facilit ymus t hav e bee n physicall yabl e t o accommodat e th e projecte d growt hduring a "representativ e baselin e period " coul d hav e a negativ e impac t i n utilit ycapacit yplanning and investmen t decisions , depending upo nho wsuc ha perio d i s determined . On e commente r note d tha t EPAshoul d specificall y recogniz e a n exceptio nfo r unit s whic hhav e bee ninactive , becaus e a uni t shoul d no t hav e t o includ e al l o f it s emission s du e t o demand growt hmerel ybecaus e i t wa s i nnee d o f repai r o r maintenanc e whil e inactive . Commenter s aske d tha t EPAbette r defin e "independen t factors " i nth e contex t o f th e demand growt hexclusion . Lastly , on e commente r state d tha t th e fina l rul e shoul d reconcil e th e "deman d growt hexclusion " wit hth e existing "hour s o f operation/rat e o f production " exclusio nb yconfirming tha t increase s attributabl e t o system-wid e demand growt har e alread y exclude d unde r th e already-existing exclusio nand , therefore , th e "deman d growt hexclusion " onl yapplie s wher eP.7 1

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- ther e i s a federally-enforceabl e permi t termlimiting hour s o f operatio n o r productio n rate . c . Comment s Generall yOpposing th e EPAProposal . Opponent s o f th e exclusio n o f emission s attributabl e t o demand growt hcontende d tha t ther e i s n o rationa l basi s fo r ignoring suc hemissions . Whe nincrease d capacit yo r utilizatio n i s th e immediat e goa l o f a projec t an d a n increas e i n emission s occurs , th e projec t mus t b e subjec t t o NS Rregardles s o f th e underlying reason s fo r th e increase d capacit yo r utilizatio nan d corresponding emissio nincrease . Contraryt o th e lette r an d purpos e o f th e statute , th e demand growt hexclusio ncoul d resul t i nmajo r increase s i n actua l emission s going unreviewe d an d unregulated , woul d creat e seriou s loca l pollutio n problems , an d woul d discriminat e agains t companie s tha t wer e successfu l i n implementing energ

yefficienc yprograms . On e loca l agency pointe d ou t tha t i t i s virtuall yimpossibl e t o determin e wit han ydegre e o f certaint ywha t portio n o f a unit' s emission s ar e attributabl e t o a nincreas e i n projecte d capacit yutilization . I n addition , commenter s note d tha t th e exclusio nwil l hav e an advers e effec t o nloca l agencies ' abilit yt o contro l emission s an

d tha t th e time o f constructio no f a projec t i s th e mos t efficien t an d effectiv e time t o addres s suc h emissions . On e commente r state d tha t th e exclusio nfo r demand growt hmayfurthe r bia s competitiv e powe r market sP.7 2

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- towar d existing units , an d tha t EPAfaile d t o conside r th e impac t o f th e causatio nrequiremen t o n utilit yoperations , emission s o r competitio n i n powe r markets . d . Th e EPAAnalysis . Afte r carefu l consideratio n o f th e comment s receive d and furthe r analysi s o f th e issue s involved , EPAha s decide d t o promulgat e th e causatio nprovisio na s proposed . Commenter s argue d tha t an ypost-chang e emission s increase , regardles s o f it s origin , shoul d subjec t a sourc e t o NSR . However , thes e argument s ignor e th e relevan t statutoryan

d regulatorymodificatio n provisions . N o commenter s challenging th e provisio n hav e suggeste d tha t th e statut e an

d implementing regulation s d o no t contai na causatio n provision . Rather , theyargu e tha t i n th e propose d rul e EPAha s misconstrue d thi s requirement . I n conjunctio n wit hdeveloping th e representativ e actua l annua l emission s methodology , EPArecognize d tha t th e analysi s o f th e causatio n requiremen t maydisclos e tha t an emission s increas e tha t follow s a nonroutin e physica l o r operationa l chang e i s merel ycoincidental , an d i nfac t result s fromindependen t factor s suc ha s demand growth . I t i s importan t t o emphasize , however , tha t thi s doe s no t amoun t t o a pe r s e exclusio no f demand growt hfromth e emission s increas e calculation . Rather , demand growt hca n onl yb e exclude d t o th e exten t i t —an d no t th e physica l o r operationa l chang e —i s th e caus e o f th e emission sP.7 3

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- increase . Th e EPAbelieve s tha t thi s i s a reasonabl e interpretatio n o f th e statutoryprovisio ni nquestion , an d o f EPA' s ow

n regulations , an

d judicia l precedents . Consequently , wher e projecte d increase d operation s ar e i n respons e t o a n independen t factor , suc ha s demand growth , whic hwoul d hav e occurre d and affecte d th e unit' s operation s durin g th e representativ e baselin e perio d eve n i nth e absenc e o f th e physica l o r operationa l change , th e increase d operation s canno t b e sai d t o resul t fromth e chang e an d therefor e mayb e exclude d fromth e projectio n o f th e unit' s futur e actua l emissions . Conversely , wher e th e increas e coul d no t hav e occurre d during th e representativ e baselin e perio d bu t fo r th e physica l o r operationa l change , tha t chang e wil l b e deeme d t o hav e resulte d i n th e increase . Th e EPAdi d receiv e numerou s comment s regarding th e difficult yo f applying thi s ne winterpretation . However , EPAbelieve s i t i s possibl e t o discer n betwee nemission s increase s tha t ar e relate d t o a physica l o r operationa l chang e fromthos e tha t ar e not . Thi s issu e i s a fact

dependen t determinatio n tha t mus t b e resolve d o n a case-by

cas e basis . A s discussed , EPAconsider s emission s increase s du e t o increase d operation s tha t coul d no t b e physicall yo r legall yaccommodate d during th e representativ e baselin e perio d bu t fo r th e propose d physica l o r operationa l change , t o resul t fromth e change . Th e preambl e t o th e proposa l als o mad e clea r tha t an yemission s increas e attributabl e t oP.7 4

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- a physica l o r operationa l chang e tha t significantl yalter s th e efficienc yo f th e plant , (se e 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 calculations . However , EPAi n n o way intend s t o discourag e physica l o r operationa l change s tha t increas e efficienc yo r reliabilit yo r lowe r operating costs , o r improv e othe r operationa l characteristic s o f th e uni t an d doe s s o b

yfocusing o n th e effec t o f an ynonroutin e change s o n th e operating characteristic s o f th e uni t during th e representativ e baselin e period . Th e EPArecognize s tha t improvement s suc ha s thes e ar e desirabl e fo r economi c reason s an

d t o assur e a reliabl e suppl yo f electricity . Thus , physica l o r operationa l change s tha t improv e operationa l characteristic s wil l b e treate d i n th e sam e manne r a s an

yothe r changes . Thi s mean s tha t wher e a n improvemen t involve s a routin e change , i t i s exclude d from th e NS Rdefinitio n o f "majo r modification. " Alternatively , wher e a n improvemen t i s no t routin e an d a nemission s increas e result s fro mth e improvement , tha t portio no f th e emission s increas e resulting fromth e improvemen t wil l b e considere d i n determining whethe r th e propose d chang e subject s th e uni t t o NS Rrequirements . Severa l commenter s requeste d a clarificatio nconcerning a unit' s abilit yt o accommodat e demand growt hi nit s pre-chang e configuration . I nEPA' s view , suc ha clarificatio n i s no t warranted . A s discusse d above ,P.7 5

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- operationa l level s tha t a uni t coul d no t hav e achieve d durin g th e representativ e baselin e perio d bu t fo r th e physica l o r operationa l chang e ar e considere d t o resul t fro m th e change . Post-chang e emission s increase s associate d wit h suc hoperationa l level s must , therefore , b e considere d t o resul t fromth e chang e an d b e take n int o accoun t fo r NS R applicabilit ypurposes . Numerou s commenter s pointe d ou t tha t i t mayb e very difficul t t o determin e whe n anincreas e i s cause d b y independen t factor s an d whe ni t i s cause d b yth e physica l change . Also , a n environmenta l commente r argue d tha t thi s causatio n questio n mus t alway s b e resolve d i n favo r o f including al l post-chang e emissio nincrease s tha t follo wa chang e whic himprove s a unit' s efficiency , sinc e i nit s vie w a n efficienc ygai n wil l alway s b e th e primarydeterminan t o f th e utility' s us e o f a generating unit , notwithstanding th e presenc e o f othe r necessary—bu t no t o f themselve s sufficien t —factor s suc ha s demand growth . However , a s s o formulated , th e commen t answer s itself . I f efficienc y improvement s ar e th e predominan t caus e o f th e chang e i n emission s an

d demand growt hi s not , th e exclusio ndoe s no t apply . Bu t thi s i s a questio no f fac t whic hmus t b e resolve d o n a case-by-cas e basi s an d i s dependen t o nth e individua l fact s an d circumstance s o f th e chang e a t issue . EP Adecline s t o creat e a presumptio n tha t everyemission sP.7 6

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- increas e tha t follow s a chang e i nefficienc yi s inextricabl y linke d t o th e efficienc ychange . I n calculating demand growth , utilitie s mayconside r th e company' s historica l operationa l data , it s ow n representations , 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 . Th e EPAdisagree s wit hcomment s tha t thi s provisio n coul d resul t i n majo r increase s i n actua l emission s going unreviewe d wit hth e potentia l t o creat e seriou s loca l ai r pollutio n problems . First , th e NS Rmajo r modificatio n provision s d o no t appl yt o al l increase s i nemissions , jus t emissio n increase s whic hresul t fro ma nonroutin e physica l o r operationa l chang e a t a nexisting majo r source . Second , a s ha s alread

ybee n observed , thi s provisio ndoe s no t amoun t t o a pe r s e exclusio n o f demand growth . Finally , thi s ne w provisio n doe s no t diminis hth e scop e o f th e coverag e o f EPA' s NS Rregulations . Rather , i t merel yincorporate s int o th e actual-to-future-actua l methodologya requiremen t o f th e pre-existin g statutoryan d regulatoryscheme . Moreover , i n respons e t o thos e concern s tha t a demand growt hexclusio n coul d lead t o seriou s loca l ai r pollutio n problems , EPAnote s th e restriction s i t place d o n th e overal l futur e projectio ni n th e proposal : th e leve l o f emission s th e sourc e claim s tha t i t wil l operat e a t shoul dP.7 7

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- b e consisten t wit hcurren t assumption s regarding th e source' s emission s tha t ar e use d i nth e relevan t SIP . Finall yth e EPAdoe s no t agre e wit hth e commente r requesting tha t th e fina l rul e confirmtha t increase s attributabl e t o system-wid e demand growt har e alread y exclude d unde r th e existing exclusio nfo r increase s i nhour s o f operatio n and , therefore , th e "deman d growt hexclusion " onl yapplie s wher e ther e i s a federally-enforceabl e permi t termlimiting hour s o f operatio n o r productio n rate . Th e commenter' s statemen t i s no t correct . Althougha sourc e ma y varyit s hour s o f operatio no r productio na s par t o f it s everydayoperations , a n increas e i n emission s attributabl e t o an increas e i n hour s o f operatio n o r productio nrat e whic hi s th e resul t o f a construction-relate d activit yi s no t exclude d fromrevie w(se e WEPCO , 89 3 F.2 d a t 91 6 n.ll ; Puert o Rica n Cement . 88 9 F.2 d a t 298) . D . Repowering . a . Background . 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 hth e mandate d aci d rai nreduction s b y repowering a uni t wit hqualifying clean coa l technology[se e 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 fro mNSP S requirements , s oP.7 8

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- long a s th e repowering "doe s no t increas e actua l hourl y emission s fo r an

ypollutan t regulate d unde r th e Act " [se e § 409(d)] . Th e EPAinterpret s th e requiremen t tha t th e repowerin g no t lead t o a n increas e i n"actua l hourl y emissions " 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 th e 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 , EPApropose d rule s provide d tha t a repowerin g projec t whic hresult s i na n increas e ove r baselin e i na unit' s post-modificatio nhourl 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 napplie d t o repowerin g 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 nlimitation s specifie d i n 4 0 CF R60.1 5 ar e no t applicabl e t o qualifyin g repowerin g projects . However , n o specia l treatmen t ca nb 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 existin g uni t i t replace s [se e CA A§ 409(d)] . Pursuan t t o § 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 th e same . b . Publi c Comment .P.7 9

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- Th e EPAdi d no t receiv e an ycomment s opposing th e repowerin g proposa l whil e severa l industryan d Congressiona l commenter s supporte d it . Th e Congressiona l commenter s requeste d clarificatio n o f EPA' s interpretatio no f term "repowering. " Th e Congressiona l commenter s state d tha t th e propose d definitio n o f "repowering " ca nb e interprete d a s limiting qualifying repowering technologie s t o thos e tha t onl yinvolv e th e replacemen t o f th e boiler , disqualifying highly-promising , multi-pollutan t technologie s tha t d o no t involv e boile r replacement . c . Th e EPAAnalysis . I n ligh t o f th e lac k o f negativ e comments , EPAi s toda y promulgatin g th e CC T provision s a s proposed . Thi s include s n o chang e i n th e definitio n o f "repowering. " However , EPA wil l follo wa n expansiv e interpretatio no f th e term repowering , whic hshoul d addres s man yo f th e concern s expresse d b

ysome o f th e commenter s whil e remaining consisten t wit hstatutoryterm s an d Congressiona l intent . Th e EPAnote s tha t thi s interpretatio ni s currentl ysubjec t t o commen t a s par t o f th e rulemaking implementing th e aci d rai n provision s o f th e 199 0 Amendment s an d EPAmayaddres s thi s issu e furthe r i nth e contex t o f tha t proceeding . Sectio n 402(12) , i nrelevan t part , define s "repowering " a s follows : Replacemen t o f anexisting 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 ,P.8 0

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- integrate d gasificatio ncombine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio nfue l cell s o r a s determine d byth e Administrator , i nconsultatio n wit hth e Secretar yo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d anyothe r technolog y capabl e o f controllin g multipl e combustio nemission s simultaneousl ywit h improve d boile r o r generatio n efficienc y an d wit 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 th e dat e o f enactmen t o f th e Clea n Ai r Ac t Amendment s o f 199 0 * * * a

Th e definitio nthu s provide s fo r thre e majo r categorie s o f repowerin g technologies : (1 ) Technologie s specificall yliste d i nth e statute ; (2 ) derivative s o f on e o r mor e o f thes e liste d technologies ; an d (3 ) technologie s which : (a ) Ar e capabl e o f controllin g multipl e combustio n emission s simultaneously ; (b ) wit himprove d boile r o r generatio nefficiency ; an d (c ) wit hsignificantl ygreate r wast e reductio ntha n technologie s i nwidesprea d commercia l us e a s o f th e dat e o f enactmen t o f th e CAA(Novembe r 15 , 1990) .

2 3 Th e las t sentenc e i nth e definitio no f "repowering " i n § 402(12 ) o f th e CA Arefer s t o a specifi c CC T projec t i n Tallahassee , Florid a (Arva hB . Hopkin s Statio nUni t 2 Circulatin g Fluidized-Be d Repowerin g Project ) awarde d Novembe r 30 , 1990 .P.8 1

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- I n accordanc e wit hth e languag e o f th e statutory definitio n o f repowering , th e fina l rul e provide s tha t a qualifying repowering technologymus t involv e "replacement " o f a n existing boiler . Th e languag e o f § 402(12) , though ambiguou s i n man

ysignifican t respects , wil l no t suppor t an interpretatio n whic hfail s t o recogniz e tha t repowering require s us e o f a n appropriat e ne wtechnolog yinstead o f th e existing boiler . Th e EPAconsidere d whethe r th e referenc e t o boile r replacemen t i n § 402(12 ) coul d b e read a s referring t o onl y th e firs t categoryo f technologies . However , suc ha n approac hwoul d requir e reading th e provisio na s i f th e recita l o f th e thre e alternativ e technologie s bega n immediatel yafte r th e phras e "repowering means, " rathe r tha n afte r th e phras e "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:. " Suc ha reading i s inconsisten t wit hth e structur e o f th e provision , i n whic hth e colon , whic hi s "use d chiefl yt o direc t attentio n t o matte r tha t follow s (a s a list , explanation , o r quotation) " [se e Webster' s Nint hNe w Collegiat e Dictionary26 6 (1985)] , follow s rathe r tha n precede s th e referenc e t o boile r replacement . Moreover , al l thre e categorie s o f technologie s woul d b e properl ydescribe d a s "th e following cleancoa l technologies:. "P.8 2

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- Whil e i t i s tru e tha t th e lis t following th e colon , lik e th e phras e "th e following clea ncoa l technologies: " coul d b e rea d t o refe r exclusivel yt o th e seve n name d technologie s (or t o thos e technologie s an d thei r approve d derivatives) , suc ha ninterpretatio nwoul d stil l fai l t o provid e a satisfactoryexplanatio n o f th e grammatica l structur e o f th e provision . Eithe r o f thes e tw o reading s woul d fai l t o explai n ho wth e technologie s that , according t o thos e reading s d o no t conside r boile r replacement , relat e t o th e term"repowering. " I n othe r words , i f th e concep t o f boile r replacemen t wer e remove d fro meithe r th e thir d categoryo f technologie s o r frombot hth e second an d thir d categories , th e provisio nwoul d read , wit hrespec t t o thos e categories : Th e term "repowering " mean s * * * a derivativ e o f on e o r mor e o f (th e seven ) technologies , an

d an yothe r technology capabl e o f (meetin g th e thre e performanc e criteria) .

Th e difficult ywit hthi s reading i s tha t "repowering, " whateve r th e precis e scop e o f it s definition , clearl ymean s doin g something wit ha derivativ e technologyo r a multipollutan t contro l technology , rathe r tha n simpl ythos e technologie s themselves . Requiring boile r replacemen t fo r al l thre e categorie s avoid s thi s particula r infirmity . Th e EPAals o considere d anothe r textua l argumen t tha t coul d b e advance d t o suppor t a ninterpretatio n o f § 402(12 )P.8 3

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- tha t boile r replacemen t i s no t require d fo r th e thir d categoryo f technology , bu t i t als o i s unpersuasive . I t simpl ydoe s no t followfromth e fac t tha t th e categoryo f multipollutan t contro l technologie s alon e ha s expressl y enumerate d performanc e criteri a tha t thos e criteri a ar e mean t t o b e th e exclusiv e tes t fo r qualifying technologie s o f thes e types . Becaus e th e thir d categoryo f technology wa s intende d t o encompas s type s o f technologie s whic hwer e unknown o n th e dat e o f enactmen t (an d thus , unlik e th e prio r categories , no t susceptibl e t o being enumerate d i nth e statute ) tha t categorywoul d necessaril yhav e t o includ e explici t defining criteria , whethe r o r no t th e boile r replacemen t criterio napplie d t o it . B yth e same token , th e fac t tha t th e latte r tw o categorie s ar e subjec t t o EPA approva l i n consultatio nwit hDO E doe s no t impl ytha t thi s i s th e onl ycriterio napplicabl e t o them . Eac hi s subjec t t o additiona l criteri a (i.e. , th e requiremen t o f derivatio n i n th e cas e o f th e secon d category , an

d th e thre e performanc e criteri a i n th e cas e o f th e thir d category) . Th e pivota l phras e "replacemen t o f a n existin g coal-fire d boiler " i s undefine d i nth e statute , an d it s scop e i s no t clearl ydelineate d b yit s context . Some o f th e seve n liste d technologie s mayno t requir e tota l boile r replacement , althoughal l requir e suc hextensiv e change s t o th e boile r tha t theyar e tantamoun t t o boile r replacement . Unde r th e principl e o f eiusdemgeneris , therefore , th eP.8 4

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- Agenc yclearl yhas , a t a minimum , ampl e discretio nt o trea t a s functiona l boile r replacemen t an ychange s broadl ysimila r i n scop e t o thos e involve d i n installing th e seve nname d technologies . Suc ha definitio n woul d clearl yrepresen t th e lower , no t th e upper , limi t o nth e Agency' s discretio n t o giv e meanin g t o th e term"replacement" . Accordingly , th e statut e confer s o n EPAth e additiona l discretio nt o defin e boile r replacemen t i n a functiona l manne r tha t take s int o accoun t achievemen t o f th e specifie d performanc e criteri a a s wel l a s th e degre e o f change s t o th e boiler . B ywayo f example , elsewher e i ntoday' s fina l rul e th e Agenc y consider s a uni t t o b e "replaced " i f i t woul d "constitut e a reconstructe d uni t withi n th e meaning o f 4 0 CF R60.15. " I n accordanc e wit hth e abov e languag e EPAwil l us e th e 4 0 CF R60.1 5 tes t fo r "reconstruction " a s genera l guidanc e i n determining whethe r eac hindividua l applicatio nunde r § 40 9 involve s sufficien t replacemen t t o qualif yfo r a repowerin g extensio n an d hence , an NSP S exemption . I n short , becaus e "Congres s ha s no t directl yspoke nt o th e precis e questio na t issue, " Chevron . U.S.A . vNRDC . 46 7 U.S . 837 , 842-4 3 (1984) , EPAenjoy s a significan t measur e o f discretio nt o determin e t o wha t exten t replacemen t o f les s tha n 10 0 percen t o f th e part s o f a n existing boile r coul d b e deeme d replacemen t fo r purpose s o f § 402(12 ) an

d thi s rule . Fo r th e reason s discusse d above , EPAbelieve s th e propose d regulatorylanguag e regardin gP.8 5

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- repowering i s reasonable . Tha t proposa l i s today promulgate d withou t change . E . Clea n Coa l TechnologyDemonstratio nProject s an d Very Clea nUnit s a . Background . Th e EPAals o propose d rule s implementing th e ne wCC T exemptio n create d b yth e 199 0 Amendments . I n 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 IV

give s thes e project s anexemptio n fromNSPS , PS D an d 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 n an

d maintai n NAAQS . Th e EPApropose d t o implemen t thi s provisio n an

d clarif ytha t EPAconsider s th e 5 yea r perio d a s starting o nth e dat e o f startu p (a s define d i n 4 0 CF R60.2) . Atemporarydemonstratio nprojec 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 th e tim e o f conversion . Further , EPApropose d 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 nrate s (or lower) . Th e retur n o f th e facilit yt o it s pre-demonstratio nphysica l an d operationa l conditio nwoul d no t resul t i n th e los s o f th e actua l emission s margi n betwee npre-demonstratio nactua lP.8 6

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- 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 nprojec t had neve r occurred. 2 4 Thi s proposa l di d no t exten d 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 ncondition , t o b e beyond th e scop e o f th e Congressiona l exemption . Th e EPAals o propose d t o implemen t a n exemptio nfrom NSP S an d PS D requirement s fo r repowering project s whic har e awarde d funding fromth 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) ] fro m th e uni t d o no t increas e a s a resul t o f th e projec t [se e § 415(b)(3)] . However , repowerin g project s tha t qualif ya s pollutio n contro l project s wil l b e treate d a s othe r pollutio ncontro l

2 4 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 n physica 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 , EPA woul d no t see k t o appl yNSP S o r NS Rbecaus e o f a post demonstratio n emission s increas e attributabl e solel yt o a n increas e i n th e hour s o f operatio no r productio nrat e o f th e uni t (subjec t t o th e NSP S limitatio ntha t th e productio n rat e increas e mus t b e accomplishe d withou t a capita l expenditure) .P.8 7

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- 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 CAA . Finally , th e proposa l implemente d th e statutory exemption s i n § 415(c) . I n tha t section , Congres s provide d a n exemptio n from

NSP S an

d PS D fo r th e reactivatio no f "ver y clea n units " otherwis e i ncomplianc e wit hth e CA Atha 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 , had bee n equippe d wit hpollutio ncontrol 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 nequippe d wit hlow-NOx burners . Thi s exemptio nappear s t o hav e bee n narrowl y tailore d an

d i s no t expecte d t o hav e widesprea d applicability . b . Comment s Generall yFavoring th e EPAProposal . Some commenter s specificall ymentione d tha t CC T demonstratio n project s shoul d no t b e subjec t t o NS R provisions . c . Comment s Generall yOpposing th e EPAProposal . Some commenter s di d no t suppor t th e propose d blanke t inclusio n o f al l CC T project s a s pollutio n contro l projects . On e commente r suggeste d tha t eac hCC T projec t b e reviewe d o n a case-by-cas e basi s and , i f th e projec t result s i nhighe r emissio n levels , i t shoul d no t b e considere d a pollutio n contro l project . Anothe r commente r gav e a nexampl e o f a CC T projec t tha t convert s anoil-fire d uni t t o a highe r emittingP.88 _

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- coal-fire d unit , notin g tha t thi s projec t shoul d no t b e considere d a pollutio ncontro l project . On e commente r oppose d t o th e pollutio ncontro l projec t exemptio nquestione d th e ver ynarro wexemptio nfro mNSP S and PS D fo r th e reactivatio no f well-controlled , ver yclea n unit s tha t ha d bee n shu t dow n fo r a t leas t 2 year s prio r t o th e enactmen t o f th e 199 0 Amendments . I f suc hexemption s ar e granted , th e commente r urge d EP At o includ e a conditio n tha t an yreactivate d source s perfor ma nai r qualit yimpac t assessmen t an d demonstrat e tha t the ywoul d no t caus e o r contribut e t o a violatio no f NAAQS , PS D increments , o r visibilit ystandards . d . Comment s Suggestin g Revision s t o th e Proposal . Th e followin g suggestion s wer e mad e wit hregar d t o th e definitio n o f "pollutio n contro l project" : (1 ) includ e al l element s o f CC T demonstratio nproject s a s a n exclude d project ; (2 ) ad d th e word s "clea n coa l technology " i nth e example s o f pollutio n contro l project s i n4 0 CF R51.165 , 51.166 , 52.21 , an d 53.24 ; an d (3 ) us e th e statutor ydefinitio n o f CC T demonstratio n projec t i n 60.14(j)(l) . Th e statutor ydefinitio nomit s th e requiremen t tha t a t leas t 2 0 percen t o f th e fundin g fo r a CC T demonstratio n projec t com e fro mth e Federa l government . f . Th e EP AAnalysis .P.8 9

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- Afte r revie wo f th e publi c comment s an d furthe r analysi s o f th e subjec t provision , EPAha s decide d t o promulgat e th e propose d rule s implementing th e CC T an d very clea n uni t exemptio ncreate d b yth e 199 0 Amendments . Th e EPAview s thi s actio na s merel yincorporating int o it s existing regulatoryframewor k statutoryexemption s tha t wer e immediatel yeffectiv e upo npassag e o f th e 199 0 Amendments .

F . Calculatio n o f NSP S Baselin e a . Background . A s discusse d i n th e proposal , "an yphysica l o r operationa l chang e t o a nexisting facilit ywhic hresult s i n a n increas e i n th e emissio n rat e t o th e atmospher e o f an y pollutan t t o whic ha standar d applies " i s a modificatio nfo r NSP S applicabilit ypurpose s [se e 4 0 CFR§ 60.14(a)] . Th e NSP S regulation s implementing thi s genera l definitio nfocu s o n increase s i n hourl yemissions , expresse d i n kilogram s o f pollutan t discharge d pe r hour . T o determin e i f a n increas 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 ypotentia l emission s a t maximu moperating capacit yt o hourl yemission s a t maximu m capacit yafte r th eP.9 0

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- change . I n thi s calculation , th e reviewing authorit y disregard s th e unit' s maximu mdesigncapacity. 2 5 Th e origina l desig n capacit yo f a unit , t o th e exten t i t differ s fromactua l maximu

m capacit ya t th e tim e tha t th e baselin e i s establishe d du e t o physica l deterioratio no f th e facility , i s immateria l t o thi s calculation . Th e EPApropose d that , fo r a nexisting electri c utilit y steamgeneratin g 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 ytim e durin g th e 5 year s prio r t o th e change . Th e proposa l retaine d th e ke y concep t i n existing regulation s tha t th e baselin e b e determine d durin g 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 EPA believe s tha t th e 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 y immediatel yprio r t o th e change . Th e proposal' 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 precludin g th e us e o f

2 5 [Se e 3 9 FR36,94 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 determining whethe r an increas e i nemissio nrat e occur s fo r purpose s o f a n NSP 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 1

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- a baselin e tie d t o origina l designcapacity , 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 undertaking physica l o r operationa l change s i n conjunctio n wit hth e aci d rai n program . Fo r instance , i f a uni t ha s broke n dow nan d 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 woul d allo wutilitie s t o demonstrat e tha t a nearlier , highe r capacit ywa s mor e representativ e o f th e unit' s maximu m hourl yemission s rate . b . Comment s Generall yFavoring th e EPAProposal . Severa l commenter s note d tha t EPA' s proposa l wil l provid e neede d flexibilit yan d alleviat e uncertaint yfo r nonroutin e repair , replacement , an d maintenanc e project s whil e stil l protecting loca l ai r quality . On e commente r supporte d retentio n o f th e ke yconcep t o f equating contemporaneou s emission s wit hrepresentativ e emissions . c . Comment s Generall yOpposing th e EPAProposal . On e commente r opposing th e proposa l note d that , th e provisio n fo r th e maximu mhourl yemission s achievabl e during th e las t 5 year s woul d resul t i n a significan t relaxatio no f NSP S requirement s an d woul d allo wutilitie s t o upgrad e equipmen t whic hmayhav e los t significan t generatin g capacit ywithou t th e equipmen t being subjec t t o NSPS . Source s tha t hav e bee noperating belo wthei r maximu mP.9 2

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- achievabl e emissio n rate s fo r th e 5 year s prio r t o th e chang e ca n caus e increase s i nactua l hourl yemissio nrates , inconsisten t wit hth e inten t o f th e NSP S program . I n addition , th e chang e i n th e baselin e wil l allo wutilitie s suc ha extensiv e abilit yt o mak e unregulate d change s suc ha s refurbishment , repowering o r life-extensio na s t o interfer e wit hcompetitio n betwee n existing unit s an d ne wunits . d . Comment s Suggesting Revision s t o th e Proposal . Th e mos t frequen t commen t o n thi s par t o f th e proposa l wa s tha t th e rul e shoul d b e clarifie d t o saytha t th e baselin e shoul d reflec t th e las t 5 year s o f operation , t o addres s unit s tha t hav e no t bee n operating . I nthi s regard , commenter s wer e concerne d abou t whethe r th e approac hwil l ensur e th e establishmen t o f pas t emissio nlevel s tha t ar e trul yrepresentativ e o f norma l sourc e operation s fo r utilit y unit s i n col d storag e fo r mor e tha n5 years . On e commente r aske d tha t th e NSP S baselin e [4 0 CF R60.14(h) ] b e mad e consisten t wit hth e NS Rpre-chang e baselin e [4 0 CF R52.21(b)(21)(ii) ] b yadding th e phrase , "o r othe r perio d deeme d b yth e Administrato r t o b e mor e representativ e o f norma l operation. " On e commente r remarke d tha t i f th e rul e canno t b e change d t o allo wconsideratio no f th e pas t 5 year s o f operation , the nEPAshoul d selec t a n alternativ e tha t woul d reflec t a mor e representativ e baseline . I n addition , some commenter s aske d fo rP.9 3

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- clarificatio n tha t a uni t may"ne t out " o f NSP S requirement s b yswitching t o lowsulfu r coal . e . Th e EPAAnalysis . Afte r carefu l consideratio no f th e comment s receive d an d furthe r analysi s o f th e subjec t provision , EPAha s decide d t o promulgat e th e propose d revise d methodologyfo r calculating th e pre-chang e baselin e fo r NSP S applicabilit y purpose s fo r a n existing electri c utilit ystea mgenerating unit . Th e amende d methodologywil l us e th e highes t hourl y emission s rat e achievabl e a t an ytime during th e 5 year s prio r t o th e change . Th e revise d methodologyretain 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 decisio n t o revis e th e curren t regulatio nwil l allo w utilitie s flexibilit yregarding th e scheduling o f nonroutin e repair , replacement , an d maintenanc e projects . Also , th e EPAbelieve s tha t withou t thi s revision , th e NSP S regulation s mayundul yburde nutilitie s undertaking physica l o r operationa l change s i n conjunctio nwit hth e aci d rai n program . Thi s chang e wil l allo wutilitie 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

m hourl yemission s rate . Th e EPAdi d no t agre e wit hcomment s tha t th e us e o f th e maximu mhourl yemission s achievabl e during th e las t 5 year sP.9 4

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- woul d resul t i n a significan t relaxatio no f NSP S requirement s an

d allo wutilitie s t o upgrad e equipmen t whic h mayhav e los t significan t generating capacit ywithou t th e equipmen t bein g subjec t t o NSPS . Th e promulgate d chang e provide s a mor e flexibl e provisio n enabling unit s t o establis ha baselin e tha t i s representativ e o f thei r physica l an

d operationa l capacit yi n recen t years , whil e stil l precludin g th e us e o f a baselin e tie d t o origina l desig n capacity , whic hmaybea r n o relationshi p t o th e facility' s capacit yi nrecen t years . Th e EPAdi d no t agre e wit hth e commen t tha t degre e o f flexibilit ygrante d utilitie s t o mak e unregulate d change s suc ha s refurbishment , repowering o r life-extensio nproject s a s a resul t o f rul e change s woul d interfer e wit hcompetitio n betwee n existing unit s an d ne wunits . Th e prio r regulation s allowe d refurbishment , repowering o r life-extensio n projects , provide d emission s d o no t increas e abov e th e unit' s curren t maximu mhourl yemission s rate . Bot hth e prio r an

d newl ypromulgate d regulation s requir e a uni t tha t undergoe s a refurbishment , repowering o r life-extensio n projec t whic hincrease s emission s abov e th e unit' s actua l curren t maximu

m hourl yrat e t o b e subjec t t o NSPS . Th e promulgate d regulatio n simpl yallow s mor e flexibilit yi n definin g a unit' s curren t capacity . Th e EPAcanno t agre e wit hcomment s tha t th e methodology fo r computing th e NSP S baselin e reflec t th e las t 5 year s o fP.9 5

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- operatio n rathe r tha n th e 5 year s prio r t o th e change . A s discusse d i n conjunctio nth e NS Rbaseline , th e us e o f suc ha baselin e woul d credi t a uni t whic hha s bee ninoperabl e fo r 2 0 o r 3 0 years , o r longer , an d i nnee d o f extensiv e nonroutin e changes , wit ha emission s baselin e tha t doe s no t reflec t curren t achievabl e level s o f operations . Th e EPA notes , however , tha t th e NSP S regulation s hav e alway s allowe d a dorman t uni t t o demonstrat e it s curren t capacit y i n orde r t o determin e it s emission s baseline . Thu s a n operabl e unit , o r on e i n nee d o f onl yroutin e maintenanc e o r repair , whic hha s bee n dorman t fo r a nextende d perio d o f tim e ca n stil l demonstrat e it s achievabl e capacit yan d associate d emission s leve l b yoperating fo r a relativel y shor t perio d o f time . Acommente r requeste d tha t th e NSP S baselin e b e revise d t o b e consisten t wit hth e NS Rpre-chang e baselin e b yadding th e phrase , "o r othe r perio d deeme d b yth e Administrato r t o b e mor e representativ e o f norma l operation. " Th e EPAdi d no t gran t thi s reques t becaus e i t woul d chang e th e emphasi s o f th e NSP S program . A s a technology-base d program , th e NSP S program

examine s maximu

mhourl yemission s rates , expresse d i n kilogram s pe r hour . Thus , emissio n 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 , regardles s o f ho wth e uni t ha s actuall yoperated . I ncontrast , i n ligh t o f th e ai r qualit yplanning componen t o f th e NS Rprogram ,P.9 6

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- th e NS Rregulation s examin e tota l actua l annua l emission s t o th e atmosphere . Consequently , norma l operation s ove r a perio d o f tim e i s considere d fo r purpose s o f determinin g a source' s impac t o n ambien t air . Fo r NS Rapplicabilit y determinatio n purpose s emission s increase s ar e determine d b y change s i n actua l annua l emission s a s expresse d i ntpy . Some commenter s requeste d clarificatio no n "netting out " o f NSP S requirement s b yswitching t o lowsulfu r coal . Th e propose d regulatorychange s wer e specificall ylimite d t o addressin g th e maximu machievabl e emission s a t a specifi c poin t i n tim e (i.e. , immediatel yprio r t o th e chang e versu s achievabl e ove r th e las t 5 years ) an d no t th e parameter s use d i n quantifying maximu mhourl yemissions . Today' s rul e doe s no t alte r curren t NSP S regulation s o nthi s point . Unde r thos e presen t NSP S regulations , onl yphysica l limitation s o n maximu mcapacit yar e considere d i n determining potentia l emission s a t powe r plants . Thus , an y prospectiv e change s i n fue l o r rawmaterial s accompanying th e physica l o r operationa l chang e ar e no t considere d i n determinin g maximu m capacity . G . Utilit yBAC T Presumptio nfo r N0 X . a . Background . Th e EPApropose d 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 CF R52.21 , BAC T fo r emission s o f NO fro mexisting coal-fire d electri cP.9 7

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- utilit ystea

mgenerating unit s undergoing a modificatio ni s th e technologyrequire d unde r § 40 7 o f th e CAA . b . Comment s Generall yFavoring th e EPAProposal . Supporter s o f th e low-NOxburne r BAC T presumptio n pointe d t o strong Congressiona l polic yjudgemen t favoring th e us e o f "low-NOxburne r technology. " Th e BAC T presumptio n shoul d provid e greate r certaint yan d consistenc y t o utilities , ye t on e supporte r though t i t woul d no t limi t th e permitting authority' s abilit yo r obligatio n t o conside r othe r factors . On e commente r note d tha t th e BAC T presumptio n establishe s tha t low-NOxburner s constitut e reasonabl e availabl e contro l technolog y(RACT ) a s wel l a s BACT . c . Comment s Generall yOpposing th e EPAProposal . Concluding tha t th e presumptio n i s unwarranted , misguided , an

d possibl yillegal , severa l opponent s o f th e BAC T presumptio n note d tha t i t foreclose s consideratio no f othe r N0 Xcontro l technologie s an d ignore s th e demonstrate d trac k recor d an

d cost-effectivenes s o f othe r technologie s suc ha s selectiv e catalyti c reductio n(SCR ) o r selectiv e noncatalyti c reduction . Commenter s note d tha t SCR technologyi s i n us e i nmor e tha n 20 0 powe r plant s i n si x nation s an

d ca n achiev e twic e th e NOxreductio n achievabl e b ylow-NOxburners . Th e SCRo r othe r technologie s mor e effectiv e tha n low-NOxburner s mayb e neede d a s retrofi t requirement s t o attai nth e ozon e standard .P.9 8

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- Anothe r commen t voice d b yopponent s o f th e low-NOx burne r BAC T presumption , wa s tha t i t canno t b e reconcile d wit hth e statutorycommand fo r case-by-cas e decisions . Th e EPAdoe s no t hav e th e righ t t o mak e suc ha presumptio nan d severa l instance s wer e cite d wher e EPAha s uphel d th e case by-cas e BAC T determinatio nprocess . Th e BAC T presumptio n fail s t o recogniz e tha t ther e ar e site-specifi c consideration s tha t wil l affec t th e selectio no f BACT . Opponent s o f th e BAC T presumptio n als o note d tha t suc h a presumptio n improperl yshift s th e burde n o f technology analysi s t o State s a t a tim e whe ntheyar e overburdened . I n addition , i t wil l hav e an advers e effec t o n th e abilit yo f Stat e an

d loca l agencie s t o contro l emission s t o th e degre e necessarybecaus e i t limit s a nagency' s attainmen t strategies . Som e o f th e northeaster n State s expresse d concern s tha t suc ha presumptio nmigh t interfer e wit h effort s t o attai n th e ozon e standard . e . Th e EPAAnalysis . Base d upo n a consideratio no f th e comment s received , an d a reexaminatio n o f th e relevan t fact s and statutory provisions , EPAha s determine d no t t o promulgat e th e presumptio n regarding BAC T fo r N0 X . Th e EPAi s concerne d tha t thi s presumptio nwoul d sugges t preemptio no f th e exercis e o f Stat e discretio n an d case-by-cas e decisionmakin g whic hCongres s envisione d a s fundamenta l t o th e BAC T process .P.9 9

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- I n ligh t o f it s decisio nno t t o adop t a BAC T low-N0 x presumption , EPAwil l no t respond t o othe r objection s an d suggestion s raise d b ycommenters. 2 6

H . Applicabilit yDetermination s A s note d i n th e proposal , sourc e owner s o r operator s i n mos t instance s ar e abl e t o readil yascertai nwhethe r NS R requirement s appl yt o them . Consequently , i nadministering thes e requirements , EPAdoe s no t requir e source s t o obtai na forma l applicabilit ydeterminatio n befor e proceedin g wit h construction . I n keeping 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 canreadil yascertai n ho w thi 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 involve 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

2 6 Thi s include s comment s o n th e environmenta l impact s o f th e low-NOxpresumption , elaboratio n o n wha t constitute s low-NOxburne r technology , an d th e merit s an

d curren t us e o f othe r N0 Xcontro l technologie s a s BACT .-98

-

wit happropriat e documentatio n t o th e appropriat e permitting authority . Comment s regarding applicabilit ydetermination s hav e previousl ybee n addresse d i n othe r section s o f thi s rulemaking . I . Limitatio n o f th e Rul e t o Electri c Utilities . 1 . Background . Consisten t wit hth e propose d rule , th e regulatory provision s promulgate d todayar e limite d t o electri c utilit y steamgenerating units . Suc hunit s ar e define d a s an ystea m electri c generating 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 t 2 5 megawatt s o f electrica l outpu t t o an

yutilit ypowe r distributio n systemfo r sale . I n th e proposal , EPAindicate d tha t i t wa s limiting thi s rulemakin g t o electri c utilit ystea mgenerating unit s fo r tw o reasons . First , titl e IV o f th e CA

Aaddresse s aci d precipitatio n an

d focuse s exclusivel yo n utilit ypowe r plants . Today' s ruling ensure s tha t th e titl e I an d titl e I V

program s wil l no t impos e conflicting requirement s fo r thos e plants . Th e secon d reaso ntha t th e provision s wer e limite d t o utilitie s i s tha t EPA' s extensiv e experienc e wit helectri c utilities , th e genera l similarit yo f equipmen t withi n th e category , an d th e particula r exten t o f publicl y availabl e information , indicat e tha t a revisio nt o th e NS Rp. 1

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- applicabilit ycriteri a fo r thi s sourc e categoryi s warranted . 2 . Publi c Comments . Severa l commenter s note d tha t limitatio no f th e proposa l t o electri c utilitie s lack s rationa l justificatio n a s wel l a s lega l an d technica l support . Severa l note d tha t th e limitatio n i s unfair , arbitrary , an d capricious . Typica l o f severa l letters , on e commente r note d tha t EPA offere d n o qualitativ e evidenc e o f underlying assumptions , an d anothe r note d tha t EPAviolate s th e Administrativ e Procedure s Ac t b

ylimiting th e proposa l t o electri c utilities . T o thi s commenter , th e limitatio ndiscriminate s agains t industria l source s an d i s no t i n lin e wit hth e intention s o f th e legislation . On e commente r note d tha t th e WEPC O cour t di d no t bas e it s analysi s o n an yparticula r characteristic s o f th e utilit yindustry . Numerou s commenter s countere d EPA' s clai man d justificatio n fo r th e limitatio n tha t th e Agenc yha s mor e experienc e wit helectri c utilitie s tha nothe r industries . Illustrating tha t EPAha s extensiv e experienc e with , othe r industries , commenter s mentione d chemica l manufacturing , cemen t plants , refineries , pape r mills , aut o assembl y plants , th e 6 5 NSP S sources , an d source s covere d i n numerou s guidelin e document s an d RAC T guidance . I n addition , severa l note d tha t th e lac k o f understanding i s a poo r excus e fo r no t applying th e proposa l t o al l industries .P. 2

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- Commenter s als o note d tha t othe r industrie s fac e th e sam e problem s tha t utilitie s d o whe n attempting t o instal l pollutio n contro l equipment . Lik e electri c utilities , pollutio n contro l project s i n othe r industrie s ar e generall y environmentall ybeneficial , bu t th e limitatio n o f th e exclusio n t o electri c utilitie s a s propose d woul d discourag e th e othe r sourc e categories , frominstalling pollutio n contro l projects . Severa l commenter s note d tha t othe r industrie s wil l b e equall yimpacte d b yextensiv e regulation s unde r title s I , III , an d V , jus t a s electri c utilitie s wil l b e affecte d b y titl e IV . Fo r example , pharmaceutica l plant s wil l underg o physica l and operationa l change s t o mee t reasonabl y availabl e contro l technology(RACT ) and/o r maximu m achievabl e contro l technology , an d thes e project s shoul d no t b e subjec t t o NS Ro r NSPS . Theynot e tha t th e burde n an d supportiv e reason s fo r making th e propose d change s ar e jus t a s grea t fo r othe r categorie s o f source s a s the yar e fo r electri c utilities . Some commenter s pointe d ou t tha t EPApresentl yapplie s th e pollutio n contro l projec t exemptio nfrom NSP S t o al l industrie s an

d tha t existing NS Rrule s ar e no t industry

specific . 3 . Th e EPAAnalysis . Th e EPAdoe s no t believ e tha t thi s rul e shoul d b e expande d a t thi s tim e bu t wil l addres s thi s issu e i naP. 3

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- separat e rulemaking . Specifically , EPAcurrentl yha s underwaya separat e rulemaking whic hwil l conside r th e desirabilit yo f adopting fo r othe r sourc e categorie s th e NS R pollutio n contro l projec t exclusio nan d th e change s t o th e methodologyfo r determining whethe r a sourc e chang e constitute s a modificatio ntha t hav e bee nadopte d todayfo r utilities . Thi s rulemaking wil l als o discharg e EPA' s obligatio n t o propos e an d tak e fina l actio n o na potential

to-potentia l methodologya s require d b yExhibi t B o f th e settlemen t agreemen t i n Chemica l Manufacturer s Associatio n v . EPA(D.C . Cir. , No . 79-1112) . Th e EPApresentl yintend s t o propos e thes e NS Rrevision s b yearl ysummer . Prio r t o proposa l o f thi s rule , EPAconsidere d goin g forwar d wit ha rul e tha t applie d t o al l sourc e categories . However , th e complexit yo f tha t tas k mean t tha t a rul e coul d no t b e develope d i n a shor t time frame , a fac t tha t pose d uniqu e an

d seriou s difficultie s fo r on e sourc e category , utilities . Whil e th e commenter s favoring expansio no f thi s rul e t o al l sourc e categorie s ar e accurat e i nthei r claim s tha t source s outsid e utilitie s fac e CAA-mandate d pollutio n contro l projects , utilitie s alon e ar e single d ou t t o participat e i n th e 199 0 Amendments ' ne waci d rai nprogram . Thi s program

require s tha t unit s subjec t t o phas e I o f th e program mee t S0 2 reductio nlimit s b y1995 . Give nth e size , complexity , an

d expens e o f scrubber s an d othe r S0 2 pollutio n contro l technologies , th e affecte d utilitie s nee d guidanc eP. 4

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- todaya s t o th e titl e I implication s o f thei r contro l strategies . Whil e othe r source s maysoo n hav e ne wcontro l requirement s impose d o nthem , utilit ysource s fac e th e mos t immediat e nee d fo r clarificatio n o f thei r NS R responsibilities . I n addition , EPAals o ha d highconfidenc e tha t a workabl e "future-actual " methodologycoul d b e develope d fo r th e utilit yindustryfo r al l change s tha t di d no t involv e constructio n o f a ne wuni t o r replacemen t o f a nexisting unit . Th e sourc e populatio ni s relativel ysmal l an d th e technologyi n us e i s relativel yuniform . Moreover , utilit y source s ar e largel yregulate d b yPUC' s whic hevaluat e anticipate d utilit ygrowt ha s par t o f th e regulatory oversigh t process . Th e fac t o f Publi c Utilit yCommissio n (PUC ) revie whelp s ensur e th e reliabilit yo f utilit y projection s o f futur e operating conditions . Th e EPA anticipate s tha t NS Rpermitting authoritie s wil l b e abl e t o dra wupo n PUC proceeding s i nevaluating utilit yclaim s o f futur e utilization . I n addition , th e emission s monitorin g provision s o f titl e IV

require s tha t continuou s emission s monitorin g dat a o r othe r highl yaccurat e method s fo r reportin g actua l emission s wil l b e use d fo r al l affecte d sources . Thi s wil l assur e tha t actua l emission s dat a wil l b e readil yavailabl e fo r utilit ysource s subjec t t o today' s rule .P. 5

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- III . Miscellaneou s A . E.O . 12291 . Unde r E.O . 12291 , EPAmus t judg e whethe r a regulatio n i s a "majo r rule " an d therefor e subjec t t o th e requiremen t fo r preparatio n o f a RegulatoryImpac t Analysis . Thi s rulin g i s no t a majo r rul e becaus e i t wil l reduc e th e economi c cost s o f meeting th e requirement s o f th e CAA . However , thi s ruling wa s submitte d t o th e Offic e o f Managemen t an

d Budge t (OMB ) fo r review . Writte ncomment s fromOMB t o EPAan

d an yEPArespons e ar e include d i n Docke t A-90-06 . B . Paperwor k Reductio nAct . Th e proposa l packag e state d tha t n o additiona l publi c reporting burde n wil l resul t fromthi s ruling . Tha t i s stil l th e cas e despit e fina l rul e requirement s fo r reporting certai n dat a t o agencie s fo r 5 year s following a chang e an d fo r documenting exclude d demand growth , becaus e thi s informatio n i s alread yrequire d b

yothe r provision s o f th e lawan d th e fina l rul e i ndoing s o i s providing exclusion s fo r th e affecte d source s an d th e ne t resul t i s a decreas e i n thes e source' s publi c reporting burden . Al l informatio n collectio n requirement s o f th e Federa l NS Ran d NSP S regulation s hav e bee napprove d b yOMB unde r th e provision s o f th e Paperwor k Reductio nAct , 4 4 U.S.C . 3501 , e t 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 tP. 6

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- o f thi s rul e woul d b e a reductio n i npaperwor k relate d t o complyin g 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 operationa l change s tha t mayb e exclude d fromthes e requirements . C . Economi c Impac t Assessmen t Th e requiremen t fo r performing a n Economi c Impac t Assessmen t unde r § 31 7 o f th e CA A(4 2 U.S.C . 7617) , doe s no t appl yt o th e amendment s EPAi s promulgating today . Sectio n 31 7 applie s onl yt o "revision s whic hth e Administrato r determine s t o b e substantia l revisions. " Th e promulgate d amendment s ar e no t substantia l revision s becaus e the yreliev e curren t regulatoryburdens .

D . RegulatoryFlexibilit yAc t Certification . A s note d i n th e proposa l notice , thi s actio ni s no t subjec t t o th e certificatio nprovision s o f § 605(b ) o f th e RegulatoryFlexibilit yAc t becaus e thi s rul e wil l resul t i n a reductio n o f administrativ e cost s an d n o increas e i n contro l costs , therefor e having n o significan t impac t o n industry . E . Effectiv e Date . A s state d earlie r i n thi s notice , thi s rul e i s effectiv e immediatel yupo npublicatio ni n th e FEDERAL REGISTER . Th e EPAha s conclude d that , unde r § 307(d)(1 ) o f th e CAA , th e requiremen t o f sec . 4(d ) o f th e Administrativ e Procedure s Act , 5 U.S.C . 553(d) , fo r a 30-daywaitin g perio dP. 7

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- befor e makin g a rul e effectiv e i s no t applicable .

F . Federalis mImplications . Unde r E.O . 12612 , EPAmus t determin e i f a rul e ha s federalis mimplication s (i.e. , substantia l direc t effect s o n th e States , o n th e relationshi p betwee n th e nationa l governmen t an

d th e States , o r o n th e distributio no f powe r an d responsibilitie s among th e variou s level s o f government) . Fo r thos e rule s whic hhav e federalis m implications , a Federalis mAssessmen t i s t o b e made . Th e EPA' s determinatio n i s tha t ther e ar e n o federalis m implications ; thes e ar e relativel ymino r change s t o existing Federa l lawand regulations . Th e executiv e orde r als o require s tha t agencies , t o th e exten t possible , refrai nfromlimiting th e Stat e polic y options , consul t wit hState s prio r t o taking an yaction s tha t woul d restric t Stat e polic yoptions , an d tak e suc h action s onl ywhe n ther e i s clea r constitutiona l authorit y and th e presenc e o f a problemo f nationa l scope . Th e executiv e orde r provide s fo r preemptio no f Stat e law , however , i f ther e i s a clea r congressiona l inten t fo r th e agenc yt o d o so . An ysuc hpreemption , however , i s t o b e limite d t o th e exten t possibl e Sinc e th e rul e i s a direc t effor t t o ensur e implementatio n o f th e 199 0 Amendments , EPA consider s al l o f th e abov e requirement s t o b e met . List s o f Subject s 4 0 CF Rpar t 5 1P. 8

-106

- Administrativ e procedur e an d practices , Intergovernmenta l relations , Ai r pollutio ncontrol , NSR , Clea n Coa l Technologyprojects , .Sulfu r oxides , Nitroge n dioxide , Particulat e matter , Carbo n monoxide , Hydrocarbons , Lead .P. 9

-107

- 4 0 CF Rpar t 5 2

Ai r pollutio n control , NSR , Clea nCoa l Technology projects , Repowering , Sulfu r oxides , Particulat e matter , Nitroge n dioxide , Carbo nmonoxide , Hydrocarbons , Lead .

4 0 CF Rpar t 6 0 Ai r pollutio n control , NSPS , Clea n Coa l Technology projects , Repowering , Sulfu r oxides , Particulat e matter , Nitroge n dioxide , Carbo nmonoxide , Hydrocarbons , Lead . Authority : 4 2 U.S.C . 7401(b)(1) , 7410 , 7411 , 7470

- 7479 , 7491 , 7501-7508 , 760 1 an d 7602 , a s amende d b yth e 199 0 Amendments , Pub . L . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) ; 402 , 409 , 41 5 o f th e CA Aa s amended , 10 4 Stat . 2399 ; 4 2 U.S.C . 7401-764 2 a s amende d b yth e 199 0 Amendments , Pub . L . No . 101-549 , 10 4 Stat , 239 9 (Nov . 15 , 1990) ; 4 2 U.S.C . 7401 , 7411 , 7414 , 7416 , an d 760 1 a s amende d b yth e 199 0 Amendments , Pub . L . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990 ; 402 , 409 , 41 5 o f th e CA Aa s amended , 10 4 Stat . 2399 , unles s otherwis e noted .P.1 0

-108

- Fo r th e reason s se t fort hi nth 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 d t o b e amende d a s follows :

Par t 5 1 - REQUIREMENT S FO RPREPARATION , ADOPTION , AN D SUBMITTA

L O F IMPLEMENTATIO

N PLANS .

1 . Th e authorit ycitatio nfo r par t 5 1 i s amende d t o rea d a s follows : Authority : 4 2 U.S.C . 7401(b)(1) , 7410 , 7411 , 7470

- 7479 , 7491 , 7501-7508 , 760 1 an d 7602 , a s amende d b yth e 199 0 Amendments , Pub . L . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) ; 402 , 409 , 41 5 o f th e CA Aa s amended , 10 4 Stat . 2399 , unles s otherwis e noted .

2 . Sectio n 51.16 5 i s propose d t o b e amende d t o rea d a s follows : 51.16 5 . Permi t requirements . 

### (a ) * (1 ) * 

### (v ) * *

* * * * * (C ) Aphysica l chang e o r a chang e i nth e metho d o f operatio n shal l no t include :P.1 1

-109

- (8 ) 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 Administrato r determine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentall ybeneficial , o r except : (i ) whe nth e Administrato r ha s reaso nt o believ e tha t th e pollutio ncontro 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 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 (ii ) 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

ynationa l ambien t ai r qualit y standard o r PS D increment , o r visibilit y limitation . (9 ) Th e installation , operation , cessation , o r remova l o f a temporarycleancoa l technology demonstratio n project , provide d tha t th e projec t complie s with :P.1 2

-110

- (i ) th e SI P fo r th e Stat e i nwhic hth e projec t i s located , an

d (ii ) othe r requirement s necessaryt o attai nan d maintai n th e nationa l ambien t ai r qualit ystandar d during th e projec t an d afte r i t i s terminated . (10 ) Th e reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea mgenerating unit .



### (xii )

(D ) Fo r an

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

mgenerating uni t specifie d i nparagrap h (E ) o f thi s subsection ) tha t ha s no t begun norma l operation s o n a particula r date , actua l emission s shal l equa l th e potential-to-emi t o f th e uni t o n tha 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 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 , provide d th e sourc e owne r o r operato r maintain s an d submit s t o th e permitting authority , o na n anntta l basi sP.1 3

-111

- fcflr, a " perio d o f 5 year s i"comth e date * th e uni t resume s tegula r operation , informatio n demonstratin g tha t th e physica l o r operationa l chang e di d Ho t resul t i n a n emission s increase * Alonge r period , no t t o excee d 1 0 years , ma yb e require d byth e permittin g authorit yi f i t determine s suc ha perio d t o b e mor e representativ e at norm l sourc e post-ohan ^ operation* . (xx ) "Electri c utilit ystea mgenerating unit " mean s an y stea melectri c generating 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 ypowe r distributio nsystemfo r sale . Anystea

msupplie d t o a stea mdistributio nsystemfo r th e purpos e o f providing stea m t o a steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determining 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 nton 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 2-yea r perio d afte r a physica l chang e o r chang e i nth e metho d o f operatio no f a unit , (or a differen t consecutiv e 2-yea r perio d withi n 1 0 year s afte r tha t change , wher e th e permittin g authorit y determine s tha t suc hperio d i s mor e representativ e o f norma lP. M

-112

- sourc e operations) , considering 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 permitting 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 h th e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r titl e IV o f th e Clea nAi r Act ; an d

(B ) exclude , i ncalculating an yincreas e i n emission s tha t result s fro mth e particula r physica l chang e o r chang e i nth e metho d o f operatio n a t a n electri c utilit ystea m generating unit , tha t portio n o f th e unit' s emission s following th e chang e tha t coul d hav e bee n accommodate d during th e representativ e baselin e perio d an

d i s attributabl e t o a n increas e i n projecte d capacit yutilizatio na t th e uni t tha t i s unrelate d t o th e particula r change , including an y increase d utilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystem a s a whole .P.1 5

-113

- (xxii ) "Temporaryclea ncoa l technologydemonstratio n project " mean s a CT T demonstratio n projec t tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic hcomplie s wit hth e SI P 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 ystandar d during th e projec t and 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 hwil 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 nth e generatio n o f electricity , o r proces s stea mwhic hwa s no t i nwidesprea d us e a s o f Novembe r 15 , 1990 . (xxiv ) "Clean coa l technolog ydemonstratio nproject " mean s a projec t using fund s (1 ) 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 n o 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 .P.1 6

-114

- (xxv ) "Reactivatio no f a veryclea ncoal-fire d electri c utilit ystea

mgenerating 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 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 noperatio n fo r th e 2-yea r perio d prio r t o th e enactmen t o f th e Clea n Ai r Ac t 199 0 Amendments , 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 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 tim e 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 7

-115

- (xxvi ) "Pollutio n contro l project " mean s an yactivit y o r projec t a t a n existing electri c utilit ystea m generating uni t fo r purpose s o f reducing emission s fromsuc hunit . Suc hactivitie s o r project 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 ) an activit yo r projec t t o accommodat e switching t o a fue l whic hi s les s polluting tha n th e fue l use d prio r t o th e activit yo r project , including , bu t no t limite d t o natura l ga s o r coa l re-burning , o r th e 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 , sec . 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sec . 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , u p 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 throughP.1 8

-116

- 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 .

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 deteriorationo 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 Administrato r determine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentall ybeneficial , o r except :P.1 9



### -117

- (a ) whe nth e reviewing authorit yha s reaso n t o believ e tha t th 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 no f an

ynationa l ambien t ai r qualit y standar d o r PS D increment , o r visibilit y limitation . (i ) 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 y generating uni t (othe r than th e additio no f a ne w uni t o r th e replacemen t o f an existing unit ) tha t woul d no t resul t i n a significan t ne t increas e i n representativ 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 technology-118

- demonstratio n project , provide d tha t th e projec t complie s with : (i ) th e Stat e implementatio n pla n fo r th e Stat e i nwhic hth e projec t i s located ; an d P.2 0

(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 . (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 na nincreas e i nth e potential

to-emi t o f an

yregulate d pollutan t emitte d b yth e unit . Thi s exemptio nshal l appl yo n a pollutant

by-pollutan t basis . (1 ) Th e reactivatio n o f a veryclea n coal--fire d electri c utilit ystea mgenerating unit .

* * * *

(21 )P.2 1

-119

- (iv ) Fo r an

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

mgenerating uni t specifie d i nparagraph (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 potential-to-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 an 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 uni t following th e physica l o r operationa l change,provide d th e sourc e owne r o r operato r maintain s and submit s t o th e permittin g authority , o n a nannua l basi s fo r a perio d o f 5 year s fromth e dat e th e uni t resume s regula r operation r

informatio ndemonstrating tha t th e physica l o r operationa l chang e di d no t resul t i na n emission s increase * Alonge r period , no t t o excee d 1 0 years , ma yb e require d byth e permittin g authorit yi f i t determine s suc ha perio d t o b e mor e representativ e o f norma l sourc e post-chang e operations , (30 ) "Electri c utilit ystea mgenerating unit " mean s an y stea m electri c generating 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 MWP.2 2

-120

- electrica l outpu t t o an yutilit ypowe r distributio n systemfo r sale . An ystea msupplie d t o a stea m distributio n systemfo r th e purpos e o f providin g stea m 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 energ youtpu t capacit yo f th e affecte d facility . (31 ) "Pollutio n contro l project " mean s an yactivit yo r projec t a t a n existing electri c utilit ysteam generatin g uni t fo r purpose s o f reducing emission s fro m suc hunit . Suc hactivitie s o r project 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 n fo r sulfu r dioxid e an

d nitroge n oxide s control s and electrostati c precipitators ; (ii ) a n activit yo r projec t t o accommodat e switching t o a fue l whic hi s les s pollutin g tha n th e fue l use d prio r t o th e activit yo r project , including bu t no t limite d t o natura l ga s o r coa l re-burning , o r th e co-firing o f natura l ga s andP.2 3

-121

- othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea ncoa l technology demonstratio n projec t conducte d unde r titl e II , sec . 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sec . 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 throughappropriation s fo r th e Environmenta l Protectio nAgency , o r (iv ) a permanen t cleancoa l technolog y demonstratio nprojec 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 2-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 2-yea r perio d withi n 1 0 year s afte r tha t change , wher e th e reviewing authorit ydetermine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations) ,P.2 4

-122

- considering 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 h th 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 ; an d

(B ) exclude , i ncalculating an yincreas e i n emission 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 n electri c utilit ystea mgenerating unit , tha t portio n o f th e unit' s emission s following th e chang e tha t coul d hav e bee n accommodate d during th e representativ e perio d an d 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 e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystema s a whole .P.2 5

-123

- (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 nstage , a t a ne wo r existing facilit y whic 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 no 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 . (34 ) "Clean coa l technolog ydemonstratio n project " mean s a projec t using fund s (1 ) 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 n o 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 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 n project . (35 ) "Temporaryclea n coa l technolog ydemonstratio nproject " mean s a clea n coa l technolog ydemonstratio nprojec t tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic hcomplie 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 eP.2 6

-124

- natio n ambien t ai r qualit ystandard s during an d afte r th e projec t i s terminated . ( 3 6)(i ) "Repowering " mean s replacemen t o f a n existing

coal-fire d boile r wit hon e o f th e following clean coa 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 n fue l cells , o r a s determine d b yth e Administrator , i nconsultatio nwit hth e Secretary o 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 nemission 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 nwidesprea 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 awarde d clea n coa l technologydemonstratio n funding a s o f January1 , 1991 , b yth e DOE .P.2 7

-125

- (iii ) Th e reviewing authorit yshal l giv e expedite d consideratio nt o permi t application s fo r an y sourc 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 n coal-fire d electri c utilit ystea

mgenerating 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 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 noperatio nfo r th e 2-yea r perio d prio r t o th e enactmen t o f th e Clean 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 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 efficiencyfo r particulate s o f n o les s tha n 9 8 percent ;P.2 8

-126

- (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 ncomplianc e wit hth e requirement s o f th e Clea n Ai r Act .P.2 9

-127

- Fo r th e reason s se t fort hi nth e preamble , par t 5 2 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 d t o b e amende d a s follows :

Par t 52-APPROVA

L AN DPROMULGATIO

N O F IMPLEMENTATIO

N PLANS

1 . Th e authorit ycitatio nfo r par t 5 2 i s amende d t o rea d a s follows : Authority : 4 2 U.S.C . 7401-764 2 a s amende d b yth e Clean Ai r Ac t Amendment s o f 1990 , PubL . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) , unles s otherwis e noted .

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 deterioratio no f ai r quality .

**** * 

### (b ) (2 ) * * *

* * *P.3 0

-128

- (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 ystea

mgenerating 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 , o r except :

(a ) whe nth 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 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 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 n o f an

ynationa l ambien t ai r qualit y standar d o r PS D increment , o r visibilit y limitation .P.3 1

-129

- (i ) Th e installation , operation , cessation , o r remova l o f a temporaryclea n coa l technologydemonstratio n project , provide d tha t th e projec t complie s with : (i ) th e Stat e implementatio n pla 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 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 . (j ) Th e installatio n o r operatio n o f a permanen t clea ncoa l technolog y demonstratio n projec t tha t constitute s repowering , provide d tha t th e projec t doe s no t resul t i nan increas e i nth e potentia l t o emi t o f an yregulate d pollutan t emitte d b yth e unit . Thi s exemptio n shal l appl yo na pollutant-by

pollutan t basis . (k ) Th e reactivatio no f a veryclea n coal-fire d electri c utilit ystea mgenerating unit .P.3 2

-130

- (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 begun norma 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,provide d th e sourc e owne r o r operato r maintain s an d submit s t o th e permitting authority , o n a nannua l basi s fo r a perio d o f 5 year s fromth e dat e th e uni t resume s tegula r operation , informatio n demonstratin g tha t th e physica l o r operationa l chang e di d no t resul t in " an"emission s 'increase * Alonge r period , ho t t o excee d 10 s years' , ma yb e require d b yth e permittin g authorit yi f i t determine s suc ha perio d t o b e mor e representativ e o f norma l soure d post-chang e operations !P.3 3

-131

- (31 ) "Electri c utilit ystea mgenerating unit " mean s an y stea melectri c generating 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 M

W electrica l outpu t t o an yutilit ypowe r distributio n system fo r sale . An

ystea msupplie d t o a stea m distributio n systemfo r th e purpos e o f providing stea m t o a steam-electri c generato r tha t woul d produc e electrica l energ

yfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility . (32 ) "Pollutio n contro l project " mean s an yactivit yo r projec t a t a n existing electri c utilit ystea m generating uni t fo r purpose s o f reducing emission s fro m suc hunit . Suc hactivitie s o r project 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 n activit yo r projec t 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 activit yo r project ,P.3 4

-132

- including , bu t no t limite d t o natura l ga s o r coa l re-burning , o r th e 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 technology demonstratio nprojec t conducte d unde r titl e II , sec . 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sec . 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 throughappropriation s fo r th e Environmenta l Protectio n Agency ; o r (iv ) a permanen t clea ncoa l technology demonstratio nprojec t tha t constitute s a repowerin g project . (33 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i nton 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 2-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 2-yea r perio d withi n 1 0 year s afte r tha t change , wher e th eP.3 5

-133

- 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 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 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

nrepresentations , filing s wit h th e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r titl e IV o f th e Clea nAi r Act ; an d (ii ) exclude , i n calculating an yincreas e i n emission s tha t result s fro mth e particula r physica l chang e o r chang e i nth e metho d o f operatio n a t an electri c utilit ystea mgenerating unit , tha t portio no f th e unit' s emission s following th e chang e tha t coul d hav e bee n accommodate d during th e representativ e baselin e perio d an

d 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 y increase d utilizatio n du e t o th e rat e o fP.3 6

-134

- electricit ydemand growt hfo r th e utilit ysystem a 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 nstage , a t a ne wo r existing facilit y whic hwil 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 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 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 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 n o f clea ncoa 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 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 n project . ( 3 6 ) "Temporaryclea n coa l technologydemonstratio nproject " mean s a clea n coa l technologydemonstratio nprojec tP.3 7

-135

- tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic hcomplie s wit hth e Stat e implementatio nplan 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 during th e projec t and afte r i t i s terminated , (37)(i ) "Repowering " mean s replacemen t o f a nexisting

coal-fire d boile r wit hon e o f th e following clean coa 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 n fue l cells , o r a s determine d b yth e Administrator , i n consultatio nwit hth e Secretary o 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 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 nwidesprea d commercia l us e a s o f Novembe r 15 , 1990 . (ii ) Repowering shal l als o includ e an yoi l and/o r gas fire d uni t whic hha s bee nawarde d clea n coa lP.38 _

-136

- technologydemonstratio n funding a s o f January1 , 1991 , b yth e DOE . (iii ) Th e Administrato r shal 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 an extensio nunde r § 40 9 o f th e Clea n Ai r Act . (38 ) "Reactivatio n o f a veryclea n coal-fire d electri c utilit ystea

mgenerating unit " mean s an yphysica l chang e o r chang e i nth 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 noperatio n fo r th e 2-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 , 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 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 n 8 5P.3 9

-137

- 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 tim e 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 nAi r Act . 3 . Sectio n 52.2 4 i s propose d t o b e amende d t o rea d a s follows :

52.2 4 Statutor

y restrictio

no nne w sources .

**** * 

### (f ) (5 ) * * *

* * * (iii ) Aphysica l chang e o r chang e i n th e metho d o f operatio n shal l no t include :

* * *P.4 0

-138

- (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 generating 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 , o r except :

(1 ) whe n th e Administrato r ha s reaso nt o believ e tha t th e pollutio ncontro 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 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 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 no f an

ynationa l ambien t ai r qualit y standar d o r PS D increment , o r visibilit y limitation . (i ) Th e installation , operation , cessation , o r remova l o f a temporaryclea n coa l technologydemonstratio n project , provide d tha t th e projec t complie s with :P.4 1

-139

- (1 ) th e Stat e implementatio n pla n fo 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 y standard s during th e projec t and afte r i t i s terminated . (j ) Th e reactivatio no f a veryclea ncoal-fire d electri c utilit ystea mgenerating unit .

(13 ) (iv ) Fo r an

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

mgenerating 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 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 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^provide d th e sourc e owne r o r operato r maintain s-140

- and f submits ' to ' th e permittin g authority , oa ' a n annua l

S S S \ S S *• • • . SSSSS S " * \ f . % bai'i s fo r "-

a perio d o f 5 Year s fromth e dat e th e uni t

s . . v. . * s s s s s^ ^ s s s resume s regula r operation , informatio ndemonstratin g tha t th e physica l o r operationa l chang e di d no t iresul t i n a n emission s increase * Alonge r period , no t t o excee d 1 0 .years , ma ybe " require d byth e permittin g authorit yi f £ t determine s suc ha perio d t o b e mare .

ss^s'*' - v * . • v • . SS S representativ e o f norma l sourc e post-chang e operations . (18 ) "Electri c utilit ystea mgenerating unit " mean s an y steamelectri c generating 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 MWelectrica l outpu t t o an

yutilit ypowe r distributio nsystemfo r sale . Anystea

msupplie d t o a stea mdistributio n systemfo 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 energ yfo r sal e i s als o considere d i n determining th e electrica l energyoutpu 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 2-yea r perio d afte r a physica l chang e o r chang e i nth e metho d o f operatio n o f a unit , (or a differen t consecutiv e 2-yea r perio d withi n 1 0 year s afte r tha t change , wher e th e Administrato rP.4 3

-141

- 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 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 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 nAi r Act ; an d (ii ) exclude , i ncalculating an yincreas e i n emission 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 n a 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 coul d hav e bee n accommodate d during th e representativ e baselin e perio d an

d 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 n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystema s a whole . (20 ) "Temporaryclea n coa l technolog ydemonstratio n project " mean s a clea ncoa l technolog ydemonstratio nprojec tP.4 4

-142

- tha t i s operate d fo r a perio d o f 5 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 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 . (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 nassociate d wit hth e utilizatio n o f coa l i n th e generatio no f electricity , o r proces s stea mwhic hwa s no t i nwidesprea d us e a s o f Novembe r 15 , 1990 . (22 ) "Clean coa l technolog ydemonstratio 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 n Coa l Technology' , 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 (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 .P.4 5

-143

- (23 ) "Reactivatio n o f a veryclea n coal-fire d electri c utilit ystea

mgenerating 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 nwher e th e unit : (i ) ha s no t bee ni noperatio n fo r th e 2-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 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 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 .-144

-

(24 ) "Pollutio n contro l project " mean s an yactivit yo r projec t a t a n existing electri c utilit ystea mgeneratin g uni t fo r purpose s o f reducing emission s fromsuc hunit . Suc hactivitie s o r project 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 n activit yo r projec t 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 activit yo r projec t including , bu t no t limite d t o natura l ga s o r coa l re-burning , co-firin g 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 , sec . 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sec . 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , u p 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 throughP.4 7

• . '. >

-145 -

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 project .P.4 8

. ft | -146

- Fo 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 d t o b e amende d a s follows :

PART 60-STANDARD S O F PERFORMANCE FO

RNE W STATIONAR

YSOURCE S

1 . Th e authorit ycitatio nfo r par t 6 0 i s amende d t o read a s follows : Authority : 4 2 U.S.C . 7401 , 7411 , 7414 , 7416 , an d 760 1 a s amende d b

yth e Clea n Ai r Ac t Amendment s o f 1990 , Pub . L . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990 ; 402 , 409 , 41 5 o f th e Clea n Ai r Ac t a s amended , 10 4 Stat . 2399 , unles s otherwis e noted .

2 . Sectio n 60. 2 i s propose d t o b e amende d b yadding th e following definitions :

"Clea n coa l technologydemonstratio nproject " mean s a projec t usin g fund s appropriate d unde r th e headin g 'Departmen t of.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 demonstration s 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 .P.4 9

« . »

-147

-

"Electri c utilit ystea mgenerating unit " mean s an ystea m electri c generating 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 MWelectrica l outpu t t o an y utilit ypowe r distributio n systemfo r sale . An ystea m supplie d t o a stea

m distributio n systemfo r th e purpos e o f providing stea

mt o a steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility . "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 ncombine 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 nconsultatio 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 technolog

ycapabl e o f controlling multipl e combustio n emission s simultaneousl y wit himprove d boile r o r generatio nefficienc yan d wit h significantl ygreate r wast e reductio nrelativ e t o th e performanc e o f technolog yi nwidesprea d commercia l us e a s o f Novembe r 15 , 1990 . Repowering shal l als o includ e an yoi l and/o r gas-fire d uni t whic hha s bee nawarde d clea ncoa lP.5 0

t -148

- technologydemonstratio n funding a s o f January1 , 1991 , b y th e Departmen t o f Energy . "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 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 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 noperatio n fo r th e 2-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 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 tim e o f commencemen t o f operation s following reactivation ; an

d-149

- (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 .

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(h ) N o physica l change , o r chang e i nth e metho d o f operation , a t a n existing electri c utilit ystea m generating uni t shal l b e treate d a s a modificatio nfo 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 mhourl yemission s achievabl e a t tha t uni t during th e 5 year s prio r t o th e change . (i ) Repowerin g project s tha t ar e awarde d funding fro m th e Departmen t o f Energ ya s permanen t clea n coa l technology demonstratio n project s (or simila r project s funde d b y Environmenta l Protectio n Agency ) ar e exemp t fromth e requirement s o f thi s sectio n provide d tha t suc hchang e doe s no t increas e th e maximu mhourl yemission s o f an ypollutan t regulate d unde r thi s sectio n abov e th e maximu mhourl 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 .-150

- (j)(1 ) Repowerin g project s tha t qualif yfo r a n extensio n unde r § 409(b ) o f th e Clea n Ai r Ac t ar e exemp t fromth e requirement s o f thi s section , provide d tha t suc h chang e doe s no t increas e th e actua l hourl yemission s o f an y pollutan t regulate d unde r thi s sectio n abov e th e actua l hourl yemission s achievabl e a t tha t uni t during th e 5 year s prio r t o th e change .

(2 ) Thi s exemptio nshal l no t appl yt o an yne w uni t that : (a ) i s designate d a s a replacemen t fo r a n existing unit ; (b ) qualifie s unde r § 409(b ) o f th e Clea n Ai r Ac t fo r a n extensio no f a nemissio n limitatio ncomplianc e dat e unde r § 40 5 o f th e Clea n Ai r Act ; an

d

(c ) i s locate d a t a differen t sit e tha nth e existing unit . (k ) Th e installation , operation , cessation , o r remova l o f a temporaryclea n coa l technologydemonstratio nprojec t i s exemp t fromth e requirement s o f thi s section . A "temporaryclea n coa l contro l technologydemonstratio nP.5 3

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- project" , fo r th e purpose s o f thi s sectio ni s a clea ncoa l technologydemonstratio nprojec t tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic hcomplie 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 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 . (1 ) Th e reactivatio no f a veryclea ncoal-fire d electri c utilit ystea mgenerating uni t i s exemp t fromth e requirement s o f thi s section .