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# OAR Box 1778 Prepped by Ollie Stewart



### Document

Number: 

# 271 ) IV-C-17 Docket Number: 

# A-90-06

Printed 10/28/20089:51:04

AM Sheet 271 of 27603/23/9 218:2 1 0

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SUBJECT : Draf t Fina l WEPC O Rul e FROM : TomKierna n

Deput yAssistan t Administrato r Offic e o f Ai r an

d Radiatio n TO : Howar d Gruenspech t

Departmen t o f Energ y Davi d Rivki n Counse l t o th e Counci l o n Competitivenes s I hav e attache d a cop yo f th e lates t draftjo f th e fina l WEPC O package , including bot hregulatoryan d preambl e language . Pleas e not e tha t you r requeste d change s hav e require d a complet e reorganizatio n o f th e preamble. . A s a result , ther e may b e some undu e repetitio n betwee nth e background (section s an d th e EPAanalysi s section s whic hw e hav e no t ha d time t o eliminate . Becaus e o f thes e changes , th e onl yissu e stil l t o b e addresse d i n th e preambl e i s ai r qualit yrelate d values .P. 3

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## ^,'A?y76560-5 0

ENVIRONMENTAL PROTECTIONAGENC Y

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

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

AGENCY : Environmenta l Protectio n Agenc y(EPA) . ACTION : Fina l Rule . SUMMARY : O n Jun e 14 , 1991 , EPApropose d amendment s t o it s regulation s governing applicabilit yo f th e ne wsourc e revie w (NSR ) requirement s o f titl e I o f th e Clea n Ai r Ac t (CAA ) t o physica l o r operationa l change s a t electri c utilit ystea m generating units . Thes e propose d amendment s clarifie d tha t certai n utilit ypollutio n contro l project s (including fue l switche s from

a mor e polluting fue l t o a les s pollutin g fue l suc ha s natura l gas ) shoul d no t b e subjec t t o NS R requirements . Thes e propose d amendment s als o clarifie d th e applicabilit yo f existing newsourc e regulation s t o modification s i n ligh t o f tw o recen t Federa l appellat e cour t decisions : Wisconsi n Electri c Powe r Compan yv . Reill y (WEPCO) , 89 3 F.2 d 90 1 (7thCir . 1990) , an d Puert o Rica n Cemen t Compan

yv . EPA . 88 9 F.2 d 27 2 (1s t Cir . 1989) . Today EPAi s taking fina l actio n o n thes e changes . Th e regulation s promulgate d todaywil l encourag e pollutio nP. 4

contro l project s (including fue l switche s t o natura l gas),- , clarif yth e scop e o f th e tw o appellat e decision s and , i n general , assur e tha t utilitie s ca nundertak e pollutio n contro l project s especiall ythos e require d b yth e aci d rai n provision s o f titl e IV o f th e CA

Aan d othe r modification s wit hcertaint ya s t o th e applicabilit yo f th e variou s titl e I ne wsourc e requirements . Specifically , today' s amendment s recogniz e a broa d NS R exclusio n fo r utilit ypollutio ncontro l project s including fue l switche s t o les s polluting fuels . Thi s exclusio n applie s t o a pollutio n contro l projec t unles s i t render s th e uni t les s environmentally-beneficia l o r woul d caus e o r contribut e t o a violatio n o f a nationa l ambien t ai r qualit y .standar d (NAAQS) , PS D incremen t o r visibilit ylimitation . I n addition , th e rule s implemen t an"actual-to-future

actual " methodologyfo r determining whethe r certai n othe r physica l o r operationa l change s a t utilitie s ar e subjec t t o NS Runde r eithe r preventio no f significan t deterioratio n (PSD ) o r nonattainmen t provision s o f part s C an d D , respectively , o f titl e I o f th e CAA . I n conjunctio nwit h th e methodologychange , EPAals o wil l t o allo wutilitie s t o us e a s thei r pre-chang e baselin e an y2-yea r perio d withi n th e las t 5 years . Today' s actio n als o implement s § § 40 9 an d 41 5 o f titl e IV

o f th e Clea n Ai r Ac t Amendment s o f 199 0 (199 0 Amendments ) whic hcreate d specia l ne wsourc e performanc e standard s (NSPS ) treatmen t fo r certai nrepowerin g project sP. 5

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- and a limite d NS Rexemptio nfo r temporaryan d permanen t clea n coa l technolog y(CCT ) project s an d fo r certai n"very clean " units . Finally , th e regulatorychange s promulgate d today modif yth e provision s o f th e titl e I NSP S programt o provid e tha t a utilit ymayus e fo r it s prechang e baselin e th e highes t hourl yemission s rat e achievabl e a t an ytim e during th e 5-year perio d prio r t o th e physica l o r operationa l change . I n it s Jun e 1 4 notice , EPAals o propose d t o creat e a presumptio n tha t low-nitroge noxide s (NOJ burner s woul d satisf yth e bes t availabl e contro l technology(BACT )
i* requirement s fo r modifie d utilit yunits . A s discusse d i n today' s notice , EPAha s determine d no t t o adop t thi s presumption . DATES : Thi s rul e take s effec t o n (dat e o f publicatio n i n FEDERAL REGISTER) . Unde r § 307(b)(1 ) o f th e CAA , petition s fo r judicia l revie wmus t b e file d o n o r befor e (6 0 day s afte r th e dat e o f publication ) i n th e U.S . Cour t o f Appeal s fo r th e D.C . Circuit . ADDRESSES : Materia l relevan t t o thi s rulemaking mayb e found i n Publi c Docke t A-90-06 . Thi s docke t i s locate d i n U.S . EPA' s Centra l Docke t Sectio n(LE-131) , Watersid e Mall , M-1500 , 40 1 MStree t SW , Washington , D.C . 20460 . Th e docke t mayb e inspecte d betwee n8:0 0 a.m . an d 3:0 0 p.m . o n weekday s an

d a reasonabl e fe e mayb e charge d fo r copying .P. 6

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- FORFURTHE RINFORMATIONCONTACT : Mr . Davi d A . Solomo n a t (919 ) 541-537 5 o r Mr . LarryElmor e a t (919 ) 541-5433 , Ne w Sourc e Revie wSectio n(MD-15) , Offic e o f Ai r Qualit y Plannin g an

d Standards , U.S . EPA , Researc hTriangl e Park , Nort hCarolin a 27711 . SUPPLEMENTARYINFORMATION : Th e following outlin e reflect s th e organizatio n o f today' s notice : I . Introductio n II . Discussio n o f Fina l Actio n o nProposa l A . Pollutio n Contro l Project s 1 . RegulatoryChange s fo r Pollutio nContro l Project s 2 . Additiona l Modeling Requirement s B . Representativ e Annua l Emission s C . Th e Causatio n Requiremen t D . Repowerin g E . Clea n Coa l TechnologyDemonstratio nProject s an d Ver y Clea n Unit s F . Calculatio n o f NSP S Baselin e G . Utilit yBAC T Presumptio n H . Limitatio n o f Proposa l t o Electri c Utilitie s III . Miscellaneou s A . Executiv e Orde r (E.O. ) 1229 1 B . Paperwor k Reductio n Ac t C . Economi c Impac t Assessmen t D . RegulatoryFlexibilit yAc t Certificatio nP. 7

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- E . Effectiv e Dat e F . Federalis mImplication s

I . Introduction . O n Jun e -14 , 1991 , EPApropose d t o amend it s regulation s implementing variou s titl e I NS Rrequirement s governin g majo r modification s a s theyappl yt o electri c utilit y generatin g units . Specifically , an amendmen t t o th e definitio n o f "majo r modification " i n th e regulation s implementing th e NS Rprovision s o f par t c an d D , 4 0 CF Rpart s 51.165 , 51.155 , 52,2 1 an d 52.24 , exclude s from NS Rcoverag e th e addition , replacemen t o r us e a t existing electri c utilit ygenerating unit s o f an ysystemo r devic e whos e primaryfunctio ni s th e reductio n o f ai r pollutant s (including switching t o a les s polluting fuel) , s o long a s th e pollutio n contro l projec t doe s no t rende r th e uni t les s environmentally-beneficial. ' Th e EPAals o propose d t o amen d it s NS Ra s the yappl yt o utilitie s to : (1 ) se t fort hanactual-to-future-actua l methodology fo r determining whethe r a physica l o r operationa l chang e i s subjec t t o NSR ;

1 Unles s otherwis e noted , reference s t o "NSR " refe r t o th e majo r ne wan

d modifie d sourc e preconstructio nrevie w requirement s o f bot hpar t C (PSD ) an d par t D (nonattainment ) o f titl e I o f th e Act . Regulation s pertaining t o thes e part s ar e codifie d a t 4 0 CFR51.165 , 51.166 , 52.2 1 an d 52.24 .P. 8

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- (2 ) provid e clarificatio n tha t onl ythos e increase s i n emission s tha t actuall yresul t fro m th e physica l chang e o r chang e i n th e metho d o f operatio nar e considere d i n determinin g whethe r th e propose d chang e subject s th e utilit y t o NS Rrequirements ; an d (3 ) implemen t § § 40 9 an d 41 5 o f titl e I V

o f th e 199 0 Amendment s whic hcreat e specia l NSP S treatmen t fo r certai n repowerin g project s an d a limite d NS Rexemptio nfo r temporaryan

d permanen t CC T projects , an d fo r certai n"very clean " units . Finally , EPAannounce d tha t fo r purpose s o f establishing th e baselin e fo r th e ne w; actual-to-futur e i methodology , EPAwoul d interpre t it s existing regulation s t o allo wth e sourc e t o selec t an y2 year s ou t o f th e 5 tha t precede d th e propose d change . Th e EPAals o propose d t o amend it s NSP S regulation s (4 0 CFRpar t 60 ) t o allo wa utilit yt o us e a s a unit' s pre-chang e baselin e it s highes t hourl yemission s rat e achievabl e during th e 5 year s prio r t o th e propose d change . I n additio n t o thes e applicabilit ychanges , EPA propose d t o creat e a presumptio ntha t lowN0 Xburner s woul d constitut e BAC T fo r NOxfo r modifie d utilit yunits . I n taking th e action s announce d today , EPAha s relie d o n th e writte n comment s provide d t o th e docke t i nthi s matte r a s wel l a s testimon yprovide d a t a publi c hearin g o n th e propose d rul e conducte d b yEPAo nJul y14 , 1991 .P. 9

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- Th e publi c commen t period , originall yschedule d t o clos e o n Augus t 19 , 1991 , wa s extende d unti l Septembe r 18 , 199 1 (5 6 F R40843 , Augus t 16 , 1991 ) t o receiv e additiona l comments . Th e commen t perio d wa s late r reopene d o n Novembe r 25 , 199 1 (se e 5 6 F R59238 ) fo r 2 week s t o receiv e comment s o n th e informatio n containe d i nth e transcrip t o f a congressiona l hearin g conducte d b yth e Subcommitte e o n Healt han

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

II . Discussio n o f Fina l Actio n o nProposal . A . Pollutio nContro l Projects . 1 . RegulatoryChange s fo r Pollutio nContro l Projects . a . Background . Th e EPApropose d t o amen d it s PS D an

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

yexercising it s authorit yunde r th e statutory definitio n o f "modification " an d confirming th e Agency' s curren t polic ytha t suc hproject s ar e no t subjec t t o NS R unles s theyrende r th e uni t les s environmentally-beneficial . Generally , pollutio n contro l project s a t existing stationary source s ar e no t majo r modification s subjec t t o NS R requirement s fo r th e simpl e reaso ntha t the yd o no t resul tP.1 0

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- i n a n increas e i n actua l emissions . I naddition , EPAha s alway s recognize d tha t Congres s di d no t intend tha t every activit ya t a n existing facilit yb e considere d a physica l o r operationa l chang e fo r purpose s o f th e NSR. 2 Th e EPApropose d t o adop t revision s t o it s PS D and nonattainmen t regulation s fo r th e addition , replacemen t o r us e a t an existing electri c utilit ystea mgeneratin g uni t o f an ysystemo r devic e whos e primaryfunctio n i s th e reductio n o f ai r pollutant s (including th e switching t o a less

pollutin g fue l wher e th e primarypurpos e o f th e switc hi s th e reductio n o f ai r pollutants) . Unde r th e proposal , a utilit ypollutio n contro l projec t woul d no t b e treate d a s a i physica l o r operationa l chang e unles s th e projec t render s th e uni t les s environmentally-beneficial . Th e ke yt o thi s additio nt o th e lis t o f exclusion s from th e term

physica l o r operationa l chang e i s EPA' s judgmen t tha t Congres s di d no t inten d tha t pollutio ncontro l project s b e considere d th e typ e o f activit ytha t shoul d trigge r NSR . Th e EPApropose d regulatorylanguag e t o explicat e an d formaliz e it s statutoryauthorit yt o exclud e pollutio n contro l project s unde r th e NS Rprovisions . I n 1977 , whe n Congres s enacte d th e NS Rprovision s o f th e CAA , i t provide d

2 Fo r instance , EPAha s specificall yrecognize d tha t routin e maintenance , repai r an d replacement , and change s i n hour s o f operatio n o r i n th e productio nrat e ar e no t considere d a physica l chang e o r chang e i n th e metho d o f operatio n [se e 4 0 CFR52.21(b)(2)(iii) , 52.24(f)(5)(iii) , 51.165(a ) (1 ) (v ) (C ) (1) , 51.166(b)(2 ) (iii ) , an d 60.14(e)(1)] .P.1 1

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- tha t th e term"modification " i nNS Rshal l hav e th e sam e meanin g a s th e term"modification " unde r NSP S [se e § § 169(2)(c) , 171(4)] . A t th e time , regulation s promulgate d unde r th e NSP S provision s defining "modification, " provided tha t th e term"modification " doe s no t include :

Th e additio n o r us e o f an ysystemo r devic e whos e primaryfunctio n i s th e reductio n o f ai r pollutants , excep t whe n a n emission s contro l systemi s remove d o r i s replace d b

ya systemwhic hth e Administrato r determine s t o b e les s environmentally-beneficial . 4 0 CF R60.14(e)(5) . I n 1978 , EPAnote d tha t "i nadding § 169(2)(c ) t o th e CAA , Congres s indicate d tha t i t intende d t o conformth e meanin g o f 'modification ' ;t o 'usag e i nothe r part s o f th e Act. ' 12 3 Congr . Rec . H11955 , 1195 7 (Nov . 1 , 1977). " [Se e 4 3 FR2639 6 (June 19 , 1978)] . Thus , jus t a s EPAhad th e statutoryauthorit yt o exclud e pollutio ncontro l project s b

yregulatio nfro

mNSPS , th e statutoryauthorit y exist s fo r EPAt o explicat e b yregulatio na nexclusio n fo r pollutio n contro l project s fro mpart s C an

d D o f titl e I . Thi s exclusio n unde r NS Rreflect s th e existing regulatoryexclusio n fo r pollutio ncontro l activitie s unde r NSP S regulations , an d severa l recen t case-specifi c nonapplicabilit ydetermination s unde r th e NS Rprograms . Th e NSP S regulatoryexclusio ncontain s th e provis o tha t th e replacemen t o f a pollutio n contro l systemo r devic e canno t b e les s "environmentally-beneficial " t o qualif yfo r th e exclusio n [se e 4 0 CFR60.15(e)(5)] . Wit hrespec t t o NSR ,P.1 2

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- th e proposa l adopte d a simila r regulatoryexclusio nfo r pollutio n contro l project s i nth e PS D an d nonattainmen t context . Th e majo r differenc e i nth e propose d NS Rexclusio n i s tha t i t woul d appl yth e "no t les s environmentally

beneficial " tes t t o th e additio nan d use , a s wel l a s th e replacement , o f a pollutio n contro l system o r device . Thi s chang e reflect s th e distinc t ai r qualit ycomponen t o f th e PS D an d nonattainmen t programs . B yfocusing o nwhethe r a pollutio n contro l projec t i s a physica l o r operationa l chang e withi n th e meaning o f th e NS Rregulations , th e proposa l avoid s th e nee d t o undertak e a quantitativ e emission s increas e calculatio n i never^ ycase , a s woul d b e t ;necessar

yi f suc hproject s wer e deeme d t o b e physica l o r operationa l changes . Th e EPAexpect s tha t most , i f no t all , pollutio n contro l project s wil l reduc e ne t actua l emissions . Nevertheless , th e Administrator' s authorit yt o conside r individua l pollutio n contro l project s provide s a nadequat e opportunit yt o determin e tha t a pollutio n contro l projec t woul d someho wresul t i nan advers e environmenta l impac t an d thu s conclud e tha t th e projec t render s th e uni t les s environmentally-beneficial , an d i s therefor e a physica l o r operationa l chang e tha t mayb e subjec t t o NSR . A s proposed , a pollutio n contro l projec t refer s t o a projec t undertake n a t a utilit yuni t fo r purpose s o f reducing emission s fromsuc hunit . Thes e change s ar e limite d t o th e installatio n o f conventiona l o r innovativ eP.1 3

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- emission s contro l equipment , including , bu t no t limite d to , installatio n o f conventiona l an d advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e (S0 2 ) an d N0 Xcontrols , electrostati c precipitators , an d project s undertake n t o accommodat e switching t o a les s pollutin g fuel , including natura l ga s o r coa l re-burning , co-firing o f natura l ga s an

d othe r fuel s fo r th e purpos e o f controllin g S0 2 an d N0 Xemissions . Likewise , an

yactivit ytha t i s necessaryt o accommodat e switching t o a les s polluting fue l i s considere d t o b e par t o f th e pollutio n contro l project . I nsome instances , thi s mayinvolv e change s t o th e pollutio ngenerating equipmen t (e.g. , boiler) , bu t onl yi f th e change s ar e necessaryt o maintai n th e norma l operating capabilit yo f th e uni t a t th e tim e o f th e project , wher e th e capabilit ywoul d otherwis e b e impaire d a s a resul t o f th e fue l switch . Fo r example , a n electri c utilit ystea mgenerating uni t tha t switche s froma highe r sulfu r bituminou s coa l t o a low-sulfu r subbituminou s coa l maynee d t o mak e certai nchange s t o th e boile r i norde r t o avoi d derating th e unit . Change s tha t ar e intende d primaril yt o restor e origina l capacit yo r t o improv e th e operationa l efficienc yo f th e facilit yar e no t considere d t o b e par t o f a pollutio n contro l projec t fo r purpose s o f thi s proposal . Also , th e sourc e stil l mus t compl ywit hal l applicabl e Stat eP. M

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- implementatio n plan s (SIP ) limit s an d requirements , permi t condition s an

d applicabl e NAAQ S o r PS D incremen t limits . b . Comment s Generall yFavoring th e EPAProposal . I n general , comment s fromindustrysupporte d th e proposa l t o exclud e pollutio ncontro l projects . Commenter s supportin g th e provisio nnote d tha t th e exclusio n i s consisten t wit hth e CA Aan d EPA' s earlie r determination s regardin g suc hprojects . Indeed , severa l commenter s expresse d th e vie wtha t n o chang e i nEPA' s rule s wa s necessary . On e commente r note d tha t Congres s indicate d it s inten t no t t o appl yNSP S o r NS Rrequirement s t o pollutio n contro l project s b yadopting th e NS Rdefinitio no f ."modification. " Anothe r commente r pointe d ou t tha t becaus e o f th e numbe r o f project s tha t wil l shortl yb e spawne d b yth e aci d rai n provision s o f th e CAA , i f permitting wer e require d fo r everyutilit yoperato r tha t plan s a fue l switc ho r th e installatio n o f pollutio ncontro l equipment , EPAwoul d b e overwhelme d wit happlications . Thi s coul d affec t th e reliabilit yo f th e electri c utilit yindustryan d delay complianc e wit htitl e IV . On e commente r note d tha t a utilit yshoul d no t b e prevente d fro m qualifying fo r th e pollutio n contro l exclusio n i f tha t utilit ytake s step s t o restor e diminishe d capacit yo f a powe r plan t a t th e sam e tim e tha t th e utilit yundertake s a pollutio n contro l projec t suc ha s repowering .P.1 5

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- Severa l commenter s supporte d flexibilit yfo r utilitie s o n strategie s fo r S0 2 control . Tw o commenter s notedtha t i f th e nationa l S0 2 emission s cap i s maintained , plan t modification s tha t mayincreas e S0 2 emission s a t on e uni t shoul d no t trigge r NS Ro r NSP S requirements . Anothe r commente r suggeste d tha t i n ligh t o f th e S0 2 emission s caps , utilitie s shoul d b e permitte d t o undertak e pollutio ncontro l project s o r mak e nonroutin e modifications , eve nthoughsuc h change s increas e S0 2 emissions , withou t being force d t o instal l technology(sucha s scrubbers ) t o contro l S0 2 . c . Comment s Generall yOpposing th e EPAProposal . Commenter s oppose d t o th e exclusio no f pollutio n contro l project s fro mNS Rprovision s dispute d EPA' s authorit yt o creat e suc h"exemptions " an d disagree d tha t Congres s intende d t o exemp t pollutio ncontro l project s from NSR . On e commente r state d tha t th e pollutio ncontro l projec t exclusio n i s illega l an d conflict s wit h§ 182(e)(2 ) o f th e CAA , noting tha t whil e § 182(e)(2 ) provide s limite d NS Rrelie f fo r some pollutio ncontro l projects , i t i s no t a blanke t exemptio n fro mNSR , becaus e th e requiremen t t o achiev e th e lowes t achievabl e emissio nrat e (LAER ) remain s effective , whic hdemonstrate s congressiona l inten t t o preven t EPAfro

m granting broade r exclusions . Opponent s t o th e exclusio nfo r pollutio ncontro l project s als o pointe d ou t tha t effort s b yutilitie s t o reduc e on e pollutan t ca n ofte n increas e emission s o fP.1 6

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- another . Suc hefforts , a s wel l a s project s tha t reduc e pollutio n i non e are a bu t increas e i t i nanother , shoul d no t b e exempte d fro mNS Ro r PS D provisions . Severa l commenter s provide d example s o f ho winstallatio no f pollutio ncontro l equipmen t o r fue l switchin g aime d a t reductio no f S0 2 als o ha d th e effec t o f increasin g emission s o f N0 Xan d particulat e matter , an d ho winstallatio no f low-NO xburner s increase d VO C emissions . Som e opponent s t o th e exclusio n fo r pollutio ncontro l project s sai d tha t th e definitio n o f pollutio ncontro l projec t i s overl ybroad , an d tha t EP Alack s authorit yt o appl ysuc ha broa d definition . > d . Comment s Suggestin g Revision s t o th e Proposal . Severa l commenters , bot hfo r an d agains t th e exclusion , suggeste d specifi c regulator ychange s t o th e pollutio n contro l exclusion . Fo r instance , numerou s commenter s requeste d a clarificatio n o f th e environmentally-beneficia l test . I n addition , th e followin g suggestion s wer e mad e wit h regar d t o th e definitio no f "pollutio ncontro l project" : (1 ) includ e anyupgrad e o f th e pollutio ncontro l efficiencie s o f existin g devices ; (2 ) includ e "pollutio n prevention " change s suc ha s lea k detectio nan d repai r program s an d th e attendan t sit e changes ; (3 ) clarif ytha t th e pollutio n contro l projec t nee d no t b e a permanen t change ;P.1 7

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- (4 ) includ e boile r alteration s involvin g natura l ga s cofiring , reburn , o r rebur nwit hsorben t injectio neve n thoug hther e ar e benefit s othe r tha npollutio ncontrol ; an d (5 ) includ e impact s o n othe r Clas s I are a ai r qualit y relate d value s a s wel l a s visibilit yi ndeterminin g whethe r a projec t tha t woul d increas e emission s i s nevertheles s environmentally-beneficial . e . Th e EP AAnalysis . Base d o na revie wo f th e comments , EP Aha s determine d t o adop t a forma l pollutio ncontro l projec t exclusio nfo r electri c utilit ystea mgeneratin g units . Thu s EP Ai s toda y adoptin g revision s t o it s PS D an d nonattainmen t regulation s :fo r th e addition , replacemen t o r us e a t a nexistin g electri c utilit ystea mgeneratin g uni t o f anysyste mo r devic e whos e primar yfunctio ni s th e reductio no f ai r pollutant s (includin g th e switchin g t o a less-pollutin g fue l wher e th e primar ypurpos e o f th e switc hi s th e reductio no f ai r pollutants) . Unde r th e regulation s a s adopte d today , a utilit yundertakin g a projec t meetin g th e pollutio ncontro l projec t definitio nwil l no t b e subjec t t o NS Runde r eithe r PS D o r nonattainmen t unles s th e projec t render s th e uni t les s environmentally-beneficial . I n th e propose d rule , EP Adi d no t provid e an yspecifi c definitio no f th e environmentally-beneficia l standard . Numerou s commenter s note d th e lac k o f a specifi c standar d fo r th e environmentally-beneficia l tes t an d requeste d tha tP.1 8

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- EPAprovid e a definitio n fo r thi s ne wterman d guidanc e a s t o ho wi t wil l b e applied . O f course , a s note d i n th e proposa l (5 6 FR27634) , pollutio n contro l project s a t existing stationarysource s ar e generall yno t subjec t t o NS R requirement s fo r th e simpl e reaso n tha t the yd o no t resul t i n a n increas e i n actua l emissions . I naddition , a s als o note d i n th e proposa l (5 6 FR27635) , EPAha s determine d that , i n general , Congres s di d no t inten d tha t pollutio n contro l project s b e considere d th e typ e o f activit ytha t shoul d trigge r NSR . O n th e othe r hand , severa l commenter s pointe d ou t tha t a projec t tha t reduce s on e pollutan t shoul d no t b e allowe d .t o increas e emission s o f anothe r pollutan t i f tha t increas e wil l caus e o r exacerbat e a differen t pollutio nproblem . Mor e specifically , anenvironmenta l commente r suggeste d tha t EPAha d endorse d a t th e Congressiona l hearing a vie wtha t increase s woul d no t b e allowe d i n nonattainmen t area s absen t "compelling showing. " Th e proposa l sough t t o reconcil e thes e factor s b

yindicating tha t th e exclusio n woul d allo w th e permittin g authorit yt o conside r project s o n a case-by

cas e basi s an

d furthe r indicate d tha t project s nee d no t necessaril ypas s a quantitativ e emission s increas e tes t t o qualif yfo r th e exclusion . I n addition , th e modelin g provisio n (discusse d i nth e following section ) provide s tha t pollutio n contro l project s tha t wil l resul t i n significan t ne t increase s ove r level sP.1 9

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- attribute d t o th e sourc e i nth e las t modelin g analysi s prepare d fo r th e area , wil l b e evaluate d fo r thei r impac t o n NAAQS , PS D increments , an d visibilit ylimitations. 3 Thi s safeguard , i n additio nt o th e permitting agency' s authorit y t o determin e a pollutio ncontro l projec t t o rende r th e uni t les s environmentally-beneficial , prevent s an yemission s increas e fromadversel yaffecting ai r qualit yi n eithe r a n attainmen t o r nonattainmen t area . Severa l commenter s challenge d th e nee d fo r a regulatory exclusion , noting tha t EPAha d alread yexclude d numerou s individua l pollutio n contro l project s pursuan t t o it s existing regulatoryauthority . However , whil e EPAha s i n : fac t mad e case-by-cas e determination s excluding pollutio n contro l project s fro mNSR , i t ha s neve r provide d a comprehensiv e statemen t o f it s polic yi nthi s regar d no r formall yinclude d thi s exclusio ni n it s NS Rregulation s governing SIP' s o r it s ow n NS Rregulations . Becaus e o f th e enormou s surg e i n project s tha t utilitie s ca nb e expecte d t o undertak e i n respons e t o th e aci d rai n provisions , EPA

3 Th e NS Rregulation s defin e a "majo r modification " subjec t t o revie wa s an yphysica l o r operationa l chang e a t a majo r stationarysourc e tha t woul d resul t i n a "significan t ne t emission s increase " i nan yregulate d pollutan t [se e e.g. , 51.166(a)(1)(v)(A)] . I n nonattainmen t area s "significant" , i n referenc e t o a ne t emission s increase , i s define d a s a rat e o f emission s tha t woul d equa l o r excee d a specifie d amount . Fo r example , unde r th e curren t regulation s a rat e o f 4 0 ton s pe r yea r o r mor e i s "significant " fo r S0 2 . [Cite ]P.2 0

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- believe s tha t a forma l rulemaking spelling ou t th e exac t parameter s o f th e exclusio ni s necessary . A t leas t on e commente r cautione d EPAagains t requirin g source s t o submi t "applications " t o secur e th e pollutio n contro l projec t exclusion , les t source s fac e excessiv e paperwor k burden s an d length

ydelay s everytim e the ychang e thei r pollutio n contro l equipment . Unde r today' s rule , an d consisten t wit hth e othe r NS Rapplicabilit ydecisions , source s remai n responsibl e i n th e firs t instanc e fo r determinin g wha t permitting requirement s appl yt o thei r activities . Beyond issuing an yconstructio no r operating permit s tha t mayb e needed , th e permittin g authorit yi s no t :necessaril yinvolve d unles s a sourc e seek s a determinatio n o f NS Rapplicabilit yon it s ow n o r a modelin g analysi s i s required . Severa l commenter s requeste d tha t thi s exclusio n b e extende d t o nonroutin e repair s tha t ar e undertake nb yth e utilit yi n conjunctio n wit hth e pollutio ncontro l project . However , titl e IV s overal l nationa l S0 2 ceiling an d emissio n trading programd o no t allo wEPAt o simpl yignor e th e loca l ai r qualit yimpac t o f S0 2 increase s a t individua l titl e IV-covere d facilities . Th e nationa l emission s cap s establishe d b

ytitl e IV

ar e no t designe d t o protec t plant

specifi c consideration s o f loca l ai r quality , th e focu s o f titl e I' s NS Rrequirements . Thi s argumen t i s als o refute dP.2 1

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- b yth e plai n languag e o f titl e IV whic hb

yit s term s doe s no t supersed e titl e I [se e § 403(f) , (g ) 4113] . Severa l opponent s o f th e exclusio npoin t ou t tha t certai n pollutio n contro l technologie s ca n actuall yincreas e emission s o f othe r pollutant s an d tha t th e installatio n o f a pollutio n contro l projec t mayresul t i nincrease d utilizatio n o f th e unit , an d thereb

yresul t i na nincreas e i n actua l emissions . A s note d abov e an d i n th e proposal , EPAexpect s tha t mos t pollutio ncontro l project s wil l decreas e actua l emissions . Moreover , eve n thoughemission s increase s ar e possibl e i n some cases , EPAi s no t preclude d fromcreating thi s exclusion . Th e mer e fac t o f a nemission s increase , standing alone , doe s no t rende r th e exclusio n inconsisten t wit hth e CAA . Fo r instance , EPAregulation s hav e long exclude d emission s increase s associate d wit h routin e maintenanc e repair s an d replacement , a s wel l a s increase s i n th e operation s o f a uni t i nrespons e t o fluctuation s i n th e marke t [see , e.g. , 4 0 CFR52.21(b)(2)(iii)(a) , (f)] . Give n th e modelin g safeguar d an

d th e overal l benefi t t o th e environmen t o f pollutio n contro l projects , EPAi s confiden t tha t th e creatio n o f thi s exclusio n i s a lawfu l an d appropriat e exercis e o f it s powers . I t wa s als o suggeste d tha t th e pollutio ncontro l projec t exclusio n i s inconsisten t wit h§ 182(e)(2 ) o f th e CAA . Sectio n 182(e)(2 ) provide s tha t i nextreme ozon eP.2 2

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- nonattainmen t area s (th e Lo s Angele s are a i s th e onl yone) , an yphysica l o r operationa l chang e "whic hresult s i nan y increas e i n emissions " wil l b e considere d a modification . Th e sourc e ca n avoi d th e offse t requirement s (bu t no t th e res t o f NSR ) b

yinternall yoffsetting (i.e. , netting ) an y increas e i n emission s a t a rati o o f a t leas t 1. 3 t o 1 . Th e provisio n als o provide s tha t th e extreme are a offse t provision s (bu t agai n no t th e res t o f NSR ) d o no t appl yt o th e installatio n o f equipmen t require d t o compl ywit h"th e applicabl e implementatio nplan , permit , o r thi s Act. " Th e EPAdoe s no t agre e tha t thi s nonattainmen t provision , whic happlie s t o onl yon e area , someho wpreclude s EPAfromadopting an exclusio n t o it s genera l NS Rrule s regardin g pollutio n contro l projects . Whil e ther e mayb e some overlap (i.e. , utilit ycomplianc e project s undertake n i n th e Lo s Angele s are a tha t qualif yunde r thi s rul e a s pollutio n contro l projects) , i ngenera l th e tw o provision s ar e quit e different . Today' s rul e i s limite d t o utilitie s bu t applie s t o al l area s o f th e country , whil e § 182(e)(2 ) applie s t o al l sourc e categorie s bu t onl yt o th e Lo s Angele s area . Sectio n 182(e)(2 ) als o appear s t o appl yt o a broade r categoryo f changes . Ther e i s n o evidenc e tha t Congres s intende d thi s limite d provisio n t o preemp t EPAfromadopting a broa d pollutio n contro l projec t exclusion . O nth e othe r hand , th e CA

Aconferee s di d specificall ydirec t EPAt o find a n administrativ e resolutio n o f th e WEPC O issues .P.2 3

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

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

to-future-actua l tes t coul d creat e publi c healt hproblems , tw o commenter s note d tha t utilitie s mus t compl ywit hal l Federal , Stat e an

d loca l ai r qualit yrestriction s regardles s o f th e test s used . Als o supporting th e actual-to-future

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

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

d efficien t physica l an d operationa l change s a t plant s s o a s t o achiev e excellen t environmenta l control . On e commente r favore d calculating futur e emission s ove r a representativ e 2-yea r perio d withi n a 5-yea r perio d afte r th e change . c . Comment s Generall yOpposing th e EPAProposal . On e opponen t o f th e propose d method s state d tha t emissio n increase s a t powe r plant s woul d no wb e fostere dP.2 4

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- unit s fromth e "representativ e actua l annua l emissions " methodology . Man ycommenter s questione d EPA' s propose d presumptio n tha t source s mayuse , a s th e baseline , emission s froman y2 consecutiv e year s withi n th e 5 year s prio r t o th e propose d chang e withou t regar d t o norma l sourc e operations . A s discusse d i n th e proposal , thi s presumptio ni s consisten t wit hEPA' s decisio n i nWEPC O an d th e 5-yea r perio d fo r "contemporaneous " emission s increase s an d decrease s i n 4 0 CF R52.21(b)(3)(i)(b). 8 Moreover , EPAi s no t reading "norma l sourc e operations " ou t o f th e regulatio n a s changed . Rather , th e presumptio n recognize s th e natur e o f utilit yoperation s withou t compromising th e existing regulatorylanguag e whic hrequire s tha t th e pre-chang e 2-yea r perio d use d i ndefinin g baselin e emission s b e representativ e o f "normal " operations . Fo r example , a s a systema utility' s "normal " operation s mean s directl yresponding t o a demand fo r electricity . Acol d winte r o r ho t summe r wil l resul t i n highlevel s o f "normal " operation s whil e a relativel ymil d yea r wil l produc e lowe r "normal " operations . B ypresumabl yallowing a utilit yt o us e an y2 consecutiv e year s withi n th e pas t 5 , th e rul e bette r take s int o consideratio n tha t electricit ydemand an d

8 Thi s presumptio ndoe s no t appl yt o pas t modification s a t a n emission s uni t fo r th e purpos e o f determinin g contemporaneou s emissio nchange s a t a sourc e an d canno t b e use d t o extend th e 5-yea r perio d specifie d i ntha t provisio n [se e 4 0 CFR52.21(b)(3)(i)(b)] .P.2 5

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

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

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

d unreviewed . Fo r thi s reason , EPAha s adde d th e safeguar d explaine d below . Th e EPAdoe s not , however , agre e wit hcomment s tha t post-chang e emission s estimate s mus t alway s b e mad e int o permanen t federally-enforceabl e permi t conditions . T o d o s o woul d permanentl yrestric t a utility' s legall yallowabl e emissio n limit s t o it s pre-chang e actua l emission s leve l

i * -unles s i t subsequentl yunderwen t NSR , an d woul d fai l t o accoun t fo r th e veryrea l possibilit ytha t emission s migh t increas e ove r baselin e level s i nth e futur e fo r reason s unrelate d t o th e physica l o r operationa l chang e i nquestion . A s discusse d mor e full yi nth e following section , NS R applie s onl ywher e th e emission s increas e i s cause d b yth e change . Thu s th e issu e shoul d b e viewe d mor e a s on e o f trackin g an

d monitorin g post-chang e utilizatio n and/o r emission s level s a t th e uni t t o confirmtha t baselin e emissio n level s ar e no t exceede d a s a resul t o f th e change . T o guar d agains t th e possibilit ytha t significan t increase s i n actua l emission s attributabl e t o th e chang e may occu r unde r thi s methodology , EPAi s clarifying i nth e fina l regulation s tha t an yutilit ywhic hutilize s th eP.2 7

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- "representativ e actua l annua l emissions " methodologyt o determin e tha t i t i s no t subjec t t o NS Rmus t submi t fo r 5 year s afte r th e chang e sufficien t record s t o determin e i f th e chang e resulte d i n a n increas e i nrepresentativ e actua l annua l emissions . Utilitie s mayus e continuou s emission s monitorin g data , operationa l levels , fue l usag e data , sourc e tes t result s o r an yothe r readil yavailabl e dat a o f sufficien t accurac yfo r th e purpos e o f documenting a unit' s post-chang e actua l annua l emissions . Wher e th e chang e doe s no t increas e th e unit' s emission s factor , i.e. , th e amoun t o f pollutio n emitte d b ya sourc e afte r contro l pe r uni t o f fue l combuste d (sucha s pound s o f S0 2 emitte d pe r to n o f coa l burned) , th e utilit ymaysubmi t annua l utilizatio n data , rathe r tha nemission s data , a s a metho d o f tracking post-chang e emissions . I f annua l utilizatio n dat a showtha t th e uni t increase d utilizatio n abov e baselin e levels , th e permitting authorit yshoul d determin e whethe r th e increas e resulte d fromth e change . Wher e a causa l lin k exis t betwee nth e chang e an d th e increas e i n utilization , th e permitting authorit yshoul d the n determin e whethe r emission s hav e als o increase d a s a resul t o f th e change . Change s tha t coul d increas e a unit' s emission s facto r typicall yinvolv e change s t o th e boile r itself . (Such change s d o no t includ e activitie s tha t qualif ya s pollutio n contro l project s unde r today' s rule. ) Wher e thes e change sP.2 8

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- ar e involved , th e utilitie s shoul d submi t annua l emission s dat a t o th e permitting authority . I f thi s dat a suggest s tha t th e utilit yha s increase d annua l emission s ove r baselin e levels , th e permittin g authorit yshoul d inquir e whethe r th e increas e resulte d from th e physica l o r operationa l change . Th e utilit ymay demonstrat e tha t an yincreas e wa s cause d b ya n independen t factor , suc ha s demand growth . Suc hrecord s ar e t o b e submitte d t o th e permittin g agenc yo n a n annua l basi s fo r a perio d o f 5 year s fromth e dat e th e uni t resume s regula r operation . Alonge r period , no t t o excee d 1 0 years , mayb e require d b yth e permittin g '• agenc ywher e i t ha s determine d tha t n o perio d withi n th e firs t 5 year s following th e chang e i s representativ e o f sourc e operations . Sinc e i t i s expecte d tha t utilitie s wil l submi t th e sam e dat a normall yuse d t o repor t emission s o r operationa l level s unde r existing Federal , Stat e o r loca l ai r pollutio n contro l agencyrequirements , EPAdoe s no t expec t tha t documentatio n o f post-chang e actua l annua l emission s wil l requir e an

yadditiona l dat a collectio nburde no n th e par t o f a utility . Th e purpos e o f thi s provisio n i s t o provid e a reasonabl e mean s o f determining whethe r a significan t increas e i n representativ e actua l annua l emission s resultin g froma propose d chang e a t an existing utilit yoccur s withi nP.2 9

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- th e 5 year s following th e change . Thu s th e inten t i s t o confirmth e utility' s initia l projection s rathe r tha n annuall yrevisiting th e issu e o f NS Rapplicability . If , however , th e reviewing authorit ydetermine s tha t th e source' s emission s hav e i n fac t increase d significantl yove r baselin e level s a s a resul t o f th e change , th e sourc e woul d becom e subjec t t o NS Rrequirement s a t tha t time . Th e EPA ha s adopte d thi s approac han d th e time perio d becaus e i t believe s that , i n mos t cases , an yemission s increas e resulting fro

ma physica l o r operationa l chang e a t a utilit y uni t woul d occu r withi nth e firs t 5 year s o f norma l operatio n o f th e uni t afte r th e change . Thus , EPAwil l presum e tha t an

yincreas e i nemission s level s mor e tha n 5 year s afte r th e chang e ha s occurre d i s no t relate d t o th e physica l o r operationa l change . I n respons e t o comment s regarding "like-kind " replacements , EPAnote s tha t today' s regulation s recogniz e n o distinctio n betwee n "like-kind " replacement s an d othe r nonroutin e physica l o r operationa l change s a t a utilit y stea mgenerating unit . Th e "actual-to-future-actual " methodologypromulgate d todayfo r calculating emission s change s applie s t o al l type s o f change s a t utilit yunits , including th e replacemen t o f "like-kind " component s a t a n existing unit . However , th e "like-kind " replacemen t o f a whol e uni t i s fo r al l practica l purpose s a replacemen t uni t and , therefore , i s treate d a s a newunit .P.3 0

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- Althoughsevera l commenter s suggeste d tha t EPAshoul d expand th e representativ e actua l emission s tes t t o ne wand reconstructe d units , EP Aha s decide d no t t o d o so . Sinc e ther e i s n o relevan t operating historyfo r ne wo r reconstructe d units , i t woul d no t b e possibl e t o accuratel y projec t operation s o r emission s fo r thes e units . Consequently , th e EP Aha s lef t unchange d th e regulation s whic hrequir e tha t fo r an yuni t whic hha s no t begun norma l operations , actua l emission s ar e considere d equa l t o th e unit' s potential-to-emit . Afewcommenter s requeste d tha t EPAdefin e o r provid e guidanc e o n "routin e repair , replacemen t an d maintenance " activities . Th e Jun e 1 4 proposa l di d no t dea l wit hthi s aspec t o f th e regulations , no r d o th e regulatorychange s promulgate d today . However , th e issu e ha s an importan t bearin g o n today' s rul e becaus e a projec t tha t i s determine d t o b e routin e i s exclude d b yEP Aregulation s fromth e definitio n o f majo r modifications . Fo r thi s reason , EPA plan s t o issu e guidanc e on thi s subjec t a s par t o f a NS R regulatoryupdat e packag e whic hEP Apresentl yintend s t o propos e b

yearl ysummer . I n th e meantime , EPAi s today clarifyin g tha t th e determinatio no f whethe r a th e repai r o r replacemen t o f a particula r ite mo f equipmen t i s "routine " unde r th e NS Rregulations , whil e mad e o na case-by-cas e basis , mus t b e base d o n an evaluatio no f whethe r tha t typ eP.3 1

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- o f equipmen t ha s bee n repaire d o r replace d b ysource s withi n th e relevan t industria l category .

C . Th e Causatio n Requirement . a . Background . Th e NS Rregulatoryprovision s requir e tha t th e physica l o r operationa l chang e "resul t in " an increas e i n actua l emission s i n orde r t o conside r tha t chang e t o b e a modificatio n [se e e.g. , 4 0 CFR52.21(2)(i)] . I n othe r words , NS Rwil l no t appl yunles s EPAfind s tha t ther e i s a causa l link betwee n th e propose d chang e an d an ypost-chang e increas e i n emissions . Th e EP Apropose d t o amend it s rule s t o clarif ythi s provisio n i n th e contex t o f modification s a t electri c utilit ystea mgenerating units . Unde r th e propose d regulations , an yemission s increas e attributabl e t o a physica l o r operationa l change , suc ha s a physica l o r operationa l chang e tha t significantl yalter s th e efficienc yo f th e plant , (see , Puert o Rica nCement , 88 9 F.2 d a t 297-8) , mus t continu e t o b e include d i n th e post-chang e emission s calculation . Th e proposa l clarifie d tha t wher e increase d operation s ar e i n respons e t o independen t factors , suc ha s system-wid e demand growth , whic hwoul d hav e occurre d an d affecte d th e unit' s operation s eve ni nth e absenc e o f th e physica l o r operationa l change , suc hincrease s d o no t resul t fromth e chang e an d shal l b e exclude d fromth e projectio n o f futur e actua l emissions . Thus , i nassessin g whethe r th e propose d chang e wil l resul t i n anincreas e i nP.3 2

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- actua l emissions , utilitie s nee d no t includ e i nthei r projectio n o f post-chang e utilizatio n tha t portio no f th e increase d rat e o f utilization , i f any , du e t o factor s unrelate d t o th e physica l o r operationa l change , suc ha s a n increas e i n projecte d capacit yutilizatio n du e t o the rat e o f electricit ydemand growt hfo r th e utilit ysystem(o f whic htha t sourc e i s a member ) a s a whole . Unde r th e proposal , during a representativ e baselin e perio d (se e supra) , th e plan t mus t hav e bee nabl e t o accommodat e th e projecte d demand growt hphysicall yand legall yeve n absen t th e particula r change . Increase d operation s (an

d resultan t increase s i nactua l emissions ) tha t coul d no t physicall yan d legall yb e accommodate d during th e representativ e baselin e perio d adher e als o bu t fo r th e propose d physica l o r operationa l chang e shoul d b e considere d t o resul t from

th e change . b . Comment s Generall yFavoring th e EPAProposal . Severa l utilit yrepresentative s supporte d th e propose d demand growt hexclusio n an d th e causatio nrequirement . Man y commenter s requeste d clarificatio n o f certai npoint s o r expansio n o f certai n provisions . On e commente r note d tha t ther e shoul d b e a specifi c exclusio nfo r emission s increase s a t a generating statio n resulting fro mgeneratio nshift s an d decrease d plan t efficiencie s cause d b yoperatio no f pollutio n contro l systems . Anothe r note d tha t th e discussio n o f th e criteri a fo r recognizing "factor sP.3 3

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- unrelate d t o th e physica l o r operationa l change " shoul d b e improve d upo n becaus e th e propose d requirement s tha t a facilit ymus t hav e bee n physicall yabl e t o accommodat e th e projecte d growt hduring a "representativ e baselin e period " coul d hav e a negativ e impac t i nutilit ycapacit yplannin g an d investmen t decisions , depending upo nho wsuc ha perio d i s determined . On e commente r note d tha t EP Ashoul d specificall y recogniz e a n exceptio nfo r unit s whic hhav e bee n inactive,

- becaus e a uni t shoul d no t hav e t o includ e al l o f it s emission s du e t o demand growt hmerel ybecaus e i t wa s i nnee d o f repai r o r maintenanc e whil e inactive . Commenter s aske d tha t EP Abette r defin e "independen t factors " i nth e contex t o f th e demand growt hexclusion . Lastly , on e commente r state d tha t th e fina l rul e shoul d reconcil e th e "deman d growt hexclusion " wit hth e existing "hour s o f operation/rat e o f production " exclusio n b yconfirming tha t increase s attributabl e t o system-wid e demand growt har e alread y exclude d unde r th e already-existing exclusio n and , therefore , th e "deman d growt hexclusion " onl yapplie s wher e ther e i s a federally-enforceabl e permi t termlimiting hour s o f operatio n o r productio nrate . c . Comment s Generall yOpposing th e EPAProposal . Opponent s o f th e exclusio n o f emission s attributabl e t o demand growt hcontende d tha t ther e i s n o rationa l basi s fo r ignoring suc hemissions . Whe n increase d capacit yo rP.3 4

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- utilizatio n i s th e immediat e goa l o f a projec t an d a n increas e i n emission s occur , th e projec t mus t b e subjec t t o NS Rregardles s o f th e underlying reason s fo r th e increase d capacit yo r utilizatio nan d corresponding emissio nincrease . Contraryt o th e lette r an d purpos e o f th e statute , th e demand growt hexclusio n coul d resul t i nmajo r increase s i n actua l emissio n goin g unreviewe d an d unregulated , woul d creat e seriou s loca l pollutio nproblems , an d woul d discriminat e agains t companie s tha t wer e successfu l i n implementing energyefficienc yprograms . On e loca l agenc y pointe d ou t tha t i t i s virtuall yimpossibl e t o determin e wit han ydegre e o f certaint ywha t portio no f a unit' s emission s ar e attributabl e t o anincreas e i nprojecte d capacit yutilization . I n addition , commenter s note d tha t th e exemptio nwil l hav e an advers e effec t o nloca l agencies ' abilit yt o contro l emission s an

d tha t th e time o f constructio no f a projec t i s

. th e mos t efficien t an d effectiv e time t o addres s suc h emissions . On e commente r state d tha t th e exclusio nfo r demand growt hmayfurthe r bia s competitiv e powe r market s towar d existing units , an d tha t EPAfaile d t o conside r th e impac t o f th e causatio n requiremen t o n utilit yoperations , emission s o r competitio n i npowe r markets .

Th e EPAAnalysis ,P.3 5

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- Afte r carefu l consideratio no f th e comment s receive d an dfurthe r analysi s o f th e issue s involved , EPAha s decide d t o promulgat e th e causatio n provisio na s proposed . Commenter s argue d tha t an ypost-chang e emission s increase , regardles s o f it s origin , shoul d subjec t a sourc e t o NSR . However , thes e argument s ignor e th e relevan t statutoryan

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

d implementing regulation s d o no t contai na causatio n provision . Rather , theyargu e tha t i n th e propose d rul e EPAha s misconstrue d thi s requirement . Congres s intende d th e NS Rprogram s t o appl y"wher e i

industria l change s migh t increas e pollutio ni nanarea " [se e Alabama Powe r Co . v . Costle , 63 6 F.2 d 323 , 40 1 (D.C . Cir . 1979) ; se e als o § 160(5 ) o f th e CA A( a purpos e o f th e PS D programi s "t o assur e tha t an ydecisio n t o permi t increase d ai r pollutio n i n a n are a .. . i s mad e onl yafte r carefu l evaluatio n o f al l th e consequence s o f suc ha decisio n an d afte r adequat e procedura l opportunitie s fo r informe d publi c participation." ] Base d o nthes e an d othe r directives , EPA ha s i n th e pas t simpl ypresume d tha t an ysignifican t emission s increas e tha t followe d a physica l o r operationa l chang e "resulte d from " tha t change . I n conjunctio n wit hdeveloping th e representativ e actua l annua l emission s methodology , EPArecognize d tha t th e analysi s o f th e causatio n requiremen t maydisclos e tha t a nP.3 6

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- emission s increas e tha t follow s a nonroutin e physica l o r operationa l chang e i s merel ycoincidental , an d i nfac t result s fromindependen t factor s suc ha s demand growth . I t i s importan t t o emphasize , however , tha t thi s doe s no t amoun t t o a pe r s e exclusio n o f demand growt hfromth e emission s increas e calculation . Rather , demand growt hca n onl yb e exclude d t o th e exten t i t — an d no t th e physica l o r operationa l chang e —i s th e caus e o f th e emission s increase . Th e EP

Abelieve s tha t thi s i s a reasonabl e interpretatio n o f th e statutoryprovisio ni nquestion , an d reject s th e view s o f commenter s wh o asserte d tha t th e Agenc y i s compelle d t o retai n it s previou s vie wo f th e statutory i * scheme . Consequently , wher e projecte d increase d operation s ar e i n respons e t o an independen t factor , suc ha s demand growth , whic hwoul d hav e occurre d an d affecte d th e unit' s operation s eve n i n th e absenc e o f th e physica l o r operationa l change , th e increase d operation s canno t b e sai d t o resul t fromth e chang e an

d therefor e mayb e exclude d fromth e projectio no f th e unit' s futur e actua l emissions . Conversely , wher e th e increas e coul d no t hav e occurre d during th e representativ e baselin e perio d bu t fo r th e physica l o r operationa l change , tha t chang e wil l b e deeme d t o hav e resulte d i n th e increase . Th e EPAdi d receiv e numerou s comment s regardin g th e difficult yo f applying thi s ne winterpretation . However , EPAbelieve s i t i s possibl e t o discer n betwee n emission sP.3 7

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- increase s tha t ar e relate d t o a physica l o r operationa l chang e from

thos e tha t ar e not . Thi s issu e i s a fact

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

cas e basis . However , EPAha s identifie d certai n principle s whic hshoul d assis t permitting authoritie s i nmakin g thei r determination . Fo r example , a s discusse d i nth e proposal , EPAconsider s emission s increase s du e t o increase d operation s tha t coul d no t b e physicall yo r legall y accommodate d during th e representativ e baselin e perio d bu t fo r th e propose d physica l o r operationa l change , t o resul t fromth e change . Th e preambl e t o th e proposa l als o mad e clea r tha t an

yemission s increas e attributabl e t o a physica l o r operationa l chang e tha t significantl yalter s th e efficienc yo f th e plant , (se e Puert o Rica nCement . 88 9 F.2 d a t 297-8) , mus t continu e t o b e include d i nth e post-chang e emission s calculations . However , EP Ai nn o wayintend s t o discourag e physica l o r operationa l change s tha t increas e efficienc yo r reliabilit yo r lowe r operating costs , o r improv e othe r operationa l characteristic s o f th e unit . Th e EPArecognize s tha t improvement s suc ha s thes e ar e desirabl e fo r economi c reason s an d t o assur e a reliabl e suppl yo f electricity . Thus , physica l o r operationa l change s tha t improv e operationa l characteristic s wil l b e treate d i nth e sam e manne r a s an

yothe r changes . Thi s mean s tha t wher e a n improvemen t involve s a routin e change , i t i s exclude d from th e NS Rdefinitio n o f "majo r modification. " Alternatively ,P.3 8

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- wher e a n improvemen t i s no t routin e an d a nemission s increas e result s fromth e improvement , tha t portio no f th e emission s increas e resulting fromth e improvemen t wil l b e considere d i n determining whethe r th e propose d chang e subject s th e uni t t o NS Rrequirements . Severa l commenter s requeste d a clarificatio nconcernin g a unit' s abilit yt o accommodat e demand growt hi nit s pre-chang e configuration . I nEPA' s view , suc ha clarificatio n i s no t warranted . A s discusse d above , operationa l level s tha t a uni t coul d no t hav e achieve d durin g th e representativ e baselin e perio d bu t fo r th e physica l o r operationa l chang e ar e considere d t o resul t fro m th e change . Post-chang e emission s increase s associate d wit h suc hoperationa l level s must , therefore , b e considere d t o resul t fro

mth e chang e an

d b e take nint o accoun t fo r NS R applicabilit ypurposes . Numerou s commenter s pointe d ou t tha t i t mayb e very .-difficul t t o determin e whe n an increas e i s cause d b y independen t factor s an d whe n i t i s cause d b yth e physica l change . Also , an environmenta l commente r argue d tha t thi s causatio n questio n mus t alway s b e resolve d i nfavo r o f including al l post-chang e emissio nincrease s tha t follo wa chang e whic himprove s a unit' s efficiency , sinc e i n it s vie w a n efficienc ygai n wil l alway s b e th e primarydeterminan t o f th e utility' s us e o f a generating unit , notwithstandin g th e presenc e o f othe r necessary—bu t no t o f themselve sP.3 9

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- sufficien t —factor s suc ha s demand growth . However , a s s o formulated , th e commen t answer s itself . I f efficienc y improvement s ar e th e predominan t caus e o f th e chang e i n emission s an

d demand growt hi s not , th e exclusio ndoe s no t apply . Bu t thi s i s a questio no f fac t whic hmus t b e resolve d o n a case-by-cas e basi s an d depending o nth e individua l fact s an d circumstance s o f th e chang e a t issue . EPAdecline s t o creat e a presumptio ntha t everyemission s increas e tha t follow s a chang e i nefficienc yi s inextricabl y linke d t o th e efficienc ychange . I n calculating demand growth , utilitie s mayconside r th e company' s historica l operationa l data , it s ow n -representations , filing s wit hFederal , Stat e o r loca l regulatoryauthorities , an d complianc e plan s develope d unde r titl e IV

o f th e 199 0 Amendments . Th e EPAdisagree s wit hcomment s tha t thi s provisio n coul d resul t i n majo r increase s i nactua l emission s goin g unreviewe d wit hth e potentia l t o creat e seriou s loca l ai r pollutio n problems . First , th e NS Rmajo r modificatio n provision s d o no t appl yt o al l increase s i n emissions , jus t emissio n increase s whic hresul t fro ma nonroutin e physica l o r operationa l chang e a t anexisting majo r source . Second , a s ha s alread

ybee n observed , thi s provisio ndoe s no t amoun t t o a pe r s e exclusio no f demand growth . Finally , thi s ne w provisio n doe s no t diminis hth e scop e o f th e coverag e o f EPA' s NS Rregulations . Rather , i t merel yincorporate s int oP.4 0

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- th e actual-to-future-actua l methodologya requiremen t o f th e pre-existing statutoryan d regulatoryscheme . Moreover , i n respons e t o thos e concern s tha t a demand growt hexclusio n coul d lead t o seriou s loca l ai r pollutio n problems , EPAnote s th e restriction s i t place d o nth e overal l futur e projectio ni n th e proposal : th e leve l o f emission s th e sourc e claim s tha t i t wil l operat e a t shoul d b e consisten t wit hcurren t assumption s regarding th e source' s emission s tha t ar e use d i nth e relevan t SIP . Finall yth e EPAdoe s no t agre e wit hth e commente r requesting tha t th e fina l rul e confirmtha t increase s attributabl e t o system-wid e demand grgwt har e alread y r exclude d unde r th e existing exclusio nfo r increase s i nhour s o f operatio n and , therefore , th e "deman d growt hexclusion " onl yapplie s wher e ther e i s a federally-enforceabl e permi t termlimiting hour s o f operatio n o r productio n rate . Th e commenter' s statemen t i s no t correct . Althougha sourc e may varyit s hour s o f operatio n o r productio n a s par t o f it s everydayoperations , an increas e i n emission s attributabl e t o an increas e i n hour s o f operatio n o r productio nrat e whic hi s th e resul t o f a construction-relate d activit yi s no t exclude d from

revie w(se e WEPCO , 89 3 F.2 d a t 91 6 n.ll ; Puert o Rican Cement , 88 9 F.2 d a t 298) .-52

- D . Repowering . a . Background . Titl e IV

o f th e 199 0 Amendment s grant s specia l P.4 1

treatmen t t o utilitie s tha t see k t o compl ywit hmandate d aci d rai n reduction s b yrepowering a uni t wit hqualifyin g CC T [se e § § 402(12) , 409(a)] . Repowering project s tha t qualif yfo r a n extensio no f th e Phas e I I S0 2 requirement s wil l b e exemp t fromNSP S requirements , s o long a s th e repowerin g "doe s no t increas e actua l hourl yemission s fo r an ypollutan t regulate d unde r th e Act " § 409(d) . Th e EPA propose d t o interpre t th e requiremen t tha t repowering no t lead t o a n increas e i n "actua l hourl y,emissions " a s a n expressio n o f Congressiona l inten t tha t EPAshoul d us e th e sam e genera l approac h—on e keye d t o change s i n maximu m hourl yemissio n rate s —t o determin e applicabilit yfo r repowerin g project s a s i t ha s fo r othe r physica l o r operationa l change s unde r th e NSPS . Accordingly , EPA propose d tha t a repowering projec t whic hdoe s no t resul t i n a n increas e ove r baselin e i na unit' s post-chang e hourl y emission s wil l b e eligibl e fo r thi s limite d NSP S exemption . Th e statutoryNSP S exemptio napplie s t o repowerin g o f existing unit s a t existing sources , s o long a s th e projec t qualifie s fo r a n extensio n o f th e Phas e I I S0 2 requirement s and satisfie s th e emission s increas e tes t [se e § 409(d)] , Becaus e o f thi s explici t statutoryprovision , th e reconstructio n limitation s specifie d i n4 0 CF R60.1 5 ar e no tP.4 2

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- applicabl e t o qualifying repowering projects . However , unde r th e term s o f § 409(d) , ne wunit s locate d a t a differen t sit e tha n th e existing uni t i t replace s ar e no t afforde d specia l treatment . Th e EPAregulatoryproposa l o n CC T followe d thes e statutoryprovisions . I neffect , EPA propose d t o mak e al l regulatorychange s necessaryt o reflec t thes e ne wCC T statutoryprovisions . Th e EPAals o propose d t o us e th e statutorydefinitio n o f repowering se t fort hi n § 402(12) . Th e EPApropose d regulation s als o provide d fo r "expedited " NS Rprocessing fo r repowering project s a s require d b

y§ 409(e) . b . Publi c Comment . ; Th e EPAdi d no t receiv e an ycomment s opposing th e repowering proposa l whil e severa l industryan d Congressiona l commenter s supporte d it . Th e Congressiona l commenter s requeste d clarificatio n o f EPA' s interpretatio no f term "repowering. " Th e Congressiona l commenter s state d tha t th e propose d definitio n o f "repowering " ca nb e interprete d a s limiting qualifying repowering technologie s t o thos e tha t onl yinvolv e th e replacemen t o f th e boiler , disqualifyin g highly-promising , multi-pollutan t technologie s tha t d o no t involv e boile r replacement . c . Th e EPAAnalysis . I n ligh t o f th e lac k o f negativ e comments , EPAi s today promulgatin g th e CC T provision s a s proposed . Thi s include s n o chang e i n th e definitio no f "repowering. " However , EPAP.4 3

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- wil l follo wa n expansiv e interpretatio no f th e ter m repowering , whic hshoul d addres s man yo f th e concern s expresse d bysom e o f th e commenter s whil e remainin g consisten t wit hstatutor yterm s an d Congressiona l intent . Sectio n402(12) , i nrelevan t part , define s "repowering " a s follows : Replacemen t o f a n existin g coal

fire d boile r wit hon e o f th e followin g clea n coa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio n combine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio nfue l cell s o r a s determine d byth e Administrator , i n consultatio n wit hth e Secretar yo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d anyother ' technolog y capabl e o f controllin g multipl e combustio nemission s simultaneousl ywit h improve d boile r o r generatio n efficienc y an d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technolog yi nwidesprea d commercia l us e a s o f th e dat e o f enactmen t o f th e Clea n Ai r Ac t Amendment s o f 199 0 * * * 9

Th e definitio nthu s provide s fo r thre e majo r categorie s o f repowerin g technologies : (1 ) Technologie s specificall yliste d i nth e statute ; (2 ) derivative s o f on e o r mor e o f thes e liste d technologies ; an d

9 Th e las t sentenc e i n th e definitio no f "repowering " i n § 402(12 ) o f th e CA Arefer s t o a specifi c CC T projec t i n Tallahassee , Florid a (Arva hB . Hopkin s Statio nUni t 2 Circulatin g Fluidized-Be d Repowerin g Project ) awarde d Novembe r 30 , 1990 .P.4 4

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- (3 ) technologie s which : (a ) Ar e capabl e o f controllin g multipl e combustio n emission s simultaneously ; (b ) wit himprove d boile r o r generationefficiency ; and (c ) wit hsignificantl ygreate r wast e reductio ntha n technologie s i nwidesprea d commercia l us e a s o f th e dat e o f enactmen t o f th e CA A(Novembe r 15 , 1990) . I n accordanc e wit hth e languag e o f th e statutor y definitio n o f repowering , th e fina l rul e provide s tha t a qualifyin g repowerin g technolog ymus t involv e "replacement " o f a n existin g boiler . Th e languag e o f § 402(12) , thoug h ambiguou s i nman ysignifican t respects , wil l no t suppor t a n interpretatio n whic hfail s t o recogniz e tha t repowerin g require s us e o f a nappropriat e ne wtechnolog yinstea d o f th e existin g boiler . Th e EP Aconsidere d whethe r th e referenc e t o boile r replacemen t i n§ 402(12 ) coul d b e rea d a s referrin g t o onl y th e firs t categor yo f technologies . However , suc ha n approac hwoul d requir e readin g th e provisio na s i f th e recita l o f th e thre e alternativ e technologie s bega n immediatel yafte r th e phras e "repowerin g means, " rathe r tha n afte r th e phras e "repowerin g mean s replacemen t o f a n existin g coal-fire d boile r wit hon e o f th e followin g clea n coa l technologies:. " Suc ha readin g i s inconsisten t wit hth e structur e o f th e provision , i n whic hth e colon , whic hi s "use d chiefl yt oP.4 5

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- direc t attentio n t o matte r tha t follow s (a s a list , explanation , o r quotation) " [se e Webster' s Nint hNe w Collegiat e Dictionary26 6 (1985)] , follow s rathe r tha n precede s th e referenc e t o boile r replacement . Moreover , al l thre e categorie s o f technologie s woul d b e properl ydescribe d a s "th e following clea ncoa l technologies:. " Whil e i t i s tru e tha t th e lis t following th e colon , lik e th e phras e "th e following clea n coa l technologies: " coul d b e read t o refe r exclusivel yt o th e seve n name d technologie s (or t o thos e technologie s an d thei r approve d derivatives) , suc ha n interpretatio nwoul d stil l fai l t o provid e a satisfactoryexplanatio no f ; th e grammatica l

. structure o f th e provision . Eithe r o f thes e tw o reading s woul d fai l t o explai n ho wth e technologie s that , accordin g t o thos e reading s d o no t conside r boile r replacement , relat e t o th e term"repowering. " I n othe r words , i f th e concep t o f boile r replacemen t wer e remove d fro meithe r th e thir d categoryo f technologie s o r fro mbot hth e second an d thir d categories , th e provisio nwoul d read , wit hrespec t t o thos e categories : Th e ter m"repowering " mean s * * * a derivativ e o f on e o r mor e o f (th e seven ) technologies , an

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

Th e difficult ywit hthi s reading i s tha t "repowering, " whateve r th e precis e scop e o f it s definition , clearl ymean sP.4 6

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- doin g something wit ha derivativ e technologyo r a multipollutan t contro l technology , rathe r tha nsimpl ythos e technologie s themselves . Requiring boile r replacemen t for al l thre e categorie s avoid s thi s particula r infirmity . Th e EPAals o considere d anothe r textua l argumen t tha t coul d b e advance d t o suppor t a n interpretatio n o f § 402(12 ) tha t boile r replacemen t i s no t require d fo r th e thir d categoryo f technology , bu t i t als o i s unpersuasive . I t simpl ydoe s no t followfro mth e fac t tha t th e categoryo f multipollutan t contro l technologie s alon e ha s expressl y enumerate d performanc e criteri a tha t thos e criteri a ar e mean t t o b e th e exclusiv e tes t fo r qualifying technologie s •of thes e types . Becaus e th e third categoryo f technology wa s intende d t o encompas s type s o f technologie s whic hwer e unknown o n th e dat e o f enactmen t (an d thus , unlik e th e prio r categories , no t susceptibl e t o being enumerate d i nth e statute ) tha t categorywoul d necessaril yhav e t o includ e explici t defining criteria , whethe r o r no t th e boile r replacemen t criterio napplie d t o it . B yth e same token , th e fac t tha t th e latte r two categorie s ar e subjec t t o EPA approva l i n consultatio nwit hDepartmen t o f Energy(DOE ) doe s no t impl ytha t thi s i s th e onl ycriterio napplicabl e t o them . Eac hi s subjec t t o additiona l criteri a (i.e. , th e requiremen t o f derivatio ni nth e cas e o f th e second category , an

d th e thre e performanc e criteri a i n th e cas e o f th e third category) .P.4 7

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- Th e pivota l phras e "replacemen t o f a nexisting coal-fire d boiler " i s undefine d i nth e statute , an d it s scop e i s no t clearl ydelineate d b yit s context . Some o f th e seve n liste d technologie s mayno t requir e tota l boile r replacement , althoughal l requir e suc hextensiv e change s t o th e boile r tha t theyar e tantamoun t t o boile r replacement . Unde r th e principl e o f enusdemgeneris , therefore , th e Agenc yclearl yhas , a t a minimum , ampl e discretio n t o trea t a s functiona l boile r replacemen t an ychange s broadl ysimila r i n scop e t o thos e involve d i ninstalling th e seve n name d technologies . Suc ha definitio n woul d clearl yrepresen t th e lower , no t th e upper , limi t o nth e Agency' s discretio nt o f •giv e meanin g t o th e ter m"replacement" . Accordingly , th e statut e confer s o n EP Ath e additiona l discretio nt o defin e boile r replacemen t i n a functiona l manne r tha t take s int o accoun t achievemen t o f th e specifie d performanc e criteri a a s wel l a s th e degre e o f change s t o th e boiler . B ywayo f ..example , elsewher e i ntoday' s fina l rul e th e Agenc y consider s a uni t t o b e "replaced " i f i t woul d "constitut e a reconstructe d uni t withi n th e meaning o f 4 0 CF R60.15. " I n accordanc e wit hth e abov e languag e EPAwil l us e th e 4 0 CF R60.1 5 tes t fo r "reconstruction " a s genera l guidanc e i n determining whethe r eac hindividua l applicatio n unde r § 40 9 involve s sufficien t replacemen t t o qualif yfo r a repowering extensio n an d hence , an NSP S exemption .P.4 8

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- I n short , becaus e "Congres s ha s no t directl yspoke n t o th e precis e questio n a t issue, " Chevron . U.S.A . vNRDC , 46 7 U.S . 837 , 842-4 3 (1984) , EPAenjoy s a significan t measur e o f discretio n t o determin e t o wha t exten t replacemen t o f les s tha n 10 0 percen t o f th e part s o f a n existing boile r coul d b e deeme d replacemen t fo r purpose s o f § 402(12 ) an

d thi s rule . Fo r th e reason s discusse d above , EPAbelieve s th e propose d regulatorylanguag e regarding repowering i s reasonable . Tha t proposa l i s today promulgate d withou t change . E . Clea n Coa l TechnologyDemonstratio nProject s an d Very Clea nUnit s . a . Background . Th e proposa l als o propose d rule s implementing th e ne w CC T exemptio n create d b yth e 199 0 Amendments . I nth e proposal , temporaryCC T demonstratio n project s wer e define d a s thos e CC T demonstratio n project s lasting 5 year s o r less . Titl e IV

give s thes e project s an exemptio nfrom NSPS , PS D an d nonattainmen t requirements . Id. , § 415(b)(2) . However , th e facilit ywoul d stil l b e subjec t t o an yapplicabl e SI P an d mus t compl ywit han yothe r requirement s necessaryt o attai n an

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

d clarif ytha t EPAconsider s th e 5 yea r perio d a s starting o n th e dat e o f startu p (a s define d i n 4 0 CF R60.2) . Atemporarydemonstratio nprojec t mayb e converte d t o a permanen t statu s a t an ytime , provide d i tP.4 9

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- meet s al l th e requirement s tha t appl yt o a permanen t CC T projec t criteri a a t th e time o f conversion . Further , EPApropose d tha t a t th e en d o f a temporary project , th e facilit ymus t b e returne d t o pre-demonstratio n condition s an

d hourl yemissio n rate s (or lower) . Th e retur n o f th e facilit yt o it s pre-demonstratio n physica l and operationa l conditio n woul d no t resul t i nth e los s o f th e actua l emission s margi n betwee npre-demonstratio n actua l emission s rat e an

d SIP-allowabl e emission s rate s fo r tha t facility . Rather , th e facilit ywoul d b e treate d a s i f th e temporarydemonstratio nprojec t had neve r occurred. 1 0 Th e proposa l di d no t extend t o emission s increase s tha t :ar e unrelate d t o th e conduc t o f temporarydemonstratio n projects . Th e EPAconsider s emission s increase s (above th e pre-demonstratio n levels ) tha t ar e attributabl e t o physica l o r operationa l changes , othe r tha n thos e necessaryt o restor e tha t uni t t o it s pre-demonstratio ncondition , t o b e beyond th e scop e o f th e Congressiona l exemption .

1 0 Thi s woul d b e th e cas e eve ni f ther e wer e smal l difference s i n th e post-demonstratio n physica l an d operationa l condition s du e t o a technica l inabilit yt o restor e th e uni t t o it s precis e pre-demonstratio n condition , o r du e t o norma l variabilit yi nth e coa l used . Thus , EPA woul d no t see k t o appl yNSP S o r NS Rbecaus e o f a post demonstratio n emission s increas e attributabl e solel yt o a n increas e i n th e hour s o f operatio no r productio nrat e o f th e uni t (subjec t t o th e NSP S limitatio ntha t th e productio n rat e increas e mus t b e accomplishe d withou t a capita l expenditure) .P.5 0

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- Th e EPAals o propose d t o implemen t a n exemptio nfrom NSP S an d PS D requirement s fo r repowering project s whic hare awarde d funding fromth e DO E a s permanen t CC T demonstratio n project s (or simila r project s funde d b yEPA ) s o long a s potentia l emission s [se e 52.21(b)(4) ] fromth e uni t d o no t increas e a s a resul t o f th e projec t [se e § 415(b)(3)] . However , repowering project s tha t qualif ya s pollutio n contro l project s wil l b e treate d a s othe r pollutio ncontro l project s fo r th e purpose s o f th e nonattainmen t provision s o f titl e I o f th e CAA . Finally , th e proposa l implemente d th e statutory exemption s i n § 415(c) . I ntha t section , Congres s provide d a n exemptio n fromNSP S an d PS D fo r th e reactivatio no f "ver y clea n units " otherwis e i ncomplianc e wit hth e CA Atha t ha d bee n shu t down fo r a t leas t th e 2 year s prio r t o enactmen t o f th e 199 0 Amendment s an d that , prio r t o th e shutdown , ha d bee n equippe d wit hpollutio n control s wit ha remova l efficienc yo f a t leas t 8 5 percen t fo r S0 2 an d 9 8 percen t fo r particulates , an

d had bee n equippe d wit hlow-NOxburners . Thi s exemptio n appear s t o hav e bee n narrowl ytailore d an d i s no t expecte d t o hav e widesprea d applicability . a . Comment s Generall yFavoring th e EPAProposal . Some commenter s specificall ymentione d tha t CC T demonstratio n project s shoul d no t b e subjec t t o NS R provisions .P.5 1

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- b . Comment s Generall yOpposing th e EPAProposal . Some commenter s di d no t suppor t th e propose d blanke t inclusio n o f al l CC T project s a s pollutio n contro l projects . On e commente r suggeste d tha t eac hCC T projec t b e reviewe d o n a case-by-cas e basi s and , i f th e projec t result s i nhighe r emissio n levels , i t shoul d no t b e considere d a pollutio n contro l project . Anothe r commente r gav e a nexampl e o f a CC T projec t tha t convert s anoil-fire d uni t t o a highe r emitting coal-fire d unit , noting tha t thi s projec t shoul d no t b e considere d a pollutio ncontro l project . On e commente r oppose d t o th e pollutio n contro l projec t exemptio n questione d th e verynarro wexemptio nfromNSP S an d t PS D fo r th e reactivatio no f well-controlled , veryclea n unit s tha t ha d bee n shu t dow n fo r a t leas t 2 year s prio r t o th e enactmen t o f th e 199 0 Amendments . I f suc hexemption s ar e granted , th e commente r urge d EPAt o includ e a conditio n tha t an yreactivate d source s performan ai r qualit yimpac t assessmen t an

d demonstrat e tha t theywoul d no t caus e o r contribut e t o a violatio no f NAAQS , PS D increments , o r visibilit ystandards . c . Comment s Suggesting Revision s t o th e Proposal . Th e following suggestion s wer e mad e wit hregar d t o th e definitio n o f "pollutio ncontro l project" : (1 ) includ e al l element s o f CC T demonstratio nproject s a s a n exclude d project ;P.5 2

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- (2 ) ad d th e word s "clea ncoa l technology " i nth e example s o f pollutio ncontro l project s i n4 0 CF R51.165 , 51.166 , 52.21 , an d 53.24 ; an d (3 ) us e th e statutor ydefinitio n o f CC T demonstratio n projec t i n 60.14(j)(l) . Th e statutor ydefinitio nomit s th e requiremen t tha t a t leas t 2 0 percen t o f th e fundin g fo r a CC T demonstratio nprojec t com e fro mth e Federa l government . d . Th e EP AAnalysis . Afte r revie wo f th e publi c comment s an d furthe r analysi s o f th e subjec t provision , EP Aha s decide d t o promulgat e th e propose d rule s implementin g th e CC T an d ver y clea n uni t exemptio n create d byth e 199 0 Amendments . Th e EP Aview s thi s actio n a s merel yincorporatin g int o it s existin g regulator yframewor k statutor yexemption s tha t wer e immediatel yeffectiv e upo n passag e o f th e 199 0 Amendments .

F . Calculatio no f NSP S Baselin e a . Background . A s discusse d i nth e proposal , "anyphysica l o r operationa l chang e t o a n existin g facilit ywhic hresult s i n a n increas e i nth e emissio n rat e t o th e atmospher e o f any pollutan t t o whic ha standar d applies " i s a modificatio n fo r NSP S applicabilit ypurpose s [se e 4 0 CF R§ 60.14(a)] . Th e NSP S regulation s implementin g thi s genera l definitio nfocu s o n increase s i nhourl yemissions , expresse d i nkilogram s o f pollutan t discharge d pe r hour . T o determin e i f a nincreas e i n hourl yemission s ha s occurre d a t a unit , a pre-chang eP.5 3

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- baselin e mus t b e established . Unde r curren t regulations , th e emission s rat e befor e an d afte r a physica l o r operationa l chang e i s evaluate d a t eac huni t b ycomparin g the curren t hourl ypotentia l emission s a t maximu m operatin g capacit yt o hourl yemission s a t maximu mcapacit yafte r the change . I n thi s calculation , th e reviewing authorit y disregard s th e unit' s maximu mdesigncapacity. " Th e origina l design capacit yo f a unit , t o th e exten t i t differ s .fro mactua l maximu

mcapacit ya t th e tim e tha t th e baselin e i s establishe d du e t o physica l deterioratio no f th e facility , i s immateria l t o thi s calculation . Th e EPApropose d that , fo r an existing electri c utilit y t steamgeneratin g unit , th e pre-chang e baselin e fo r NSP S applicabilit ypurpose s shal l b e calculate d usin g th e highes t hourl yemission s rat e achievabl e a t an ytime durin g th e 5 year s prio r t o th e change . Th e proposa l retaine d th e ke y concep t i n existing regulation s tha t th e baselin e b e determine d during a perio d tha t i s roughl ycontemporaneou s wit hth e propose d chang e a t th e affecte d facility . Th e EPA believe s tha t th e propose d revision , whil e modest , i s stil l necessaryt o avoi d th e curren t regulation' s undu e emphasi s

1 1 [Se e 3 9 FR36,94 8 col . 1 (propose d rule)] . I n WEPCO , th e utilit ycontende d tha t baselin e capacit yfo r th e purpos e o f determining whethe r anincreas e i n emissio nrat e occur s fo r purpose s o f anNSP S modificatio ni s th e origina l desig n capacit yo f th e facility . However , th e cour t rejecte d WEPCO' s argumen t tha t origina l desig n capacit yo r pas t "representative " capacity , n o longe r achievabl e a t th e plant , had t o b e use d fo r th e baselin e emission s rate .P.5 4

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- o n th e physica l conditio n o f th e affecte d facilit y immediatel yprio r t o th e change . Th e proposal' s mor e flexibl e provisio n enable s unit s t o establis ha baselin e tha t i s representativ e o f it s physica l an d operationa l capacit yi n recen t years , whil e stil l precluding th e us e o f a baselin e tie d t o origina l designcapacity , whic ha s note d abov e maybea r n o relationshi p t o th e facility' s capacit yi n recen t years . Withou t thi s revision , th e NSP S regulation s mayundul y burde n utilitie s undertaking physica l o r operationa l change s i n conjunctio n wit hth e aci d rai n program . Fo r instance , i f a uni t ha s broke n dow n an d i s i n nee d , of repairs , th e i * utility' s baselin e wil l b e artificiall ylow . Th e propose d chang e woul d allo wutilitie s t o demonstrat e tha t a nearlier , highe r capacit ywa s mor e representativ e o f th e unit' s maximu mhourl yemission s rate . b . Comment s Generall yFavoring th e EPAProposal . Severa l commenter s note d tha t EPA' s proposa l wil l provid e neede d flexibilit yan d alleviat e uncertaint yfo r nonroutin e repair , replacement , an d maintenanc e project s whil e stil l protecting loca l ai r quality . On e commente r supporte d retentio n o f th e keyconcep t o f equating contemporaneou s emission s wit hrepresentativ e emissions . c . Comment s Generall yOpposing th e EPAProposal . On e commente r opposing th e proposa l note d tha t th e provisio n fo r th e maximu m hourl yemission s achievabl e duringP.5 5

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- th e las t 5 year s woul d resul t i na significan t relaxatio n o f NSP S requirement s an d woul d allo wutilitie s t o upgrad e equipmen t whic hmayhav e los t significan t generatin g capacit ywithou t th e equipmen t being subjec t t o NSPS . Source s tha t hav e bee n operating belo wthei r maximu m achievabl e emissio n rate s fo r th e 5 year s prio r t o th e chang e ca n caus e increase s i nactua l hourl yemissio nrates , .inconsisten t wit hth e inten t o f th e NSP S program . I n .addition , th e chang e i nth e baselin e wil l allo wutilitie s suc ha extensiv e abilit yt o mak e unregulate d change s suc ha s refurbishment , repowering o r life-extensio na s t o interfer e wit hcompetitio n betwee n existing unit s an d ne wunits . d . Comment s Suggesting Revision s t o th e Proposal . Th e mos t frequen t commen t o nthi s par t o f th e proposa l wa s tha t th e rul e shoul d b e clarifie d t o sa ytha t th e baselin e shoul d reflec t th e las t 5 year s o f operation , t o addres s unit s tha t hav e no t bee n operating . I n thi s regard , .commenter s wer e concerne d abou t whethe r th e approac hwil l ensur e th e establishmen t o f pas t emissio nlevel s tha t ar e trul yrepresentativ e o f norma l sourc e operation s fo r utilit y unit s i n col d storag e fo r mor e than5 years . On e commente r aske d tha t th e NSP S baselin e [4 0 CF R60.14(h) ] b e mad e consisten t wit hth e NS Rpre-chang e baselin e [4 0 CF R52.21(b)(21)(ii) ] b yadding th e phrase , "o r othe r perio d deeme d b yth e Administrato r t o b e mor e representativ e o f norma l operation. " On e commente r remarke dP.5 6

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- tha t i f th e rul e canno t b e change d t o allo wconsideratio no f th e pas t 5 year s o f operation , the nEPAshoul d selec t a n alternativ e tha t woul d reflec t a mor e representativ e baseline . I n addition , some commenter s aske d fo r clarificatio n tha t a uni t may"ne t out " o f NSP S requirement s b y switching t o lowsulfu r coal . e . Th e EPAAnalysis . Afte r carefu l consideratio no f th e comment s receive d an d furthe r analysi s o f th e subjec t provision , EPAha s decide d t o promulgat e th e propose d revise d methodologyfo r calculating th e pre-chang e baselin e fo r NSP S applicabilit y purpose s fo r a n existing electri c utilit ystea m generating r unit . Th e amende d methodologywil l us e th e highes t hourl y emission s rat e achievabl e a t an ytime during th e 5 year s prio r t o th e change . Th e revise d methodologyretain s th e keyconcep t i n existing regulation s tha t th e baselin e b e determine d during a perio d tha t i s roughl ycontemporaneou s wit hth e propose d chang e a t th e affecte d facility . Th e EPAbelieve s tha t thi s decisio n t o revis e th e curren t regulatio n wil l allo w utilitie s flexibilit yregarding th e scheduling o f nonroutin e repair , replacement , an d maintenanc e projects . Also , th e EPAbelieve s tha t withou t thi s revision , th e NSP S regulation s mayundul yburde n utilitie s undertaking physica l o r operationa l change s i n conjunctio nwit hth e aci d rai n program . Thi s chang e wil l allo wutilitie s t o demonstrat eP.5 7

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- tha t a n earlier , highe r capacit ywa s mor e representativ e o f th e unit' s maximu

mhourl yemission s rate . Th e EPAdi d no t agre e wit hcomment s tha t th e us e o f the maximu mhourl yemission s achievabl e during th e las t 5 year s woul dresul t i n a significan t relaxatio no f NSP S requirement s an

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

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

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

mhourl yrat e t o b e subjec t t o NSPS . Th eP.5 8

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- promulgate d regulatio n simpl yallow s mor e flexibilit yi n defining a unit' s curren t capacity . Th e EPAcanno t agre e wit hcomment s tha t th e methodology fo r computing th e NSP S baselin e reflec t th e las t 5 year s o f operatio n rathe r tha nth e 5 year s prio r t o th e change . A s discusse d i n conjunctio n th e NS Rbaseline , th e us e o f suc ha baselin e woul d credi t a uni t whic hha s bee ninoperabl e fo r 2 0 o r 3 0 years , o r longer , an d i n nee d o f extensiv e nonroutin e changes , wit ha emission s baselin e tha t doe s no t reflec t curren t achievabl e level s o f operations . Th e EPA notes , however , tha t th e NSP S regulation s hav e alway s allowe d a dorman t uni t t o demonstrate > it s curren t capacit y •in orde r t o determin e it s emission s baseline . Thu s a n operabl e unit , o r on e i n nee d o f onl yroutin e maintenanc e o r repair , whic hha s bee n dorman t fo r an extende d perio d o f tim e ca n stil l demonstrat e it s achievabl e capacit yan d associate d emission s leve l b yoperating fo r a relativel y shor t perio d o f time . Acommente r requeste d tha t th e NSP S baselin e b e revise d t o b e consisten t wit hth e NS Rpre-chang e baselin e b yadding th e phrase , "o r othe r perio d deeme d b yth e Administrato r t o b e mor e representativ e o f norma l operation. " Th e EPAdi d no t gran t thi s reques t becaus e i t woul d chang e th e emphasi s o f th e NSP S program . A s a technology-base d program , th e NSP S programexamine s maximu mhourl yemission s rates , expresse d i n kilogram s pe r hour . Thus , emissio n increase sP.5 9

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- fo r NSP S purpose s ar e determine d b ychange s i nth e hourl y emission s rate s a t maximu mphysica l capacity , regardles s o f ho wth e uni t ha s actuall yoperated . I ncontrast , i nligh t o f th e ai r qualit yplanning componen t o f th e NS Rprogram , th e NS Rregulation s examin e tota l actua l annua l emission s t o th e atmosphere . Consequently , norma l operation s ove r a perio d o f tim e i s considere d fo r purpose s o f determinin g a source' s impac t o n ambien t air . Fo r NS Rapplicabilit y determinatio n purpose s emission s increase s ar e determine d b y change s i n actua l annua l emission s a s expresse d i n ton s pe r year . Some commenter s requeste d clarificatio n o n "netting out " o f NSP S requirement s b yswitching t o lowsulfu r coal . Th e propose d regulatorychange s wer e specificall ylimite d t o addressin g th e maximu machievabl e emission s a t a specifi c poin t i n time (i.e. , immediatel yprio r t o th e chang e versu s achievabl e ove r th e las t 5 years ) an d no t th e parameter s use d i n quantifyin g maximu mhourl yemissions . Today' s rul e doe s no t alte r curren t NSP S regulation s onthi s point . Unde r thos e presen t NSP S regulations , onl yphysica l limitation s o n maximu mcapacit yar e considere d i n determinin g potentia l emission s a t powe r plants . Thus , an y prospectiv e change s i nfue l o r rawmaterial s accompanyin g th e physica l o r operationa l chang e ar e no t considere d i n determinin g maximu mcapacity .P.6 0

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- G . Utilit yBAC T Presumptio nfo r N0 X . a . Background . Th e EPApropose d t o adop t a n assumptio nthat , i nth e cas e o f PS D permit s issue d b yEPAunde r 4 0 CF R52.21 , BAC T fo r emission s o f N0 Xfro mexisting coal-fire d electri c utilit ystea

mgenerating unit s undergoin g a modificatio ni s th e technolog

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

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

d cost-effectivenes s o f othe r technologie s suc ha s selectiv e catalyti c reductio n (SCR ) o r selectiv e noncatalyti c reduction . Commenter s note d tha t SCRP.6 1

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- technologyi s i n us e i n mor e tha n 20 0 powe r plant s i nsi x nation s and ca n achiev e twic e th e N0 Xreductio nachievabl e b ylow-NOxburners . Th e SCRo r othe r technologie s mor e effectiv e tha n low-N0 xburner s mayb e neede d a s retrofi t requirement s t o attai nth e ozon e standard . Anothe r commen t voice d b yopponent s o f th e low-NOx burne r BAC T presumption , wa s tha t i t canno t b e reconcile d wit hth e statutorycommand fo r case-by-cas e decisions . Th e 'EP Adoe s no t hav e th e righ t t o mak e suc ha presumptio nan d severa l instance s wer e cite d wher e EPAha s uphel d th e case by-cas e BAC T determinatio n process . Th e BAC T presumptio n fail s t o recogniz e tha t ther e ar e site-specifi c 1 consideration s tha t wil l affec t th e selectio no f BACT . Some commenter s representin g Stat e an d loca l ai r agencie s note d tha t theyfavore d keeping th e top-dow nBAC T process . Opponent s o f th e BAC T presumptio n als o note d tha t suc h a presumptio n improperl yshift s th e burde no f technology analysi s t o State s a t a time whe ntheyar e overburdened . I n addition , i t wil l hav e a nadvers e effec t o n th e abilit yo f Stat e an

d loca l agencie s t o contro l emission s t o th e degre e necessarybecaus e i t limit s an agency' s attainmen t strategies . Some o f th e northeaster n State s discusse d a stud yo f th e relationshi p o f N0 Xemission s an d attainmen t o f ozon e standard s i n tha t area . Th e stud yconclude d tha t substantia l NO xan

d VO C emissio nreduction s mus t b e achieve dP.6 2

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- i n orde r t o attai nth e ozon e NAAQS , ye t th e low-NO xburne r technolog ywil l no t resul t i n sufficien t N0 Xreduction s t o attai n th e ozon e standard . Th e followin g comment s opposin g th e BAC T presumptio n wer e als o made : (1 ) i t ignore s th e legislativ e an d polic yimperative s t o reduc e N0 Xemissions ; (2 ) th e CA

A( § 407 ) di d no t se t BAC T unde r th e PS D program , i t merel yestablishe d a cos t ceilin g fo r N0 X control s o n existin g source s unde r th e aci d rai nprogram ; (3 ) i t wil l encourag e utilitie s t o structur e thei r capacit yexpansio nprogram s a s modification s t o existin g unit s an d thi s woul d effectivel yrepea l th e genuin e NO xBAC T technolog yrequirement s fo r companie s tha t ow nagin g powe r plants ; (4 ) i t set s a poo r precedent ; (5 ) i t woul d undercu t marketplac e incentive s t o develo p an d promot e new , cost-effectiv e contro l technologies ; an d (6 ) th e environmenta l impact s hav e no t bee n determined . d . Comment s Suggestin g Revision s t o th e Proposal . Commenter s mad e thre e suggestion s wit hrespec t t o th e BAC T presumption : (1 ) "low-NO xburne r technology " shoul d b e define d t o encompas s technologie s suc ha s fue l staging , ai r staging ,P.6 3

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- in-furnac e injectio n o f urea/ammoni a an d natura l ga s cofirin g an d reburn , a s wel l a s N0 Xburner s suc ha s th e P M an d CF/S F o r IF S models ; (2 ) promotin g maximu mflexibility , low-NO xburner s shoul d no t b e mandator yi f th e uni t ca nmee t th e emission s limit s throug hothe r burne r modification s o r in-furnac e processes ; an d (3 ) low-NO xburner s ca n b e use d fo r tangentially-fire d -boiler s t o compl ywit htitl e I V requirement s accordin g t o th e inten t o f Congress . e . Th e EP AAnalysis . Base d upo na consideratio no f th e comment s received , an d a reexaminatio n o f th e relevan t fact s an d statutor y provisions , EP Aha s determine d no t t o adop t th e propose d presumptio n regardin g BAC T fo r N0 X . Th e EP Ai s concerne d tha t thi s presumptio n woul d sugges t preemptio no f th e exercis e o f Stat e discretio n an d case-by-cas e decisionmakin g whic hCongres s envisione d a s fundamenta l t o th e BAC T ^process . I n ligh t o f it s decisio n no t t o adop t a BAC T low-NO x presumption , EP Awil l no t respon d t o othe r objection s raise d b ycommenters. 1 2

1 2 Thi s include s comment s o nth e environmenta l impact s o f th e low-NO xpresumption , elaboratio no nwha t constitute s low-NO xburne r technology , an d th e merit s an d curren t us e o f othe r N0 Xcontro l technologie s a s BACT .P.6 4

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- I . Limitatio n o f th e Proposa l t o Electri c Utilities . 1 . Background . Consisten t wit hth e propose d rule , the regulator y provision s promulgate d todayar e limite d t o electri c utility stea mgenerating units . Suc hunit s ar e define d a s an y stea m electri c generatin g uni t tha t i s constructe d fo r the purpos e o f supplying mor e tha n one-thir d o f it s potentia l electri c outpu t capacit yan

d mor e tha t 2 5 megawatt s of.electrica l outpu t t o an

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

Aaddresse s aci d precipitatio n an

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

program s wil l no t impos e conflicting requirement s fo r thos e plants . Th e second reaso n tha t th e provision s wer e limite d t o utilitie s i s tha t EPA' s extensiv e experienc e wit helectri c utilities , th e genera l similarit yo f equipmen t withi n th e category , an d th e particula r exten t o f publicl y availabl e information , indicat e tha t a revisio nt o th e NS R applicabilit ycriteri a fo r thi s sourc e categoryi s warranted . 2 . Publi c Comments . Severa l commenter s note d tha t limitatio no f th e proposa l t o electri c utilitie s lack s rationa l justificatio n a s wel l a s lega l an d technica l support . Severa l note d tha tP.6 5

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- th e limitatio n i s unfair , arbitrary , an d capricious . Typica l o f severa l letters , on e commente r note d tha t EPA offere d n o qualitativ e evidenc e o f underlying assumptions , and anothe r note d tha t EPAviolate s th e Administrativ e Procedure s Ac t b

ylimiting th e proposa l t o electri c utilities . T o thi s commenter , th e limitatio ndiscriminate s agains t industria l source s an d i s no t i n lin e wit hth e intention s o f th e legislation . On e commente r note d tha t th e WEPC O cour t di d no t bas e it s analysi s o n an yparticula r characteristic s o f th e utilit yindustry . Numerou s commenter s countere d EPA' s clai man d justificatio n fo r th e limitatio n that,th e Agenc yha s mor e i experienc e wit helectri c utilitie s thanothe r industries . Illustrating tha t EP Aha s extensiv e experienc e wit hothe r industries , commenter s mentione d chemica l manufacturing , cemen t plants , refineries , pape r mills , aut o assembl y plants , th e 6 5 NSP S sources , an d source s covere d i n numerou s guidelin e document s an d RAC T guidance . I naddition , severa l note d tha t th e lac k o f understanding i s a poo r excus e fo r no t applying th e proposa l t o al l industries . Commenter s als o note d tha t othe r industrie s fac e th e sam e problem s tha t utilitie s d o whe n attempting t o instal l pollutio n contro l equipment . Lik e electri c utilities , pollutio n contro l project s i n othe r industrie s ar e generall y environmentally-beneficial , bu t th e limitatio no f th e exclusio n t o electri c utilitie s a s propose d woul d discourag eP.6 6

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- th e othe r sourc e categories , fro minstalling pollutio n contro l projects . Severa l commenter s note d tha t othe r industrie s wil l b e equall yimpacte d b

yextensiv e regulation s unde r title s I , III , an d V , jus t a s electri c utilitie s wil l b e affecte d b y titl e IV . Fo r example , pharmaceutica l plant s wil l underg o physica l an

d operationa l change s t o mee t reasonabl y availabl e contro l technolog y(RACT ) and/o r maximu m achievabl e contro l technology , an d thes e project s shoul d no t b e subjec t t o NS Ro r NSPS . Theynot e tha t th e burde nan d supportiv e reason s fo r making th e propose d change s ar e jus t a s grea t fo r othe r categorie s o f sourqe s a s the yar e fo r electri c utilities . Some commenter s pointe d ou t tha t EPApresentl yapplie s th e pollutio n contro l projec t exemptio nfro mNSP S t o al l industrie s an

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

specific . 3 . Th e EPAAnalysis . Th e EPAdoe s no t fin d th e factua l o r lega l argument s i n favo r o f expanding th e presen t rulemaking t o b e compelling . Prio r t o proposa l o f thi s rule , EP Aconsidere d goin g forwar d wit ha rul e tha t applie d t o al l sourc e categories . However , th e complexit yo f tha t tas k mean t tha t a rul e coul d no t b e develope d i n a shor t time frame , a fac t tha t pose d uniqu e an d seriou s difficultie s fo r on e sourc e category , utilities . Whil e th e commenter s favoring expansio n o f thi s rul e t o al lP.6 7

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- sourc e categorie s ar e accurat e i n thei r claim s tha t source s outsid e utilitie s fac e CAA-mandate d pollutio ncontro l projects , utilitie s alon e ar e single d ou t t o participat e i n th e 199 0 Amendments ' ne waci d rai nprogram . Thi s program require s tha t unit s subjec t t o phas e I o f th e programmee t S0 2 reductio n limit s b y1995 . Give n th e size , complexity , and expens e o f scrubber s an d othe r S0 2 pollutio ncontro l technologies , th e affecte d utilitie s nee d guidanc e todaya s t o th e titl e I implication s o f thei r contro l strategies . Whil e othe r source s maysoo nhav e newcontro l requirement s impose d o n them , utilit ysource s fac e th e mos t immediat e nee d fo r clarificatio n o f thei r NS Rresponsibilities . I n addition , EP

Aals o had highconfidenc e tha t a workabl e "future-actual " methodologycoul d b e develope d fo r th e utilit yindustry . Th e sourc e populatio ni s relativel y smal l an

d th e technolog

yi nus e i s relativel yuniform . Moreover , utilit ysource s ar e largel yregulate d b yPUC' s •whic hevaluat e anticipate d utilit ygrowt ha s par t o f th e Regulator yoversigh t process . Th e fac t o f Publi c Utilit y Commissio n (PUC ) revie whelp s ensur e th e reliabilit yo f utilit yprojection s o f futur e operating conditions . Th e EPA anticipate s tha t NS Rpermitting authoritie s wil l b e abl e t o dra wupo n PUC proceeding s i n evaluating utilit yclaim s o f futur e utilization . I n addition , th e emission s monitorin g provision s o f titl e IV

require s tha t continuou s emission s monitorin g dat aP.6 8

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- o r othe r highl yaccurat e method s fo r reporting actua l emission s wil l b e use d fo r al l affecte d sources . Thi s wil l assur e tha t actua l emission s dat a wil l b e readil yavailabl e fo r utilit ysource s subjec t t o today' s rule . Sinc e other sourc e categorie s ar e no t subjec t t o th e variet yo f regulatoryprogram s a s utilitie s an d fo r th e othe r reason s note d above , EPAdecline s t o extend thi s rulemaking t o other sources . Notwithstanding thi s response , EPAcurrentl yha s underwaya separat e rulemaking whic hwil l conside r th e desirabilit yo f adopting fo r othe r sourc e categorie s th e NS R pollutio n contro l projec t exclusio n an d th e change s t o th e methodologyfo r determining whethe r a sourc e chang e constitute s a modificatio ntha t hav e bee n adopte d todayfo r utilities . Thi s rulemaking wil l als o discharg e EPA' s obligatio n t o propos e an d tak e fina l actio n o na potential

to-potentia l methodologya s require d b yExhibi t B o f th e settlemen t agreemen t i n Chemica l Manufacturer s Associatio n v . EPA(D.C . Cir. , No . 79-1112) . Th e EPApresentl yintend s t o propos e thes e NS Rrevision s late r thi s year . III . Miscellaneou s A . E.O . 12291 . Unde r E.O . 12291 , EP Amus t judg e whethe r a regulatio n i s a "majo r rule " an d therefor e subjec t t o th e requiremen t fo r preparatio n o f a RegulatoryImpac t Analysis . Thi s ruling i s no t a majo r rul e becaus e i t wil l reduc e th e-80

-

economi c cost s o f meetin g th e requirement s o f th e CAA . However , thi s ruling wa s submitte d t o th e Offic e o f P.6 9 /

Managemen t an

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

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

yothe r provision s o f th e lawan d th e fina l rul e i ndoing s o i s providing exclusion s fo r th e affecte d source s an d th e ne t resul t i s a decreas e i n thes e source' s publi c reporting burden . Al l informatio n collectio n requirement s o f th e Federa l NS Ran d NSP S regulation s hav e bee n approve d b yOMB unde r th e provision s o f th e Paperwor k Reductio nAct , 4 4 U.S.C . 3501 , e t seq. , an d hav e bee n assigne d OMB contro l number s 2060-000 3 fo r NSR , an d 2060-0023 , 2060-002 6 an d 2060-007 2 fo r NSPS . Th e effec t o f thi s rul e woul d b e a reductio ni npaperwor k relate d t o complying wit hNS Ran d NSP S requirements , sinc e thi s rulin g provide s additiona l clarificatio n a s t o physica l an d operationa l change s tha t mayb e exclude d fromthes e requirements .P.7 0

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- C . Economi c Impac t Assessmen t Th e requiremen t fo r performing anEconomi c Impac t Assessmen t unde r § 31 7 o f th e CA A(4 2 U.S.C . 7617) , doe s no t appl yt o th e amendment s EPAi s promulgating today . Sectio n 31 7 applie s onl yt o "revision s whic hth e Administrato r determine s t o b e substantia l revisions. " Th e promulgate d amendment s ar e no t substantia l revision s becaus e the yreliev e curren t regulatoryburdens .

D . RegulatoryFlexibilit yAc t Certification . A s note d i n th e proposa l notice , thi s actio ni s no t subjec t t o th e certificatio n provision s o f § 605(b ) o f th e RegulatoryFlexibilit yAc t becaus e thi, s rul e wil l resul t i n a reductio n o f administrativ e cost s an d n o increas e i n contro l costs , therefor e having n o significan t impac t o n industry . E . Effectiv e Date . A s state d earlie r i nthi s notice , thi s rul e i s effectiv e immediatel yupo n publicatio ni nth e FEDERAL REGISTER . Th e EP

Aha s conclude d that , unde r § 307(d)(1 ) o f th e CAA , th e requiremen t o f sec . 4(d ) o f th e Administrativ e Procedure s Act , 5 U.S.C . 553(d) , fo r a 30-da ywaitin g perio d befor e making a rul e effectiv e i s no t applicable .

F . Federalis mImplications . Unde r E.O . 12612 , EP Amus t determin e i f a rul e ha s federalis mimplication s (i.e. , substantia l direc t effect s o n th e States , o n th e relationshi p betwee n th e nationa lP.7 1

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- governmen t an

d th e States , o r o nth e distributio no f powe r and responsibilitie s among th e variou s level s o f government) . Fo r thos e rule s whic hhav e federalis m implications , a Federalis mAssessmen t i s t o b e made . Th e EPA' s determinatio n i s tha t ther e ar e n o federalis m implications ; thes e ar e relativel ymino r change s t o existing federa l lawan

d regulations . Th e executiv e orde r als o require s tha t agencies , t o th e exten t possible , refrai n fromlimiting th e Stat e polic y options , consul t wit hState s prio r t o taking an yaction s tha t woul d restric t Stat e polic yoptions , an d tak e suc h action s onl ywhe n ther e i s clea r constitutiona l authorit y :an d th e presenc e o f a problemo f nationa l scope . Th e executive.orde r provide s fo r preemptio no f Stat e law , however , i f ther e i s a clea r congressiona l inten t fo r th e agenc yt o d o so . An ysuc hpreemption , however , i s t o b e limite d t o th e exten t possibl e Sinc e th e rul e i s a direc t effor t t o ensur e implementatio no f th e 199 0 Amendments , EPA consider s al l o f th e abov e requirement s t o b e met . List s o f Subject s 4 0 CF Rpar t 5 1 Administrativ e procedur e an d practices , Intergovernmenta l relations , Ai r pollutio ncontrol , NSR , Clea n Coa l Technologyprojects , Sulfu r oxides , Nitroge n dioxide , Particulat e matter , Carbo nmonoxide , Hydrocarbons , Lead .P.7 2

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- 4 0 CF Rpar t 5 2

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

- i 1479, 7491 , 7501-7508 , 760 1 an d 7602 , a s amende d b yth e Clea n Ai r Ac t Amendment s o f 1990 , Pub . L . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) ; 402 , 409 , 41 5 o f th e Clea n Ai r Ac t a s amended , 10 4 Stat . 2399 ; 4 2 U.S.C . 7401-764 2 a s amende d b

yth e CleanAi r Ac t Amendment s o f 1990 , Pub . L . No . 101-549 , 10 4 Stat , 239 9 (Nov . 15 , 1990) ; 4 2 U.S.C . 7401 , 7411 , 7414 , 7416 , an d 760 1 a s amende d b yth e Clea n Ai r Ac t Amendment s o f 1990 , Pub . L . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990 ; 402 , 409 , 41 5 o f th e Clea n Ai r Ac t a s amended , 10 4 Stat . 2399 , unles s otherwis e noted .P.7 3

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- Fo r th e reason s se t fort hi nth e preamble , Par t 5 1 o f Chapte r I o f titl e 4 0 o f th e cod e o f Federa l Regulation s i s propose d t o b e amende d a s follows :

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

L O F IMPLEMENTATIO

N PLANS .

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

- 7479 , 7491 , 7501-7508 , 760 1 an d 7602 , ,a

s amende d b

yth e Clea n Ai r Ac t Amendment s o f 1990 , Pub . L . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) ; 402 , 409 , 41 5 o f th e Clea n Ai r Ac t a s amended , 10 4 Stat . 2399 , unles s otherwis e noted .

2 . Sectio n 51.16 5 i s propose d t o b e amende d t o rea d a s follows : 51.16 5 Permi t requirements , (a ) * * * (1 ) * * * (v ) * * * (C ) Aphysica l chang e o r a chang e i nth e metho d o f operatio n shal l no t include :

**** *P.7 4

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- (8 ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t a nexisting electri c utilit ystea

mgenerating unit , unles s th e Administrato r determine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentally-beneficial , o r except : (i ) whe n th e Administrato r ha s reaso n t o believ e tha t th e pollutio n contro l projec t woul d resul t i na significan t ne t increas e i n representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d fo r tha t sourc e i nth e mos t recen t ai r qualit yimpac t analysi s i n th e are a conducte d fo r th e purpos e o f titl e I , i f any , an d (ii ) th e Administrato r determine s tha t th e increas e wil l caus e o r contribut e t o a violatio no f an

ynationa l ambien t ai r qualit y standar d o r PS D increment , o r visibilit y limitation . (9 ) Th e installation , operation , cessation , o r remova l o f a temporaryclean coa l technology demonstratio nproject , provide d tha t th e projec t complie s with :P.7 5

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- (i ) th e Stat e implementatio npla n fo r th e Stat e i n whic hth e projec t i s located , an d (ii ) othe r requirement s necessaryt o attai nan d maintai n th e nationa l ambien t ai r qualit ystandar d during th e projec t an d afte r i t i s terminated . (10 ) Th e reactivatio no f a veryclea ncoal-fire d electri c utilit ystea mgeneratin g unit .



### (xii )
(D ) Fo r an

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

mgenerating uni t specifie d i nparagrap h (E ) o f thi s subsection ) tha t ha s no t begun norma l operation s o n a particula r date , actua l emission s shal l equa l th e potential-to-emi t o f th e uni t o n tha t date . (E ) Fo r an electri c utilit ystea mgeneratin g uni t (othe r tha n a newuni t o r th e replacemen t o f a n existing unit) , actua l emission s o f th e uni t followin g th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e unit , provide d th e sourc e owne r o r operato r maintain s an d submit s t o th e permitting authority , o nan annua l basi sP.7 6

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- fo r a perio d o f 5 year s fromth e dat e th e uni t resume s regula r operation , informatio ndemonstratin g tha t th e physica l o r operationa l change'di d no t resul t in-a n emission s increase . Alonge r period ; no t t o exceed-1 0 years , ma yb e require d b yth e permittin g authorit yi f d t determine s suc ha perio d t o b e mor e representativ e o f norma l sourc e post-chang e operations . (xx ) "Electri c utilit ystea mgenerating unit " mean s an y stea melectri c generating uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha n one-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n2 5 MWelectrica l

t outpu t t o an

yutilit ypowe r distributio nsystemfo r sale . An ystea msupplie d t o a stea mdistributio nsystemfo r th e purpos e o f providing stea mt o a steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility . (xxi ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i nton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e 2-yea r perio d afte r a physica l chang e o r chang e i nth e metho d o f operatio no f a unit , (o

r a differen t consecutiv e 2-yea r perio d withi n 1 0 year s afte r tha t change , wher e th e permittin g authorit y determine s tha t suc hperio d i s mor e representativ e o f norma lP.7 7

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- sourc e operations) , considerin g th e effec t anysuc hchang e wil l hav e o n increasin g o r decreasin g th e hourl yemission s rat e an d o nprojecte d capacit yutilization . I nprojectin g futur e emission s th e permittin g authorit yshall :

(A ) conside r al l relevan t information , includin g bu t no t limite d to , historica l operationa l data , th e company' s ow nrepresentations , filing s wit h th e Stat e o r Federa l regulator yauthorities , an d complianc e plan s unde r titl e I V o f th e Clea nAi r Act ; an d

/ (B ) exclude , i n calculatin g anyincreas e i n emission s tha t result s fro mth e particula r physica l chang e o r chang e i nth e metho d o f operatio n a t a nelectri c utilit ystea mgeneratin g unit , tha t portio no f th e unit' s emission s followin g th e chang e tha t i s attributabl e t o a n

, increas e i n projecte d capacit yutilizatio na t th e

uni t tha t i s unrelate d t o th e particula r change , includin g anyincrease d utilizatio ndu e t o th e rat e o f electricit ydeman d growt hfo r th e utilit y syste m a s a whole . (xxii ) "Temporar yclea n coa l technolog ydemonstratio n project " mean s a clea ncoa l technolog ydemonstratio nprojec tP.7 8

-89

- tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic h complie s with , th e Stat e implementatio npla nfo r th e Stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai n an d maintai n th e nationa l ambien t ai r qualit ystandar d during th e projec t an d afte r i t i s terminated . (xxiii ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existing facilit ywhic hwil l achiev e significan t reduction s i nai r emission s o f sulfu r dioxid e o r oxide s ; o f nitroge nassociate d i

• wit hth e utilizatio no f coa l i nth e generatio no f electricity , o r proces s stea mwhic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (xxiv ) "Clean coa l technolog ydemonstratio nproject " mean s a projec t using fund s (1 ) appropriate d unde r th e heading 'Departmen t o f Energy-Clean Coa l Technology, ' up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea ncoa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency . Th e Federa l contributio nfo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio n project .P.7 9

-90

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

mgenerating unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio nassociate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio nwher e th e unit : (i ) ha s no t bee ni n operatio n fo r th e 2-yea r perio d prio r t o th e enactmen t o f th e Clea nAi r Ac t 199 0 Amendments , an

d th e emission s fromsuc huni t continu e t o b e carrie d i nth e permitting authority' s emission s inventorya t th e time o f enactment ; t (ii ) wa s equippe d prio r t o shut-dow nwit ha continuou s system o f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e tim e o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i ncomplianc e wit hth e requirement s o f th e Clea n Ai r Act .P.8 0

-91

- (xxvi ) "Pollutio ncontro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t a nexisting electri c utilit ystea mgenerating uni t fo r purpose s o f reducing emission s fro msuc hunit . Suc hchange s ar e limite d to : (i ) th e installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e an d nitroge noxide s control s an d electrostati c precipitators ;

t (ii ) a physica l change , o r chang e i nth e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting thanth e fue l i n us e prio r t o th e chang e including , bu t no t limite d t o natura l ga s o r coa l re burning , o r th e co-firing o f natura l ga s an d othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea ncoa l technologydemonstratio n projec t conducte d unde r titl e II , sec . 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sec . 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r simila r project s funde d throughP.8 1

-92

- appropriation s fo r th e Environmenta l Protectio nAgency ; o r (iv ) a permanen t clea ncoa l technolog ydemonstratio n projec t tha t constitute s a repowering project .

3 . Sectio n 51.16 6 i s propose d t o b e amende d t o rea d a s follows :

51.16 6 Preventio no f significan t deterioratio no f ai r quality .

**** * r (b ) * * * (2 ) * * * (iii ) Aphysica l chang e o r chang e i nth e metho d o f operatio n shal l no t include :

(h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t an existing electri c utilit ystea

mgenerating unit , unles s th e Administrato r determine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentally-beneficial , o r except :P.8 2

-93

- (a ) whe n th e reviewing authorit yha s reason t o believ e tha t th e pollutio n contro l projec t woul d resul t i n a significan t ne t increas e in representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d for tha t sourc e i nth e mos t recen t ai r qualit yimpac t analysi s i n th e are a conducte d fo r th e purpos e o f titl e I , i f any , an d

(b ) th e reviewing authorit ydetermine s tha t th e increas e wil l caus e o r contribut e t o a violatio no f an

ynationa l ambien t ai r qualit y i * standard o r PS D increment , o r visibilit y limitation . (i ) an yphysica l chang e o r chang e i nth e metho d o f operatio n a t anexisting electri c utilit y generating uni t (othe r than th e additio no f a ne w uni t o r th e replacemen t o f a n existing unit ) tha t woul d no t resul t i na significan t ne t increas e i n representativ e actua l annua l emission s o f a regulate d pollutan t a t th e unit . (j ) Th e installation , operation , cessation , o r remova l o f a temporarycleancoa l technologyP.8 3

-94

- demonstratio n project , provide d tha t th e projec t complie s with : (i ) th e Stat e implementatio n pla n fo r th e Stat e i nwhic hth e projec t i s located ; an d (ii ) othe r requirement s necessaryt o attai n an d maintai n th e nationa l ambien t ai r qualit y standard s during th e projec t and afte r i t i s terminated . (k ) Th e installatio no r operatio n o f a permanen t clea n coa l technologydemonstratio n projec t tha t constitute s repowering , provide d tha t th e projec t doe s no t resul t i n an increas e i n th e potential

to-emi t o f an

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

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

* * *

(21 )P.8 4

-95

- (iv ) Fo r an

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

mgenerating uni t specifie d i nparagrap h (v ) o f thi s subsection ) tha t ha s no t begunnorma l operation s o n a particula r date , actua l emission s shal l equa l th e potential-to-emi t o f th e uni t o ntha t date . (v ) Fo r a n electri c utilit ystea mgenerating uni t (othe r tha n a newuni t o r th e replacemen t o f an existing unit) , actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e uni t following th e physica l o r operationa l change,provide d r .. . th e sourc e owne r o r operato r maintain s and submit s t o th e permittin g authority , o n anannua l basi s fo r a perio d o f 5 year s fromth e dat e th e uni t resume s regula r operation , informatio n demonstratin g tha t th e physica l o r operationa l chang e di d no t resul t i n a n emission s increase . Alonge r period , no t t o excee d 1 0 years , ma yb e require d b yth e permittin g authorit yi f i t determine s sucha perio d t o b e mor e representativ e o f norma l sourc e post-chang e operations . (30 ) "Electri c utilit ystea m generating unit " mean s an y stea m electri c generating uni t tha t i s constructe d fo r th e purpos e o f supplying mor e thanone-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n 2 5 MWP.8 5

-96

- electrica l outpu t t o an yutilit ypowe r distributio n systemfo r sale . Anystea msupplie d t o a steam distributio n systemfo r th e purpos e o f providin g steam t o a steam-electri c generato r tha t woul d produc e electrica l energ

yfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility . (31 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio na t anexisting electri c utilit ystea mgenerating uni t fo r purpose s o f reducing emission s fromsuc hunit. . Suc hchange s ar e limite d to : (i ) th e installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio nfo r sulfu r dioxid e an

d nitroge n oxide s control s an d -JS ' electrostati c precipitators ;

(ii ) a physica l change , o r chang e i n th e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting than th e fue l i n us e prio r t o th e change , including bu t no t limite d t o natura l ga s o r coa l re-burning , o r th e co-firin gP.8 6

-97

- o f natura l ga s an

d othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea n coa l technology demonstratio n projec t conducte d unde r titl e II , sec . 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sec . 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r simila r project s funde d throughappropriation s fo r t;h e Environmenta l r Protectio n Agency , o r (iv ) a permanen t clea ncoa l technology demonstratio nprojec t tha t constitute s a repowering projec t
(32 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e 2-yea r perio d afte r a physica l chang e o r chang e i n th e metho d o f operatio n o f a unit , (or a differen t consecutiv e 2-yea r perio d withi n 1 0 year s afte r tha t change , wher e th e reviewing authorit ydetermine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations) ,P.8 7

-98

- considering th e effec t an ysuc hchang e wil l hav e o n increasing o r decreasing th e hourl yemission s rat e an d o n projecte d capacit yutilization . I nprojectin g futur e emission s th e reviewing authorit yshall : (A ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s ow

n representations , filing s wit h th e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r titl e IV o f th e Clea n Ai r Act ; an d

3 i (B ) exclude , i n calculating an yincreas e i n emission s tha t result s fromth e particula r physica l chang e o r chang e i n th e metho d o f operatio n a t anelectri c utilit ystea mgeneratin g unit , tha t portio no f th e unit' s emission s following th e chang e tha t i s attributabl e t o a n increas e i nprojecte d capacit yutilizatio na t th e r}',. uni t tha t i s unrelate d t o th e particula r change ,

including an

yincrease d utilizatio ndu e t o th e rat e o f electricit ydemand growt hfo r th e utilit y systema s a whole . (33 ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion ,P.8 8

-99

- o r pos t combustio nstage , a t a ne wo r existing facilit y whic hwil l achiev e significan t reduction s i nai r emission s o f sulfur dioxid e o r oxide s o f nitroge n associate d wit hth e utilizatio n o f coa l i nth e generatio n o f electricity , o r proces s stea mwhic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (34 ) "Clean coa l technolog ydemonstratio nproject " mean s a projec t using fund s (1 ) appropriate d unde r th e heading 'Departmen t o f Energy-Clea nCoa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea ncoa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio nAgency . Th e Federa l contributio n fo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio n project . (35 ) "Temporarycleancoa l technolog ydemonstratio nproject " mean s a clean coa l technologydemonstratio nprojec t tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic hcomplie s wit hth e Stat e implementatio npla nfo r th e Stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai nan d maintai n th e natio n ambien t ai r qualit ystandard s during an d afte r th e projec t i s terminated .P.8 9

-100

- (36)(i ) "Repowering " mean s replacemen t o f a n existin g

coal-fire d boile r wit hon e o f th e following clea n coa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio n combine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio n fue l cells , o r a s determine d b yth e Administrator , i nconsultatio n wit hth e Secretary o f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an

d an yothe r technologycapabl e o f controlling multipl e combustio n emission s simultaneousl ywit himprove ^ boile r o r generatio n i efficienc yan

d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technologyi n widesprea d commercia l us e a s o f Novembe r 15 , 1990 . (ii ) Repowering shal l als o includ e an yoi l and/o r gas fire d uni t whic ha s bee nawarde d clea n coa l technologydemonstratio n funding a s o f January1 , 1991 , b yth e DOE . (iii ) Th e reviewing authorit yshal l giv e expedite d consideratio n t o permi t application s fo r an y sourc e tha t satisfie s th e requirement s o f thi sP.9 0

-101

- subsectio n an

d i s grante d an extensio nunde r § 40 9 o f th e Clea n Ai r Act . (37 ) "Reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea

mgenerating unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio n associate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio n wher e th e unit : (i ) ha s no t bee n i noperatio n fo r th e 2-yea r perio d prio r t o th e enactmen t o f th e Cl§a n Ai r Ac t Amendment s r o f 1990 , an

d th e emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s than 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e time o f commencemen t o f operation s following reactivation ; an

d-102

- (iv ) i s otherwis e i n complianc e wit hth e requirement s o f th e Clea n Ai r Act . P.9 1P.9 2

-103

- Fo r th e reason s se t fort hi nth e preamble , Par t 5 2 o f Chapte r I o f titl e 4 0 o f th e Cod e o f Federa l Regulation s i s propose d t o b e amende d a s follows :

Par t 52 -APPROVAL AND PROMULGATIONO F IMPLEMENTATIONPLANS

1 . Th e authorit ycitatio n fo r Par t 5 2 i s amende d t o rea d a s follows : Authority : 4 2 U.S.C . 7401-764 2 a s amende d b yth e Clean Ai r Ac t Amendment s o f 1990 , PubL . No . 101-549 , 10 4 Stat . 239 9 (Nov . 15 , 1990) , unless , otherwis e noted . t 2. Sectio n 52.2 1 i s propose d t o b e amende d t o read a s follows :

52.2 1 Preventio n o f significan t deterioratio no f ai r quality .

**** *

(b ) (2 ) * * *

* * *(iii )

* * -104

-

Aphysica l chang e o r a chang e i n th e metho d o f operatio n shal l no t include :

* * * P.9 3

(h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t a nexisting electri c utilit ystea

mgenerating unit , unles s th e Administrato r determine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentally-beneficial , o r except :
(a ) whe n th e Administrato r ha s reaso n t o t believ e tha t th e pollutio n contro l projec t woul d resul t i n a significan t ne t increas e i n representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d fo r tha t sourc e i n th e mos t recen t ai r qualit yimpac t analysi s i nth e are a conducte d fo r th e purpos e o f titl e I , i f any , an d (b ) th e Administrato r determine s tha t th e increas e wil l caus e o r contribut e t o a violatio no f an

ynationa l ambien t ai r qualit y standar d o r PS D increment , o r visibilit y limitation .P.9 4

-105

- (i ) Th e installation , operation , cessation , o r remova l o f a temporaryclea n coa l technologydemonstratio nproject , provide d tha t th e projec t complie s with : (i ) th e Stat e implementatio npla nfo r th e Stat e i n whic hth e projec t i s located , an

d (ii ) othe r requirement s necessaryt o attai n an

d maintai n th e nationa l ambien t ai r qualit ystandard s during th e projec t an d afte r i t i s terminated . (j ) Th e installatio n o r operatio n o f a permanen t cleancoa l technolog y demonstratio n projec t tha t constitute s repowering , provide d tha t th e projec t doe s no t resul t i nanincreas e i nth e potentia l t o emi t o f an yregulate d pollutan t emitte d b yth e unit . Thi s exemptio n shal l appl yo na pollutant-by

pollutan t basis . (k ) Th e reactivatio no f a veryclea ncoal-fire d electri c utilit ystea mgenerating unit .P.9 5

-106

- (21 ) (iv ) Fo r an

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

mgenerating uni t specifie d i n paragrap h (v ) o f thi s subsection ) tha t ha s no t begun norma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o emi t o f th e uni t o n tha t date . (v ) Fo r a n electri c utilit ystea mgeneratin g uni t (othe r tha n a newuni t o r th e replacemen t o f an existing unit) , actua l emissions ; o f th e uni t following i th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e unit,provide d th e sourc e owne r o r operato r maintain s an d submit s t o th e permitting authority , o n a n annua l basi s fo r a perio d o f 5 year s fromth e dat e th e uni t resume s regula r operation , informatio ndemonstratin g tha t th e physica l o r operationa l chang e di d no t resul t i n a n emission s increase . Alonge r period , no t t o excee d 1 0 years , mayb e require d b yth e permittin g authorit yi f i t determine s suc ha perio d t o b e moir e representativ e o f norma l sourc e post-chang e operations .P.9 6

-107

- (31 ) "Electri c utilit ystea mgenerating unit " mean s an y stea melectri c generating uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha n one-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n2 5 MW electrica l outpu t t o an yutilit ypowe r distributio n systemfo r sale . An ystea msupplie d t o a stea m distributio n systemfo r th e purpos e o f providin g stea m t o a steam-electri c generato r tha t woul d produc e electrica l energ

yfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility . / (32 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t anexisting electri c utilit ystea mgenerating uni t fo r purpose s o f reducing emission s fromsuc hunit . Suc hchange s ar e limite d to : (i ) th e installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio nfo r sulfu r dioxid e an d nitroge n oxide s control s an

d electrostati c precipitators ; (ii ) a physica l change , o r chang e i nth e metho d o f operation , t o accommodat e switching t o a fue lP.9 7

-108

- whic hi s les s pollutin g tha n th e fue l i nus e prio r t o th e chang e including , bu t no t limite d t o natura l ga s o r coa l re-burning , o r th e co-firin g o f natura l ga s and othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea ncoa l technology demonstratio nprojec t conducte d unde r titl e II , sec . 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sec . 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , up t o a tota l amoun t o f i $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency ; o r (iv ) a permanen t clea ncoa l technology demonstratio nprojec t tha t constitute s a repowering project . (33 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i nton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e 2-yea r perio d afte r a physica l chang e o r chang e i n th e metho d o f operatio n o f a unit , (or a differen t consecutiv e 2-yea rP.9 8

-109

- perio d withi n 1 0 year s afte r tha t change , wher e th e Administrato r determine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations) , considering th e effec t an ysuc hchang e wil l hav e o n increasing o r decreasing th e hourl yemission s rat e an d o nprojecte d capacit yutilization . I nprojectin g futur e emission s th e Administrato r shall : (i ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s ow

nrepresentations , filing s wit h th e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r titl e IV o f th e Clea n Ai r Act ; an d (ii ) exclude , i ncalculating an yincreas e i n emission s tha t result s fromth e particula r physica l chang e o r chang e i n th e metho d o f operatio n a t an electri c utilit ystea mgenerating unit , tha t portio no f th e unit' s emission s following th e chang e tha t i s attributabl e t o a n increas e i nprojecte d capacit yutilizatio na t th e uni t tha t i s unrelate d t o th e particula r change , including an

yincrease d utilizatio ndu e t o th e rat e o f electricit ydemand growt hfo r th e utilit y systema s a whole .P.9 9

-110

- (34 ) "Clea n coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion , o r pos t combustio nstage , a t a ne wo r existing facilit y whic hwil l achiev e significan t reduction s i nai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n •associated wit hth e utilizatio no f coa l i nth e generatio n o f electricity , o r proces s stea mwhic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (35 ) "Clea n coa l technolog ydemonstratio nproject " mean s a projec t usin g fund s (1 ) appropriate d unde r th e headin g 'Departmen t o f Energy-CleanCoa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency . Th e Federa l contributio n fo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio n project . (36 ) "Temporarycleancoa l technologydemonstratio nproject " mean s a clea n coa l technologydemonstratio nprojec t tha t i s operate d fo r a perio d o f 5 year s o r less , and whic hcomplie s wit hth e Stat e implementatio nplan s fo r th e Stat e i n whic hth e projec t i s locate d an d othe rp. 1

-Ill

requirement s necessaryt o attai nan d maintai nth e nationa l ambien t ai r qualit ystandard s during th e projec t an

d afte r i t i s terminated . (37)(i ) "Repowering " mean s replacemen t o f a nexisting

coal-fire d boile r wit hon e o f th e following clea n coa l technologies : atmospheri c o r pressurize d fluidize d bed combustion , integrate d gasificatio n combine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio n fue l cells , o r a s determine d b yth e Administrator , i n consultatio n wit hth e Secretary o f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an

d an yothe r technologycapabl e o f controlling multipl e combustio nemission s simultaneousl ywit himprove d boile r o r generatio n efficienc yan

d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technolog

yi n widespread commercia l us e a s o f Novembe r 15 , 1990 . (ii ) Repowering shal l als o includ e an yoi l and/o r gas fire d uni t whic hha s bee n awarde d clea ncoa l technolog

ydemonstratio n funding a s o f January1 , 1991 , b yth e DOE .P. 2

-112

- (iii ) Th e Administrato r shal l giv e expedite d consideratio n t o permi t application s fo r an ysourc e tha t satisfie s th e requirement s o f thi s subsectio n an d i s grante d a n extensio nunde r § 40 9 o f th e Clea n Ai r Act . (38 ) "Reactivatio n o f a verycleancoal-fire d electri c utilit ystea

mgenerating unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio nassociate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d t operatio n wher e th e unit : (i ) ha s no t bee ni noperatio nfo r th e 2-yea r perio d prio r t o th e enactmen t o f th e Clea n Ai r Ac t Amendment s o f 1990 , an

d th e emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e tim e o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ;P. 3

-113

- (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e tim e o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i n complianc e wit hth e requirement s o f th e Clea n Ai r Act . 3 . Sectio n 52.2 4 i s propose d t o b e amende d t o read a s follows :

52.2 4 Statutoryrestrictio no nnewsources .

**** * > (f ) * * *

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

* * * (h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t an existing electri c utilit ystea m generating unit , unles s th e Administrato r determine sP. 4

-114

- tha t suc haddition , replacement , o r us e render s th e uni t les s environmentally-beneficial , an d except : (1 ) whe n th e Administrato r ha s reaso nt o believ e tha t th e pollutio ncontro l projec t woul d resul t i n a significan t ne t increas e i n representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d fo r tha t sourc e i nth e mos t recen t ai r qualit yimpac t analysi s i nth e are a conducte d fo r th e purpos e o f titl e I , i f any , an d

(2 ) th e Administrato r determine s tha t th e increas e wil l caus e o r contribut e t o a violatio n o f an

ynationa l ambien t ai r qualit y standar d o r PS D increment , o r visibilit y limitation . (i ) Th e installation , operation , cessation , o r remova l o f a temporaryclea n coa l technolog ydemonstratio n project , provide d tha t th e projec t complie s with :
(1 ) th e Stat e implementatio n pla n fo r th e Stat e i n whic hth e projec t i s located , an dP. 5

-115

- (2 ) othe r requirement s necessaryt o attai n an d maintai n th e nationa l ambien t ai r qualit y standard s during th e projec t an d afte r i t i s terminated . (j ) Th e reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea mgenerating unit .P. 6

-116

- (13 ) * * * (iv ) Fo r an

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

mgeneratin g uni t specifie d i n paragrap h (v ) o f thi s subsection ) tha t ha s no t begunnorma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o emi t o f th e uni t o ntha t date . (v ) Fo r a n electri c utilit ystea mgenerating uni t (othe r tha n a newuni t o r th e replacemen t o f a n existing unit) , actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e unit,provide d th e sourc e owne r o r operato r maintain s and submit s t o th e permittin g authority , o n a n annua l basi s fo r a perio d o f 5 year s fromth e dat e th e uni t resume s regula r operation , informatio ndemonstratin g tha t th e physica l o r operationa l chang e di d no t resul t i n a n emission s increase . Alonge r period , no t t o excee d 1 0 years , ma yb e require d b yth e permittin g authorit yi f i t determine s suc ha perio d t o b e mor e representativ e o f norma l sourc e post-chang e operations . (18 ) "Electri c utilit ystea mgenerating unit " mean s an y stea melectri c generating uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha none-thir d o f it s potentia lP. 7

-117

- electri c outpu t capacit yan d mor e tha n 2 5 MWelectrica l outpu t t o an

yutilit ypowe r distributio n system fo r sale . Anystea

msupplie d t o a stea m distributio n systemfo r th e purpos e o f providing stea mt o a steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility . (19 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e 2-yea r perio d afte r a physica l chang e o r chang e i n th e metho d o f operatio n o f a unit , (o

r a differen t consecutiv e 2-yea r perio d withi n 1 0 year s afte r tha t change , wher e th e Administrato r determine s tha t suchperio d i s mor e representativ e o f norma l sourc e operations) , considering th e effec t an ysuc hchang e wil l hav e on increasing o r decreasing th e hourl yemission s rat e an d o n projecte d capacit yutilization . I n projectin g futur e emission s th e Administrato r shall : (i ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s ow

n representations , filing s wit hth e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r titl e IV

o f th e Clea n Ai r Act ; an d-118

- (ii ) exclude , i ncalculating an yincreas e i n emission s tha t result s fro

mth e particula r physica l chang e o r chang e i n th e metho d o f operatio n a t a n electri c utilit ystea

mgenerating unit , tha t portio no f th e unit' s emission s following th e chang e tha t i s attributabl e t o an increas e i nprojecte d capacit y utilizatio n a t th e uni t tha t i s unrelate d t o th e particula r change , including an yincrease d utilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystema s a whole . (20 ) "Temporaryclean coa l technolog ydemonstratio n project " mean s a cleancoa l technolog ydemonstratio nprojec t tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic h complie s wit hth e Stat e implementatio nplan s fo r th e Stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai n an d maintai nth e nationa l ambien t ai r qualit ystandard s during th e projec t an d afte r i t i s terminated . (21 ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existin g facilit ywhic hwil l achiev e significan t reduction s i nai r emission s o f sulfu r dioxid e o r oxide s o f nitroge nassociate d wit hth e utilizatio no f coa l i n th e generatio n o fP. 9

-119

- electricity , o r proces s stea mwhic hwa s no t i nwidespread us e a s o f Novembe r 15 , 1990 . (22 ) "Clean coa l technolog ydemonstratio nproject " mean s a projec t usin g fund s (1 ) appropriate d unde r th e headin g 'Departmen t o f Energy-Clea nCoa l Technology' , u pt o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency . Th e Federa l contributio nfo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio n project . (23 ) "Reactivatio n o f a veryclea n coal-fire d electri c utilit ystea

mgenerating unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio n associate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio nwher e th e unit : (i ) ha s no t bee ni noperatio n fo r th e 2-yea r perio d prio r t o th e enactmen t o f th e Clea n Ai r Ac t Amendment s o f 1990 , an

d th e emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e time o f enactment ;P.1 0

-120

- , „ (ii ) wa s equippe d prio r t o shut-dow nwit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e tim e o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i ncomplianc e wit hth e requirement s o f th e Clea n Ai r Act . • (24 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t an existing electri c utilit ystea mgenerating uni t fo r purpose s o f reducing emission s fro msuc hunit . Suc hchange s ar e limite d to : (i ) th e installatio no f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e an d nitroge n oxide s control s an d electrostati c precipitators ;P.1 1

-121

- (ii ) a physica l change , o r chang e i nth e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting tha nth e fue l i n us e prio r t o the change including , bu t no t limite d t o natura l ga s o r coa l re burning , co-firing o f natura l ga s an d othe r fuel s for th e purpos e o f controlling emissions ; (iii ) a permanen t clea n coa l technolog ydemonstratio n projec t conducte d unde r titl e II , sec . 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sec . 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , up,t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r simila r project s funde d through appropriation s fo r th e Environmenta l Protectio n Agency ; o r (iv ) a permanen t clean coa l technolog ydemonstratio n projec t tha t constitute s a repowering project .P.1 2

-122

- « Fo r th e reason s se t fort hi nth e preamble , Par t 6 0 o f Chapte r I o f titl e 4 0 o f th e Cod e o f Federa l Regulation s i s propose d t o b e amende d a s follows :

PART 60-STANDARD S O F PERFORMANCE FO

RNE W STATIONAR

YSOURCE S

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

yth e Clea nAi r Ac t Amendment s o f 1990 , Pub . L . 101-549 , 10 4 Stat . 239 9 (Nov . .15 , 1990 ; 402 , 409 , r .41 5 o f th e Clea n Ai r Ac t a s amended , 10 4 Stat . 2399 , unles s otherwis e noted . 2 . Sectio n 60. 2 i s propose d t o b e amende d b yaddin g th e following definitions :

"Clea n coa l technologydemonstratio nproject " mean s a projec t usin g fund s appropriate d unde r th e headin g 'Departmen t o f Energy-Clea nCoa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstration s o f clea n coa l technology , o r simila r project s funde d through appropriation s fo r th e Environmenta l Protectio n Agency .P.1 3

-123

- "Electri c utilit ystea mgenerating unit " mean s an ystea m electri c generatin g uni t tha t i s constructe d fo r th e purpos e o f supplying mor e thanone-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n 2 5 MWelectrica l outpu t t o an y utilit ypowe r distributio n systemfo r sale . An ystea m supplie d t o a stea

mdistributio nsystemfo r th e purpos e o f providin g stea

mt o a steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility . "Repowering " mean s replacemen t o f anexisting coal-fire d i ;boile r wit hon e o f th e following cleancoa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio ncombine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio n fue l cells , o r a s determine d b

yth e Administrator , i n consultatio nwit hth e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an

d an yothe r technolog

ycapabl e o f controlling multipl e combustio nemission s simultaneousl y wit himprove d boile r o r generatio n efficienc yan d wit h significantl ygreate r wast e reductio n relativ e t o th e performanc e o f technolog yi n widesprea d commercia l us e a s o f Novembe r 15 , 1990 . Repowering shal l als o includ e an yoi l and/o r gas-fire d uni t whic hha s bee nawarde d clea ncoa lP.1 4

-124

- technologydemonstratio n funding a s o f January1 , 1991 , b y th e Departmen t o f Energy . "Reactivatio n o f a veryclea n coal-fire d electri c utilit y steamgenerating unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio nassociate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio nwher e th e unit : (i ) ha s no t bee n i noperatio n fo r th e 2-yea r perio d prio r t o th e enactmen t o f th e CleanAi r Ac t Amendment s o f 1990 , an

d th e emission s fro ms.uc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e tim e o f commencemen t o f operation s following reactivation ; an

dP.1 5

-125

- (iv ) i s otherwis e i ncomplianc e wit hth e requirement s o f th e Clea n Ai r Act . 3 . Sectio n 60.1 4 i s propose d t o b e amende d t o read a s follows : 60.1 4 MODIFICATION .

**** * (h ) N o physica l change , o r chang e i nth e metho d o f operation , a t an existing electri c utilit ystea m generatin g uni t shal l b e treate d a s a modificatio nfo r th e purpose s o f thi s sectio n provide d tha t suc hchang e doe s no t increas e th e r maximu mhourl yemission s o f an ypollutan t regulate d unde r thi s sectio n abov e th e maximu mhourl yemission s achievabl e a t tha t uni t during th e 5 year s prio r t o th e change . (i ) Repowering project s tha t ar e awarde d funding from th e Departmen t o f Energ ya s permanen t clea ncoa l technology demonstratio n project s (or simila r project s funde d b y Environmenta l Protectio nAgency ) ar e exemp t fromth e requirement s o f thi s sectio nprovide d tha t suc hchang e doe s no t increas e th e maximu mhourl yemission s o f an ypollutan t regulate d unde r thi s sectio nabov e th e maximu mhourl y emission s achievabl e a t tha t uni t during th e fiv e year s prio r t o th e change .P.1 6

-126

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

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

d

(c ) i s locate d a t a differen t sit e tha nth e existing unit . (k ) Th e installation , operation , cessation , o r remova l o f a temporaryclea n coa l technologydemonstratio nprojec t i s exemp t fromth e requirement s o f thi s section . A "temporaryclea n coa l contro l technolog ydemonstratio n-127

-

project" , fo r th e purpose s o f thi s sectio ni s a clea ncoa l technologydemonstratio n projec t tha t i s operate d fo r a perio d o f 5 year s o r less , an d whic hcomplie s wit hth e Stat e implementatio n pla n fo r th e Stat e i n whic hth e projec t i s locate d an

d othe r requirement s necessaryt o attai nan d maintai n th e nationa l ambien t ai r qualit ystandard s during th e projec t an

d afte r i t i s terminated . (1 ) Th e reactivatio no f a veryclea ncoal-fire d electri c utilit ystea mgenerating uni t i s exemp t fromth e requirement s o f thi s section . i r