Document ID: EPA-R05-OAR-2018-0072-0001
Agency: epa
Document Type: Proposed Rule
Title: Proposed Approval of Illinois Variances for Exelon Generation and Calpine Corporation
Posted Date: 2019-06-12T04:00Z

[Federal Register Volume 84, Number 113 (Wednesday, June 12, 2019)]
[Proposed Rules]
[Pages 27212-27215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12412]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2018-0072; FRL-9995-13-Region 5]

Air Plan Approval; Illinois; Sulfur Dioxide

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve a request submitted by the Illinois Environmental Protection 
Agency (IEPA) on February 6, 2018 to revise the Illinois State 
Implementation Plan (SIP) under the Clean Air Act (CAA) for the 2010 
sulfur dioxide (SO2) National Ambient Air Quality Standard 
(NAAQS). IEPA is specifically requesting EPA approval to amend 
Illinois' SIP for the 2010 SO2 NAAQS to account for two 
variances recently granted by the Illinois Pollution Control Board 
(IPCB) to Calpine Corporation (Calpine) and Exelon Generation, LLC 
(Exelon).

DATES: Comments must be received on or before July 12, 2019.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2018-0072 at http://www.regulations.gov, or via email to 
blakley.pamela@epa.gov. For comments submitted at Regulations.gov, 
follow the online instructions for submitting comments. Once submitted, 
comments cannot be edited or removed from Regulations.gov. For either 
manner of submission, 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 restricted 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 of all points you wish to make. 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 CONTACT 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: Francisco J. Acevedo, Mobile Source 
Program Manager, Control Strategies Section, Air Programs Branch (AR-
18J), Environmental Protection Agency, Region 5, 77 West Jackson 
Boulevard, Chicago, Illinois 60604, (312) 886-6061, 
acevedo.francisco@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA. This SUPPLEMENTARY INFORMATION 
section is arranged as follows:

I. What is the background for this action?
II. What changes have been made as part of the SIP revision?
III. What is EPA's analysis of the state's submittal?
IV. What action is EPA taking?
V. Incorporation by Reference
VI. Statutory and Executive Order Reviews

I. What is the background for this action?

    On June 22, 2010, EPA promulgated a new 1-hour primary 
SO2 NAAQS of 75 parts per billion (ppb), which is met at an 
ambient air quality monitoring site when the 3-year average of the 
annual 99th percentile of 1-hour daily maximum concentrations does not 
exceed 75 ppb, as determined in accordance with appendix T of 40 CFR

[[Page 27213]]

part 50. See 75 FR 35520, codified at 40 CFR 50.17(a)-(b). On August 5, 
2013, EPA designated a first set of 29 areas of the country as 
nonattainment for the 2010 SO2 NAAQS, including the Lemont 
and Pekin areas within Illinois. See 78 FR 47191, codified at 40 CFR 
part 81, subpart C. These area designations were effective October 4, 
2013. More recently, on July 12, 2016, EPA designated the Alton 
Township area (including part of Madison County) and the Williamson 
County area as additional nonattainment areas for the 2010 
SO2 NAAQS in Illinois. See 81 FR 45039. These area 
designations were effective September 12, 2016.
    In conjunction with its adoption of SO2 emission limits 
for major sources, Illinois adopted rule revisions (Sulfur Content 
Rule) to limit the sulfur content of distillate and residual fuel oil 
combusted at stationary sources throughout the state. See 35 Ill. Adm. 
Code 214.161(b)(2) and 214.305(a)(2). The Sulfur Content Rule 
specifically requires that the sulfur content of distillate fuel oil 
combusted on or after January 1, 2017, not exceed 15 parts per million 
(ppm). The rule applies to owners and operators of existing fuel 
combustion emission and process emission sources that burn liquid fuel. 
Consistent with trends toward increasing availability and use of lower 
sulfur oil of all kinds, these limits were intended to assure that the 
considerable number of generally smaller boilers that burn these fuels 
use fuels with relatively low sulfur content.
    Rather than imposing fuel sulfur content limitations piecemeal as 
additional areas are designated nonattainment, the IEPA proposed 
establishing such limits statewide. The new limits adopted by Illinois 
are intended to help protect air quality in the entire state, including 
the Alton Township, Lemont, Pekin, and Williamson County nonattainment 
areas. The limits will also assist Illinois' attainment planning 
efforts in future nonattainment areas and could potentially help 
certain areas avoid a nonattainment designation.
    Illinois' Sulfur Content Rule, containing 35 Ill. Adm. Code 
214.161(b)(2) and 214.305(a)(2), was submitted to EPA as a SIP revision 
on March 2, 2016, and the EPA issued an approval in the Federal 
Register on February 1, 2018 (83 FR 4591) and May 29, 2018 (83 FR 
24406).

II. What changes have been made as part of the SIP revision?

    Exelon maintains a series of diesel fuel storage tanks at four of 
its nuclear generation stations for fuel that powers equipment in the 
event of an emergency or loss of power. The facilities must always keep 
a specified volume of diesel fuel on hand to power the emergency 
equipment and ensure nuclear safety. However, the amount of fuel 
actually used is low because the use of the fuel for anything other 
than emergencies and readiness testing is prohibited. This results in a 
large amount of fuel with sulfur content greater than 15 ppm being 
stored for long periods of time. The four stations currently have 47 
emergency fuel tanks with over 700,000 gallons of diesel fuel 
containing sulfur ranging from 19 ppm to 211 ppm.
    On May 18, 2016, Exelon filed a Petition for Variance with the IPCB 
regarding its Byron (Ogle County), Clinton (DeWitt County), Dresden 
(Grundy County), and LaSalle (LaSalle County) nuclear generation 
stations. See Exelon Generation, LLC v. Illinois Environmental 
Protection Agency, PCB 16-106. Exelon requested relief from the 15 ppm 
sulfur content limitation for distillate fuel oil set forth in 35 Ill. 
Adm. Code 214.161(b)(2). On September 8, 2016, the IPCB granted the 
variance from January 1, 2017, to December 31, 2019, for the Byron and 
Dresden stations, subject to certain conditions; from January 1, 2017, 
to December 31, 2020, for the Clinton station, subject to certain 
conditions; and from January 1, 2017, to December 31, 2021, for the 
LaSalle station, subject to certain conditions.
    Calpine owns three simple-cycle natural gas fired turbines with 
distillate oil as back up fuel to generate electricity in Zion, 
Illinois (known as ``Zion Energy Center''). The Zion Energy Center is a 
``peaker'' plant that only operates when electricity demand is high. 
Each turbine at the Zion Energy Center is equipped with dry low 
NOX combustors for natural gas firing and water injection 
for oil firing. The Zion Energy Center also maintains a supply of 
distillate oil to burn when it cannot access natural gas. The facility 
currently has 960,000 gallons of distillate oil with a sulfur content 
of 113 ppm, a mixture of ultra-low sulfur fuel (at or below 15 ppm) and 
fuel with higher sulfur content.
    On June 16, 2016, Calpine filed a Petition for Variance with the 
IPCB regarding the Zion Energy Center. See Calpine Corporation (Zion 
Energy Center) v. Illinois Environmental Protection Agency, PCB 16-112. 
On August 8, 2016, Calpine filed an Amended Petition for a Variance 
with the IPCB, requesting relief from the 15 ppm sulfur content 
limitation for distillate fuel oil set forth in 35 Ill. Adm. Code 
214.161(b)(2). On November 17, 2016, the IPCB granted the variance from 
January 1, 2017, to December 31, 2021, subject to certain conditions.
    On August 3, 2017, Calpine filed a Motion to Administratively Amend 
the IPCB's Order Granting a Variance to amend the IPCB's final order by 
replacing references to 35 Ill. Adm. Code 214.161(b)(2), which applies 
to fuel combustion emission units, with references to 35 Ill. Adm. Code 
214.305(a)(2), which applies to process emission units, as the units 
subject to the variance are actually process emission units. The IPCB 
granted the motion on August 17, 2017, amending its order to correct 
the errors.
    Since the petitions for variance sought relief from provisions that 
were approved into the Illinois SIP, such variances must be submitted 
to EPA for approval as SIP revisions. None of the facilities addressed 
in the Exelon and Calpine variances are located in or near existing 
SO2 nonattainment areas.

III. What is EPA's analysis of the state's submittal?

    Our primary consideration for determining the approvability of 
Illinois' revision is whether approval of the Exelon and Calpine 
variances to the SO2 SIP comply with the SO2 
NAAQS.
    EPA can approve a SIP revision that modifies control measures in 
the SIP once the state makes a demonstration that such modification 
will not interfere with attainment of the NAAQS, or any other CAA 
requirement.

Exelon Variance

    Exelon considered four potential options to comply with the Sulfur 
Content Rule as of January 1, 2017. Such options included combusting 
all of the noncompliant fuel; continuing to dilute the fuel's sulfur 
content concentrations with ultra-low sulfur diesel (ULSD); draining 
all of the storage tanks and refilling them with ULSD; or draining and 
refilling on the larger tanks. For the proposed SIP revision, Exelon 
has demonstrated that none of the four compliance alternatives 
evaluated were practicable for meeting the 15 ppm sulfur limit by 
January 1, 2017 and presented a substantial hardship to the company.
    Exelon explains that the facilities are required to maintain large 
volumes of diesel fuel to power emergency generators, auxiliary boilers 
(at two of the facilities), and fire pumps, equipment that Exelon 
collectively refers to as its ``Emergency Equipment.'' The Nuclear 
Regulatory Commission (NRC) requires that the facilities maintain this 
equipment to be used in emergency situations, such as during

[[Page 27214]]

power losses. See 10 CFR 50.63. The NRC also requires that the 
Emergency Equipment be maintained in a condition that will ensure they 
will startup and provide emergency power when called upon at a high 
degree of readiness. Exelon explains that this ``availability'' 
requirement limits the amount of time Exelon can perform preventative 
maintenance on the equipment and the associated fuel tanks.
    Exelon further explains that NRC regulations require that the 
facilities store and maintain on-site enough fuel to power the 
Emergency Equipment for up to seven days. Exelon indicates, if the 
minimum inventory is not immediately available, the plant enters a 
Limiting Condition for Operation (LCO) for the associated emergency 
engines. This threatens the pertinent station's ability to meet 
applicable availability and operability requirements, and if not 
corrected within seven days, obligates the station to begin a 
controlled shutdown of the affected nuclear reactor.
    Exelon indicates that the federally enforceable state operating 
permits (FESOPs) for the facilities restrict the usage of, and 
emissions from, the Emergency Equipment. Similarly, some of the 
equipment is subject to Federal New Source Performance Standards (NSPS) 
for ``Stationary Compression Ignition Internal Combustion Engines'' 
(NSPS IIII, 40 CFR 60.4200) and the National Emission Standards for 
Hazardous Air Pollutants (NESHAP) for ``Stationary Reciprocating 
Internal Combustion Engines'' (Maximum Achievable Control Technology 
(MACT) ZZZZ, 40 CFR 63.6580), which also restrict the amount of time 
the Emergency Equipment can be operated.
    Exelon explains that, in 2007 for the Byron, Dresden, and LaSalle 
Stations and in 2010 for the Clinton Station, it began purchasing only 
ultra-low sulfur fuel (i.e., fuel with sulfur content no greater than 
15 ppm) to replenish any fuel depleted from the pertinent diesel fuel 
storage tanks. While this has resulted in the dilution of the sulfur 
content of the stored fuel, recent sampling of a representative number 
of tanks at the facilities indicates that there is fuel in the system 
that currently remains above 15 ppm.
    Exelon's plan for complying with the Sulfur Content Rule by the end 
of the variance period outlined by the IPCB calls for continuing to 
replenish the lower sulfur tanks with ULSD; and, as part of a 
coordinated program, emptying the higher sulfur tanks and refiling them 
with ULSD.
    Using sulfur concentrations equal to those from current tank 
samples at the facilities, Exelon estimates that it would emit a total 
of 0.481 more tons of SO2 under the variance than if it 
timely complied with the Sulfur Content Rule. As Exelon replenishes the 
emergency tanks with ULSD, sulfur concentrations in the fuel will be 
reduced over time. Taking this dilution into account and using annual 
averages for fuel burned over the last five years, the estimated 
SO2 emissions with the variance are 0.067 more ton per year 
than with compliant fuel. As the variance relief would last from three 
to five years, depending on the station, Exelon estimates that it would 
emit a total of 0.26 ton more of SO2 under the variance than 
if it timely complied with the Sulfur Content Rule.
    IEPA does not believe that any injury to the public or environment 
will result from granting the variance. None of the facilities are in 
an SO2 nonattainment area, and the estimated SO2 
emissions increase is negligible and extremely unlikely to impact an 
SO2 nonattainment area. Further, IEPA has examined the 
locations of these facilities in comparison to areas currently being 
investigated and modeled for future area designation recommendations 
and determined that there is no overlap; IEPA therefore does not 
believe that the facilities will impact potential future nonattainment 
areas.

Calpine Variance

    Calpine considered two potential options for immediate compliance 
with the Sulfur Content Rule. Such options included combusting all of 
its distillate oil before January 1, 2017; and draining the fuel from 
the storage tanks. For the proposed SIP revision, Calpine demonstrated 
that none of the compliance alternatives evaluated were practicable for 
meeting the 15 ppm sulfur limit by January 1, 2017 and presented a 
substantial hardship to the company.
    Calpine argued that it cannot combust all of its distillate oil 
without violating its Clean Air Act Permit Program (CAAPP) permit that 
was reissued on October 16, 2014 (ID NO. 097200ABB, Application No. 
99110042). Under its permit, the facility may only combust distillate 
oil for limited purposes including when natural gas is unavailable or 
for shakedown, evaluation, and testing of the turbines. Calpine alleges 
that because the facility's turbines are expensive to operate, 
electricity grid operators only direct the Zion Energy Center to 
generate electricity when demand is high, such as during extreme 
weather conditions. Therefore, the facility's permit and economic 
conditions prevented burning the entire supply of the distillate oil 
supply before January 1, 2017. Additionally, Calpine also argues that 
draining the storage tanks would impose a substantial hardship. 
Draining the tanks would entail purchasing and installing new equipment 
and revising facility plans that safeguard fuel spills at a substantial 
cost. Furthermore, Calpine alleges that it is contractually obligated 
to maintain 12 hours of backup fuel in case of emergency, so draining 
the tanks would violate this obligation and risk public safety. Based 
on Calpine's argument, the IPCB and IEPA both determined that Calpine 
would suffer a substantial hardship if required to immediately comply 
with the Sulfur Content Rule.
    Under Calpine's compliance plan, the facility would comply with the 
Sulfur Content Rule by January 1, 2022 by continuing to purchase only 
fuel with sulfur content below 15 ppm. This ensures that the sulfur 
content of the fuel used at the facility will continue to decrease. 
During the variance period, the sulfur content of all distillate oil 
combusted by Calpine must not exceed 115 ppm sulfur content.
    Calpine alleges that with its existing supply of distillate oil, 
its turbines can operate for approximately 68.6 hours (or approximately 
22.8 hours of operation for each of the three turbines). With the 
proposed maximum sulfur content of 115 ppm for distillate oil, this 
operation would emit a total of 0.77 tons of SO2 over the 
five-year term of the variance, or 0.15 tons per year (tpy). Under 
compliance with the Sulfur Content Rule (using only 15 ppm distillate 
oil), 68.6 hours of operation would yield a total of 0.10 tons of 
SO2 emissions, or 0.02 tpy. Therefore, Calpine estimates 
that it would emit a total of 0.67 ton more of SO2 under the 
variance than if it timely complied with the Sulfur Content Rule.
    IEPA does not believe that any injury to the public or environment 
will result from granting the Calpine variance. The Zion Energy Center 
is not located in an SO2 nonattainment area, and the 
estimated SO2 emissions increase is negligible and extremely 
unlikely to impact an SO2 nonattainment area. Further, IEPA 
has evaluated air dispersion modeling submitted by Calpine that 
demonstrates that even under a 115 ppm sulfur scenario, as outlined in 
the variance, the facility will not cause a violation of the 
SO2 NAAQS; IEPA therefore does not believe that the Facility 
will impact potential future nonattainment areas.

[[Page 27215]]

Conclusion

    None of the facilities addressed in the SIP are in or near existing 
SO2 nonattainment areas. EPA has no reason to believe that 
Illinois' revision to the Illinois SO2 SIP will cause any 
area in Illinois to become nonattainment for the SO2 NAAQS. 
Based on the above discussion, EPA believes that the variances granted 
by the IPCB will not interfere with attainment or maintenance of the 
SO2 NAAQS in Illinois and would not interfere with any other 
applicable requirement of the CAA, and thus, is approvable under CAA.

IV. What action is EPA taking?

    EPA is proposing to approve the revision to the Illinois SIP 
submitted by the IEPA on February 6, 2018, because the variances 
granted by the IPCB for Calpine and Exelon meet all applicable 
requirements and would not interfere with reasonable further progress 
or attainment of the SO2 NAAQS.

V. Incorporation by Reference

    In this rule, EPA is finalizing regulatory text that includes 
incorporation by reference. In accordance with requirements of 1 CFR 
51.5, EPA is finalizing the incorporation by reference of the IPCB 
Opinion and Order of the Board (PCB 16-106) adopted on September 8, 
2016, effective on September 13, 2016; and Opinion and Order of the 
Board (PCB 16-112) adopted on November 17, 2016, effective on December 
19, 2016 and subsequently amended on August 17, 2017. EPA has made, and 
will continue to make, these documents generally available through 
www.regulations.gov, and at the EPA Region 5 Office (please contact the 
person identified in the FOR FURTHER INFORMATION CONTACT section of 
this preamble for more information).

VI. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the CAA and applicable 
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
action merely approves state law as meeting Federal requirements and 
does not impose additional requirements beyond those imposed by state 
law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Orders 
12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 
2011);
     Is not expected to be an Executive Order 13771 (82 FR 
9339, February 2, 2017) regulatory action because this action is not 
significant under Executive Order 12866;
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, the SIP is not approved to apply on any Indian 
reservation land or in any other area where EPA or an Indian tribe has 
demonstrated that a tribe has jurisdiction. In those areas of Indian 
country, the rule does not have tribal implications and will not impose 
substantial direct costs on tribal governments or preempt tribal law as 
specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Sulfur oxides.

    Dated: June 3, 2019.
Cheryl L. Newton,
Acting Regional Administrator, Region 5.
[FR Doc. 2019-12412 Filed 6-11-19; 8:45 am]
BILLING CODE 6560-50-P