Defining and Redefining 

the “Source”

for the PSD BACT Analys

Brian Doster

Air and Radiation Law Office

EPA Office of General Counsel

February 3, 2010

NOTE: This summary of legal authorities and prior EPA statements is informational purposes only and does not constitute legal advice or establish any interpretive or policy positions of the EPA. 
Goals of Presentation

• To highlight relevant

– Provisions of the Clean Air Act and EPA regul– Court decisions interpreting those provisions– Statements by EPA applying those provisions 

various contexts.

• To assist the workgroup in identifying

– Scope of permitting authority discretion.– Procedural steps that may be warranted to 

implement specific recommendations.
Two Questions Relating to the 

“Definition” of the Source

• What is the “source” to which a BACT ana

applies?

– The entire facility or– Individual emissions units at a facility

• When do potentially “available” options f

BACT “redefine the source”?

– EPA has not considered options that fundam

redefine a source to be “available” at Step 1.

– EPA has acknowledged permitting authority 

discretion to consider options that “redefine.
Step 1: Top-Down Process

“The first step in the BACT selection proceinvolves identifying and listing all ‘availabcontrol options. NSR Manual at B.5. The tavailable is used in its broadest sense unthe first step and refers to control options a ‘practical potential for application to th

emissions unit’ under evaluation. Id. (emadded). The goal of this step is to develop comprehensive list of control options.”

In Re Knauf Fiber Glass, GMBH, 8 EAD 121, 129-30 (EA
Clean Air Act

“No major emitting facility ... may be constructed in any area to which this applies unless – ... (4) the proposed facility is subject to best available co

technology for each pollutant subject regulation under this chapter emitted from, or which results from, such fac

§ 165(a) (emphasis added
Clean Air Act

“The term ‘best available control technology’ meemission limitation based on the maximum degreduction of each pollutant subject to regulation this Act emitted from or which results from any emitting facility, which the permitting authority, 

case-by-case basis, taking into account energy, environmental, and economic impacts and othedetermines is achievable for such facility throug

application of production processes and availabmethods, systems, and techniques, including fucleaning, clean fuels, or treatment or innovative combustion techniques for control of such pollu

§ 169(3) (emphasis add
Definition of the Source

• BACT provisions in CAA and EPA regulatio

often use the term “facility” or “source,” bregulations use “emissions unit” in some contexts.

• In policy and interpretive documents, EPA 

generally called for a separate BACT analfor each emissions unit at a facility. 

• EPA has supported a logical grouping of 

emissions units and considered controls available for individual pollutants when evaluating the merits of grouping.
EPA Regulations

“Best available control technology means an emlimitation (including a visible emission standardon the maximum degree of reduction for each pollutant subject to regulation under Act which wbe emitted from any proposed major stationary or major modification which the Administrator, o

case-by-case basis, taking into account energy, environmental, and economic impacts and othedetermines is achievable for such source or 

modification through application of production processes or available methods, systems, and techniques, including fuel cleaning or treatment innovative fuel combustion techniques for contrsuch pollutant. ...”

40 C.F.R. § 52.21(b)(12) (emphasis a
EPA Regulations

“... If the Administrator determines that technological or economic limitations on application of measurement methodologparticular emissions unit would make the 

imposition of an emissions standard infea design, equipment, work practice, operstandard, or combination thereof, may be prescribed instead to satisfy the requiremfor the application of best available contrtechnology. ...”

40 C.F.R. § 52.21(b)(12) (emphasis 
EPA Regulations

“(2) A new major stationary source shall apply b

available control technology for each regulated pollutant that it would have the potential to emisignificant amounts.”“(3) A major modification shall apply best availacontrol technology to each regulated NSR pollutwhich it would result in a significant net emissioincrease at the source. The requirement applieeach proposed emissions unit at which a net em

increase in the pollutant would occur as a result physical change or change in the method of opeof the unit.”

40 C.F.R. § 52.21(j) (emphasis 
EPA Regulations

“(5) Stationary source means any building, strucfacility, or installation which emits or may emit regulated NSR pollutant.”“(7) Emissions unit means any part of a stationasource that emits or would have the potential to any regulated NSR pollutant and includes an eleutility steam generating unit as defined in parag(b)(31) of this section. ...”

40 C.F.R. § 52.2
EPA Guidance

“The BACT requirement applies to each individuor modified affected emission unit and pollutanemitting activity at which a net emissions increawould occur. Individual BACT determinations aperformed for each pollutant subject to a PSD reemitted from the same emissions unit. Conseqthe BACT determination must separately addreseach regulated pollutant with a significant emisincrease at the source, air pollution controls for emissions unit or pollutant emitting activity subjreview.”

Draft NSR Workshop Manual at B.4
EAB Decisions

“As reflected by Draft NSR Manual, the current Epolicy is that ‘each new or modified emission unlogical grouping of new or modified emissions usubject to PSD is required to undergo BACT revieDraft NSR Manual at B.10. Permitting authoritieencouraged by the Draft Manual to evaluate ‘loggrouping’ of emission units in each industry on a reasonable case-by-case basis, focused on analytechnical feasibility and control effectiveness. S

In re: General Motors, Inc., 10 EAD 360, 382 (EAB 
EAB Decisions

“In a BACT determination, the Region must give consideraeach individual emissions unit or pollutant emitting activisubject to review. New Source Review Workshop Manual We agree with the Region that the Grain Line and the Preare properly treated as separate pollutant-emitting activitnoted above, the Press Line emits PM10, but the Grain Linot, and this difference means that some technologies avfor controlling emissions from the Grain Line will not be afor controlling emissions from the Press Line. Moreover, ethough both lines emit VOCs, the technologies for controlemissions from the Grain Line are not necessarily availabcontrolling VOC emissions from the Press Line. Because tlines are separate pollutant emitting activities for which tavailable control technologies are different, the Region's to perform separate BACT analyses for the two lines does strike us as clearly erroneous.”

In Re Masonite Corporation, 5 EAD 551, 557-8 (EAB 1994) (footnot
EPA Legal Briefs

• EPA has argued that BACT for a new electric-gen

unit at a larger facility cannot be less stringent bon improved control at other EGUs at the same szinc mine) that were not subject BACT.

• “The plain terms of the Clean Air Act require tha

State determine and apply the best available cotechnology for each ‘major emitting facility’ that ‘constructed,’ 42 U.S.C. 7475(a)(1). Neither a faowner nor a State may avoid the BACT requirema new facility by arguing that some other controtechnology will be used on some other facility.”

EPA Brief in Alaska DEC v. EPA, 124 S.Ct 98
Redefining the Source

• Since 1988, EPA has recognized that BACT optio

fundamentally redefine the proposed source maexcluded at Step 1 of the analysis. 

• EPA has also said that redefinition is not wholly 

prohibited, so it has been a question of degree wthe discretion of the permitting authority.

• Recent EAB decisions emphasize the need for a 

record showing that the excluded option would dthe applicant's basic business purpose for the proposed facility. 

• One U.S. Court of Appeals has upheld EPA’s disc

to exclude options that “redefine the source” whidentifying some limitations.
Step 1: Available Control Optio

• Three types of options that should be considered

– Inherently Lower-Emitting Processes/Practices– Add-on Controls– Combinations of Inherently Lower Emitting Processes a

on Controls

NSR Workshop Manual at B.10 (emphasis in the o

• The “redefining the source” rationale is only 

appropriate for excluding inherently lower-emittinprocesses, not add-on controls.

In re: Prairie State Generating Company

Appeal No. 05-05, Slip. Op. at 33 (EAB 2
Origin of “Redefining the Sourc

“The permit conditions that define these [control

systems are imposed on the source as the applicahas defined it. Although imposition of the conditimay, among other things, have a profound effect the viability of the proposed facility as conceived bapplicant, the conditions themselves are not intento redefine the source.”

In re Pennsauken, 2 E.A.D. 667 (1988) [Administra
NSR Workshop Manual

“Historically, EPA has not considered the 

requirement as a means to redefine the dof the source when considering available control alternatives. ... However, this is aaspect of the PSD permitting process in wstates have the discretion to engage in a broader analysis if they so desire. ”

NSR Workshop Manual at B.1
EAB’s Current Approach

Does the option “so substantially alter the purpose or basic design of [the] proposed facility that it should be considered a redefinition of the source?”In re: Desert Rock Energy Company, LLC, PSD Appeal No. 08-03 et al., S

64 (EAB Sept. 24, 2009). 
EAB’s Current Approach

“[T]he permit applicant initially defines the proposed faci

object, aim, or purpose — that is the facility's basic designalthough the applicant's definition must be for reasons independent of air permitting.”“The permit issuer ... should take a ‘hard look’ at the appldetermination in order to discern which design elements inherent for the applicant's purpose and which design elemay be changed to achieve pollutant emissions reductionwithout disrupting the applicant's basic business purpose proposed facility, while keeping in mind that BACT, in moshould not be applied to regulate the applicant's purpose objective for the proposed facility.”

Desert Rock at 64 (internal quotations from Prairie State opinion 
EAB Emphasis on the Record

“[T]he Board first looks at the administrative record to see applicant defined its ‘goal, objectives, purpose, or basic dthe proposed Facility in its application. “

Desert Rock a

“The Board's analysis in Prairie State, NMU, and today's demphasize that such an analysis of the underlying adminrecord is an essential component of a supportable BACT dthat a proposed control technology redefines the source.”

Desert Rock a
EAB Criteria

“[W]hen evaluating an applicant's assertion that a design is fundamental, the permit issuer should consider whethefacts underlying that assertion are better considered withframework of steps 2 through 5 of the top-down method, than grounds for excluding redesign at step 1.”

– Cost savings is not a basic or fundamental design elem

(considered at Step 4)

– Avoiding risk of new or innovative technology is not a 

design element (considered at Step 2).

In re: Prairie State Generating Company, PSD Appeal No. 05-05, Sli

n. 23 (EAB Aug. 24, 2006). 
U.S. Courts

“ EPA ... distinguishes between ‘control technology’ as a mreducing emissions from a power plant or other source of and redesigning the ‘proposed facility’ (the plant or other changing its ‘fundamental scope.’ The agency consigns thpossibility to the ‘alternatives’ section of the Clean Air Actas we said is not involved in this case. Refining the statutdefinition of ‘control technology’ - ‘production processes aavailable methods, systems, and techniques, including fucleaning, clean fuels, or treatment of innovative fuel comtechniques’-to exclude redesign is the kind of judgment badministrative agency to which a reviewing court should dSierra Club v. EPA, 499 F.3d 653, 655-6 (7th Cir. 2007) (on appeal of EAState decision)
U.S. Courts

• An interpretation that would completely r

statutory term, such as “clean fuels,” out BACT definition would be questionable. 

See, Sierra Club, 499 F.3d at 656

• EAB has acknowledged this potential lim

on the redefining the source policy.

– Northern Michigan University (“clean fuels” and low su

– Desert Rock Energy Company (“innovative fuel combu

techniques” and coal gasification)
Coal-Fired Power Plants

• Desert Rock Energy Company, PSD Appeal No. 0

et al. (EAB Sept. 24, 2009). 

– Remanded permit that excluded coal gasification (IGC

option from BACT analysis for proposed coal-fired boil

– Application listed IGCC as one of four potential techno

for a new large coal-fired power plant.

– No distinction of this permit from two previous federa

permits where IGCC was considered an available optio

– In footnote, EAB observed that discretion to exclude IG

be limited because “innovative fuel combustion technlanguage in Act appears intended to generally call for consideration of coal gasification (citing legislative his7th Circuit). 
Coal-Fired Power Plants

• Northern Michigan University, PSD Appeal No. 0

(EAB Feb. 18, 2009).

– Remanded permit for small coal and wood-fired boile

insufficient record to support exclusion of low-sulfur credefining the source grounds.

– Permit application said design allows burning of bitum

and subbituminous Powder River Basin coal. 

– “Clean fuels may not be ‘read out’ of the Act merely b

their use requires ‘some adjustment’ to the proposed technology. ... If the only required adjustment were thdirtier fuel be “switched” to a cleaner fuel, ... then low coal should be the BACT choice over high sulfur coal.” at 27 (citing 7th Circuit). 
Coal-Fired Power Plants

• Prairie State Generating Company, PSD Appeal 

05 (EAB Aug. 24, 2006).

– No error in excluding low-sulfur coal option where app

proposed to build a mine-mouth power plant for the putilizing a dedicated 30-year supply of coal. 

– Rejected argument that purpose of power plant must 

viewed as broadly as the production of electricity from 

• May consider how the function of a unit as a base

peaking unit affects the design and available cont

• Some fuel choices may be integral to design.

– Rejected argument that the coal type inherently defin

design of a power plant. 
Coal-Fired Power Plants

• NSR Workshop Manual (page B.13)

– “[A]pplicants proposing to construct a coal-fired electr

generator, have not been required by EPA as part of a analysis to consider building a natural gas-fired electralthough the turbine may be inherently less polluting product (in this case electricity). ...”

– “Thus, a gas turbine normally would not be included in 

of control alternatives for a coal-fired boiler.”
Coal-Fired Power Plants

• Old Dominion, 3 E.A.D. 779 (1992) [Administrat

– No error in state determination that it could not requir

coal-fired steam electric generating station to fire nat

– “Traditionally, EPA does not require a PSD applicant to 

the fundamental scope of the project.”

– But also said “the BACT analysis should include consid

of cleaner forms of the fuel proposed by the source.”
Coal-Fired Power Plants 

• Hawaiian Commercial & Sugar Co., 4 E.A.D. 95 

– No error in permitting new coal-fired, circulating fluidi

boiler at sugar mill instead of combined cycle facility flow sulfur distillate oil. 

– “EPA’s PSD permit conditions regulations do not man

the permitting authority redefine the source in order temissions. . . . Petitioner’s preference as to the type and fuel to be used in this instance would in effect redthe source.”
Coal-Fired Power Plants

• SEI Birchwood Inc., 5 E.A.D. 25 (1994). 

– No error in permitting new coal-fired plant rather than 

gas facility. 

– “It is clear that permits issued by delegated states und

federal PSD permitting regulations are not subject to challenge because the permit issuer refused to redefisource.”
Waste Incinerators

• In re Pennsauken, 2 E.A.D. 667 (1988) [Adminis

– No error in permitting new municipal waste incinerato

availability of power plants in area that could burn wa

– “The permit conditions that define these [control] syst

imposed on the source as the applicant has defined itAlthough imposition of the conditions may, among oththings, have a profound effect on the viability of the pfacility as conceived by the applicant, the conditions themselves are not intended to redefine the source.”
Waste Incinerators 

• Spokane Regional Waste-to-Energy Facility, PSD 

Appeal No. 88-12 (June 9, 1989) [Administrato

– No error in permitting new municipal waste incinerato

landfill without fuel cleaning and source separation beevidence did not show these options resulted in bette

emissions reductions. 

– Technology is not “available” in any meaningful sense 

knowledge about its effect on emissions, in the particconfiguration in which it would be employed, is so incoas to be unusable.
Waste Incinerators

• Brooklyn Navy Yard Resource Recovery Facility, 

3 E.A.D. 867 (1992) [Administrator] 

– Remanded permit for new municipal waste incinerato

to consider viability of a source separation program fonitrogen-containing materials. 

– Contrary to Spokane, information now showed that fu

cleaning and separation in combination with pollution equipment could reduce emissions and were thus avatechnologies for purposes of a BACT determination.
Waste Incinerators

• Hillman Power Co., 2002 EPA App. LEXIS 15 (Ju

2002). 

– No error in permitting modification of existing waste-f

and wood) electric generating facility to increase the aof tire-derived fuel (TDF) burned. 

– “In this case, limiting TDF burning to the amount auth

under Hillman Power’s existing permit, as advocated bwould necessarily operate to the exclusion of the procmodification Hillman Power seeks.”
Other Facilities

• Hibbing Taconite Co., 2 E.A.D. 838 (1989) [Adm

– Remanded permit to modify taconite ore pellet facility 

petroleum coke in place of natural gas and fuel oil benatural gas fuel not considered in BACT analysis. 

– “Hibbing will continue to manufacture the same produ

taconite pellets) regardless of whether it burns naturapetroleum coke.”

– “... because Hibbing is already equipped to burn natur

this alternative would not require a fundamental chanfacility.”
Other Facilities

• Knauf Fiber Glass, 8 E.A.D 121 (1998). 

– Remanded permit for new rotary spin fiberglass 

manufacturing facility because of failure to consider alternative rotary spin manufacturing process employ

competitor who achieved lower PM10 emissions. 

– “Although it is not EPA’s policy to require a source to e

different design, redefinition of the source is not alwaprohibited. This is a matter for the permitting authoridiscretion. The permitting authority may require consof alternative production processes in the BACT analyappropriate.”