p.1 

OAR Box 1787 

Prepped by Ollie Stewart 

Document Number: 

73) ll-C-31 

Docket Number: 

A-90-37 

Printed 11/4/2008 10:22:19 AM Sheet 73 of 147 
| 2E- ! UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

"Xofio^ 0 WASHINGTON. D.C. 20460 

MAY I 2 1989 

fill 

c

/o-

~C 

P.2 

•2.7 

- i/ 

THE ADMINISTRATOR 

Mr. Michael C. Farrar, Vice President > , 

Environmental _ Health Program ' !J^ 2. t) 

American Paper Institute 

1250 Connecticut Avenue, N.W. 

Washington, D.C. 20036 '.U 0 ^ u <iOb U 

Dear Mr. Farrar: 

This is in response to your March 29, 1989 letter, and the 

April 11, 1989 letter from your counsel Mr. Michael Glenn, 

regarding the "top-down" process for determining best available 

control technology (BACT) under the prevention of significant 

deterioration (PSD) provisions of the Clean Air Act. You 

requested that the Environmental Protection Agency (EPA) 

immediately rescind its policy regarding the top-down process and 

take certain other administrative actions. 

The EPA has carefully reviewed the arguments presented in 

your petition. However, I do not agree that EPA's implementation 

of a top-down BACT process is either at variance with the 

statutory definition or constitutes a revision to the PSD 

regulations. Rather, EPA's top-down policy is just that— a 

statement of policy, reflecting a lawful and appropriate exercise 

of congressionally-delegated authority to interpret and 

administer the Clean Air Act and regulations issued thereunder. 

Neither the December 1, 1987 memorandum from former 

Assistant Administrator J. Craig Potter nor any of the other EPA 

documents cited in your petition purport to change existing 

regulations, nor do they have that effect. The key provisions of 

EPA's policy regarding the top-down process are consideration of 

the most effective control technologies available, and a 

demonstration, through objective indicia, that such technologies 

are not achievable due to case-specific energy, environmental, or 

economic impacts. These core criteria are consistent with EPA's 

prior BACT guidance. Thus, the top-down policy represents EPA's 

judgment that existing BACT requirements can best be accomplished 

through a particular analytical methodology. 

As your petition notes, the Potter memorandum (insofar as it 

addressed BACT determinations) in part implements an earlier 

adjudicative decision of the Administrator interpreting the " 

statutory and regulatory definition of BACT. [Honolulu Resource 
P.3 

Recovery Facility ("H-Power"), PSD Appeal No. 86-8 (remand order, 

June 22, 1987)]. The EPA believes that, like the other documents 

you cite, both H-Power and the later adjudicative decision in 

Pennsauken County, New Jersey Resource Recovery Facility, PSD 

Appeal No. 88-8 (remand order, Nov. 10, 1988), do not change the 

law, but rather interpret existing law. It is clear that EPA, 

like other regulatory agencies, has authority to create binding 

precedent through adjudication [see, e.g., NLRB v. Wyman-Gordan 

Company, 394 U.S. 759 (1969)]. It is also clear that, absent an 

explicit statutory constraint, EPA has broad discretion to employ 

those procedures and methods it feels are best suited to 

discharging its numerous and varied duties [see, e.g., Vermont 

Yankee Nuclear Power Corp. v. NRDC. 435 U.S. 519, 543 (1978)]. 

In summary# in calling for the use of the top-down approach, 

EPA did not alter the BACT requirement. The definition of BACT 

in the statute, EPA regulations, and State implementation plans 

has not changed. In addition, EPA does not believe that its 

policy views on the top-down process create any new legal rights 

or duties which must be implemented through rulemaking. I 

believe it is appropriate at this time for EPA to continue 

implementing its BACT policies through policy statements and any 

relevant adjudicative decisions. This is the route taken by EPA 

since passage of the PSD program and promulgation of BACT 

regulations. Consequently, I must deny your petition. 

As you are aware, EPA is in the process of developing 

guidance material for the implementation of top-down BACT. I 

believe that the "forthcoming material will serve to address many 

of the concerns expressed in your petition regarding the 

implementation of the top-down process and its place under the 

overall statutory scheme of the Clean Air Act. A copy of the 

information will be made available to you when it is issued in 

final form. 

Sincerely yours, 

William K. Reilly 

William K. Reilly 

cc: Michael K. Glenn 

Michael G. Dowd