United States
Environmental Protection
Agency
Air and Radiation
(ANR-445)
EPA 400/1-89-001
March 1989
vvEPA State Acid Rain Program
Final Report
nrifCt
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State Acid Rain Program
Final Report
By David Bassett
Office of Air and Radiation
Office of Atmospheric and Indoor Air Programs
Emerging Programs Staff
U.S. Environmental Protection Agency
401 M Street, SW
Washington, DC 20460
March 1989
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ACKNOWLEDGMENTS
Special thanks are due to all who contributed to this report and to the cooperative
effort of those participating in the STAR Program. The collective expertise of many
individuals extending over a period of several years is represented in this document.
Brian McLean of EPA provided extensive comments and suggested changes that
improved this document. Many other reviewers at State air agencies and EPA Regional
Offices also contributed constructive comments. Robert Arnott of ERM-Rocky Mountain
solicited reactions to the STAR Program from the States and, together with Carol Etter of
RCG-Hagler, Bailey, Inc., provided information used in this report. The State and
Territorial Air Pollution Program Administrators and the Association of Local Air
Pollution Control Officials assisted the production of this report by facilitating a survey of
States and their opinions of the STAR Program. John Schakenbach of EPA provided
valuable editing assistance.
The contributions of individuals representing the many State air agencies that
participated in the STAR Program are acknowledged. These contributions are particu-
larly important in view of on-going regulatory activities which demand the attention of
States.
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Table of Contents
PREFACE i
EXECUTIVE SUMMARY 1
BACKGROUND 2
FUNDAMENTAL DIFFERENCES 2
Geographic Scale of Acidic Deposition 3
Multistate Operation of the Sources 3
Jurisdiction of Control Institutions 3
Geographic Scope 3
Socio-economic Dimension 4
PROGRAM TYPES 5
CONCERNS OF PROGRAM MANAGERS 6
Traditional Concerns 6
Adequacy of Resources: Financial, Human, and
Technical 6
Administrative Complexity 6
Effect on Existing Air Programs 7
Contentiousness of the New Control Program 7
New Concerns 8
Socio-economic Decision-making 9
Involvement of Multiple Agencies 9
Multistate Scale 9
IMPLEMENTATION ISSUES 10
State Goals and Design Philosophies 10
Adequacy of Resources 10
Selection of the Type and Number of Sources 11
Data Requirements 11
Enforcement 11
Multiple Interests / Lead Agency 12
Interstate Coordination 12
Credible Federal Default 13
Timing 13
Energy Conservation 13
Magnitude of Reductions Achievable 14
Relationship of Emissions to Demand 14
How States Might Accommodate Conservation in
Control Plans 14
Control Techniques 15
Conventional Controls 15
Clean Coal Technologies 16
Managed Emissions Dispatch 16
Emissions Trading 16
SUMMARIES OF STAR PROJECTS 17
USEFULNESS OF THE STAR PROGRAM 17
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CHAPTER 1 INTRODUCTION 19
GEOGRAPHIC SCALE OF ACIDIC DEPOSITION 19
MULTISTATE OPERATION OF THE SOURCES 20
JURISDICTION OF CONTROL INSTITUTIONS 21
Geographic Scope 21
Socio-economic Dimension 22
A NEW RESPONSE 23
THE STATE ACID RAIN (STAR) PROGRAM 23
CHAPTER 2 IMPLEMENTORS' CONCERNS AND PROGRAM
TYPES 27
FOUR BASIC TYPES OF CONTROL PROGRAMS 27
Source-based Control Programs 28
Emission-based Control Programs 28
Pollutant Loadings-based Control Programs 29
Environmental Effects-based Control Programs 30
Increasing Complexity 31
CONCERNS OF PROGRAM IMPLEMENTORS 31
Traditional Concerns 32
Financial Resources 32
Human Resources 32
Technical Resources 32
Administrative Complexity 32
Effect on Existing Programs 33
Contentiousness of a New Control Program 33
New Concerns 35
Socio-economic Decision-making 35
Involvement of Multiple Agencies 35
Interstate Coordination 36
CHAPTER 3 IMPLEMENTATION ISSUES 37
ISSUES LINKED TO IMPLEMENTORS' CONCERN 37
Required Resources and Program Complexity 38
Selection of the Type and Number of Sources 38
Data Requirements 39
Enforcement 41
Interaction with Existing Air Programs 42
Contentiousness of Control Program 43
Equity 43
Flexibility 44
Efficacy 45
Multistate Scale 46
Nature of Utilities 46
Regional Cooperation and Authorities 47
Multiple Interests / Lead Agency 49
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ISSUES THAT CROSS PROGRAM LINES 50
State Goals and Design Philosophies 51
Credible Federal Default 51
Timing 52
Energy Conservation 54
Magnitude of Reductions Achievable 54
Relationship of Emissions to Demand 55
How States Might Accommodate Conservation in
Control Plans 56
Control Technologies 57
Conventional Controls 57
Clean Coal Technologies 58
Managed Emissions Dispatch 59
Emissions Trading 59
CHAPTER 4 SUMMARIES OF STAR PROJECTS 63
CHAPTER 5 USEFULNESS OF THE STAR PROGRAM 71
THE CHALLENGE 71
THE TOOLS 72
THE OPINION OF THE STATES 72
Management Approaches 72
Role of the EPA Regional Offices 73
Role of STAPPA/ALAPCO 73
National STAR Workshops 74
Summary of STAR Management 76
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PREFACE
The acid rain issue has been debated for many years by Congress and by numerous
interest groups, and has been the focus of intense scientific investigation. The debate
centers on the policy question of whether or not there should be a program to control acid
rain and how the program should be shaped. Scientific inquiries have been examining
research questions regarding the nature and extent of the problem. The State Acid Rain
(STAR) Program was designed to address a third question of how to implement a control
program should one be enacted, leaving the policy debate and research investigations to
others.
Independent of any program to control acid rain, significant national efforts exist to
limit emissions of traditional pollutants, including sulfur dioxide, nitrogen oxides and
oxidants, which are the principle precursors in the formation of acidic compounds. These
efforts are designed to protect public health and welfare by achieving ambient air quality
standards. Any effort to control acid rain at the regional scale must be viewed in the context
of existing state and local air quality control programs for these pollutants. EPA continues
to investigate additional but related long-range transport issues such as visibility and
acidic aerosols.
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EXECUTIVE SUMMARY
This final report of the STate Acid Rain (STAR) Program documents the results and
findings of a four-year, $3 million effort to engage States in identifying and exploring
potential issues associated with controlling acidic deposition. In coordination with the
State and Territorial Air Pollution Program Administrators and the Association of Local
Air Pollution Control Officials (STAPPA/ALAPCO), EPA funded 47 State Projects that
focused on management and administrative issues.
The success of the STAR Program may be measured by examining where we are today
relative to where we were in 1983 when the program was conceived. By this yardstick, the
STAR Program produced definite successes in improving EPA's understanding of State
concerns, in improving the States' understanding of EPA's role in carrying out Federal
legislation, and in increasing both EPA's and the States' understanding of potential im-
plementation problems. Throughout the course of the Program, the dynamic nature of the
issue and the State studies provided a "real-time" relevance to project findings and results.
As an overall consequence of the STAR Program, mos States are better prepared today
than they were in 1983 to carry out a major control program if Congress should decide one
is needed. This greater preparedness should lead to better acid rain control planning and
more effective implementation. The program also expanded our collective understanding
of the management of regional air pollutants in general.
Success of the STAR Program is also evidenced by actions taken independently by
several States to explore further many of the issues identified by the STAR Program. In
addition, over the past two years, legislative proposals have responded to some of the
findings of the Program. The most noticeable response has been the increased time
provided States and EPA to prepare plans that reflect the complexities of managing this
multistate pollution problem. Finally, EPA is continuing a constructive dialogue with
State air agencies and public utility commissions, through their national organizations, on
implementation issues associated with the control of acidic deposition.
Chapter 1 provides an overview of fundamental differences between control of acid
rain and traditional pollutants. Chapter 1 also details the evolution of a concept for better
planning through the design and implementation of the STAR Program.
Chapter 2 describes four general types of acid rain control programs and the concerns
that program administrators are likely to have if they were asked to carry them out. The
Program Types and Concerns provide a foundation for Chapter 3, where the nature and
significance of potential implementation issues are examined using findings from the
STAR Program as supporting evidence. Chapter 4 lists features of the individual State
projects and serves as a guide for specific information in each report.
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Chapter 5 examines the management of the STAR program and highlights expanded
management approaches used by EPA because of the special nonregulatory nature of the
effort. Results of a third-party review of the Program (which solicited States' reactions to
the program and its management) are presented.
BACKGROUND
By late 1983, EPA became concerned that neither EPA nor the States were well
prepared to implement any of the then-current legislative proposals to control acid rain.
A concept evolved to work with air pollution program managers because they might be
responsible for implementing any future control program. A national network developed
of individuals who ultimately might have implementation responsibility. The STAR
approach maybe contrasted with the traditional state-federal relationship (of implement-
ing mandated control programs) where Federal operating guidance is often issued to States
without the benefit of first inviting them to analyze the issues and then incorporating their
views and perspectives.
Since neither Congress nor the Administration had yet determined that acid rain
control legislation was necessary, EPA kept the Program "policy-neutral," by taking no
position on the question of whether or not there should be an acid rain control program.
Recognizing that participation was voluntary and that other State priorities would
compete for time and resources, EPA made special efforts to develop a sense of common
purpose among participants. So that all interested parties could benefit from the
individual projects, EPA emphasized the importance of clear and concise reporting and
designed special management tools to ensure the maximum usefulness of projects by
sharing information on issues, options, and results among the States. Finally, the Agency
articulated a belief that positive, useful information could be gleaned from failed attempts
and unsuccessful investigations, as well as from successful attempts to find workable
solutions.
FUNDAMENTAL DIFFERENCES
The existing State and Federal air pollution control programs did not appear
appropriate to carry out the solutions being proposed to control acid rain. This mismatch
between proposed solutions and the existing infrastructure appeared to be due largely to:
1) the nature of the acid rain problem, in particular, its geographic scale, 2) the multistate
operation of the principal sources of acidic deposition, and 3) the jurisdictional limitations
of state and local air pollution control agencies.
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Geographic Scale of Acidic Deposition
A unique combination of location of coal deposits, industrial development, technology,
population, geographic size of states, rainfall patterns, and glacial history create an acidic
deposition problem for the thin granitic soils, particularly in the Northeast, Upper
Midwest, and Canada, that are downwind of major combusters of high-sulfur coal.
Combustion products (particularly sulfur dioxide and oxides of nitrogen) are emitted,
carried by the atmosphere, and transformed with the help of sunlight into sulfates and
nitrates and other sulfur-particulate-complexes, which then settle or wash out of the
atmosphere. Large-scale atmospheric motion transports the pollution 300 to 500 (or more)
miles downwind, thus assuring an interstate problem.
While the greatest extent of damage has occurred on glaciated soils of the Northeast,
the thin soils and watersheds of the West are at risk because they have even less capacity
to neutralize acids. Also, the soils of the South are currently adsorbing sulfur deposited
there, and if the soils become saturated, it is likely that sulfates will pass through to the
aquatic systems and acidify them.
Multistate Operation of the Sources
More than two-thirds of total S02 emissions (23 million tons in 1985) and about one-
third of NO emissions (21 million tons in 1985) come from electric utility sources. Due to
this and the inherent administrative difficulties and costs of controlling a large number of
smaller sources which generally have lower emissions rates (on average), virtually all
proposed SO2 reductions have been directed at electric utilities. Controlling electric utili-
ties for regional benefit requires knowledge of the interstate nature of utility operations.
Electric utilities often serve customers in more than one state, and several large
utility holding companies cover multistate regions. Many utilities are also members of one
or more power-pools that exchange power among the member utilities. This multistate
difference between acid rain and traditional pollutants increases the complexity of
regulating interstate sources through existing state-wide institutions.
Jurisdiction of Control Institutions
Geographic Scope
Existing air pollution control programs rely heavily on the action of State and local
governments. The primary focus of State control programs since 1970 remains the
attainment and maintenance of the National Ambient Air Quality Standards (NAAQS).
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These standards are carried forward by the authority provided to each air agency by their
respective State legislatures to protect the health and welfare of their residents.
Existing State authorities were designed to resolve in-state pollution problems, not
interstate problems. The current Clean Air Act is not well suited to accommodate the large
geographic scale of acidic deposition. The Act does not provide sufficient authority to allow
one State to require emissions reductions from sources in another State without assistance
from EPA. In general, current regulatory practice continues to place the heaviest burden
for attainment of ambient standards on the State in which a violation occurs, regardless
of the point-of-origin of the emissions which cause the violation. However, occassionally
EPA Regional Offices are able to resolve interstate pollution problems.
Use of the existing State air agencies to control sources that typically operate at
multistate scales and have out-of-state impacts is generally beyond the jurisdiction and
authority of a single State air agency. This situation illustrates a mismatch of problem
solution and authority. In the absence of new Federal and State enabling legislation,
controlling out-of-state emissions could require regulators to establish either an interstate
compact or an interstate agency to determine and enforce specific requirements. Estab-
lishing such an interstate agreement or agency would most likely need to be ratified by
State legislatures and Congress.
Socio-economic Dimension
Unlike the control of traditional air pollutants where reasonably clear source-
receptor relationships and source culpability can be established, allocating emissions
burdens for control of acidic deposition would rely less on scientific tools (e.g., diffusion
models and ambient measurements), and would rely more on judgments of air agencies and
consideration of state-wide social and economic factors. Socio-economic concerns tradi-
tionally have been incorporated in developing source-specific standards, but an acid rain
control program would shift the balance of these concerns and heighten their importance
because of the greater state-wide impact of control decisions (which may affect electricity
consumers and the viability of local industriesespecially electricity-intensive industries
and coal mining).
Fundamental differences between acid rain and traditional pollutants suggested that
an institutional response to acid rain control might be fundamentally different as well.
Many conventional implementation issues would be complicated further by the interstate
nature of the pollution, the multistate extent of the operation of emitters, and the
mismatch of scale between pollutants, sources, and the jurisdiction of State regulatory
institutions. For these reasons, controlling acid rain would introduce complexities greater
than those of controlling traditional pollutants.
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PROGRAM TYPES
A goal of all acid rain control proposals is to reduce or eliminate damage from acidic
deposition. However, the objectives that control proposals set for the program administra-
tor can be quite different. These objectives affect not only the cost and feasibility of
implementation but also the likelihood of achieving the goal.
In the process of investigating implementation issues through the STAR program, a
structure emerged that can be used for examining regional pollutants like acid rain and
for understanding the nature and significance of potential implementation issues faced by
environmental program administrators. This structure may also be useful for examining
other environmental control efforts. This taxonomy of control programs as seen from an
implementor's perspective consists of four basic types: source-based, emission-based,
pollutant loadings-based, and environmental effects-based.
Source-based control programs are directed at the operation of an emissions source
with an emphasis on enforceability of control requirements. Meeting a specific perform-
ance standard or emissions rate (in terms of pounds of SOg/mmBtu of heat input, percent
sulfur-in-fuel by weight or by volume, grams of pollutant per mile traveled, for example)
provides for a level of performance without directly addressing the choice of hardware
required to attain this standard. As long as each source meets its performance standard,
the program objective is achieved. An air program manager need not ensure that regional
emissions goals or deposition levels are achieved.
Emission-based control programs focus on reducing total emissions over a defined
geographic area such as a State, a multistate region, or the entire nation. In an emission-
based program, the objective may be stated as an emissions reduction target (typically
tons-of-pollutant per year) or as an emissions ceiling. Implementation responsibility is
usually assigned to the States for administrative reasons. As long as the total tonnage of
emissions is reduced by a specified amount or kept below a specified threshold, the program
objective is achieved.
A pollutant loadings-based control program's objective is to limit the concentration
of a pollutant affecting the environment. The current air program uses National Ambient
Air Quality Standards (NAAQS) to protect the health and welfare of the most sensitive
individuals and the environment. For acidic deposition, deposition standards could be set
to ensure that sensitive resources do not suffer adverse impacts. Setting a deposition
standard would not mandate a specific control technology for a source or fix a level of
emissions for a region.
The emphasis of an environmental effects-based control program is to protect the most
sensitive humans, flora, and fauna from the deleterious effects of pollution. Success would
be measured by the health and quality of the sensitive resources themselves. Program
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objectives for an acid rain program could be expressed in terms of maintaining the diversity
and quantity of a fish population or the quality and productivity of a forest. With this
program type, regulators have great flexibility in devising strategies so long as the net
result is protection of the sensitive resources. However, meeting these biologic standards
would add yet another layer of complexity to the job of the program implementor.
CONCERNS OF PROGRAM MANAGERS
Traditional Concerns
A number of traditional concerns are identified as important to managers when new
programs are instituted. The primary concerns are:
Adequacy of Resources: Financial. Human, and Technical
When program managers are faced with the prospect of incorporating a new control
effort with an existing program, a universal concern is whether the existing capabilities
and resource levels can accommodate the new demands; and if they cannot, what
additional financial, human, and technical resources will be needed to fulfill the additional
responsibilities?
Moving from a source-based approach to an effects-based approach, the amount of
financial resources, the skills of the human resources, and the sophistication of technical
resources needed to implement a control program all increase substantially.
Administrative Complexity
Administrative complexity of implementation is influenced by the number of deci-
sions that are required to implement a program and the difficulties encountered in making
those decisions. Decision-making may be difficult because of lack of (or conflicting)
information, uncertainties in the quality and reliability of information, an even balance
between the "pros" and "cons" of each option, and lack of clear alternatives. Greater
flexibility often leads to greater complexity, greater regulatory responsibility, increased
contentiousness, and lengthy litigation all of which may delay environmental benefit.
However, multiple revisions of a simple program can increase administrative complexity,
too. In general, programs become more complicated to administer as one moves from the
simpler source-based type to the most complex effects-based type, but details of program
design and implementation can alter this general rule somewhat.
The administrative complexity of a program is not only a concern of the implementor,
but also of the sources and the society at large. A properly conceived and implemented
program ensures efficient use of resources and provides for timely achievement of
environmental benefits.
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Effect on Existing Air Programs
Administrators are concerned that a new air pollution program may conflict or
interfere with the operation of existing programs, or at a minimum, may draw resources
away from existing programs and hinder their successful administration. Reconciling
program goals and activities without creating confusion for the source and/or the enforce-
ment staff is important.
Further control of SO2 and N0x would affect existing ambient air programs. States
indicated that source- and emission-based programs would be relatively easy to integrate
with an existing program but that more complex program types may require establishing
a separate program infrastructure within and among States.
Contentiousness of the New Control Program
Implenientors wish to minimize the likelihood of conflict, protracted debate, or
litigation over a control program because these divert limited resources away from
implementation and usually delay achievement of environmental goals. The acceptance
of a control program will depend on the perceptions of all affected parties, particularly
perceptions of equity, flexibility, and efficacy of the control effort.
Equity. Development of acid rain control plans presents State regulators with a
dilemma of how to allocate the costs of control equitably. The more decisions and
administrative judgements made by the air agency, the greater the likelihood that
concerns of equity will dominate and possibly, the more contentious the resulting control
program will be.Depending on the type of control program that a manager is asked to im-
plement, administrative and institutional costs can be considerable. Nevertheless, these
costs are often overshadowed by the costs of control.
If a source-based program were established by Federal legislation, which applied one
emissions rate to all existing and new industrial and utility sources, it could be considered
equitable even though the costs of complying could vary greatly. In addition, industrial
sources could incur both the cost of their own emissions controls and a portion of the electric
utility controls through higher rates. Alternatively, assigning emissions reductions solely
to utilities shifts costs to ratepayers and may be viewed as subsidizing customers of
polluting industries.
In theory, the loadings- and effects-based programs would have a "scientific" equity
since controls would be required only from those sources specifically contributing to
violations of a deposition standard or causing damaging effects. However, costs of control
would also fall only on specific sources. The emission-based program provides the
implementor with the most flexibility to allocate the costs of control.
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Flexibility. In order to implement a control program smoothly, most implemen-
tors desire the flexibility to determine which sources are to be controlled, with considera-
tion of the economic consequences of those controls on a particular company, industry,
locale, and State. Further, implementors desire the flexibility to choose among a number
of available strategies and to select the most effective reduction strategy for their State.
Under the source-based approach, the role for States is limited to enforcing source
performance. Source-specific standards have the benefit of reducing administrative
burdens and encouraging rapid implementation and control. An emission-based control
program may allow States the option of determining specific control actions to be taken
at each source, so long as an overall emissions goal is achieved. Loadings- and effects-based
control programs provide regulators with the flexibility to select the most environmentally
effective control strategies. Controls are needed only for those sources causing the loadings
or effects standard to be exceeded.
Efficacy. The successful control program will reduce environmental damage from
acidic deposition and will prevent future re-occurrence of damage. A source-based
approach has the certainty of establishing a level of performance for controlled sources but
the uncertainty of whether those control actions will improve the areas damaged by acidic
deposition. No direct linkage between effects and source performance is maintained, and
some areas may be "overprotected" while others may lack sufficient protection. This
approach can provide substantial emissions reductions and a program that is relatively
easy to administer, but it does not ensure a limit on emissions or the achievement of
environmental goals.
An emission-based program provides assurance that expected S02 and NOx reductions
will be achieved and is driven largely by socio-economic concerns, but like source-based
programs, it provides no direct linkage between effects and level of emissions.
Loadings- and effects-based control programs would control only those sources that
are causing violations of deposition standards or producing damaging effects. Program
effectiveness depends on States pinpointing and adequately controlling out-of-state
sources. While technically and administratively complex, these programs would provide
the benefit of targeting controls.
New Concerns
New concerns were raised as a result of investigating acid rain control programs.
These concerns include some traditional concerns that are intensified largely by the
greater transport of the pollutant and multistate operation of its sources, greater economic
consequences, and a more obscure sense of the relationship between sources and receptors.
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Socio-economic Decision-making
Controlling acid rain shifts the emphasis of economic and social concerns and
increases their significance relative to the control of traditional pollutants. A fundamental
new concern is that air agencies may be required to allocate controls among a pool of
candidate sources without clearly defined source culpability. Particularly in the case of an
emission-based program, air agencies may find themselves in the unfamiliar position of
supporting control decisions primarily on social and economic grounds, rather than on air
pollutant impact grounds, which is the primary basis used in managing traditional control
programs.
Involvement of Multiple Agencies
Whenever a multifaceted problem is imposed upon an existing institutional infra-
structure (that was not designed to handle the problem), the capabilities of the institutions
may be mismatched with the problem. Task forces and ad hoc committees are convened
as a way of assembling the needed blend of disciplines, often by drawing from the technical
experience of agencies operating in a related field. Eventually, either an existing institu-
tion is broadened or a new one is created with a specific mandate to ensure the "right" blend
of expertise and staffing. Program managers are concerned that the perspectives of their
agency be accommodated and represented in the decision-making process.
The differences and complexities of acid rain control require new ideas on the role of
the State agencies in controlling multistate pollution. To be effective, a lead agency should
be designated to resolve problems which may arise where multiple agencies have overlap-
ping or conflicting interests, responsibilities, and authorities.
Multistate Scale
Program managers are concerned that traditional State-based planning is compli-
cated by the interstate nature of the transport of acid rain precursors and the intercon-
nected nature of the electric utility industry. Given these complications, it is not possible
to eliminate all interstate coordination problems. The following example illustrates one
type of problem that could arise:
A few generating plants located in one State are partly or wholly owned by
other utilities in neighboring states. The State in which the plant is located
could allocate a large emissions reduction to the plant owned by out-of-state
utilities or serving customers in neighboring states, thus shifting the costs of
compliance to out-of-state ratepayers. Moreover, under existing mandates to
provide reliable service at the lowest possible cost, State PUCs could be
obligated to shift costs in the manner outlined above.
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Interstate issues arising from the electric utility industry would probably be least
significant with a source-based program. However, the interstate nature of the electric
utility industry becomes a significant factor under the other program types. For loadings-
and effects-based programs, implementors are concerned that they must have explicit
authority (as well as the practical means and resources) to compel sources outside their
State to control emissions. Establishment of interstate agreements depends on the
willingness of States to negotiate away some autonomy.
IMPLEMENTATION ISSUES
The primary purpose of the STAR Program was to investigate potential implemen-
tation issues under a Federally legislated acid rain control program and in the process, to
prepare the States and EPA to carry out such a program. Given that most legislative
proposals have focused on emission-based approaches, most of the STAR projects investi-
gated issues that could arise under that type of program. Because of their lower source
density and less immediate need to seek reductions, the Western States project (WESTAR)
also looked at the implementation issues presented by a pollutant loadings-based program
type. Many of the projects, particularly those that focused on control options and costs,
would be applicable to all program types.
The following discussion summarizes the major implementation issues identified
through the STAR Program and relates them to the program types and concerns outlined
above.
State Goals and Design Philosophies
Some States found that they could design a control program to meet the letter of the
legislative requirement and, at the same time, achieve State goals such as maximizing
environmental benefit, minimizing cost to ratepayers or to sources, or minimizing employ-
ment impacts. New York State expressed an interest in developing a State plan that would
meet not only Federal requirements but would also provide maximum protection to the
acid-sensitive Adirondack region of that State. Pennsylvania identified a concern for
protection of the local high-sulfur coal mining industry, which could influence development
of compliance plans. Other state-specific goals might include minimizing control require-
ments on certain economically important industries, minimizing electric rate impacts on
rate-sensitive industries, and promoting energy conservation or use of non-fossil energy
sources.
Adequacy of Resources
STAR participants examined program elements and identified good barometers of
resource intensity (i.e., type and number of sources to be controlled, amount and quality
of data needed to support the control program, and difficulties of enforcement). These
barometers are good indicators of the magnitude of resources required to implement and
the complexity of the program.
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Selection of the Type and Number of Sources
The narrower the coverage of a program (for example, only utility sources) and the
fewer compliance options (for example, only fuel switching and scrubbers allowed), the less
complex the program and, probably, the fewer resources required to implement. The
broader the coverage of the program (mobile and all stationary sources) and the more
flexibility allowed sources (e.g., trading emissions, using unproven control technologies,
etc.), the more difficult and resource-intensive the plan will be to implement and
administer. This relationship between resource requirements and program complexity
holds for financial, human, and technical resources and overall development and admini-
stration of the program.
Data Requirements
The type of control program an air agency is asked to implement will influence the
complexity of data gathering and analysis. Of the four program types, a source-based
control program requires the least data for implementation. A traditional emissions
inventory is not essential because the program could be implemented with limited data
that identifies the qualifying sources (type, size, and street address), identifies existing
controls and current emissions performance, and provides sufficient information to moni-
tor compliance.
Many emission-based legislative proposals specify an emissions "baseline" as well
as intermediate emissions milestones. To determine actual baseline emissions, an
inventory must be developed of actual emissions. Many STAR projects provided valuable
information about the magnitude of effort and resources required to adequately develop
and verify emissions inventories and the data required to support economic modeling and
socio-economic decision-making.
In addition to all of the information requirements of emission-based programs,
loadings- and effects-based programs would require additional accurate temporal and
spatial knowledge of emissions covering multistate regions. Development of a plan for a
loadings-based program would require greater data gathering and analysis than either
source-based or emission-based programs. In addition to all the requirements of a
loadings-based program, an effects-based program would require still more data and
analysis. Regulators would also need to identify ecosystems at risk and determine
appropriate biologic indicators.
Enforcement
Enforcement would be straightforward under a source-based control program. An
important asset for implementing source-based control programs would be further devel-
opment and wider deployment of continuous emission monitors (CEMs) to minimize the
enforcement burden and to ensure source compliance.
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Emission-based programs could present additional enforcement burdens. Any
approach that allows emissions trading, leasing, or other more administratively complex
approaches (such as managed emissions dispatch), will require a significant additional
commitment of enforcement resources. To avoid forced shut-downs near the end of an
averaging period, Massachusetts examined a concept of "Dynamic Emission Management"
with a goal of continuously tracking and, if necessary, adjusting the operation of sources
to ensure ultimate attainment of annual state-wide average emissions targets.
Enforcement of loadings-based or effects-based programs must be implemented on
an interstate basis. However, this may render programs impractical from a State
perspective and significantly more complex and resource-intensive from a Federal per-
spective than either source- or emission-based programs.
Multiple Interests / Lead Agency
There are a number of State agencies and other interested parties that may want, or
need, to be involved in developing a plan for controlling acidic deposition (e.g., State air,
energy, and natural resource agencies, power plant siting boards, public utility commis-
sions (PUCs), representatives from governor's offices and legislatures, utility and industry
representatives, environmental groups, consumer advocates, Federal agencies including
the EPA, the Federal Energy Regulatory Commission (FERC), and the Department of
Energy (DOE)).
Public utility commissions (PUCs) will certainly be involved since most acidic
deposition control proposals focus on the electric utility industry and consequent rate
impacts. Failure to properly involve affected interests could lead to delays in implement-
ing the plan, including protracted public comment, resistance to State enabling legislation,
and legal challenges to the plan.
An interagency agreement or new State legislation may be necessary to clearly
identify and empower a lead agency with primary responsibility within a State. A primary
role of a lead agency would be to resolve conflicts that may arise where multiple agencies
have overlapping interests and authorities. If possible, the lead agency should be the same
agency that will plan, implement, monitor, and enforce the control program.
Interstate Coordination
Resolution of conflicts between States may require Federal administrative or judicial
intervention, or some mechanism for interstate cooperation.
Unless some other agency is specified, the de facto mediator for interstate conflicts
would be the EPA since, under all acid rain legislation proposed to date, the Agency would
have responsibility for plan approval. However, EPA may not have the resources to
assume this role and does not have extensive experience with utility regulatory issues.
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Alternative solutions require legislative "fixes" to provide explicit mechanisms to
foster communication among States and/or to resolve interstate issues and conflicts.
Credible Federal Default
A default provision provides a federally legislated back-up control requirement that
would be known at the outset, before States develop control plans in response to legislation.
A default provision would specify some control certain in the absence of timely State action
(e.g., a 1.2 pounds of SO/mmBtu emission rate on a unit or plant basis). For a default
provision to be credible, the Federal government must be able to implement and enforce
it without State assistance and with comparable environmental benefit, tolerable eco-
nomic and social costs, and a certainty of occurrence. Most default proposals preempt the
more flexible (and frequently less-costly) approaches developed by States.
Most States, when faced with a credible Federal default provision, would try to avoid
the more restrictive and costly default requirements and would make extra effort to ensure
the timely delivery of an approvable control plan to EPA.
Timing
Results of working groups at the Asheville, N.C. workshop indicate that some States
(particularly those with difficult control decisions and complex regulatory and legislative
review procedures) could require a minimum of 24 months (and preferably 30) to develop
control plans. Since that workshop, some States indicated that they are now in a better
position to develop control plans because of the advance planning exercises of the STAR
Program and that the plan development period might be reduced somewhat. On the other
hand, results from a January 1989, workshop with State air agencies and public utility
commissioners indicate that existing utility regulatory requirements might dictate more
time for plan development.
Massachusetts suggested that the time required for acid rain compliance plan
development and approval could possibly be shortened by parallel processing where EPA
would receive intermediate results. This would allow the Agency to interact with State
planning groups as the plan was being developed, rather than only after completion, as is
currently the case.
Energy Conservation
Three primary issues surround energy conservation relative to acid rain control
plans: 1) the ability of conservation measures to reduce the demand for electricity; 2) the
relationship of these reductions in demand to emissions; and 3) whether a State will use
conservation techniques prospectively to reduce future emissions, or retrospectively as
control devices to reduce current emissions.
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Magnitude of Reductions Achievable
Estimates of reductions in demand attributable to energy conservation measures
vary greatly, mostly according to assumptions about the penetration of various measures.
Massachusetts, NESCAUM, and Wisconsin specifically investigated the role that energy
conservation might play in an acid rain control plan. These projects indicate that energy
conservation offers potential for reducing emissions and/or the cost of control. Conserva-
tion techniques have a short payback period for residential, commercial, and industrial
sectors, and may produce additional savings by eliminating or deferring capital construc-
tion of utilities. These States and Tennessee (with TVA) indicate that the attractiveness
of conservation to utilities is greatest in regions with unmet demand (e.g., New England)
and least in regions with excess generating capacity (e.g., the Midwest). Conservation is
less attractive to utilities with excess capacity because implementing conservation
measures may further increase their excess capacity.
Relationship of Emissions to Demand
The relationship between air quality and energy conservation is complex and
sometimes counter-intuitive:
With economic dispatch, cleaner (more costly) units are usually removed
from the grid before the dirtier (and cheaper) units. For this reason,
emissions reductions do not always follow demand reductions. Control plans
that include energy conservation could allow mutual multistate benefits and
could be fostered by development of regional emissions control requirements
and a regional compliance plan.
Implementing conservation measures may cause electric rates to increase
because the fixed costs of a utility continue and must be met with revenues
from reduced sales. This consequence is most likely in areas with excess
generating capacity.
One utility-sponsored conservation program involving appliance replace-
ment had the unexpected effect of increasing the demand for electricity (and
consequent emissions) because older appliances continued in service after
being "replaced" with energy-efficient models. This finding underscores the
importance of determining the effectiveness of conservation measures.
How States Might Accommodate Conservation in Control Plans
State air agencies may embrace conservation in two fundamentally different ways:
either prospectively to reduce future emissions, or retrospectively (as one might retrofit
control equipment) to reduce current emissions levels. The ramifications for a State air
agency are significant.
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If an agency uses conservation programs to reduce future emissions, there is no need
for enforcement or for protracted rigorous study of effectiveness or penetration of various
conservation measures. Discrepancies between actual and projected emissions may be
accommodated by adjusting the mix of conventional emissions controls to supplement any
shortfall in the performance of the conservation program.
If States use conservation measures as conventional controls to reduce existing
emissions levels, the need for certainty in the deployment and performance of conservation
measures presents a significant obstacle to their adoption by State air agencies. In
addition to seeking reasonable assurance (of performance), the air agency must provide for
sufficient monitoring and tracking of the performance of conservation measures to ensure
defensible enforcement actions, if necessary.
Uncertain of the effect that conservation measures will have, air agencies may require
back-up control plans to be used if conservation does not achieve the estimated effect in the
required time. Sources may see such contingency plans as a discouraging extra layer of
complexity. On the other hand, a credible back-up plan may encourage implementing the
primary plan due to reluctance to adopt the back-up plan and accept defeat of the primary
plan.
Interestingly, the term "conservation" is interpreted by disparate groups in a context
which meets the need of the implementor. To utilities, conservation smooths peaks in
generation, cuts capital requirements for new construction, and allows efficient use of
existing capacity. To environmentalists, conservation usually means "using less."
Control Techniques
The choice of an appropriate control technique(s) for each source is an important
implementation decision under any type of acid rain control program. This choice presents
implementors with a number of issues, including performance, effectiveness, cost, and
reliability.
New technologies promise greater control at less cost, but present the air agency and
the source with a question of certainty (i.e., how can performance of an unproven
technology be assured?).
Conventional Controls
Fuel switching is a clear option at boilers that can easily be converted from one fuel
type to another. To evaluate the cost- effectiveness of coal switching relative to other
control options, an estimate of future low-sulfur coal prices is helpful, but difficult, since
the collective response of States to acid rain legislation will certainly influence the price
of low-sulfur coal. The Midwest Research Insitiute (MRI) reviewed twelve STAR projects
that investigated control techniques and their costs, and compiled an overview of State
efforts entitled "Review of Methodologies for Estimating Control Costs for Acid Rain
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Precursors." This report reviews available methods for estimating the cost of SO2 controls
fitted to utility boilers and is intended to assist air agencies in identifying cost methodolo-
gies that may best fit their needs and resources.
Clean Coal Technologies
The Clean Coal Technology (CCT) Program was created by Congress to assist the
development and commercial-scale demonstration of less-polluting, more efficient, and
less costly control technologies for sources burning primarily high-sulfur coal. CCT could
play a role under any type of acid rain control program, but States and sources must decide
whether CCTs will be incorporated in the range of control options considered for each
facility. Depending upon their cost, the status of their commercial demonstration, and
compliance deadlines in Federal legislation, States may want to provide for inclusion of
CCTs in the control program.
Managed Emissions Dispatch
Managed emissions dispatch operates in a manner similar to economic dispatch
except that generating units are brought "on-line" with consideration of their emissions.
Currently, the emissions characteristics of generating units are considered only to the
extent that the cost of operating control equipment is reflected in the overall cost of
operation of each unit (i.e., its rank in the dispatch order).
Best suited to emission-based control programs, managed emissions dispatch could
operate under any of the other program types. With loadings- and effects-based programs,
this approach could create difficulties, however, since the spatial distribution of pollutants
would constantly change as the dispatching system responded to demand. To successfully
employ managed emissionsdispatch, a State air agency would need to work closely with the
central dispatcher to develop a new "sorting" protocol which would fundamentally revise
current dispatching practice. The development of the environmental dispatching protocol
would likely require expertise and resources not readily available at many air agencies.
Multiple issues need to be resolved before managed emissions dispatch could be imple-
mented.
Emissions Trading
If allowed by legislation, emissions trading could operate under any of the four
program types but would be best suited for emission-based programs. Theoretically,
emissions trading provides flexibility and potential cost reductions, while having minimal
impact on the achievement of the environmental objectives of a regional pollution problem.
Since pollution control costs vary from source to source, trading would allow sources that
could reduce emissions inexpensively to sell or lease additional emissions reductions to
sources that find reaching even their required reductions too costly. This would allow a
State to achieve lower-cost compliance.
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Barriers to trading include: considerable administrative and enforcement resources
for the air agency; participation of enough buyers and sellers; potential need for incentives;
and reluctance of utilities to participate due to uncertainty about how their PUC might
treat trading revenues and costs. Massachusetts investigated emissions trading in detail
in their STAR project and concluded that this approach looks promising for the control of
acid rain because potential savings increase as the trading area becomes larger and less
restricted. However, regulators reported trade-offs between source flexibility and regula-
tory oversight requirements; regulatory costs increase as trading becomes more complex.
Management difficulties expand with geographic scale, particularly when two or more
States become involved.
SUMMARIES OF STAR PROJECTS
Final reports of the STAR projects are now available with summaries prepared by the
States or EPA. Chapter 4 is a guide to the complete set of STAR project reports. Key words
relate to the focus of each State STAR project; these are grouped into seven broad
categories:
Control Approaches
Basic Information Requirements
Control Technologies
Other Compliance Strategies
Compliance Planning
Industrial Controls
Monitoring and Enforcement
Most of the STAR projects investigated more than one issue. Popular issues
investigated by the STAR projects include: planning criteria (17 projects), use of flue gas
desulfurization (scrubbers) (12), use of fuel switching (15), and development or validation
of emissions inventories (13).
Appendix A provides brief (1- to 4-page) summaries of the individual STAR projects.
USEFULNESS OF THE STAR PROGRAM
Without the force of regulation and recognizing the many regulatory activities that
demand States' attention, EPA's challenge was to constructively engage the States in a
contingency planning effort. EPA also sought information which most participants were
not accustomed to providing (i.e., to think creatively outside the boundaries of conventional
program requirements; to think about difficulties that might arise from managing a
regional pollutant like acid rain; and to report information gleaned from unsuccessful as
well as successful investigations that could be useful to other States).
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To facilitate interchange between States and their Federal counterparts, manage-
ment approaches were designed to enhance communication with the States as well as to
provide current information on the status of all projects. National workshops, informa-
tional memoranda, computerized public-access bulletin boards, and enhanced coordina-
tion with STAPPA/ALAPCO were used in addition to conventional report writing. To
determine the States' opinion of the usefulness and overall management of the STAR pro-
gram, EPA retained the third-party consulting firm of ERM-Rocky Mountain to solicit
views of the States on the program.
States identified workshops as the single most effective program management tool
and indicated that workshops surpassed initial expectations. The national workshops
served as excellent forums to initiate and continue personal contacts among STAR project
participants and EPA staff, and to exchange specific ideas on project direction and results.
Participants indicated that the workshops (particularly the second at Asheville) were
extremely effective in broadening program understanding and support and provided the
best possible mechanism to interact with peers to "brainstorm" implementation ideas.
Participants particularly appreciated the implementation planning exercise of the Asheville
workshop and suggested that the single most important transferable element from the
STAR Program is the use of workshops designed with a significant role for participating
States.
EPA's effort to involve STAPPA/ALAPCO from the beginning of the STAR Program
was identified as the second most successful management initiative. STAPPA/ALAPCO
helped focus the STAR program, reviewed State projects for funding, and provided on-
going communication with the States. This mechanism proved effective in increasing
communication with States and project "networking." STAPPA/ALAPCO sent a question-
naire to the States to solicit their views on the management of the STAR Program and
facilitated its return.
A criticism of the management approach of the STAR Program was the unusual level
of freedom provided participants to explore ideas and new approaches. In general, States
complimented the interactive management approach which generated a level of trust in
the process not always found in State/EPA relationships. Both States and EPA believe that
the Agency can benefit from the STAR experience in future relationships with States and
that the Agency should be alert to potential new program areas early enough so that
exercises like STAR may be utilized.
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CHAPTER 1
INTRODUCTION
In 1983, when EPA conducted a thorough review of the acid rain issue, it was apparent
that the problem as it was coming to be understood, did not match well with the existing
statutory authorities and institutions established to deal with air pollution. Although
solutions were being proposed, EPA was concerned that neither EPA nor the States were
well prepared to implement any then-current legislative proposals to control acid rain. It
also appeared that even though a decision to control acid deposition was not certain, the
substantial cost of this potential decision suggested that the prudent course was to
undertake some contingency planning.
This mismatch between the proposed solutions and existing infrastructure to carry
out those solutions appeared to be a function of 1) the nature of the acid rain problem, in
particular, its geographic scale, 2) the multistate operation of the principal sources of acidic
deposition, and 3) the jurisdictional limitations of state and local air pollution control
agencies.
GEOGRAPHIC SCALE OF ACIDIC DEPOSITION
Aunique combination of location of coal deposits, industrial development, technology,
population, geographic size of states, rainfall patterns, and glacial history create an acidic
deposition problem for the mostly thin granitic soils in the Northeast and Canada that are
downwind of major combusters of high-sulfur coal. By geologic circumstance, huge
deposits of high-sulfur coal are mined in the Midwestern U.S. and burned to produce
electricity and steam for industrial processes. Coincidentally, the combined climatologic
effects of planetary circulation, the jet stream, and the Great Lakes cause many weather
fronts (with attendant precipitation) to travel from the Midwest to the Northeast.
Combustion products (particularly sulfur dioxide and oxides of nitrogen) are emitted.
Some are carried by the atmosphere and transformed with the help of sunlight into sulfates
and nitrates and other sulfur-particulate-complexes, which then settle'or wash out of the
atmosphere. Some sulfur and nitrogen combustion products settle out of the atmosphere
as dry deposition closer to the combustion source. Transformations of gaseous sulfur
dioxide to sulfates and sulfur-particulate-complexes require three days, on average, to
occur. During this time, large-scale atmospheric motion transports the pollution 300 to
500 or more miles downwind (assuming typical trajectories), thoroughly mixing individual
plumes. Gaseous oxides of nitrogen convert more quickly than sulfur dioxide; therefore,
the effects of nitrogen emissions are seen closer to the source of emissions, but still typically
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100 to 300 miles away. At the longer downwind distances, the probability increases that
the converted combustion products will be washed out of the atmosphere by rainfall.
Once deposited, the effect of acidic combustion products is often masked by the ability
of many soils to neutralize or buffer the acidic deposition. The response of soils and
watersheds to acidic deposition is complex and continues to be investigated and reported
by the National Acid Precipitation Assessment Program (NAPAP).
While the greatest extent of damage is occurring on glaciated soils of the East, the thin
soils and watersheds of the West are also at risk because they have even less capacity to
neutralize acids. Many high-mountain lakes in the West are characterized as "granite
bathtubs," where the quality of lake water directly reflects the quality of local precipita-
tion. Even though many Western lakes are sensitive, they are not chronically acidic, and
current levels of acidic deposition are relatively low. Periods of temporary acidification and
recovery are documented in conjunction with spring snowmelt and summer storms, but
potential damage resulting from these episodes is highly uncertain. If SO2 or NOx
emissions were to increase substantially in the West, then the potential for damage would
increase.
Also, the soils of the South are currently adsorbing and retaining sulfur deposited
there, and at some point, when the soils become saturated, the sulfates will pass through
to the aquatic systems and acidify them. Recent surveys of lakes by the National Acid
Precipitation Assessment Program revealed no acidic lakes in the Southern Blue Ridge.
However, a complementary survey of streams in the Mid-Atlantic and Southeast did reveal
significant numbers of acidic streams in the Southeast region. A number of lakes were
found to be acidic in Florida, but the chemical composition of some of these lakes may be
largely related to land use practices and the natural decay of vegetation. Although acid
rain is not yet implicated as a direct cause of forest decline, concern exists about the health
of the forest resources in the Southeast, particularly because of the concentration of
commercial forests in that region.
MULTISTATE OPERATION OF THE SOURCES
More than two-thirds of total S02 emissions (23 million tons in 1985) and about one-
third of N0xemissions(21 million tons in 1985)come from electric utility sources. Because
of this and because of the inherent administrative difficulties and costs of controlling a
large number of smaller, and generally more stringently controlled, industrial, commer-
cial, and residential sources, virtually all proposed S02 reductions have been directed at
electric utilities. To control electric utilities for regional benefit requires knowledge of the
interstate nature of utility operations.
Electric utilities often serve customers in more than one state, and several large
utility holding companies cover multistate regions. Many utilities are also members of one
or more power-pools that facilitate the exchange of power among the member utilities.
Generating units in the power-pool are dispatched by a central controller based on minute-
by-minute evaluations of supply and demand and cost-of- generation. Demand is generally
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met first with the generating unit in the pool that is least expensive to operate. Increases
in demand are met by selecting (in dispatch order) additional generating units in order of
ascending cost of operation. Addition of pollution control equipment increases the cost of
operation. This usually lowers that unit's rank in the dispatch order and, therefore, its
utilization. Conceivably, a downwind State could apply controls to a generating unit
within its jurisdiction, only to have that unit used less frequently because the load shifted
to an uncontrolled upwind out-of-state utility. Without close interstate coordination, the
receiving State could experience both increased pollution levels and increased cost of
electricity to ratepayers. This and other examples (discussed more completely in Chapter
3) underscore a fundamental difference between acid rain and traditional pollutants: the
increased complexity of regulating interstate sources through existing state-wide institu-
tions.
JURISDICTION OF CONTROL INSTITUTIONS
Geographic Scope
Existing air pollution control programs rely heavily on the action of State and local
governments. The Federal Clean Air Amendments of 1970 engage States in an effort to
attain the national goal of protection of health and welfare more quickly. The current
Clean Air Act, Section 110, requires States to adopt and submit to the Administrator of
EPA, "a plan which provides for implementation, maintenance, and enforcement of" any
primary or secondary National Ambient Air Quality Standard (NAAQS) established by
EPA. Success of the current ambient air program is measured by attaining and maintain-
ing concentrations of traditional pollutants in the atmosphere at ground-level. The
original intent of this measurement protocol was to protect the health and welfare of the
most sensitive population at nose-level. At first, some pollution sources responded to the
concentration standard by crafting "solutions through dilution;" the early 1970s witnessed
the introduction of automotive air pumps and tall utility smokestacks as air pollution
control devices. While these responses may have accommodated the immediate goals of
attaining the ambient air standard, they did not limit the total mass of pollution entering
the atmosphere nor did the tall-stack response prevent long-range atmospheric transport.
Nonetheless, the primary focus of State control programs since 1970 remains the attain-
ment and maintenance of the NAAQS, carried forward by enabling State authorities
provided to each air agency by their respective legislatures to protect the health and wel-
fare of in-state residents.
Existing State authorities are designed to resolve in-state pollution problems, not
interstate. The current Clean Air Act is not well suited to accommodate the large
geographic scale of acidic deposition, nor does it provide sufficient authority to enable one
state to require emissions reductions from sources in another State without EPA assis-
tance. Few provisions are directed toward interstate pollution. Section 123 (1977
Amendments) was intended to reduce general atmospheric loadings by restricting the
dispersion benefits of tall smokestacks and other dispersion techniques. Section 126 of the
CAA provides authority which allows a state to "petition the Adminisitrator [of EPA] for
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a finding that any major source emits or would emit any air pollutant in violation of the
prohibition of SectionllO (a) (2) (E) (i)." This portion of SectionllO prohibits "any
stationary source within the state from emitting any air pollutant in amounts which will
prevent attainment or maintenance by any other state of any . . . ambient air quality
standard, or interfere with measures ... to prevent significant deterioration of air quality."
A debate over the intent of Section 126 centers on the question of whether this section is
intended to address localized problems (where a single-source contributes to violations of
the NAAQS just over the border of a contiguous state), or whether Sectionl26 provides
broad authority for multi-source emissions reductions over an entire geographic region.
Despite best efforts to deal with interstate pollution, current regulatory practice continues
to place the heaviest burden for attainment of ambient standards on the State in which a
violation occurs, regardless of the point of origin of the emissions which cause the violation.
Use of the existing State air agencies to control sources that typically operate at
multistate scales and have out-of-state impacts is generally beyond the jurisdiction and
authority of a single State air agency, and represents a mismatch of problem solution and
authority. In the absence of new Federal and State enabling legislation, controlling out-
of-state emissions could require regulators to establish either an interstate compact or an
interstate agency to determine and enforce specific requirements. Establishment of such
an interstate agreement or agency would most likely have to be ratified by state
legislatures and Congress.
Socio-economic Dimension
Unlike the control of traditional air pollutants where reasonably clear source-
receptor relationships and source culpability can be established on a local scale, allocating
regional emissions burdens presents State air agencies with an expanded scale of coverage
and an expanded socio-economic dimension to their control decisions. Programs for
regional control of SO2 are likely to resemble ozone control programs rather than tradi-
tional programs for attaining ambient standards.
An expected consequence of controlling utility sulfur emissions is that many sources
will switch from higher- to lower-sulfur fuels, with expected concommitant changes in coal
mining employment. Job losses in high-sulfur coal producing regions are likely to increase
steadily as SO2 emissions are reduced by the first 4 to 6 million tons due to fuel switching.
There are few additional job losses as S02 emissions are reduced more than 8 million tons
because additional reductions can only be achieved through technological controls such as
flue gas desulfurization (FGD or scrubbing), rather than by fuel switching. Even though
decreased mining of high-sulfur coal may be offset by increased mining of low-sulfur coal,
these fuel resources generally occur in geographically different areas (far enough apart
that miners would be forced to relocate).
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A NEW RESPONSE
All of these fundamental differences between acid rain and traditional pollutants
suggest that an institutional response to acid rain control might be fundamentally
different as well. Many conventional implementation issues will be complicated by the
interstate nature of the pollution, the multistate extent of the operation of emitters, and
the mismatch of scale between pollutant, sources, and the state-wide jurisdiction of the
regulating institutions.
THE STATE ACID RAIN (STAR) PROGRAM
From the concern that neither EPA nor the States were well prepared to implement
legislative proposals to control acid rain, EPA developed a concept to voluntarily engage
managers of air pollution control programs to examine implementation issues. The varied
experiences and perspectives of air directors were needed to develop a better understand-
ing of the potential difficulties and problems that might be encountered at all levels of
government if control legislation were passed by Congress.
In late 1983, the U.S. EPA, through its Task Force on Acid Deposition, specifically
recognized implementation and management issues as important to any acid rain
program, regardless of the shape that legislation might eventually take. This recognition
was supported by the the history of implementation of air pollution control programs in the
United States, which suggested that any effective acidic deposition control program would
rely heavily on the States for implementation. Atthattime, most Congressional legislative
proposals focused on emissions reductions that are planned and enforced by States.
In late November 1983, a concept paper proposed that EPA, with State and local air
pollution control agencies, undertake a project to work cooperatively with a volunteer
State to develop a prototype State acid rain control plan. In January 1984, in his State of
the Union message, the President announced that the Administration would work with the
States on acid rain issues; and in February 1984, EPA Administrator Ruckelshaus, in
testimony, elaborated on that commitment. By the Spring of 1984, the implementation
concern had evolved into a broader concept that would seek the perspectives of multiple
States.
EPA and the State and Territorial Air Pollution Program Administrators (STAPPA)
and the Association of Local Air Pollution Control Officials (ALAPCO) met in May 1984,
to discuss participation of State and local agencies in this effort. The mechanism for State
and local input and review was discussed along with methods for evaluating various
options for dealing with issues. By August 1984, the first in-depth compilation of (209)
potential implementation issues emerged as a document entitled "Potential Acid Rain
Control Program Implementation Issues." This document did not attempt at that point to
present options or solutions, but provided a comprehensive listing of issues.
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Congress authorized $3 million in State air grant funds (Clean Air Act Section 105)
for the development of "the technical and institutional foundations for future acid rain
control strategies." In consultation with STAPPA/ALAPCO, letters of invitation were sent
to State and local air directors to solicit proposals from each air agency. Many States re-
sponded with enthusiasm and, by November 1984, some $6 million in grant proposals were
received. EPA and the STAPPA/ALAPCO Acid Rain Implementation Task Force reviewed
the proposals, and EPA ranked them according to evaluation criteria. After consulting
with STAPPA/ALAPCO, the EPA made final selections and allocated $2.7 million to them
in December 1984. The remaining $300,000 was held as a contingency until December
1985, when it was allocated to projects. The first awards were made to New York,
Wisconsin, Connecticut, and the Northeast States for Coordinated Air Use Management
(NESCAUM) in March 1985. A total of 47 projects were funded over the course of what
become known as the State Acid Rain (STAR) Program.
Recognizing State participation as voluntary, EPA committed to keep the Program
"policy neutral," by deliberately taking no position on the policy question of whether or not
there should be an acid rain control program. Each STAR project was thoroughly reviewed
and changes were negotiated with each State on a case-by-case basis. Most work plans
were adjusted so as to better focus projects on the special constraints of the funding and
to integrate the projects to reduce (and in some cases, ensure) redundancy on issues. Some
proposals required modification to keep them policy-neutral; and several spawned follow-
up studies. Throughout the course of the STAR Program, EPA Regional and Headquar-
ters staff provided advice, but in general, States were left largely on their own to explore
ideas and new approaches.
When the STAR Program started, EPA found only one state actively planning for
contingencies and investigating acid rain implementation issues. The Maryland Power
Plant Research Program provided an excellent example of State-funded on-going strategic
planning with a mission of identifying and assessing emerging issues and future program
needs.
Since the STAR Program started, other similar studies have been initiated both
within and independent of State government. The State of Ohio started work outsideof the
STAR Program to investigate how Ohio might reduce S02 and NOx emissions. This effort
helped the State work with New York in the development of the Cuomo-Celeste Acid Rain
Proposal, an agreement between Governors Cuomo of New York and Celeste of Ohio for
mutual environmental benefit. The Ohio Office of the Consumers' Counsel released, in
July 1988, a report on the impacts of energy conservation on sulfur emissions reduction
programs for Ohio electric utilities, entitled "Clearing the Air: Using Energy Conservation
to Reduce Acid Rain Compliance Costs in Ohio."
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The Center for Clean Air Policy managed a project funded jointly by the Tennessee
Valley Authority (TVA) and the American Electric Power Company (AEP) to look quanti-
tatively at opportunities to substantially reduce emissions of SO2 and NOx through
aggressive conservation of electricity and improvements to generation efficiency. In
another study, the Center investigated how different control options may influence the
price of electricity and coal mining in West Virginia.
Given this background, Chapter 2 of this report provides a structure for evaluating
program implementation issues. Chapter 3 uses this structure to examine them as they
evolved through the conduct of the 47 STAR projects and through numerous discussions
with State officials.
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CHAPTER 2
IMPLEMENTORS1 CONCERNS AND PROGRAM TYPES
This chapter describes four general types of acid rain control programs and the
concerns that program administrators are likely to have if they were asked to carry them
out. The Program Types and Concerns are used to provide a foundation for Chapter 3
where the nature and significance of potential implementation issues are examined.
FOUR BASIC TYPES OF CONTROL PROGRAMS
A goal of all acid rain control proposals is to reduce or eliminate damage from acidic
deposition. However, the objectives that control proposals set for the program administra-
tor can be quite different. They can affect not only the cost and feasibility of implementa-
tion, but also the likelihood of achieving the goal.
Legislation can define program objectives broadly as in Section 115 of the current
Clean Air Act which simply requires governors "to prevent or eliminate ... endangerment
of the public health or welfare in a foreign country" when that endangerment is caused by
pollutants emitted in the U.S. Or, the legislation can define objectives narrowly as in
Section 111, which specifies detailed performance standards for specific kinds and sizes of
new stationary sources. For State program implementors, the specificity of Section 111
removes the burden of deciding the "right" level of control for each source, but at the
expense of limiting flexibility. The broadness of Section 115 provides tremendous
flexibility in developing an approach (to prevent or eliminate endangerment) yet imposes
a substantial administrative burden of analysis, plan development, and enforcement to
ensure that the objective is attained.
In 1984, in the absence of acid rain control legislation, EPA took the opportunity to
examine what implementation issues might arise in a future acid rain control program and
how they might differ from the issues presented by the current air pollution control
program. Fundamental differences in the scale and complexity of the environmental
problem itself suggested that different institutional responses might be appropriate.
In the process of investigating implementation issues through the STAR program,
a structure emerged which provides a convenient architecture for examining not only
regional pollutants like acid rain, but environmental control programs in general. This
taxonomy of control programs, as seen from an implementor's perspective, consists of four
basic types: source-based, emission-based, loadings-based, and effects-based.
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Source-based Control Programs
Source-based control programs are directed at the operation of emissions sources.
These programs emphasize the enforceability of control requirements. Meeting a specific
performance standard or emissions rate is the hallmark of this program type, as illustrated
by the example of Section 111 above. Other examples are provided by existing air pollution
control elements, such as Reasonably Available Control Technology (RACT), Best
Available Control Technology (BACT), Lowest Achievable Emission Rates (LAER, repre-
senting the best control performance achievable through state-of-the-art technology), and
emissions standards for cars and trucks.
Source-based programs are not necessarily linked directly to hardware or technol-
ogy. Specifications of an emissions rate (pounds of SO/ mmBtu, percent sulfur-in-fuel by
weight or by volume, grams of pollutant per mile traveled, for example) provide for a level
of performance without directly addressing the choice of hardware required to attain this
standard. Source-based programs are typically linked to the operation of a combustion
source at the unit-level, on a short-term basis, and are independent of the degree of unit
utilization. Total annual emissions from a facility could change significantly while still
maintaining an hourly rate or fuel specification. For example, under the Federal Motor
Vehicle Control Program, the emissions performance of an automobile is specified (in
grams of pollutant per mile), but the program does not limit vehicle use (total vehicle-miles-
traveled) and consequently does not limit total emissions per year.
One legislative proposal which focused heavily on the source-based approach was
Senate Bill S. 300, which was introduced by Senator Stafford in 1987. It called for
tightening performance standards for new stationary and mobile sources and establishing
stringent performance standards for existing sources to go into effect after thirty years of
source operation.
Under source-based control programs, the implementor is successful if each source
meets its performance standard. The implementor does not need to ensure that regional
emissions goals or deposition levels are achieved.
Emission-based Control Programs
Emission-based control programs focus on reducing total emissions over a defined
geographic area such as a state, a multi-state region or the entire nation. In an emission-
based program, the objective may be stated as an emissions reduction target (typically
tons-of-pollutant per year) or as an emissions ceiling. Responsibility for achieving the
emissions goal is usually assigned to the States for administrative reasons.
To manage an emission-based program, regulators must provide sources with
measurement protocols and collect data to estimate total emissions. One distinction
between source-based programs and emission-based programs is the averaging time over
which measurements are taken: emissions rates of source-based programs are linked to
source operation and are typically expressed over short averaging times (e.g., per hour-of-
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operation); emission-based programs are typically expressed over much longer averaging
times (e.g., on an annual basis). Day-long or week-long excursions above an emissions rate
can be accommodated easily in the longer averaging time of an emission-based program.
Another distinction beween the source-based approach and the emission-based
approach is the greater flexibility that regulators and affected sources have in choosing
emissions controls. Under an emission-based approach, sources may be able to use
emissions trading and leasing, fuel switching, changes in rates of production, installation
of control equipment, as well as receiving credit for emissions reductions resulting from
energy conservation efforts and efficiency improvements. As long as the total tonnage of
emissions is reduced by a specific amount or kept below a specified threshhold, the program
objective is achieved.
Pollutant Loadings-based Control Programs
With a pollutant loadings-based control program, the objective is to limit the amount
of a pollutant affecting the environment. For example, the current air program uses
National Ambient Air Quality Standards (NAAQS), which are typically expressed as mass-
of-pollutant per volume of ambient air. Meeting the NAAQS should protect the health and
welfare of the most sensitive individuals and the environment. For acidic deposition, such
standards (typically defined as mass per surface area; for example, kilograms of sulfate or
nitrate per hectare) could be set to ensure that adverse impacts of acid deposition would
not occur to sensitive resources.
Setting a deposition standard would not mandate a specific control technology for
a source or fix a level of emissions for a region. This flexibility enables regulators to select
from the same range of control strategies as the emission-based approach, but in addition,
the implementor can specify an emissions reduction necessary to meet the deposition
standard. A substantial administrative and scientific burden also accompanies this
flexibility since many combinations of source reductions and aggregate emissions levels
could achieve the standard under various meteorological conditions. Also, it may be
desirable to vary the standard to reflect the widely varying sensitivities of affected
resources in different geographic regions.
Regardless of whether a deposition standard is constant or variable, the technical
and scientific tools do not exist currently at the operational level to enable this approach.
For purposes of implementing this type of acid rain control program, operational state-
level, long-range dispersion models do not yet adequately simulate chemical transforma-
tions and air-mass trajectories. This, combined with lack of adequate knowledge of critical
damage threshholds for various species, has the result that few programs based on
deposition standards have been proposed.
Although S.1894, reported out of the Senate Environment and Public Works Com-
mittee in 1987, directs the study of acidic deposition standards, none of the Federal
legislative proposals to date uses deposition standards as an objective of a control program.
However, the State of Minnesota did establish a State control program based upon a
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deposition standard of eleven kilograms per hectare per year and specified that emissions
reductions are required only of those sources determined to be contributing to the violation.
Since Minnesota sources contribute only about 10% of current sulfur deposition, Minne-
sota air officials estimate that reducing emissions in other States is essential for attain-
ment of their deposition standard. Minnesota's lack of authority to control sources in other
States highlights one of the difficulties of achieving success with the pollutant loadings-
based approach.
Environmental Effects-based Control Programs
The emphasis of an environmental effects control program is to protect the most
sensitive human beings, flora, and fauna from the deleterious effects of pollution. Success
is measured by the health and quality of the sensitive resources themselves. For example,
for acidic deposition, program objectives might be expressed in terms of maintaining the
diversity and quantity of a fish population or the quality and productivity of a forest.
Meeting these biologic standards would add yet another layer of complexity to the job of
the program implementor.
Effects-based control programs would require complex analytic tools and data in
order to: identify sensitive areas and species; identify the level of pollution that each
species can tolerate without suffering deleterious effects; specify the biologic standard to
be achieved; monitor species and ambient pollutant levels to determine whether the effects
threshhold is exceeded; use a method (model) for linking effects to causes (points of
emission); and identify and ensure specific emissions reductions that are sufficient to
remedy the deleterious environmental effects.
With this program type, a State regulator would have great flexibility in devising
strategies so long as the net result is protection of sensitive resources. However,
administrative and scientific burdens would also be great because the implementor must
use and defend all the relationships noted above. In addition to all of the complexities of
pollutant-loadings based programs, effects-based programs would require intimate knowl-
edge of all organisms in the region affected by the pollution. These complexities are a
primary reason that no acid rain proposals have utilized this type of program.
Current air programs that come closest to an effects-based approach are Sections
115 and 165 of the Clean Air Act. Section 115 has as its objective the prevention or
elimination of the endangerment of public health or welfare in foreign countries from
pollution emitted in the United States. It defines only the effect-related objective and
leaves all subsequent steps to the implementors EPA and the States. Section 165 re-
quires that "air quality related values" be protected in wilderness areas and national parks
when new sources are permitted. Again, defining and meeting that objective is left to the
Federal implementors.
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Increasing Complexity
By examining the program types from the perspective of those charged with
implementation, it is clear that the job of implementation becomes more complex with each
layer of action and judgment required of the implementor, particularly when scientific and
regulatory uncertainties are large. As the length of the scientific chain of causal
relationships increases, so does overall institutional complexity. The greater the number
and complexity of administrative decisions, the greater the risk of challenge, and timely
implementation becomes less feasible.
CONCERNS OF PROGRAM IMPLEMENTORS
Utilizing insights gained from the STAR program, the balance of Chapter 2
describes the likely concerns of program implementors when confronted by the require-
ment to carry out a new control program.
Drawing from State and Federal air pollution control experience, a number of
"traditional" concerns are identified as important to managers when new programs are
instituted. Primary among these concerns are:
Adequacy of resources: financial, human, and technical
Administrative complexity
Interaction with/effect on existing air programs
Contentiousness of the new control program: equity and cost, flexibility, and
efficacy.
STAR investigations reinforced the importance of these traditional concerns and
identified new ones specific to acid rain control. Important "new" concerns were expressed
as "needs:"
Need for socio-economic decision-making in addition to air quality planning
Need to involve multiple agencies and designate a "lead" agency
Need for interstate cooperation.
By examining both traditional and new concerns of program implementors through
the structure provided by the Program Types, the implementation issues and institutional
responses to an acid rain control program presented in Chapter 3 should be clear.
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Traditional Concerns
Financial Resources
When program managers are faced with the prospects of incorporating a new control
program into an existing one, a universal concern is whether sufficient additional funds
will enable them to fulfill additional responsibilities and duties. A key issue in formulating
an administrative response to a new charge is whether the burden must be accommodated
within existing funding levels or whether the new charge brings additional funding for
implementation.
Human Resources
Parallel to the above issue, program managers are concerned whether the burden
of a new program must be accommodated by existing staff or whether the new charge
brings additional specialized personnel. If a program manager faced severe staffing
limitations, it would be necessary to determine whether current staff provides the "right"
mix of talent to implement the new program. Assuming that funding permits additional
staff, implementors are concerned with the size of staff required to implement; what "lead"
times will be required to hire new personnel; what level of staff expertise and skill will be
required to implement the program; what specialized training will be required; what
kinds of decisions staff will be expected to make; and how much judgment will staff be
required to exercise in implementing the program.
Technical Resources
Program managers are concerned about the adequacy of the technical infrastruc-
ture of their program and whether new or specialized equipment may be required. Typical
concerns are driven by the kind of demand (type of control program) that is anticipated to
implement the program (e.g., sufficient computer capability, monitoring capability, and
laboratory capability and access to analytic equipment).
Administrative Complexity
Administrative complexity is influenced by the number of decisions that are
required in implementing a program and the difficulties encountered in making those
decisions. Decision-making may be complicated by lack of information, conflicting
information, uncertainties in the quality and reliability of the data, an even weighting in
the balance of the "pros" and "cons" of the options, lack of clear alternatives, concern with
"downside" risk, and conflict of interest. The administrative complexity of a program also
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may be influenced by the amount of flexibility that an agency can exercise in implementing
it. Added flexibility often leads to greater complexity and greater regulatory responsibili-
ties, such as:
Selecting and defending a control approach
Establishing and defending a proper control level
Determining what data is necessary to implement, and then collecting and
analyzing it
Administering and monitoring all aspects of the selected control approach
(e.g., establishing an emissions trading protocol and tracking results; ap-
proving design of emissions controls and scheduling their installation)
Monitoring source compliance with emissions limits.
An administratively simple program can fail to achieve its goal and will need
revision if it is not crafted carefully to ensure that it goes forward smoothly and effectively.
Multiple revisions of a simple program can increase administrative complexity, too.
Effect on Existing Programs
Implementors are concerned with the effect that any new charge or responsibility
may have on their ability to successfully administer current responsibilites. They are
particularly concerned that the burden may be placed on existing staff if a new program
is added to the old, and the extra burden may hinder successful administration of existing
programs. Administrators also express concern that one program may conflict or interfere
with another. Since many sources are controlled for multiple pollutants and multiple
purposes, the potential for conflict or interference is great. Examples are abundant:
enforcement to meet an annual emissions target would need to coexist with enforcement
to meet a short-term ambient air standard. Administrators must reconcile these two goals
without creating confusion for the source and/or the enforcement staff. A new air program
can affect other environmental programs and emerging concerns: a scrubber installed for
attainment of ambient air standards may produce waste which complicates the job of
implementors seeking to improve the quality of ground water; baghouses installed to
reduce particulate emissions produce fly-ash which places additional burden on landfills;
scrubbers impose an energy penalty on the operation of an electric utility such that the net
heat rate is increased causing attendant increases in CO2 emissions, which affects global
climate.
Contentiousness of a New Control Program
Implementors are concerned with how smoothly a new program goes forward to
solve the problem it was designed to remedy. Administrators wish to minimize the
likelihood of conflict, protracted debate, or litigation from sources, environmental groups,
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consumer advocates, industry, and/or other State agencies. Conflict or protracted debate
diverts limited resources away from implementation and usually delays achievement of
the environmental goal. Contentiousness of a control program is a function of perceptions
of equity, flexibility, and efficacy of the control plan.
Equity. Implementors want to ensure that their control efforts are perceived as
reasonable and fair from the perspective of all affected parties. Most discussions of equity
center on how the costs of regulation are allocated and who will benefit. For local air
pollution problems, the polluter has traditionally paid for the cleanup, and the nearby area
has benefited. But under an acid rain control program, where source attribution would be
problematic and the benefits of control would fall over a large area (much of which would
be distant from the source), the issue of "who pays" is complicated. Opinions differ on how
to allocate the costs fairly and what role States should play in making these determina-
tions.
Flexibility. With the ambient control program, administrators see two kinds of
situations with two kinds of responses. In rural areas where large S02 sources dominate,
source culpability is relatively easy to determine. In such circumstances, the "flexibility"
that States exercise is limited to determining what remedy is reasonable to ask of the
identified source (i.e., what control equipment or control actions are appropriate). In
metropolitan areas, the sheer number of sources presents the State with a different kind
of "flexibility." In these circumstances, pollution controls could be placed on a multitude
of source types and sizes, and the air agency has considerable discretion in determining
which source(s) will bear a control burden and how that burden will be implemented. A
typical response of a control agency to excursions above the ambient SO2 standard is to
prescribe a common limit on the sulfur content of fuels for all sources in the entire
metropolitan region. For traditional ambient air programs, flexibility is a concern, but not
a preeminent one.
This traditional concern for flexibility takes on new importance with potential
control actions for acid rain because allocation decisions need to be made among candidate
sources as opposed to for a specific source or across all sources. Faced with allocating acid
rain controls among sources, many State implementors have expressed a desire for the
flexibility to choose among a pool of available controls with consideration of the economic
consequences of those controls on the particular company, industry, locale, and/or State.
Efficacy. Implementors are concerned with how well their programs solve the
problem(s) they are designed to remedy. Implementors want to be able to show that their
control programs are effective and worthy of being continued and supported. For
traditional control programs, ambient air monitoring serves to demonstrate the efficacy of
local control efforts; but with acid rain, it is harder to link changes in deposition with a
State's control activities.
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New Concerns
The fundamental differences between acid rain and traditional pollutants described
in Chapter 1 elevate some of the traditional concerns to much greater prominence; these
are expressed as "new" concerns. Central to these new concerns is implementors' belief
that air agencies may be required to allocate controls among a pool of candidate sources
without the supporting benefit of clearly defined source culpability. Driven largely by the
multistate nature of the pollutant, the interstate operation of its sources, higher economic
stakes, and a more obscure sense of the relationship between sources and receptors, new
concerns identified by participants in the STAR Program include: socio-economic decision-
making, multiple and lead agencies, and interstate cooperation.
Socio-economic Decision-making
Controlling acid rain shifts the emphasis of economic and social concerns and
increases their significance relative to the control of traditional pollutants. Particularly,
if the burden for making allocation decisions is placed on the States, air agencies may find
themselves in the unfamiliar position of supporting control decisions primarily on social
and economic grounds, rather than on air pollutant impact grounds, which is the primary
basis used in managing traditional control programs.
These additional responsibilities may require additional types of skills, and will
probably involve more and different participants than during previous efforts to control
conventional pollutants. For example, few air agencies have personnel with the skills
required to use economic models that estimate costs and employment impacts of various
acid rain control scenarios on the electric utility and coal industries.
Involvement of Multiple Agencies
Frequently, when a multifaceted problem is imposed upon an existing institutional
infrastructure (that was not designed to handle the problem), there is a mismatch between
the capabilities of the institutions and the problem. Task forces" and "ad hoc" committees
are often convened as a way of assembling the needed blend of disciplines. Often, technical
specialists with diverse backgrounds are drawn from the participating agencies.
Eventually, either an existing institution is broadened or a new one is created with
a specific mandate to ensure the right blend of expertise and staffing. Until a lead agency
emerges, however, the group can suffer from the stress of differing charges, responsibili-
ties, and mandates.
The differences and complexities of acid rain control outlined in Chapter 1 suggest
that fresh thinking is needed on the role of the State agencies (including State air agencies,
State energy offices, power plant siting boards, public utility commissions (PUCs)),
representatives from governors' offices and legislatures, utility and industry representa-
tives, environmental groups, consumer advocates, and Federal agencies, including the
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EPA, the Federal Energy Regulatory Commission (FERC), and the Department of Energy.
For example, in developing a plan to control acid rain, public utility commissions will
certainly be involved because most acid deposition control proposals focus on reducing SO2
emissions from the electric utility industry. Given the ex parte nature of most PUCs, an
open question is whether the PUCs should wait until the air agency's control plan is
complete before assessing the rate impacts, or whether PUC staff should participate in the
development and analysis of control options?
A primary role of a lead agency is to resolve problems which may arise where
multiple agencies have overlapping or conflicting interests and authorities. An inter-
agency agreement or new state legislation may be necessary to clearly identify and
empower a lead agency with primary responsibility within a State. Resolution of conflicts
between States may require Federal administrative or judicial intervention, or some
mechanism for interstate cooperation.
Interstate Coordination
Interstate issues are much more likely to arise under an acid rain control program
than under traditional air pollution control efforts because both the nature of the problem
and the operation of the primary sources causing the problem are interstate in scope.
Compliance plans developed in one State may be influenced readily by actions in
other States: if an out-of-state generating unit that was exporting power is closed, the
import "void" must be filled by the power-pool, with a likely consequence that additional
generation (and emissions) will be required in the importing state. In such a circumstance,
some type of regional or interstate coordination would be necessary to ensure that State
compliance plans are compatible and consistent. For highly integrated regions such as
New England, regional compliance plans might be a feasible way to ensure compatibility.
Interstate issues are likely whenever a utility serves more than one State, when a
utility is a member of an interstate power-pool, when a plant located in one State is owned
partially or completely by an out-of-state utility, or if there are a small number of emitters
in a region. One or more of these situations occur frequently, and most States face inter-
state issues to some degree.
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CHAPTER 3
IMPLEMENTATION ISSUES
The primary purpose of the STAR Program was to investigate potential implemen-
tation issues under a Federally legislated acid rain control program and, in the process,
better prepare the States and EPA to carry out such a program. Given that most legislative
proposals have focused on emission-based approaches, most of the STAR projects investi-
gated issues that could arise under that type of program. Because of their lower source den-
sity and less immediate need to seek reductions, the Western States project (WESTAR)
also looked at the implementation issues presented by a pollutant loadings-based program
type. Many of the projects, particularly those that focused on control options and costs,
would be applicable to all program types.
The following discussion summarizes the major implementation issues identified
through the STAR Program and relates them to the Program Types and Concerns outlined
in Chapter 2. Chapter 4 identifies specific State projects that address these issues.
ISSUES LINKED TO IMPLEMENTORS' CONCERNS
In general, the more complex actions and judgments required of the implementor, the
more resources will be required to develop, implement, monitor, and enforce a control
program. The adequacy of financial, human, and technical resources, and the complexity
of administering a program are closely related and may be considered together by
examining program elements which can be resource-intensive. The STAR program
identified the following as good barometers of resource requirements:
the type and number of sources to be controlled
the amount and quality of data necessary to support the control program
the difficulties of enforcement.
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Required Resources and Program Complexity
Selection of the Type and Number of Sources
As indicated in Chapter 1, existing large stationary sources of SO2 are the primary
concern of proposals to control acid rain. Pennsylvania and New York STAR projects used
data from emissions inventories to prioritize both the type and number of sources that
might be the subject of a control plan. Pennsylvania found that an SO2 emissions reduc-
tion of 30,000 tons per year could be achieved either by controlling one large power plant
or, alternatively, by controlling over 100 sources in six different industries.
Candidates for emissions control include stationary (utility, industrial, and commer-
cial), mobile, and area sources. As cogeneration and small non-utility power producers
play a larger role in future electricity supply, the distinction between utility and industrial
emitters may begin to blur. States with large cogeneration potential may want to consider
including nonregulated (electric generating) sources in the potential pool of source
categories. Any or all of these emissions source categories could be included within any of
the program types.
STAR participants emphasized controlling major stationary source emissions be-
cause Federal emissions-based proposals have specified "all fossil-fueled stationary
sources," included separate standards for utility and industrial stationary sources, and/or
covered only utility sources. Also, regulating a relatively small number of sources is more
manageable administratively and technically than controlling numerous area and mobile
sources.
In general, the narrower the coverage of a program (e.g., only utility sources) and the
fewer compliance options (e.g., only fuel switching and scrubbers allowed), the less complex
the program and, probably, the fewer resources required to implement. The broader the
coverage of the program (e.g., mobile and all stationary sources) and the more flexibility
allowed sources (e.g., trading emissions, using unproven control technologies, etc.), the
more difficult and resource-intensive the plan will be to administer. This relationship
between resource requirements and program complexity holds for financial, human, and
technical resources and overall development and administration of the program.
Administering a source-based control program would be relatively simple once
standards are established. The State regulatory agency's role would be confined to
identifying the sources to which legislation applies and ensuring that those sources comply
with the Federal requirements. Because the State would exercise little discretion, overall
administrative cost for a source-based control program would be the smallest of the four
program types. In contrast, under an emissions-based program, if States are provided
flexibility to determine the type and number of sources to control, regulatory agencies
would apportion emissions reductions among sources. States would then defend that
apportionment to withstand legal challenge from affected sources and finally ensure that
sources comply with the State control plan. Development of a control plan and a defensible
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apportionment would significantly increase the administrative complexity and require
more resources than a source-based program.
Both pollutant loadings- and effects-based programs contain an unavoidable inter-
state component (because of atmospheric transport) that creates a significant administra-
tive burden for regulators. This extra burden results from a greatly expanded pool of
candidate sources (both number and type), a need for more planning, interstate coordina-
tion, more data, more complicated models, and a far greater likelihood that the control plan
will be contended. Administrative complexity could increase dramatically because the
interstate element would require a level of monitoring and modeling more sophisticated
than any yet used to determine which sources (including out-of-state sources) are causing
deleterious effects. Apportioning emissions reductions to out-of-state sources goes beyond
the experience of most State air agencies.
The Western States STAR project (WESTAR) considered a pollutant loadings-based
program because the smaller number of sources in the West might allow for the identifi-
cation of emitters responsible for exceeding a deposition standard. In the eastern United
States, current modeling techniques and source density may make such programs imprac-
tical.
In some states, NOx emissions from mobile sources are major precursor contributors
to acid deposition. Particularly in the West, mobile and area sources are important
emitters of nitrogen oxides and may need to be included in a control program to secure
public support (WESTAR). A 1982 emissions inventory for the New England States indi-
cated that 60% of the N0x emissions were created by mobile sources, while 60% of the S02
emissions were from utilities. Emissions controls for new mobile sources are traditionally
the domain of the Federal government (an exception is California) and are not a traditional
control option available to States. For State regulators, control strategies for mobile
sources have been limited to implementing "Inspection and Maintenance" programs,
reducing vehicle use, and/or regulating fuel quality. However, States may elect to adopt
the tighter California standards as a means of reducing NOx emissions. The WESTAR
project specifically addressed the control of mobile sources as a viable option for a State
control agency. Some proposed acid deposition bills recognize the contributions of mobile
sources and have provisions for reducing tailpipe NO emissions via Federal regulation.
Data Requirements
The type of control program an air agency is asked to implement will influence the
complexity of data gathering and analysis. Of the four program types, a source-based
control program requires the least data for implementation. Unlike the other control
programs, a traditional emissions inventory is not essential for a source-based emissions
control program. A source-based program could be implemented with limited data that:
identifies the qualifying sources (type, size, and street address); identifies existing controls
and current emissions performance; and provides sufficient information to monitor
compliance.
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Many emission-based legislative proposals specify an emissions "baseline" as well
as intermediate determinations of emissions "milestones." To determine baseline emis-
sions, an inventory must be developed of actual emissions and not allowable emissions
(upon which many State permit programs are based). Alabama, Connecticut, Pennsylva-
nia, and the Western States developed or improved inventories of emissions sources as part
of their STAR projects. Other States, particularly Michigan, Indiana, and Illinois,
investigated procedures to verify emissions estimates with the sources and to reconcile dif-
ferences when found. The Metropolitan Washington Council of Governments investigated
and critiqued different methods of estimating emissions from area sources, which is
important in any determination of "baseline" emissions. The Ohio STAR project developed
a list of ten general data needs (comprised of numerous subcategories) necessary to provide
accurate evaluations of plant-specific control strategies. These efforts provide valuable
information about the magnitude of effort and resources required to adequately develop
and verify emissions inventories.
With emissions data in hand, State planners could set emissions limits to meet a
state-wide average emissions rate or apportion emissions reductions among the sources of
emissions. To make reasoned apportionments, States would require source-specific
economic and operating data and models such that the relative costs and benefits of various
compliance options could be evaluated with respect to each source as well as for the State
as a whole. The collection and analysis of this information will require skills not normally
found within State air agencies and may require involvement of both air agencies and
PUCs. PUC utility cost models can evaluate economic impacts of alternative compliance
options, but typically do not include emissions data. Air quality models typically lack the
capability to forecast the cost of various compliance options.
Loadings- and effects-based programs require accurate temporal and spatial knowl-
edge of emissions covering interstate regions. Development of a loadings-based program
requires greater data gathering and analysis than either source-based or emission-based
programs. Regulators will have to develop a sophisticated understanding of the sources
and their contributions to acid deposition within a State. To accomplish this, regulators
will have to:
Develop defensible standards for deposition of sulfate and/or nitrate, proba-
bly after identifying and understanding sensitive areas within a State.
Develop an accurate emissions inventory (probably interstate) and deter-
mine each State's contributions to violations of the deposition standard.
Apportion responsibility for emissions reductions to each contributing State
or source (probably using mathematical source-receptor models).
Model the impacts of apportioned emissions reduction.
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Develop monitoring protocols.
Monitor sensitive areas to determine compliance with the deposition stan-
dard.
Monitor compliance with emissions reduction obligations in every State that
contributes to violations.
In addition to all the requirements of a loadings-based program, an effects-based
program requires still more data and analysis. Regulators must also identify ecosystems
at risk and determine appropriate biologic indicators.
Institutional costs are often overlooked or overshadowed by the costs of control.
Depending on the type of control program that a manager is asked to implement,
administrative and institutional costs can be considerable. For example, in considering a
loading-based program, the Western States estimated it would take hundreds of thou-
sands of dollars and several years to develop and verify models necessary for source-
receptor modeling.
Enforcement
Enforcement would be straightforward under a source-based control program.
Checking the source to see that specified control equipment was installed and checking
performance of that equipment would be typical activities (e.g., stack testing, fuel
sampling to verify percent sulfur-in-fuel, tailpipe probes, operating logs, etc.). State
control requirements could be incorporated into existing State Implementation Plans
(SEPs) to provide EPA with an enforcement mechanism.
An important asset for implementing source-based control programs is further
development and wider deployment of continuous emission monitors (CEMs) to minimize
the enforcement burden and to further ensure source compliance. Current requirements
for CEMs are not uniform: new and existing sources are subject to different compliance
requirements; many agencies and sources believe that the current data requirements
imposed on the States and sources by EPA are redundant. PEI's investigation concluded
that CEMs are rapidly improving and that durability and reliability of CEMs are strongly
dependent on proper maintenance. Ironically, facilities with the poorest maintenance rec-
ord generally have the greatest need for CEMs (poor maintenace is often the cause of
emissions excursions). CEM technology is being used successfully abroad to verify
continuous compliance. PEI suggests a uniform Federal policy to reduce data handling
without compromising quality.
Emission-based programs could present additional enforcement burdens. Any
approach that allows emissions trading, leasing, or other more administratively complex
approaches (such as managed emissions dispatch) will require a significant additional
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commitment of enforcement resources. If reduction requirements are apportioned among
emissions sources, the regulatory agency could incorporate reduction commitments into
"permits to operate." The agency may be able to use existing staff and regulatory authority
to enforce compliance. If an emissions cap is specified, enforcement mechanisms should
match the geographic extent of coverage of the control plan (i.e., state-wide enforcement
for a state-wide cap; regional enforcement for a regional cap). If an annual or monthly
state-wide average emissions rate is specified, some means of checking progress and
making "running adjustments" must be incorporated to prevent an excursion at the end
of the averaging period. To avoid unpopular forced shut-downs near the end of an
averaging period, Massachusetts examined a concept of "Dynamic Emission Management"
with a goal of continuously tracking and, if necessary, adjusting the operation of sources
to ensure ultimate attainment of annual state-wide average emissions targets.
Enforcement of loading-based or effect-based programs must be viewed from an
interstate perspective, which may render them significantly more complex and resource-
intensive than either source- or emission-based programs. Emissions contributing to
violations of a loadings or effects standard will most likely come from multiple upwind
States and may require regulators to develop new enforcement mechanisms. Adequacy of
these enforcement mechanisms depends on interstate agreements or provisions in Federal
legislation that authorize interstate controls and enforcement mechanisms. The absence
of an effective Federal enforcement mechanism could result in the establishment of weak
State programs.
Minnesota's loadings-based control program specifies wet sulfate deposition stan-
dards and illustrates the difficulties of administering and enforcing multistate emissions
reductions necessary to achieve program goals. Minnesota's program, where intrastate
sources typically contribute less than 10% of total sulfur deposition at sensitive areas,
depends on obtaining enforceable reductions from out-of-state sources. Minnesota air
officials estimate that only substantial reductions from out-of-state sources would result
in attainment of the deposition standard at Minnesota's most sensitive site. Minnesota's
case underscores a need, with this type of program, to develop interstate agreements that
would (most likely) need to be ratified by State legislatures and the Federal Congress.
Interaction with Existing Air Programs
The principal acid rain precursors, S02 and NOx, are currently controlled by the
ambient program, and further control of these pollutants would have an effect on existing
air programs. At STAR workshops, most States indicated that source- and emission-based
programs would be relatively easy to integrate with an existing program but that more
complex program types may require establishing a separate program infrastructure
within and among States.
California's South Coast Air Quality Management District (SCAQMD) conducted a
STAR project that looked at extending the Urban Airshed Model beyond its traditional use
(of predicting NOx and ozone) to predict PM10, visibility, and dry acidic deposition as well.
This project was specifically designed to extend the use of existing analytic tools to examine
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inter-relationships of various control strategies for acidic formation and other existing air
quality control programs. This study concluded that inter-relationships are important but
that the extended model is not yet ready for regulatory use.
EPA's Region 3 Office (in conjunction with Region 5) is currently investigating the
relationship of the existing ambient air program to a potential acid rain control program
in the Tri-State region of Pennsylvania, West Virginia, and Ohio. This STAR project will
identify: the effect that emissions reductions (made for ambient purposes) may have on
acidic deposition; how emissions reductions made to attain the different goals of the
ambient program and the goals of an acid rain control program may be reconciled at the
source to avoid "double-hitting;" how enforcement of the ambient program might be
integrated with an acid rain program; and what role continuous emission monitors might
play in the design ofboth an ambient control plan and an acid rain control plan. This project
is on-going.
Contentiousness of Control Program
Equity
Development of acid rain control plans, which is required under all program types
except the source-based approach, presents State regulators with a dilemma of how to
allocate the costs of control equitably. The basic problems are defining "equity" and
determining to what extent equity considerations should influence the design of a control
plan. Other issues include whether consideration should be given to prior control efforts
and how much consideration should be given to financial impact of control on a given source
(i.e., lessening a reduction requirement for a financially troubled source(s)).
Equity has multiple meanings to a diverse group of affected parties: consumers,
regulators, sources, those affected by the pollution, ratepayers, fuel suppliers, etc. An
examination of how the costs of regulation are shared is central to most definitions.
Sources are concerned that Federal or State authorities may force one industry or State
to incur a disproportionate share of the cost of reducing emissions.
Likewise, the concept of "cost" is defined differently by affected parties. Expressed
narrowly, cost of a control program is simply the aggregate of individual plant control costs.
In States with severe acid rain damage, environmental improvement may be "credited"
against the cost of control so as to reduce the "net" societal cost of a control program. In
States with significant mining of high-sulfur coal, the cost of jobs lost may be added to the
cost of the actual control equipment, thus increasing total societal control costs. Economic
development agencies predict increased or decreased economic vitality and competitive-
ness of the State as a result of control actions. Electric utility ratepayers may express "cost"
only in terms of individual electric rates, etc. Largely because of these diverse perspec-
tives, the concept of control cost has been historically divisive in the national debate on acid
rain control and is likely to be equally divisive at the State level, centering on "cost to : I
whom."
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As typically envisioned under emission-based programs, a least-cost compliance plan
could be developed by first identifying all emissions sources (utility, industry, area, mobile
sources, etc.) and all possible control options at each source. The cost to install each con-
trol option at each source would be determined with the corresponding emissions reduc-
tion. The State would then rank the combinations of sources and controls from most cost-
effective to least cost-effective. A compliance plan might then consist of selecting the most
cost-effective options from the ranking until the state's emissions target is met.
Assuming uniform treatment under an emission-based program, industrial sources
could incur both the cost of their own emissions controls and a portion of the electric utility
controls through higher rates. Alternatively, assigning emissions reductions solely to
utilities shifts costs to ratepayers and subsidizes customers of polluting industries.
The WESTAR project concluded that an effective acidic deposition control program in
the West would include mobile sources because of their major contribution to total
emissions of NOx and the greater perceived equity. Not regulating mobile sources under
an emission-based program would shift the cost of NOx control entirely onto stationary
sources and their customers.
Emissions trading between utilities would allow for more equal distribution of utility
costs. However, any direct cost-transfer mechanism that would alter rates would be
problematic for the public utility commissions, whose charters (typically) prohibit explicit
transfers between utilities. In their STAR project, New Hampshire determined that
further control of the Public Service Company of New Hampshire's power plant would be
the most cost-effective approach in meeting state-wide sulfur reduction requirements.
This project raised the possibility of having smaller emissions sources reimburse the utility
for their share of reductions.
In theory, the loadings- and effects-based approaches have scientific equity because
emissions reductions would be required only from those sources specifically contributing
to violations of a deposition standard or causing damaging effects.
Flexibility
In order to implement a control program that goes forward smoothly, implementors
desire the flexibility to determine which sources are to be controlled, with consideration of
the economic consequences of those controls on a particular company, industry, locale, and
State. Further, implementors desire the flexibility to choose among a number of available
strategies and to select the most effective reduction strategy for their State.
Increasing flexibility can benefit the public by keeping costs down. STAR projects
support the notion that increased flexibility lowers the cost of compliance to emitters and
to their ratepayers and customers. However, lowered cost to emitters maybe balanced by
increased administrative cost to the control agency. Also, the more decisions and
administrative judgments made by the air agency, the greater the likelihood that concerns
of equity will dominate and possibly, the more contentious the resulting control program
will be.
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A source-based control program specifies which sources will be controlled and the
level of control to be achieved. Such an approach does not allow the States flexibility in
determining which sources are to be controlled and does not take into account the economic
consequences that meeting a prescribed standard could have on a particular company,
industry, or local economy. Under the source-based approach, the role for states is limited
to enforcing source performance. Source-specific standards have the benefit of reducing
administrative burdens and encouraging rapid implementation and control.
An emission-based control program may allow States the option of determining
specific control actions to be taken at each source or may allow individual emissions sources
the flexibility to chose the most environmentally effective or the most cost-effective
reduction strategy.
A State could determine that shutting down one source, installing scrubbers at a
second, fuel switching at a third, and doing nothing at the rest of State sources is the most
cost-effective combination of control options for the State as a whole. As mentioned above,
this approach would require the planning group to conduct detailed analyses of the costs
and benefits of control options at each source and for all sources in combination.
Considerable time and resources would be required. Despite the time and resources
invested in developing the plan, it still could be challenged by utilities, industries, or
ratepayers that felt they were bearing an unequal burden of total compliance costs.
Whether the State exercises flexibility or allows sources to exercise flexibility,
monitoring and enforcement mechanisms will be required. With State allocations, the
State would know in advance what compliance actions would be required, and thus, could
plan for monitoring these. With sources developing their own mix of controls, States would
have less prior knowledge of which compliance actions would be selected, thus raising the
possibility of inefficiency and under-utilization of monitoring equipment or enforcement
resources. Additionally, States might need specialized tools and/or experience for only one
or two sources, which could limit the number of compliance options that States allow
sources.
Loadings- and effects-based control programs also provide regulators with the flexi-
bility to select the most environmentally effective or the most cost-effective control
strategies. Controls would need to be sought only for those sources causing the loadings
or effects standard to be exceeded.
Efficacy
The successful control program will reduce environmental damage from acidic
deposition and will prevent future re-occurrence of damage.
A source-based approach has the certainty of establishing a level of performance for
controlled sources but the uncertainty of whether those control actions will sufficiently
improve the areas damaged by acidic deposition. No direct linkage between effects and
source performance is maintained, and some areas may be overprotected while others may
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lack sufficient protection. This approach does not limit emissions growth, but it provides
regulators with a program that is relatively easy to administer.
An emission-based program provides assurance that expected S02 and NOx reductions
will be achieved, but like source-based programs, it provides no direct linkage between
effects and level of emissions. Effectiveness of emission-based programs is related to the
quality of the analysis of various emissions reduction scenarios, regulatory supervision of
selected emissions control programs, and enforcement of a potentially diverse group of
control techniques.
Loadings- and effects-based control programs would control only those sources that
are predicted to cause violations of deposition standards or produce damaging effects.
Program effectiveness depends on States pinpointing and adequately controlling out-of-
state sources. Theoretically, these programs would require the least intrusive reduction
requirements, while producing the greatest environmental benefit. An effects-based
program would be administratively complex, but it would provide the potential benefit of
targeting and controlling a smaller number of sources.
Multistate Scale
State-based planning is complicated by the interstate nature of the transport of acid
rain precursors and the interconnected nature of the electric utility industry.
Nature of Utilities
Almost all utilities belong to one or more power pools that facilitate the economic
dispatch of power among member utilities. Some electric utilities have multistate service
territories and many are members of utility holding companies that cover large geographic
regions. Examples of multistate power-pools include the Pennsylvania, New Jersey,
Maryland (PJM) pool and NEPOOL in the New England States. Examples of multistate
companies include the American Electric Power Company in the midwest, the Southern
Company in the South, and the Tennessee Valley Authority (TVA).
Despite the interstate nature of utility operations, the retail sales of electric utilities
(accounting for 75 - 80% of total regulated sales) are regulated on a state-by-state basis.
(The Federal Energy Regulatory Commission (FERC) regulates rates for interstate
wholesale electric sales, wheeling rates, power-pool arrangements, and interstate electric
utility holding companies.) State PUCs must be conscious of interstate coordination and
cost-allocation problems. Control of emissions from utility plants may intensify the need
for interstate communication and coordination. The following examples illustrate the
types of problems that could arise:
A few generating plants located in one State are partly or wholly owned by
other utilities in neighboring States. The State in which the plant is located
could allocate a large emissions reduction to the plant owned by out-of-state
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utilities or serving customers in neighboring States, thus shifting the costs
of compliance to out-of-state ratepayers. Moreover, under existing mandates
to provide reliable service at the lowest possible cost, State PUCs could be
obligated to shift costs in the manner outlined above.
One State could select energy conservation as a compliance strategy and
actively invest in conservation programs. If the conserving customers are
served by a utility that is a member of an interstate power-pool, it is possible
that a reduction in emissions (due to conservation) could occur in a neighbor-
ing State. Thus, the State buying conservation measures would see no
change in its emissions, while another State would benefit from reduced
emissions.
A utility with excess capacity that sells power to utilities in neighboring
States could comply by shutting down an old plant, thus reducing the power
available for resale. This, in turn, could cause utilities in the neighboring
States to operate their own power plants more and increase their emissions.
If neighboring States do not accommodate (in their own compliance plans)
the anticipated loss of "imported" power, then their own plans could be
rendered inadequate.
Interstate issues arising from the electric utility industry would probably be least
significant with a source-based program. However, the interstate nature of the electric
utility industry becomes a significant factor in the other program types.
Regional Cooperation and Authorities
Implementors are concerned that, to be effective, they must have explicit authority
(as well as the practical means and resources) to compel sources to control emissions.
Given the interstate transport of acid rain precursors and the nature of the electric utility
industry and its existing regulatory structure, it is not possible to eliminate interstate
coordination problems such as those described above. Communication among states with
related interests might reduce the number and magnitude of conflicts among states. It is
doubtful that informal coordination and communication could completely eliminate
conflicts between States.
Formal interstate cooperative mechanisms could be established which might include
interstate compacts with a designated mediator to resolve significant conflicts. Alterna-
tively, regional planning authorities might provide an informal cooperative mechanism.
Unless some other agency is specified, the de facto mediator for interstate conflicts
would be the EPA since, under all acid rain legislation proposed to date, the Agency would
have responsibility for plan approval. However, EPA may not have the resources to
assume this role and does not have extensive experience with utility regulatory issues.
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The above options indicate how implementors might respond to current legislative
proposals. Alternative solutions require legislative "fixes" to provide explicit mechanisms
to foster communication among states and/or to resolve interstate issues and conflicts.
Possible options for handling interstate issues include:
Strengthen the statutory review role of States as part of EPA's plan review
and approval process. This would provide a mechanism for States with
economic as well as environmental concerns about the compliance plans of
neighboring States to express those concerns to the EPA.
Allow (or require) regional or multistate compliance plans in areas with
highly integrated power-pools. While this might reduce the number of
conflicts, it would not eliminate them entirely. It would increase the
complexity of the compliance plan and the planning process, and correspond-
ingly, increase the amount of time required to develop a plan (see "Timing").
Interstate or regional plans would complicate enforcement, thus highlighting
a need for a clear multistate enforcement mechanism.
Provide a process for neighboring States to establish an interstate commis-
sion to review compliance plans of member States. Such a commission could
provide a preliminary forum for airing and resolving interstate disputes over
implementation and enforcement.
Place the Federal Energy Regulatory Commission (FERC) in the role of
coordinator and adjudicator. FERC currently regulates wholesale exchanges
of power and is already familiar with inter-utility and interstate utility
regulatory issues. However, FERC does not have experience with air issues,
and this would be an additional administrative responsibility. Also, State
PUCs might resist casting FERC in the mediator role.
Explicitly designate EPA as coordinator and adjudicator and provide the
agency with the resources needed to carry out the role.
Develop an arbitration panel, made up of representatives selected from the
EPA, FERC, State air agencies, State PUCs, private industry, academia, etc.
A possible model for enabling procedures could come from the American
Arbitration Association. Authority for such a panel might conflict with
States' rights. Different combinations of these options are possible. For
example, EPA could be designated the ultimate mediator jalong with an
arbitration panel to provide recommendations to the EPA on specific inter-
state disputes.
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Multiple Interests / Lead Agency
There are a number of State agencies and other interested parties that may want, or
need, to be involved in developing a plan for controlling acidic deposition. These include
State air agencies, State energy offices, siting boards, coal or natural resource depart-
ments, public utility commissions, regional councils of government, representatives from
governor's offices and legislatures, utility and industry representatives, environmental
groups, and consumer advocates. Public utility commissions (PUCs) will certainly be
involved because most acid deposition control proposals focus on the electric utility
industry and consequent rate impacts.
Key parties need to be accommodated in the plan development process either formally
or informally. If involved formally, roles and responsibilities would need to be clearly
defined with sensitivity toward accommodating the diverse goals and constraints of the
participants due to different mandates or charters. For example, a charge of air agencies
is to meet Federal or State air quality standards, while PUCs are charged with ensuring
reliable electric service and financial viability of the utility company while providing
electric power at the lowest possible cost to ratepayers. For various reasons, some agencies
or groups may find it difficult politically, or impossible legally, to be active participants if
other parties are also participants. An example of this is that public utility commissions
and air pollution control agencies may be precluded from participating in meetings with
utility representatives unless the meetings are announced and open to the public. If
involved informally, the views of key parties could be incorporated via a public comment
procedure. Failure to involve affected interests could lead to delays in implementing the
plan, including protracted public comment, resistance to enabling legislation, and legal
challenges to the plan.
A primary role of a lead agency is to resolve conficts which may arise where multiple
agencies have overlapping interests and authorities. Resolution of conflicts between
agencies could be addressed through the development of interagency agreements which
delineate the responsibilities and authority of each participant. If interagency agreements
cannot be reached, a higher authority, such as the governor's office or the State legislature,
may be required to mediate and settle the dispute.
New State legislation maybe necessary to clearly identify and empower a lead agency
with authority that matches the geographic scale of the control program. If possible, the
lead agency should be the same agency that will plan, implement, monitor, and enforce the
control program.
Wisconsin and the Northeast States for Coordinated Air Use Management (NES-
CAUM) conducted STAR projects that brought together air agencies and PUCs. The
Western States Acid Rain Project provided a similar forum for air agencies in ten western
states and resulted in the formation of the on-going WESTAR Council to explore options
for working together on other air issues of regional interest.
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Establishment of interstate agreements is contingent on the willingness of States to
negotiate away some autonomy. Elected officials may be unwilling, in the absence of
specific Federal reduction targets and sanctions, to force in-state industries to incur
substantial costs to benefit citizens of other States.
ISSUES THAT CROSS PROGRAM LINES
Along with the issues linked directly to concerns of implementors discussed in the first
section of this chapter, numerous broad additional issues arise from examination of
different types of acid rain control programs. These broader issues include:
State Goals and Design Philosophies. To what extent could a State go
forward in designing a control program to meet the Federal legislative
mandate and, at the same time, achieve local goals of maximizing environ-
mental benefit or minimizing cost?
Credible Federal Default. What effect would back-up assurance of some
"control certain" have on the development of State control plans if provided
by legislation in advance of plan development?
Timing and Schedule Requirements. What implementation schedule
provides sufficient time for States to develop acid rain compliance plans?
What can States do in advance to prepare for plan development?
Energy Conservation. What role can energy conservation play in develop-
ment of compliance plans? How is conservation encouraged or discouraged
by compliance plans?
Plant Control Options. How can new Clean Coal Technologies be included
and encouraged in compliance plans? Will scrubber suppliers be able to meet
demand if legislation is passed, at what price, and with what delay? What
price premiums can be expected for low-sulfur fuels?
Managed Emissions Dispatch. How can managed emissions dispatch be
used as a control option? Can the existing (State) utility system effectively
implement emissions dispatch?
Emissions Trading. What administrative overhead is required of emis-
sions trading? To what extent will trading reduce the cost of compliance?
What mechanisms will be necessary to effectively implement emissions
trading?
Each of these issues is discussed below.
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State Goals and Design Philosophies
In the course of negotiating the scope and scale of the STAR projects, some States
became immediately concerned with data and models that might be required to implement
a program. One State expressly viewed the role of the State air program as analogous to
the role of a plant manager. This view limits the creativity of the air agency to an
examination of control equipment that could easily be acquired and installed at facilities
throughout the State. Other States started with a much broader question of the purpose
and goal of a control program. Given any type of control program and any portion of a
national control burden, a State could go forward designing a control program to meet the
letter of the legislative requirement and, at the same time, achieve State goals such as
maximizing environmental benefit or minimizing cost to ratepayers or to sources.
Analysts often assume that States, in developing their compliance plans, would
strive to control emissions in a manner resulting in lowest total compliance cost for the
utilities without consideration of related economic factors such as environmental
benefit or effect on employment and local industries.
Some States have additional goals or constraints that could influence development
of a compliance plan. New York State jexpressed an interest in developing a State plan that
would meet not only Federal requirements but would also provide maximum protection to
the acid-sensitive Adirondack region of that State. Alternatively, while fuel switching
might be a cost-effective control option for emitters, an overriding State concern might be
protection of the local high-sulfur coal mining industry. With sufficiently strong concern
for coal miners, a State could limit or prohibit fuel switching as a compliance option. This
situation was identified by Kentucky and Pennsylvania, where protection of the local high-
sulfur coal mining industry is important and could influence development of compliance
plans. Other State-specific goals might include minimizing impact on industry; minimiz-
ing rate impacts on "rate-sensitive" industries; or promoting energy conservation or
nonfossil energy sources.
Credible Federal Default
Default provides a Federally legislated "back-up" control requirement that would be
known at the outset, before States respond to legislation by developing control plans. A
default provision would specify some "control certain" in the absense of timely State action.
For a default provision to be credible, the Federal government must be able to implement
and enforce it without State assistance and with comparable environmental benefit,
tolerable economic and social costs, and a certainty of occurrence. Most default proposals
preempt the more flexible (and frequently, less-costly) approaches developed by States.
Because of multistate complexities, States are likely to encounter difficulties which
might either delay a compliance plan or cause it to be disapproved by EPA. In either event,
the interdependence of State plans would necessitate action by all States, either voluntar-
ily or involuntarily via default. Conceivably, a few States could benefit from a default
provision because it could relieve the State agency of making difficult allocation choices.
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Additionally, any source or group of sources within the State, which believes the default
controls to be more favorable than those developed through a State control plan, could
delay the State plan and consequently trigger the default provisions.
An important finding of the second national STAR workshop is that States, when
faced with a credible Federal default provision, would try to avoid the more restrictive
default and would make extra efforts to ensure the timely delivery of an approvable control
plan to EPA.
Timing
Results of working groups at the Asheville workshop indicate that some States could
require a minimum of 24 months (and preferably 30) to develop control plans. Since that
time, several States have indicated that because of the advance planning exercises of the
STAR Program, they are now in a better position to develop control plans if required, and
that the plan development period might be reduced somewhat perhaps to 18 to 24
months. On the other hand, results from a January 1989, workshop with State air agencies
and public utility commissioners indicate that existing utility regulatory requirements
might dictate more time for plan development. A typical State implementation time-line
and steps in the plan development and approval process are shown, with corresponding
estimates of time required by each step, in Figure 3-1. Results of a Massachusetts STAR
project indicate that the longer the implementation time, the greater the prospects of in-
corporating complex or innovative measures or controls.
Recent legislative proposals are more accommodative of State implementation time-
lines. Since January 1988, Bills introduced by Congressmen Cooper (H.R. 5211) and
Bonker (H.R. 5622), and the "Mitchell Compromise Proposal" which was not introduced,
allowed more time than earlier proposals for State planning (up to 24 months) and final
compliance (up to 15 years from enactment) to accommodate deployment of emerging
energy technologies.
States continue to question the ability of EPA to approve plans on a timely basis,
particularly if EPA were to receive all State plans within a 24-month period. A Wisconsin
STAR project with the midwestern PUCs and air agencies supported reducing emissions
in two phases to lessen planning bottlenecks and spread the implementation burden over
a longer period.
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Figure 3 -1: Implementation Schedule
EPA PLAN CRITERIA
AND GUIDANCE
STATE PLAN PREPARATION
EPA PLAN REVIEW/APPROVAL/
DISAPPROVAL
OPPORTUNITY FOR STATE CORRECTION
SOURCE DEFAULT PLAN
EPA REVIEW/APPROVAL/DISAPPROVAL
SOURCE DESIGN OF CONTROL EQUIPMENT
STATE APPROVAL
SOURCE INSTALLATION OF CONTROL EQUIPMENT
STATE CERTIFICATION
Time required
to implement (years)
8
10 11 12 13
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Depending on the type of control program being implemented, a number of factors (in
addition to steps identified in Figure 3-1) may contribute to the length of the planning
process:
development of an emissions inventory and related modeling
large number of participants in the planning process
interagency agreements
consideration and analyses of many control options some outside the tra-
ditional expertise of lead agencies
consideration of non-air quality goals, such as protecting industry
coordination with out-of-state agencies where interstate issues are involved
State legislative and administrative authorization for control strategies
procedural requirements, notice for review and comment, public hearings,
etc.
One Massachusetts STAR project suggested that the time required for acid rain
compliance plan development and approval could possibly be shortened by "parallel
processing" to provide EPA with intermediate results and allow EPA to interact with State
planning groups as the plan was being developed, rather than only after completion. At
the beginning of the STAR Program, the concept of "parallel processing" was new, but it
is now implemented routinely, particularly in New England.
Energy Conservation
Three primary issues surround energy conservation relative to acid rain control
plans: the total magnitude of reductions in electricity demand attributable to implemen-
tation of conservation measures; the relationship of these reductions in demand to
atmospheric emissions; and whether a State will use conservation techniques prospec-
tively to reduce future emissions, or retrospectively as control devices to reduce current
emissions.
Magnitude of Reductions Achievable
Estimates of reductions in demand attributable to energy conservation measures
vary greatly, mostly according to assumptions about the penetration of various measures.
Considerable effort outside of the STAR Program has been expended developing penetra-
tion estimates for consumers, industry, and utilities. Investigators include the Rocky
Mountain Institute, TVA, the Bonneville Power Administration (particularly the Hood
River Project), DOE, the American Council for an Energy Efficient Economy, the Center
for Clean Air Policy, the Princeton Center for Energy and Environmental Studies,
Lawrence Berkeley Laboratory, EPRI, the Alliance for Clean Energy, the Environmental
and Energy Study Institute, World Resources Institute, the Alliance to Save Energy, a
number of university-based groups, and others.
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In the STAR program, Massachusetts, NESCAUM, and Wisconsin specifically
investigated the role that energy conservation might play in an acid rain control plan.
These States and Ohio believe that energy conservation offers potential for reducing
emissions and/or the cost of control. Conservation techniques have a short payback period
for residential, commercial, and industrial sectors and may also produce savings by
eliminating or deferring capital construction of utilities. These States and Tennessee (with
TVA) indicate that the attractiveness of conservation to utilities is greatest in regions with
unmet demand (e.g., New England) and least in regions with excess generating capacity
(e.g., the Midwest) because implementing conservation measures may further increase
"excess capacity." Utilities try to minimize excess capacity because such unused capacity
produces no return on investment.
However, results of the Tennessee/TVA STAR project indicate that conservation
looks particularly attractive when very large generating units (nuclear) are taken off the
grid (for routine servicing, due to malfunction, etc.). If excess capacity does not cover
shortfall, make-up power must be purchased from neighboring power-pools. In this
situation, energy conservation measures would reduce demand for costly purchased power
and, consequently, would be more economically attractive to the utility.
Relationship of Emissions to Demand
Maryland and the above STAR projects determined that the relationship between air
quality and energy conservation is complex and may be counter-intuitive:
With economic dispatch, cleaner (more costly) units are usually removed
from the grid before the dirtier (and cheaper) units. Consequently, emissions
reductions do not always follow demand reductions. Particularly in areas
where the electric utility industry is highly integrated between States
through regional power-pools (e.g., New England, Pennsylvania, Maryland,
and New Jersey), adoption of a conservation program in one State may not
provide the intended emissions reductions in that State because of the
interstate economic dispatch of utility plants. If each State in a region were
to adopt conservation as part of each compliance plan, mutual benefits might
occur. These benefits could be fostered by development of regional emissions
control requirements and a regional compliance plan.
Since a utility must support capital investments by selling electricity, imple-
menting conservation measures may cause electric rates to increase so that
fixed costs may continue to be paid, particularly in areas with excess
generating capacity.
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One utility-sponsored conservation program involving appliance replace-
ment had the unexpected effect of increasing the demand for electricity and,
consequently, emissions because older appliances continued in service after
being "replaced" with energy-efficient models. This finding underscores the
importance of designing and determining the effectiveness of conservation
measures.
How States Might Accommodate Conservation in Control Plans
State air agencies may embrace conservation in two fundamentally different ways:
either prospectively to reduce future emissions, or retrospectively (as one might use control
equipment) to reduce past emissions levels. The ramifications for a State air agency are
significant.
If an agency uses conservation programs to reduce future emissions, there is no need
for enforcement or for protracted rigorous study of effectiveness or penetration of various
conservation measures. States simply make "best-estimates" of the effectiveness of the
measures and then turn to the task of implementing and committing their energies to
ensuring maximum effectiveness. Since States do not enforce against a projection, the
consequences of falling short of expectations are much less than if the performance of
conservation measures were being enforced. Discrepancies between actual and projected
emissions may be accommodated by adjusting the mix of conventional emissions controls
to supplement any shortfall in the performance of the conservation program. If the
conservation program exceeds expectations, conventional controls may not need to be so
stringent, or additional "room for growth" may be provided to new or expanding industries.
In the Northeast where States are facing a tight supply of electricity, use of conservation
may result in postponing new generating capacity but may not result in significant
emissions reductions.
If States use conservation measures as conventional controls to reduce existing
emissions levels, the need for certainty in the deployment and performance of conservation
measures presents a significant obstacle to their adoption by State air agencies. If a source
decides to utilize energy conservation measures to control emissions, the air agency will
seek reasonable assurance that it can firmly rely on this control. Further, the air agency
must provide for sufficient monitoring and tracking of the performance of conservation
measures so that defensible enforcement actions may be taken if necessary. In deciding
whether to allow a source to implement conservation measures, the air agency must fully
evaluate the potential emissions impact. Detailed conservation program data must be
developed and electric utility system dispatch models must be run, which require expertise
thatis not normally available in State air agencies. Public utility commissions and/or State
energy agencies might be a source for this type of expertise.
Because of the uncertainties in achieving the projected effect any given set of
programs will have on emissions, compliance plans that include conservation may need to
include contingency plans that are used if conservation does not achieve the estimated
effect in the required time frame. Sources often see contingeny plans as a discouraging
extra layer of complexity.
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57
Control Technologies
A wide array of controls is available to sources, ranging from relatively low technology
to relatively high technology. Many of the proven methods are familiar to air agencies and
new ones are emerging as clean coal technologies. A goal of all control technologies is to
reduce emissions as effectively as possible. Either an air agency or an emitter may
determine which technology best "fits" the required level of control and the unique
circumstances at a source. Once chosen, the air agency must ensure the performance and
maintenance of a control. Simple fuel switching may be sufficient to achieve small to
moderate emissions reductions; scrubbers (or an equivalent) are needed for large
reductions. New technologies promise greater control at less cost, but they present the air
agency and the source with a question of certainty (i.e., how can performance of an
unproven technology be assured?). Control techniques are important under any type of
acid rain control program and present implementors with a number of issues, including
performance, effectiveness, cost, and reliability.
Conventional Controls
A likely control option for many sources is substituting a lower sulfur content fuel for
the current fuel (typically, the substitution of low-sulfur coal, oil, or natural gas for high-
sulfur coal). Fuel switching is a clear option at boilers that can easily be converted from
one fuel type to another. Some boilers are designed for only specific kinds of fuels, which
complicates evaluation of their potential to meet emissions standards by fuel switching.
For an air agency to evaluate the cost-effectiveness of coal switching relative to other
control options, an estimate of future low-sulfur coal prices is helpful, but difficult to obtain
because the collective response of States to acid rain legislation will certainly influence the
price of low-sulfur coal. The extent of this influence cannot be known with certainty. Other
uncertainties center on the amount of under-utilized mine and coal processing capacity
that is available in the low-sulfur coal industry. Accurate estimates of future coal prices
may require expertise not typically found within State air agencies. Sensitivity analyses
could be warranted in States anticipating wide-spread switching of fuels to estimate risk.
Many STAR projects investigated control techniques and their costs. Project results
were reviewed by the Midwest Research Institute (MRI), and an overview of State efforts
was compiled entitled "Review of Methodologies for Estimating Control Costs for Acid Rain
Precursors." This report is part of the STAR record and reviews available methods for
estimating the cost of SO2 controls fitted to utility boilers including methods developed by
EPA and EPRI. The MRI document is intended to help air agencies identify cost
methodologies that may best fit their needs and resources.
The Kentucky STAR project investigated criteria for determining the feasibility of
S02 and NOX control technologies. Of fifteen initial criteria, only six were selected as most
useful to the State. Kentucky found criteria affecting the selection of SO2 and N0x control
techniques to be extremely interactive. Specifying a value for one criterion often defines
which of the remaining criteria will be most important in determining feasibility of each
control technique.
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58
Missouri developed site-specific evaluation criteria for retrofit of control equipment
to electric utilities, for fuel switching, and for scrubbing. Criteria include: cost and
characteristics of coals; transportation costs; boiler design limitations; effects of control
equipment on emissions of other pollutants and on thermal performance; space required
for retrofit; sludge disposal; and overall cost-effectiveness.
The Ohio STAR project utilized difficulty factors to determine the feasibility of retrofit
of various control technologies to existing facilities. These difficulty factors were developed
from cost-estimating guidelines prepared by EPRI and by NAPAP. Ohi o used these factors
to estimate capital and annual costs of retrofit.
The Florida STAR report provides valuable cost and reliability data on physical coal
cleaning, spray-dry FGD, dual alkali FGD, fluidized bed combustion, and limestone
injection multi-stage burners (LIMB). Kentucky found LIMB technology to be applicable
to 22 of 54 utility boilers examined in their study; Ohio and Missouri also examined LIMB
applications but did not develop detailed estimates because they considered the technology
"emerging."
Clean Coal Technologies
The Clean Coal Technology Program was created by Congress to assist the develop-
ment and commercial-scale demonstration of less polluting, more efficient, and less costly
control technologies for sources burning high-sulfur coal. Clean Coal Technologies (CCT)
include fluidized bed combustion boilers (FBC), advanced coal cleaning, advanced flue gas
desulfurization, limestone injection multistage burners (LIMB), and integrated gasifica-
tion combined cycle (IGCC) turbines.
These new technologies face three types of potential impediments:
Because technologies are new, estimates of cost and performance are uncer-
tain. Utilities are reluctant to take economic risks with unproven technolo-
gies.
Institutional problems of rate regulation feed utility reluctance to invest in
new generating facilities, including CCT.
Air quality regulations may potentially impede CCT deployment because
they may create confusion for the applicant, provide inadequate time for
compliance, and/or cause delay in permitting/approval.
Currently, economic, regulatory, and environmental incentives are being considered
to address these potential impediments. CCT could play a role under any type of acid rain
control program, but States and sources must decide whether CCTs will be incorporated
in the range of control options considered for each facility. Depending upon their cost, the
status of their commercial demonstration, and compliance deadlines in Federal legisla-
tion, States may want to provide for inclusion of CCTs in the control program.
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59
Managed Emissions Dispatch
Managed emissions dispatch operates in a manner similar to economic dispatch
except that generating units are brought "on-line" with consideration of their emissions.
Currently, the emissions characteristics of generating units are considered only to the
extent that the cost of operating control equipment is reflected in the overall cost of
operation of each unit (i.e., its rank in the dispatch order).
Best suited to emission-based control programs, managed emissions dispatch could
operate under any of the other program types. With loadings- and effects-based programs,
this approach could create difficulties, however, since the spatial distribution of pollutants
would constantly change as the dispatching system responded to demand. To successfully
employ managed emissions dispatch, a State air agency would need to work closely with
the central dispatcher to develop a new "sorting" protocol which would fundamentally
revise current dispatching practice. The development of the environmental dispatching
protocol would likely require expertise and resources not readily available at many air
agencies. This approach is not "business as usual" and would require care in implementing
to ensure its efficacy. Lack of careful implementation could create repercussions for the
State air agency and for the efficient operation of sources. Multiple issues need to be
resolved before managed emissions dispatch could be implemented.
A study by the Center for Clean Air Policy, "Acid Rain: Road to a Middleground
Solution," indicates substantial compliance cost savings associated with managed emis-
sions dispatch. The subject was investigated by Maryland and Wisconsin STAR projects
which concluded that managed emissions dispatch could reduce the cost of compliance in
States with excess capacity. However, generating and transmission capacity shortages
could limit the use of managed emissions dispatch. Lack of transmission capacity was
identified as the limiting factor for the use of this approach in the eastern U.S., specifically
mentioned in the NESCAUM STAR project. Wisconsin identified an inverse relationship
between managed emissions dispatch and stringency of reduction requirements (i.e.,
stringent control requirements lessen the value of this approach as a compliance mecha-
nism).
Emissions Trading
If allowed by legislation, emissions trading could operate under any of the four
program types but would be best suited for emission-based programs. Theoretically,
emissions trading provides flexibility and potential cost reductions, while having minimal
impact on the achievement of the environmental objectives of a regional pollution problem.
Since pollution control costs vary from source to source, trading would allow sources that
could reduce emissions inexpensively to sell or lease additional emissions reductions to
sources that find reaching even their required reductions too costly. This would allow a
State to achieve lower-cost compliance.
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60
Although a few legislative proposals suggested controlling one pollutant in order to
get credit for controlling another (i.e., trading NOx for S02), this approach has not been
considered recently because SO2 is linked to adverse environmental effects from acidic
deposition while the contribution of N0x remains vague. Any consideration of inter-
pollutant trading must await a better understanding of the role of NOxin acidic deposition
and its cross-relationship to ozone formation.
North Carolina and Massachusetts STAR projects found that, in general, the broader
the trading, the greater the cost savings, but the greater the administrative and enforce-
ment burden. The narrowest trading would be between units at the same facility. Broader
trading could occur among sources owned by the same company and located in the same
State. These trades would be the easiest to enforce because the required reductions for
each source could be aggregated into a total facility-wide or company-wide reduction.
Trading could be broadened to allow trading between sources owned by different compa-
nies but still located in the same State. The broadest trading envisioned would allow
trading between sources located in different States and either owned by the same company
or by different companies. Generally, trading is assumed to take place between utility
sources, although trading between utility and industry sources could occur.
Ideally, emissions trading could allow a State to achieve the least-cost compliance
strategy. However, there are barriers to achieving this ideal situation; administrative and
enforcement needs would be considerable. Additionally, efficient emissions trading
requires participation of enough buyers and sellers; emissions sources may need incen-
tives to participate; and utilities might be reluctant to participate due to uncertainty about
how their PUC might treat trading revenues and costs.
The difficulties of administration and enforcement are important to air agencies: An
example concerns two sources, one of which (the selling source) installs a scrubber. If, after
the trade, the scrubber operates only at partial capacity, against which source does the
State enforce (i.e., which source has first claim to the reduced emissions)? If the scrubber
or the scrubbed plant is shut down for extended maintenance, must both sources cease
operations, or just the controlling source? These enforcement questions become more
complicated as more players become involved. Would the State allow any selling source
to sell credits to more than one buyer, and a buying source to purchase credits from more
than one seller?
Trading between States amplifies administrative and enforcement problems. Two (or
more) air agencies and corresponding public utility commissions would be involved, and
enforcement issues may need to be allocated between States. While the Florida and
Maryland STAR projects identified cost benefits attributable to interstate trading, STAR
projects generally concluded that interstate trading would be difficult to implement and
enforce. The Massachusetts STAR project identified discrepancies between State rules
and regulations that would have to be reconciled before interstate trading could take place.
One of the NESCAUM projects also examined interstate trading and reached similar
conclusions. A study by the Center for Clean Air Policy ("Acid Rain: Road to a Middle-
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61
ground Solution," July 1987) indicates potential for considerable compliance cost savings
from trades involving units owned by American Electric Power (AEP) subsidiaries located
in five States.
In a similar study, the Tennessee STAR project, in concert with TVA, looked at
benefits and administrative costs of implementing an emissions "cap" at the plant-level,
the State-level, and at an interstate system (company) level. Tennessee concluded that a
system cap is the most cost-effective of the three and would reduce cost of compliance by
up to 50% over the plant-level cap. However, the study indicates that this scale of
implementation poses the additional requirement of cooperation among States. While all
three caps improve overall air quality, the plant cap produced the greatest overall improve-
ment.
A number of remedies were proposed by States to overcome some of the barriers to
implementation discribed above. Leases of emissions credits for a fixed period of time
might encourage otherwise reluctant sources to participate because sellers would be able
to reclaim the emissions credits at a future time when and if the source needed them for
growth. Public utility commissions could address these concerns directly through devel-
opment of sample contracts and advance hearings on trading costs.
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CHAPTER 4
SUMMARIES OF STAR PROJECTS
Between 1984 and 1988, EPA funded 47 State Acid Rain projects. Two projects were
cancelled and most of the remaining 45 projects were completed with final reports
prepared. To prepare this final report, summaries of all projects and final reports were
reviewed. Figure 4-1 lists STAR projects that have summaries available and indicates the
focus of each project. Some projects are missing from the list because neither a summary
nor a final report were available. Missouri and WESTAR provided a single summary for
more than one project.
A set of "key words" was developed to identify the focus of each state STAR project.
Key words were grouped into seven broad categories:
Control Approaches
Rate vs. Target
NOx Reduction
Basic Information Requirements
Emissions Inventory
Deposition Modeling
Control/Cost Modeling
Control Technologies
FGD Scrubbers
New Technologies
Coal Cleaning
Other Compliance Strategies
Fuel Switching
Energy Conservation
Emissions Trading
Environmental Dispatch
Life Extension
Plant Retirement
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64
Compliance Planning
Planning Criteria
Planning Constraints
Regional Approach
Utility Commissions
Public Perceptions
Industrial Controls
Monitoring and Enforcement
Most of the STAR projects investigated more than one issue. Popular issues inves-
tigated by the STAR projects include: planning criteria (17 projects), use of flue gas
desulfurization (FGD/scrubbers) (12 projects), use of fuel switching (15 projects), and
development or validation of emissions inventories (13 projects).
The STAR projects summarized in alphabetical order are based in part on summaries
prepared by the states or EPA and augmented by independent readings of final reports by
ERM-Rocky Mountain. Table 4-2 provides a complete list of STAR project reports.
Appendix A provides brief (1- to 4-page) summaries of the individual STAR projects.
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TABLE 4.2 -- Reports of STAR Projects
Alabama
Connecticut
Connecticut
Connecticut
Florida
Illinois
Illinois
Indiana
Kentucky
Maryland
Maryland
Alabama Department of Environmental Management, Sulfur
Dioxide and Nitrogen Oxide Emissions from Industrial and
Utility Sources in Alabama from 1980 to 1985. July, 1986.
Chmura, Thomas J. and Laforte, Joseph D., for the
Connecticut Department of Environmental Protection,
Assessment of Economic Implications of Connecticut and
Federal Sulfur Dioxide Control Policy Options. August, 1987.
Chmura, Thomas J. for the Connecticut Department of
Environmental Protection, A Survey of Connecticut Residential
Electricity Customers' Perceptions of Acid Rain Issues.
March, 1987.
Chmura, Thomas J. and Laforte, Joseph D., for the
Connecticut Department of Environmental Protection,
Projected Sulfur Oxide Emissions in ConnecticutStatus Quo
and Revision to 0.5% Sulfur Content. July, 1987.
Florida Department of Environmental Regulation, Acid Rain
Control: A Cost Estimation Model for Florida. December, 1987.
Illinois Environmental Protection Agency, The Illinois
Environmental Protection Agency STAR Data Base
Management System User's Guide. February, 1988.
Illinois Environmental Protection Agency, Report on the
Methods. Procedures, and Problem Resolution for Compiling
the Non-Utility Sulfur Dioxide Emissions Data Base for the
Illinois Environmental Protection Agency STAR Project.
November, 1987.
Indiana Department of Environmental Management,
Emission Inventory Verification. February 26, 1988.
Kentucky Department for Environmental Protection, Kentucky
State Acid Rain (STAR) Project. December, 1987.
Maryland Department of Economic and Community
Development and BEST Consulting, (Draft) Statewide Caps on
Sulfur Emissions in Maryland. July 24, 1986.
ERT for the State of Maryland, Description of the Emissions
"Cap" at Westvaco Corporation's Luke Mill (Luke. Maryland)
and Discussion of Possible Extension of this Emission Control
Approach to Other Maior Industrial Sources. August, 1986.
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Table 4.2 (continued)
Massachusetts
Massachusetts
Massachusetts
Massachusetts
Massachusetts
MWCOG
Michigan
Missouri
Missouri
NESCAUM
NESCAUM
NESCAUM
Massachusetts Department of Environmental Quality
Engineering, A Methodology for Evaluating Acid Rain Control
Strategies A Massachusetts Case Study. July, 1988.
Massachusetts Department of Environmental Quality
Engineering, Development and Testing of a Planning
Approach to Acid Deposition Control. February, 1987.
Massachusetts Department of Environmental Quality
Engineering, Dynamic Emissions Management for Acid
Deposition Control. June, 1987.
Massachusetts Department of Environmental Quality
Engineering, Emissions Trading Within Acid Deposition
Control. October, 1986.
Massachusetts Department of Environmental Quality
Engineering, Evaluation of Options for Acid Deposition Control
Program Regulations. April, 1988.
Metropolitan Washington Council of Governments, Estimation
of 1985 Area and Mobile Source Emissions of Sulfur Dioxide
and Oxides of Nitrogen in the Washington. D.C.. Metropolitan
Area. March,1988.
Michigan Department of Natural Resources, Emission
Inventory Verification Procedures. March, 1988.
Energy Ventures Analysis, Inc. for the Missouri Division of
Environmental Quality, Cost-Effectiveness Analyses of S02
Reduction Alternatives at 13 Selected Missouri Utility
Powerplants. July, 1986.
Energy Ventures Analysis, Inc. for the Missouri Division of
Environmental Quality, Cost-Effectiveness Analyses of SO2
Reduction Alternatives at 3 Missouri Primary Lead Smelters.
August, 1986.
Northeast States for Coordinated Air Use Management,
Appropriate Emission Control Techniques for the New
England States. December, 1986.
Northeast States for Coordinated Air Use Management,
Maintaining State Emission Levels. December, 1986.
Northeast States for Coordinated Air Use Management, Air
Quality and Energy Conservation: Cutting the Cost of Clean
Air. September, 1988.
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Table 4.2 (continued)
NESCAUM
New Hampshire
New York
New York
North Carolina
Ohio
Pennsylvania
Pennsylvania
SCAQMD
Tennessee
Tennessee
Northeast States for Coordinated Air Use Management,
Education and Communication Between the New England Air
Quality Control Divisions and Public Utility Commissions.
August, 1987.
GCA Corporation for the State of New Hampshire, (Draft-
Final) Development of a Methodology to Evaluate Costs and
Impacts of Several Acid Rain Control Strategies in New
Hampshire.
New York State Department of Environmental Conservation,
Evaluation of Sulfur Dioxide Emissions Reduction Strategies
from New York Utilities - A Guide for Other States. January
29,1988.
New York State Department of Environmental Conservation,
Procedures for Estimating Statewide Sulfur Dioxide and
Nitrogen Dioxide Air Emissions. September, 1986.
North Carolina Department of Natural Resources and
Community Development, Alternative Emission Offset
Programs. September, 1987.
PEI Associates, Inc. for Ohio Environmental Protection
Agency, Estimation of the Cost of Reducing Sulfur Dioxide
Emissions in Ohio (Volume D. October, 1987.
E.H. Pechan and Associates, Inc., for the Commonwealth of
Pennsylvania, Pennsylvania STAR Project-Phase I: Data
Base Refinement. July, 1987.
E.H. Pechan and Associates, Inc., Pennsylvania STAR
Project-Phase II: Strategy Development. July, 1988.
South Coast Air Quality Management District, Development of
a Photochemical Air Quality Model with Extensions to
Calculate Aerosol Dynamics and Visibility
(Project Summary). September 8, 1987.
Tennessee Valley Authority, Tennessee State Acid Rain
Project: A Study of S02 Emission Reduction Strategies for a
Multistate Utility. November, 1985.
Midwest Research Institute, Tennessee Acid Rain Project.
March 27, 1987.
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Table 4.2 (continued)
Vermont
WESTAR
WESTARI
WESTAR
Wisconsin
Wisconsin
MRI, Inc.
PEI, Inc.
Vermont Air Pollution Control Division, Sensitivity to
Alternative Maintenance Plan Provisions in a State with Low
Emissions. March, 1987.
ERM for WESTAR, Analysis of Options for the Implementation
of an Acid Deposition Program in the Western U.S.. March 31,
1988.
Gaia Associates for the Western Governors' Association,
(Draft) An Assessment of Existing Regulatory Mechanisms for
Controlling Precursors of Acid Deposition in 12 Western
States. Phase I - Task D. September, 1986.
PEI Associates, Inc. and E.H. Pechan and Associates for
Western Governors' Association, (Draft) Western States Acid
Deposition Project - Phase II: Technical Feasibility and Cost of
Obtaining Further Reduction in SC>2 and NOx Emissions from
Existing and New Sources. Volumes I and II. October, 1987.
Wisconsin Department of Natural Resources and Wisconsin
Public Service Commission, The Potential Role of Public
Service Commissions (PSC's) in Implementing National Acid
Rain Control Policies.
Wisconsin Public Service Commission, STAR Report. October,
1987.
Midwest Research Institute, Inc., Review of Methodologies for
Estimating Control Costs for Acid Rain Precursors (Final
Report). September 30,1987.
PEI, Inc., Issues Associated with the Expanded Use of CEM's
for Potential Acid Rain Emissions Reduction Initiatives. April,
1988.
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CHAPTER 5
USEFULNESS OF THE STAR PROGRAM
This chapter examines the EPA STAR Program and highlights management ap-
proaches that were used because of the special nonregulatory nature of the effort. A third
party solicited reactions to the program from the States, and the results are presented in
this chapter.
THE CHALLENGE
Unlike most pollution control programs that are set in place hurriedly in response to
legislative deadlines, the STAR Program was established with only the threat of legisla-
tion. The absence of actual control legislation allowed time for an examination of issues
that could potentially confront program administrators if they were asked to implement
a major control program. Recognizing the differences between acid rain and traditional
pollutants, the EPA sought to discover how these differences (see Chapter 1) might affect
the structure of control programs and how the States might implement potential Federal
legislation in this area.
The STAR Program was unique because it examined implementation issues before
legislation passed, and it engaged the parties likely to have primary responsibility for
carrying out a national control effort, the State air agencies. Without the force of
regulation, EPA's challenge was to constructively engage the States, while recognizing the
fullness of on-going regulatory activities that demand States' attention.
The STAR Program went forward with a commitment to remain "policy-neutral" by
taking no position in favor of or opposing acid rain controls. Under that broad commitment,
the STAR Program was further commited to: technology transfer (sharing findings)
among the States; an emphasis on clear and concise reporting; and a belief that positive,
useful information could be gleaned from failed attempts and unsuccessful investigations,
as well as from approaches that proved successful. States were encouraged to experiment
and to expand the boundaries of traditional responses and to think about how the problems
that might be presented by a regional pollutant like acid rain (and solutions to those
problems) might be different from the familiar ambient program.
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THE TOOLS
To facilitate interchange among States and their Federal counterparts, new and
expanded management approaches were employed from the beginning of the STAR
Program to engage a national network of air pollution professionals at all levels of
government. These approaches were designed to enhance communication with the States
as well as to provide information on the status of all projects. Interim progress and final
reports were utilized alongside such additional approaches as national workshops,
informational memoranda, a computerized public-access progress tracking bulletin board,
frequently updated lists of State and Federal STAR contacts, enhanced coordination with
the EPA Regional Offices, and increased communication with STAPPA/ALAPCO (State
and Territorial Air Pollution Program Administrators/Association of Local Air Pollution
Control Officials).
To determine State opinion of the usefulness and overall management of the STAR
Program, EPA retained a third-party consulting firm (ERM-Rocky Mountain) to solicit
views from the States. ERM formed a program review team to coordinate the effort and
started by reviewing management documents produced by the STAR Program. A meeting
to obtain State comment was held on May 18,1988 in Washington, D.C. in conjunction with
STAPPA/ALAPCO and was followed by individual interviews with State representatives.
Finally, a survey initiated by STAR management was sent to the States (State program
directors and key project staff) through STAPPA/ALAPCO in November 1988, to deter-
mine their opinions of the program and EPA management effort. A copy of the State survey
and results are presented in Appendix B.
THE OPINION OF THE STATES
Management Approaches
Increased communication with STAPPA/ALAPCO and the national workshops were
regarded by States as the most important and successful of the EPA management tools,
and these are discussed separately. Wisconsin believed the informational memoranda,
called STAR UPDATES, were primarily important to air pollution control officials, staff,
and interested parties not actively involved in the STAR Program. For those fully involved
in the STAR Program, Wisconsin preferred personal discussion with EPA Headquarters
staff for timely and relevant information. Other States concurred that the informational
memoranda were more important for individuals less directly involved.
Likewise, States suggested that STAR-TRAK, the computerized EPA management
tool (of project status, STAR contacts, and deadlines) served as a valuable public-access
communications vehicle on project status, but it was useful primarily for administrators
and others not directly involved. STAR-TRAK was believed to be most important for
monitoring project status and administering grant commitments. Some States believed
STAR-TRAK to be an important tool for the Regions but not for the States. STAR-TRAK
appears to have served a useful overall function by providing any interested party with
detailed project and fiscal status.
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73
Some participants indicated a general dislike of all management tools like STAR
UPDATE and STAR-TRAK, but the majority believed that they were useful for specific
audiences and that they can effectively support efforts like the STAR program.
Role of the EPA Regional Offices
Although the EPA Headquarters STAR staff believed that several of the Regional
Offices played a constructive role with the States during the STAR Program (particularly
Regions 1,4, and 5), the States indicated that the Regional role was not significant for most
project activities and was limited (except for Region 1) to providing grant money and pe-
riodically monitoring expenditures. This difference of perceived role for the Regions may
indicate a need to better define future roles for voluntary programs developed by the
Agency. For regulatory activities, the Regional role appears to be well-defined.
Role of STAPPA/ALAPCO
EPA project managers sought involvement of STAPPA/ALAPCO from the beginning
of the STAR Program. While the Agency as a whole has made tremendous strides in recent
years in their understanding of and involvement with the National Governors' Association
and other Executive Branch Organizations, the STAR Program managers, from the
beginning, utilized STAPPA/ALAPCO to help develop the direction of the STAR Program,
select State projects, and provide on-going communication with the States.
Early in the Program, EPA Headquarters and Regional Office staff developed an
initial list of "Potential Acid Rain Control Program Implementation Issues," and shared
the product with the States through STAPPA/ALAPCO's Acid Rain Implementation Task
Force. Later, STAPPA/ ALAPCO provided suggestions to EPA in the development of
evaluation criteria by which projects were selected for funding. Following EPA's selection,
STAPPA/ALAPCO's Task Force reviewed and concurred with EPA's ranking of the
proposals. EPA initiated awards for 13 projects and agreed to defer the remainder. In
December 1984, during the semi-annual meeting of STAPPA/ALAPCO, the membership
endorsed the Task Force recommendation to concur with EPA's ranking of the remaining
proposals. As a result of this initial interaction, and through continuing interest, STAPPA/
ALAPCO remains instrumental in assessing the importance of State studies of emerging
issues.
STAPPA/ALAPCO's Task Force proved to be a key sounding board for EPA staff
ideas and facilitated communications with the States. STAPPA/ALAPCO staff partici-
pated in the STAR workshops and helped organize a meeting with State and Local Air
Officials and the STAR Program staff onMay 18,1988. This meeting led to the State survey
(Appendix B) and follow-up interviews with States to solicit their views on the manage-
ment of the STAR Program.
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74
Coordination with STAPPA/ALAPCO demonstrated benefits and proved to be a very
effective way to increase dialogue with States and to provide increased project "network-
ing." This approach can work for regulatory program activities as well as for voluntary
efforts like STAR.
National STAR Workshops
Based on State interviews, the single most effective program management tool was
EPA's use of workshops. Both national workshops emphasized involvement of State
project staff and provided an important forum for one-on-one contacts between STAR
project participants, EPA staff, and other interested parties.
The first workshop was held in Pittsburgh, Pennsylvania on November 19-21,1985.
This workshop featured an overview of Federal legislative proposals to control acid rain,
addressed the background of the STAR Program, and identified attributes of a successful
project. Even though many projects were underway, none had yet produced significant
findings and most projects were still maleable and could incorporate suggestions from the
workshop. In addition, the meeting provided an excellent opportunity for participants to
discuss current project efforts and to exchange ideas on future activities. "Proceedings of
the First STAR Workshop, Pittsburgh, Pennsylvania, November 19-21,1985," documents
this workshop.
The second STAR workshop, held in Asheville, North Carolina on October 20-23,
1986, was coordinated by the States of North Carolina and Wisconsin. While many
participants believed the Pittsburgh workshop established important contacts, they
believed the Asheville workshop provided valuable information on anticipated project
results. The clear focus of this workshop was sharing program results to date, although
the status of Federal research and legislative proposals was reported as well. By the fall
of 1986, specific issues and ideas were sufficiently developed that detailed substantive
discussions could occur.
With this in mind, the second workshop was carefully structured to maximize its
usefulness to participants, individual projects, and to the STAR Program. As background,
an evening session provided an opportunity to review judicial, legislative, and administra-
tive events of the preceding year relating to the acid rain issue. The first full day of the
workshop was dedicated to reviewing current and anticipated findings of the individual
STAR projects. A second day was designed to interactively apply the collective knowledge
and experience of the participants to a mock program implementation exercise using small
workgroups. These workgroups were carefully chosen to ensure that membership included
a representative cross-section of States (i.e., both "sending" and "receiving" States;
industrial and non-industrial; geographically diverse; etc.). Four workgroups defined the
actions States would take and the schedule they would follow in response to the hypotheti-
cal passage of acid rain control legislation. With two groups each on two different legisla-
tive approaches, it was possible to develop independent responses to the same legislation,
as well as to compare responses to different legislative approaches.
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The workshop also provided an opportunity to brief participants on the aquatics and
forest research programs and included a day-long tour of current research sites on Mount
Mitchell to examine forest damage.
Largely because of its structure, the Asheville workshop produced useful insights to
State implementation. Results of the working groups indicate:
recognition of the diversity that exists among States and that State re-
sponses to a control program will vary according to the needs of each State.
awareness of many interests within each State and a need for a team
approach on plan development.
that at least 24 to 30 months would be necessary for plan development and
for adequate resolution of conflicting interests in the more complex States,
based on an assumption that clear EPA approval criteria would be known at
the outset.*
that a credible default provision would make a significant difference in how
States might respond to a national control program.
that energy conservation and efficiency measures have potential to reduce
emissions.
that States prefer maximum flexibility in developing a plan and in making
allocation decisions, although this preference was not unanimous.
recognition of the interstate nature of utility operations and its potential to
complicate State control plannning.
Participants were wary of the administrative burden of emissions trading; believed
that the concept of source verification of emissions data was sound (and long overdue);
recognized that too much data was frequently collected without consideration of the
specific data elements that are actually needed; were skeptical of the usefulness of
economic/ emissions models for plan development; and identified key problems with both
the "total emissions" and "emissions rate" approaches to a control plan. "Proceedings of the
Second STAR Workshop, Asheville, North Carolina, October, 1986" are available from
EPA.
* Footnote: Although, in the two years since this workshop, some believe that the STAR
Program, and similar strategy development done by States, may have shortened this time
requirement.
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With the exception of New Hampshire, States indicated that the STAR workshops
were the most successful part of the STAR Program and that they provided excellent
forums to initiate and continue peer contacts, to exchange specific ideas on projects, and
to direct and broaden program understanding and the base of participation in the
discussions. Individual participants indicated that the workshops, especially the second
workshop, surpassed expectations. The STAR workshop approach, with its generous
involvement of the States and problem-solving atmosphere, created a different kind of
interactive relationship than frequently found with previous responses to Federal-State
regulatory issues. Several participants indicated a sense of camaraderie and esprit de
corps among fellow STAR participants by the end of the Program.
Summary of STAR Management
The STAR Program provided an opportunity for EPA to develop and use multiple
program management tools beyond those traditionally used by the Agency in its regulatory
programs. States were asked to assess these tools. In general, States were complimentary
of the STAR management approach, particularly of the frequent consultation with States
and STAPPA/ALAPCO during development and operation of the program. This interac-
tive approach generated a level of trust in the process not always found in State/EPA
relationships. Newsletters and other written communications were important, but they
were useful mostly to individuals who were interested but only peripherally involved.
Workshops structured to involve State participants were the most impressive of EPA's
management efforts.
Most States believed that the workshops were very successful and provided the best
possible mechanism to interact with State peers and to discuss and "brainstorm" implem-
entation ideas. The Asheville workshop was considered by the States to be especially
effective. By the time of this workshop, State projects were showing results which allowed
substantive discussion. States also appreciated the implementation planning exercise of
this second workshop. Use of workshops, designed with a significant role for the
participating States, is the single most important transferable element from the STAR
Program. Based on State comment, the project review team recommends that workshops
structured along the lines of those employed in the STAR Program be considered for use
in all Agency programs.
The significant criticism of the management approach of the STAR Program was the
unusual level of freedom provided participants to explore ideas and new approaches. Some
States believed that too much flexibility was provided to the State participants and that
follow-through was insufficient to achieve timely completion of all State projects. This
comment is most unusual in State/EPA relationships, and the project review team believes
it reflects a deliberate EPA effort to allow participants "room to think," an approach made
possible by the nonregulatory nature of the STAR Program.
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States-believe management of the STAR Program by EPA Headquarter's staff was
constructive and provided flexibility to States in the completion of their STAR projects.
Both States and EPA believe that the Agency can benefit from the STAR experience in
future relationships with States and that the Agency should be alert to potential new
program areas early enough so that exercises like STAR may be utilized.
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