FINAL REPORT 

Small Business Advocacy Review Panel 

on EPA’s Planned Proposed Rule: 

Combined Rulemaking for Industrial, 

Commercial, and Institutional Boilers and 

Process Heaters at Major Sources of HAP 

and Industrial Boilers and Commercial and 

Institutional Boilers at Area Sources 

March 23, 2009
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Table of Contents 

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 

2. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 

2.1 Background and Regulatory History . . . . . . . . . . . . . . . . . . . . . . 5 

2.2 Description of Rule and its Scope . . . . . . . . . . . . . . . . . . . . . . . 6 

2.3 Related Federal Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

3. Overview of Proposal Under Consideration . . . . . . . . . . . . . . . . . . . . . . . 8 

3.1 Potential Requirements of the Proposal . . . . . . . . . . . . . . . . . . . . 8 

3.2 Options Likely to be Proposed . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 

4. Applicable Small Entity Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 

5. Small Entities That May Be Subject to the Proposed Regulation . . . . . . 11 

6. Summary of Small Entity Outreach . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

7. List of Small Entity Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

8. Summary of Inputs from Potential Small Entity Representatives . . . . . 16 

8.1 Number and Types of Entities Affected . . . . . . . . . . . . . . . . . . . 16 

8.2 Potential Reporting, Record Keeping, and Compliance . . . . . . . 16 

8.3 Related Federal Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 

8.4 Regulatory Flexibility Alternatives . . . . . . . . . . . . . . . . . . . . . . 17 

 8.4.1 Work Practice Standards . . . . . . . . . . . . . . . . . . . . . . . . 17 

 8.4.2 Subcategorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 

 8.4.3 Health Based Compliance Alternatives (HBCA). . . . . . 19 

 8.4.4 Potential Adverse Economic Impact . . . . . . . . . . . . . . 19 

 8.4.5 Emissions Averaging . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 

9. Panel Findings and Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 

9.1 Number and Types of Entities Affected .. . . . . . . . . . . . . . . . . . . 20 

9.2 Potential Reporting, Record Keeping, and Compliance . . . . . . . 20 

9.3 Related Federal Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 

9.4 Regulatory Flexibility Alternatives . . . . . . . . . . . . . . . . . . . . . . . 21 

 9.4.1 Work Practice Standards . . . . . . . . . . . . . . . . . . . . . . . . 21 

 9.4.2 Subcategorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 

 9.4.3 Health Based Compliance Alternatives (HBCA). . . . . . 23 
3

 9.4.4 Emissions Averaging . . . . . . . . . . . . . . . . . . . . . . . 23

 9.4.5 Compliance Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 

Appendices 

Appendix A: List of Materials EPA Shared With SERs 

Appendix B: Summaries of Outreach Meetings with SERs 

Appendix B: Written Comments Received from SERs 
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Final Report for the Small Business Advocacy Review Panel 

on EPA’s Planned Proposal of Combined Rulemaking for Industrial, Commercial, 

and Institutional Boilers and Process Heaters at Major Sources of HAP and 

Industrial Boilers and Commercial and Institutional Boilers at Area Sources 

1. INTRODUCTION 

This report is presented to the Small Business Advocacy Review Panel (SBAR Panel or 

Panel) convened for the planned proposed rulemakings on the National Emission 

Standards for Hazardous Air Pollutants (NESHAP) for Industrial, Commercial, and 

Institutional Boilers and Process Heaters (Boiler MACT) and on the NESHAP for 

Industrial, Commercial, and Institutional Boilers Area Sources, currently being developed 

by the U.S. Environmental Protection Agency (EPA). Under section 609(b) of the 

Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory 

Enforcement Fairness Act of 1996 (SBREFA), a Panel is required to be convened prior to 

publication of the initial regulatory flexibility analysis (IRFA) that an agency may be 

required to prepare under the RFA. In addition to EPA’s Small Business Advocacy 

Chairperson, the Panel will consist of the Director of EPA’s Sector Policies and Programs 

Division within the Office of Air Quality Planning and Standards, the Administrator of 

the Office of Information and Regulatory Affairs within the Office of Management and 

Budget, and the Chief Counsel for Advocacy of the Small Business Administration. 

This report includes the following: 

• background information on the planned proposed rule being developed; 

• information on the types of small entities that would be subject to the planned 

proposed rule; 

• a description of efforts made to obtain the advice and recommendations of 

representatives of those small entities; and 

• a summary of the comments that have been received to date from those 

representatives. 

Section 609(b) of the RFA directs the Panel to report on the comments of small entity 

representatives and make findings on issues related to identified elements of an IRFA 

under section 603 of the RFA. Those elements of an IRFA are: 

• a description of and, where feasible, an estimate of the number of small entities 

to which the proposed rule will apply; 

• projected reporting, record keeping, and other compliance requirements of the 

proposed rule, including an estimate of the classes of small entities which will be 
5

subject to the requirements and the type of professional skills necessary for 

preparation of the report or record; 

• an identification, to the extent practicable, of all other relevant Federal rules 

which may duplicate, overlap, or conflict with the proposed rule; and 

• any impacts on small entities and any significant alternatives to the proposed 

rule which accomplish the stated objectives of applicable statutes and which 

minimize any significant economic impact of the proposed rule on small entities; 

Once completed, the Panel report is provided to the agency issuing the planned proposed 

rule and included in the rulemaking record. In light of the Panel report, and where 

appropriate, the agency is to make changes to the draft planned proposed rule, the IRFA 

for the planned proposed rule, or the decision on whether an IRFA is required. 

It is important to note that the Panel’s findings and discussion will be based on the 

information available at the time the final Panel report is drafted. EPA will continue to 

conduct analyses relevant to the proposed rule, and additional information may be 

developed or obtained during the remainder of the rule development process. The Panel 

makes its report at a preliminary stage of rule development and its report should be 

considered in that light. At the same time, the report provides the Panel and the Agency 

with an opportunity to identify and explore potential ways of shaping the proposed rule to 

minimize the burden of the rule on small entities while achieving the rule’s purposes. 

Any options identified by the Panel for reducing the rule’s regulatory impact on small 

entities may require further analysis and/or data collection to ensure that the options are 

practicable, enforceable, environmentally sound, and consistent with the Clean Air Act. 

2. BACKGROUND 

2.1 Background and Regulatory History 

Section 112 of the Clean Air Act (CAA) requires the Environmental Protection Agency 

(EPA) to list categories and subcategories of major sources and area sources of hazardous 

air pollutants (HAP) and to establish NESHAP for the listed source categories and 

subcategories. Industrial boilers, commercial and institutional boilers, and process 

heaters were listed as a major source for regulation. Major sources of HAP are those that 

have the potential to emit greater than 10 tons per year (tpy) of any one HAP or 25 tpy of 

any combination of HAP. 

Under the CAA section 112(k) (Urban Strategy/Area Source Program), EPA is to identify 

and list area source categories accounting for 90 percent of the emissions of each of 30 

urban HAP emitted from area sources. EPA published the Integrated Urban Air Toxics 

Strategy on July 19, 1999 (64 FR 38707). As part of the Strategy, EPA listed Industrial 

Boilers and Commercial/Institutional Boilers as two of the area source categories for 

regulation. Once the area source categories are listed, section 112(d) requires the EPA to 
6

promulgate technology-based standards for the sources in the listed category. The 

standards can be based on either maximum achievable control technology (MACT) or, at 

the discretion of the Administrator, generally available control technology (GACT). 

In addition, both area source industrial boilers and commercial/institutional boilers are on 

the list of section 112(c)(6) source categories, which requires that the listed categories be 

subject to MACT regulation. These categories are on the 112(c)(6) list because of 

emissions of mercury and polycyclic organic matter (POM). 

A NESHAP (Boiler MACT) was promulgated on September 13, 2004 for industrial 

boilers, commercial and institutional boilers, and process heaters. Petitions for judicial 

review were filed on the promulgated Boiler MACT. The Boiler MACT was vacated by 

the D.C. Circuit Court of Appeals on June 8, 2007. The court remanded the NESHAP to 

EPA, requiring the Agency to revise the Boiler MACT and the associated MACT floors. 

In the same decision, the court also vacated and remanded EPA’s CISWI definitions rule, 

in which the Agency had defined “commercial and industrial solid waste” to exclude 

materials combusted in units for energy recovery. The court held that the plain meaning 

of the statute required EPA to regulate under section 129 of the CAA “any” unit which 

combusts “any” solid waste material. Under section 129, “solid waste” is to have the 

meaning established by the Administrator under the Solid Waste Disposal Act. 

Therefore, combustion units that combust any solid waste will be subject to emissions 

standards under section 129. Combustion units that do not combust any solid waste will 

be subject to emissions standards under section 112. 

2.2 Description of the Rule and its Scope 

The industrial boilers source category includes boilers used in manufacturing, processing, 

mining, and refining or any other industry. The commercial/institutional boilers source 

category includes boilers used in commercial establishments (stores/malls, laundries, 

apartments, restaurants), medical centers (hospitals, clinics, nursing homes), educational 

and religious facilities (schools, universities, churches), hotels/motels, and municipal 

buildings (courthouses, prisons). 

The vacated Boiler MACT affected industrial boilers, institutional and commercial 

boilers, and process heaters located at major source facilities. A process heater was 

defined as enclosed device using controlled flame, that is not a boiler, and the unit’s 

primary purpose is to transfer heat indirectly to a process material. Process heaters do not 

include units used for comfort heat or space heat, food preparation for on-site 

consumption, or autoclaves. A boiler was defined as an enclosed device using controlled 

flame combustion and having the primary purpose of recovering thermal energy in the 

form of steam or hot water. Waste heat boilers are excluded from the definition of boiler. 

Hot water heaters were also not regulated under the vacated rule. A hot water heater was 

defined as a closed vessel with a capacity of no more than 120 U.S. gallons, in which 

water is heated by combustion of gaseous or liquid fuel. Temporary boilers were also not 

regulated under the vacated rule. A temporary boiler was any gaseous or liquid fuel-fired 
7

boiler that remained at any one location for less than 180 consecutive days. Boilers or 

process heaters that are used specifically for research and development were not 

regulated under the vacated rule. 

The vacated Boiler MACT reflected the application of the maximum achievable control 

technology (MACT). Pollutants of interest are all hazardous air pollutants (HAP), but 

mainly metals, acid gases, mercury, and organic HAP. Hydrogen chloride (HCl) was the 

predominant HAP emitted from boilers/process heaters, and HCl was used as a surrogate 

for all acid gases. Boilers/process heaters also emit metals (mostly arsenic, cadmium, 

chromium, mercury, manganese, nickel, and lead). The vacated Boiler MACT used PM 

as a surrogate for metal emissions. Boilers/process heaters emit organic HAP emissions 

(mostly formaldehyde, benzene, and acetaldehyde). Carbon monoxide (CO) was used as 

a surrogate for organic HAP emissions. 

In developing the vacated Boiler MACT, it was estimated that the number of affected 

boilers/process heaters were as follows: 3,808 solid fuel, 7,500 liquid fuel, and 46,892 

gaseous fuel. These estimates were based on data that were compiled in 1999. Based on 

a preliminary review of responses to a survey conducted by EPA of all facilities that 

would have been subject to the vacated Boiler MACT, revised estimates are 2,414 major 

source facilities with about 11,500 boilers/process heaters. Approximately, 158 (or 7 

percent) of these facilities are reported to be small entities. 

As for boiler area sources, there are estimated to be over one million boilers located at 

industrial, commercial, and institutional area source facilities. The vast majority of area 

source boilers are estimated to be located at commercial and institutional facilities, and, 

thus, generally owned or operated by small entities. Many of the boilers at area sources 

are not required to have a permit or submit periodic emission reports to a state or federal 

agency. Natural gas is the principal fuel type used by commercial and institutional 

boilers, but many do combust wood, coal, or other non-fossil and biomass fuels (e.g., fish 

oil, landfill gas, and agricultural residues). Pollutants of interest are all HAP, but mainly, 

metals, mercury, and organic HAP. Industrial boilers and commercial/institutional 

boilers are on the 112(c)(6) list due to their emissions of mercury and POM. 

2.3 Related Federal Rules 

These rules will regulate source categories covering industrial boilers, institutional and 

commercial boilers, and process heaters. These source categories potentially include 

combustion units that are already regulated by other MACT standards. Therefore, we 

intend to exclude from these rules any boiler or process heater that is already or will be 

subject to regulation under another MACT standard. 

Combustion units that are regulated by other standards and are therefore likely to be 

excluded from these rules include: solid waste incineration units covered by section 129 

of the CAA; boilers or process heaters covered by the hazardous waste combustor 

NESHAP; kraft recovery furnaces; and electric utility steam generating units (i.e., a fossil 

fuel-fired combustion unit of more than 25 megawatts that serves a generator that 
8

produces electricity for sale). 

In 1986, EPA developed new source performance standards (NSPS) for industrial, 

commercial, and institutional boilers having a heat input capacity greater than 100 

million Btu per hour (40 CFR part 60, subparts Db and Dc). The NSPS regulates 

emissions of particulate matter (PM), sulfur dioxide, and nitrogen oxides from boilers 

constructed after June 1984. Sources subject to the NSPS would also be subject to these 

rules because these rules regulate sources of HAP while the NSPS does not. However, in 

developing these rules for industrial, commercial, and institutional boilers and process 

heaters, EPA will minimize the monitoring requirements, testing requirements, and 

recordkeeping requirements to avoid duplicating requirements. 

3. OVERVIEW OF PROPOSAL UNDER CONSIDERATION 

3.1 Potential Requirements of the Proposals 

Development of standards for major sources and area sources are a statutorily required 

action. Voluntary and incentive-based approaches are not available for these 

rulemakings. These proposals must set technology-based limits as appropriate, but will 

explore options to nontraditional rulemaking, such as pollution prevention approaches 

(e.g., energy audits and tune-ups) and innovative compliance measures (e.g., health based 

compliance alternatives). 

Section 112(d)(2) of the CAA states that standards are based on the maximum achievable 

control technology (MACT). Section 112(d)(3) sets minimum stringency criteria 

(MACT Floor) for these standards. For existing sources, the standards shall not be less 

stringent than “the average emission limitation achieved by the best performing 12 

percent of existing sources...” For new sources, the MACT floor is “the emission control 

achieved in practice by the best controlled similar source...” 

The court has rule that the “no emission reduction” MACT floors (resulting in no 

emission limits being set for some of the existing subcategories) in the vacated Boiler 

MACT are unlawful. Thus, the proposal for major sources will contain limits for HAP 

for all subcategories. Therefore, emission limits will need to be developed for PM (as a 

surrogate for metals), mercury, HCl (as a surrogate for acid gases), and CO (as a 

surrogate for organic HAP). Based on the rulemaking done for the vacated Boiler 

MACT, the likely control technology basis representing the MACT Floor for the various 

emission limits for major sources will be: 

• PM/metals = Fabric Filters 

• Mercury = Fabric Filters 

• HCl = Wet Scrubber 

• CO = Good Combustion Practice (CO limit/monitoring) 

One of the first issues that must be addressed in these rulemakings is defining “solid 

waste.” The definition of “solid waste,” that is nonhazardous solid waste, is being 

developed by EPA’s Office of Solid Waste. Once that is determined, waste-burning 
9

boilers will be removed from MACT databases, and the emission limits will be 

reassessed in accordance with recent court decisions regarding MACT floor 

determinations. This will require that MACT floor “emission limits” be developed for 

subcategories and HAP groups that had no emission standards in the vacated Boiler 

MACT. 

To assist in this effort, EPA is currently conducting a survey to collect information on 

materials combusted and emissions in order to address the court decisions. That is, 

revising the population of boilers that should be covered under the Boiler MACT. This 

survey was sent mainly to major sources. Responses to the survey were received by the 

end of November 2008. 

For the Boiler Area Source rule, emission limits for mercury and POM must be based on 

MACT because MACT emission limits are required under 112(c)(6) and mercury and 

POM are 112(c)(6) pollutants. Again, CO will be used as surrogate for POM. The likely 

control technology basis for mercury is either a fabric filter or fuel switching to a lower 

mercury content fuel and for POM is good combustion practices (GCP), such as annual 

tune-up or burner replacement. A work practice standard, instead of emission limits, may 

be proposed if it can be justified under section 112(h), that is, it is impracticable to 

enforce the emission standards due to technical or economic limitations. These work 

practice standards could include annual tune-up and/or energy audits. These work 

practice standards could reduce fuel use which would result in reduced emissions of 

mercury and POM. For the other HAP (metals, organic HAP), GACT emission limits 

will be proposed, using PM as surrogate for metals and CO as surrogate for organic HAP, 

or a GACT management practices will be proposed (annual tune-up, energy audits, 

installation of energy efficient boiler). 

3.2 Options Likely to be Proposed 

EPA is in the early stages of developing the proposals. EPA has not yet decided on a 

detailed approach for subcategorizing the source categories, determining the MACT 

floor, or the compliance requirements. As EPA is beginning to develop these 

rulemakings, EPA is also starting to discuss appropriate options that would, consistent 

with the Clean Air Act, ease the compliance burden for small businesses that may be 

affected by the rules while maintaining the overall goals of the programs. EPA will 

continue to seek input from small entities throughout the regulatory development process. 

We note that the vacated Boiler MACT was certified as not having a significant 

economic impact on a substantial number of small entities due to the decisions made at 

that time regarding the development of that rule. However, the decision to have a 

separate subcategory for small boilers which resulted in a no emission reduction MACT 

floor (and thus no emission limit) has since been ruled unlawful by the court. Therefore, 

we must assess the potential options in light of current case law. 

In addition, expansion of the program to both major and area sources means that certain 

sectors and businesses that were not previously covered under the vacated Boiler MACT 

will now become obligated parties. EPA does intend to explore potential flexibility 
10

options for small entities. Some potential options to assist small entities in compliance 

with the new rule requirements are discussed below. 

A likely option for both rulemakings is to limit the number of subcategories to four: coal, 

biomass, liquid, and gas. While emission characteristics differ between fuel types. Size 

and duty cycle have little effect on emissions or controls. Subcategories by fuel type 

would simplify the regulations and enforcement. Basing subcategories on industry 

sectors, such as, pulp & paper, chemical, furniture, refineries, etc., or source categories, 

such as, commercial units, institutional units will continue to be explored. However, it 

currently appears that the sector has little effect on emissions or control feasibility and 

there is limited emissions information on many sectors. So, there appears to be no 

technical justification for creating additional special subcategories but EPA will continue 

to consider any option suggested for subcategorization to reduce the impact of the rules 

on small entities. 

Likely options to be proposed are in terms of compliance requirements, such as, emission 

averaging within facility, reduced monitoring/testing requirements, or allowing more 

time for compliance. For area sources, exempting them from Title V permitting may be 

an option but only if we can determine compliance would be impracticable, infeasible, or 

unnecessarily burdensome. 

4. APPLICABLE SMALL ENTITY DEFINITIONS 

For purposes of assessing the impacts of the proposed rule on small entities, small entity 

is defined as: (1) a small business as defined by the Small Business Administration's 

(SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a 

government of a city, county, town, school district or special district with a population of 

less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is 

independently owned and operated and is not dominant in its field. Small businesses (as 

well as large businesses) would be regulated by these rulemakings, as well as small 

governmental jurisdictions or small organizations as described above. As set by SBA, the 

categories of small entities that will potentially be affected by this rulemaking are defined 

in the following table: 

Defined as small entity by SBA if 

less than or equal to: 

Sector NAICS 

Code 

Number of 

Employees 

Millions of 

Dollars Revenue 

or Budget 

Major 

Sources 

Area 

Sources

Wood Product 

Manufacturing 

321 500 Yes Yes 

Furniture 337 500 Yes Yes 

Utilities 

(Municipal) 

221 4 million 

megawatt hours 

Yes No 

Food 311 500 Yes Yes 
11

Manufacturing 

Elementary and 

Secondary 

Schools 

611110 $7.0 No Yes 

Hospitals 622 $34.5 No Yes 

Religious 

Organizations 

813110 $7.0 No Yes 

Full-Service 

Restaurants 

722110 $7.0 No Yes 

Commercial 

Printing 

323 500 Yes Yes 

Hotels and 

Motels 

721110 $7.0 No Yes 

EPA used a variety of sources to identify which entities are appropriately considered 

“small.” EPA used the criteria for small entities developed by the Small Business 

Administration under the North American Industry Classification System (NAICS) as a 

guide. Information about the characteristics of the sectors comes from sources including 

the Energy Information Administration (EIA) within the U.S. Department of Energy and 

the U.S. Census Bureau. EPA then found employment, revenue, and population 

information for parent entities using the Dun and Bradstreet, Standard & Poor’s, 

American Business Information, and U.S. Census Bureau. 

5. SMALL ENTITIES THAT MAY BE SUBJECT TO THE PROPOSED 

REGULATION 

The estimated number of small entities that will be subject to these rulemakings, as 

required by CAA, for the various industrial, commercial, and institutional sectors are 

presented in the following tables: 

Boiler MACT

Sector Estimated Number of Small Entities

Food and Kindred Products (NAICS 311) 7 

Plastics and Rubber Products Manufacturing 

(NAICS 326) 

12 

Lumber and Wood Products (NAICS 321) 20 

Furniture and Fixtures (NAICS 337) 9 

Paper and Allied Products (NAICS 322) 16 

Chemical and Allied Products (NAICS 325) 18 

Electric, Gas, And Sanitary Services (i.e., 

Municipal Boilers) (NAICS 221) 

26 

Fabricated Metals Products (NAICS 332) 9 

Petroleum Refining and Related Industries 

(NAICS 324) 

8 

Primary Metal Manufacturing (NAICS 331) 6 
12

Transportation Equipment Manufacturing (NAICS 

336 

6 

Printing and Related Support Activities (NAICS 

323) 

5 

Oil and Gas Extraction (NAICS 211) 3 

Nonmetallic Mineral Products Manufacturing 

(NAICS 327) 

3 

Waste Management (NAICS 562) 2 

Educational Services (NAICS 611) 2 

Others (NAICS 212, 313, 316, 339, 493, 423) 6 

TOTAL 158 

Boiler Area Sources

Sector Estimated Number of Small 

Entities 

Food Manufacturing (NAICS 311) 18,200 

Wood Product Manufacturing (NAICS 321) 1,300 

Religious Organizations (NAICS 8131) 37,500 

Wholesale Trade (NAICS 422) 1,900 

Real Estate (NAICS 531) 329,000 

Educational Services (NAICS 611) 210,000 

Traveler Accommodations (NAICS 7211) 42,700 

Hospitals (NAICS 622) 23,800 

Food Services and Drinking Places (NAICS 722) 21,200 

TOTAL 685,600 

 

Based on the 2002 Economic Census, EPA believes that the percentage of firms 

qualifying as small entities under the NAICS definitions in each of these sectors range 

from 96 percent to 99.5 percent. It should be noted that the estimate of facilities 

nationwide in each of the sectors is projected from inventories of boilers, inspected for 

safety and insurance purposes, from 13 states, the actual number of small entities that 

ultimately subject to these rules could be different than this initial estimate. 

6. SUMMARY OF SMALL ENTITY OUTREACH 

6.1 Small Entity Outreach 

Before beginning the formal SBAR Panel process, EPA actively engaged in outreach 

with entities that would potentially be affected by the upcoming rulemaking. EPA held 

phone conferences with some of these companies, and also had conference calls with an 

ad-hoc coalition of small entities to discuss the proposed rulemaking and to provide these 

contacts with an early opportunity to ask questions and discuss their concerns with the 

upcoming rulemaking. EPA provided each potential small entity representative (SER) 

with general information on the SBAR Panel process and background information on the 

Boiler MACT and the Boiler Area Source rulemaking process. Once the SBAR Panel 
13

process began and potential SERs were identified, EPA held an outreach meeting with 

the potential SERs on November 13, 2008. 

6.2 Summary of EPA’s Outreach Meeting with Potential Small Entity 

Representatives 

On November 13, 2008 EPA held a two-hour meeting with potential SERs for this SBAR 

Panel and invited representatives from the Office of Advocacy of the Small Business 

Administration and the Office of Information and Regulatory Affairs within the Office of 

Management and Budget to the meeting. To help them prepare for the 

meeting/teleconference, on October 30, 2008, EPA sent materials to each of the potential 

SERs via email. A list of the materials shared with the potential SERs during the prepanel outreach meeting is contained in Appendix A. The Outreach Meeting was held to 

solicit feedback from the potential SERs on the upcoming rulemaking. Representatives 

from nine of the twelve companies and organizations that we selected as potential SERs 

for this SBREFA process participated in the meeting (in person and by phone). 

The meeting was opened by Lanelle Wiggins, acting in place of Alex Cristofaro, EPA’s 

Small Business Advocacy Chair, with a short introduction to the Regulatory Flexibility 

Act (RFA) and SBREFA; this also included an explanation of the SBREFA process, the 

purpose of the Outreach Meeting, and the importance of the SERs’ comments. Following 

this was a presentation by EPA staff on the Boiler MACT and Boiler Area Source rules, 

requirements of CAA, and our current thinking on the scope of the proposed 

requirements for the Boiler MACT and Boiler Area Source rules. EPA then began a 

discussion on how the rulemakings are working so far, previous alternatives used in past 

rulemakings, and potential small business flexibilities for these rules. (See Section 8.5 

for discussions/comments raised during the EPA Outreach Meeting, and Appendix B for 

the written comments received from potential SERs.) EPA asked that the potential SERs 

provide feedback on the outreach packet they received as well as the outreach meeting 

itself by November 26, 2008. 

A discussion of issues related to the NESHAP program (both the Boiler MACT and 

Boiler Area Source rules) followed EPA’s presentation. The area source program was 

discussed for those who are not as familiar with the program since many small entities 

have not previously been subject to emission standards. Further, there were discussions 

regarding the changes mandated by Court that will be proposed in the Boiler MACT and 

Boiler Area Source rules that are of importance to the small entities. These changes 

include: standards for all HAP and subcategories instead of a MACT floor of “no 

emission reduction” (thus requiring emissions limits for all units) and work practice 

standards only if they can be justified due to technical or economic reasons. In general, 

potential SERs noted that a regulatory approach to improve combustion efficiency, such 

as work practice standards instead of emission standards, would have positive impacts 

with respect to the environment and energy use and it would save revenue. 

6.3 Summary of SBAR Panel’s Outreach Meeting with Small Entity Representatives 
14

The SBAR Panel convened on January 22, 2009. The Panel held a formal outreach 

meeting/teleconference with SERs on February 10, 2009. To help the SERs prepare for 

the meeting/teleconference, on January 29, 2009, the Panel sent materials to each of the 

SERs via email. A list of the materials shared with the SERs during the SBAR Panel 

Outreach Meeting is contained in Appendix A. 

Information presented at the meeting included: 

• Background and regulatory history 

• Overview of proposal ideas 

• Applicable small entity definitions 

• Small entities potentially subject to regulation 

• Regulatory flexibility options for small entities 

• Preliminary cost and economic impact on small entities 

 

The Outreach Meeting was held to solicit feedback from the SERs on their suggestions 

for the upcoming rulemakings. The main areas for comment received in the previous 

outreach meeting covered the following topics: 

o Subcategorization of units 

o Health-Based Compliance Alternatives 

o Emission Averaging 

EPA asked the Panel Members to elaborate on specific information needed from the 

SERs that will help inform their report to the Administrator. The Panel summarized the 

following needs: 

1. Specific Ideas for making compliance with both the major source boilers and 

process heaters rule and the area source rule more flexible to small entities. Ideas 

emphasized to date have included: 

a. Health-based Compliance Alternatives 

b. Increased subcategorization (considering unit design, fuels, operations) 

c. Energy Audits, and how they can be made most effective 

2. Emission variability issues to the extent there is data to support the variability of 

emissions across a certain subcategory, and/or intra-unit variability. 

The Agency received written comments from five SERs (See Appendix B). Section 8.6 

of this document contains a summary of the minutes for the February 10 Panel Outreach 

Meeting. 

7. LIST OF SMALL ENTITY REPRESENTATIVES 

Of the original 15 potential SERs who participated in the pre-panel outreach 14 were 

selected as official SERs for the Panel process. In addition to the original 14, the 

National School Board Association was added following the pre-panel outreach meeting. 
15

The Council of Industrial Boiler Owners participated at the pre-panel level and provided 

comment, but did not participate in the panel stage. The official SER list is as follows: 

Waccamaw Community Hospital 

David W. Crego 

Murrells Inlet, SC 

Bulter Printing & Laminating Inc. 

Walter L. Nordblom 

Bulter, NJ 

Port Townsend Paper Corporation 

Eveleen Muehlethaler 

Port Townsend, WA 

 

Bamberg County Hospital 

R. Dean Felkel 

Bamberg, SC 

 

Monadnock Paper Mills, Inc. 

Richard Verney 

Bennington, NH 

Sugar Cane Growers Cooperative of Florida 

Kathleen Lockhart 

Belle Glade, FL 

Darby Schools 

Mr. Rick Scheele 

Darby, MT 

 

Hartzell Hardwoods, Inc. 

Terri Gerlach 

Piqua, OH 

Orrville Utilities 

Jeff Brediger 

Orrville, OH 

Cedar Lane Farms 

Tom Machamer 

Wooster, OH 

American Forest & Paper Association 

Timothy G. Hunt 

Washington, DC 
16

National School Boards Association 

Marc Egan 

Alexandria, VA 

American Home Furnishings Alliance 

Bill Perdue 

High Point, NC 

American Hotel and Lodging Association 

Kevin Maher 

Washington, DC 

Interfaith Coalition on Energy 

Andrew Rubin 

Melrose Park, PA 

8. SUMMARY OF INPUT FROM SMALL ENTITY REPRESENTATIVES 

8.1 Number and Types of Entities Affected 

Though the SBAR Panel did not receive specific comments on the number and types of 

entities that may be affected by the two rulemakings, the Panel believes that the SERs are 

in agreement with EPA on this matter. The tables in Chapter 5 of this report, which 

present the industry, commercial, and institutional sectors, number of small entities 

potentially affected by the two rules, were provided to the SERs before both outreach 

meetings, and were discussed at the meetings. 

8.2 Potential Reporting, Record Keeping, and Compliance 

During the outreach meeting, EPA directed the focus to a list of directed questions EPA 

had prepared for SER (See Appendix B for the actual questions). The purpose of the 

questions was for EPA to collect information on how small entities will have to absorb 

the costs of compliance with the proposed rulemakings. The SERs were encouraged to 

provide comments on the specific questions in addition to other metrics of absorbing 

costs of the regulations. Several SERs noted that recordkeeping activities, as was 

required by the vacated Boiler MACT, would be especially challenging for small entities 

that do not have a dedicated environmental affairs department. They estimated that one 

hour per day would be devoted to recordkeeping activities mentioned in the regulatory 

options. Two SERs commented that requiring recordkeeping and reporting for operator 

training or certification would be an increased burden with little environmental benefits. 

8.3 Related Federal Rules 

The only comment the SBAR Panel received from SERs on related Federal rules was 

about the rulemaking on the definition of non-hazardous solid waste. The SERs 
17

commented that the solid waste definition could have significant economic impact on 

small entities. The SERs commented that additional regulatory requirements that would 

be imposed on a small entity if it was regulated as an incinerator under section 129 of the 

CAA would present an extreme burden on a small entity, possibly forcing the facility to 

shut down. 

8.4 Regulatory Flexibility Alternatives 

As described in section 6.2 and 6.3 above, EPA conducted outreach to SERs by sending 

outreach packages and conducting outreach meetings/teleconferences with them on 

November 13, 2008 and February 10, 2009. In addition to the oral comments that the 

SERs made during the outreach meetings, the Panel received written comments from 5 

potential SERs during the pre-Panel outreach and from 5 SERs during the formal Panel 

outreach process (including two who submitted a set of joint comments). The written 

comments were distributed to all Panel members as they were received. A summary of 

the comments is provided below. 

 8.4.1 Work Practice Standards 

During the SER Outreach meeting, several questions were directed towards the SERs 

regarding the management practices (e.g., tune-ups, operator training or certification) that 

are typically required by their State. It was commented that they are not aware of any 

state requirements for boiler “tune-ups” but they believe annual tune-ups are the most 

cost effective way to improve boiler performance and reduce emissions under a MACT 

rule. One SER, representing sugar cane growers, suggested that a fuel specification 

standard specifically for bagasse-fired boilers could also be a cost effective option, as it 

would eliminate or reduce the needing for testing and monitoring, but only if it was an 

option and not a requirement. 

The SERs commented that it is less clear how requiring energy audits would work for 

small sources since the annual tune-up may achieve most of the emission reduction 

benefits. The SERs have concerns with implementation of energy audit findings, but if 

required to implant energy audit findings, one SER suggested that the threshold should be 

no more than a 1-year payback period. 

As for operator licensing, only 11 states and 18 major cities have some program with 

respect to boiler operator licensing. In many instances, when a licensed boiler operator is 

required is dependent on the size and operating pressure of the boiler. Boilers located at 

large industrial facilities generally have dedicated operators who have been trained in the 

proper operation and maintenance of boilers. Boilers located at commercial and 

institutional facilities generally are smaller than those at industrial facilities and do not 

have dedicated operators but are operated by staff personnel (e.g., custodian) who do not 

have the same degree of training in good combustion practices. 

The SERs presented their estimates on the cost and burden for permitting, recordkeeping, 

annual tune-up, and operator training and licensing, but commented EPA should consider 
18

other ways to mitigate the cost of compliance for small entities, including relaxed 

monitoring, recordkeeping/reporting and testing obligations. 

 8.4.2 Subcategorization 

SERs commented that subcategorization is a key concept that could make sure that like 

boilers are compared with similar boilers so that MACT floors are more reasonable and 

could be achieved by all units within a subcategory using appropriate emission reduction 

strategies. One SER commented that bagasse-fired boilers should be regulated as a 

separate subcategory. Bagasse-fired boilers have several unique characteristics. The 

boilers usually are operated only during the sugarcane harvest. The design of the furnace, 

combined with the high moisture content and other characteristics of the bagasse, 

produces a relatively unique combustion process and a characteristic mix of emissions. 

Emissions data obtained by EPA for other solid fuel-fired boilers are not likely to be 

representative of the emissions from bagasse-fired boilers. 

One SER commented that EPA should subcategorize based on coal type. Coal rank 

matters because different categories of coal have very different characteristics. Coalfired boilers are not “one-size fits-all,” but rather much more specialized units that are 

designed to operate effectively burning a particular type of coal. Boilers designed to burn 

a certain coal type cannot burn other coal ranks to meet emission limits. In addition to 

properly recognizing technological differences, subcategorization will also help alleviate 

the achievability concerns likely to stem from combining boilers that burn different coal 

ranks when determining the MACT floor. 

Several SERs commented that EPA should examine a full list of possible subcategories 

based on fuel type, boiler type, and duty cycle. The structural differences among boiler 

types (e.g., fluidized bed, stokers, pulverized coal, suspension burners) translate into 

distinct combustion efficiency and emissions profiles that are unrelated to control 

technology. The vacated Boiler MACT subcategorized fuels into solid, liquid and gas. 

The SERs requested that further subcategorization be made for fuel such as coal, wet 

biomass, dry biomass, distillate fuel oil, residual fuel oil, and gas. SERs also commented 

that limited use boilers (such as those used in churches, municipalities) be a subcategory, 

A comment raised during the SER Outreach Meeting was whether EPA could 

subcategorize on facility-level differences as opposed to technical differences in the unit 

size and design. For example, some SERs asked whether a separate subcategory for units 

at small entities could be developed. Since the SER Outreach Meeting, EPA has 

investigated the issue and based on a review of the legislative history has determined that 

economic grounds are not to be the basis for creation of section 112 categories. 

Therefore, it is clear that EPA has concluded that subcategorization cannot be based 

solely on costs or entity size. The types of factors that are rational bases for 

subcategorizing are emissions differences, based on the fuel burned, combustor size and 

use characteristics, and the technical feasibility of applying emissions controls. 
19

 8.4.3 Health Based Compliance Alternatives (HBCA) 

Several SERs commented that the HBCA for both hydrogen chloride (HCl) and 

manganese is perhaps the most important step EPA can take to mitigate the serious 

financial harm Boiler MACT will otherwise inflict on small entities using solid fuels 

nationwide and, therefore, HBCA should be a critical component of any future rule to 

lessen impact on small entities. The HBCA that were in the vacated Boiler MACT were 

one of the several decisions EPA made that resulted in limiting the impact of the rule on 

small entities and the rule not having a significant economic impact on a substantial 

number of small entities. 

The panel and SERs acknowledge that the HBCA provision was the main issue in the 

litigation of the Boiler MACT but the Court did not rule on this issue in vacating the 

Boiler MACT. 

 8.4.4 Potential Adverse Economic Impact 

Several SERs commented that their interpretation of these rulings would find them in a 

awkward financial situation. One SER commented that with profits of less then one 

percent over the last five years, how would they get and repay the capital to buy, install, 

and maintain the new equipment required by these rules. The SER commented that “we 

have been down this road before” when they invested over $350,000 during the late 

1990s to minimize emissions from one of their existing boilers; the SER believe that they 

still have not recovered from that investment. 

One SER expressed concerns that, depending on the range of requirements, the 

regulations could be exceptionally costly or even outright unaffordable for local school 

districts to implement, and urged EPA to fully and seriously weigh the ultimate 

consequences the regulations might have on the nation’s school districts. 

Several SERs commented that they know of several other small entities that will also be 

negatively affected by these rules. They feel that the impact of these rules, as they 

understand them, will put them out of business. This is due to the fact that the estimate 

for the equipment and installation to bring their seasonal boilers up to the new rule 

standards would be over $500,000 which is nearly half of their yearly sales. 

 8.4.5 Emissions Averaging 

SERs commented that a measure EPA should consider to lessen the regulatory burden of 

complying with Boiler MACT is to allow emissions averaging at sources with multiple 

regulated units. By allowing averaging, sources with multiple units at a common site will 

be able to achieve EPA’s regulatory requirements at lower overall compliance costs while 

achieving the same emission control benefit. This enables innovation and offers the 

flexibility to match control technologies to the units with the highest utilization at a 

facility. 
20

SERs commented that another approach that can aide small entity compliance is to set 

longer averaging times (i.e., 30-days or more) rather than looking at a mere 3-run (hour) 

average for performance. Given the inherent variability in boiler performance, an annual 

or quarterly averaging period for all HAP, but especially for CO, would prevent a single 

spike in emissions from throwing a top performing unit into non-compliance. 

Several SERs commented that properly capturing variability is central to establishing 

MACT standards that are achievable by all similarly situated units in a given 

subcategory. There are at least four aspects of variability that must be considered in 

setting MACT floors: (1) boiler operating variability (such as load swings), (2) variability 

in control device performance, (3) variability in the test methods, and (4) variability in 

the composition of fuels combusted. 

9. PANEL FINDINGS AND DISCUSSION 

9.1 Number and Types of Entities Affected 

The Boiler Area Source rule consists primarily of institutional and commercial facilities, 

such as, schools, churches, and hotels/motels. For the Boiler MACT, the small entities are 

primarily industrial facilities, such as, lumber mills and municipal boilers. For a complete 

description and estimate of the type and number of small entities to which the proposed 

rules will apply, see section 5. 

9.2 Potential Reporting, Record Keeping, and Compliance 

In general, state agencies will enforce both the Boiler MACT and the Boiler Area Source 

rules, owing to CAA section 112(l), which directs the EPA Administrator to delegate to 

each State, when appropriate, the authority to implement and enforce standards and other 

requirements pursuant to section 112 for stationary sources located in that State. Title V 

of the CAA requires that a State’s permit programs ensure compliance with all 

requirements established under section 112 applicable to major sources and area sources. 

Section 502(a) of the CAA, however, provides that the Administrator may exempt an 

area source category (in whole or in part) from title V if the Administrator determines 

that compliance with title V requirements is impracticable, infeasible, or unnecessarily 

burdensome on an area source category. Therefore, if the Boiler Area Source rule 

exempts sources from the need to obtain a title V permit, it is unclear whether state 

agencies will implement and enforce the rule. Regardless of whether a rule is delegated, 

EPA retains enforcement authority for section 112 rules. 

The General Provisions, subpart A of 40 CRF part 63, list the requirements for 

recordkeeping and reporting to ensure compliance with, and effective enforcement of 

rules established under section 112 of the CAA. As part of any rulemaking, these 

requirements are evaluated to determine the minimum recordkeeping and reporting 

necessary to ensure compliance with and enforcement of the proposed rules. The Panel 

recommends that EPA minimize the potential burden of compliance on small entities. 
21

Specifically, with respect to sources at area sources, the Panel recommends EPA consider 

an exemption from title V permitting requirements, reduced monitoring requirements, 

and less frequent reporting. 

9.3 Related Federal Rules 

The Panel is aware of the requirements of section 112 of the CAA that direct EPA to 

establish national emission standards for hazardous air pollutants for both major and area 

sources. Section 112 requires the regulations to reflect the maximum degree of 

reductions in emissions that is achievable taking into consideration the cost of achieving 

emission reductions, any non-air quality health and environmental impacts, and energy 

requirements. Section 112 further states that these standards shall not be less stringent 

than the average emission limitation achieved by the best performing 12 percent of the 

existing sources, commonly referred to as the “MACT floor.” 

The Panel is also aware of the rulemaking currently underway by EPA’s Office of 

Resource Conservation and Recovery to issue a final rule on the definition of nonhazardous solid waste. Boilers that combust any solid waste material would be regulated 

under section 129 of the CAA instead of either the Boiler MACT or the Boiler Area 

Source Rule. 

9.4 Regulatory Flexibility Alternatives 

EPA is seeking to minimize the burden of the proposed rules on small entities in both 

complying with the standards and in the permitting, recordkeeping, and reporting 

requirements. Because of the potential burdens and costs of meeting these standards, the 

Panel recommends that EPA consider and seek comments on the flexibility options 

described below. Several SERs commented that flexibility is important to small entities. 

The Panel believes that EPA should consider adopting the following flexibility options if 

it could assure that they significantly reduce compliance burden without significantly 

compromising intended protections for human health and the environment. 

 9.4.1 Work Practice Standards 

A work practice standard, instead of MACT emission limits, may be proposed if it can be 

justified under section 112(h) of the CAA, that is, it is impracticable to enforce the 

emission standards due to technical or economic limitations. Potential work practice 

standards could include annual boiler tune-up and/or energy audits. These work practice 

standards could reduce fuel use and improve combustion efficiency which would result in 

reduced emissions. 

In general, SERs commented that a regulatory approach to improve combustion 

efficiency, such as work practice standards, would have positive impacts with respect to 

the environment and energy use and save on compliance costs. The SERs strongly 

suggested that a work practice standard would be necessary for area sources to comply 

with the rule. The SERs were concerned with work practice standards that would require 
22

energy audits and implementation of audit findings. The basis of these concerns rested 

upon the uncertainty of the potential costs and the lack of standardized energy audit 

criteria. A SER noted that even if an energy audit finding has a short payback, there is no 

guarantee that there are available funds to implement a particular audit’s findings.

The Panel believes that EPA should consider a regulatory approach based on improving 

combustion efficiency. EPA should investigate the extent to which such an approach 

could have multiple positive impacts for the facility with respect to the environment, 

energy use, and saved compliance costs for the affected facility. The panel recommends 

that EPA consider requiring annual tune-ups, including standardized criteria outlining 

proper tune-up methods targeted at smaller boiler operators. In addition, the panel 

recommends that EPA analyze and consider the efficacy of energy audits at improving 

combustion efficiency and the cost of performing the audits, especially to smaller boiler 

operators. Furthermore, the panel recommends the EPA take comment on the cost and 

efficacy of energy audits.

 9.4.2 Subcategorization 

SERs commented that subcategorization is a key concept that could ensure that like 

boilers are compared with similar boilers so that MACT floors are more reasonable and 

could be achieved by all units within a subcategory using appropriate emission reduction 

strategies. SERs commented that EPA should subcategorize based on fuel type, boiler 

type, duty cycle, and location. 

 The Panel recognizes the need to subcategorize in order to develop MACT standards that 

are reasonable and achievable for the various boiler types and fuels used in the industrial, 

commercial, and institutional source categories. SERs recommended that EPA adopt the 

following subcategories for boilers: 

 Fuel type (including coal rank, bagasse, biomass by type, and oil by 

type); 

 Boiler design type (e.g. fluidized bed, stoker, fuel cell, suspension 

burner); 

 Duty cycle; 

 Geographic location; 

 Boiler size; 

 Burner type (with and without low-NOx burners); 

 Process heaters; 

 Limited use boilers. 

The Panel acknowledges that it may not be practicable to adopt all of the proposed 

subcategories, as there is substantial overlap between the groups. However, the Panel 

recommends that EPA consider the subcategories discussed by SERs and adopt a set of 

standards that is consistent with the Clean Air Act and which effectively reduces burden 

on small entities. 
23

 9.4.3 Health Based Compliance Alternatives (HBCA) 

In the vacated Boiler MACT, there were two HBCA (HCl and manganese) that could be 

used if the facility could demonstrate it was a low health risk to the surrounding 

community. Several SERs commented that adopting an HBCA for both HCl and 

manganese would perhaps be the most important step EPA could take to mitigate the 

serious financial harm the Boiler MACT would otherwise inflict on small entities using 

solid fuels nationwide and, therefore, HBCA should be a critical component of any future 

rule to lessen impact on small entities. 

In light of SER comments, the Panel recommends that EPA adopt HBCA as a regulatory 

flexibility option for the Boiler MACT rulemaking. The panel recognizes, however, that 

EPA has concerns about its legal authority to provide an HBCA under the Clean Air Act, 

and EPA may ultimately determine that this flexibility is inconsistent with the Clean Air 

Act.

 9.4.4 Emissions Averaging 

SERs commented that a measure EPA should consider to lessen the regulatory burden of 

complying with Boiler MACT is to allow emissions averaging at sources with multiple 

regulated units. SERs commented that another approach that can aide small entity 

compliance is to set longer averaging times (i.e., 30-days or more) rather than looking at 

a mere 3-run (hour) average for performance. Given the inherent variability in boiler 

performance, an annual or quarterly averaging period for all HAP, but especially for CO, 

would prevent a single spike in emissions from throwing a unit into non-compliance. 

The Panel appreciates the SERs comments regarding emission averaging and 

recommends that EPA consider a provision for emission averaging and long averaging 

times for the proposed emission limits. 

 9.4.5 Compliance Costs 

Several SERs noted that recordkeeping activities, as written in the vacated boiler MACT, 

would be especially challenging for small entities that do not have a dedicated 

environmental affairs department. The SERs advocate for the most efficient way to get 

reductions in HAP and requested that the Panel consider all available alternatives to 

reduce to a bare minimum any extraneous requirements that require considerable 

paperwork that in the opinion of the SERs do not contribute to emission reductions. 

The Panel recommends that EPA carefully weigh the potential burden of compliance 

requirements and consider for small entities options such as, emission averaging within 

facility, reduced monitoring/testing requirements, or allowing more time for compliance. 

For area source boilers, the Panel recommends that EPA consider exempting them from 

Title V permitting. 
24

Appendix A

List of Materials EPA Shared With Potential SERs 

(October 2008) 

• PowerPoint Presentation entitled “Combined Rulemaking for 

Industrial, Commercial, and Institutional Boilers and Process Heaters at Major Sources 

of HAP and Industrial Boilers and Commercial and Institutional Boilers at Area 

Sources” including: 

 • Regulatory History 

• Overview of Proposal Ideas 

• Applicable Small Entity Definitions 

• Small Entities Potentially Subject to Regulation 

• Regulatory Flexibility Options for Small Entities 

• Schedule 

• List of Potential SERs 

• Questions for Potential SERs 

• EPA Report: Revised Economic Impact Analysis of the Industrial Boilers and Process 

Heaters NESHAP (Condensed Version), June 2007 

• Draft Report: Economic Impact Analysis of NESHAP for Institutional, Commercial, 

and Industrial Boilers at Area Sources, RTI International, February 2007 

• Memorandum: Cost-to-Sales Analysis of Testing and Monitoring Costs, RTI 

International, June 7, 2007 

• Cost-to-Sales Appendix A (Excel file) 

Additional Materials the SBAR Panel Shared With SERs 

(February 2009) 

• PowerPoint representation (revised) 

• Memorandum: Preliminary Small Entity Cost and Emission Impacts for Boiler and 

Process Heater Rulemakings, January 2, 2009 

• Spreadsheets: Control Costs for Preliminary Economic Analysis 

• Memorandum: Draft Small Entity Screening Analysis: Industrial Boilers and Process 

Heaters, January 26, 2009 

• Spreadsheets: Small Business Screening Analysis Results 

• Information on the Linkageless Combustion Controls 

• Spreadsheet: Health Based Compliance Alternative Tracking Table 

• Spreadsheets: Capital Costs for Scrubbers, ESP, and Fabric Filters 
25

Appendix B 

Summaries of Outreach Meetings with SERs 
26

November 13, 2008 Outreach Meeting Summary

The meeting focused on three main topics: 

1. Regulatory Background 

2. Discussion and Questions on Presentation 

3. Introduction and Discussion of Directed Questions for SERs 

EPA-OAQPS presented the history and background of the NESHAP standards for boilers 

and process heaters, estimated costs and impacts of pending regulations, and a summary 

of possible regulatory options for consideration by the SERs. 

Discussion began with questions from the potential SERs on the regulatory background. 

One potential SER asked how EPA estimated the area source boiler population to be 1 

million units. EPA stated that it extrapolated this inventory nationally using boiler safety 

inspector inventories from 13 states. Another SER asked if EPA is obligated to evaluate 

all 30 HAP or just mercury (Hg) and polycyclic organic matter (POM). EPA indicated 

that EPA is obligated under section 112 (c)(6) of the Clean Air Act to consider MACT 

for Hg and POM and added that EPA is also required to focus on the 30 urban HAP that 

is specifically listed for the area sources. 

The question was asked if EPA has the authority to exclude certain sectors from its 

rulemaking. EPA indicated that it was not aware of any authority or precedence for 

excluding certain sectors that have combustion units. The question was also asked if 

EPA has any discretion on establishing a minimum threshold for the size of boilers 

subject to the standard. EPA replied that the rules will regulate all boilers, regardless of 

size, included in the source categories. One potential SER asked why gas units needed 

to be regulated if they are not on the 112 (c)(6) list. EPA responded that gas units are not 

regulated for Hg or POM, but they are regulated under 112(k) for the other HAP 

associated with the boiler category. The asked how many of the affected area source 

facilities are expected to be small entities. EPA estimated that 80 percent of area source 

facilities were expected to be small entities. 

Several potential SERs had questions on subcategories for the proposed rulemakings. 

One potential SER suggested that these new rulemakings present significant opportunity 

to re-define the subcategories in order to provide for regulatory flexibility. EPA 

responded that in order to subcategorize, you have to have enough data to assess 

variability and performance for units assigned to that subcategory. Another SER asked if 

EPA could subcategorize on facility-level differences as opposed to technical differences 

in the unit size and design. For example, could a separate subcategory be developed for 

units at small entities. Alternately, would it be possible for EPA to subcategorize based 

on whether the facility was in the public or private sector? EPA noted that the statute 

says EPA can subcategorize based on the process, class, type, and size. EPA has not 

historically looked at subcategorizing based on facility-level factors other than unit-level 

technical differences. EPA will investigate what types of sub categorization are 

statutorily appropriate for this rulemaking. 
27

SERs asked the group to summarize the major benefits of the Heath Based Compliance 

Alternatives (HBCA). EPA responded that the biggest benefit, from a compliance cost 

perspective, was that the HBCA substantially reduced the number of boilers subject to a 

numerical emission limit. There were two HBCAs in the vacated standard that could be 

used if the facility could demonstrate it was a low health risk to the surrounding 

community. In the first alternative, a facility could demonstrate compliance with a 

health-based facility-wide HCl equivalent allowable emission limit instead of a unit-level 

emission limit. In the second alternative, in lieu of complying with the emission standard 

for total selected metals (TSM), (arsenic, cadmium, chromium, mercury, manganese, 

nickel, and lead) you may demonstrate eligibility for complying with the TSM standard 

based on excluding manganese emissions from the summation of TSM emissions for the 

affected source unit. The SERs were asked if they have any data on the cost 

effectiveness of the HBCAs. If this data is available, it was requested they submit it in 

their written comments by November 26, 2008. 

 EPA directed the focus of the meeting to the list of directed questions EPA has prepared 

for SERs (actual questions shown below). The purpose of these questions is for EPA to 

collect information on how small entities will have to absorb the costs of compliance with 

the proposed rulemakings. The SERs were encouraged to provide comment on the 

specific questions in addition to other metrics of absorbing costs of the regulation. SBA 

added that a regulatory approach to improve combustion efficiency is favorable from the 

SBA perspective since efficiency based standards can have multiple positive impacts for 

the facility with respect to the environment, energy use, and saved revenues for the 

affected facility. SBA would be specifically interested in data on the costs and efficiency 

improvements of various combustion improvements. 

Directed Questions for SERs 

Questions on Management Practices 

Tune-ups and boiler operator requirements: 

1. Does your state or local authority require an annual or periodic tune-up of the 

boiler? 

2. If not, do you perform an annual or periodic tune-up as part of routine 

maintenance, and what is your estimate of the cost to perform it? What 

percentage of the cost of performing routine maintenance is the annual tune-up? 

3. Does your state or local authority require any training or certification (licensing) 

of the boiler operator? 

4. If so (a certified (licensed) boiler operator is required), what is your estimate of 

the cost of either certifying the current boiler operator or adding a certified 

(licensed) boiler operator? What percentage of your facility’s or organization’s 

budget will this cost be? 

Energy audit (assessment): 

1. Does your state or local electric power company offer any assistance, incentive, or 

discount in conducting an energy audit (assessment) for your facility? 
28

2. If a requirement for implementation of the energy conservation measures 

identified by the energy audit is imposed, what rate-of-return (in percent terms, 

not payback period) would be the minimum required for you to implement any 

identified energy conservation measures for your type of operation? 

Good Combustion Practices: 

1. Do you use any monitors, emissions parameters, or process parameters to monitor 

the operation of the boiler? 

2. If you use monitors, what kind and how many? If monitors are used, are these 

monitors in place for environmental regulatory reasons? Insurance reasons? Are 

there other reasons, and if so, what are they? 

Questions on Compliance Demonstration

1. Does your state require any continuous monitoring of emissions or process 

parameter(s)? If so, what are the costs to the facility? What percentage of overall 

facility costs do these represent? 

2. Does your state require any periodic testing or monitoring of emissions or process 

parameter(s)? If so, what are the costs to the facility? What percentage of overall 

facility costs do these represent? 

3. Do your boilers have testing ports available for conducting compliance tests? If 

not, what do you estimate the costs to be of modifying the stack for testing? 

4. If your boilers were subject to emission limits, are there alternatives to monitoring 

emissions or to stack testing that would be less costly to demonstrate compliance? 

How much less costly are these alternatives? 

Permitting: 

1. Are your boilers required to be permitted by the state or a local authority? If so, 

what is the cost for permitting? If not, what would you estimate the burden to be 

in terms of costs and hours if the boilers are required to be permitted? What is the 

size of these costs compared to the costs of boiler operation and the facility as a 

whole? If your boilers require permitting, are your permitting activities done by 

in-house staff or by outside contractors? 

2. Are your boilers required to be inspected for safety, insurance or other reasons? 

If so, how often is this performed? What is the cost of these inspections? What is 

the size of these costs compared to the cost of boiler operation and the facility as a 

whole? 

Compliance: 

1. How do you know if your boilers are properly operated and maintained, and how 

do you ensure good combustion? 

2. How much burden (in terms of cost and hours) would it be for you to maintain a 

file with daily operation and each inspection and maintenance conducted? 

3. If your boiler was subject to an emission limitation would you consider switching 

to a less polluting fuel and how much additional burden (in terms of cost and 

hours) would it add? What fuel would your facility switch to (or blends of fuels), 

and what benefits outside of reduced emissions could your facility experience? 
29

Capital Availability and Regulatory Impact: 

1. Are your firm’s or organization’s expenses for the activities listed above largely 

paid for out of equity, earnings, or debt? 

2. Considered together, how much of your firm’s or organization’s revenues or 

budget are the costs of the activities listed above in percentage terms? 
30

February 10, 2009 Panel SER Outreach Meeting Summary

Alex Christopher, EPA Small Business Chair, opened the outreach meeting and provided 

a brief background on the Regulatory Flexibility Act. He added that previous discussions 

and discussions held today will help inform the SBREFA panel on recommendations for 

these two rulemakings. He reminded all participants that written comments are due to the 

panel by February 24, 2009. The panel will then prepare a report by March 19, 2009 to 

document suggestions for the Administrator with respect to regulatory flexibility options 

for small businesses. It is EPA policy that the report will be made available to the public 

at the same time the rules are proposed. 

EPA-OAQPS presented briefly on regulatory history and the types of comments received 

by the SERs to date on the area and major source boiler rulemakings. The main areas for 

comment received in previous panel meetings covered the following topics: 

- Subcategorization of units - Previous comments had asked whether or not it 

was feasible to subcategorize based on whether or not the unit was located at a small 

entity. EPA Office of General Counsel reiterated that while EPA has some flexibility in 

developing subcategories, the subcategories must be based on technical differences 

between the units in the categories (e.g., unit design, operations, fuel types). 

Subcategories cannot be based on small entity status or sectors at which the unit is 

located. 

- Health-Based Compliance Alternatives: Previous comments have emphasized 

the need for using the health-based compliance alternatives, as were included in the 

vacated boiler MACT rulemaking as a way to reduce the burden on small entities. 

- Emission Averaging: Previous comments have emphasized that the emissionaveraging clause included in the vacated rulemaking would provide another mechanism 

to provide regulatory flexibility to small entities. 

A SER commented on the costs of the area source rulemaking under regulatory option 1, 

and emphasized his concern over the magnitude of a rulemaking with a cost of $27 

billion. He added that most of those costs are monitoring and testing costs, which do not 

achieve environmental benefits. He strongly suggested that a work practice standard 

would be justified and necessary for area sources to comply with the rule. 

Several SERs asked about the significance of the 3% cost:to:sales ratio threshold. The 

Agency explained that the 3% threshold is used as an indicator to determine whether or 

not a rulemaking has a substantial impact on a significant number of small entities 

(SISNOSE). If a rulemaking is considered to trigger a SISNOSE, a SBREFA panel must 

be convened in order for the Agency to provide ample opportunity for small entities to 

learn and provide input about the rulemakings impact. Several EPA representatives 

emphasized that the 3 percent threshold is not used from this point going forward as a 

determination of whether or not a standard is economically feasible. The Administrator 

must consider certain statutory required technology minimums, if complying with the 

MACT standard. However, the Administrator has more flexibility to consider 

economically feasible regulatory options, in combination with corresponding emission 

reduction potentials, if a GACT standard is adopted. 
31

 

A SER mentioned that municipalities must borrow money through bond funds, and he 

added that the interest rates for these funds are very high in today’s economic climate. 

The SER suggested that by providing small entities with a longer compliance timeframe, 

the small entities could stretch the compliance costs out over a longer period of time. A 

longer compliance window would significantly help cities needing to borrow capital. 

Several SERs emphasized that large capital expenses for environmental controls would 

present a very difficult challenge in this economic environment. Many of the affected 

companies would have to borrow money in order to finance this equipment during a 

period of evermore stringent credit. One SER added that they done a lot of work in 

anticipation of the Boiler MACT and that that costs should also be included in 

determining the cost of compliance. 

Several SER noted that recordkeeping activities, as written in the vacated boiler MACT 

would be especially challenging for small entities that do not have a dedicated 

environmental affairs department. They estimate that 1 hour per day would be devoted to 

recordkeeping activities mentioned in the regulatory options. 

One SER emphasized the limited use of church boilers, which operate only a few hours 

per week. These operating schedules minimize the pollutants emitted thereby increasing 

the cost per ton of pollutant removed, assuming these units would be subject to the same 

controls as other more frequently operated units. The SER requested a charitable 

exemption from the rules for all non-profit organizations. The Agency reiterated here that 

the Act does not allow for an exemption based on the sector the combustion unit is 

located. 

Several SERs expressed concerns of not incorporating unit design into the regulatory 

subcategories. One SER suggested that location be considered when creating 

subcategories for coal-fired units. The SER provided a map of coal regions with recent 

emission test data summaries for mercury emissions. He noted that mercury emission 

factors range from 2 to 20 lb/trillion Btu. 

The SERs were concerned with work practice standards that would require repetitive 

energy audits, implementation of audit suggestions, or boiler operator certifications. A 

SER noted that even if an energy audit finding has a short payback, there is no guarantee 

that there are available funds to implement a particular audit’s findings. In conclusion, 

perhaps payback period should not be the only criteria for determining whether or not a 

facility would be required to implement the audit’s suggestions. In summary, the SER 

advocates for the most efficient way to get reductions in HAP and requested that the 

Panel consider all available alternatives to reduce to a bare minimum any extraneous 

requirements that require a lot of paperwork, certification of operators, etc... that do not 

contribute to emission reductions. 

A SER suggested that longer averaging periods, especially for a pollutant like CO where 

there is a lot of variability, would help SERs comply with the standard. 
32

In closing, the Panel Members elaborated on specific information needed from the SERs 

that will help in their report to the Administrator. The Panel summarized the following 

needs: 

- Specific Ideas for making compliance with both the major source boilers and process 

heaters rule and the area source rule more flexible to small entities. Ideas emphasized to 

date have included: 

a. Health-based Compliance Alternatives 

b. Increased subcategorization (considering unit design, fuels, operations) 

c. Energy Audits, and how they can be made most effective 

- Emission variability issues to the extent there is data to support the variability of 

emissions across a certain subcategory, and/or intra-unit variability. 
33

Appendix C 

Written Comments Received from SERs 
34

Comment Received from Cedar Lane Farms

To: Jim Eddinger 

 U.S. EPA 

From: Thomas Machamer 

 Cedar Lane Farms Corp. 

 Wooster, Ohio 

December 2, 2008 

Ref: Rulemakings, HAPs and Public Comments 

Cedar Lane Farms is a 220,000 sq.ft. wholesale greenhouse in rural Wayne County, Ohio. We have two 

5.6mmBtu coal fired stokers and a 8.5mmBtu Atmospheric Fluidized Bed Combustor System (AFBC). At 

the peak of our production season we employ over 50 people and annual sales of under $1.4 million. 

Historically there has been a greenhouse on this farm for over 100 years. 

The wholesale value of just the greenhouse industry (floriculture) is over $4 billion. This is according to 

the U.S. Dept. of Agriculture Statistics Services. This $4 billion does not include sales from the tree 

nurseries, landscape companies, retail garden centers and retail box stores like Lowe’s or Wal-Mart. These 

other green industries will be negatively impacted as well. The cost (if still in business) will be passed on to 

the retail consumer. 

Our interpretation of these rulings find Cedar Lane Farms in a financial awkward situation. With profits of 

less then 1% over the last five years, we ask ourselves, how will we get and repay the capital to buy, install, 

and maintain the new equipment required by these rules. 

We have been down this road before of Maximum Achievable Control Technology (MACT) with the 

installation of our 8.5mmBtu AFBC heating system, in the late 1990s, to reduce our stoker use and 

minimize our environmental emissions. We invested over $350,000 to accomplish this. It took us over ten 

years to get the system up and running. We believe we still have not recovered from that investment. 

We have however reduced our sulfur emissions “VOLUNTARILY” with the AFBC. Actually, due to the 

way we calculate our emissions with the Maximum Potential Emissions calculations, the installation of the 

AFBC has put us potentially under these rulings . 

We know of several other local green industry companies that will also be negatively effected by these 

rules. 

To summarize the impact of these rules, as we understand them, they will put us out of business. This is 

due to the fact that the estimates for the equipment and installation to bring our seasonal stokers up to the 

new rule standers would be over $500,000. This is nearly half of our yearly sales. 

We ask for your assistance and recommendations you may have to keep Cedar Lane Farms in business 

under these rules. 

Respectfully Submitted 

Thomas Machamer 

President CLF Corp. 

 
35

Comment Received from Sugar Cane Growers Cooperative of Florida

Golder Associates Inc. 

6241 NW 23rd Street, Suite 500 

 Gainesville, FL 32653-1500 

 Telephone (352) 336-5600 

 Fax (352) 336-6603 

November 26, 2008 Via Electronic Delivery 

Energy Strategies Group 

Sector Policies and Program Division (D243-01) 

U.S. Environmental Protection Agency 

Research Triangle Park, NC 27711 

Attention: Jim Eddinger 

SUBJECT: BOILER MACT SUBCATEGORIZATION AND BAGASSE BOILERS Dear 

Mr. Eddinger: 

This letter is on behalf of the Sugar Cane Growers Cooperative of Florida (SCGCF), a Small 

Entity that will be impacted by the Boiler MACT rule, and the Florida Sugar Industry (FSI), 

which is comprised of sugarcane processors located in south Florida. These processors harvest 

sugarcane to produce raw and/or refined sugar. The SCGCF and FSI operate industrial boilers 

that use bagasse (a co-product of sugarcane processing) as their primary fuel. 

The FSI understands that the U.S. Environmental Protection Agency (EPA) is currently 

determining subcategories of boilers that should be regulated under Section 112 of the Clean Air 

Act (CAA). To assist EPA with its determination, the FSI has prepared a report (attached) 

concerning the U.S. sugarcane industry. The FSI’s report explains why bagasse is a fuel and not a 

solid waste, and why bagasse-fired boilers should be regulated under Section 112 of the CAA in a 

separate subcategory of solid fuel-fired boilers. 

Bagasse is mostly carbon, hydrogen, and oxygen. It contains a small amount of nitrogen, traces of 

other elements, and very low ash and sulfur content. Since the bagasse is washed and re-washed 

during the milling operation, it is very clean and typically has about 50-percent moisture content, 

as it is fed into the boilers. 

For more than 200 years, the sugarcane industry has used bagasse as its primary fuel. Sugarcane 

mills use bagasse-burning boilers to produce steam, which is needed to evaporate the sugarcane 

juice, run rotating equipment, and produce electricity. The electricity is used for internal 

operations in the mill and any excess is provided to the power grid. 

Bagasse has been used in sugar mills worldwide to displace the use of fossil fuels. Burning 

bagasse, instead of fossil fuels, reduces carbon dioxide (CO2) emissions into the atmosphere and, 

thus, helps mitigate global warming. In the United States, bagasse helps reduce the nation’s 

dependence on imported fuels. 

Bagasse-fired boilers have several unique characteristics. The boilers usually are operated only 

during the sugarcane harvest, which typically lasts less than 6 months in Florida. The design of 
36

the furnace, combined with the high-moisture content and other characteristics of the bagasse, 

produces a relatively unique combustion process and a characteristic mix of emissions. Among 

other things, the combustion temperatures in the FSI’s furnaces are relatively low, which 

produces relatively low nitrogen oxide (NOx) emissions, and relatively high carbon monoxide 

(CO) emissions. Of course, emissions of sulfur dioxide (SO2) and metals remain very low. 

EPA’s emissions data for other solid fuel-fired boilers are not likely to be representative of the 

emissions from bagasse-fired boilers. Consequently, EPA is not likely to establish an appropriate 

MACT floor for bagasse-fired boilers if bagasse-fired boilers are regulated under Section 112 in a 

category that includes other types of solid fuel-fired boilers. Therefore, EPA should establish a 

separate subcategory for bagasse-fired boilers when EPA establishes the MACT floor for solid 

fuel-fired boilers. 

In conclusion, bagasse is a valuable fuel that is unique to the sugar industry. Bagasse-fired boilers 

are designed to burn bagasse instead of fossil fuels, resulting in: 

 Reduced CO2 emissions, thus helping to mitigate climate change; 

Reduced emissions of metals, SO2, and NOx , when compared to the use of fossil fuels; 

Reduced dependence on foreign oil; and 

Energy and economic savings for the nation. 

For all of these reasons, EPA should establish a separate subcategory for bagasse-fired boilers, 

and not place bagasse-fired boilers in a general category with other types of solid fuel-fired 

boilers, when EPA establishes the MACT floors. 

Please do not hesitate to contact me at (352) 336-5600 if you have any questions about these 

issues. 

Sincerely yours, 

GOLDER ASSOCIATES INC. 

David A. Buff 

David A. Buff, P.E., Q.E.P. 

Principal Engineer 

 

Enclosures 

Cc: Kathy Lockhart, SCGCF 

 
37

Comment from American Forest and Paper Association

Email from Tim Hunt, American Home Furnishings Alliance, to Jim Eddinger, EPA, 

dated 12/01/08 

Jim, 

The minutes capture my memory of the meeting pretty faithfully. 

I would make a discrete action item out of your response to question 24 

so that it is highlighted like you have done with other action items 

since this issue is so critical to a MACT/GACT rule that minimizes 

impacts to small entities. It would read (additions in CAPS): EPA will 

contact the facilities identified in the best-controlled 12 percent OF 

VARIOUS POSSIBLE SUBCATEGORY GROUPINGS to request long-term data THAT 

WOULD SHOW PERFORMANCE VARIABILITY OVER TIME. 

In addition, I would also create an action item around responses to 

questions 27 and 28 that would say: "EPA will investigate ANY REASONABLE 

SUGGESTIONS FOR NEW/ADDITIONAL sub categorizations THAT are statutorily 

appropriate AND MIGHT REDUCE IMPACTS ON SMALL ENTITIES." Once we have 

had a chance to look at the survey results, we should have some 

suggestions for possible subcategories. 

Once we have the information on HBCA from you, I can try and answer 

Keith's question about its exact value to small entities in my sector. I 

can say with confidence now, however, that HBCA for both HCL and 

Manganese will be a critical component of any future rule to lessen 

impact on small entities. I was glad to see the concept reaffirmed in 

the recent Hazardous Waste Combustor MACT (FR 10/28 - excerpt attached) 

I have asked my members to consider the questions posed to SERS and get 

feedback to me later this month which I will be glad to share in 

January. 

I would note that the schedule you sent out says promulgation by March 

2010 when the consent decree you mentioned is July 15th 2010. It's 

probably worth updating especially since letters to facilities that will 

have to do HAP testing won't go out until early next year. 

I've built an e-mail distribution list of the SERS in case any of us 

want to set up a call in advance of any future call or meeting. I'd be 

glad to host if there is an interest. 

Hope everyone had a good Thanksgiving. 

Tim 
38

Comment from Council of Industrial Boiler Owners

Email from Robert Bessette, Council of Industrial Boiler Owners, to Jim Eddinger, EPA, 

dated 11/25/08 

Jim, 

I asked the following question of some of our people and Randy Rawson of 

the American Boiler Manufacturers Association (ABMA): 

Is there something at the National Board that describes boiler 

inspection or insurance inspection requirements? What are the Ohio 

Special Boilers? Are these the ones that do not need an operator? Is 

there a break point between boilers that need and do not need operators? 

I have also contacted the National Institute for Uniform Licensing of 

Power Engineers < http://www.niulpe.com/ > for a list of state 

jurisdictions that have adopted an operator licensing program. As you 

will read below, this program is designed for safety which is the topmost concern within any boiler house. 

Attached is also a copy of New Jersey's annual tune-up rule. I 

understand they are in the process of trying to update the program. Any 

tune-up program must take into consideration the linkages between Excess 

Air, CO, NOx and Efficiency (CO2)as expressed in the attached Graph 

generated by Hamworthy-Peabody Burner Company linking combustion and 

boiler design. 

Considering the amount of time, these initial comments are not complete. 

Should a SEBRFA Panel be needed, we will be prepared to discuss the 

complete list of questions. It might be worth while for the DOE to make 

a presentation on the results of the Eave Energy Now Program and the 

2000+ energy audits they have run. I believer part of that process was 

information gathered on boiler tune-ups. 

RDB 

The responses to date are as follows. We will have more after the 

holidays. 

_______________________________________________________________ 

Several comments in no particular order: 

 

As I recall an "Ohio Special" is a boiler so constructed that it has 

more output for the amount of surface area than a standard firetube 

boiler. Alternatively, since I think that Ohio's rules for operators 

revolve around surface area an "Ohio Special" allowed you more steaming 

without an operator. 

 The break point between attended and non attended boilers is 

generally two fold: state and/or local regulations requiring an operator 

based on boiler heating surface pressure, heat input or steaming rate 

and good practice at larger facilities where an on duty utility operator 

handles multiple systems. 

There is a National Board inspection code - Part RB would seem to apply 

for a general inspection. However most industrial boilers are generally 

covered by some sort of boiler and machinery insurance and typically the 

inspector from the insurance company will periodically inspect the 

boilers. It should be noted that this inspection is for mechanical 

/structural integrity and not for emissions limits compliance or 

combustion performance. 

________________________________________________________________________ 
39

Perhaps the attached will help in the interim. My quick take on Ohio 

is: Ohio law requires that steam boilers larger than 30 hp cannot be 

operated unless they are directly in the charge of a licensed engineer. 

The law goes on to define one hp as 12 sq ft of boiler heating surface. 

Additionally, this engineer may not leave the boiler plant unattended 

any longer than the length of the evaporation test of the boiler. Rules 

such as this have been the source of ambiguity and debate, however. The 

other important part of the unique Ohio Special regulations is the 

number of boilers at the (+/-) 358 sq. ft. heating surface restriction 

does not factor in to the requirement for operators. For example, as I 

understand it, a single 800 HP installation would require operators, but 

four 200 HP Ohio Specials do not, even though both scenarios generate a 

total of 800 HP of steam. 

The National Board Inspection Code (NBIC) was first published in 1946 as 

a guide for state and local jurisdiction chief inspectors. It has become 

an internationally recognized standard, adopted by most (BUT NOT ALL) US 

and Canadian jurisdictions. The NBIC provides standards for the 

installation, inspection, and repair and/or alteration of boilers, 

pressure vessels, and pressure relief devices. The Synopsis I have 

attached is self-explanatory. 

I have a couple of inquiries out that may yield more info. I'll be back 

with you tomorrow or so. 

In addition to the material above, RE: The National Board's Synopsis 

and the boiler rule overview, I would offer the following observations: 

 The National Board does not address operational considerations - 

their members (the jurisdictional boiler inspectors in the several 

states) are primarily concerned with installation and commissioning of 

boilers. The NBIC offers those inspectors guidance, but in the final 

analysis, local and state boiler inspectors will make decisions based on 

their jurisdictional requirements - and, in many instances, they may 

differ significantly from those of the ASME and/or the NBIC. Stateauthorized boiler inspectors make the final decisions. 

. In-service inspections are sometimes done by National 

Board-certified inspectors - so-called Authorized Inspectors - and many 

times they represent insurance companies. They, too, may use ASME and 

National Board codes for guidance, but they inspect primarily to satisfy 

insurance requirements. 

. Unfortunately - and I would not say this publically, necessarily - 

most boiler inspectors - National Board members or AI's from insurance 

companies -- are NOT sufficiently - if at all -- informed on combustion 

practices and most certainly not on combustion practices as they may 

pertain to emissions control. They are oriented almost entirely to the 

pressure vessel. 

. We know of no state requirements for boiler "tune-ups." If they 

exist, they most probably exist through the environmental departments 

and agencies of the states rather than the departments and agencies that 

inspect or license or certify boilers. 

. According to the information I have been able to find over the 

last few hours, the following states and major cities have some program 

with respect to boiler operator licensing: Alaska, Arkansas, Maine, 

Maryland, Massachusetts, Minnesota, Montana, New Jersey, New Mexico, 

Ohio, Oklahoma, Washington, D.C., Los Angeles, Denver, Tampa, Chicago, 

New Orleans, Detroit, Kansas City, St. Louis, New York City, Buffalo, 

Philadelphia, Pittsburgh, Memphis, Houston, Salt Lake City, Seattle, 

Milwaukee, plus over 200 more licenses in other cities. [This is 

probably not as exhaustive as it should be.] 

. Although I am not sure how many of the above it actually affects, 

in many instances when a licensed boiler operator is required is 

dependent on the size and operating pressure of the boiler or in 
40

conformance with other criteria such as the Ohio Specials. The trend, 

now, is to take action to avoid situations where licensed operators are 

needed. For instance, in a hospital, efforts may be taken to localize 

sterilization techniques within the hospital, retrofit the boiler, and 

lower the pressure of an otherwise high pressure boiler to avoid having 

to employ a licensed operator. 

. Very large boilers are operated and maintained to the highest 

criteria, normally. The smaller boilers - so-called commercial and 

institutional (schools, hospitals, prisons, shopping malls, office 

buildings, dry-cleaners, etc.) are not operated or maintained as 

vigorously, particularly in the nation's school systems. The smaller 

the boiler, seemingly, the less rigorous the operational criteria or 

routine maintenance. ABMA has fought the battle for years to train the 

operators of these types of systems to extend their lives and to obtain 

highest efficiency. When you are talking about condensing boilers - as 

opposed to conventional boilers - the rigors of operation and 

maintenance grow exponentially. If you do not practice good operations 

techniques and if you are not religious about maintenance, you will not 

get the advertising efficiency out of your boiler. Few owners 

understand this additional requirement when they purchase the systems. 

They are used to conventional systems which are far more forgiving of 

abandonment than are condensing systems (technologies). To reach the 

type of "green" efficiencies for which many are calling, condensing 

technology is the way to go, but too often the "green" turns to "brown" 

or "black" because the owner/operator doesn't operate and maintain the 

systems or the equipment in strict accordance with manufacturers' 

recommendations. 

In all candor, small boiler operators typically do not take the same 

degree of care of their systems as to larger boiler owners/operators. 

The level of operator sophistication is just not there. Many small 

boiler operators KNOW that better operation and maintenance of their 

systems would save them money on many different levels, but such is just 

a very low if not nonexistent priority. When it comes to operational or 

maintenance for emissions controls . well, if they don't spend money to 

save money (fuel and life-of-boiler perspective), they certainly don't 

spend money to control emissions. Smaller boiler operators are not 

sophisticated on good combustion practices. Every manufacturer that 

sells at least a >400,000 Btu heat input boiler will thoroughly advise 

their customer on the proper long-term operational criteria and 

maintenance routine to keep that boiler alive for a very long time. 

Because of the way they are made, those conventional boilers (again, 

condensing boilers not so much) will last a very long time even if 

neglected. 

Hope this helps. We are available for any additional consultation that 

is appropriate. 

_______________________________________________________________________ 

I agree. My experience with inspection, particularly insurance 

inspections, is that they are solely pressure part oriented leaving out 

the non pressure parts such as the burners etc entirely. In a previous 

reincarnation I was able to work out an arrangement with the insurance 

company that they would note any apparent problem areas - ie. something 

looks weird or damaged – on their reports but that was the extent of it. 

These people are pressure vessel oriented and not combustion or 

emissions oriented. A boiler could pass an insurance inspection flying 

colors and fail an emission test completely. 

 

Several states have annual tune up requirements in their operating 

permits. New Jersey and Georgia come to mind but the boilers involved 

were larger units, say 90,000 lb/hr and above in terms of size. 

 
41

We need to keep in mind that licensing per se is not necessarily the 

answer since in my experience there was, in general, no requirement for 

relicensing when say a low NOx burner was installed in place of an 

existing one. 
42

Comments from Orrville Utilities
43
44
45
46
47
48

Appendix C 

Preliminary Small Entity Cost and Emission Impacts 
49

To: Jim Eddinger, EPA SPPD 

From: Amanda Singleton, ERG 

Subject: Preliminary Small Entity Cost and Emission 

Impacts for Boiler and Process Heater Rulemakings 

 Date: January 2, 2008 

This memo summarizes the preliminary cost estimates for add-on control devices, work practice 

standards; and testing and monitoring requirements anticipated for boilers and process heaters subject to 

the hazardous air pollutants (HAP) emission standards. All costs are presented in year 2007$. This memo 

also discusses the emission reductions corresponding to the regulatory options for various hazardous air 

pollutants (HAP) and HAP surrogates that are targeted under the emission standards. The memo is 

separated into two sections to separately summarize the cost and emission impacts for units at area and 

major sources of HAP. 

1.0 Summary of Cost and Emission Impacts for Boilers at Area Sources of HAP 

Model units were created to represent approximately 1.37 million boiler area source population database so that an 

impacts analysis could be performed on a reasonable number of units and could be conducted in a practical and 

timely manner. The development of model units involved reviewing parameters that distinguish and characterize 

unit characteristics, such as the materials combusted, existing (baseline) air pollution control devices and heat input 

capacity (in million British thermal units per hour (MMBtu/hr)). Model units were defined based on various 

combinations of the parameters so that the boiler population would be accurately represented by the models. 

1.1. Model Units for Area Source Boilers 

Table A-1 presents the estimated population of 1.37 million boilers at area sources of HAP. These 

estimates were derived from boiler inspector inventories from 13 states. These inventories were then 

extrapolated nationally using a ratio of boiler heat input to state population. The distribution of boiler fuels 

was assigned based on a state-specific distribution of fuels used in industrial and commercial 

applications.1

 The distribution of unit size and baseline control was assigned based on the distribution of 

boiler sizes in the 13-state boiler inspector inventory. 

As shown in table A-1, 90 percent of the area source boiler population is gas-fired without any type of air 

pollution control device or monitoring equipment. These units have only trace emissions of PM, mercury, 

and metallic HAP. However, gas-fired units do produce organic HAP during the combustion process. 

Since emission factors at units of a similar fuel and control device are expected to be similar for units 

regardless of whether or not they are located at area or major sources of HAP, the baseline emission 

rates shown in the summary table are based on data collected during the vacated industrial, commercial 

and institutional boiler NESHAP (40 CFR Part 63 Subpart DDDDD). 

1.2 Preliminary Emission Limits for Boilers at Area Sources 

Section 112(d)(5) of the Clean Air Act (CAA) allows for area source standards to be based on GACT 

(Generally Available Control Technology). GACT may consider costs and economic impacts. However, 

since solid and liquid fuel industrial boilers and institutional/commercial boilers at area sources are on list 

of CAA 112(c)(6) source categories for Mercury (Hg) and polycyclic organic matter (POM), EPA is 

required to make these source categories subject to a MACT (Maximum Achievable Control Technology) 

for Hg and POM. EPA can use GACT for other HAP. 

 1

 2001 EIA State Fuel Consumption Data by Sector. Accessed online at: 

http://www.eia.doe.gov/emeu/states/sep_sum/html/sum_btu_res.html

http://www.eia.doe.gov/emeu/states/sep_sum/html/sum_btu_com.html
50

Table A-2 summarizes preliminary numerical MACT floor emission limits for the best controlled 12 percent 

of units for CO (as a surrogate to organic HAP) and mercury (Hg) at solid and liquid fuel boilers. Table A2 also summarizes preliminary numerical GACT emission limits for PM and metallic HAP at all boilers as 

well as GACT limits for CO and Hg at gas-fired boilers. 

MACT Floor for Mercury (Hg) 

No air pollution control devices were installed to reduce Hg at area sources. The Hg limits in Table A-2 

were based on the average coal mercury contents in the 13 states with boiler inspector inventories. The 

lowest 12 percent of boiler coal mercury contents were comprised of Nebraska boilers (assumed to be 

firing Wyoming coal), Colorado boilers, and Utah boilers. Mercury limits at biomass units were based on 

Hg contents of wood fuels from five of the 13 states with boiler inspector inventories. The lowest 12 

percent of boiler wood mercury contents were based on Hg contents for New York and North Carolina 

boilers. Variability factors were applied to these floors to account for the standard deviations of each fuel’s 

mercury content. 2

 Hg limits at liquid fuel units were based on AP-42 emission factors for distillate oil 

boilers. 

MACT Floor for Carbon Monoxide (CO) 

No control devices were installed to reduce organic HAP and CO emissions. The MACT floors for CO at 

coal and liquid fuel boilers were based on available state permit limits for CO. Coal boiler permit limits 

consisted of 11 coal boilers in Illinois and Ohio while liquid boiler permit limits were comprised of limits 

from 46 boilers in Vermont, New Hampshire, Maine, and Rhode Island. The MACT floor for CO at 

biomass boilers was based on 27 state permit limits in Vermont, New Hampshire, Maine, and Rhode 

Island as well as actual CO emission data (with variability factors) from 14 boilers under the Department 

of Forestry Fuels for Schools program.2

GACT for Particulate Matter (PM) and non-Mercury Metallic HAP 

Based on a review of available information and state regulations, GACT for the boiler source category 

was set to be an annual tune-up work practice standard. PM and non-mercury metallic HAP emissions 

are expected to decrease 5 to 10 percent below baseline levels as a result of implementing an annual 

tune-up. 

1.3 National Impacts for Area Source Boilers 

Table A-3 presents per boiler costs for fabric filters (if necessary), work practice standards (tune-ups, 

linkageless boiler management systems (LBMS), and energy audits) and testing and monitoring costs to 

demonstrate compliance with the numerical limits. Fabric filter costs are specific to each model boiler, 

because the control costs are based on exhaust flows, and required pollutant removal efficiencies. The 

costs for work practice standards, testing, and monitoring are constant across all model boilers. 

The national costs and emission impacts are summarized in Tables A-4a, b, and c. To estimate the 

national costs of each regulatory option, the per boiler costs in Table A-3 were multiplied by the number 

of boilers represented by the model unit. In order to avoid double counting the control costs in the cost 

effectiveness summaries, the cost of the control is only assigned to the targeted pollutant of each 

regulatory option. The cost of a fabric filter was assigned to mercury reductions while the cost of an 

annual tune-up was assigned to polycyclic aromatic hydrocarbon (PAH) reductions. 

Regulatory Option 1 – MACT for Hg and CO and Work Practice Standard for PM and Metallic HAP (Table 

A-4a) 

 

2 Draft Memo. Eddinger, Jim. Approach for determining MACT floors for existing area source boilers. 

August 22, 2008. 
51

Based on the distribution of coal and wood Hg contents, this preliminary analysis assumes that 12 

percent of coal fired units and 14 percent of biomass fired units will fire fuels with mercury contents above 

the MACT floor emission limits. Since AP-42 emission factors represent an average of all available 

information, this analysis assumes 50 percent of liquid units are expected to have mercury contents 

higher than the MACT floor. A fabric filter will be required on units with fuels with Hg contents higher than 

the MACT floor. A fabric filter is expected to achieve 75 percent reduction in Hg and 99 percent reduction 

in PM and non-Hg metallic HAP. Based on the distribution of state permit limits and CO stack test data 

27 percent of coal units, 68 percent of biomass units, and 4 percent of liquid fuel units will need to install 

enhanced combustion control equipment, such as a LBMS, to meet the CO MACT floor. The remaining 

coal, biomass, and liquid fuel units were assumed to conduct and annual tune-up and achieve 5 to 10 

percent reduction in CO, Hg, non-Hg metallic HAP, and PAH. Gas units do have testing and monitoring 

costs to meet GACT CO limit, all other boilers have PM and Hg testing costs, and monitoring costs for 

opacity, mercury content and CO, O2 levels. Table 1 summarizes the national costs of option 1. 

Table 1 National Annualized Control Costs for Regulatory Option 1 (2007 million$) 

Add-On Control 

Costs 

Combustion 

Control Costs Testing Costs 

Monitoring 

Costs Total Costs 

222 4,099 2,962 16,386 $ 23,669 

Regulatory Option 2 – Work Practice Standard for All Pollutants (Table A-4b) 

Section 112(h) of the CAA allows EPA to promulgate a work practice standard, if it is not feasible to 

enforce an emission standard. Not feasible means the application of measurement methodology is not 

practicable due to technological and economic limitations. Given the high costs associated with testing 

and monitoring associated with the MACT floor under regulatory option 1, regulatory option 2 summarizes 

the costs associated with conducting an annual tune-up work practice standard on all units that are not 

already assumed to be conducting tune-ups in order to comply with existing state emission standards. 

This option considers the cost of a tune-up only (annualized costs of $2,219 per boiler) and it does not 

incorporate any costs for add-on controls, testing, or monitoring. A tune-up is expected to achieve 5 to 10 

percent reductions in all pollutants. Table 2 summarizes the national costs of regulatory option 2. 

Table 2 National Annualized Control Costs for Option 2 (2007 million$) 

Add-On Control 

Costs 

Combustion 

Control Costs Testing Costs 

Monitoring 

Costs Total Costs 

0 2,906 0 0 $ 2,906 

Regulatory Option 3 – Energy Audit on All Solid Fuel Boilers with Tune-up on all Other Units (Table A-4b) 

Regulatory Option 3 analyzes work practice standards more stringent than the tune-ups analyzed under 

option 2. The cost to conduct an energy audit and implement any audit findings with less than a 3-year 

payback was analyzed for all solid units. The one-time cost of an energy audit was estimated as $245. 

Costs associated with implementing the findings of the energy audit were not included in this analysis, 

because it was assumed that the cost for implementation would be offset by fuel savings. Table 3 

summarizes the national costs of regulatory option 3. 

Table 3 National Annualized Control Costs for Option 3 (2007 million$) 

Add-On Control 

Costs 

Combustion 

Control Costs Testing Costs 

Monitoring 

Costs Total Costs 

0 2,909 0 0 $ 2,909 
52

1.4 Example Small Entity Costs for Area Source Facilities with Boilers 

Tables A-5a, b, c present example facility costs for typical area source facilities to comply with regulatory 

options 1, 2, and 3 outlined above. The example costs are based on actual area source facilities that 

responded to the 2008 combustion survey. According to table A-6 there is an average of two boilers per 

area source facility. The types of controls necessary and corresponding emission reduction potentials will 

depend on the blend of fuels and boiler sizes at each facility. 

Regulatory Option 1 

Under option 1, the annualized costs for the example facilities are $2,200 for a church with one small gas 

boiler, and $399,100 for a public sector training facility with two coal and two liquid fuel boilers. 

Regulatory Option 2 

Under option 2, the annualized costs for the example facilities are $2,200 for a church with one small gas 

boiler, and $11,100 for a not-for profit hospital with five gas boilers. 

Regulatory Option 3 

Under option 3, the annualized costs for the example facilities are $2,200 for a church with one small gas 

boiler, and $101,000 for a public sector training facility with two coal and two liquid fuel boilers. 

2.0 Summary of Cost and Emission Impacts for Boilers and Process Heaters at Major Sources 

of HAP 

Similar to the discussion in Section 1.0 model units were created to represent the boiler major source population 

database so that an impacts analysis could be performed on a reasonable number of units and could be conducted in 

a practical and timely manner. Table M-1 summarizes the distribution of small entity facilities to various 

types of facilities. On average there are 3.2 boilers per major source facility, compared with 2 boilers per 

area source facility. The majority of small entity major sources are located in private industries; however 

there are some small entities in the public and non-profit sectors. 

2.1 Model Units for Major Source Boilers and Process Heaters 

Table M-2 presents the estimated population of boilers at major sources of HAP. These estimates are 

based on the estimates in the vacated boiler MACT rulemaking. The actual population of units will be 

modified to reflect the results of the 2008 combustion survey. At this time, model units were not yet 

developed based on the recent survey. Based on preliminary screening of the survey results, the total 

population of units is much less. There are approximately 12,000 boilers and process heaters at major 

sources, compared to the 58,200 boilers summarized in Table M-2. However, the distribution of units in 

the survey contains proportionately much less coal-fired units than what is shown in Table M-2. The 

baseline emission rates shown in the summary table are based on data collected during the vacated 

boiler maximum achievable control technology (MACT) standard. Only baseline PAH emission rates are 

summarized for gas units. 

2.2. MACT Floor Emission Limits for Boilers and Process Heaters at Major Sources 

Based on the current status of data from the 2008 combustion survey, it is premature to estimate 

numerical emission limits (and corresponding emission reductions) based on the best performing 12 

percent of units. Despite the lack of a numerical limit, it is expected the level of control technology 

required to meet the emission limits of the new MACT standard will be comparable to the controls 

analyzed in the vacated boiler MACT standard. 

2.3 National Impacts for Major Source Boilers and Process Heaters 
53

The control, testing, and monitoring costs shown in table M-3 represent the controls analyzed under the 

vacated standard. Tables M-4a and b present the national costs for regulatory options 1 and 2. To 

estimate the national costs of each regulatory option, the per unit costs in Table M-3 were multiplied by 

the number of boilers and process heaters represented by the model unit. 

Regulatory Option 1 – National Cost to Achieve MACT Floor for Hg, HCl, Metallic HAP and POM (CO) 

Emissions (Table M-4a) 

The costs in regulatory option 1 include control costs for fabric filter, venturi scrubber, and ESP, as 

needed. These costs also include monitoring costs such as process monitors for control devices if a 

control device is installed otherwise fuel content monitoring. Costs also include monitoring opacity and 

CO, O2 levels as well as testing for HCl, PM, and Hg. Table 4 summarizes the national costs of regulatory 

option 1. 

Table 4 National Annualized Control Costs for Option 1 (2007 million$) 

Add-On Control Costs (TAC) Testing Costs (TAC) Monitoring Costs (TAC) Total 

1,878 208 1,558 3,644 

Regulatory Option 2 – National Cost to Achieve MACT Floor Assuming Certain Coal and Wood-Fired 

Units Comply with the HCl and Manganese Exclusion Health-Based Compliance Alternatives (HBCA) 

(Table M-4b) 

If a facility can demonstrate that facility-wide emissions of HCl and Cl2 do not pose significant risks, the 

facility does not have to comply with the HCl MACT floor limit on individual boiler basis. To analyze the 

reduce costs of compliance for facilities estimated to comply the the HCl HBCA, the HCl (scrubber) 

control costs on approximately 220 boilers and process heaters were removed. These units were 

assumed to comply with the HCl emission standard using the facility-wide HCl health-based compliance 

alternative. 

Similarly, if a facility can demonstrate that facility-wide emissions of manganese do not pose significant 

risks, the facility can exclude manganese emissions when determining compliance with the total selected 

metals (TSM) limit on an individual boiler basis. To analyze the reduce costs of compliance for facilities 

estimated to comply the TSM HBCA, the PM (fabric filter or ESP) control costs on an additional 202 

boilers and process heaters were removed. These units were assumed to qualify for exempting their 

Manganese emissions from the TSM emission limit and thus avoid the need to install controls to comply 

with the TSM standard. 

Although these 400 units were exempt from control costs under the HCl and TSM HBCA, costs for testing 

and monitoring are still applicable in order to demonstrate compliance with the standard. The portion of 

units eligible for the HCl and TSM HBCA standards was based on a memorandum prepared for the 

vacated Boiler MACT standard.3

 Table 5 summarizes the national costs of regulatory option 2. 

Table 5 National Annualized Control Costs for Option 2 (2007 million$) 

Add-On Control Costs (TAC) Testing Costs (TAC) Monitoring Costs (TAC) Total 

1,687 208 1,520 3,415 

2.4 Example Small Entity Costs for Major Source Facilities with Boilers and Process Heaters 

 3

 Eddinger, J. Estimating Impact on Control Costs and Emissions Reductions of the Health-Based 

Compliance Alternatives. February 2004.
54

Tables M-5a and b present example facility costs for typical major source type facilities that were 

identified as small entities to comply with regulatory options 1 and 2 outlined above. The example costs 

are based on actual major source facilities that responded to the 2008 combustion survey. The types of 

controls necessary at each unique facility will depend on the blend of fuels and boiler and process heater 

subcategories at each facility. 

Regulatory Option 1 

Under option 1, the annualized costs for the example facilities are $148,000 for a small wood products 

facility with one biomass boiler and one gas-fired boiler, and $1 million for a facility with three boilers firing 

a blend of coal, biomass and non-fossil solid fuels. 

Regulatory Option 2 

Assuming the two facilities mentioned above could comply with the HBCA, the annualized costs for the 

small wood products facility decreased from $148,000 to $64,200. The cost for the facility with three solid 

fuel boilers decreased from $1 million to $451,400. 
55

Appendix D 

 Draft Small Entity Screening Analysis 
56

TO: Tom Walton 

FROM: Brooks Depro 

Dallas Wood 

DATE: January 26, 2009

SUBJECT: Draft Small Entity Screening Analysis: Industrial Boilers and Process 

Heaters 

The Regulatory Flexibility Act as amended by the Small Business Regulatory 

Enforcement Fairness Act (SBREFA) generally requires an agency to prepare a 

regulatory flexibility analysis of any rule subject to notice and comment rulemaking 

requirements under the Administrative Procedure Act or any other statute, unless the 

agency certifies that the rule will not have a significant economic impact on a substantial 

number of small entities. Small entities include small businesses, small governmental 

jurisdictions, and small not-for-profit enterprises. 

We performed a preliminary screening analysis to assess small entity impacts. The initial 

screening analysis suggests a large number of small entities (business and governments) 

have sales and revenue tests that exceed 3 percent. 

1. Small Business Screening Analysis 

The industry sectors covered by the rule were identified through lists of small entities at 

major and area sources included in the survey database provided to RTI (ERG, 2008). A 

listing of the sectors affected (3-Digit NAICS) and the range of SBA size definitions are 

provided for major and area sources in Tables 1 and 2. 

1.1 Representative Small Business Analysis Using Census 

Statistics of U.S. Businesses 

For each 3-Digit NAICS code, the Statistics of U.S. Businesses (SUSB) provides national 

information on the distribution of economic variables by industry and enterprise size 

(U.S. Census, 2008a and b).4

 The Census Bureau and the Office of Advocacy of the 

Small Business Administration (SBA) supported and developed these files for use in a 

broad range of economic analyses.5

 Statistics include the total number of establishments 

and receipts for all entities in an industry; however, many of these entities may not 

 

4

The SUSB data do not provide establishment information for the national security North American 

Industry Classification System (NAICS) code (92811) or irrigated farms. Since most national security 

installations are owned by the federal government (e.g., military bases), the U.S. Environmental Protection 

Agency (EPA) assumes these entities would not be considered small. For irrigated farms, we relied on 

receipt data provided in the 2003 Farm and Irrigation Survey (USDA, 2004). 5

 See http://www.census.gov/csd/susb/ and http://www.sba.gov/advo/research/data.html for additional 

details. 
57

necessarily be covered by the proposed rule. SUSB also provides statistics by enterprise 

employment and receipt size. 

Table 1. Major Sources: Affected Sectors and Size Standards 

Industry Description 

Corresponding 

NAICS 

SBA Size Standard for 

Businesses (effective 

March 11, 2008) 

 Oil & gas extraction 211 500 employees

 Mining (except oil & gas) 212 500 employees 

 Utilities 221 a 

 Food mfg 311 500 to 1,000 employees 

 Textile mills 313 500 to 1,000 employees 

 Leather & allied product 

mfg 316 

500 to 1,000 employees 

 Wood product mfg 321 500 employees 

 Paper mfg 322 500 to 750 employees 

 Printing & related support 

activities 323 

500 employees 

 Petroleum & coal products 

mfg 324 

Typically 500 to 1,500 

employees 

 Chemical mfg 325 500 to 1,000 employees 

 Plastics & rubber products 

mfg 326 

Typically 500 to 1,000 

employees 

 Nonmetallic mineral 

product mfg 327 

500 to 1,000 employees 

 Primary metal mfg 331 500 to 1,000 employees 

 Fabricated metal product 

mfg 332 

500 to 1,500 employees 

 Transportation equipment 

mfg 336 

500 to 1,000 employees 

 Furniture & related product 

mfg 337 

500 employees 

 Warehousing & storage 493 

$25.5 Million in Annual 

Receipts 

 Waste management & 

remediation services 562 

Typically $7 to $14 Million 

in Annual Receipts 

 Educational services 611

Typically $7 to $35.5 

Million in Annual Receipts

a NAICS codes 221111, 221112, 221113, 221119, 221121, 221122—A firm is small if, including its affiliates, it is primarily engaged 

in the generation, transmission, and/or distribution of electric energy for sale and its total electric output for the preceding fiscal 

year did not exceed 4 million megawatt hours. 
58

Table 2. Area Sources: Affected Sectors and Size Standards 

Industry Description 

Corresponding 

NAICS 

SBA Size Standard for Businesses 

(effective March 11, 2008) 

 Utilities 221 a 

 Food mfg 311 500 to 1,000 employees 

 Beverage & tobacco product mfg 312 500 to 1,000 employees

 Textile mills 313 500 to 1,000 employees 

 Textile product mills 314 500 to 1,000 employees 

 Wood product mfg 321 500 employees 

 Paper mfg 322 500 to 750 employees 

 Printing & related support activities 323 500 employees 

 Petroleum & coal products mfg 324 500 to 1,500 employees 

 Chemical mfg 325 500 to 1,000 employees 

 Plastics & rubber products mfg 326 500 to 1,000 employees 

 Nonmetallic mineral product mfg 327 500 to 1,000 employees 

 Fabricated metal product mfg 332 500 to 1,500 employees 

 Computer & electronic product mfg 334 500 to 1,000 employees 

 Electrical equipment, appliance, & 

component mfg 335 

500 to 1,000 employees 

 Transportation equipment mfg 336 500 to 1,000 employees 

 Furniture & related product mfg 337 500 employees 

 Miscellaneous mfg 339 500 employees 

 Hospitals 622 $34.5 Million in Annual Receipts

a NAICS codes 221111, 221112, 221113, 221119, 221121, 221122—A firm is small if, including its affiliates, it is primarily engaged 

in the generation, transmission, and/or distribution of electric energy for sale and its total electric output for the preceding fiscal 

year did not exceed 4 million megawatt hours. 

The Census Bureau’s definitions used in the SUSB are as follows: 

 establishment: An establishment is a single physical location where business 

is conducted or where services or industrial operations are performed. 

 receipts: Receipts (net of taxes) are defined as the revenue for goods 

produced, distributed, or services provided, including revenue earned from 

premiums, commissions and fees, rents, interest, dividends, and royalties. 

Receipts exclude all revenue collected for local, state, and federal taxes. 

 enterprise: An enterprise is a business organization consisting of one or more 

domestic establishments that were specified under common ownership or 

control. The enterprise and the establishment are the same for singleestablishment firms. Each multi-establishment company forms one 

enterprise—the enterprise employment and annual payroll are summed from 
59

the associated establishments. Enterprise size designations are determined by 

the summed employment of all associated establishments. 

Because the SBA’s business size definitions (SBA, 2008) apply to an establishment’s 

“ultimate parent company,” we assumed in this analysis that the “enterprise” definition 

above is consistent with the concept of ultimate parent company that is typically used for 

SBREFA screening analyses and the terms are used interchangeably. 

The analysis generated a set of establishment sales tests (represented as cost-toreceipt ratios) for NAICS codes associated with sectors listed in Tables 1 and 2. Although 

the appropriate SBA size definition should be applied at the parent company (enterprise) 

level, we can only compute and compare ratios for a model establishment owned by an 

enterprise within an SUSB size range (employment or receipts). Using the SUSB size 

range helps us account for receipt differences between establishments owned by large and 

small enterprises and also allows us to consider the variation in small business definitions 

across affected industries. Using establishment receipts is also a conservative approach, 

because an establishment’s parent company (the “enterprise”) may have other economic 

resources that could be used to cover the costs of the regulatory program. 

The engineering costs analysis developed compliance costs estimates for facilities 

reported to be owned by small businesses. There were four estimates for private 

enterprise major sources and two estimates for private enterprise area sources. Within 

each group, the initial screening uses the highest value as the numerator for the cost-toreceipt ratio. This assumption does not significantly influence the conclusions in this 

memo unless EPA determines the lowest facility cost data is more likely representative of 

small facility costs. 

Major Sources: 

 Option 1: $1 million (highest cost small facility) 

o 4 facility range: $148K to $1 million 

 Option 2: $1 million (highest cost small facility) 

o 4 facility range: $64K to $1 million 

Area Sources: 

 Option 1: $195K (highest cost small facility) 

o 2 facility range: $163K to $195K 

 Option 2: $4K (RTI estimate using 2 boilers × average cost per boiler in cost 

spreadsheet ($2K) 
60

o 2 facility range: Not available/reported 

 Option 3: $7K(highest cost small facility) 

o 2 facility range: $2K to $7K 

A large number of sources within SUSB NAICS/enterprise categories had ratios 

exceeding 3 percent. We have provided details on the cost-to-receipt ratios generated 

using the SUSB in the attached MS Excel workbook (3-67 SUSB Small Entity Screen 

Tables 1-26-2009.xls)6

. A summary of results by source type shows: 

Major Sources: 

 Option 1: 75 percent the NAICS/enterprise categories had ratios exceeding 3 

percent. 

 Option 2: 73 percent the NAICS/enterprise categories had ratios exceeding 3 

percent. 

Area Sources: 

 Option 1: 25 percent the NAICS/enterprise categories had ratios exceeding 3 

percent. 

 Option 2: No NAICS/enterprise categories had ratios exceeding 3 percent. 

 Option 3: No NAICS/enterprise categories had ratios exceeding 3 percent. 

1.2 Additional Small Business Analysis Using Sample of Small 

Businesses Identified in Combustion Facility Survey 

Next, we performed a more detailed analysis that compares the Census SUSB 

representative small entity results with a firm-specific sample of major and area small 

private enterprises. In this approach, we identified the survey facility names listed as 

small, traced the ultimate parent company name in order to verify the facility was owned 

by a small business, and collected the most recent parent company sales and employment 

figures. As Tables 5 shows, the average cost-to-sales ratios for small major source 

companies are above 5 percent. The median ratios are similarly high (approximately 3 

percent). Average cost-to-sales ratios for small area sources are smaller; the average and 

median values are less than one and a half percent. 

 

6

 Prior to computing the cost-to-receipt ratios reported in the tables presented in the spreadsheet, we 

adjusted the engineering compliance costs to reflect 2002 dollars using the implicit price deflators for gross 

domestic product (GDP)The values used are: 2002 = 104.187 and 2007 = 119.816 (U.S. BEA, 2008). 
61

Table 5. Major Sources: Sales Tests Using Small Companies Identified in the 

Combustion Survey 

Sample Statistic Option 1 Option 2 

Minimum <0.1% <0.1% 

Maximum 32.4% 32.2% 

Median 2.9% 2.7% 

Average 5.1% 5.0% 

Ultimate Parent Company Observations: 62 62 

Table 6. Area Sources: Sales Tests Using Small Companies Identified in the 

Combustion Survey 

Sample Statistic Option 1 Option 2 Option 3 

Minimum <0.1% <0.1% <0.1% 

Maximum 6.1% 0.1% 2.3% 

Median 0.8% <0.1% 0.3% 

Average 1.5% <0.1% 0.6% 

Ultimate Parent Company Observations: 45 45 45 

 

2. Small Government and Non-Profit Screening Analysis 

In addition to the private sector, this rule also covers sectors that include entities 

owned by small and large governments. Given the uncertainty and data limitations 

associated with identifying and appropriately classifying these entities, we computed a 

“revenue” test for a model small government, where the annualized compliance cost is a 

percentage of annual government revenues (U.S. Census, 2005a and b). 

As before, compliance costs were estimated for model facilities for major and 

area sources for multiple options. When there were multiple model facilities, the model 

facility with the highest cost was chosen as representative. A summary of the compliance 

costs used follows: 

Major Sources: 

 Option 1&2: $1.3 million (highest cost public facility) 

Area Sources: 

 Option 1: $399K (highest cost public facility) 

o Schools $67K

o Churches $2K

 Option 2: $9K (highest cost public facility) 

o Schools $2K
62

o Churches $2K

 Option 3: $9K (highest cost public facility) 

o Schools $5K

o Churches $2K

From the 2002 Census (in 2007 dollars), the average revenue for small 

governments (counties and municipalities with populations fewer than 10,000) are $3 

million per entity, and the average revenue for local governments with populations fewer 

than 50,000 is $7 million per entity. 

Highest Cost Public Facility: for major sources, the cost-to-revenue ratio would 

be 43% for the smallest group of local governments (<10,000 people) and 19% for the 

larger group of governments (<50,000). For area sources, the cost-to-revenue ratio would 

range from 0.3% to 13.3% for the smallest group of local governments (<10,000 people) 

and would range from 0.1% to 5.7% for the larger group of governments (<50,000 

people). 

Schools: For area sources, the cost-to-revenue ratio would range from 0.1% to 

2.2% for the smallest group of local governments (<10,000 people) and would range 

from <0.1% to 1.0% for the larger group of governments (<50,000 people). 

Churches: Assuming an annual operating budget of $150,000, the ratio of costto-expenditures is approximately 1.3 percent. 

3. References 

Singelton, Amanda, Eastern Research Group, December 2008. Email Communication 

with Jim Eddinger, Larry Sorrels, and Tom Walton, U.S. Environmental 

Protection Agency. Major and Area Source Preliminary Economic Impacts. 

U.S. Bureau of Economic Analysis (BEA). 2008. Table 1.1.9. Implicit Price Deflators 

for Gross Domestic Product. Last Revised November 25, 2008. 

U.S. Census Bureau. 2005a. 2002 Census of Governments, Volume 4, Number 3, 

Finances of County Governments: 2002 GC02(4)-3. U.S. Government Printing 

Office, Washington, DC. Table 12. 

U.S. Census Bureau. 2005b. 2002 Census of Governments, Volume 4, Number 4, 

Finances of Municipal and Township Governments: 2002 GC02(4)-4. U.S. 

Government Printing Office, Washington, DC. Table 13. 
63

U.S. Small Business Administration (SBA). 2008. Table of Small Business Size 

Standards Matched to North American Industry Classification System Codes. 

Effective March 11, 2008. 

<http://www.sba.gov/services/contractingopportunities/sizestandardstopics/ 

size/index.html>.