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OAR Box 1787 

Prepped by Ollie Stewart 

Document Number: 

56)jl-C-14 

Docket Number: 

A-90-37 

Printed 11/4/200810:22:19 AM Sheet 56 of 147 
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

REGION 6 

1445 ROSS AVENUE, SUITE 1200 

DALLAS, TX 75202-2733 

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Mr. Lane Hartsock 

Deputy Director 

Air Quality Planning 

Texas Air Control Board 

12124 Park 35 Circle 

Austin, Texas 78753 

RE: Proposed Revisions to Regulation VII - Nitrogen Oxides (NOx) 

Reasonably Available Control Technology (RACT) 

Dear Mr. Hartsock: 

Thank you for the opportunity to review the proposed 

Regulation VII revisions pertaining to NOx RACT. The Texas Air 

Control Board (TACB) proposed these revisions to address several 

issues raised by the affected community and the U.S. 

Environmental Protection Agency (EPA) concerning the NOx RACT 

rule for the Houston and Beaumont ozone nonattainment areas, 

adopted on May 11, 1993. 

The proposed revisions pertain to four areas: 

1. §117.105 and §117.205, concerning existing permit limits and 

their relationship to RACT requirements; 

2. §117.540, concerning phased-RACT determinations; 

3. §117.550, concerning a general permit for collateral emission 

increases due to installation of NOx controls; and 

4. §117.580, concerning source mass emissions caps. 

We support the effort of the State to address concerns that we 

and the affected community have with the recently adopted N0X 

RACT rule. Our specific comments on the proposed revisions are 

enclosed. While we feel the proposals are directionally sound, 

the EPA does not have final guidance on several of the issues 

raised in these proposals. The EPA will therefore need to do 

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another review of these provisions when our guidance is 

finalized. Although we do not anticipate the need for major 

changes, further revisions may be necessary before the 

regulations can be Federally approved. 

We appreciate the opportunity to comment on these proposed 

revisions to Regulation VII. We value the productive working 

relationship that we have with you and your staff in trying to 

resolve these complex issues pertaining to the N0X RACT rule. If 

you would like to discuss our comments in further detail, please 

contact Leila Yim Surratt of my staff at (214) 655-7231. 

Sincerely yours, 

"Original Signed by Gerald FontenoT 

Gerald W. Fontenot 

Chief 

Air Programs Branch (6T-A) 

Enclosure 

cc: Doug Grano (MD-15) 

Bill Lamason (MD-15) 
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U.S. Environmental Protection Agency (EPA) 

Comments on the Proposed Revisions to Regulation VII. 

Nitrogen Oxides (NOx) 

Reasonably Available Control Technology (RACT) 

Emission Limit Specifications 

1. Page 6-7, §117.105(m) and §117.205(h) - These provisions 

allow certain boilers and heaters with an existing permit 

limit of 0.12 pound N0X per million Btu (lb/MMBtu) heat 

input to maintain the 0.12 lb/MMBtu permit limit. These 

units are exempt from the RACT-specified limits which may be 

0.10 lb/MMBtu for some units. For the State to allow this 

alternative RACT determination, the State should demonstrate 

why requiring these sources to reduce 0.02 lb/MMBtu would 

not be considered RACT. 

In addition, these provisions clarify that the more 

stringent of any permit or RACT emission limit applies. 

This clarification is necessary to ensure that for averaging 

purposes, units with more stringent permit limits do not 

provide "paper credits" to other,units, by trading the 

difference between the permit limit and the RACT limit. 

Even with this revision, however, there may be the 

opportunity for permitted units to provide "windfall 

credits" to other units if the permitted units' actual 

emission rates are significantly below their allowable 

limits. In this case, permitted units that have 

historically emitted below their allowable limits would 

provide credit to other units, potentially diluting the 

reductions achieved with the NOx RACT rule. Has the State 

considered the extent to which such "windfall credits" might 

occur by allowing sources to use the lowest allowable 

emission rate rather than the lowest of actual or allowable 

emission rates in calculating the system/plant-wide average? 

Does the State have any industry specific data to 

substantiate that such "windfall credits" would be minimal? 

Phased-RACT Determinations 

2. Page 9, §117.540(a)(1) - The State must have sufficient time 

to make a determination on a source's phased-RACT petition 

prior to the compliance deadline of May 31, 1995, as 

mandated by the Clean Air Act. Petitions should be 

submitted no later than the submission deadline for initial 

control plans which is April 1, 1994. Therefore, the last 

clause of this section, "or as soon as possible after 

tlete:rmination by the owner or operator that compliance by 

May 31, 1995 is not practicable," should be deleted. 
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3. Page 11, §117.540(a)(2)(E)(ii) - If it is the State's intent 

that sources contact all qualified vendors before making the 

assertion that the equipment is unavailable, then the last 

clause of the first sentence, "and who have been contacted 

to obtain the required services and equipment," should be 

deleted. 

4. Page 11, §117.540(a)(2)(E) - The State requests specific 

information from sources to demonstrate equipment 

unavailability and/or system reliability but does not 

specifically require economic information; however, in 

§117.540(a)(3), the State allows the Executive Director to 

approve a phased-RACT petition based on, " . . . economic 

factors (such as costs of additional outages necessitated by 

compliance with the emission specifications of this title by 

May 31, 1995, as demonstrated by comparison to costs of 

actual historical and planned outages) as the TACB 

determines is appropriate." If the State will approve 

phased-RACT applications based on economic factors, the 

State should specify in §117.540(a)(2)(E) what information 

will be required from the source,to make such a 

determination. 

5. Page 14, §117.540(a)(4) - The State needs to avoid 

automatically allowing for source compliance delays through 

use of the petition or appeals process. To accomplish this, 

the State may want to clarify that if a complete petition is 

not submitted by a date certain or if a petition is not 

approved by the Executive Director by May 31, 1995, then the 

petition would be considered denied. Even if the source 

appeals the decision, the source must assume compliance is 

required by May 31, 1995, and remain in compliance unless 

the decision is overturned by the Board. The State may also 

want to include in the regulation the maximum amount of time 

the State can take to make a determination. 

6. Page 14, §117.540(a)(5) - Because this proposal for 

phased-RACT determinations does not meet the EPA's 

requirements for replicable procedures, any phased-RACT 

determination will require EPA approval. The State may want 

to work with the EPA to develop a process that allows for an 

expedited EPA review and approval process such that the 

phased-RACT determinations can be Federally approved prior 

to the Federally mandated compliance deadline of 

May 31, 1995. 
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General Permit for Collateral Emission Increases 

7. Page 19, §117.550(a)(1)(C) - This provision allows 

grandfathered equipment to emit up to the rate at which the 

emission unit actually operated and emitted prior to 

September 1, 1971. The EPA is concerned that this may 

interfere with the State's ability to achieve real N0X 

reductions through the NOx RACT rule by allowing units that 

may have degraded since 1971 to restore their capacity 

without going through the permitting process. To avoid this 

situation, the "actual grandfather rate" should be defined 

as the maximum annual emission rate or data that are related 

to emissions which are reflected in the most recent 

emissions inventory (i.e., the 1990 emissions inventory). 

8. Page 20, §117.550(a)(3) - The State should clarify the term 

emissions by revising this paragraph to read, "If 

installation of NOx abatement equipment or implementation of 

a NOx control technique will result in *a significant net 

increase in representative actual annual emissions of any 

criteria pollutant over levels used for that source in the 

most recent air quality impact analysis in the area, a 

person claiming a general permit shall submit information 

sufficient to demonstrate that the following conditions will 

be met ... " 

9. Page 22, §117.550(a)(5) - This paragraph requires sources to 

submit carbon monoxide minimization plans. Similar plans 

should be required for significant increases in other 

criteria pollutants such as volatile organic compounds. 

Therefore, we suggest that this paragraph be revised to 

read, "Notice of the intent to be covered by the general 

permit must be accompanied by a [GO] minimization plan for 

collateral emission increases, describing efforts to be 

taken to minimize increases in [GO] emissions that will 

result from installing NOx abatement equipment or 

implementing a NOx control technique." 

10. The proposed revisions to §117.550 do not require sources to 

offset significant collateral emission increases. The 

treatment of these emission increases must be consistent 

with the State's attainment demonstration plan. Therefore, 

any increases that are not required to be offset should be 

accounted for as growth for the State's planning purposes. 
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Source Mass Emissions Cap 

11. The EPA has released draft guidance on establishing plant 

caps (N0x RACT Trading Guidance, July 2, 1993, draft) for 

the purposes of complying with the N0x RACT requirement. 

The State's proposal appears to be consistent with our draft 

guidance, especially as it relates to the following areas: 

establishing the cap based on average actual activity 

levels, using the lower of actual or allowable emission 

rates for previously permitted sources, restricting how 

shutdown units may be incorporated into the cap, restricting 

how units exempt from the N0X RACT rule can be brought into 

the plant cap, and requiring that the area's offset ratio be 

applied for exempt units brought into the plant cap. As 

mentioned in our cover letter, although we do not anticipate 

the need for major changes, once the EPA's final guidance is 

issued, these provisions will need to be reviewed again for 

consistency with the Federal policy. 

12. Page 26, §117.580(b) - The State,does not define how "actual 

historical average heat input" should be determined by 

sources for the purpose of setting the cap. The EPA's draft 

guidance defines the historic actual production as, "the 

average of the production that occurred in the two years 

directly preceding the effective date of the rule. A State 

may select a different two year period that is more 

representative of normal source operation, but in no case 

can this include a time period before November 15, 1990." 

The State may want to define in the rule how actual 

historical average heat input should be determined.