The EPA Region IX Acting Regional Administrator, Deborah Jordan , signed the following rule

on June 30, 2016 and the EPA is submitting it for publication in the Federal Register (FR). While we have taken steps to ensure the accuracy of this version of this rule, it is not the official version. Please refer to the official version in a forthcoming FR publication appearing on the Government Printing Office website, http://fdsys.gpo.gov/fdsys/search/home.action, and on www.regulations.gov in Docket Number EPA

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6560

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- P
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52 [ EPA

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- XXX ] Approval and Revision of Air Plans; Arizona; Regional Haze State and Federal Implementation
Plans ; Reconsideration
AGENCY : Environmental Protection Agency (EPA).
ACTION : Proposed rule.
SUMMARY : The Environmental Protection Agency (EPA) is proposing to approve a source
specific revision to the Arizona State Implementation Plan (SIP) that addresses requirements for best available retrofit technology (BART) at Cholla Generating Station ( Cholla )

. The EPA proposes to find that the SIP revision fulfills the requirements of the Clean Air Act (CAA) and the
EPA ’ s Regional Haze Rule (RHR) for BART at Cholla

. In conjunction with this proposed approval, we propose to withdraw those portions of the federal implementation plan (FIP) that
address BART for Ch olla

. We previously partially grant ed petition s for reconsideration of that FIP from Cholla’s owners, Arizona Public Service Company (APS ) and PacifiCorp. We are now proposing to find that final withdrawal of the FIP , as it applies to Cholla , would constitute our
action on A PS ’s and PacifiCorp’s petitions for reconsideration of the FIP

. DATES: Written comments must be received on or before [ Insert date 45 days after th e date of publication in the Federal Register ]

. Requests for public hearing must be received on or before [Insert date 15 days after the date of publication in the Federal Register ]

.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 2 of 46 ADDRESSES : Submit your comment s, identified by Docket ID No. EPA

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- 0292 at http://www.regulations.gov, or via email to limaye.vijay @epa.gov . For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulati ons.gov. For either manner of submission, the EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information
whose disclosure is restri cted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and
should include discussion o f all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e. on the web, cloud, or other file sharing system). For additional submission methods, please contact the person
identified in the “For Further Information Conta ct” section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting

- epa
- dockets.
FOR FURTHER INFORMATION CONTACT : Vijay Limaye , U.S. EPA, R egion 9, Planning Office, Air Division, Air

- 2, 75 Hawthorne Street, San Francisco, CA 94105. Vijay Limaye can be

reac hed at telephone number (415) 972

- 3086 and via electronic mail at limaye.vijay @epa.gov.
SUPPLEMENTARY INFORMATION : Throughout this document , “we,” “us” and “our” refer

to the EPA

. Table of Contents
I. General Information II. BackgroundThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 3 of 46 III. Summary of t he Cholla SIP Revision
IV. The EPA ’s Evaluation of the Cholla SIP Revision
V. Proposed Action
V I

. Environmental Justice Considerations VII. Incorporation by Reference
VIII. Statutory and Executive Order Reviews
I. General Information A. Definitions For the purpose of this document, we are giving meaning to certain words or initials as
follows:

 The words or initials Act or CAA mean or refer to the Clean Air Act, unless the context
indicates otherwise.

 The initials ADEQ mean or refer to the Arizona Department of Environmental Quality.

 The initials AFUDC mean or refer to Allowance for Funds Used During Construction

.

 The initials A PS mean or refer to Arizona Public Service Company

.

 The words Arizona and State mean the State of Arizona.

 The initials BART mean or refer to Best Available Retrofit Technology.

 The term Class I area refers to a mandatory Class I Federal area. 1

 The initia ls CBI mean or refer to Confidential Business Information.

1 Although states and tribes may designate as Class I additional areas which they consider to have visibility as an important value, the requirements of the visibility program set forth in section 169A of the CAA apply only to “mandatory Class I Federal are as.”This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 4 of 46  The initials CCM mean or refer to the EPA’s Control Cost Manual.

 The words EPA , we , us or our mean or refer to the United States Environmental Protection Agency.

 The initials FIP mean or refer to F ederal Implementation Plan.

 The initials LNB mean or refer to low

- NO X burners.

 The initials MMBtu mean or refer to million British thermal units

 The initials NO X mean or refer to nitrogen oxides.

 The initials OFA mean or refer to over fire air.

 The initials PM 10 mean or refer to particulate matter with an aerodynamic diameter of less
than 10 micrometers.

 The initials RHR mean or refer to the EPA’s Regional Haze Rule.

 The initials RP mean or refer to Reasonable Progress.

 The initials RPG or RPGs mean or refer to Reasonable Progress Goal(s).

 The initials SCR mean or refer to Selective Catalytic Reduction.

 The initials SIP mean or refer to State Implementation Plan.

 The initials SNCR mean or refer to Selective Non

- catalytic Reduction

 The initials SOFA mean or refer to separated over fire air.

 The initials SO 2 mean or refer to sulfur dioxide.
B. Docket
The EPA has established docket number EPA

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- 0292 for this action. Generally, documents in the docket for this action are available elect ronically at http://www.regulations.gov or in hard copy at EPA Region IX, 75 Hawthorne Street, SanThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 5 of 46 Francisco, California 94105

- 3901. While all documents in the docket are listed at http://www.regulations.gov, some information may be publicly a vailable only at the hard copy location (e.g., copyrighted material, large maps, multi

- volume reports), and some may not be available in either location (e.g., confidential business information (CBI)). To inspect the hard copy materials, please schedule an appointment during normal business hours with the contact
listed in the FOR FURTHER INFORMATION CONTACT section.
C . Public Hearings If anyone contacts the EPA by [ I nsert date 15 days after publication in the Federal Register ] requesting to speak at a public hearing, the EPA will schedule a public hearing and announce the hearing in the Federal Register

. Contact Vijay Limaye at (415) 9 72

- 3086 or at limaye.vijay @epa.gov to request a hearing or to determine if a hearing will be held

. II. Background
A. Statutory and Regu latory Background This section provides a brief overview of the requirements of the CAA and RHR, as they apply to this particular action. Please refer to our previous rulemakings on the Arizona Regional Haze SIP for additional background regarding the visi bility protection provisions of the CAA and
the RHR. 2 In section 169A of the 1977 Amendments to the CAA, Congress created a program for protecting visibility in the nation's national parks and wilderness areas. This section of the CAA
establishes as a nati onal goal the “prevention of any future, and the remedying of any existing,

2 77 FR 42834, 42837

- 42839 (July 20, 2012), (Arizona Regional Haze “Phase 1” Rule) 77 FR 75704, 75709

- 75712 (December 21, 2012), (Arizona Regional Haze “Phase 2” Rule).This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 6 of 46 impairment of visibility in mandatory Class I Federal areas which impairment results from manmade air pollution.” 3 It also directs states to evaluate the use of retrofit controls a t certain larger, often uncontrolled, older stationary sources in order to address visibility impacts from these sources. Specifically, section 169A(b)(2)(A) of the CAA requires states to revise their SIPs to contain such measures as may be necessary to ma ke reasonable progress towards the natural visibility goal, including a requirement that certain categories of existing major stationary sources
built between 1962 and 1977 (known as “BART

- eligible” sources) procure, install, and operate
BART . In the 1990 CAA Amendments, Congress amended the visibility provisions in the CAA to focus attention on the problem of regional haze, which is visibility impairment produced by a multitude of sources and activities located across a broad geographic area. 4
In 1999 , we promulgated the RHR, which requires states to develop and implement SIPs to ensure reasonable progress toward improving visibility in mandatory Class I Federal areas (Class I areas) 5 by reducing emissions that cause or contribute to regional haze. 6 Under the RHR,
states are directed to conduct an analysis and make a BART determination for each BART

- eligible source that may be anticipated to cause or contribute to any visibility impairment in a Class I area. 7 In particular, under CAA section 169A(g)(2) and 40 CFR 51.308(e)(1)(ii)(A) , states must analyze
and consider the following five factors as part of each source
- specific BART analysis : (1) t he costs

3 42 U.S.C. 7491(a)(1). 4 See CAA section 169B, 42 U.S.C. 7492. 5 Areas designat ed as mandatory Class I Federal areas consist of national parks exceeding 6000 acres, wilderness areas and national memorial parks exceeding 5000 acres, and all international parks that were in existence on August 7, 1977. 42 U.S.C. 7472(a). When we use th e term “Class I area” in this action, we mean a “mandatory Class I Federal area.” 6 See generally 40 CFR 51.308. 7 40 CFR 51.308(e).This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 7 of 46 of compliance of each technically feasible control technology, (2) the energy and non

- air quality
environme ntal impacts of compliance of the control technologies, (3) any existing pollution control technology in use at the source, (4) the remaining useful life of the s ource, and (5) the degree of
im provement in visibility which may reasonably be anticipated to result from the use of such technology ( collectively known as the “five

- factor BART analysis”)

. In 2005, the EPA published the Guidelines for BART Determinations under the Regional Haze Rule at Appendix Y to 40 CFR part 51 (“BART Guidelines”) on July 6, 2 005. The BART Guidelines assist states in determining which of their sources should be subject to the BART requirements and in determining appropriate emission limits for each such “subject

- to

- BART” source. In making BART determinations for fossil fuel

- fir ed electric generating plants with a total generating capacity in excess of 750 megawatts, states must use the approach es set forth in the BART Guidelines. States are encouraged, but not required, to follow the BART Guidelines in making BART determinations for other types of sources. In lieu of requiring source

- specific BART controls, states also have the flexibility to adopt an alternative measure as long as the alternative provides greater reasonable progress towards natural visibility conditions than BART (i.e. , the alternative must be “better than BART”)

. 8 In addition to the visibility protection requirements of the CAA and the RHR, SIP revisions concerning regional haze are also subject to the general requirements of CAA section 110 . In particu lar, they are subject to the requirement in CAA section 110(l) that SIP revisions must not

“ interfere with any applicable requirement concerning attainment and reasonable further progress

8 40 CFR 51.308(e)(2).This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 8 of 46 (as defined in [CAA § 171] ), or any other applicable requirement of [the CAA],” as well as the requirement in CAA section 110(a)(2)(A) that SIPs must include enforceable emission limits.
B. Cholla Generating Station
Cholla Generating Station consists of four primarily coal

- fired electricity generating units with a total p lant

- wide generating capacity of 1,150 megawatts. Unit 1 is a 12 6 MW tangentially

fired, dry

- bottom boiler that is not BART

- eligible. Units 2, 3 and 4 have capacities of 272 MW,
272 MW and 4 10 MW, respectively, and are tangentially

- fired, dry

- bottom boiler s that are each
BART

- eligible. Units 1, 2, and 3 are owned and operated by APS and Unit 4 is owned by PacifiCorp and operated by APS.
C

. Summary of State Submittals and EPA Actions
1. 2011 Arizona R egional H aze SIP On February 28, 2011, the Arizona Department of Environmental Quality (ADEQ)
submitted a Regional Haze SIP under Section 308 of the RHR (“Arizona R egional H aze SIP”) to
EPA. This submittal included BART analyses and det erminations for nitrogen oxides (NO X ) , particulate matter with an aerodynamic diameter of less than 10 micrometers (PM 10 ) , and sulfur dioxide (SO 2 ) at Cholla Unit s 2 , 3 , and 4

. ADEQ's BART analyses for Cholla included the following seven steps: • Step 1: Identify the Existing Control Technologies in Use at the Source , • Step 2: Identify All Available Retrofit Control Options , • Step 3: Eliminate All Technically Infeasible Control Options , • Step 4: Evaluate Control Effectiveness of Remaining Technologies , • Step 5: Evaluate the Energy and Non

- Air Quality Environmental Impacts and DocumentThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 9 of 46 Results , 9 • Step 6: Evaluate Visibility Impacts , and • Step 7: Select BART. 10
2. 2012 EPA Action on Arizona R egional H aze SIP and FIP
On December 5, 2012, we issued a final rule approving in part and disapproving in part ADEQ’s BART determinations for three sources, including Cholla

. 11 W e found that ADEQ’s overall approach to conducting BART analyses and its implementation of the first four steps of its approach were generally reasonable and consistent with the RHR and the BART Guidelines

. However, we found significant flaws in ADEQ’s implementation of the last three steps. In particular, under step 5, we found that the costs of compliance were not calculated in accordance with the BART Guidelines; under step 6, we found that the visibility benefits were not appropriately evaluated and considered; and under step 7, we found that ADEQ did not provide a sufficient explanation and rationale for its determinations. 12 As a result of these flaws , we disapproved ADEQ’s BART determinations for NO X at Cholla Unit s 2, 3, and 4

. We also found
that the SIP lack ed enforceable emission limits for all units and pollutants

. In the same action, we promulgated a FIP for the disapproved portions of the SIP, including NO X BART determinations
for Unit s 2, 3, and 4

. We determined that BART for NO X at Unit s 2 , 3 , and 4 was an emission limit
of 0.0 55 pounds per million British thermal units (lb/MMBtu) determined as an average across the

9 We note that, while ADEQ referred to its Step 5 as an evaluation of energy and non

- air quality e nvironmental impacts, this step also includes consideration of the costs of compliance and the remaining useful life of the source, consistent with the BART Guidelines, 40 CFR part 51, appendix Y, section IV.D.4. 10 Arizona Regional Haze SIP Revision, Appendix D, section XI. 11 77 FR 72511. 12 See 77 FR 42834 , 42840

- 42941.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 10 of 46 three units, based on a rolling 30

- boiler

- operating

- day average , which is achievable with the use
of l ow
- NO X b urners (LNB), overfire air (OFA) and selective catalytic reduction (SCR). The compliance date for the NO X BART emission limit is December 5, 2017. In addition, we established an SO 2 removal efficiency requirement of 95 percent for the scrubbers on Cholla Units 2, 3 and 4 . Cholla Units 3 and 4 were required to ac hieve this removal efficiency by December 5, 2013, and Cholla Unit 2 was required to comply by April 1, 2016. We also established requirements for equipment maintenance, monitoring, recordkeeping , and reporting for all units and all pollutants

. 3. 2015 APS Application for Significant Permit Revision for Cholla Generating Station On January 15 , 2015, APS and PacifiCorp submitted an “ Application for Significant Permit
Revision and Five

- Factor BART Reassessment for Cholla ” to ADEQ. APS and PacifiCo rp requested that ADEQ conduct a revised BART analysis and determination based on new facts (“BART Reassessment”) and submit this BART Reassessment to the EPA as a revision to the Arizona Regional Haze SIP. Under the Cholla BART Reassessment , APS and Pacif iCorp would commit to the following measures in lieu of implementing the FIP requirements for the Cholla Generating Station :

 Unit 2 would be permanently shut down by April 1, 2016 ;

 Unit 3 and Unit 4 would continue to operate with currently installed LNB a nd separated over fire air ( SOFA ) . In addition, by April 30, 2025, APS and PacifiCorp would permanently cease burning coal at both units with the option to convert to pipeline

- quality natural gas by July 31, 2025 , with a ≤ 20 percent annual average capacit y factor.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 11 of 46 4. 201 5 Arizona R egional H aze SIP Revision for Cholla Generating Station On October 22, 2015, ADEQ submitted a revision to the Arizona Regional Haze SIP that incorporate s the Cholla BART Reassessment (“Cholla SIP Revision”). The Cholla SIP Revision is the subject of this proposal. III. Summary of the Cholla SIP Revision
The Cholla SIP Revision consists of a revised BART analysis and determination for NO X
at Cholla , an analysis under CAA section 110(l) , and a revision to Cholla’s o perating p e rmit (“Cholla Permit Revision”) 13 to implement both the revised BART determination for NO X and ADEQ’s prior BART determinations for SO 2 and PM 10 at Cholla

. If fully approved by the EPA,
the Cholla SIP Revision would fill the gap in the Arizona Regional Haze SIP that resulted from the EPA’s disapproval of ADEQ’s BART determination s for NO X at Cholla Units 2, 3, and 4 and
the lack of enforceable emission limits for all units and pollutants . Acc ordingly, full approval of
the Cholla SIP Revision would enable the EPA to withdraw the provisions of the Arizona Regional Haze FIP that apply to Cholla. In the Cholla SIP Revision, ADEQ determined that , if Unit 2 were shut down by April 1,
2016 , n o BART determination for Unit 2 would be necessary “ because the enforceable shutdown
date is within the five

- year BART window

. ” 14 For Units 3 and 4, ADEQ performed a revised BART analysis , taking into account the new requirements that would be imposed as part of the
Cholla BART Reassessment. T his re
- analysis and the resulting BART determination s are

13 Cholla BART SIP Revision, Appendix A Significant Permit Revision No. 61713 to Operating Permit No. 53399 for Arizona Public Service Company Choll a Generating Station (October 16, 2015)

. 14 Cholla SIP Revision, section 2.2, page 4.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 12 of 46 summarized in the following sections.
A. BART Re

-

Analysis for Cholla Units 3 and 4 ADEQ’s BART re

- analysis for Units 3 and 4 consists of an evaluation of each of the five BART factors, effectively replacing step 5 (evaluation of costs of compliance, energy and non

- air quality environmental impacts , and remaining useful life) and step 6 (e valuat ion of v isibility
be nefits ) of ADEQ’s prior BART analysis for Cholla in the Arizona Regional Haze SIP.
1. Cost of Compliance ADEQ evaluated the cost s of compliance for three control options: (1) LNB and SOFA, (2) SNCR with LNB and SOFA, and (3) SCR with LNB and SOFA. Two fuel

- use scenarios were
used as a comparison: (1) twenty years of operation on coal and (2) eight years of operation o n coal followed by twelve years of operation on natural gas (as provided for under the BART Reassessment)

. The cost

- effectiveness values for each control option under each of these scenarios
are shown in Tables 1 and 2. For all options , the costs associated with the BART Reassessment are due to lower utilization periods (coal firing until 2025 instead of for 20 years) as well as significantly lower NO X emissions after conversion to natural gas.
T ABLE 1

– C OST

- E FFECTIVENESS OF NO X C ONTROL O PTIONS AT C HOLLA A SS UMING 20 YEARS OF O PERATION ON C OAL Average Incremental a Unit Control option Annual cost ($/year) Emission

reduction relative to baseline (ton/year) Average

cost

effectiveness ($/ton) Incremental

annual cost ($/year) Incremental

emission reduction (ton/year) Incremental

cost

effectivenes s ($/ton)
3 LNB and SOFA $483,300 1,219 $396

- - - SNCR with LNB and SOFA $3,070,443 1,911 $1,607 $2,587,143 691 $3,742
SCR with LNB and SOFA $9,448,912 3,300 $2,838 $8,965,612 2,110 $4,248
4 LNB and SOFA $673,550 1,756 $384

- - - SNCR with LNB and SOFA $4,086,366 2,643 $1,546 $3,412,816 887 $3,848This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 13 of 46 SCR with LNB and SOFA $13,590,853 4,408 $3,083 $12,917,303 2,652 $4,871

a The incremental cost effectiveness results for SNCR and SCR are based on the emission and cost differences between these technologies and the proposed LNB +SOFA option.
T ABLE 2

– C OST

- E FFECTIVENESS OF NO X C ONTROL O PTIONS AT C HOLLA A SSUMING 8 Y EARS OF O PERATION ON C OAL AND 12 YEARS OF O PERATION ON N ATURAL G AS Average Incremental Unit Control option Annual cost ($/year) Emission

reduction relative to baseline (ton/year) Average

cost

effectiveness ($/ton) Incremental

annual cost ($/year) Incremental

emission reduction (ton/year) Incremental

cost

effectiveness ($ /ton)
3 LNB and SOFA $411,300 488 $843

- - - SNCR with LNB and SOFA $2,497,743 786 $3,177 $2,086,443 299 $6,989
SCR with LNB and SOFA $8,716,452 1,387 $6,286 $8,305,152 899 $9,237
4 LNB and SOFA $571,550 702 $814

- - - SNCR with LNB and SOFA $3,283,930 1,085 $3,027 $2,712,380 383 $7,091
SCR with LNB and SOFA $12,480,744 1,833 $6,810 $11,909,194 1,130 $10,539
2. Energy and Non

- Air Environmental Impacts ADEQ indicated that the energy impacts of LNB , SOFA , and SNCR are minimal and that
there are no non

- air quality environmental impacts associated wi th LNB and SOFA. ADEQ also
noted that SNCR and SCR would result in ammonia slip and that the transport and handling of anhydrous ammonia presents potential safet y hazards

. 3. Existing Air Pollution Controls ADEQ noted that, u nder the Cholla BART Re assessment , use of the existing LNB and
SOFA would be continued at Units 3 and 4. ADEQ proposed n o additional controls for these two
units

. Unit 2 would be shut down in April 2016 , while Unit 1 (the non

- BART unit) would cease burning coal in 2025.
4. Remaining Useful Life ADEQ used a 20

- year amortization period in order to calculate the cost s of compliance forThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 14 of 46 Units 3 and 4 because neither unit is subject to an enforceable shutdown date.
5. Degree of Visibility Improvement ADEQ included the results of modeling conducted by APS and PacifiCorp to predict the degree of visibility improvement associated with the three BART scenarios

. This modeling predicted visibility impacts at the thirteen Class I areas within 300 km of the Cholla facility under

a baseline scenario ( based on 2001

- 2003 emissions with all four units operating), as well as the
three BART control scenarios :

 BART Option 1 : Unit 1 with 2001

- 2003 baseline controls (pre

- LNB), Unit 2 shut down, LNB/SOFA on Units 3 and 4;

 BART Option 2: Unit 1 with 2001

- 2003 baseline controls (pre

- LNB), Unit 2 shut down, LNB/SOFA and SNCR on Units 3 and 4; and

 BART Option 3: Unit 1 with 2001

- 2003 baseline controls (pre

- LNB), Unit 2 shut down,
LNB/SOFA and SCR on Units 3 and 4. APS and PacifiCorp used CALPUFF version 5.8 and incorporated meteorological data for 2001

- 2003, an assumption of 1.0 part per billion background concentration for ammon ia, and “Method
8b” 20 percent best days background conditions for all cases. The results of this modeling are
shown in Tables 3 and 4.
T ABLE 3

- P REDICTED V ISIBILITY I MPACTS (22 ND H IGHEST D ELTA

- D V O VER 3

- YEAR P ERIOD ) Class I Area Baseline BART Option 1 (LNB/SOFA) BART Option 2

(LNB/SOFA/S NCR) BART Option 3

(LNB/SOFA/S CR) Petrified Forest NP 5.31 4.33 4.05 3.55 Grand Canyon NP 3.40 1.79 1.62 1.20 Capitol Reef NP 2.19 1.04 0.91 0.62 Mazatzal WA 2.23 0.96 0.87 0.69This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 15 of 46 Sycamore Canyon WA 2.27 1.00 0.88 0.67 Mount Baldy WA 2.10 0.97 0.85 0.62 Gila WA 1.53 0.53 0.47 0.39 Sierra Ancha WA 2.28 1.05 0.97 0.81 Mesa Verde NP 2.08 0.88 0.78 0.60 Galiuro WA 0.96 0.34 0.31 0.27 Superstition WA 2.00 1.00 0.93 0.73 Saguaro NP 0.70 0.22 0.22 0.20 Pine Mountain WA 1.64 0.67 0.59 0.48

T ABLE 4 P REDICTED V ISIBILITY I MPROVEMENT OVER THE B ASELINE V ISIBILITY I MPACTS (22 ND H IGHEST D ELTA

- D V O VER 3

- YEAR P ERIOD ) Class I Area BART

Option 1 (LNB/SOFA) BART

Option 2 (LNB/SOFA /SNCR) BART

Option 3 (LNB/SOFA /SCR) Option 2

over Option 1 Option 3

over Option 1
Petrified Forest NP 0.98 1.26 1.77 0.28 0.79 Grand Canyon NP 1.61 1.78 2.20 0.17 0.59 Capitol Reef NP 1.15 1.28 1.57 0.13 0.42 Mazatzal WA 1.27 1.36 1.54 0.09 0.27 Sycamore Canyon WA 1.27 1.39 1.60 0.12 0.33 Mount Baldy WA 1.14 1.26 1.48 0.12 0.34 Gila WA 1.00 1.06 1.14 0.06 0.14 Sierra Ancha WA 1.22 1.30 1.47 0.08 0.25 Mesa Verde NP 1.21 1.30 1.49 0.09 0.28 Galiuro WA 0.62 0.65 0.69 0.03 0.07 Superstition WA 1.00 1.07 1.28 0.07 0.28 Saguaro NP 0.48 0.49 0.50 0.01 0.02 Pine Mountain WA 0.97 1.04 1.16 0.07 0.19 Cumulative 13.92 15.24 17.89 1.32 3.97 Average 1.07 1.17 1.38 0.10 0.31
B. BART Determination for Cholla Units 3 and 4 ADEQ’s BART determination for Cholla U nits 3 and 4 in the Cholla SIP Revision effectively replaces step 7 (select BART) of its prior BART analysis for NO X BART for Cholla in the Arizona Regional Haze SIP. In making this determination, ADEQ compared the three emissionThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 16 of 46 control options (LNB and SOFA , SNCR with LNB and SOFA, SCR with LNB and SOFA ). For Option 1, it found that the LNB and SOFA controls co uld be installed at reasonable cost

effectiveness and would deliver visibility improvements ranging from 0.48 to 1.61 dv over baseline conditions across thirteen Class I areas. For Option 2, i t found the SNCR control option to be too costly in comparison t o the small additional visibility benefits it would be expected to deliver. For
O ption 3 , ADEQ noted that the visibility benefits of SCR ( 3.97 dv cumulative incremental visibility improvement ) would only last until 2025 when coal firing would cease , after which the incremental benefits of SCR would be “negligible

. ” Based on its analysis, ADEQ found Option 1 ( LNB with SOFA ) to be BART for NO X at Cholla Units 3 and 4. The rolling 30

- boiler

- operating

day NO X emission limits associated with this BART determination are 0.22 lb/MMbtu ( effective until April 30 , 2025) , which reflects the use of coal, and 0.080 lb/MMbtu (effective May 1, 2025),
which reflects the use of natural gas.
C. 110(l) Analysis
In addition to the BART re

- analysis and determination s , t he Cholla SIP Revision also
includes a demonstration of “noninterference” under CAA section 110(l)

. In particular, ADEQ considered whether the Cholla SIP Revision would interfere with (1) any applicable require ment concerning attainment of any Nationa l Ambient Air Quality Standards (NAAQS) or (2) any other applicable requirement of the CAA

. 1

. Demonstration of Noninterference with NAAQS Attainment ADEQ noted that Cholla is located in Navajo County, Arizona , which is currently designated as attainment or unclassifiable for the following NAAQS: carbon monoxide ( CO ) , lead ( Pb ) , nitrogen dioxide (NO 2 ) , ozone (O 3 ) (2008 NAAQS) , PM 2.5 (1997 and 2006 NAAQS), PM 10 ,This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 17 of 46 and SO 2 (1971 NAAQS). ADEQ also noted that it has re commended an attainment/ unclassifiable designation for this area for the 2012 PM 2.5 and 2010 SO 2 standards. ADEQ’s demonstration of noninterference with attainment focused on the NAAQS for
PM 10 , SO 2 , NO 2 , and O 3 because ambient levels of these pollutants are affected by emissions of
PM 10 , SO 2 , and/or NO X . Specifically, ADEQ analyzed emissions of PM 10 , SO 2 , and NO X under the control strategies in the Cholla BART Reassessment , as compared with the existing control requirements in the applicable SIP and FIP. This assessment was conducted by considering revised
emissions limits included in the Cholla SIP Revision , summarized in Table 5

.

T ABLE 5

– E MISSION L IMITS FOR C HOLLA BART R EASSESSMENT
Emission Limit (lb/MMbtu) Unit Dates NO X PM 10 SO 2 Unit 2 Unit shut down on April 1, 2016 Unit 3 until April 30, 2025 0.22 0.015 0.15

after April 30, 2025 0.08 0.01 0.0006 Unit 4 until April 30, 2025 0.22 0.015 0.15

after April 30, 2025 0.08 0.01 0.0006
For its PM 10 analysis, ADEQ found that the emission control strategies in the Cholla BART
Reassessment will result in gre ater PM 10 reductions than those in the Arizona Regional Haze SIP beginning in 2016 and continuing into the future , as shown in Table 6

. Beginning in 2026, PM 10 emissions will be further reduced under the Cholla BART Reassessment , due to the 20 percent capacity factor limit and the more stringent emission limits ( 0.01 lb/MMBtu rather than 0.015 lb/MMBtu) that will apply after the switch to natural gas at Units 3 and 4. Therefore, ADEQ found
that the Cholla SIP Revision will not interfere with attainment and maintenance of the PM 10 NAAQS.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 18 of 46 T ABLE 6

- C OMPARISON OF A NNUAL PM 10 E MISSIONS FOR 2011 A RIZONA SIP VS

. C HOLLA BART R EASSESSMENT Unit Number Annual PM 10 ( tons per year ( tpy ) ) Time Period 2011 AZ SIP Cholla SIP

Revision 2016 Unit 1 84 84

Unit 2 214 a 78 b Unit 3 197 197 Unit 4 269 269 Total 764 628 2017

- 2025 Unit 1 84 84

Unit 2 181 0 Unit 3 197 197 Unit 4 269 269 Total 731 550 2026 for ward Unit 1 84 13

Unit 2 181 0 Unit 3 197 30 Unit 4 269 39 Total 731 82

a Based on compliance date of April 1, 2016 for emissions limit of 0.015 lb/MMBtu. b B ased on operation of Unit 2 until April 1, 2016. ADEQ also compared SO 2 emission control strategies in the 2011 SIP with those in the
Cholla BART Reassessment

. As shown in Table 7, the control strategies in the Cholla BAR T
Reassessment will result in greater SO 2 reductions than thos e in the 2011 SIP beginning in 2016 and continuing into the future . Therefore, ADEQ found that the emissions reductions achieved by the control strategy outlined in the Cholla SIP Revision will not interfere with attainment and
maintenance of the SO 2 NAAQS.
T ABLE 7

- C OMPARISON OF A NNUAL SO 2 E MISSIONS FOR 2011 A RIZONA SIP VS

. C HOLLA BART R EASSESSMENT Time Period Unit Number Annual SO 2 (tpy) 2011 AZ SIP Cholla SIP

Revision 2016 Unit 1 844 844

Unit 2 1,614 452 aThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 19 of 46 Unit 3 1,966 1,966 Unit 4 2,688 2,688 Total 7,112 5,950 2017

- 2025 Unit 1 844 844

Unit 2 1,614 0 Unit 3 1,966 1,966 Unit 4 2,688 2,688 Total 7,112 5,498 2026 for ward Unit 1 844 1

Unit 2 1,614 0 Unit 3 1,966 2 Unit 4 2,688 2 Total 7,112 5

a B ased on operation of Unit 2 until April 1, 2016. ADEQ also analyzed the emission control strategies for NO X in the Cholla BART
Reassessment (Unit 2 shutdown and LNB/SOFA controls at Units 3 and 4 until conversion to natural gas by 2025 with a ≤ 20 percent annual average capacity factor) in comparison to the FIP, which requires t he installation of SCR with LNB and SOFA at all units by December 5, 2017. As shown in Table 8, w hile the shutdown of Unit 2 results in lower NO X emissions than the FIP for 2016, the Reassessment will allow for 4,161 tpy more NO X emissions than the FIP between 2018
and 2025. However, a fter 2025, due to the conversion to natural gas , the Cholla BART Reassessment will result in greater annual NOx emission reductions than the FIP. ADEQ found that, becaus e there are no nonattainment or maintenance SIPs that rely on emission reductions at
Cholla to ensure continued attainment of the NO 2 NAAQS and the Cholla BART Reassessment
will result in NO X emission reductions relative to the existing operating conditions of the facility,
it will not interfere with attainment or maintenance of the current NO 2 NAAQS.
T ABLE 8

- C OMPARISON OF NO X A NNUAL E MISSIONS FOR FIP VS

. C HOLLA BART R EASSESSMENT

Unit Annual NO X (tpy)This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 20 of 46 Time Period Number EPA FIP Cholla BART Reassessment Annual Emission Change (Cholla

BART Reassessment to EPA FIP)
2016 Unit 1 1,131 1,131 0

Unit 2 3,601 900 a

- 2,701 Unit 3 2,766 2,766 0 Unit 4 3,548 3,548 0 Total 11,046 8,345

- 2,701 2017 Unit 1 1,131 1,131 0

Unit 2 3,601 0

- 3,601 Unit 3 2,766 2,766 0 Unit 4 3,548 3,548 0 Total 11,046 7,445

- 3,601 2018

- 2025 Unit 1 1,131 1,131 0

Unit 2 602 0

- 602 Unit 3 655 2,766 2,111 Unit 4 896 3,548 2,652 Total 3,284 7,445 4,161 2026 forward Unit 1 1,131 105

- 1,026

Unit 2 602 0

- 602 Unit 3 655 244

- 411 Unit 4 896 308

- 588 Total 3,284 657

- 2,627

a B ased on operation of Unit 2 until April 1, 2016. Similarly, with regard to ozone, for which NO X emissions are a precursor, ADEQ noted
that there are no nonattainment or maintenance SIPs that rely on emission reductions at Cholla to ensure continued attainment of the NAAQS and that the Cholla BART Reassessment will result in greater long

- term NO X emission reductions than the existing FIP. Accordingly , ADEQ
concluded that the Cholla BART Reassessment will not interfere with t he attainment or
maintenance of the 2008 ozone NAAQS.
2. Demonstration of Noninterference with Other CAA Requirements With regards to the other applicable CAA requirements, ADEQ considered whether theThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 21 of 46 Cholla BART Reassessment would interfere with (1) the requirements of the Regional Haze program or (2) the CAA’s air toxics requirements. In evaluating potential interference with the RHR , ADEQ relied primarily on the results of air quality modeling (using CALPUFF) performed by APS and PacifiCorp to assess the visibility impacts of Cholla under the Cholla SIP Revision compared to the existing SIP and FIP requirements

. 15 Thes e results, summarized in Table 9 , show that, compared with the existing SIP
and FIP requirements , the Cholla SIP Revision woul d result in less visibility improvement at all
affected Class I areas between 2018 and 2025, but would result in greater improvement starting in
2026. Based on these results and taking into consideration the long

- term goal of the Regional Haze
Rule to achi eve natural visibility conditions, ADEQ found that the BART Reassessment will not interfere with the requirements of the regional haze program.
T ABLE 9

- M ODELED V ISIBILITY I MPACTS OF C HOLLA
EPA FIP and Existing SIP SIP Revision BART (2018

- 2025) SIP Revision BART

(2026 forward )
Class I A rea Visibility Impacts (dv) Visibility Impacts (dv) Visibility Impacts (dv) Petrified Forest NP 2.64 3.75 1.45 Grand Canyon NP 1.11 1.48 0.45 Capitol Reef NP 0.62 0.92 0.29 Mazatzal WA 0.75 0.83 0.30 Sycamore Canyon WA 0.73 0.94 0.29 Mount Baldy WA 0.69 0.87 0.28 Gila WA 0.46 0.47 0.17 Sierra Ancha WA 0.82 0.94 0.36 Mesa Verde NP 0.63 0.84 0.30 Galiuro WA 0.29 0.30 0.09 Superstition WA 0.73 0.88 0.30

15 Id.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 22 of 46 Saguaro NP 0.20 0.19 0.05 Pine Mountain WA 0.51 0.58 0.17 Cumulative impacts 10.18 12.99 4.50 Concerning air toxics, ADEQ noted that in addition to ceasing operation of Unit 2, the Cholla facility proposes to implement sorbent injection at Units 1, 3, and 4 by March 2016 to
reduce air toxics and achieve co mpliance with the EPA’s Mercury and Air Toxics ( MATS ) rule

. Therefore, ADEQ conclude d that the Cholla BART Reassessment will not interfere with any air toxics requirements of the CAA.
D. Cholla Permit Revision
The Cholla Permit Revision , which is incorpora ted as Appendix A to the Cholla SIP Revision, was issued by ADEQ on October 16, 2015. The Permit Revision incorporates emission limits and compliance dates as well as monitoring, recordkeeping, and reporting requirements to implement both the Cholla BART R eassessment and ADEQ’s prior BART determinations for SO 2 and PM 10 at Cholla.
IV. The EPA ’s Evaluation of the Cholla SIP Revision We have evaluated the Cholla SIP Revision for compliance with the requirements of the CAA, the RHR , and the BART Guidelines. 16 Our evaluation of each of the major components of
the Cholla SIP Revision is summarized in the following sections.
A. The EPA ’s Evaluation of the Enforceable Retirement Provision for Cholla Unit 2 The Cholla Permit Revision requires Unit 2 to be permanently retired by no later than April

16 CAA section 169A(b)(2) and 40 CFR 51.308(e)(1)(ii)(B) require that BART for each fossil

- fuel fired generating power plant having a total generating capacity in excess of 750 megawatts be determined pursuant to the BART Guidelines. Cholla has a total gener ating capacity in excess of 750 megawatts, so the BART Guidelines are mandatory for the Cholla BART analysis and determination.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 23 of 46 1, 2016. 17 This date coincides with the compliance deadlines for SO 2 and PM 10 in the Arizona Regional Haze FIP and precedes the deadline for NO X by over a year. 18 In fact, the unit was shut down on October 1, 20 15. 19 If Unit 2 were not retired, APS would have been required to install
additional controls to meet the SO 2 and PM 10 limits in the SIP, as well as the NO X limit in the FIP , which is achievable with SCR

. The requirement for permanent retirement will become effective and federally enforceable when the Cholla SIP Revision is approved into the SIP and the FIP provisions applicable to Cholla are withdrawn. 20 Accordingly, w e agree with ADEQ that no further analysis is required for Cholla Unit 2 , and w e propose to approve the requirement for permanent retirement as satisfying the requirements of the CAA and RHR for Cholla Unit 2

. B. The EPA ’s Evaluation of ADEQ’s BART Analysis for Cholla Units 3 and 4 We find that ADEQ’s BART analysis for Cholla Units 3 a nd 4 is consistent with the requirements of the CAA, RHR , and the BART Guidelines. In particular, we find that ADEQ’s
BART re

- analysis addresses the flaws that were the basis for our disapproval of ADEQ’s prior BART analysis for Cholla. 21 With regard to th e cost of compliance , in its previous BART analysis for Cholla, ADEQ included certain line item costs not allowed by the EPA Control Cost Manual (CCM), 22 such as owner's costs, surcharge, and Allowance for Funds Used During Construction (AFUDC). 23 This
appro ach did not comply with BART Guidelines’ direction that cost estimates should be based on

17 Cholla Permit Revision section I.C.1. 18 See 40 CFR 51.145(f)(4). 19 Letter from Edward Seal, APS, to Kathleen Johnson, EPA, an d Eric Massey, ADEQ (October 28, 2015). 20 Cholla Permit Revision section I.A. 21 See 77 FR 42840

- 42941 and 42849 , 77 FR 72565

- 72566

. 22 EPA Air Pollution Control Cost Manual , available at https://www3.epa.gov/ttn/ecas/cost_manual.html

. 23 See 77 FR 42849

.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 24 of 46 the CCM. In the Cholla SIP revision, by contrast , ADEQ used the cost estimates that the EPA developed as part of the Regional Haze FIP, 24 which were calculated using t he CCM methodology

. 25
We note that in May 2016 , EPA revised the CCM c hap ter that concerns SCR systems

. 26
The revised CCM recommends use of a 30

- year equipment life for SCR systems, 27 whereas the previous version recommended a 20

- year life. 28 As noted above, ADEQ used a 20

- year remaining useful life in its cost calculations in the Cholla SIP Revision, which was consistent with the current
CCM recommendation at the time o f SIP submittal in October 2015 . Given that the majority of
other BART ana lyses, including the EPA’s analysis for Cholla in the Arizona Regional Haze FIP, 29
have used a 20

- year remaining useful life for SCR, we believe that this remains an appropriate assumption in this instance in order to ensure a consistent comparison with the cost estimates for
SCR in other BART determinations. Nonetheless , we have also conducted an additional analysis
to evaluate how use of a 30

- year remaining useful life would affect the cost

- effectiveness values
f or SCR at Cholla Units 3 and 4. We found tha t use of a 30

- year remaining useful life would increase the average cost

- effectiveness of SCR at Unit 3 from $6,286/ton to $7,864/ton and the
“incremental” cost

- effectiveness (as compared with LNB+SOFA) from $9,237/ton to

24 See , e.g., Cholla SIP Revision, Appendix B, Table B

- 1, footnote (a). 25 See 77 FR 42852

. 26 CCM (7th Edition), Section 4, Chapter 2

- Selective Catalytic Reduction (May 2016), available at https://www3.epa.gov/ttn/ecas/docs/SCRCostManualchapter7thEdition_ 2016.pdf

. 27 See id. at 2

- 78 (“broadly speaking, a representative value of the equipment life for SCR at power plants can be considered as 30 years.”) 28 CCM (6th edition), Section 4.2, Chapter 2

- Selective Catalytic Reduction (October 2000), available a t https://www3.epa.gov/ttn/ecas/docs/cs4

- 2ch2.pdf, at 2

- 48 (“ An economic lifetime of 20 years is assumed for the SCR system. ”) 29 See 77 FR 42854This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 25 of 46 $11,295/ton. 30 The average and “incremental” (as compared with LNB+SOFA) cost

- effectiveness of SCR at Unit 4 would be increased from $6,810/ton to $8,401/ton and from $10,539 to $12,674, respectively. 31 Thus , if ADEQ had calculated the average and incremental cost

- effect iveness of
SCR based on a 30

- year remaining useful life , it would have provided further support for ADEQ’s
determination that the incremental costs of compliance for SCR are not warranted by the
incremental benefits. With regard to visibility modeling, in its previous BART analysis for Cholla, ADEQ
considered the benefits from controls on only one emitting unit at a time and overlooked significant
benefits at multiple C lass I areas, thereby understating the full visibility benefits of the candidate
controls

. 32 By contrast, in the Cholla SIP revision, ADEQ looked at the visibility impacts and potential improvements from all three BART

- eligible units together and also considered impacts and potential improvements at all 13 Class I areas within 300 km of Cholla , based on modeling performed by APS and PacifiCorp

. 33 In considering the results of this modeling, i t should be noted that the baseline scenario included emissions from Unit 2, but the control scenarios d id not include any emissions from Unit
2

. As a resul t, the total visibility improvement anticipated under each of the control scenarios represents not only the visibility benefits of controls on Units 3 and 4 , but also the visibility benefits
of the closure of Unit 2. We consider this to be a reasonable approach because it is consistent with the requirement of the BART Guidelines for s tates to consider the visibility improvement from

30 See Cholla _SCR_costs (30 yr life) .xlsx 31 Id. 32 See 77 FR 42849

. 33 See , e.g., Cholla SIP Revision, Table 4 and 5.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 26 of 46 controls applied to the entire BART

- eligible source. 34 However, given that ADEQ is not making
a BAR T determination for Unit 2 in this instance, we believe it is appropriate to also consider the visibility improvement expected to result from controls on Units 3 and 4 only. ADEQ’s evaluation of the “incremental" visibility benefits of S N CR (“ Option 2 over Option 1 ” in Table 4) and SCR (“Option 3 over Option 1” in Table 4) effectively excludes the benefits of the Unit 2 shutdown because Options 1, 2 , and 3 all exclude emissions from Unit 2. Given that ADEQ relied heavily
on these “ incremental ” visibility be nefits in reaching its ultimate BART determination, 35 we find
that ADEQ appropriately considered the visibility benefits of controls on Units 3 and 4 only , as well as the benefits of the Cholla BART Reassessment as a whole

. We also note that ADEQ did not q uantify the expected visibility benefits of SCR and SNCR on Units 3 and 4 after these units are converted to gas in 2025, but characterized these benefits as “negligible.” In order to evaluate ADEQ’s characterization, we scaled the modeled visibility
benef its of SCR under the coal

- fired scenario to roughly estimate what the benefits would be under the gas

- fired scenario. The results of this scaling indicate that , under the gas

- fired scenario, the approximate benefi ts of SNCR would be 0.07 dv at the most

- improved Class I area and 0.31 dv cumulatively over all affected Class I area s , while the approximate benefi ts of SCR would be 0. 15
dv at the most

- improved Class I area and 0. 77 dv cumula tively over all affected Class I areas. 36

34 In particular, t he BART Guidelines explain that, "[i]f the emissions from the list of emissions units at a stationary source exceed a potential to emit of 250 tons per year for any visibility

- impairing pollutant, then that collection of emissions uni ts is a BART

- eligible source." 40 CFR part 51, appendix Y, section II.A.4. In other words, the BART

eligible source (the list of BART emissions units at a source) is the collection of units for which one must make a BART determination. The BART Guidelines also state "you must conduct a visibility improvement determination for the source(s) as part of the BART determination." Id , section IV.D.5. This requires consideration of the visibility improvement from BART applied to the BART

- eligible source as a whole

. 35 See Cholla SIP Revision section 2.3. 36 See Cholla_SCR_vs_NG rev2.xlsxThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 27 of 46 Thus, the benefits of S NCR or SCR under the gas

- fired scenario would be significantly less than
under the coal

- fired scenario , for which the expected “incremental” benefit s over LNB+SOFA are 0. 28 dv at the most

- improved area and 1.32 dv cumulative for SNCR and 0.79 dv at the mos t

improved Class I area and 3.97 dv cumulative for SCR

. In the Cholla SIP Revision, ADEQ also appropriately accounted for the requirements that will apply to U nits 3 and 4 as of 2025, i.e. , the permanent cessation of coal burning by April 30,
2025 , with the option to convert to pipeline

- quality natural gas and comply with a 20 percent annual average capacity factor limit by July 31, 2025 . These new requirements significantly
decrease the emission reductions achievable by SCR or SNCR beginning in 202 5 and thus increase the average $/ton of both SCR and SNCR over the remaining useful life of the units , as show n in
Table s 1 and 2 above

. Similarly, these requirements limit the timeframe in which significant visibility benefits would result from either SC R or SNCR to less than eight years

. We note that ADEQ did diverge slightly from the BART Guidelines in its calculation of
the incremental cost

- effectiveness of SCR . In particular, ADEQ calculated the incremental cost, as well as incremental visibility bene fits, based on a comparison between SCR with LNB+SOFA and LNB+SOFA only. This differs from the approach to calculating incremental cost

- effectiveness
that is set forth in the BART Guidelines, under which incremental cost

- effectiveness is calculated by comp aring “the costs and performance level of a control option to those of the next most stringent option

. . . . ” 37 In this case, SNCR with LNB+SOFA is the next most stringent option

37 40 CFR part 51 appendix Y, section IV.D.4.e (emphasis added). The BART Guidelines do not specify a method for calculating incremental visibility benefits. We consider it appropriate to calculate these benefits in the same manner as incremental costs, i.e. by comparing the expected benefits of a control option to those of the next most stringent option.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 28 of 46 compared to SCR with LNB+SOFA. Had ADEQ compared SCR with LNB+SOFA to SNCR wi th LNB+SOFA, the incremental cost

- effectiveness using a 20

- year remaining useful life would have
been $10,347/ton for Unit 3 and $12,295/ton for Unit 4 , 38 rather than $9,237/ton for Unit 3 and $10,539/ton for Unit 4. Similarly, had ADEQ calculated the incremental visibility benefits of SCR with LNB+SOFA based on a comparison to SNCR with LNB+SOFA, the per area incremental benefits would have ranged from 0.0 1 dv to 0.51 dv, rather than 0.07 dv to 0.79 dv , and the
cumulative incremental benefit would have been 2.65 dv rather than 3.97 dv. 39 Thus , if ADEQ
had calculat ed the incremental costs and benefits of SCR in accordance with the BART Guidelines , it would ha ve resulted in higher incremental cost

- effectiveness values and lower incremental visibility benefits compared with the figures provided in the Cholla SIP Revision, which would provide further support for ADEQ’s determination that the incremental cost s of compliance for
SCR are not warranted by the incremental benefit s . Accordingly, in reviewing the reasonableness of ADEQ’s re

- analysis of BART for these units, we find that ADEQ’s diversion from the BART Guidelines in this regard was of no consequence

. Base d on our findings that the Cholla SIP Revision addresses the flaws that were the basis for our disapproval of ADEQ’s prior BART analysis for Cholla and otherwise meets the requirements of the CAA, RHR, and the BART Guidelines , we propose to approve ADEQ’s BART

re
- analysis for Cholla Units 3 and 4.
C. The EPA ’s Evaluation of ADEQ’s BART Determination for Cholla Units 3 and 4 We also find that ADEQ’s BART determination for NO X at Cholla Units 3 and 4 is

38 Cholla Units 3 and 4 Incremental Costs and Benefits.xlsx 39 Id.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 29 of 46 consistent with the requirements of the CAA, RHR , and the BART Guidelines. In particular, w e find that ADEQ appropriately considered and weighed the five BART factors in relation to the available control options and reached a reasonable BART determination based on its consideration
of the factors

. With regard to SCR, we find that it was reasonable for ADEQ to conclude that the cost s of SCR were not warranted by the visibility benefit s in this instance . In particular, with regard to costs, we are not aware of any instance in which the EPA has determined S CR to be BART where the average cost

- effectiveness of SCR was greater than $6,000/ton and the incremental cost

effectiveness (calculated in accordance with the BART Guidelines) was greater than $10,000/ton,
as is the case with Cholla Units 3 and 4. Similar ly, we are not aware of any instance in which the EPA has disapproved a s tate ’s BART determination that rejected SCR as BART based on similar

cost

- effectiveness values. Further more , while the total visibility benefits of the SCR

- based control scenario (“BA RT Option 3”) are large (2.20 dv at the most improved area and 17.89 dv cumulative across all affected areas), as noted in the previous section, these benefits include not only the effect of SCR installation on Units 3 and 4, but also the retirement of Unit 2. Thus, we believe it was appropriate for ADEQ to focus primarily on what it characterized as the “incremental” visibility benefits, i.e. , the relative degree of visibility improvement expected under Option 3 (Unit 2 retired
and SCR with LNB+SOFA on Units 3 and 4) compared with Option 1 (Unit 2 retired and
LNB+SOFA on Units 3 and 4) , which were 0.07 dv to 0.79 dv per area and 3.97 dv cumulative

. 40

40 As described in the previous section, if ADEQ had calculated the incremental benefits of SCR in accordance with the BART Guidelines, the per area incremental benefits would have ranged from 0.01 dv to 0.51 dv, and the cumulative incremental benefit would have been 2.65 dv

.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 30 of 46 While these benefits are significant, we believe it was reasonable for ADEQ to determi ne that the
bene fits were not warranted in light of the high costs of SCR and the fact that benefits of this magnitude would only last for approximately eight years , after which the benefits of SCR would
be far less (roughly 0. 15 dv at the most

- improved Class I area and 0

. 77 dv cumula tively over all affected Class I areas)

. With regard to SNCR, we find that it was reasonable for ADEQ to conclude th at the cost s of SNCR were not warranted by the visibility benef its

. In particular, with regard to costs, we are
not aware of any instance in which the EPA has determined SNCR to be BART where the average

cost

- effectiveness of SNCR was greater than $ 3 ,000/ton and the incremental cost

- effectiveness

was roughly $ 7 ,000/ton, as is the case with Cholla Units 3 and 4. Similarly, we are not aware of any instance in which the EPA has disapproved a s tate ’s BART determination that rejected S N CR
as BART based on similar cost

- effectiveness values. Furthermore, while the total visibility benefits
of the SNCR

- based control scenario (“BART Optio n 2”) are large (1.78 dv at the most improved
area and 15.24 dv cumulative across all affected areas), as noted above, these benefits include not only the effect of SNCR installation on Units 3 and 4, but also the retirement of Unit 2. Thus, we
believe it was appropriate for ADEQ to focus primarily on incremental visibility benefits, i.e. , the relative degree of visibility improvement expected under Option 2 (Unit 2 retired and S N CR with
LNB+SOFA on Units 3 and 4) compared with Option 1 (Unit 2 retired and LNB+SOFA on Units 3 and 4), which were 0.0 1 dv to 0. 28 dv per area and 1.32 dv cumulative . While these benefits are
not in significant, we believe it was reasonable for ADEQ to determine that the benefits were not warranted in light of the relatively high c osts of S N CR and the fact that benefits of this magnitude would only last for approximately eight years , after which the benefits of SNCR would be far lessThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 31 of 46 (roughly 0.07 dv at the most

- improved Class I area and 0.31 dv cumulatively over all affected
Class I area s )

. Therefore, we propose to approve ADEQ’s determination that BART for NO X at Cholla
Units 3 and 4 consists of LNB+SOFA with associated emission limit s of 0.22 lb/MMbtu (rolling
30

- boiler

- operating

- day average) for each unit . As explained above, th ese emission limits will remain in effect until April 30, 2025, at which point both units will be permanently retired or converted to natural gas with NO X emission limits of 0.08 lb/MMBtu (rolling 30

- boiler

- operating

day average)

. D

. The EPA ’s Evaluation U nder CAA Section 110(l)
CAA section 110(l) requires that any revision to an implementation plan shall not be approved by the EPA Administrator if the revision would interfere with any applicable requirement concerning attainment and rea sonable further progress (RFP) or any other applicable requirement
of the Act. 41 In evaluating whether the Cholla SIP Revision would interfere with any CAA requirements, we note that overall, the Cholla SIP Revision will result in reduced emissions of
both SO 2 and PM 10 compared to the existing SIP and FIP requirements beginning in 2016 (see
T ables 6 and 7 above) due to the retirement of Unit 2 . While the Cholla SIP Revision will require
fewer NO X reductions than the FIP between 2018 and 2025, it will ensure that NO X emissions remain at or below current levels (i.e. , levels consistent with non

- operation of Unit 2 42 and operation of LNB and SOFA on Units 1, 3 and 4) until 2025, after which it will require a substantial

41 CAA Section 110(l), 42 U.S.C. 7410(l). 42 As shown in Table 8, ADEQ projected that total NO X emissions at Cholla Unit 2 would be 900 tpy in 2016, based on a Unit 2 shutdown date of April 1, 2016. Because Unit 2 was retired in October 2015, 2016 emissions from Unit 2 will actually be zero, so we anticipate the total NO X emissions from the facility will be roughly 7,445 tpy for all years between 2016 and 2025.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 32 of 46 reduction in NO X emissions compared to both current levels and the FIP (see Table 8 above). With regard to applicable requirements concerning attainment and RFP, as explained by ADEQ, Cholla is located in north central Navajo County , Arizona, which is designated as

u nclassifiable/ a ttainment for all of the NAAQS for which the EPA has issued designations

. 43 ADEQ also indicated that it has recommended an attainment/ unclassifiable designation for this

area for the 2012 PM 2.5 and 2010 SO 2 standards . With regard to the 2012 PM 2.5 standard, the EPA has finalized a designation of u nclassifiable/ a ttainment for Navajo County. 44 With regard to the
2010 SO 2 standard, we note that, under the EPA’s Data Requirements Rule , 45 ADEQ is required

to develop and submit air quality data characteriz ing ambient concentrations of SO 2 in the area
around Cholla

. 46 The EPA will take these data into consideration in finalizing a designation for
the area. Finally, we note that, on October 1, 2015, the EPA promulgated revised primary and secondary ozone NAAQS

. 47 State designation recommendations for the 2015 ozone NAAQS are due to the EPA by October 1, 2016

. 48 In summary, Cholla is located in area that is designated unclassifiable/attainment or has not yet been designated for each of the current NAAQS. Thus, th e Arizona SIP does not currently rely on emission limitations at Cholla to satisfy any attainment or RFP requirements. Given that the Cholla SIP Revision will result in equivalent or lower emissions of NO X , PM 10 and SO 2 for all future years, compared to cu rrent emission levels, in an area that is designated

43 Cholla SIP Revision, pages 12

- 13, Table 7. 44 See 40 CFR 81.303. 45 40 CFR part 51, subpart BB. 46 See Letter from Eric Massey, ADEQ, to Doris Lo, EPA (January 13, 2016). 47 80 FR 65292 (October 26, 2015). 48 Id. at 65438.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 33 of 46 unclassifiable/attainment or has not yet been designated for all NAAQS, we propose to find that the Cholla SIP Revision would not interfere with any applicable requirements concerning
attainment or RFP.
Th e other requirements of the CAA that apply to Cholla are :

 Standards of Performance for New Stationary Sources (NSPS), 40 CFR Part 60, Subpart D ;

 National Emission S tandards for H azardous A ir P ollutants (NESHAP) , 40 CFR Part 63, Subpart UUUUU (also known as MATS) ;

 Compliance Assurance Monitoring ( CAM ), 40 CFR Part 64; and

 BART and other visibility protection requirements under CAA section 169A and
the RHR

. The Cholla SIP Revision would not affect the applicable NESHAP, NSPS and CAM requireme nts

. Therefore, we propose to find that the Cholla SIP Revision would not interfere with
the applicable NESHAP, NSPS and CAM requirements. We also propose to find that Cholla SIP Revision would not interfere with the visibility protection requirements of the CAA and the RHR

. Our proposed approval of the BART
Reassessment is based on our determination that , taking into consideration the differences in the
facts underlying the EPA’s prior BART analysis for NO X in Arizona Regional Haze FIP and the Cholla BART Reassessment, ADEQ’s revised BART analysis and determination for Cholla meet
the BART requirements of the CAA and RHR

. Furthermore, the Cholla SIP Revision would result in greater visibility improvement tha n the existing SIP and FIP requirements beginning in 202 6 , which is consistent with the long

- term national goal of restoring natural visibility conditions atThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 34 of 46 Class I areas. Thus , we propose to find that the Cholla SIP Revision would not interfere with the visibility protection requirements of the CAA

. E

. The EPA ’s Evaluation of Enforceable Emission Limits
C AA section 110(a)(2)(A) requires SIPs to include enforceable emission limitations as necessary or appropriate to meet the applicable requirements of the Act. In addition, SIPs must contain regulatory requirements related to monitoring, recordkeeping, and reporting for applicable
emission limitations. 49 The Cholla Permit Revision includes such enforceable emission limits, as well as associated monitoring, r ecordkeeping, and reporting requirements, for all units and pollutants. These requirements will become effective and federally enforceable when the Cholla SIP Revision is approved into the SIP and the FIP provisions applicable to Cholla are withdrawn. 50
The refore, we propose to find that the Cholla SIP Revision meets the requirements of the CAA
and the EPA’s implementing regulations for enforceable emission limitations. V. Proposed Action For the reasons described above, the EPA proposes to approve the Cholla SIP Revision

. Because this approval would fill the gap in the Arizona Regional Haze SIP left by the EPA’s prior partial disapproval with respect to Cholla, we propose to withdraw the provisions of the Arizona
R egional H aze FIP that apply to Cholla

. We also propose to find that withdrawal of the FIP woul d
constitute our action on APS ’s and PacifiCorp ’s p etition s for r econsideration of the Arizona Regional Haze FIP.
V I. Environmental Justice Considerations

49 See , e.g. , CAA section 110(a)(2)(F) and 40 CFR 51.212(c). 50 Cholla Permit Revision section I.A.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 35 of 46 As shown in T ables 6 and 7 , th e Cholla SIP Rev ision will result in reduced emissions of
both SO 2 and PM 10 compared to the existing SIP and FIP requirements beginning in 2016

. As shown in Table 8, w hile the Cholla SIP Revision will result in fewer NO X reductions than the FIP between 2018 and 2025, it will ensure that NO X emissions remain at or below current levels until 2025, after which it will require a substantial reduction in NO X emissions compared to both current
levels and to the existing Arizona Regional Haze FIP

. Therefore, the EPA believes that this action will not have potential disproportionately high and adverse human health or environmental effects on minority, low

- income, or indigenous populations

. VII. Incorporation by Reference
In this r ule, the EPA is proposing to include in a final EPA rule , regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference “ Significant Permit Revision No. 61713 to Op erating Permit No.
53399 ” issued by ADEQ on October 16, 2015 . The EPA has made, and will continue to make, this
document available electronically through www.regulations.gov and in hard copy at U.S. Environmental Protection Agency Region IX , Air

- 2 , 75 Hawt horne Street, San Francisco, CA,
94105

- 3901.
V I I I . Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review. This rule applies to only one facility and is therefore not a rule of general applicability.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 36 of 46 B. Paperwork Reduction Act (PRA) This action does not impose an information collection burden under the PRA. This rule applies to only one facility . Therefore, its recordkeeping and reporting provisions do not constitute
a "collection of information" as d efined under 44 U.S.C. 3502(3) and 5 CFR 1320.3(c)

. C. Regulatory Flexibility Act (RFA) I certify that this action will not have a significant economic impact on a substantial number of small entities. This action will not impose any requirements on small entities. Firms primarily engaged in the generation, transmission, and/or distribution of electric energy for sale are small if, including affiliates, the total electric output for the preceding fiscal year did not exceed 4 million megawatt hours. Both ow ners of Cholla , APS and PacifiCorp, exceed this threshold. D. Unfunded Mandates Reform Act (UMRA) This action does not contain an unfunded mandate of $ 100 million or more as described in UMRA, 2 U.S.C. 1531

- 1538 , and does not significantly or uniquely af fect small governments.
E. Executive Order 13132: Federalism This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the
distrib ution of power and responsibilities among the various levels of government.
F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments This action does not have tribal implications, as specified in Executive Order 13175. It wil l not have substantial direct effects on any Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Thus, Executive Order 1 3175 does not apply to this action.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 37 of 46 G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety
Risks The EPA interprets EO 13045 as applying only to those regulatory actions that concern health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of "covered regulatory action" in section 2

- 202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not concern an environmental health risk or safety risk. H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use This action is not subject to Executive Order 13211 because it is not a significant regulatory
action under Executi ve Order 12866. I. National Technology Transfer and Advancement Act This rulemaking does not involve technical standards. The EPA is not revising any technical standards or imposing any new technical standards in this action.
J. Executive Order 12898: Fede ral Actions To Address Environmental Justice in Minority Populations and Low

- Income Populations The EPA believes the human health or environmental risk addressed by this action will not have potential disproportionately high and adverse human health or env ironmental effects on minority, low

- income, or indigenous populations. The results of this evaluation are contained in
section VI above

. K. Determination Under Section 307(d) Pursuant to CAA section 307(d)(1)(B), the EPA proposes to determine that this act ion isThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 38 of 46 subject to the provisions of section 307(d). Section 307(d) establishes procedural requirements specific to certain rulemaking actions under the CAA. Pursuant to CAA section 307(d)(1)(B), the withdrawal of the provisions of the Arizona Regional Haze FIP that apply to Cholla is subject to the requirements of CAA section 307(d), as it constitutes a revision to a FIP under CAA section 110(c). Furthermore, CAA section 307(d)(1)(V) provides that the provisions of section 307(d) apply to “ such other actions as the Administrator may determine. ” The EPA proposes that the provisions of 307(d) apply to the EPA’s action on the Cholla SIP revision.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 39 of 46 List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Particulate matter, Reporting and recordkeeping requirements, Sulfur dioxide, Visibi lity

. AUTHORITY : 42 U.S.C. 7401 et seq.

_______________________________ _____________________________ Dated: Deborah Jordan , Acting Regional Administrator, EPA Region IXThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 40 of 46 PART 52

-- APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS 1. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 740 1 et seq. Subpart D

-- Arizona
2. In § 52.145, revise paragraphs (f)(1), (f)(2), (f)(3), (f)(4), (f)(5), and (f)(10) to read as follows: §52.145 Visibility protection.
* * * * * (f) * * * (1) Applicability. This paragraph (f) applies to each owner/operator of the following coal

- fired electricity generating units (EGUs) in the state of Arizona: Coronado Generating Station, Units 1 and 2. The provisions of this paragraph (f) are severable, and if any provision of this paragraph (f), or the application of any provision of this paragraph (f) to any owner/operator or circumstance, is held invalid, the application of such provision to other owner/operators and other circumstances, and the remainder of this paragrap h (f), shall not be affected thereby. (2) Definitions. Terms not defined below shall have the meaning given to them in the Clean Air Act or EPA's regulations implementing the Clean Air Act. For purposes of this paragraph (f): ADEQ means the Arizona Departm ent of Environmental Quality.
Boiler

- operating day means a 24

- hour period between 12 midnight and the following midnight during which any fuel is combusted at any time in the unit.
Coal

- fired unit means any of the EGUs identified in paragraph (f)(1) of thi s section. Continuous emission monitoring system or CEMS means the equipment required by 40 CFR part 75 and this paragraph (f).This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 41 of 46 Emissions limitation or emissions limit means any of the Federal Emission Limitations required by this paragraph (f) or any of t he applicable PM 10 and SO 2 emissions limits for Coronado Generating Station submitted to EPA as part of the Arizona Regional Haze SIP in a letter dated February 28, 2011, and approved into the Arizona State Implementation Plan on December 5,
2012.
Flue Gas Desulfurization System or FGD means a pollution control device that employs flue gas desulfurization technology, including an absorber utilizing lime, fly ash, or limestone slurry, for
the reduction of sulfur dioxide emissions.
lb means pound(s).
NO X mean s nitrogen oxides expressed as nitrogen dioxide (NO 2 ). Owner(s)/operator(s) means any person(s) who own(s) or who operate(s), control(s), or supervise(s) one or more of the units identified in paragraph (f)(1) of this section.
MMBtu means million British t hermal unit(s). Operating hour means any hour that fossil fuel is fired in the unit.
PM 10 means filterable total particulate matter less than 10 microns and the condensable material in the impingers as measured by Methods 201A and 202 in 40 CFR part 51, ap pendix M. Regional Administrator means the Regional Administrator of EPA Region IX or his/her authorized representative.
SO 2 means sulfur dioxide.
SO 2 removal efficiency means the quantity of SO 2 removed as calculated by the procedure in paragraph (f)(5)(i ii)(B) of this section.
Unit means any of the EGUs identified in paragraph (f)(1) of this section.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 42 of 46 Valid data means data recorded when the CEMS is not out

- of

- control as defined by 40 CFR part
75. (3) Federal emission limitations (i) NO X emission limitation s. The owner/operator of each coal

- fired unit subject to this paragraph (f) shall not emit or cause to be emitted NO X in excess of the following limitations, in pounds per million British thermal units (lb/MMBtu) from any coal

- fired unit or group of coal

- f ired units. Each emission limit shall be based on a rolling 30

- boiler

- operating

- day average, unless otherwise indicated in specific paragraphs.

Coal fired unit or group of coal
- fired units Federal emission limitation Coronado Generating Station Unit 1 0.065 Coronado Generating Station Unit 2 0.080 (4) Compliance dates. (i) The owners/operators of each unit subject to this paragraph (f) shall comply with the NO X emissions limitations and other NO X - related requirements of this paragraph (f) no later than December 5, 2017. (ii) The owners/operators of each unit subject to this paragraph (f) shall comply with the applicable PM 10 and SO 2 emissions limits submitted to EPA as part of the Arizona Regional Haze SIP in a letter dated February 28, 2011, and ap proved into the Arizona State Implementation Plan on December 5, 2012, as well as the related compliance, recordkeeping and reporting of this paragraph (f) no later than June 3, 2013

. (5) Compliance determinations for NO X and SO 2 (i) Continuous emission m onitoring system.This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 43 of 46 (A) At all times after the compliance date specified in paragraph (f)(4) of this section, the owner/operator of each coal

- fired unit shall maintain, calibrate, and operate a CEMS, in full compliance with the requirements found at 40 CFR p art 75, to accurately measure SO 2 , NO X , diluent, and stack gas volumetric flow rate from each unit. In addition, the owner/operator of Cholla Units 2, 3, and 4 shall calibrate, maintain, and operate a CEMS, in full compliance with the requirements found at 40 CFR part 75, to accurately measure SO 2 emissions and diluent at the inlet of the sulfur dioxide control device. All valid CEMS hourly data shall be used to determine compliance with the emission limitations for NO X and SO 2 in paragraph (f)(3) of this

s ection for each unit. When the CEMS is out

- of

- control as defined by 40 CFR part 75, that CEMs data shall be treated as missing data, and not used to calculate the emission average. Each required CEMS must obtain valid data for at least 90 percent of the un it operating hours, on an
annual basis. (B) The owner/operator of each unit shall comply with the quality assurance procedures for CEMS found in 40 CFR part 75. In addition to these 40 CFR part 75 requirements, relative accuracy test audits shall be calcul ated for both the NO X and SO 2 pounds per hour measurement and the heat input measurement. The CEMs monitoring data shall not be bias adjusted. The inlet
SO 2 and diluent monitors required by this rule shall also meet the Quality Assurance/Quality Control (Q A/QC) requirements of 40 CFR part 75. The testing and evaluation of the inlet monitors and the calculations of relative accuracy for lb/hr of NO X , SO 2 and heat input shall be performed each time the 40 CFR part 75 CEMS undergo relative accuracy testing. ( ii) Compliance determinations for NO X . (A) [reserved]This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 44 of 46 (B) Coronado Generating Station. Compliance with the NO X emission limits for Coronado Unit 1 and Coronado Unit 2 in paragraph (f)(3)(i) of this section shall be determined on a rolling 30
boiler

- operat ing

- day basis. The 30

- boiler

- operating

- day rolling NO X emission rate for each unit shall be calculated in accordance with the following procedure: Step one, sum the total pounds of
NO X emitted from the unit during the current boiler operating day and the p revious twenty

- nine (29) boiler operating days; Step two, sum the total heat input to the unit in MMBtu during the current boiler operating day and the previous twenty

- nine (29) boiler operating days; Step three, divide the total number of pounds of NO X em itted from that unit during the thirty (30) boiler operating days by the total heat input to the unit during the thirty (30) boiler operating days. A
new 30

- boiler

- operating

- day rolling average NO X emission rate shall be calculated for each new boiler operating day. Each 30

- boiler

- operating

- day average NO X emission rate shall include all emissions that occur during all periods within any boiler operating day, including emissions from startup, shutdo wn, and malfunction. (C) If a valid NO X pounds per hour or heat input is not available for any hour for a unit, that heat input and NO X pounds per hour shall not be used in the calculation of the 30

- day rolling average. (iii) Compliance determinations for SO 2 . (A) The 30

- day rolling average SO 2 emission rate for each coal

- fired unit shall be calculated in accordance with the following procedure: Step one, sum the total pounds of SO 2 emitted from the unit during the current boiler

- operating day and the pre vious twenty

- nine (29) boiler

operating days; step two, sum the total heat input to the unit in MMBtu during the current boiler

operating day and the previous twenty

- nine (29) boiler

- operating day; and step three, divide the total number of pounds of SO 2 e mitted during the thirty (30) boiler

- operating days by the totalThis document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 45 of 46 heat input during the thirty (30) boiler

- operating days. A new 30

- day rolling average SO 2 emission rate shall be calculated for each new boiler

- operating day. Each 30

- day rolling average
SO 2 emission rate shall include all emissions and all heat input that occur during all periods within any boiler

- operating day, including emissions from startup, shutdown, and malfunction. (B) [reserved] (C) If a valid SO 2 pounds per hour at the outlet of the FGD system or heat input is not available for any hour for a unit, that heat input and SO 2 pounds per hour shall not be used in the
calculation of the 30

- day rolling average. (D) If both a valid inlet and outlet SO 2 lb/MMBtu and an outlet value of lb/hr of SO 2 are not available for any hour, that hour shall not be included in the efficiency calculation.
* * * * * (10) Equipment operations (i) [reserved] (ii) Coronado Generating Station. At all times, including periods of startup, shutdown, and malfunction, the owner or operator of Coronado Generating Station Unit 1 and Unit 2 shall, to the extent practicable, maintain and operate each unit in a manner consistent with good air pollution control practices for minimizing emissions. The owner or operator shall c ontinuously operate pollution control equipment at all times the unit it serves is in operation, and operate pollution control equipment in a manner consistent with technological limitations, manufacturer's specifications, and good engineering and good air pollution control practices for minimizing emissions. Determination of whether acceptable operating and maintenance procedures are being used will be based on information available to the Regional Administrator which may include,This document is a prepublication version signed by the EPA Region IX Acting Regional

Administrator , Deborah Jordan, on June 30 , 2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

Page 46 of 46 but is not limited to, mo nitoring results, review of operating and maintenance procedures, and inspection of each unit.