EPA-450/2-78-027R
Guideline On Air Quality Models
               (Revised)
         U.S. ENVIRONMENTAL PROTECTION AGENCY
              Office of Air and Radiation
         Office of Air Quality Planning and Standards
            Research Triangle Park, NC 27711

                   July 1986

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32176    Federal Register / Vol. 51. No. 174  /  Tuesday.  September 9. 1986 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY

40CFRP«t»S1and52

[AH-FRL-3011-6, Oocfctt Na A-M-M)

Requirements for Preparation,
Adoption, and Submtttal of
Implementation Plan*

AGENCY: Environmental Protection
Agency (EPA).
ACTION: Final rule.	

•UMMAMV: On December 7.1984 [49 FR
48018] EPA proposed to amend 40 CFR
51.24 and 52.21 to substitute by
reference the "Guideline on Air Quality
Models (Revised)," EPA 450/2-78-027R
for the April 1978 version. The guideline
lists the air quality models and data
bases required to assess impact and to
estimate ambient concentrations due to
certain sources of air pollutants. Today's
action establishes those revisions and
incorporates changes as a result of
public comment
•rrecnvE DATE October 9.1986. The
incorporation by reference of certain
publications listed in the regulations if
approved by the Director of the Federal
Register as of October 30,198&
POft RMTMKII INPOmiATION CONTACT:
Joseph A. Tikvart Chief. Source
Receptor Analysis Branch. Office of Air
Quality Planning and Standards, US.
Environmental Protection Agency,
Research Triangle Park. North Carolina
27711; telephone (919) 541-6561 or Jawad
S. Touma, telephone (919) 541-5681.
AMMO***: All documents relevant to
development of this rule have been
placed in Docket A-60-46, located in the
Central Docket Section (LE-131). U.S.
Environmental Protection Agency, 401M
Street SWH Washington. DC 70460. The
docket is available for public inspection
and copying between BOO am. and 44)0
p.nu Monday through Friday, at the
address above. A reasonable fee may be
charged for copying.
   The "Guideline on Air Quality Models
[Revised)" (1986). Publication No. EPA
450/2-78-027R is for sale from the U.S.
Department of Commerce. National
Technical Information Service, 5825 Port
Royal Road, Springfield Virginia. 22101.
This document is also available for  '
public inspection at the libraries of each
of the ten EPA Regional Offices and at
the EPA library at 401 M Street SW-
Washington. DC 20460.
•UmjEMCNTAMY INFORMATION:

Background
   Section 165{e)(3)fD) of the Clean Air
Act (CAA) requires the Administrator to
adopt regulations specifying with
reasonable particularity each model or
models to be used to comply with the
Act's prevention of significant
deterioration (PSD) requirements. To
carry out these requirements, the
Guideline on Air Quality Models was
incorporated by reference in regulations
promulgated for PSD [40 CFR 51.24].
Because of its incorporation, revisions to
the guideline must satisfy the
rulemaking requirements of section
307(d)oftheAct
  In March 1980. EPA issued a notice
soliciting air quality models developed
outside the Agency for potential
inclusion in the planned revisions to the
Guideline on Air Quality Models [45 FR
20157). EPA received nearly 30 air
quality models from private model
developers. These were reviewed for
technical feasibility and for utility to
potential users. In addition to a review
by EPA for technical merit
documentation, validation, and coding.
the submitted models are also subjected
to public review and comment
  On December 7,1984 J49 FR 48018],
EPA proposed amendments to its
regulations concerning air quality
models *n<^ announced that it would

amendments m?4 on the revised-
guideline.
  EPA aJao invited the public t*
participate and provide advice and
comment on DM proposed revisions to
the Guldelin. on Air Quality Models. On
December 20,1984 [49 FR 49484). EPA
announced the Third Conference on Air
Quality Modeling to provide a forum for
pubUc review. A transcript of aff oral
comments received at the conference, as
well aa a record of all written
comments, is maintained in Docket A-
80-M. The written comment period waa
extended to April 11985, and the
rebuttal comment period was held open
until April 3tt 1985.
BsMVMMMaal 10 •^
  Specific comments received can be
found in Docket A-60-t6. in items IV-D
and IV-H. All comments were
consolidated according to the issues
raised and are discussed, along with full
EPA responses in the "Summary of
Comments and Responses on the
December 1984 Proposed Revisions to
the Guideline on Air Quality Models.
January 1986." (Docket Item IY-G-26).
Certain comments raised significant
issues that are fundamental to the
development of this guideline. These
issues are summarized below, along
with EPA responses.

A. Consistency and Accuracy
  A number of commenters urged that
use of the most accurate models should
be promoted and that the need for
consistency waa overstated. They noted
mat (1) The regulatory program should
not require use of a single model (2) use
of a single model was based on an
arbitrary selection process, and (3) this
selection made the Agency inflexible in
allowing use of nongnidelme models.
  EPA's position reflects Congressional
concerns that permitting different
requirements in different parts of the
country could lead to the inequitable
location of some industries. Section
165(e)(3)(D) of the CAA specifically
requires that EPA ". .  . shall specify
with reasonable particularity each air
quality model or models to be  used
under specified sets of conditions. . ."
Also, section 301(a)(2)(A) of the CAA
requires EPA "to assure fairness and
uniformity in the criteria, procedures,
and policies applied by the various
regions in implementing and enforcing
the Act" EPA uses the term
"consistency" to mean that the same
model is used in determining emission
limitations for similar sources of air
pollution. The result is a uniform
approach to modeling-based decisions.
Such consistency is not however.
promoted at the expense of model and
date base accuracy. In selecting the
models listed in Appendix A of the
revised guideline, EPA conducted
several evaluations of model
performance using air quality monitoring
data, and peer scientific reviews of
mftdifling techniques. The findings lead
to a conclusion that the models listed in
Appendix A are at least as accurate as.
if not better than, other available
models, that these preferred models are
statistically unbiased, and that they are
familiar to the modeling community.
Every effort has been made to ensure
within the revised guideline that the
realism, flexibility, accuracy and best
technical Judgments, sought by both
regulatory agencies and the regulated
community, can be provided. Suitable
mechanisms have been provided to
assure such accuracy, and flexibility.
and to allow the use of alternate or new
models.
B. Use of Non-Guideline Models in
Particular Anat (The Texas Models)
  Many commenters urged EPA to make
provisions in the guideline for use of
new models, for improvements to
existing models, and for models that are
otherwise more appropriate in specific
cases. In particular, the Texas Models
wen cited as meeting EPA's criteria for
selection and being more economical to
run. Concern was also expressed that
failure to include these as preferred
models would have an advene effect on

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         Fedorsi Register /  Vol.  51. No. 174 / Toeaday. September 9. 1986 / Rules  and Regulation*    32177
the consistency of PSDpomMsnf.
analyses in Texu when these SMdesi
in cumntljr used
  EPA has made provistosj in CFR 51.24
and 52.21 ani to «riaMh§ftrwtag
alternative and iapumd •eaJih.Tht
final ndes provide that •odCoUim or
substitution of an approved model saey
occur on either a case-by-case basis or
on a generic basis within a state's
regulatory program. However. EPA wifl
only give genehc approval where a stale
demonstrate* that generic mage is
appropriate under defined
circumstances. For example, a state may
be able to show that a model is
appropriate far the entire stale or sane
portion thereof baaed on gryr*^ aad
meteorological characteristics. EPA
encourages ta* we of shea* provisions
and does not intend to place « wdee
burden on states that use alternative
modek or to delay itapieremitottnii «f
scientific advances taai am ae> aeapetaea
for regulatory use. EPA has discussed
these issues wilfc capraaaatativa* af the
Texas Air Caatsol Baaed and has
indicated that il may be possible fat
them to deanoaotme teat Bsan» aiiffirianr
justification for tha sHsftiea aft**
Urban Airshed Model as the prtrfairad
model for the specified applications.
D. Bj
  EPA's proposed tow of ink
was opposed by munarous commenters.
Many of these comaanters objected to
the BJorkhmd and Bowers algorithm on
the grounds that it-was semi-empirical
and that it waj iaaufficieBtb/ tastad by
EPA.
  EPA is withdrawing its propoaaJ to
use the BporkhsBd aad BBSKJO stack-tip
do wnwaah aJaorttaa T~**~1t Autaer
evahatsssL so teJBttrisj,EPA
                     1 shea* of the
meteofok^ert deto. fa appiujniato.
Mefwns&flenneBtarsdn eot present
JSCSBBJ •vsnasraeB wUca wowd feed
EPA to after Us i
G.UMtfQ^mt,

  Sonera
                                                  etan
                                                                    tttvt
for those cases wfaaa the ISM
dowmiMsa is appraariate.

£.
                                     if one year of quality assured aa sits
                                     data ia available, toe guideline should
                                     require its ose end eliminate the
                                     source's option of using the most
                                     beneficial result of either on-site or
                                     NWS data.
                                       EPA agrees with these suggestions
                                     and t-«/vM|im»t^f that {f quality assured
                                     on-sfte data are available, they an
                                     preferable to NWS data and should be
                                     used,
  Many conuBstntars **li* taal the use of
maximum aondy «mty«i^ri r«t»« ]|
unreafisfic >fw^ ovsnstiinatat air *y'"^*T
impact Alter»aOves soch as oslnf
actual er '«*<>"§, ^^ftf htfVTicil (stg,
three ye&. »), or system-wide fimKsfions
on load (far power aknts) wexe
susjBjesleu*
  EPA is  required, sncordnfto 40 CfK
STTTi to ejejopt iepBteaiosi BnsHsrffens
      iui smiasmius BSI aassi j fa
srtainaBMt

stationary sooros oaaHral
State tmn\ffKfHtf Hum Malta
bo determined ns&if the
emission
federal^
  ais
                                       Commenters stated that EPA should
                                     incorporate sBodel uncertainty when
                                     setting ffnff ri*™ Ifmftaflf1"* based f*p
                                     estimates! eancentrafioaa. Other factors
                                     such as *hf uncertainty ia f"j«*i""« and
                                     meteorol^sjical f^*tfli inputs should AASO
                                     be considered No viable
                                     recomsfleadatiatts oa how ta
                                     this coaospt was* gives.
this coaospt wave give*.
  EPA has sponsored research OR
improving meAeda to eeeees hew
be aaad«aejr sf it ki»dats%
enfonasabk. Tafs rnaii
the aoiisca[s) subjeot to **»• fsn>
limit atut to njorty
                           jsj
joint JsopafiL Utt amiaaioBnis)£ic
which generally eoatdbata onhr to the
background has been modified to
indicate actual fastud of the maximum.
rate to reflect real production or firfai
rate and hours of operations.
F. Length of Record
                                                           ttoetosLTkus,
                                                               i to extend
                                                              •site
                                     guideline at *W* HIM; such a rr-H1*"^

                                     fuhas)«a«B>
                                     I. Additional Model*

                                       Many commenters recommended that
                                     the gsideUao tacksdo Ihm aew atodets.
                                     the Ro^Tenmto DaToetoa Modal
                                     (KTBM$, a eseoMM *entaa of the
                                     buMsaaiisi.ui.ealialaiilthMaifJe
                                     Indi
       all
Cosnafex(ISC)aMKM.
                                     sad 
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          F«d«nl Register / Vol. 51. No.  174 / Tuesday. September  9. 1986 /  Rules and Regulations
          ^^^^^^•••••^^^••^^•••••••••^••••••••••••••••••^•^^•••^••ii^BBi^^nMIBMMHi^^HMIHMHHHB^BMMHiMHBHH
MB8ORLUMB, and RTDM (version 3.00).
IstaMnot specifically addresse.4 in the
goi/deliae. such •• those associated with
new method* or technique* will be
investigated and future guidance issued.
subject to public comment as necessary.
K. Other Issues
  Although the December 7 proposal
solicited, in particular, advice and
comment on eight issues, several of
these topics received little or no
comment Both EPA and the commenters
found it easier to include these
comments under appropriate sections in
the guideline instead of listing these
issues separately. Responses to public
comments on the eight issues are
contained in the Summary of Comments
and Responses document (FV-G-28) as
follows:                   	
  (1) Specific changes to 40 CFR Parts 51
and 52 (no comment received);
  (2) Revised format of the guideline
(Chapten 1 and 3);
  (3) Recommendations for ozone
models (Chapter 6);
  (4) Proposed changes to preferred
models (Chapten 4. 5, and Appendices
A and B):
  (5) Improving performance
evaluations (Chapten 3 and 10);
  (6) Modeling uncertainty (Chapter 10)}
  (7) Degree to which State or local
regulatory agenda* can have authority
to use nonguidettne models (Chapten 1
and 3fc and
  (8) Degree of oversight or approval
authority retained by EPA (Chapten 1
and 3).
E.0.12291
  Under Executive Order 12291. EPA
must judge whether a rule is "major"
and therefore subject  to the requirement
of a Regulatory Impact Analysis. The
Administrator finds this rule not major
because it will not have an annual effect
on the economy of $100 million or more:
it will not result in a major increase in
costs or prices: and there will be no
significant advene effects on
competition, employment investment.
productivity, innovation or on the ability
of U.S.-based enterprises to compete
with foreign-based enterprise* in
domestic or export market*. This
regulation will result in no significant
environmental or energy impacts. Thus.
no Regulatory Impact Analysis was
conducted.
Regulatory  Flexibility Act
  Pursuant  to the provisions of 5 U.S.C
605; D), I hereby certify that the attached
rule will not have a significant impact
on z substantial number of small
entitle*. This rule merely update*.
existing technical requirements for air
quality modeling analyse* required by ~~
other Clean Air Act programs
(prevention of significant deterioration*.
new source review, SEP-revisions) and
imposes no new regulatory burden*.

Economic Impact Assessment
  The requirement for performing an
economic impact assessment in section
317 of the Act 42 U.S.C 7617. does not
apply to this action since the revisions
included do not constitute a substantial
change in the  regulatory burden imposed
by the regulation. However, since the
guidance  includes more sophisticated
models, and addresses the use of site-
specific data (required  under a different
section of the  PSD regulation*), an
analysis of the relative cost* of using
some of the 1978 models and data bases
venus the models and  data base*
specified In the 1980 updated guidance
was prepared This report "Cost
Analysis  of Proposed Changes to the Air
Quality Modeling Guideline" is
available for inspection in Docket A-*60-
46 at the Central Docket Section whose
addre** is given above; or from the
National Technical Information Service
Pap
dcRadu
i Act
  This rule doe* not contain any
information collection requirement*
subject to review by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act of I960
U.S.C 3501 etaeq. EPA has submitted
this regulation to OMB for review under
Executive Order 12291 and their written
comments on the revisions and any EPA
responses have been placed in the
docket for this proceeding.

List of Subjects

40 CFR Port 51
  Administrative practice and
procedure. Air pollution control.
Intergovernmental relations. Reporting
and recordkeeping requirement*, Ozone,
Sulfur oxides. Nitrogen dioxide. Lead.
Paniculate matter. Hydrocarbon*.
Carbon monoxide.

40 CFR Port 52

  Air pollution control. Ozone. Sulfur
oxides. Nitrogen dioxide. Lead.
  This notice of final rulemaking i*
issued under the authority granted by
sections 185(e) and 320 of the Clean Air
Act 42 U.S.C. 7475(e), 7820.
                                 Dated: August 19, 1806,
                               LwM.Tb.MB**.
                               Adminntmtor.

                               PART 51-REOUfRCMENTS FOR
                               PREPARATION ADOPTION AND
                               SUBUITTAL Of IMPLEMENTATION
                               PLANS

                                 Part 51. Chapter L Title 40 of the Code
                               of Federal Regulations, i* amended as
                               follows:
                                 1. The authority citation for Part 51
                               continues to read as follows:

                                 Authority: 42 U.S.C 7475(e). 7620.

                                 2. Section 51.24 is amended by
                               revising paragraph (1) to read as follows:
X ft 4 44
j 91*24
deterioration o. air quaHty.
•    •     •   •    •

  (1) Air quality models. The plan shall
provide for procedure* which specify
that—
  (1) All estimate* of ambient
concentration* required under this
paragraph shafi be based on the
applicable air quality models, data
base*, and other requirements specified
in the "Guideline" ear Air Quality Models
(RevUedT flMBfidtfdt I* incorporated
by reference. Iris HMuPublication No.
450/2-78-02711 and I* tor sale from the
U.S. Department of Commerce, National
Technical Information Service. 5825 PC-
Royal Road. Springfield. Virginia. 2216:.
It is also available for inspection at the
Office of the Federal Register. Room
8301. 1100 L Street NW., Washington.
DC This incorporation by reference was
approved by the Director of the Federal
Register on October 9. 1986. These
materials are incorporated as they exist
on the date of approval and a notice of
any change will be published in the
Federal Register.
  (2) Where an air quality impact model
specified in the "Guideline on Air
Quality Models (Revised)" (1986) is
inappropriate, the model may be
modified or another model substituted.
Such a modification or substitution of a
model may be made on a case-by-case
basis or. where appropriate, on a generic
basis for a specific state program.
Written approval of the Administrator
must be obtained for any modification
or substitution. In addition, use of a
modified or substituted model must be
subject to notice and opportunity for
public comment under procedures
developed in accordance with
paragraph (q) of this section.

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         Federal Register / Vol.  51. No. 174 / Tuesday. September 9, 1986 / Ruiea and Regulations   32179
PART 52-APPROVAL AND
PROMULGATION OF
IMPLEMENTATION PLAN* -

  Part 52, Chapter I of TOte 40 of the
Code of Federal Regulation!. Is
amended as follows:
  l. The authority citation for Part 52
continues to read as follows:
  Authority: 42 U.S.C 74751 e). 7620,
  2. Section 52.21 is amended by
revising paragraph (1) to read as follows:

§5£21 Prevention of sJgntflcant
deterioration of * quaMy.
•    •    •    •    •
  (1) Air quality models. (1) All
estimates of ambient concentrations
required under this paragraph shall be
based on the applicable air quality
models, data basec aarfathaiM n •*_•*•••*
requirements specified in the "Guideline
on Air Quality Model* (RevnedT flBWf
which is incorporated by referem. frit
EPA publication No. 430/**78mZ7R an*
is for sale from the U.S. Department of*
Commerce. National Technical
Information Service. 5825 Port Royal
Road, Springfield. Virginia. 22181. It is
also available for inspection at the
Office of the Federal Register. Room
8301.1100 L Street NW. Washington.
DC This incorporation by reference was
approved by the Director of the Federal
Register on October 9.1986. These
materials are incorporated as they exist
on the date of approval and a notice of
any change will be published in the
Federal Register.
  (2) Where  an air quality impact model
sperifieiui ttsv#Coideaie oarAir
Qaaifty Models fReriaedr (UBfii*
inappnnmata. the modal may be
modified t» anolnafaodei subetMvted
Such a modification or substitution of •
mode} may Be made on a caM-by-case
basis or. where appropriate, on a generic
basis for a specific state program.
Written approval of the Administrator
must be obtained for any modification
or substitution. In addition, use of a
modified or substituted model must be
subject to notice and opportunity for
public comment under procedures
developed in accordance with
paragraph (qj of this section,
[PR Doc 8B-1MOa Filed 9-9-88; 8:45 am]
i

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                                  EPA-450/4-84-023
Interim  Procedures for Evaluating Air
        Quality Models (Revised)
            U.S. ENVIRONMENTAL PROTECTION AGENCY
              Monitoring and Data Analysis Division
             Office of Air Quality Planning and Standards
            Research Triangle Park. North Carolina 27711

                    September 1984

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              United States
              Environmental Protection
              Agency
           Office of Air Quality
           Planning and Standards
           Research Triangle Park NC 27711
EPA-450/4-85-006
July 1985
              Air
•r/EPA
Interim Procedures
For Evaluating Air
Quality Models:
Experience with
Implementation

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REFERENCES FOR SECTION 4.4

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                              EPA-450/2-78-027R
Guideline On Air Quality Models
               (Revised)
         U.S. ENVIRONMENTAL PROTECTION AGENCY
              Office of Air and Radiation
          Office of Air Quality Planning and Standards
            Research Triangle Park, NC 27711

                   July 1986

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vvEPA
             United States
             Environmental Protection
             Agency
            Office of Air Quality
            Planning and Standards
            Research Triangle Park NC 27711
EPA-450/4-87-013
June 1987
             Air
On-Site Meteorological
Program Guidance for
Regulatory Modeling
Applications
                                AUG L*.-)
                  UB'RARY
                                      urnU;

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United States
Environmental Protection
Agency
Environmental Monitoring Systems  EPA-600 4-82-06C
Laboratory          Feb 1983
Research Triangle Park NC 27711
Research and Development
Quality Assurance
Handbook for Air Pollution
Measurement Systems:

Volume IV. Meteorological
Measurements

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United States             Environmental Monitoring Systems
Environmental Protection        Laboratory
Agency                Research Triangle Park NC 27711
Research and Development       EPA-600/4-82-060 Feb. 1983
Quality Assurance
Handbook for Air Pollution
Measurement Systems:

Volume IV. Meteorological
Measurements
Peter L Pinkelstein, Daniel A. Mazzarella, Thomas J. Lockhart,
William J. King, and Joseph H. White

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REFERENCES FOR SECTION 4.5

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                              EPA-450/2-78-027R
Guideline On Air Quality Models
               (Revised)
         U.S. ENVIRONMENTAL PROTECTION AGENCY
               Office of Air and Radiation
          Office of Air Quality Planning and Standards
            Research Triangle Park, NC 27711

                   July 1986

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o"1"
               UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                     Office of Air Quality Planning and Standards
                     Research Triangle Park, North Carolina 2771 1
                                   1 6 MAR 198S
     MEMORANDUM

     SUBJECT:
     FROM:
     TO:
Use of Allowable Emissions for National Ambient Air
Quality Standards (NAAQS) Impact Analyses Under the
                   evention of Significant
Det<
                                               (MD-15)
               Technical Support -Division (MD-14)
Thomas J. Maslany, Director
Air Management Division, Region III

William B. Hathaway, Director
Air, Pesticides, & Toxics Div., Region VI
          This  memorandum is in response to recent requests from your
     offices  for clarification of the Environmental Protection
     Agency's (EPA)  policy concerning the implementation of the PSD
     air quality impact analysis under 40 CFR 51..I66(k) [also
     §52.21(k)].   Of specific concern is the question of whether the
     required analysis for new major sources and major modifications
     is  to be based  on actual or allowable emissions from existing
     background sources.   This memorandum sets forth the position that
     allowable  emissions should generally be used.  However, as
     explained  below,  certain allowances may be made, primarily with
     respect  to the  evaluation of impacts on the long term NAAQS, to
     consider an existing source's actual annual operations.  This
     position best resolves the inconsistencies between previous
     written  guidance for PSD and the guidance applicable to NAAQS
     attainment demonstrations for State implementation plans (SIP'S).

          The PSD regulations at 40 CFR 51.166(k) stipulate that
     "allowable emission increases from the proposed source or
     modification, in conjunction with all other applicable emissions
     increases...  would not cause or contribute to air pollution in
     violation  of [any national ambient air quality standard
     (NAAQS)]." (Emphasis added.)  While this provision clearly
     requires the use of allowable emissions for the new or modified
     source,  it offers no similarly explicit requirement regarding
     emissions  to be used for existing source contributions.

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     Nationally, States and EPA Regional Offices have utilized
several interpretations which have lead to a consistency problem
in implementing the requirement for a NAAQS demonstration under
40 CFR 51.166(k).  Some States presently accept the use of actual
source emissions for existing background point sources, and
reference EPA guidance to support their position.  Regions, on
the other hand, encourage the use of emissions estimates more
closely reflecting legally allowable emissions.

     Available EPA guidance for PSD, which dates back to 1980,
supports the use of actual emissions to project the air quality
impacts caused by existing point sources.  Specifically, the
"Prevention of Significant Deterioration Workshop Manual" (EPA-
450/2-80-081, October 1980) states that "actual emissions should
be used... to reflect the impact that would be detected by
ambient air monitors" for the PSD NAAQS analysis.  However,
because many sources typic^.ly emit at rates well below their
legally allowable emission rate on an annual basis, we now
believe that the use of actual emissions to demonstrate NAAQS
attainment could substantially underestimate the potential air
quality impacts resulting from existing sources.

     The EPA's policy for demonstrating stationary point source
compliance with the NAAQS for SIP purposes clearly requires the
use of emissions which are more closely tied to allowable
emissions.  The model emission input data requirements for such
SIP demonstrations are contained in Table 9-1 of the "Guideline
for Air Quality Models (Revised)" (GAQM), EPA'-450/2-78-02R, July
1986.  For "nearby background sources" an adjustment to the
allowable emission rate1"  may be made only for determinations  of
compliance with the annual and quarterly NAAQS, and only with
respect to the annual operating factor.  For "other background
sources" an adjustment to both the operating level and the
operating factor, as explained in Table 9-1, could be made for
determinations of compliance with the long term and short term
NAAQS.

      The referenced model emission input data requirements for
existing point sources are contained in the GAQM which has
undergone rulemaking and is incorporated by reference in EPA's
PSD regulations under Parts 51 and 52.  Although a footnote in
Table 9-1 indicates that the model input data requirements may
not apply to PSD NAAQS analyses, we now believe that such
requirements should be applied to PSD rather than using actual
emissions as indicated in the 1980 PSD guidance.  Thus,
     1Emission rates for model input consist of three components:
1) the emission limit, e.g.,  f/mmBtu; 2) the operating  level,
e.g., mmBtu/hour; and 3) the  operating factor, e.g., hours/day,
hours/year.

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compliance demonstrations for PSD and for stationary source
control strategies under SIP's will be accomplished in a
consistent manner.

     In order to apply Table 9-1 in the GAQM to PSD NAAQS
analyses, certain clarifications need to be provided.  First, the
proposed major new source or major modification must be modeled
at its maximum allowable emission rate.  Second, the existing
facility to which a major modification has been proposed/ but
whose actual emissions (not including emissions from the proposed
modification) will remain unchanged, may be considered as the
"stationary point source subject to SIP emission limit(s)...w to
determine the model emission input requirements.  Portions of the
existing facility where the emission rate is expected to increase
as a result of the proposed modification should be modeled at the
allowable emission rate.  Finally, background point sources 1)
having already received their construction permit but not yet in
operation, or 2) with less than two years, of operational history,
should also be modeled at their allowable, emission rate.

     Of course, an analysis which demonstrates no contravention
of the standards, based entirely on maximum allowable emissions
rates (including full operation for the entire year) for all
modeled point sources is acceptable.  If a violation of any NAAQS
is revealed by this type of analysis, then the adjustments
described above may be made in cases where it can be shown to the
satisfaction of the permit granting agency that historical
operating levels and/or operating factors will be representative
of future conditions.

     This use of Table 9-1 of the GAQM for accomplishing the
required PSD NAAQS analysis will supersede the various procedural
interpretations presently being applied.  Since different
procedures are currently in use, we believe that it is necessary
to provide a grace period for implementing the required
procedure.  Consequently, modeling analyses for any PSD
application submitted to the reviewing agency on or after
October 1, 1989 should be based on legally allowable emissions or
must use the model emission input data requirements contained in
Table 9-1 of the GAQM as clarified above for PSD purposes.

cc:  Air Branch Chief, Regions I-X
     New Source Review Contacts
     Regional Modeling Contacts
     E.  Lillis
     J.  Tikvart
     T.  Helms
     B.  Bauman

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                 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
" ^^77 $              Office of Air Quality Planning and Standards
A4y|6fr/             Research Triangle Park, North Carolina 27711
                                 3   MAY 1989
       MEMORANDUM

       SUBJECT:   Identj^i^t^tffyof New Areas Exceeding the NAAQS


                /Air Quality Jrainag^nent Division  (MD-15)

       TO:        William Laxton, Director-
                 Technical Support Division  (MD-14)


            This is in response to your earlier request for our
       consideration of two modeling related State implementation plan
       (SIP) issues.  Specifically, the two issues are:   (1) approval of
       a proposed SIP emission limit for a source under consideration
       when there are modeled violations of the national  ambient air
       quality standards (NAAQS) due to nearby background sources in the
       surrounding area, and (2) the resource burden associated with
       assembling the data necessary for modeling the background
       sources.   This memorandum restates the existing policy developed
       by the Model Clearinghouse and discusses.limited exceptions to
       the policy.

       SIP Approvals

            Our general policy may be summarized as follows:

            1.   Background concentrations are an essential part of the
                 total air quality concentration to be considered in
                 determining source impacts.  Nearby sources which are
                 expected to cause a significant concentration gradient
                 in the vicinity of the source under consideration
                 should be explicitly modeled (as "background" sources).

            2.   Under section 110 of the Clean Air Act,  each SIP must
                 provide for attainment and maintenance of the NAAQS.
                 where background sources are found to cause or
                 contribute to a violation, a SIP revision for the
                 source under consideration generally should not be
                 approved until each violation in the modeled Region is
                 prevented or eliminated through the SIP  rules.  This
                 policy avoids approval of a SIP revision which does not
                 provide for attainment throughout the modeled area.

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     I also recognize that section no allows for approval of
portions of SIPs.  Therefore, exceptions to the general policy
may be warranted in certain circumstances.   Before any exception
will be considered, it must be clearly shown that the SIP would
be improved as a result of the partial approval.  As a minimum,
the following factors should be considered in determining
exceptions to the general policy:

     1.   Approval would not interfere with expeditious
          attainment (i.e., emissions from the source under
          consideration do not cause or contribute to the modeled
          violation).

     2.   There would be an environmental benefit (i.e., the SIP
          revision would res-It in an actual emissions decrease
          and ambient air quality improvement).

     3.   Enforcement of the SIP would be improved (e.g., without
          approval there would be no federally enforceable
          measure for the source under consideration or
          ambiguities in the previous limit serve to frustrate
          enforcement efforts).

     Where it is found that an exception should be made based on
the above factors, we expect the proposed approval notice to
specifically identify the background source violations and
clearly state that the State retains an obligation to take action
expeditiously to correct the background violations.  The final
approval notice for the source under consideration should not be
promulgated before the State acknowledges the background
violations and submits an acceptable schedule for corrective
action.  The schedule would then be included in the final notice
as the State's response to EPA's ^identification of violations.  A
SIP call pursuant to section llO(a)(2)(H) should be issued where
a State fails to acknowledge its obligation and submit a schedule
for resolution of violations during the comment period.

Resources

     The resource burden associated with assembling the necessary
data and modeling the background sources has been extensively
discussed through the Model Clearinghouse and annual modelers'
workshops.  I believe that the resource burden associated with
modeling background sources using current modeling guidance need
not be as great as it potentially appears.

     The Guideline on Air Quality Models (Guideline^ states that
the nearby (background) source inventory should be determined in
consultation with the local air pollution control agency.
Specifically, the Guideline states that "The number of
(background) sources is expected to be small except in unusual

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situations."  In this and in other areas, the Guideline
necessarily provides flexibility and requires judgment to be
exercised by the reviewing agency.  The resource burden may be
mitigated somewhat by application of this judgement.

     In investigating whether more explicit guidance is needed,
my staff has coordinated with the Model Clearinghouse and the
modeling and SO, contacts in each Regional Office.  Given the
flexibility that is provided by existing guidance and the
tendency for more explicit policy to reduce this flexibility, no
further guidance was judged necessary.  The Regional offices
generally have been able to work with their States to collect
sufficient data to support the necessary modeling.  Consequently,
there was little support for the suggestion to revise the current
policy to more explicitly limit the number of sources that should
be modeled for downwash.

Conclusion

     I believe that an exception to the general policy regarding
processing of SIP revisions may be warranted where it is in the
best interests of air quality to approve certain SIP revisions
notwithstanding the existence of violations due to background
sources.  However, the affected State retains an obligation to
take corrective action in response to any properly conducted
analyses which demonstrate a violation.  This policy is
consistent with the Guideline and Model Clearinghouse actions.
My staff is available to assist in application of this policy on
a case-by-case basis.

     If you would like to discuss these issues further, please
call me or have your staff contact Doug Grano at extension 5255.

cc:  R. Bauman
     R. Campbell
     P. Embrey (OGC)
     E. Ginsburg
        Grano
     J. Silvasi
     D. Stonefield
     J. Tikvart
     D. Wilson
     Air Division Directors, Regions I-X

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v->'*° "••-,
                UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
      I               Office of Air Quality Planning and Standards
     V              Research Triangle Partc. Nortfi Carolina 27711
    ^

                                  OCT i 0 19S5
   MEMORANDUM

   SUBJECT:   Questions  and  Answers  on  Implementing the
             Revised  Stick  Height Regulation

   FROM:     6.  T.  Helms, Chleff' L Vw-*1 •*•
             Control  Programs  Operations  Branch  (MD-15)

   TO:        Chief, A1r Branch,  Regions I-X

        A number of questions  have  arisen in  several areas of the  revised
   stack belght  regulation  since Its promulgation on July 8.  The  following
   answers have  been  developed 1n response.   The questions and  answers  are
   arranged  under the general  topic headings  of Interpretation  of  the regula-
   tion, State Implementation  plan  (SIP)  requirements, and modeling  analyses.
   Please continue  to call  Sharon Relnders at 629-5526 1f you have further
   comments  or additional questions.

   Interpretation of  the Regulation

   1.  Q:  What  criteria should  be  used to determine when a  stack  was "1n
   existence" with  respect  to  the various grandfatherlng dates  1n  the
   regul ation?

       A:  The recent promulgation  of  revisions to the stack height  regulation
   did  not change the definition of "1n existence."  The definition  1s  provided
   in 40 CFR 51.1(gg) and includes  either the commencement of continuous
   construction  on  the  stack or  entering  Into a binding contract for stack
   construction, the  cancellation of which would result 1n "substantial
   loss" to  the  source  owner or  operator. The definition of what  constitutes
   a "substantial loss" will be the subject of future guidance.

   2.  Q:  What  "source" definition should be used 1n determining  whether  tie-
   ins  to grandfathered stacks should  be  permitted or prohibited?

       A:  The term "source" in  this instance means a single emitting unit.
   Thus, credit  for tying  a single  post-1970  unit(s) into a  grandfathered
   stack serving a  number of old units is prohibited under the  regulation.

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                                   -2-


3.  Q:  What is meant  in  the regulation by "facility"?

    A:  For purposes of this regulation, the definition contai-ned  in
40 CFR 51.301(d) should be  used.  That definition essentially defines the
term as the entire complex  of  emitting activities on one property  or
contiguous properties  controlled by a single owner or designee.

4.  Q:  Must good engineering  practice (SEP) stack height be established
separately for each pollutant?  If  not, how should it be determined?

    A:  It is not necessary to calculate a separate 6EP stack height for
each pollutant.  Since "SEP' 1s  defined by Section 123 of the Clean Air
Act as the height necessary to ensure against excessive concentrations of
any air pollutant, it  follows  that  SEP should be established for each
source based on the pollutant  requiring the greatest height to avoid
excessive concentrations.

5.  Q:  How should "reliance"  on the 2.5H foraula be determined?

    A:  First, "reliance" on the 2.5H formula applies only to stacks 1n
existence before January  12, 1979.  Credit for  "reliance* on the 2.5H
formula, can be granted under the following cases:  (a) Where the stack
was actually built to  a height less than or equal to 2.5H; (b) Where the
stack was built taller than 2.5H and the emission limitation reflects the
use of 2.SH in the SIP modeling analysis; or (c) Where evidence 1s provided
to show 'reliance* as  discussed in  the following paragraph.  If no modeling
was used to set the emission limitation for the source, then it cannot  be
argued that there was  'reliance" on the formula, since EPA's guidance was
specifically aimed at  using stack  height credit in establishing emission
limitations.  Once it  is  determined that the emission limitation was in
fact based on estimates of  dispersion  from the  stack, then the source can
be said to have properly  "relied"  on the 2.5H formula.   In the event that
it cannot be fleterrained that the emission limit is based  on  "reliance"  on
the 2.5H formula, then the  refined H +  1.5L formula must  be  used.

     Where a clear relationship between  a 2.5H  stack height  and the
emission limitation cannot  be  shown, where the  emission  limitation was
not calculated based precisely on  the  2.5H. height, or where  the stack
height used in modeling cannot be  verified, then  additional  evidence will
be needed.  Preferred  would be written  documentation, such  as  copies  of
the original engineering  calculations  or  correspondence  between the State
or the emission source owner  and EPA  indicating that the 2.5H  formula
should be used to derive the  emission  limitation.   However,  recognizing
that  such evidence 1s  often not retained  for more than  a few years,
"reconstructed" documentation  may be  considered,  but should  only  be used
as a  last resort.  This  evidence should include explanations by  those
individuals who were involved  in designing  the  facility, calculating
emission  rates, and who  represented the facility in  dealings with the

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                                   -3-


State and EPA on how the emission limit was derived,  including  a  discussion
of how the formula was originally used in deriving  the  source emission
limitation, a discussion of the analytical  method applied,  and  a  listing
of any contacts OP discussions with EPA during  that period.   This listing
will  aid EPA in searching its own files to  find any records of  communication
or correspondence that may bear on the Issue.

     In no case should a source be allowed  after January  12,  1979, to
obtain a relaxation in the emission limitation  by arguing that  it "relied"
on past EPA guidance endorsing the 2.5H formula. In  cases  where  a relaxation
based on 6EP formula height 1s sought 1n the future,  the  refined  H * 1.5L
formula must be used.

6.  Q:  The preamble specifically discusses cooling towers  as structures to
which the formula should not be applied.  Will  the  Office of  Air  Quality
Planning and Standards be specifying other structures that  are  not well
represented by the formul a?

    A:  The discussion in the preamble and  SEP  guideline  is not intended to
be all-inclusive; judgment should be used in determining  when fluid
modeling should be used to estimate the effects of  structures with rounded,
domed, or tapered shapes.  Water towers and storage tanks are additional
examples of such structures.  As additional information becomes available
on the aerodynamic effects of specific building shapes  and  configurations,
we will evaluate the need to revise the GEP guidance.  'However, at present,
there are no plans to issue a "laundry list" of structures  to which the
formulas do not apply.

SIP Retirements

7.  Q:  Should a compliance averaging time be explicitly  stated in a
SIP revision for sulfur dioxide (S02) emission  limits that  are  revised to
meet  the stack height regulation?

    A:  A compliance averaging time need not be specified as  an enforceable
SIP provision as long as a stack test compliance method is  in place  in the
underlying federally approved SIP.  EPA's current national  policy requires
that  SIP's and permits contain enforceable 'short-tern" emission  limits
set to limit maximum emissions to a level which ensures protection of  the
short-term national  ambient air quality standards  (NAAQS) and prevention
of significant deterioration (PSD) increments.   EPA relies  upon a short-term
stack test provision in the SIP as the method of determining  compliance
with  the emission limits.  In lieu of a stack test, EPA has accepted  fuel
sampling and analysis and continuous emission 1n-stack  monitors (CEM's).
When  compliance is to be determined fron information  obtained by  fuel
sampling and analysis and CEM's, short-term averaging times should be
specified.

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                                   -4-


8.  Q:  Are all  States  -equired  to  have  "stack height regulations"?

    A:  Limitations on  creditable stack  height and dispersion  techniques
impact the SIP program  in  two  areas—SIP emission limits for existing
sources and SIP provisions covering  new  source review (NSR)/PSD permitting
procedures.  For existing  sources,  State regulations limiting  credit 'for
stack height and other  dispersion techniques (stack height regulations)
are not necessary as long  as the SIP emission limits are not affected  in
any manner by so much of the stack  height as exceeds GEP, or any other
dispersion technique.  Where a State has stack height regulations, those
regulations must be consistent with  EPA's regulation.  Where a SIP contains
regulations that are inconsistent with EPA's regulation, the State must
either adopt a stack height regulation that is consistent with EPA's or
Incorporate the EPA regulation t reference.

     For the NSR/PSD programs, it is essential that the plan contain
limitations on the amount  of creditable  stack height and other dispersion
techniques.  The following cases have been developed to illustrate what
action(s)  may be required  of the State since promulgation of the stack
height regulation.

CASE AU):  A fully or  partially delegated PSO program that references but
            does not define SEP  where the delegation agreement does not
            a date to define which  version of the PSO rule is  being "oeTegated

ACTION:     Notify the  State that all permits issued henceforth must b«
            consistent  with EPA's stack  height regulation.  AIT permits
            previously  issued  must  be reviewed and revised as  necessary
            within 9 montns.

CASE A(2):  A fully or  partially delegated PSO progran that references
            but does not define  GEP where the delegation agreement
            does contain a date  to  define which version of the PSD rule
            is being delegated.

ACTION:     Uodate the  delegation agreement to reflect agreement  with  EPA's
            stack height regulation as of July 8, 1985.  Notify the  State
            that all permits  issued henceforth must be consistent  with
            EPA's stack height regulation.  All permits previously Issued
            must be reviewed  and revised as necessary within 9 months.

CASE B:     The current federally  aoproved SIP for NSTVPSO does  not
            contain a reference  to  GEP  or dispersion techniques,  i.e.,
            provisions  assuring  that emission  limitations  will not be
            affected by stack  height in  excess of SEP or  any prohibited
            dispersion  techniques do not exist in the current  SIP.

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                                   -5-
ACTION:      Notify  the  State that such provisions must be adopted and
            submitted  as  a  SIP revision within 9 months.  This can be
            accomplished by adopting stack height regulations at the
            State level  or  by adopting the appropriate reference and
            commitment  to comply with EPA's stack height regulation as
            promulgated on  July 8, 1985.  Interim permitting should be
            consistent  with EPA's stack height regulation."

CASE C:      The current federally approved SIP for NSR/PSD contains
            references  to,  but does not define, SEP or dispersion techniques.

ACTION:      Notify  the  State that a connltaent to comply with EPA's stack
            height  regulation as promulgated on July 8, 1985, 1s required.
            If a State  1s unable to make such a commitment, State regulations
            must be revised to be consistent and submitted to EPA as a SIP
            revision within 9 months and Interim permitting should be
            consistent  with EPA's stack height regulation.  No "grace
            period" will  be allowed for sources receiving permits between
            July 1985  and April 1986.**

CASE D;      The current federally approved SIP for NSR/PSD contains stack
            height  regulations that are Inconsistent with EPA's regulation.

ACTION:      Notify  the  State that such regulations must be revised to be
            consistent  and  submitted as a SIP revision within 9 months
            and that interim permitting should be consistent with EPA's
            stack height  regulation.**

CASE E(l):   A SIP for  NSR/PSD has been submitted to EPA, or will be
            submitted  to  EPA before the due date for stack height revisions.
            The submittal contains provisions that conflict with .EPA's
            stack height  regulation.

ACTION:      Notify  the  State that EPA cannot approve the subraittal until
            it is revised pursuant to EPA's July 8, 1985, regulation.
**In the event that a State does not have legal  authority  to  comply with
  EPA's regulation in the interim (e.g.,  because  1t must enforce State
  rules that are inconsistent with EPA's  regulation)  and is compelled to
  issue a permit that does not meet the requirements  of the EPA revised
  stack height regulation, then EPA should notify the State that such
  permits do not constitute authority under the  Clean A1r  Act to commence
  construction.

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                                   -6-
CASE E(2):  As in Case 1(1),  a  SIP  for  NSR/PSO has been submitted to EPA
            or will  be submitted  to EPA before the due date for stack
            height revisions.   The  submittal is not inconsistent with
            EPA's stack height  regulation, but portions of the existing
            approved SIP that relate to the submittal are inconsistent.

ACTION:     Approve the SIP submittal based on a commitment by the State
            to correct the inconsistencies in its existing SIP to comport
            with EPA's July 8 regulation and submit the corrections as a
            SIP revision within 9 months.  Interim permitting should be
            consistent with EPA's stack height regulation."* If the exist-
            ing SIP 1s ambiguous, I.e., the SIP references but does not
            define terms relating to SEP or dispersion techniques, the
            action steps outlined in Case c above should b« followed.

CASE F:     In nonattalnment  areas, emission limits or permits do not always
            include modeling, but rather are based on lowest achievable
            emission rate (LAER)  and offsets.

ACTION:     If no modeling is used  1n the Issuance of a permit, the emission
            requirements for  the  source are not "affected" by stack heights
            or dispersion techniques, and no action is needed.  However,  if
            modeling was used in  the process of preparing and issuing a    ^
            permit, such as cases where offsets were obtained offslte, thatflj
            modeling must be  reviewed for consistency with the stack height
            regulation.

9.  Q:  What must all States  do now that EPA's stack height regulation is
promulgated?

    A:  States must review and  revise.their SIP's as necessary to  include or
revise provisions to limit stack  height credits and dispersion techniques
to comport with the revised regulations, and, in  addition, review  and
revise all emission limitations that are affected by stack height  credit
above GEP or any other dispersion techniques.   In accordance with  Section
406(d)(2) of the Clean Air Act, States  have 9 months from  promulgation to
submit the revised SIP's and  revised SIP emission limitations  to  EPA.

      In an August 7, 1985, memo titled  "Implementation of  the  Revised
Stack Height Regulation-Request for Inventory  and  Action  Plan to Revise
SIP's,* Regional Offices were requested to begin  working  with  each of
their States to develop States' Action  Plans.   Each Action Plan  should
include the following:   (1) An  inventory of  (a)  all  stacks greater than
65 meters (m), (b) stacks at sources which exceed 5,000  tons  per year
total allowable SO?  emissions;  and  (2)  A reasonable schedule  of dates  for
significant State actions to conform both State stack  height  rules and
emission  limitations to  EPA's stack height regulation.   Schedules should
include increments of  progress.  Regional  Offices should be satisfied       m
that  each of their States provide  scnedules  for completion of trie tasks      ™

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as outlined in the August memo and  report  the  status of  schedule commitments
to then on a monthly basis.  Regional  Offices  have  been  asked  to forward
monthly status reports to the Control  Programs Development Division  on
the States' progress to meet scheduled commitments  and  also  report the
results of followup with the States on schedules that are not  met.  In
order to facilitate tracking the States monthly progress, guidance on a
standardized format will be Issued  shortly.

Modeling Analyses

10.  Q:  Is there any restriction or prohibition against, or demonstration
required for, raising an existing (or replacing) stack up to 65  ra?

     A:  No, as long as prohibited  dispersion  techniques are not employed.

11.  Q:  Are flares considered to be stacks?

     A:  No, flares are excluded from the  regulation.

12.  Q:  What load should be used for a fluid  modeling demonstration?

     A:- One hundred percent load should generally  be used unless there
is a compelling argument otherwise..

13,  Q:  Can new or modified sources who have  agreed to  a case-by-case
best available control  technology (BACT) emission rate be required to use
this rate for fluid modeling rather than a less stringent new  source
performance standard (NSPS) emission rate?

     A:  As set forth in 40 CFR 51.1 (kk), the allowable emission rate to
be used in making demonstrations under this  part shall be prescribed by
the NSPS that is applicable to the source  category  unless the  owner  or
operator demonstrates that this emission rate  is.infeasibl e.

U.  Q:  Must the exceed*nce of NAAQS or PSD increment  due to  downwash, wakes,
or eddies occur at a location meeting the  definition of  ambient  air?

     A:  No, the exceedance may occur at any location,  including that to
which the general public does not have access.

15.  0:  Is a source that meets NSPS or BACT emission Halts subject to
restrictions on plume merging?

     A:  Yes.  However, in a majority of such  cases, there win  be no practical
effect since BACT or NSPS limits will be sufficient to  assure  attainment
without credit for plume rise enhancement.

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                                   •8-
     0:  What stack parameters  are  to  be  used  in modeling when  the actual
stac* height is greater than  GEP  height?

     A:  Where it is necessary  to reduce  stack height credit below what  is
existence, for modeling purposes, use  existing stack gas exit parameters--
temperature and flow rate--and  existing stack top diameter and  model at
GEP height.

17.  0*  How should a stack that  1s less  than GEP height be modeled when
dispersion techniques are employed?

     A:  In order to establish  an appropriate emission limitation where  a
source desires to construct less  than  a GEP stack but use dispersion
techniques to make up the difference in plunt rise, two cases should be
tested.  First, conduct a modeling  analysis Inputting the GEP stack
height without enhanced dispersion  parameters, then conduct a second
analysis inputting the less than  GEP stack height with the increased
plune rise.  The more stringent emission  limitation resulting from  each
of the two runs should be the one specified as the enforceable  limitation.

18.  Q:  How are the effects  of prohibited dispersion techniques to be
for modeling purposes?

     A:  Where prohibited dispersion techniques have be«n used, modeling to
exclude their effects on the  emission  limitation will be  accomplished  by
using the temperature and flow  rates as the gas  stream  enters the  stack, anc
recalculating stack parameters  to exclude the  prohibited  techniques
(e.g., calculate stack diameter without  restrictions in  place,  determine
exit gas temperatures before  the use of  prohibited reheaters, etc.).

19.  Q:  How are single flued merged stacks  and  multiflued  stacks  to be
treated in a modeling analysis?
     A:  This is a multistep process.  First, sources with allowable
emissions below 5,000 tons/year may be modeled accounting for any plume
merging that has Deen employed.  For larger sources, multiflued stacks
are considered as prohibited dispersion techniques in the same way as
single flued merged gas streams unless one of the three allowable conditions
has been met; i.e., (1) the source owner or operator demonstrates that
the facility was originally designed and constructed with such merged gas
streams; (2) after date of promulgation, denonstrate that such merging is
associated with a change in operation at the facility that includes the
installation of pollution controls and results in a net reduction in the
allowable emissions of the pollutant for which credit 1s sought; or  (3)
before date of promulgation, demonstrate that such merging did not result  ^
in any increase in the allowable emissions (or, in the event that no       m
emission limit existed, actual emission level) and was associated with a   ~
change in operation at trie facility  that included the installation of

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                                   -9-
missions control equipment or was carried out  for sound  economic or
engineering reasons, as demonstrated to EPA.  Guidelines  on what constitutes
sound economic or engineering justification will  be issued  shortly.

     If plume merging from multiflued stacks  is not allowable,  then each
flue/liner must be modeled as a separate source and the combined impact
determined.  For single flued merged stacks where credit  is not allowed,
each unit should be modeled as a separate stack located at  the  same
point.  The exit parameters. I.e. velocity and  temperature, would be the
same as for the existing merged stack conditions and the  volume flow rate
based on an apportionment of the flow from the  Individual units.

20,  Q>  What stack height for point sources  should be Input to air quality
dispersion modeling for the purpose of demonstrating protection of the
NAAQS and PSO increments?

     A:  A discussion of the maximum stack height credit  to be  used in modelii
analyses is provided in the "Guideline for Determination  of Good Engineering
Practice Stack Height" and provides that the  SEP stack height should be
used as input to the model assessment.  If a  source is operating with a
less than GEP stack height, then the actual stack height  should be input
to the "model.

21.  Q:  What stack height should be used for background  sources in
modeHwg analyses?

     A:  The SEP-stack height for each background source  should
be input to the model assessment.  If a background source is operating
with a less than GEP stack height, then the actual stack  height should be
input to the model.

22.  Q:  Can credit for plume merging due to  installation of control
equipment for total  suspended particulate (ISP) matter be allowed when
setting the S02 1 imit?

     A:  To state the question another way, the concern  is  what impact
the merging and installation of control equipment have on the emission
limit for another pollutant, and whether the  merging occurred before or
after July 8, 1985.  After July 8, 1985, any  exclusion from the definition
of "dispersion techniques" applies only to the  emission  limitation for
the pollutant affected by such change in operation and 1s accompanied by
a net reduction in allowable emissions of the pollutant.   For exanple, a
source tears down two old stacks and builds one new GEP  stack with an
electrostatic precipitator (ESP).  This results in a net  reduction  in TSP
emissions.  This source could model using stack gas characteristics
resulting from merging the two gas streams in setting the TSP emission
limit, but may not so model and receive the credit for  stack merging when
evaluating the S02 emission limit.

-------
     Before July 8, 1985,  Installation  of  TSP  pollution  control  equipment
generally justifies the merging  of the  stacks  for TSP.   However,  if a
source's emission limitation  for SOj  increased after the merging,  then
credit would generally not be allowed since  it is presumed that  the
merging was to increase dispersion.

     A source with no previous SOj emission  limit that merges  stacks and
installs an ESP for TSP control  may consider the effects of merging on
compliance with the TSP NAAQS but may not  use merging to justify  setting
an S02 emission limit less stringent  than  Its  actual emission  rate before
the merging.

23.  Q:  If, after determining SEP stack height by fluid modeling,
dispersion modeling under  other  than  "downwash' meteorological conditions
shows that a lower emission limit than  that  from the fluid model  SEP
analysis 1s necessary to m? »t ambient air  quality constraints, should a
new stack height be define-; for  the source?

     A:  No.  SEP stack height is set.  Ambient air quality problems
predicted by dispersion modeling at the fluid  modeled height means that *
more stringent emission limit is necessary.

24.  Q:  Does EPA intend to issue additional guidance on fluid modeling
demonstrations?

     A:  See the attached  memo from Joseph A.  Tikvart,  Chief,  Source
Receptor Analysis Branch,  to David Stonefield, Chief, Policy Development
Section, on guidance for a discussion of  existing  and additional  guidance
on fluid model demonstrations.

Attachment

cc:  Stack Height Contacts
     Gerald Emison
     Ron Campbell
     B. J. Steigei-wald

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                       MAR 31 1988
MEMORANDUM

SUBJECT:  Application of Building Downwash in Prevention of
          Significant Deterioration  (PSD) Permit Analyses

FROM:     John Calcagni, Director
          Air Quality Management Division (MD-15)

TO:       William B. Hathaway, Director
          Air, Pesticides, and Toxics Division  (6T)
          Region VI

     Thank you for your memorandum of March 8,  1989 in which you
urge consideration of changes to EPA's current  policy of applying
building downwash to background sources in PSD  modeling.   Your
memorandum describes problems associated with the collection of
building dimension data necessary for downwash  modeling, and you
suggest that EPA might issue rules and provide  funding to collect
this building data.  Alternatively, you believe that downwash
modeling should not be required for any background sources.

     Members of my staff are currently analyzing several
approaches for handling background sources.  This will be the
subject of a future conference call with the Regional Offices.
In the interim, some of our concerns regarding  this issue and
your specific suggestions are discussed below.

     The Guideline on Air Quality Models notes  that background
concentrations are an essential part of the total air quality
concentration to be considered in determining source impacts and
therefore requires certain background sources to be fully
modeled.  The Guideline indicates that "... all sources
expected to cause a significant concentration gradient in the
vicinity of the source or sources under consideration for
emission limit(s) should be explicitly modeled."  This guidance
provides considerable flexibility and requires  judgment to be
exercised by the reviewing agency in identifying which background
sources should be fully modeled.  The burden of collecting
building dimension data may be mitigated somewhat by application
of this judgment.  We are exploring the development of additional
guidance to better assist in this judgment.  However, I caution
that it may not be possible to establish many objective "bright
line" tests that will eliminate the need for Regional Office
judgment in individual cases.

-------
     I realize that information needed to model background
sources is frequently not contained in the State's existing
emission inventory.  In some cases the applicant will need the
reviewing agency to assist in collecting the data.  However, I am
not convinced that we must undertake a national effort to issue
regulations or to fund the States/Regional Offices to collect the
data.  It is important to note that the PSD rules place this
burden primarily on the proposed source, not the regulatory
agencies.

     Your memorandum suggests that the PSD analyses could ignore
building downwash effects.  I do not believe that the PSD rules
and the Guideline allow this alternative.  Further, since it is
not unusual to find a national ambient air quality standards
(NAAQS) violation caused by downwash, the PSD analysis must
carefully consider that possibility.  If a proposed source
contributes to a NAAQS violation caused by downwash from a
background source, the permit cannot be issued.  On the other
hand, not every source potentially subject to downwash must be
evaluated.  Therefore, we are pursuing alternatives to better
define the range within which detailed modeling should be
required.

     In summary, please be assured that we are sensitive to the
issues raised in your memorandum and that we will coordinate with
Region VI in this effort.  If you have any questions, please
contact me or have your staff contact Doug Grano at 629-5255.

cc:  R. Bauraan
     D. deRoeck
     E. Ginsburg
     D. Grano
     W. Laxton
     E. Lillis
     J. Tikvart
     D. Wilson
     J. Yarbrough

AQMD:SDPMPB:DGrano:PFinch:RTP(MD-15):629-5255:3-29-89
DataTech/DOWNWASH.R6
Control Number AQMD-023       Due Date:  3-29-89

Response coordinated with New Source Review Section and Source
Receptor Analysis Branch.
                                                                       i

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REFERENCES FOR SECTION 4.6

-------
                              EPA-450/2-78-027R
Guideline On Air Quality Models
               (Revised)
         U.S. ENVIRONMENTAL PROTECTION AGENCY
               Office of Air and Radiation
          Office of Air Quality Planning and Standards
             Research Triangle Park, NC 27711

                   July 7986

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           UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                 Office of Air Quality Planning and Standards
                Research Triangle Park, North Carolina 27711
                         February 15,  1989
MEMORANDUM

SUBJECT:  Modeling  Requirements for Pennsylvania  Power  and Light
          (PP&L), Martins  Creek,  Pennsylvania
FROM:     Robert D. Bauman,  Chief
          S0,/Particulate Matter Programs Branch  (MD-15)

TO:       Joseph Tikvart, Chief
          Source Receptor Analysis Branch (MD-14)

     This is in response to a memorandum dated January 4, 1989 from
Al Cimorelli, Region 3, to Dean Wilson of your branch.  Since this
appears to be  more of  a policy than a  technical  issue/  my branch
agreed to prepare  a response.

     Region 3  is asking  if EPA policy would allow PP&L's modeling
analysis  to  address  only the  designated  nonattainment  area  in
Warren  County, New Jersey.   If   so,  it  might  be  possible  to
reclassify  the  Warren  County  area  to  attainment  without  an
evaluation of PP&L's impact outside the Warren County nonattainment
area.  Additionally, the Region has asked  if a  redesignation for
Warren County  could proceed independent of  any revision  to the
Pennsylvania SIP,  in the event the modeling analysis shows Warren
County  to  be  attainment   but  shows   a  modeled  violation  in
Pennsylvania.

     The Guideline on Air Quality  Models  fRevised^ ( Guideline ^  on
page 1-3 states that the  current guidance  should be followed in all
air quality analyses relative to State implementation plans and in
analyses required by EPA, State and local agency air programs. This
policy is consistent with  stack height implementation  policy and
general guidance found  in  a  January 2, 1985 memorandum from SRAB
to the  regional modeling  contacts.   Guidance  contained  in the
Guideline recommends  on page  9-8   that  "all sources expected  to
cause a significant concentration  gradient  in the vicinity of the
source or sources under consideration for emission limit(s) should
be explicitly  modeled."   On page  8-4,  the Guideline states that
"Receptor  sites  for  refined  modeling  should  be  utilized  in
sufficient  detail   to  estimate  the  highest  concentrations  and
possible violations of a NAAQS or  a PSD increment."

-------
     I believe that application of  guidance  noted above does not
allow a  partial modeling  analysis.    If  a modeling  analysis is
required for any reason, that analysis must meet the requirements
of the Guideline.

     Redesignation policy is generally contained in the April 21,
1983 memorandum from Sheldon Meyers  to  the Regional Air Directors.
That  policy  includes  requirements   for  a  modeling  analysis
demonstrating attainment  and evidence  of  implementation  of the
approved SIP.   As noted  by Region 3,  PP&L's analysis  may show
violations at  locations outside of the  designated nonattainment
area, while  demonstrating  an  absence of  violations  within the
nonattainment area.   In such an  event,  the  existing  SIP  may be
judged adequate to demonstrate attainment in  Warren County and an
action to redesignate the area to attainment  could proceed before
the State completes the  necessary  effort to resolve the violations
outside the nonattainment  area.  While separate rulemaking actions
are  possible,   it  may  be  mor ?  efficient  to  consolidate  the
redesignation and SIP revision actions whenever possible.

     I trust  that this memorandum  is  responsive to  Region 3's
concerns.  If  you need any  additional information, please call me.

cc:  A.  Cimorelli, Region 3
    u^<*Ginsburg, OAQPS/AQMD
     0.  Grano, OAQPS/AQMD
     S.  Sambol, Region 2
     D.  Wilson, OAQPS/TSD

-------
REFERENCES FOR SECTION 4.7

-------
                              EPA-450/2-78-027R
Guideline On Air Quality Models
               (Revised)
         U.S. ENVIRONMENTAL PROTECTION AGENCY
              Office of Air and Radiation
          Office of Air Quality Planning and Standards
            Research Triangle Park. NIC 27711

                   July 1986

-------
REFERENCES FOR SECTION 5.1

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27852	Federal Register  /  Vol. 50.  No. 130  / Monday. July 8.  1985 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY

40CFRPart51

IAO-FBL-2847-6)

Stack Height Regulation

AGENCY: Erv. .-or.nep- ,! Protcc-ion
Aacnc> (EPA|
ACTION: F tndl ruiemaking

SUMMARY: Section 123 of the Clean Air
Art as amended, requires EPA to
promulgate regulations to ensure that
tr.e aegrte of emission limitation
re^i!:red for tne control of any air
pollutant under an applicable State
implementation plan (SIP) is not
affected by that portion of any slack
hpight which exceeds zood engineering
practice |GEP'( or by any oiher
dispersion technique. A regulation
implementing section 123 was
prorr'-iij-iteu on February1 8. 19S2.  at 47
FR 5864. Revisions to the regulation
v\ ere proposed on November 9. 1964. at
49 FR 44878. Today's action incorporates
changes to  the proposal and adopts this
regulation in final form.
EFFECTIVE DATt: This regulation
becomes effective on August 7, 1985.
FOR FURTHER INFORMATION CONTACT:
Eric 0. Gmsburg. MD-15. Office of Air
Quality Planning and Standards. EPA.
Research Triangle Park.  North Carolina
27711 Telephone (919) 541-5540.
SUPPUEMENTAMY INFORMATION:

Docket Statement

   Pertinent information concerning  this
regulation is included in  Docket Number
A-83-49. The docket is open for public
inspection between the hours of 6.-00
a.m. and 4.00 p.m.. Monday  through
Friday, at the EPA Cential Docket
Section. West Tower Lobby. Gallery
One. 401 M Street. SW..  Washington.
D  C.  Background documents normally
a\ ailable tc the public, such as Federal
Register nonces and Congressional
reports, are noi included in  the docket.
A  reasonable fee may  be charged for
copying uocumerus.

Background
  Section 123. which was added to the
Clean Air Act by the 1977 Amendments.
regulates the  manner in which
techniques for dtsperson of pollutants
from a source may be considered in
setting emission limitations. Specifically.
section 123 requires that the degree of
emission limitation shall not be affected
by that portion of a stack which exceeds
GEP or by "any other dispersion
technique." It defines GEP. with respect
to stack heights as:
the height necessary to insure that emissions
from the stack do not result in excesaive
concentrations of any air pollutant in the
immediate vicinity of the source is t result of
atmospheric downwash eddies or wakes
which ma>  be created &> the source itself.
nearb\ sirjct-res or nearoy terrain obstacles
.  . . (Section 123(c)|
Section 123 further provides that GEP
stack height shall not exceed two and
one-halt times the heigh! of the source
(2.5H) unless a demonstration is
performed showing that a higher stack is
needed to  avoid "excessive
concentrations." As the legislative
history of section 123 makes clear, this
reference to a two and one-half tunes
test reflects the established practice of
using a formula for determining the GEP
stack height needed to avoid excessive
downwash. Finally, section 123 provides
that the Administrator shall regulate
only stack height credits—that is. the
portion of the stack height used in
calculating an emission limitation—
rather than actual stack heights.
  With respect to "other dispersion
techniques" for which emission
limitation  credit ii  restricted, the statute
is lest specific. It states only that the
term shall include intermittent and
supplemental control systems (ICS.
SCS). but otherwise leaves the definition
of that term to the discretion of the
Administrator.
  Thus the statute  delegates to the
Administrator the responsibility for
defining key phrases, including
"excesaive concentrations" and
"nearby."  with respect to both
structures and terrain obstacles, and
"other dispersion techniques." The
Administrator must also define the
requirements of an adequate
demonstration )ustifytng stack height
credits in excess of the 2.5H formula.
Rulemaking and Litigation
  On February 8.1982 (47 FR 5864). EPA
promulgated final regulations limiting
stack height credits and other dispersion
techniques. Information concerning the
development of the regulation was
included in Docket Number A-79-01 and
is available for inspection at the EPA
Central Docket Section. This regulation
was challenged in  the U.S. Court of
Appeals for the D.C. Circuit by the
Sierra Club Legal Defense Fund. Inc. the
Natural Resources Defence Council Inc.:
and the Commonwealth of Pennsylvania
in Sierra Club v. EPA. 719 F. 2d 436. On
October 11.1983. the court issued  its
decision ordering EPA to reconsider
portions of the  stack height regulation.
reversing certain oortions and upholding
other portions. Further discussion  of the
court decision is provided later in th:s
notice.
Administrative Proceedings Subset} af :
to the Court Decision

  On December 19.1933. EPA held a
public meeting to take comments to
assist the Agpnry in implementing trie
mandate of the cour(  T.iis meeting was
announced in the Federal Register en
December 8.1983. at 48 FR 54999
Comments rpce-ved bj EPA are
included in Docket NUT.T.F: A-83—49  O.
February 28.1984. the e,tz\- -. pov\er
industry filed a petition fjr a v. n; of
cert'orar. with the U.£ S.p:e.T> Cou."
While the petition was per, '.r.g before
the court, the mandate frjrr. tne L'.S
Court of Appeals was s:a\ta On |ui>  2
1964, the Supreme Cour' denied  the
petition (104 S.Ct. 3571). and on July T8
1984. the Court of Appeals  manda'e
was formally issued, implementing the
court's decision and requiring EPA to
promulgate revisions to the stack height
regulations within £ months. The
promulgation deadline was ultima'.bA
extended to fune 27.1965. in order to
provide additional opportunities for
public comment, to allow EPA to hold a
public heanng on January 8.1985. and to
provide additional time for EPA to
complete its analysis of rulemaking
alternatives.
Documents
  In conjunction with the 1982
regulation and this revision. EPA
developed several technical and
guidance documents. These served as
background information for the
regulation, and are included in Dockets
A-79-01 and  A-83-49. The following
documents have been or will be placed
in the National Technical Information
Service (NTIS) system and may  be
obtained by contacting NTIS at  5285
Port Royal Road, Springfield, Virginia
22161.
  (1) "Guideline for Use of Fluid
Modeling to Determine Good
Engineering Stack Height." July  1981
EPA. Office of Air Quality  Planning and
Standards. EPA-450/4-61-003 (NTIS
PB82 145327).
  (2) "Guideline for Fluid Modeling of
Atmospheric Diffusion." April 1981.
EPA. Environmental Sciences Researcr.
Laboratory. EPA-600/8-01-009 (MIS
PB81 201410).
  (3) "Guidance for Determination of
Good Engineering Practice Stack Height
(Technical Support Document for the
Stack Height Regulation)." |une 1985
EPA. Office of Air Quality  Planning and
Standards. EPA-450<4-823R.
  (4) "Determination of Good
Engineering Practice Stack Height—A

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              Federal Register  /  Vol. 50. No. 130 / Monday. July 6. 1985  /  Rules and Regulations       27893
Fluid Model Demonstration Study for a
Power Plant." April 1983. EPA.
Environmental Sciences Research
laboratory. EPA-600/3-£3-024 (NTIS
PBB3 207407).
  (5) "Fluid Modeling Demonstration of
Cood-Engmeenng-Practice Stack Height
in Complex Terrain." April 1985. EPA
Atmospheric Sciences Research
Laboratory. EPA/600/3-e5/022 (NTIS
PB85 203107).
  In addition, the following documents
are available in Docket A-63-49.
  "Economic Impact Assessment for
Revisions to the EPA Stack Height
Regulation." June 1985.
  "Effect of Terrain-Induced Downwash
on Determination of Good-Engmenng-
Pnctice Stack Height.'* July 1984.

Program Overview

Gfnemi
  The problem of air pollution can be
approached in either of two ways:
through reliance on a technology-baaed
program that mandates specific control
requirements (either control equipment
or control efficiencies) irrespective of
ambient pollutant concentrations, or
through an  air quality based system that
relies on ambient air quality levels to
determine the allowable rate* of
emissions.  The .Clean Air Act
incorporates both approaches, but the
SIP program under section 110 uses an
air quality-based approach to establish
emission limitations for sources.
Implicitly, this approach acknowledges
and is based on the normal dispersion of
pollutants from their points of origin into
the atmosphere prior to measurements
of ambient concentrations at ground
level.
  There are two general methods for
preventing violations of the national
ambient air quality standards (NAAQS)
and prevention of significant
deterioration (PSD) increments.
Continuous emission controls reduce on
a continuous basis the quantity, rate, or
concentrations of pollutants released
into the atmosphere from a source. In
contrast, dispersion techniques rely on
the dispersive effects of the atmosphere
to carry pollutant emissions away from
the source  m order to prevent high ,
concentrations of pollutants near the
source. Section 123 of the Clean Air Act
limits the use of dispersion techniques
by DO Hut ion sources to meet the NAAQS
or PSD increments.
  Tall stacks, manipulation of exhaust
gas parameters, and varying the rate of
emissions  based on atmospheric
conditions (ICS and SCS) are the basic
 types of dispersion techniques. Tall
 stacks enhance dispersion by releasing
 pollutants into the air at elevations high
above ground level, thereby providing
greater mixing of pollutants into the
atmosphere. The result is to dilute the
pollutant levels and reduce the
concentrations of the pollutant at ground
level, without reducing the total amount
of pollution released. Manipulation of
exhaust gas parameters increases the
plume rise from the source to achieve
similar results. ICS and SCS vary a
source's rate of emissions to take
advantage of meteorologic conditions.
When conditions favor rapid dispersion.
the source emits pollutants at higher
rates, and when conditions are adverse.
emission rates are reduced. Use of
dispersion techniques in lieu of constant
emission controls results in additional
atmospheric loadings of pollutants and
can increase the possibility that
pollution will travel long distances
before reaching the ground.
  Although overreliance on dispersion
techniques may produce adverse effects.
some use of the dispersive properties of
the atmosphere has long been an
important factor in air pollution control.
For example, some stack height is
needed to prevent excessive pollutant
concentrations near a source. When
wind meets an obstacle such as a hill or
a building, a turbulent region of
downwash. wakes, and eddies is
created downwind of the obstacle as the
wind passes over and around it This
can force a plume rapidly to the ground.
resulting in excessive concentrations of
pollutants near the source. As discussed.
previously, section 123 recognizes these
phenomena and responds by allowing
calculation of emission limitations with
explicit consideration of that portion of
a source's stack that is needed to ensure
that excessive concentrations due to
downwash will not be created near the
source. This height is called CEP stack
height
Summary of tht Court Decision
  Petitions for review of EPA's 1982
regulation were filed in the D.C Circuit
within the statutory time period
following promulgation of the regulation.
On October 11.1983. the court issued its
decision ordering EPA to reconsider
portions of the stack height regulation.
reversing certain portions and upholding
others. The following is a summary of
the court decision.
   The EPA's 1962 rule provided three
ways to determine CEP stack height
One way was to calculate the  height by
using a formula based on the
dimensions of.nearby structures. The
other two were a de minimis height of 85
meters, and the height determined by a
fluid modeling demonstration  or field
study. The court endorsed the formula
 as a starting point to determine GEP
height. However, it held that EPA has
not demonstrated that the formula was Jtt
an accurate predictor of the stack heigrM|
needed to avoid "excessive
concentrations of pollutants due to
downwash. Accordingly, the court
directed EPA to re-examine in three
ways the conditions under which
exceptions to the general rule of formula
reliance could be justified.
  First the 1982 rule allowed a source to
justify raising its stack above formula
height by showing a 40-percent increase
in concentrations due to downwash.
wakes, or eddies, on the ground that this
was the percentage increase that the
formula avoided. The court found this
justification insufficient and remanded
the definition to EPA with instructions
to make it directly responsive to health
and welfare considerations.
  Similarly, the 1982 rule allowed a
source that built a stack to less than
formula height to raise it to formula
height automatically. Once again, the
court required more justification that
such a step was needed to avoid
adverse health, or welfare effects.
  Finally, the court directed EPA either
to allow the authorities administering
the stack height regulations to require
modeling by sources in other cases as a
check on possible error in the formula
or explain why the accuracy of the
formula made such a step unnecessary
  The 1982 rule provided two formulae
to calculate GEP stack height For
sources constructed on or before
January 12.1979. the data of initial
proposal of the stack height regulations.
the applicable formula was 2.5 tunes the
height of the source or other nearby
structure. For source* constructed  after
that data, the rui* specified a newer,
refined formula, the height of the source
or other nearby structure plus 1.5 times
the height or width of that structure.
whichever is leva (H-t-l.SL). The EPA
based its decision-to include two
formulae on the unfairness of applying
the new formula retroactively. In its
examination of this issue, the court
specified four factors that influence
whether an agency has a duty to apply a
rule retroactively. They are:
  I. Whether th« new rule represent* an
abrupt departure from will eiublif hed
pr*cnce or merely attempts to fill • void m an
unsettled ana of law.
  2. Th* extent to which th* party agiinst
whom the new nil* ii applied relied on :ne
former nil*.
  X Tht dcftw of burden which a retroactive
order tmpoaes ori • party, and
  4. Tht statutory interest In applying a new
rule despite the teh«nc« of t p«rty on the oid
standard.
i

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 27W       Fedatal  Rapatat / Vol 50. Na.  130 / Monday, friy 8. 1965 /  Rates and Regulations
 719 Fid at 467 (citations omitted).
 Applying this inalyus to the two
 formulae, the court upheld EPA't basic
 decision.
   However, the court also held that
 sources constructed on or be/ore
 January 12,1979. should not be
 automatically entitled to full credit
 calculated under the Z.5K formula unless
 they could demonstrate reliance on that
 formula. The court remanded this
 provision for revision to take actual
 reliance on the 2.5H formula into
 account.
   The statete limits stack height eredH
 to that needed to avoid excessive
 concentration* dv* to downwaeft caused
 by "nearby" straeturee or terrain
 feature* The 19*2 refutation defined
 "nearby" for CEP foramla appheatioaa
 as five times the leaaer of ertfcar the
 height or projected width of the
 structure -u^iing downwasa, net to
 exceed aim hall rub. No such distance
 limitation was placed oa structures or
 terrain features waose effects wen
 being considered in Quid •riHiiat
 demonstrations or field studios. The
 court held that section 123 explicitly
 applies the "nearby" limitation to
 demonstrations and studies at watt aa
 formula applications, and •™*"ri*ii the
 rule to ETA to apply the limitation in
 both contexts.
   The 1962 rule defined "dispersion
 techniques" ae those techniques which
 attempt to affect poDutant
 coit€HitieliuRS by  wing that \pu\ (fuii of a
 stack exceeding CEP. by varyinf
 emission retoe sciurding tv etBraspiwric
 conditions or pollutant eonceittntioft*.
 or by the eddltion of e fan or raneetertB
 obtain a less stringent emiseim
• limitation. The court foand lids
 definition too narrow/ because any
 technique "sifTBficairtty motivated Vy aa
 intent to gain missions credit for
 greater dispersion" should be barred.
 719 F.2d 462. As a result the covt
 directed EPA to develop rule*
 disallowing credit  for all sack dispersion
 techniques unless  die Agency
 adequately justified excapetsae oa the
 basis of administrative necessity or ede
 minima result.
   The CEP formulae established in the:
 1982 rule do not consider paaaa nae.ea
 the ground that plume nse is not
 significant under downwash condLu'ona.
 In its review at this, provision, the court
 affirmed this judgment by EPA.
   The 1962 rule addressed pollutant
 concentratioas estimated to occur whan
 a plume impacts elevated terrain by
 allowing credit {or stack height
 necessary to avoid aix quality vlniatioaa
 in such cases. However, the court ruled
 that section 123 did not  allow EPA to
 grant credit for plume impaction in
setting esaiaeioa Units, and reversed tata
part of tee regulation.
  The preaBhis (e the 19&2 regulation
provided a 22 norna process fat Stale
laoalaBentauon ai the regulation. The
court found tbia period to he coBtrary to
section 4>6 haniitiinrl welsaro
envissaaed by Coosjreee wsaa it
section 123. tai tae. sweat that teca a
Reliance on the 2JH Formula

  In its 1982 rule* KPA attawad sources
built befat* laauary U MB9, tho date on
which it proposed the refined; H+1.SL
formulae, to calculate *h»»» onuestoa
limit* based on tae tradstioaal 2JH
forauila that existed pmviously. The
court approved this distincrtoa, bat
ruled mat it should be  uauted to soartes
that "reaed" oa tae traditioaal forauis.
snpflssriifc fat axasaple. that sources
that hod daisied ooail for stacks far
taller thaa thexiarautia pravided ctmid
not bo said ta save "retted" oa it
  IB respeaae to the coaxt deoawa. EPA
proponed In reviaa ha icsaJetioa at
raojara taat far stacks  ta exist mna*
laauary 12.1979. aourcaa dssnaastrata-
that thar aetaafly relied oa the rSH
formakt ia the  dasnat of tkasr stacka
before recarvsag oadst for taatkesaVi in
settaytnestiagiiBsnallBiMstiim to tae
proposes, EPA ressanass) i
whatftsaaaidi
eviaaacaafi

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             Federal Register / Vol.  50. No. 130 / Monday. July 8. 198S  /  Rules and Regulations        27895
Definition of "
  In its 1982 rules, EPA allowed source*
that modeled the effects of terrain
obstacles on downwash to include any
terrain features in their model without
limiting their distance from the suck.
The court though persuaded that this
was a sensible approach, since it
allowed the model to best approximate
reality, ruled that Congress had
intended a different result, namely that
terrain features beyond tt mile from the
stack should not be included in the
model
  In response, EPA proposed, to revise
§ 51.1(ii){3) of its regulation to limit the
consideration of downwash. wake*, and
eddy effects of structures tad tacrmia
features to those features classified as
being "nearby" as defined in | 51.1/jj).
Under this proposal structures and
terrain features would be considered to
be "nearby"*!/ they occur within a
distance of not more than QuB km (to
mile); terrain features that extend
beyond 04 km could be considered if. at
a distance of 0.8 km, they achieved a '
height greater than or equal to 40-
percent of the CEP stack height
calculated by applying the CEP formula
to actual nearby structures. In other
words, a terrain feature would be said to
"begin" within tt mile if it reached at
least the height of nearby buildings
within that »««»«m^ Such features «""iway* at
limiting terrain m the modei beyond the
proposed  distance limitations.
  To establish a baseline for
comparison, two sitematives wodd
initially modei the stack cm a flat plane
with no structure or terrain influences.
To analyze downwesh effects, the firti
approach would then insert nearby
terrain, with ail terrain beyond the
distance limit "c*t off" horizontally The
second approach would gradually
smooth and ilope the terrain beyond the
distance limit down to the elevation of
the base of the stack.
  The third approach would proceed in
a somewhat different manner. A
baseline would be established by
modeling all terrain beyond the distance
limit smoothing and sloping nearby
terrain to minimise its influence. To
analyse downwash effects, the nearby
terrain would than  be inserted into the
model and the difference in effect
measured to determine appropriate
downwash credit for stack height
Definition of "Ditptnioa Ttcfuuqutt"
  In the 1962 rake. EPA identified two
practices, in addition to stacks above
CEP aad ICS/SCS, M baring no owpoaa
other dun to obtain a las* stringent
CSUaVHOfl UfltttDOOaL CB 0O QOUl^L 11
allowed credit for any other practice
that had the reeolt of increasing
dispersion, The court concluded that
Congre**  ad intended, at a »ttiimiii«
to forbid any dispersion ^•""••P""?*
practice that was significantly
motivated by an intent to obtain
additional credit for greater dispersion.
and remanded the question to EPA for
^examination.
  The EPA proposed to revise It*
definition of "dispersion techniques"
generally to incfode. hi addition to ICS.
SCS, and stack helgnta in exeaea of CEP.
any tacmwraa* that bar* Ifct effect of
enhancing exhaoat gas piuM ria*.
Combining aewni existing stacks into
on* new stack can have each an effect
However, each eoabiaadoae alee often
haw Independent economic and
engineering justfflcetiofL Aocordngry,
wA reQjB***eQ ooflBBast on oexmi&g tn*
orcameunce* under which ta*
combining ofg*a stream* should not be
considered a dispersion tochaiom aad
proposed to allow source* to take i
in emsesiofi iitiniatfooe for stun i
wherra facility wae originally
and coaatracted win merged gas
•tnflaU Of WIMfV OW l&iW£IR9 OCCWi
with tfae inetallation of additional
controls yielding a net reduction in total
emissions of the affected pollutant. The
EPA retained excraston* from its
definition of prohibited dispersion
techniques for smoke management in
agricultural and sirricutnraJ prescribed
burning programs and also proposed to
exclude episodic restrictions on
residential woodbuming and debris
burning,
New Source* Tttd into Pn-I9n Stock*
   Section 123 exempts stacks "In
existence'' at the end of 1970 from its
requirements, EPA's general approach to
implementing this language was upheld
by the court However, to its 1962 rule
EPA had also allowed tnli credit to
sources built after that date that had
tied into stacks built before that date.
EPA failed to respond to comments
objecting to this allowance, and so the
court remanded the question to EPA for
the agency to address.
  Upon ^examination. EPA saw no
convincing justification for granting
credit to these  sources. Consequently.
for sources constructed after December
31.1970. with emissions ducted into
grandfathered  stacks of greater than
CEP height and for sources constructed
before that date but for which major
modifications or reconstruction have
been carried out subsequently, EPA
proposed to limit stack height credit to
only so much of the actual stack height
es conforms to CEP. Sources
constructed prior to December 31.1970,
for which modifications are carried out
that are not classified as "major" under
40 CPR Sl.lSOJfi). S1.24(6)(2)(fl. and
51.a(flM2)(i) would be allowed to retain
full credit for their existing stack
heights.

Plume laipactian

  In its 1982 rale*. EPA sllowed stack
height credit for "plume impart on." a
phenomenon that is distinct from
downwash. wakes and eddies. The
court though sympathetic to EPA's
policy position, .reversed this judgment
as beyond the  scope of toe statute.
Accordingly. EPA proposed to delete th«
allowance of plume impaction credit
from its regulation in compliance with
the court dt^fi"* However. EPA also
recognized that aoarcas in rnmpieT
tamo face additional analytical
>nm,».jH-. waaa alternating to conduct
modeling to determine appr*prnt*
emiaatoB liautatioos. Coo***jo*ntly.  EPA
request**) mnimatM on whether any
allowance should be made for
implementation problem* that may
result from the application of revised
CEP stack height assumptions end. if so.
how such allowance should be made.

Stat* Impimttatioa Plan Requimnenu

  EPA's 1982 roles gave states s total of
22 months to revise their rules and to
establish source emission limitations
based on new stack height credits. The
court found this, too, to go beyond the
language of the statute. In response.
EPA stated in the proposal that States
would be required pursuant to section
408fd)(2)(b) of the Clean Air Act. to
review their rde* and existing emission
limitations, revising them as needed to
comply with the new regalsboa withm 9
months of the daUi of its pronuixaJion.

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27896       Federal Register / Vol. 50. No.  130 / Monday. July 8. 1985 / Rules and Regulations
Response to Public Comments on the
November 9,1984, Proposal
  The EPA received over 400 comments
during the public comment period and at
the public hearing, addressing a number
of aspects of the proposed
regulation.These comments have been
consolidated according to the issues
raised and are discussed, along with
EPA's responses, in a "Response to
Comments" document included in the
ruiemaking docket. Certain comments
can be characterized as "major" in that
they address issues that an
fundamental to the development of the
final regulation. These comments are
summarized below, along with EPA's
responses. Additional discussion of the
issues raised and further responses by
EPA can be found in the "Response to
Comments" document

I. Maximum Control of Emissions in Lieu
of Dispersion
  A central legal and policy question
addressed in this ruiemaking was raised
in the comments of the Natural
Resources Defense Council (NRDC) and
the Sierra Club. They contend that
section 123 requires all sources to install
the maximum feasible control
technology before receiving any credit
for the dispersive effects of a stack of
any height or for other practices that
may enhance pollutant dispersion.
  The NRDC argument is summarized
fully in the Response to Comments
document together with EPA's response.
Very briefly, NRDC contends that
litigation prior to the 1977 Clean Air Act
Amendments had established that
dispersion can never be used as an
alternative to emission control and that
this understanding was carried forward
and strengthened in the 1977 Clean Air
Act Amendments. Accordingly, no rule
that does not require full control of
emissions as a prerequisite to any stack
height credit would be comment with.
Congressional intent
  EPA disagrees. During the 8 years
between 1977 and NRDCa comments, a
period covering two Administrations
and three Administrators. NRDCs
position has never been either adopted
by EPA or seriously advocated before it
The pre-1977 cases cited by NRDC-do
not bar all stack credit, but only credit
for stacks beyond the historical norm.
Finally, the text and legislative history
of section 123 contain essentially no
support for NRDCs "control first"
position.

II. Discussion of Other Major Issues
  The EPA's position on the "control
first" comments provides the necessary
background against which the remaining
major issues in this ruiemaking are
discussed. These issues are: the
definition of "excessive concentrations"
due to dpwnwash. wakes, and eddies:
the definition of "nearby;" and the
definition of "dispersion technique." A
question that affects several of these
decisions, and that is addressed where
it arises, concerns the extent to which
any changes made in the stack heights
regulations should be applied
prospectively rather than retroactively.
  This discussion of "excessive
concentrations" is in turn divided into a
discussion of the physical characteristics
of downwesh. followed by a discussion
of the significance of those
characteristics aa they pertain to the
CEP formula*, to stacks above formula
height to stacks being raised to formula
height and to stacks at formula height
being modeled at the choice of the
administering authorities.

Definition of "Excessive
Concentrations"
  The Physical Nature of Downwash. A
number  of commenters, including the
Utility Air Regulatory Croup (UARG),
have argued that the court decision does
not obligate EPA to revise the definition
adopted in the 1982 regulation, but only
directs EPA to ensure that the 40-
percent criterion protect! against
concentrations due to downwash that
could be related to health and welfare
concern*. They point out that whan
emissions from a source become  trapped
in the wake region produced by the
source itself or upwind structures aad
terrain features, those emissions  an
brought  rapidly to earth, with little
dilution. This, the commentan argue.
can produce short-term peak
concentrations at groundlevel that are
many times greater that the
concentration levels of the NAAQS.
Because their duration is relatively
short averaging these concentrations
over the times specified by the NAAQS
does not result in NAAQS violations.
Nonetheless, the-commenters argue that
these concentrations should be regarded
as nuisances that section 123 was
specifically enacted to avoid.
Accordingly, the commenters held that
EPA would be justified in retaining the
40-percent criterion without requiring
that such increases result in
exceedances of the NAAQS.
  These same commenters argued that
severe hardships would result  if EPA's
second proposed definition of
"excessive concentrations" is adopted,
and that by limiting stack height credit
to that just  necessary to avoid
exceedance of NAAQS or PSD
increments, the definition would  act to
limit actual stack design and
construction in a way that would
increase the likelihood of NAAQS or
PSD exceedances. This would occur.
they argue, because, by building only so
tall a stack as they can receive credit
for, sources would be eliminating a
"margin of safety" that would normally
be provided otherwise. Furthermore, it
was argued that due to the changing
nature of background air quality.
inclusion of absolute concentrations
such as the NAAQS or PSD increments
in the definition would render
determinations of CEP stack height
constantly subject to change.
  NRDC argued on the other hand that
only a violation of air quality standards
can be considered the type of
"excessive concentration" for which
downwash credit can be justified, the
EPA had failed to specify the health or
welfare significance of the short-term
peaks that it might consider as meeting
this description, and that in any event
UARC's attempt to show that short
stacks could cause a large number of
short-term peaks was technically flawed
in several different ways.
  Response. Extensive discussion of the
downwash phenomenon, as well as the
aerodynamic effects of buildings and
terrain features on windflow patterns
and turbulence, is contained in the
technical and guidance documents
previously listed in this notice. To
summarise briefly, numerous studies
nave shown that the region of
turbulence created by obstacles to
windfiow extends to e height of
approximately 2J times the height of the
obstacle. Pollutants emitted into this
region can be rapidly brought to the
ground, with limited dilution. Though
this tendency decreases the higher
vertically within the downwash region
that the  plume is released, because of
the highly  unpredictable nature of
downwash and the lack of extensive
quantitative data, it is extremely
difficult to reliably predict plume
behavior within the downwash region.
As noted in the comments submitted.
the distinguishing features of downwash
do not show up well  over an averaging
time aa long aa 1 hour or more. Pollutant
concentrations resulting from
dowawash can arise and subside very
quickly aa meteorological conditions,
including wind speed and atmosphere
stability vary. This can result in short-
term peaks, lasting up to 2 minutes or 10.
recurring intermittently for up to several
hours, that significantly exceed the
concentrations of the 3- and 24-hour
NAAQS. Little quantitative information
is available on the actual levels of these
peaks, or on the frequency of their
occurrence since most stacks have been

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                                                                a>

             Federal Register / Vol.  50. No. 130 / Monday.  July B. 1965  /  Rdeg and Regulations
                                                                      2T1
designed to, a void downwash and
because downwash momtonng i* not
typically conducted
  A number of modeling and momtonng
studies in the record assess the
significance of downwash when plumes
are released into the downwash region.
The most important of these are a
number of studies cited in the November
9 proposal showing that for sources with
sulfur dioxide (SOi) emission rates of 4
to 5 -ounds per million British Thermal
Units (Ib./mmBTU), stacks releasing the
plume into  the downwash region can
significantly exceed the 3-hour NAAQS.
  The utility industry submitted
momtonng results from four sites
showing that facilities with short stacks
(ranging from 23 to 88 percent of formula
height) generated many short-term
peaks in the vicinity of the plant at
concentrations at least 2 times the
highest concentration of the 3-hour SOi
standard, i.e- 1 ppm for up to 10
minutes. Those concentrations are the
maximun that could be recorded by the
monitors used. There is no way to
determine from these data the true peak
ground-level concentrations.
  The NRDC in commenting on this
subject has argued that dowawaah- •  •
related concentrations are largely
theoretical since stacks have generally
been built to avoid downwash. and that
actual concentration* occur under other
meteorological conditions such  as
"inversion breakup fumigations" and
"looping plums," that  can equal these
"theoretical" concentrations predicted
under downwash.' The NRDC alao
criticized the utility data on numeroae
technical grounds.
  EPA's studies indicate that when
stacks are significantly less than CEP
formula height high short-term
concentrations can indeed occur due to
downwash that are in the range of the
values reported by the utility industry.
Concentrations produced by the other
conditions cited by NRDC. though high.
may be lower by an order of magnitude.
and occur less frequently by as much as
two orders of magnitude, than those
produced by downwash.' As stack  '
   In mvcnian breakup fuoiieauon."
layer diwipatea oue to heaung of tht ground lemnf,
me poilutaiui tnat wtn tripped in it detceod
suddenly to (round level, (n "loopin| plume*." a
p'ume i« broufht down to the ground dow to IKe
source in tha form of intermittaai puffa under very
unsiible atmoapnene conditraM.
  '  Comment* on Peak Ground-Level
Concentration* Due to Buildinf Downwath Relative
'o Pejk Concentriiioni Under Almoaphenc
D icersion Proceiwt" Alan H. Huber ind rVancis
Poo'er |r luxe 10 IMS.
height approaches the height determined
by the CEP formula, the expected
frequency and seventy of short-term
peaks due to downwash becomes iesa
certain. This is to be expected, since it is
the purpose of a formula height stack to
avoid excessive downwash. While it
might theoretically be possible for EPA
to revise the CEP formula-downward
(e.g.. from H+1.5L to H+1.2L or some
other value), such a revision would have
little purpose. By moving the release
point further into the downwash region.
such a change would increase the
probability of high downwash-caused
peaks. On the other hand, such
relatively small changes in stack height
are not likely to appreciably affect the
emission limitation for the source. This
is because emission limitations an
calculated based on  physical stack
height and associated plume rise under
atmospheric conditions fudged most
controling for the source. Increasing or
decreasing stack height by a small
fraction will not greedy change the rate
or extent of dispersion and thus will not
affect the ground-level concentration.
Moreover, as EPA noted in its
November 9 proposal, no data presently
exist on which to base a revision to the
formula.
  The NRDC submitted data to EPA
which it believed to support the
conclusions that it urged EPA to adopt
co nee ruing short-term peak
concentrations under other
meterological conditions.'However.
these data were not presented in • fen
that could be readily interpreted and
EPA has thus far been unable to draw
any conclusions from them.'
  In  reviewing NRDCs comments oa
building downwash. EPA agree* that
there is greet uncertainly about ov
present understanding of this
phenomenon, and this is supported by
the range and variation of downwash
effects observed in recent studies.
However, no information has been
presented which would convince EPA to
abandon the present CEP formulae to
favor of any alternative.
  The health and welfare significance of
downwash concentrations that result in
violations of the ambient standards are
documented and acknowledged kn the
standards themselves. The significance
of short-term peaks at the levels that
EPA's analyses predict is more
judgmental. However, a number of
studies cited in EPA's "Review of the
National Ambient Air Quality Standards
  'Memorandum from David C. Hewktn*. NRDC to
 William F Pederwn. fr. Office of General CauneeL
 USEPA. May 2S. !•«.
  ' Memorandum from Aim H. Huber. ASRL to
 David Stonefield. OAQPS, June n. 1BU
for Sulfur Oxides: Assessment of
Scientific and Technical information
(EPA-4SO/5-82-007, November IS
indicate that concentrations of or
sustained for durations of 5 minuteTo
more can produce branchoconstrictic:
in asdimatics accompanied by
symptoms such as wheezing and
coughing. Such concentrations are we
within the range of concentrations tha
can result from downwash. When
sources meet the ambient standards, •
frequency of occurrence for these
concentrations under the other
conditions cited by NRDC is
substantially lower than for down was i
when stacks are less than CEP.
  CEP formula Stack Hught. Some
commanter*. including NRDC stated
that EPA cannot justify retention o/ the
traditional (2JH) and refined (H-rl.5L
CEP formulae based simply on thev
reletionship-to die 40-percent en tenor.
and argued that the formulae provide
too much credit IB many or most  case*.
This, they argue, results in allowing
sources to obtain unjustifiably lenient
emission limitations.
  Other coBmenters argued that
Pimm sen explicitly reaffirmed the
traditional CEP formula, and that EPA
should allow m**rtmmn reliance on it
(and. by implication, on the refined
formula that was subsequently de
from it).
  RgtponM. The ose of EPA's
formula as a starting point for
determining GBP was not called Into
question  by any litigant in the Sierra
Club ess*. Tha court's opinion likewise
does not question die use of the formuii
as a starting point A detailed discussio
of the court's treatment of the formula.
showing how it endorsed the formula'*
presumptive validity, is contained In thi
Response to Comments document
  Despite ****• llnjitt/l endorsement. EP<
might need to revisit the formula on its
own if its reexamination of the
"excessive concentratten" and modelic.
issues indicated that the formula ckari;
and typically misstated the degree of
stack height needed to avoid downwasl
concentrations that cans* aaa»th or
welfare concerns.
  However, no such result has emerged
from our iteexamination. Stacks below
formula height are associated with
downwasn-related violations of the air
quality standards themselves where
emission rates significantly exceed the
levels specified by NSPS. Even where
emissions are low. downwash
conditions at stacks below formula
height can be expected, unlike other
condition*, to generate numerous »"""
term peaks of air pollution et high

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27898        Federal Register /  Vol. 50. No. 130 / Monday. July 8.  1985 / Rules and Regulations
that raisa a real prospect of local health
or welfare impacts.
  As EPA stated in the proposal, it is
impossible  to rely pnmanly on fluid
modeling to implement the stack height
regulations, particularly under the
timetable established by the court. 49 FR
44883 (November 9.1964). No
commenter other than NRDC even
suggested a different formula that  in
their eyes would be better, and NROC's
suggestions were premised on their
"control first" position, which EPA has
found inconsistent with the statute and
has rejected. EPA considers the refined
formula to be the state-of-the-art for
determining necessary stack height
  Given the degree of presumptive
validity the formula already possesses
under the statute and the court opinion.
we believe that this record amply
supports its reaffirmation,
  Stadu Abovt CEP Formula Height
The EPA's 1978 stack height guidelines
[cite] imposed special  conditions on
stacks above formula height—the
installation of control  technology—that
were net imposed on lower stacks.
Similarly. EPA's 1973 proposal had
made credit above formula fctight
subject to a vaguely defined "detailed
investigation" (38 FR 25700). The
legislative history of the 1977 Chan Air
Act Amendments cautioned that credit
for stacks above formula height should
be granted only in rare cases, and  the
Court of Appeals adopted this as on* of
the keystones of its opinion. The court
also concluded that Congress
deliberately adopted very strict
requirements for sources locating in
hilly terrain.
   For these reasons, EPA Is requiring
sources seeking credit lor stacks above
formula height and credit for any stack
height justified by terrain affects to
ihow by field studies or fluid modeling
that this height is needed to avoid a 40»
percent increase in concentrations due
to downwtih and that tuch an increase
would result in exceedance of air
quality standards or applicable PSD
increments. This will restrict stack
height credit in  this context to cases
where the downwash  avoided ia at
levels specified by regulation or by ect
of Congress as possessing health or
welfare significance.
   To conduct a demonstration to show
that an absolute air quality
concentration such as NAAQS or PSD
increment will be exceeded, it ia
necessary to specify an emission rate for
the source in  question.* The EPA
believes that in cases where greater
than formula height may be needed to
prevent excessive concentrations.
sources should first attempt to eliminate
such concentrations by reducing their
emissions. For this reason EPA ia
requiring that the emission rate to be
met by a source seeking to conduct a
demonstration to justify stack height
credit above the formula be equivalent
to the emission rate prescribed by NSPS
applicable to the industrial source
category. In doing this. EPA is making
the presumption that this Unit can be
met by all sources seeking to justify
stack heights above formula height
Sources may rebut this presumption.
establishing an alternative emission
limitation, on a case-by-case basis, by
demonstrating to the reviewing
authority that the NSPS emission
limitation may mot feasibly be met given
the characteristics of the particular
source.' For example, it may be possible
for a i.  ~ca presently emitting SOi at a
rate of, A Ib./mmBTU to show that
meeting the NSPS rate of 1.2 lb./mmflTU
would be prohibitive in that it would
require scrapping existing scrubber
equipment for the purpose of in«>«lli«g
higher efficiency scrubbers. Similarly, a
source may be able to show that due to
space constraints and plant
configuration, it ia not poeaible to install
the necessary equipment to meet die
NSPS emission rate. la the event that •
source believes that downwaab will
continue to result ia excessive
concentrations when tha source-
emission rate is consistent with NSPS
requirements, additional stack height
credit may  be justified through fluid
modeling at that emission rale.
  A source, of course, always remains
free to accept the emission rat* that is
associated  with a formula height stack
rather than relying on a demonstration
under the conditions described ham.
The third alternative mentioned in the
proposal—using the actual emission
limit for tha source—has been rejected
because, to the extent mat limit relied
on greater than formula height it would
amount to using a tall stack to justify
itself.
  The EPA's reliance on exceedancejs.
rather than violations of the NAAQS
and PSD increments, ia deliberate. Fluid
modeling demonstrations are extremely
complicated to design and cany out
even when the most simple
demonstration criteria—that ia, a
percentage increase ia concentrations.
  ' la coovut If th« MM at "nenmw
 concMHnaow- lavotod • tiapl* cwratHiyt
 IBCJMM. ibm wouid b* to aMd to ip«efy u>
          . fine* th* IBCTUM in conemtnfioB
c*«Md by do«mw
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             Federal Register /  Vol.  50.  No. 130  /  Monday. July & 1985  / Rules and Regulations
                                                                      27899
expansion is carried out—not actual
stack height.
  An additional theoretical
complication is presented when an
absolute concentration is toed where
meteorological conditions other than
downwash result in the highest
predicted ground-level concentrations in
the ambient air. In such cases, a source
that has established CEP at a particular
height, assuming a given emission rate.
may predict a NAAQS violation at that
stack height and emission rate under
some other condition, e.g.. atmospheric
stability Class 'A.' Reducing the
emission rate to eliminate the predicted
violation would result in stack height
credit greater than absolutely necessary
to avoid an excessive concentration
under downwash. However, reducing
stack height places the source back in
jeopardy of a NAAQS violation under
the other meteorological condition, and
to on. "ratcheting"  stack height credit
and emission rates lower and lower.  The
EPA has eliminated this "ratcheting"
potential in the CEP guideline by
providing that once CEP is established
for a source, adjusting the emission rate
to avoid a violation under other
conditions does not require
recalculation of a new CEP stack height
  EPA is making this part of the
regulations retroactive to December 31.
1970. In the terms of the court's
retroactivity analysis,  stacks greater
than formula height represent a si tut don
that Congress did affirmatively "intend
to alter" in section 123. Moreover. EPA
regulatory pronouncements since 1970
have placed a stricter  burden on sources
raising stacks above formula height than
on others.
  N.o source is precluded from building
a stack height greater  than formula
height if such height is believed to be
needed to avoid excessive downwash.
However, the design and purpose of
section 123 prohibit SIP credit for that
effort unless a relatively rigorous
showing can be made.
   Given the ability of sources to avoid
modeling and rely on validity of the CEP
formulae and requirement for further
control of emissions in conjunction with
stack heights in excess of formula*
height, the result predicted by UARC—
exceedances of the NAAQS or PSD
increments due to inadequate stack
height—is highly unlikely.
   The potential effect of changes m
background air quality on stack height
credit la not substantially different from
the effect that such changes in
background can have  on source
emission limitations in nonattamment
areas. In the first case, however, sources
may be able to address these effects
through greater stack  height if such
changes affect the concentrations under
downwash. Moreover, the possibility
that shifting background air quality can
yield different calculations of CEP is
significantly limited by the fact that
consideration of background in CEP
calculations is restricted to those cases
where credit for greater than formula
height is being sought or sources are
seeking to raise stacks to avoid
excessive concentrations.
  Raising Stacks Mow Formula Height
to Formula Height In response to EPA's
proposal to allow automatic credit for
CEP formula height several commuter*
have argued that EPA has failed to
adequately respond to the court's
directive to "reconsider whether, in light
of it* new understanding of 'excessive
concentration*,' demonstrations art
necessary before stack heights may be
raised even if the final height will not
exceed formula height"
  Responte. Raising a stack below
formula height to formula height is not
in EPA's judgment subject to the same
statutory reservations as building stacks
greater than formula height However.
as the court has cautioned it may anil
be necessary for these sources to show
that raising stacks is necessary to avoid
"excessive concentrations" that raise
health or welfare concerns.
  For these reasons, sources wishing to
raise stacks subsequent to October 11.
1983, the date of the D.C Circuit
opinion, must provide evidence that
additional height is necessary to avoid
downwasb-reiated concentrationa
raising health and welfare concerns.
These rules allow sources to do this in
two ways.
  Toe first way is to rebut the
presumption thai the short stack was
built high enough to avoid dewnwasb
problem*: L*« to show, by site-specific
information such aa monitoring data or
citizen complaints, that the short stack
had in fact caused a local nuisance and
must be raited for this reason. The EPA
believes that both the historical
experience of the industry and the data
on short-term peaks discussed earlier
show that short stacks can cause local
nuisances due to downwash. However.
where a source has built a short stack
rather than one at formula height it has
created a presumption that this is not
the case. General data on short-term
peaks may not be strong enough to
support by themselves and in the
abstract a conclusion that the stack
must be raised to-a void  local advene
effects. Instead that proposition must be
demonstrated for each particular source
involved            ,
  In the event that a source cannot
make such a showing, the second way to
justify raising a stack is to demonstrate
by fluid modeling or field study an
increase in concentrations due to
downwash that is at least 40-percent m
excess of concentrations in the absence
of such downwash and in excess of the
applicable NAAQS or PSD increments.
In making this demonstration, the
emission rate in existence before the
stack is raised must be used
  Since raising stacks to formula height
is not subject to the same extraordinary
reservations expressed by Congress and
the court with respect to stacks being
raised above formula height EPA does
not believe that the use of presumptive
"well-controlled" emission rate is
appropriate here. Aa discussed in EPA's
response to NRDCs "control first"
argument the basic purpose of section
123 was to take sources as it found them
and baaed on those circumstances, to
assure that they did not avoid control
requirements through additional
dispersion. Use of a source's actual
emission rate in this instance is
consistent with that b'asic purpose and
absent special indications of a different
intent should be used in stack height
calculation*.
  The EPA believes that it is most
unlikely that any toarce with a current
emission limitation has failed to claim
full formula credit for a stack of formula
height Accordingly, the question
whether a source can receive stack
height credit op to formula height will
involve only sources that want to
actually raise their physical stack not
sources that simply want to claim more
credit for a stack already in existence. A
source will presumably not go to the
trouble of raising an existing stack
without some reason. If a source cannot
show that the reason was in fact the
desire to avoid a problem caused by
downwaah.  then the inference that it
was instead a desire for more dispersion
credit is hard to avoid A nuisance
caused by downwashed emissions could
include citizen or employee complaints
or property damage. A source would be
expected to show that complaints of this
nature were reasonably widespread
before getting credit under this section.
  The EPA does not intend to make this
rule retroactive to sucks that
"commenced construction" on
modifications that would raise them to
formula height prior to October It1981
Applying the court's retroactiviry
analysis, it appears:
   1. The new rule does depart from prior
practice. The EPA's 1973 proposed rule
affirmatively encouraged sources with
shorter stacks to raise them 9 formula

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27900        Federal Regular / Vol. 50. No.  130 / Monday. July 8.  1965 / Rules and Regulations
height.'Though EPA'i 1976 guideline
can be read a* imposing a "control first"
requirement on some stack height
increases, its general thrust gave
automatic credit for all stacks that met
the "2.5" times formula.* Automatic
permission was similarly set forth in the
1979 proposal, in the 1961 reproposal.
and in the 1962 final rule. Only a notice
published in 1980. but later withdrawn.
departs from this trend, requiring the use
of field studies or fluid modeling
demonstrations to justify stack height
increases op to CEP formula height.*
Even then, the notice would have mad*
this policy prospective in its  application.
  2. Sources that raited stack* m
reliance on this past EPA guidance
assuming the availability of dlapenioa
credit cannot be distinguished from the
sources, in the example approved by the
court that  built sucks to the traditional
formula in  an identical expectation of
dispersion credit.
  3. It cannot be said that the raising of
stacks to formula height is a  practice
that Congress -affirmatively sought to
end" It ia not mentioned in the text of
the statute or its legislative history.
Further, as the court has already noted,
the statute attributes a degree of
presumptive validity to the formula oa
which soarcs* that raise their stack*
will have relied.
  Detention to Rtqwn Fluid Modfting.
Several ooanaenten argued thai EPA'a
proposal to allow egeociee to require the)
use of fluid nm«4«Uin waa unnecessary.
since EPA had already  U HI
              t»
planned to rely on the formula to show
instead by fluid modeling that • stack
this high was required to avoid dangers
to health and welfare caused by
downwash. The court suggested that
EPA should include such a provision
unless it could find that the formula was
so accurate, or tended so much to err on
the low side, as to make discretionary
authority to adjust formula height
downward unnecessary.
  The EPA believes that the court was
mistaken in its conclusion that a stack
at formula height is likely to generate
downwash concentrations as great ae 40
percent only in uncommon situations. In
fact EPA's observations indicate that
when stack* are built to GEP formula
height an increase in concentration*
due to downwaah can still be expected
to occur that is between 20 and 80
percent greater than the concentration
that would occur in the absence of
building influence*. '*
  Nevertheless, in response to the
court's remand EPA is including in this
final rule a provision for the authority
administering the** rules to require field
studies or fluid modeling
demonstrations, even for stack* built to
formula height in cases what* it
believe* that the formula mey
significantly overstate the appropriata
stack height credit*1
  Whu* EPA believes the formula i* a
reasonable rule of thumb indicating the
stack height needed to avoid MM
probability of • standard* violation and
a significantly greater probability of a
local auieenca, acteai result* in any
given case-may vary sunewaat beeed,
on specific r*Tir*tfn''irT Tb* EPA he*
attempted to minimixe this posaibiMty
within the amtt* of avedabte data by.
identifying two particular dtnafioe* ia
which it believe* mat the forawla* awy
not be raoabie indicator* of G9f Faroe*
structnres end building* weoe* shape*
are aerodyneiHMj*liy ssDootner tnea tao
simpi* biock.*Bap*d stneture* ea
which the formula* are based. «•
         iferDtttraluaoaofGoad
fntiMgtot Hmett» Sto^ IhtotC •• am. Thto H
            I *iFlew lea**
SUM* »m •ttieftty to
ofMcttnnaaftB*
                   Air AM.
whra ipnltad to
for Miuin upend itrucnvw tad ceoUos;
••GutMttM tar OMnmiuflee «( Go*
Pmcda Stock H>to»t.* fifr isst •<
ttrucnin* tfait ««« frutcd prtor \» No*«tohar*>
10S4. Slnet EPA fudane* h*»
for pareu* im«.iui»». dM mtrfctMa la thl* r«U to
tuck louetvm •ppkH M til t«du to tummmm
 However. EPA acknowledges that other
 situations, of which the Agency is not
 presently aware, may arise wherein the
 formula* may not be adequate.
  The EPA intends to "grandfather" any
 source that relied on the formal* in
 building its stack before the date of
 EPA's 1079 proposal from the effect of
 this discretionary reexamination
 requirement.
  Only in that proposal did EPA first
 suggest that such a discretionary
 reexamination provision might be
 included in the final rule. The
 retroactivity analysis set out earlier
 therefore supports exempting stacks
 built in reliance on EPA guidance before
 that data from discretionary
 reexamination. Indeed a failure to
 "grandfather" these sources would lead
 to the paradoxical result that a source
 that bad built a GEP stack under the
 traditional EPA formula would have its
 direct reliance interest* protected by the
 "grandfather" provision previously
 upheld by the court but could then lose
 that ••grandfathered" credit through e
 caa* specific deatonatretion requirement
 showing that the traditional formal* was
 somewhat inaccurate—the very reason
 behind the cnaag* in the formula
 property foand aoa-nttoactiv* by  EPA
 earner.
. Given thfe background EPA believe*
 mat the effect oa emission* of including
 or of cxcndfflsj • provision for
 diecrettonary determinations from this
 ml* is likely to be very small Building
 stack* abov* fomnua height end raising
 stack* below formula height to formula
 height are covered by regulatory
 provisions already discussed The only
 case left for discretionary
 determinations to addresa is the building
 of stack* at formula height In the post-
 1979 period However, all major sources
 built since that ttm* an already
 controled to SO* emission rates no
 greater than t2 Ib./mmBTU—and, not
 uncommonly much le**^Hind*r veriou*
 EPA regulation*. AQ new power plants
 on which construction "commenced"
 since 1951 must meet EPA's NSPS
           u fyf*"*" rate no greater
 than taia level That standard waa
 tightened for ill power plants on which
 construction "ooaBvanced" after 1979. la*
 addition, all "major" source* built since
 1977 in area* sabf*ct to the Act's PSD
 requirasoenta have bed to install beet
 available control technology. That
 technology mu*t require the greatest
 degree of emission control that ia
 achievable cooaidehni technology.
 •«"««'«''— and  aacrsj impacts.'*

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             Federal Register / Vol.  50. No. 130 /  Monday. July 8. 1985  / Rules and Regulations
                                                                      27901
  If such sources had to show that use
of a formula height stack was needed to
avoid exceedances of the NAAQS or
PSD increments, that might prove
difficult for many of them. The
likelihood of such exceedances tends to
decrease as the emission rate for the
source decreases.  By the same token.
the incremental emission reductions
available from the sources that are at
issue here tend to  be small and among
the most expensive available. In terms
of emission reductions, little is at stake
where these sources are concerned.
  Accordingly, the rules will require
such sources, if a reviewing authority
calls for a demonstration, to the rules
show that the use of a formula stack
height is needed to avoid a 40-percent
increase in concentration* due to
downwash. This will provide a rough
check on whether the formula, as
applied in the particular case at issue.
produces the result it was designed to
produce.
  The EPA is not providing here for
sources to justify their formula height
stacks by arguing  that the height in
excess of that needed to avoid NAAQS
violations is needed to avoid a local
nuisance. The discretionary modeling
requirement is designed for application
to stack* before they were built Beyond
that, there is no way to determine based
on the-absence of  a local nuisance that a
formula height stack is not too tall in
the way that the presence of a nuisance
shows that a stack under formula height
in fact is too short Accordingly, there
will be no way. as there was with short
stacks being raised, to determine from
actual experience whether a local
nuisance would occur at a shorter stack
height Though avoiding locaJ nuisance
is a legitimate purpose for which stacks
are built it would be very difficult to
show by modeling what stack height
was needed to avoid it
  Some commenters have
misunderstood EPA's allowance of
discretion to require fluid modeling a*
requiring such modeling whenever any
individual or entity called for such a
demonstration. This discretion reets
explicitly with the reviewing afeacies
who have always had the prerogative to
require more stringent analyses in the-
SIP process.-and no obligation is implied
for these agencies ro require fluid
modeling simply because it has been
called for by some individual during the
permit review process. It is EPA's
expectation that technical decisions to
require such additional demonstrations
would be based on sound rationale and
va:id data to show why the formulae
may r.oi be adequate in a given
situation. In any case, given the burden
of reviewing a fluid modeling
demonstration, an agency is not likely to
exercise this option absent sufficient
justification. Consequently. EPA
disagrees with the commenters'
contention that fluid modeling will
supplant the use of the CEP formulae.
except in what EPA believes will be
unusual instances.
  Reliance on the 2.SH Formula. In
limiting the applicability of the i3H
formula to those cases where the
formula was actually relied upon, the
November 9 proposal defined such
reliance in terms of stack design. A
number of comments indicated that
actual stack design and construction
may ultimately be control not by the
2.5H engineering rule, but by
construction materials specifications.
Consequently, while 24H rule may have
provided an initial starting point in
suck design, the rule may not have
dictated final stack height In other
cases, it was argued that a number of
source owner* may have constructed
their stacks in excess of what was
determined to be minimum GEP for
precautionary reason*, for process
requirement*, or in anticipation of
additional growth in the area
surrounding the facility, even though
emission limitation* for these sources
would have been limited then, a* now,
to formula height Consequently, it wa*
argued that EPA should allow *ourc*s to
demonstrate reliance on the formula in
the calculation of emission limit* aa well
as in the design of the stack.
  In response to EPA's request for
comments on what evidence should b«
considered acceptable in determining
reliance on the iSH formula, some
eommenter* urged EPA to consider
reconstructed evidence, e.g. affidavit*
from design engineers or copies of
correspondence indicating past reliance
on EPA guidance. Other commenters
suted that "reliance" should be very
strictly construed, that EPA should be
circumspect in it* review of reliance
demonstration*, and that only
contemporaneous documentary
evidence, such as blueprints and facility
design plan*, be accepted a* evidence.
  Responie. The EPA it in general
agreement with the view that reliance
should be considered in relation to the
emission limitation for the source, not
the design. Since section 123 specifically
prohibits EPA from regulating actual
stack heights and rather regulates stack
height credits used in setting emission
limitations, it would be illogical to
require that sources demonstrate
reliance on the 2.5H formula for actual
stack design. Moreover, such  an
approach would contradict principles of
sound planning, in that it would penalize
those sources that have built taller
stack* in anticipation of facility
expansion or other growth in the area
that could influence CEP
determination*.
  If a stack has been built taller than
2.5H formula provide*, while the
emiaaion limitation ha* been calculated
assuming 2.5H credit a convincing
demonstration ha* been made that the
source properly relied on the formula.
Conversely, if the emiaaion limitation for
the source is based on some other stack
height credit *uch a* &6H. 3.5H or some
other number, it would be difficult to
show that the CEP formula had in fact
been relied on.
  In some caeca the emission limit
information may be unavailable or
inconcluaive. In such ease*. EPA will
allow reliance on reconstructed
evidence of construction intent
  In comment* submitted during the
public comment period and in response
to question* raised by EPA at the public
hearing held on fanuary 8.1965, industry
representative* repeatedly stated that
contemporaneous evidence of reliance
on the LSH formula, such a* facility
design plan*, dated engineering
calculation*, or decision records are
rarely, if ever, retained for more than a
few yean after construction of the
facility i* completed. Consequently, they
argued that moat caaee of legitimate
reliance would b* denied if
contemporaneous evidence were
required in order to retain for the 2.5H
formula.
  The EPA agree*. Additionally, credit
afforded by the 2.5H formula in excess
of that resulting from the UM of the
H+1JL derivative i* likely to be small
except when the building on which
stack height credit i* based i*
substantially taller than it is wide.
Finally, it is EPA's view that the court
did not intend that sources be subject to
a rigorous or overly stringent of reliance.
but only that they be accorded a
reasonable opportunity to ihow reliance
on the 2.5H formula. For these reasons.
EPA will allow the submission of
reconstructed. I.e.. noncontemporaneous
documentary evidence to demonstrate
reliance on the 2-5H formula.
   Definition of "Nearby" Comments
were submitted by UARG and  others.
arguing that effectively, no limitation
should be placed on the consideration of
terrain-induced downwash.
Alternatively, some of these
commenters argued that the court
decision requires that a limitation be
adopted that doe* not apply any
distance restriction of H mile m
modeling terrain effects such a* if

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27902
Fedarml
                                /  Vol. 50. No. 130 / Monday. July 8. 1965 /  Rales and Regulations
applied to structures in tht UM of GEP
formula*, but rather allows
consideration of afl terrain that'results
in the same downwash effect as those
itructurcs within ft mile of the stack.
  Other commenten have argued that
the court decision and legislative history
preclude EPA from allowing
consideration of any terrain beyond e
distance of H mile, regardless of where
it begins.
  Response, for the reasons
summarized below, EPA does not accept
either the interpretation that the court
decision authorizes EPA to adopt a
definition based solely on effect or that
it limits consideration exclusively to
terrain features falling entirely within H
mile.
  When Congress discaaeed the-
allowance of credit for stack height to
addraea downwash, it stated that the
term "nearby* was to be -strictly
construed." noting that if the ten were
to be interpreted "to apply to man-made
structures or terrain features *  to H
mile away from the sourcaa or more, the
result could be an opea invitation to
raise stick heights to unreasonably high
elevations aad to defeat the basic
underlying committea infant" **
  In its opinion, thexoort held that EPA
could not grv* unlimited credit when
modeling terrain features because that
would conflict with the Congraeaionai
intention to impose artificial Units on
that credit The court waa not preee&tad
with, and did not address, tht question
of what to do about terrain feature* that
       'within
outside it The approach adopted by
EPA carried out thia congressional
purpose to impose an artificial limit bat
at the same time reflects da real facts
more closely than an absolute ft mile
limitation.
  Unlike "t*"-nisrH structures* ^T**'**
features do not have readily definable
dim«n«i«nf other than height For thia.
reason. EPA has defined "nearby" as
generally allowing '""l"«Vn of
consideration of terrain features that fafl
within a distance of ft mile of the stack.
EPA's definition wifl paxnit
consideration of such tacrain that
extends beyond the tf mile Omit if the
terrain begins within % mile, allowing
that portion within 10 times, the  -
maximum height of the feature, not to
exceed 2 miles, as described in the
proposal
  To define when a terrain feature
"begins" within H mile. EPA has related
terrain height at the Vi mile distance to
the maximum stack height that could be
justified under the other two methods
                          for determining GEP. Accordingly. EPA
                          will require that terrain features reach a
                          height at the H mile distance limit of
                          either 28 meters (La. 65 maters divided
                          by 2.5) or 40 percent of the (tack height
                          determined by the GEP formulae applied
                          to nearby buildings.
                             Treatment of New versus Existing
                          Sources Under the Definition of
                          "Nearby". In the proposal EPA
                          requested comment on whether new
                          sources should be treated differently
                          from existing sources and presented two
                          options for sddresaing mem.
                            Few comments were received on
                          these options. Several questioned the
                          logic of distinguishing between new and
                          existing sources in the regulations. One
                          commenter argued that new and existing
                          sources should both be subject to the
                          strict >6 miia* limit propoeoo under one
                          option for new sources only. This haa
                          already been discussed under EPA's
                          response to comments on the general
                          definition of "nearby" and Is not
                          addressed further here.
                            Response. New sources are initially
                          subject to more stringent control
                          requirements than many existing
                          sources. Consequently, it is lees likely
                          that the emission limitations  and stack
                          height credits for these sources will be
                          affected by terrain features.
                          Furthermore. EPA believes that the
                          effect of applying a more restrictive
                          distance limitation will be insignificant
                          and will result only in minor  changes •
                          siting, rather than substantial relocation
                          of soarcee. For thia reason. EPA haa
                          selected the second option, treating new
                          and exieting source* Identically
    HJL RJ*OB. Me. 2M. SSlft Coo*, lit SMS. Si
                          the definition of "nearby.1
                            EPA is giving this definition of
                          "nearby" retroactive application to
                          December 31.1870. The cowf s decbioat
                          makaa clear its condasion that Cnngtees
                          affirmatively focused on thia issue; aad
                          decided thus *^n trine application as of
                          the enactment dale proper.
                            Definition of Other Qispeniaa
                          Techniques, The EPA received many
                          comments on the proper scope of the
                          definition of "dispersion techniques."
                          and perhaps more on"tha appropriate
                          bounds of *he exclusions. Industiv
                          commentars generally argued that EPA
                          had improperly proposed to deny
                          consideration for plume-enhancement
                          effects that ate "co incidental" with
                          techniques and practices routinely
                          carried out for sound engineering and
                          economic reasons. They argued  that
                          EPA should prohibit credit only  when a
                          technique or practice was decisively
                          motivated by a desire for dispersion
                          credit Such an approach would create a
                          "but for" test using the intent of the
                          source owner or operator as the basis
                          for EPA's decisions.
                                                                                 Other commanters argued that EPA
                                                                               must use a test based purely on effects.
                                                                               prohibiting credit where a technique or
                                                                               practice has the effect of enhancing
                                                                               dispersion, regardless of any other
                                                                                 Response. In the final regulation. EPA
                                                                               has rejected the polar positions
                                                                               discussed above. The argument that
                                                                               dispersion effects are forbidden
                                                                               regardless of motive is discussed and
                                                                               rejected as a part of the general
                                                                               response to the argument that only
                                                                               "well-controlled" sources can receive
                                                                               any dispersion credit
                                                                                 Conversely, a pure "but for" test runs
                                                                               the risk of creating exclusions that
                                                                               effectively swallow the rule itself. The
                                                                               EPA judge* that few, if any.
                                                                               circumstances are likely to arise in
                                                                               which some other benefit or justification
                                                                               cannot he asserted aa the basis for a
                                                                               practice. mnl^ therefore for such an
                                                                                 Where prospective evaluation of
                                                                               merged gas streams, or combined
                                                                               stacks, is concerned, there is no reason
                                                                               to assume the serious administrative
                                                                               burdens investigating such ^i«'f» might
                                                                               entail The court directed EPA to apply
                                                                               an intent test "at a »r^i sources in the
                                                                               future wiQ be sola to plan against  the
                                                                               background of rules  that define
                                                                               persusaible credits precisely, little
                                                                               unfairness results bom a restrictive
                                                                               approach*
                                                                                 Wham ratBoapective application  is
                                                                               ""i^mrl however, the retroactivity
                                                                               analysis spelled out  by the court directs
                                                                               that anintanl-baaad teat be employed as
                                                                               described later.   '
                                                                                 Accordingly, after «««»«<«<«H«g the
                                                                               record on thaea matters. EPA hss
                                                                               determined to take a ••middle-ground"
                                                                               approach to this question. The final
                                                                               regulation retains the same broad
                                                                               prohibition found in  the proposal on
                                                                               increasing exhaust gas plume rise  by
                                                                               manipulation of parameters, or the
                                                                               combining of exhaust gases from several
                                                                               existing stacks into one stack, with
                                                                               several classes of exclusions. These
                                                                               exclusions recognize the existence of
                                                                               independent justifications based on
                                                                               engineering and/or economic factors.
                                                                                 (1] Demonstration of original facility
                                                                               design and construction with merged
                                                                               gas streams
                                                                                 (2) Demonstration that merging after
                                                                               July a. 1988 la part of a change in
                                                                               operation that includes the installation
                                                                               of pollution controls and results in s net
                                                                               of pouul
                                                                               reductio
                                                                                    Son m allowable emissions of the
                                                                               pollutant for which credit is sought or

-------
             Federal Repstar / Vol. 30. No.  130 / Monday. July 8.  1965 / Rules  and Regulation.       27903
  (3) OemoBttntioa that merging btforw
July 8.1965 wit part of a change in
operation that included the installation
of control equipment or was earned out
for found economic or engineering
reason*. An allowable emissions
increase creates the .presumption that
the merging was not carried out for
sound economic or engineering
reason*."
Of these exclusions, the first i* identical
to the proposal, and the second and
third are modifications of the second
exclusion included in the proposal with
a refinement based on prospective/
retroactive application.
  The first exclusion was retained for
the reasons stated in the proposal After
reviewing the comments submitted EPA
determined that it* previous
conclusion—that standard practice in
designing and coottrocting facilities
routinely includes venting ""'"tons
from several units into a common or
multifiued stack—ia correct Sound
engineering and economic reason*.
based on cost* of constructing and
maintaining separate stack*, availability
of land and cost saving* for pollution
control equipment support facility
design and construction consideration*.
Even if air pollution requirement* did
not exist at all. sources would have
incentives to ose as few stack* a*
possible.
  Since iacreaiiag plume rise, rather
than plume rise iUett 1* a "dispersion
technique" and original design and
construction define the initial base, such
original design and construction  of
merged gas stream* i* not considered a
dispersion technique. Moreover,  in
designing the facility, a source can
usually choose to build one larger unit
rather than several smaller anils.
Therefore, prohibiting credit for original
design generally only effect the design
of units and not the phone rise.
  Objections have been raised to
applying this logic to source* which are
constructed over a period of time, but
use a single stack. However, the tame
factual arguments just listed would
apply is the same, if the original design
included prevision for the additional
units in the plans for the facility, end in
the design and construction of the stack.
In such a case, the later units merged  .
into the stack would be included within
the exclusion.
  In addition, it would be logically very
difficult to apply a rule denying crwtif to
original design stack*. EPA or the State
would have to assume how many stack*
                       Uatt uorttd tar •
would have been built absent a desire
for dispersion credit, where they would
have been located and how high they
would have been. Since these
alternative stack* would be purely
hypothetical then would be no clear
way of answering these question*; the
answer would simply have to be
•elected arbitrarily from the wide rang*
of possible answers, Thi* problem ia
absent when existing tuck* have been
combined
  In contrast EPA find* changes from
the original design of a facility ia order
to include merged stacks to require a
narrower judgment. The EPA concluded
that where prospective application ia
concerned the exclusion should be
available only to SOUKM that cambute
stacks reduce* allowable emissions of
the pollutant for which the credit is
granted There art obvious economic
advantages in /*f"T'HTing stacks to
reduce the Ttvtri*x*r of
units that must be purchased In
addition, the '"••MHH'fi of pollution
control for the pollutant in question
provides substantial assurance that the
purpose of the combination ia not to
receive a more i»"'«n* e       H****
  However, given past EPA guidance OB
merging of stacks. EPA has concluded
that retroactive application of this leaf
would not be proper. The EPA guidance
document* uniformly took the view that
merging of separate (tacks into a single
•tack "1* generally not considered a
dispersion technique" absent other
factors such as excessive use of fans or
other devices. ** Each ^tMrument
provided guidance to a source of a
Regional Office regarding the proper
treatment of merged stacks in
calculating emission limitations.
Considering these statements, EPA must
consider the standards expressed by the
court as previously discussed in this
notice, in judging the propriety of a
differing standard for retroactive
application. Given the nature and
applications of the guidance which it
issued in the past EPA judges the first
two criteria— -that is, whether the new
rule represents an abrupt departure from
wail-eitabhshed practice, and whether
the parties against whom the new rule is
applied relied on the former rule— to be
satisfied a addition, applying the
prospective criteria to past practice
would require significant changes in fuel
and/or control equipment for parties
whose emission limits wen based on
previous guidance. Finally, and
particolariy when  sources have not
been allowed to increase their previous
emission* at a result of the combining of
stacks, EPA does not judge the st*tuto
interest to b« overriding in this iniunc
since the ralo even in it* retrospective
version only exempts source* that can
•how a reasonable non-dispersion
enhancement ground for combining
•tack*, and thereby implement* the
"intent" test iiuggested by the court. On
the other hand EPA ha* never suggested
that combined stacks that cannot meet
such a test an proper. Sources whose
actual emission* an increased or
whose emission limitations an relaxed
in connection with the combining of
•tacks create « strong presumption that
the combtaaticm was carried out in
order to avoid the installation of
controls. Soch combinations would
indeed run counter to toe statutory
purpose, and retrospective application
of a test that forbids them is therefore
  "MMorudum from D»yl Tytar to
 Roihbljrti Ao«wc m ISSO. SM «lM tofWr tnm Witt
 B*rtMr tfam How< Ofe Center S, ISSS. i
 0*vtd StotwMri • IMS* HJM. fv» P.
  Exemption* from tht Definition of
Duptniaa Ttchnjqun. The EPA

response to its request for input on what
consideration, if any, should be given to
excluding sources from the definition of
"Dispersion Techniques'* whose
emissions an below a specified level or
whose stacks are less than the de
minima height. 'These commenten
argued that combining gar stnams in
particular often Iliad an economic
justification indsipendent of its effects
OB dftpersten, end tbeiefcm should not
be generally forWdden. Other comments
stated (hat m considering any such
exclusion. EPA should consider the
effect on tetsJ etmospJheric loadings.
  Rttpam*. Some limitation on the
number of sources affected by the
definition at "dispersion techniques'
necessary for EPA to carry out the stack
height program. Then an currently
estimated to be over 23.000 sources of
SO* m the United State* with setual
emissions exceeding 100 tons per year. It
would not be possible for EPA or Ststes
to review the emission limits of even s
significant fraction of this number
within a  reasonable time period
Twenty-two thousand of these sources
have emissions lens than 1000 ton* per
year and contribute a total of less than
13 percent of the total annual SO.
emission."For thin reason, and for
reasons of adminiittntive necessity
discussed earner. EPA is adopting ah
exemption from prohibitions cm
manipulating prone rise for facilities
with allowable SQt emissions below
                                                                                           frw» Jtrte Ciwbin- OAQPS ti

-------
2790*       Padayai  Register / Vol. 50.  No. 130  /  Monday.  July a. 1965  /  Rules and Regulation
5.000 tons per year. The EPA believes
the effect of this exemption on total SOi
emissions to b* o*« miniaiis in nature.
Even if'these sources were able to
increase their emission rates as the
result of an exemption from the
definition of dispersion techniques, their
combined effect would not be
significant Indeed, because these
sources are exempt on the basis of their
annual emissions, there exists an upper
limit to the extent to which they may
obtain relaxed emission limitations. i.e,
to m**n^in an.exemption, the ^Htymi
emissions of a source may never exceed
5.000 tons per year. For these reason*.
the 5,000 ton limit pesses a d» minimi!
test even more dearly  than the W-meter
limit included without  challenge in the
prior version of this ml*. Moreover. EPA
believes that a large majority of th***
sources would not be inclined to s**k
less stringent emission limitations, la
part because a substantial portion of
them an limited by State and local hid
userula*.
  The EPA believes at mis time that a
dfoafiaiit six* exemption la justified
only for aaurcee of SOi end that th*
number of small sources for which,
emission limitations for other pollutants
are a sigaHlrant concern would not
support a similar exemption. Th* EPA
will **i**^
-------
              F«d«r»J Reystar / V0L 50. No.  130 / Monday. July 8. 1965 / Rules and  Regulation*
                                                                                                               27905
through the use of "grandfathered" stack
height*.
  Sources undertaking major
modification, or reconstruction become
subject to additional control
requirement* under the Clean Air Act
and are treated aa "new lourcet" for the
purpose r' new source review and PSD
requirer•»-.'.». EPA finds it appropriate
that CEr requirements should be
invoked at the time that other
requirements for new, modified, or
reconstructed sources become
applicable.

Summary of Modifications to EPA 'i
Proposal Resulting from Public
Coaunentt

  Based on comments received during
the public comment period EPA has
made a number of revision* to its
proposed regulation in addition to those
discussed above. These revisions are
summarized below.
  Section 51.1(hh)(2)(B)fii) of the
regulation has been clarified to require
sources merging gas streams after July S,
1963 to achieve a net reduction in
allowable emissions. This change was
made to make it dear that toe effects of
merging should not be used as a way of
achieving compliance with present
emission limits and to avoid penalizing
sources who are presently emitting at
less than allowable levels.
  Section 31.1(MX3)(BXiii) aflows
credit for a source that merged gas
streams in a change of operation  et the
facility prior to July 8, IMS that induced
the installation of control equipment or
had other sound engineering or
economic reasons. Any increase in the
emission limitation, or in the previous
actual emissions where no emission
limitation existed created a presumption
that those sound reasons were not
present
  Section Sl.l(hh)(2)(E) has been added
to exclude from the definition of
prohibited "dispersion techniques" the
use of techniques affecting final exhaust
gas plume rise where the resulting total
allowable emissions of SOi from the
facility do not exceed  5.000 tons per
year.
  Section 51.1(ii)(l) has been revised to
specify that  the 65 meter de minimis
height is to be measured as in other
determinations of CEP stack height
from the ground-level elevation at the
base of the stack. This does not
represent a substantive change in the
rule or in its application relative  to past
practices, but rather a simple
clarifies aon,
  Section St.l(ii)(2) has been revised to
require that source owners demonstrate
that the 2.SH formula was relied on in
establishing the emission limitation.
  Section 51.1(ii)(3) has been revised as
discussed elsewhere in this notice to
specify that an emission rate equivalent
to NSPS most be met before a source
may conduct fluid modeling to Justify
stack height credit in excess of that
permitted by the CEP formulae.
  Section Sl.l(jj) now defines "nearby"
for purposes of conducting field studies
or fluid modeling demonstrations as 04
km  (H mile), but allows limited
consideration of terrain features
extending beyond that distance if such
features "begin- within OJ km, as
defined in the regulation.
  Section Sl.l(kjk) has been revised to
provide) separata diacaseiona of
"excessive  concentrations" for the
separate situations discussed earlier in
this preamble. As that discussion makes
clear. EPA believes that the differing
categories of sources subject to this rule
are best addressed by requirements that
vary somewhat with those
circumstances. This definition embodies
that approach.
  Section 5U2(k) has been corrected to
provide that the provisions of 131.12(0
shall not apply to ttack height* in
existence before December 31,1970. The
proposal had incorrectly stated that
"... I 51.12 shall not apply to itada
existence.. . ."
  This regulation doee not limit the
physical stack height of any source, or
the actual use of dispersion techniques
at a source, nor doee it require any
specific stack height for any source.
Instead it sets limits on the maximum
credit for stack height and other
dispersion techniques to be used in
ambient air modeling for the purpose of
setting an emission limitation and
calculating the air quality impact of a
source. Sources are modeled at their
actual physical stack height unless that
height exceeds their CEP stack height
The regulation applies to all stacks in
existence and all dispersion techniques
implemented since December Jt 1970.

State Impkmentatioo Plan
Requirements
  Pursuant to section 406(d)(2) of the
Clean Air Act Amendments of 1977,
EPA is requiring that all States (1)
review and revise, as necessary, their
Sip's to include provisions that limit
stack height credits and dispersion
techniques in accordance  with this
regulation and (Z) review all existing
emission limitations to determine
whether any of these limitations have
been affected by stack height credits
 above CEP or by any other dispersion
 techniques. For any limitations that
 have been so affected States must
 prepare revised limitations consistent
 with their revised SIP'S. All SIP
 revisions and revised emission
'limitations must be submitted to EPA
 within 9 months of promulgation of this
 regulation.

 Interim Guidance

  In its proposal, EPA stated that it
 would use the proposed regulation to
 govern stack height credits during the
 period before promulgation of the final
 regulation. The EPA further stated that
 any stack height credits that are granted
 based on this mtwrim guidance would be
 subject to review against the final rules
 and may need to be revised
 Consequently, with these final rules,
 EPA is requiring that any actions that
 were taken oa stuck heights and stack
 height  credits during this intern period
 be reviewed and revised ss needed to
 be >*»f»^«»Tp« with this regulation.

 Regulatory FlexfliUtty Analysis

  Pursuant to the) provisions of 5 U-S.C
 606(b). I hereby certify thai the attached
 rule will not have «yp'H"*"> economic
 impacta on a substantial number of
 small entities. This rule is structured to
 apply only to large sources: Le, those
 with stacks above U meters (213 feet),
 or with annual SO* emissions in excess
 of 54100 tons, as further noted in the rule.
 Based  on aa analysis of impacts, electric
 utility plants and several smelters and
 pulp and paper mills will be
 significantly affected by this regulation.

 Exscativ* Order 122*1

  Under Executive Oder 12291. EPA
 must judge whether s regulation is
 "major" and therefore subject to the
 requirement of a regulatory impact
 analysis. EPA's analysis of economic
 impacts predicts a potential cost to
 emission source owners add operators
 exceeding SlOO million: therefore, this is
 a major rule under Executive Order
 12291.  However, due to the promulgation
 deadline imposed by ihe court EPA did
 not have sufficient tune to develop a fuU
 analysis of costs and ber.t fits as
 requL'sd by the Executive Order.
 Consequently, it in not possible to judge
 the annual effect of lh;s rule on the
 economy. A preliminary economic
 impact analysis arid S'iricquent revision
 were prepared and a.-j  n  ie docket
   For any facility, the * : ruliry and
 economic impact of Lk.i suck height
 regulation generally deper.ds  on the
 extent to which th« ac^a'. stack at that
 facility conforms to CE? tuck height.

-------
27906       F«d«f«i Register /  Vol. 50.  No. 130  / Monday.  July 8. 1965 / Rules  and  Regulations
Thus, when the regulation is applied to
large sources. La., those with itaek
height greater than CEP and emissions
greater than 5.000 tons per year, it will
have the potential for producing
emiiiion reduction* and increaied
control costs.
  A preliminary evaluation of the
potential air quality impacts and a co
-------
             Federal Register / Vol.  50. No. 130 /  Monday. July  8. 1985 / Rules and Regulations
                                                                                                             2790-
concentrations of any air pollutant as a
result of atmospheric downwaah. wakes.
or eddy effects created by the source
itself, nearby structures or nearby
terrain features.
  (jj) "Nearby" as used in f 51.1(ii) of
this part is defined for a specific
structure or terrain feature and
  (1) for purposes of applying the
formulae provided in } 51.1(ii)(2) means
that  distance up to five times the lesser
of the height or the width dimension of a
structure, but not greater than 0.8 km (Vi
mile), and
  (2) for conducting demonstrations
under f 31.1fii)(3) means not greater  '
than 
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-------
     WORKSHOP ON IMPLEMENTING THE STACK
             HEIGHT REGULATIONS
                  (REVISED)

           OCTOBER 29 TO 30, 1985
                     by

            PEI Associates, Inc.
      505 South Duke Street, Suite 503
     Durham, North Carolina  27701-3196
    CONTROL PROGRAMS DEVELOPMENT DIVISION
OFFICE OF AIR QUALITY PLANNING AND STANDARDS
    U.S. ENVIRONMENTAL PROTECTI9N AGENCY
RESEARCH TRIANGLE PARK, NORTH CAROLINA  27711
                October 1985

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REFERENCES FOR SECTION 5.2

-------
                          EPA-450/4-80-023R
Guideline for Determination of Good
  Engineering Practice Stack Height
(Technical  Support Document for the
      Stack Height Regulations)

               (Revised)
          U S. ENVIRONMENTAL PROTECTION AGENCY
              Office of Air and Radiation
           Office of Air Quality Planning and Standards
             Research Triangle Park. NC 27711

                  June 1985

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REFERENCES FOR SECTION 5.3

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REFERENCES FOR SECTION 5.4

-------
                                 Attachment A

        *i
         5          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                   WASHINGTON, D.C 20460
                                 APR  22B68
                                                                       AOLANDtAMAn
MEMORANDUM

SUBJECT:   Interim Policy on Stack Height Regulatory Actions

FROM:   -
       A Ai
      I)     for Air and Radiation  (AI^R-443)

TO:        Director, Air Management  Division
             Regions I,  III, IX
           Director, Air and Waste Management Division
             Region II
           Director, Air, Pesticides,  and Toxics Management Division
             Regions IV, VI
           Director, Air and Radiation Division
             Region V
           Director, Air and Toxics  Division
             Regions VII, VIII,  X


     On January 22, 1988, the U.S. Court of Appeals for the District of
Columbia issued its.decision in  NRDC v. Thomas. 838 F. 2d 1224 (D.C. C1r.
1988), regarding the Environmental Protection Agency's (EPA's) stack height
regulations published on July 8, 1985  (50 FR 27892).  Subsequent petitions
for rehearing were denied.  Although the court upheld most provisions of the
rules, three portions were remanded  to EPA for review:

     1. Grandfathering  pre-October 11, 1983 w1thin-formula stack height
increases from demonstration requirements [40 CFR 51.100(kk)(2)3;

     2. Dispersion credit for sources  originally designed and constructed
with merged or multiflue stacks  [40  CFR Sl.lOO(hh)(2)(1 i)(A)]; and

     3. Grandfathering  of pre-1979 use of the refined H + 1.5L formula
[40 CFR 51.100(11)(2)].

     A number of pending State implementation plan (SIP) and other rulemaking
actions may be affected  by this  decision in advance of EPA's promulgation of
further revisions of the stack height  regulations.  This Includes not only
rulemaking packages developed to respond to the 1985 stack height regulations,
but also such actions as issuance of new source review (NSR) and prevention
of significant deterioration (PSD) permits, permit modifications, SIP revisions

-------
dealing with specific source emission limitations,  and  redesignatlons  under
section 107 of the Clean Air Act.  Consequently,  until  resolution of litigation
and completion of any rulemaking activity to respond to the court decision,
the following policy will be applied.

     In general, actions to approve States'  rules may proceed provided appropriate
caveat language is inserted which notes that the  action is potentially subject
to review and modification as a result of the recent court decision.  Actions
addressing State permitting authority should require States to provide notice
that permits are subject to review and modification if  sources are later
found to be affected by revisions to stack height regulations.  Where  States
currently have the authority to Issue permits under fully-approved or  delegated
NSR and PSD programs, any permits Issued prior to EPA's promulgation of
revised stack height regulations should provide notice  as described above
that they may be subject to review and modification.  Regional Office  staff
are requested to contact their State officials and  notify them accordingly.
Where EPA has retained authority to issue permits,  it should also Insert
appropriate cautionary language in the permit.

     The EPA will try to avoid taking source-specific actions that may need
to be retracted later.  Such actions may Include  certain emission limitations
and good engineering practice demonstrations which  reflect dispersion  credit
affected by the remand.  The EPA may approve these  State submittals on a
case-by-case basis, with the explicit caution that  they and the sources
affected by them may need to be evaluated for compliance with any later
revisions to the stack height regulations, as a result  of the litigation.
The EPA will continue to process, under normal procedures, any source-specific
actions which do not involve the remanded .provisions.

     Requests for redesignation of areas from nonattainment to attainment
which are affected by any of the remanded provisions of the stack height
regulations will be put on hold until EPA has completed any rulemaking
necessary to comply with the court's remand.  This  1s due to the  issue of
whether EPA has authority to unilaterally change  attainment designations.

     During this interim period, the Regional Office staff should review with
their States all regulatory actions involving dispersion credits  and identify
those actions or sources affected by the remanded provisions.  The Region
should consult with their States on appropriate  action  for all such packages,
consistent with this policy.

     If you have any questions regarding the application of this  policy,
please contact Doug Grano at FTS 629-0870 or Janet  Metsa at FTS 629-5313.

cc:  D. Clay
     A. Eckert
     J. Emison
     D. Grano
     J. Metsa
                                                                                  i

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             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                    Office of Air Quality Planning and Standards
                   Research Triangle Park, North Carolina 27711
                              WAY 1 ? lSc3
MEMORANDUM

SUBJECT:  Appliratfc^of^the Interim Policy for Stack Height
          Re gu%to^ Actions
              W&*
               'CaTca
FROM:     JprnVCaTcagrH,  0i rector
              Quality Manager--t  Division  (MD-15)
70:    
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     My staff has applied the policy when reviewing packages currently in
Headquarters (Attachment C).  While proposals to approve (or disapprove)
State rules will remain on the Headquarters clock, the Regional  Offices are
requested to review these packages and provide appropriate  boilerplate as
soon as possible.  Negative declaration packages and final  actions  on State
rules are being returned to the Regional  Office clock as more substantial
revisions and commitments may be required.   The redesignation packages
currently in Headquarters which contain sources affected by the  remand are
being placed on formal hold.

     If you have any questions regarding the April 22 policy, today's
guidance, or disposition of the SIP's, please contact Janet Metsa
(FTS 629-5313) or Doug Grano (FTS 629-0870).

Attachments

cc:  R. Bauman
     R. Campbell
     C. Carter
     G. McCutchen
     J. Pearson
     J. Sableski

bcc:  B. Armstrong
      P. Embrey
      G. Foote
      E. Ginsburg
      D. Grano
      N. Mayer
         Reinders
      R. Roos-Collins
      SOj SIP Contacts
      Stack Height Contacts, Regions I-X

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/  £5  ri
\JSSBj
              Attachment A


UNITED STATES ENVIRONMENTAL PROTECTION' AGENCY
                WASHINGTON, D.C. 20460
                                 APR22B88
                                                                             tor
                                                                       ABLANPRAOtATI
MEMORANDUM

SUBJECT:   Interim Policy on Stack Height Regulyifory Actions

FROM:   *
      /7 A!
      I)     for Air and Radiation (AldR-443)

TO:        Director, Air Management Division
             Regions I,  III, IX
           Director, Air and Waste Management Division
             Region II
           Director, Air, Pesticides, and Toxics Management Division
             Regions IV, VI
           Director, Air and Radiation Division
             Region V
           Director, Air and Toxics Division
             Regions VII, VIII, X


     On  January 22. 1988, the U.S. Court of Appeals for the District of
Columbia issued its-decision in NRDC v. Thomas. 838 F. 2d 1224 (D.C. Cir.
1988), regarding the Environmental Protection Agency's (EPA's) stack height
regulations published on July 8, 1985 (50 FR 27892).  Subsequent petitions
for rehearing were denied.   Although the court upheld most provisions of the
rules, three portions were remanded to EPA for review:

     1.  Grandfathering pre-October 11, 1983 within-formula stack height
increases from demonstration requirements [40 CFR 51.100(kk)(2)3;

     2..Dispersion credit for sources originally designed and constructed
with merged or multiflue stacks [40 CFR 51.100(hh)(2)(1 i)(A)]; and

     3.  Grandfathering of pre-1979 use of the refined H + 1.51 formula
[40 CFR  51.100(11) (2) J.

     A number of pending State implementation plan (SIP) and other rulemaking
actions  may be affected  by this decision in advance of EPA's promulgation of
further  revisions of the stack height regulations.  This includes not only
rulemaking packages developed to respond to the 1985 stack height regulations,
but also such actions as issuance of new source review (NSR) and prevention
of significant deterioration (PSD) permits, permit modifications, SIP revisions

-------
dealing with specific source emission limitations,  and  redesignafions  under    A
section 107 of the Clean Air Act.  Consequently,  until  resolution  of litigation^
and completion of any rulemaking activity to  respond to the court  decision,
the following policy will be applied.

     In general, actions to approve States' rules may proceed provided appropriate
caveat language is inserted which notes  that  the  action is potentially subject
to review and modification as a result of the recent court decision.  Actions
addressing State permitting authority should  require States to provide notice
that permits are subject to review and modification 1f  sources are later
found to be affected by revisions to stack height regulations.  Where  States
currently have the authority to issue permits under fully-approved or  delegated
NSR and PSD programs, any permits Issued prior to EPA's promulgation of
revised stack height regulations should  provide notice  as described above
that they may be subject to review and modification.  Regional Office  staff
are requested to contact their State officials and  notify them accordingly.
Where EPA has retained authority to issue permits,  it should also  Insert
appropriate cautionary language 
-------
                               Attachment B

     The following boilerplate, or variations  tailored  to  suit  particular
situations, should be used in rulemaking actions affected  by  the stack
height remand.


                             General Addition

     "The EPA's stack height regulations were  challenged in NRDC v.
Thomas. 838 F.2d 1224 (D.C. Ci r. 1988).  On January  22, 1988, the U.S.
Court of Appeals for the D.C. Circuit Issued Its decision  affirming the
regulations in large part, but remanding three provisions  to  the EPA  for
reconsideration.  These are:

   1.  Grandfather!ng pre-October 11, 1983 wUhin-formula  stack  height
       increases from demonstration requirements [40 CFR 51.100(kk)(2)];

   2.  Dispersion credit for sources originally designed and  constructed
       with merged or multiflue stacks [40 CFR Sl.lOO(hh)(2)(1i)(A)]; and

   3.  Grandfathering pre-1979 use of the refined H  + 1.5L formula
       [40 CFR 51.100(ii)(2)]."


                Addition for Stack Heights Rules Packages

     "Although the EPA generally approves [State's]  stack  height  rules on
the grounds that they satisfy 40 CFR Part 51,  the EPA also provides notice
that this action may be subject to modification when EPA completes
rulemaking to respond to the decision in NRDC  v. Thomas. 838 F.2d 1224
(D.C. Cir. 1988).  If the EPA's response to the NROTTemand modifies the
July 8, 1985 regulations, the EPA will notify  theTtate of [_J  that  its
rules must be changed to comport with the EPA's modified requirements.
This may result in revised emission limitations or may  affect other
actions taken by [State] and source owners or  operators."


            Additions for Stack Negative Declaration Packages

     "The EPA is not acting on ____ sources (identified 1n table form or by
asterisk) because they currently receive credit under one  of  the provisions
remanded to the EPA in NRDC v. Thomas. 838 F.2d 1224 (D.C. C1r  1988).
The [State] and EPA will review these sources  for compliance with any
revised requirements when the EPA completes rulemaking to  respond to the
NRDC remand."

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        Additions for Stack Height Emission  Limitation Changes or
                 Good Engineering Practice Demonstration

     The OAQPS and OGC will provide language on  a  case-by-case basis when
the EPA is acting on a source-specific package which  is affected by the
remand.


             Language for Proposed NSR and PSO SIP Approvals

     "Under this  program, [State] will  be  issuing  permits and establishing
emission limitations that may be affected  by the court-ordered reconsideration
of the stack height regulations  promulgated  on July 8, 1985 (50 FR 27892).
For this reason,  EPA requires that the State Include  the following caveat
in all potentially affected permit approvals until the EPA completes Its
reconsideration of remanded portions of the  regulations and promulgates any
necessary revisions:

     'In approving this permit,  [name of agency] has  determined that the
     application  complies with the applicable provisions of the stack
     height regulations as revised by EPA  on July  8,  1985 (50 FR 27892).
     Portions of  the regulations have been remanded by a panel of the  U.S.
     Court of Appeals for the D.C. Circuit In NRDC */. Thomas. 838 F.2d
     1224 (D.C. Cir. 1988).  Consequently, this  permit may be subject  to
     modification if and when EPA revises  the regulation 1n response to
     the court decision.  This may result  in revised  emission limitations
     or may affect other actions taken by  the source  owners or operators.'

     [State] must make an enforceable commitment to Include this caveat in
all affected permits before the  EPA can take final action approving the
[NSR or PSD] program."


               Language for Final NSR and  PSO SIP  Approvals

     "Under this  program, [State] will  be  Issuing  permits and establishing
emission limitations that may be affected  by the court-ordered reconsideration
of the stack height regulations  promulgated  on July 8, 1985 (50 FR 27892).
For this reason,  the EPA has required that the State  Include the following
caveat in all potentially affected permit  approvals until the EPA completes
its reconsideration of remanded  portions of  the  regulations and promulgates
any necessary revisions:

     'In approving this permit,  [name of agency] has  determined that the
     application  complies with the applicable provisions of the stack
     height regulations as revised by the  EPA on July 8, 1985  (50 FR
     27892).  Portions of the regulations  have been remanded by a panel of
     the U.S. Court of Appeals for the D.C.  Circuit  in NRDC v. Thomas, 838
     F.2d 1224 (D.C. Cir. 1988).  Consequently,  this  permit may be  subject
     to modification if and when the EPA revises the  regulations  in

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                                     3

     response to the court decision.   This may result in revised emission
     limitations or may affect other  actions  taken  by the  source owners
     or operators.1

     [State] has made an enforceable  commitment to  include this  caveat in
all affected permits by letter dated  [  ]. This commitment  is being
incorporated into the Code of Federal  Regulations for the  State  of [__] as
part of EPA's approval  action."

     See Attachment D for sample CFR  amendment.

     The Regional Offices are requested  to contact  those States  that
currently have permitting authority and  request that  they  include similar
language in any permits issued until  EPA has  .completed  Its  reconsideration
of the stack height regulations and has  promulgated any necessary revisions.

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Attachment C
State
____^
AZ/CA/NV
AZ/CA/NV
SC
MS
NJ/NY/YI
WA
MD
AR
OH
TX
LA
DE
OH
SO
CO
AQMD 1
3059
3210
3243
3330
3418
3480
3543
3548
3570
3572
3592
3600
3334
•
3618
3623
Description
Promulgation of Stack Height Regs.
App. and Dlsapp. of Stack Height Req.
Negative Declaration
Mississippi's Negative Declaration
Stack Height Revisions
Stack Height Rules
Negative Declaration
Stack Height Rules
Stack Height Regulations
Stack Height Regulations
Revisions to Stack Height Rules
Stack Height Regulations
Redes 1gnat1 on of Gall a County to
Attainment
Administrative Rules
Negative Declaration
Disposition
HQ
RO
RO
RO
RO
HQ
RO
HQ
HQ
HQ
HQ
HQ
Hold
RO
RO

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         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                Office of Air Quality Planning and Standards
               Research Triangle Park, North Carolina 27711
                        1 2 NCV  :^7


MEMORANDUM

SUBJECT.  Incorporation by  Reference

FROM:     6. T.  Helms,  ChieM^~~
          Cont-ol  Programs  Operations Branch

TO:       Chief, A1r Branch
          Regions  I-X


     The Office of the Federal Register  (OFR) has recently advised us
that commitment  letters are not  acceptable for Incorporation by reference
because they are not regulatory  in nature.

     Instead, the  OFR has informed us that the Code of Federal Regulations
(CFR) can be amended by adding a new section or amending an existing section
to add the commitment;  the  "Identification of Plan" paragraph should not
be amended.

     Attached is an example of a CFR page that the OFR has reviewed and
approved and the commitment letter from  the State of Minnesota that was
the basis for this sample regulatory text.  Please note that the core
paragraph from the letter should be quoted in the new section that Is
being added to the CFR.

     If you have any questions on incorporation by reference procedures,
call Oenise Gerth  at 629-5550.   Thank you for your cooperation.

Attachments

-------
cc:  Betty Abramson
     Walter Bishop
     Ted Creekmore
     Tom Diggs
     Pat Embrey
     Greg Foote
     Denlse G^rth
     Dean 6111 am
     Laurie Krai
     Carol  LeValley
     Sandy  McLean
     Bob  MUler
     Rich Osslas
     Carolyn Payne
    Sharon Relnders
    Julie Rose
    John S1lvas1
    Marcla Spink
    Rebecca Taggart
    Paul  Truchan

-------
40 CFR Part 52, Subpart Y, is amended as follows:
1.   The authority citation for Part 52 continues  to read as follows
     AUTHORITY:  42 U.S.C. 7401-7642
2.   A new Section 52.1237 is added as follows:
     §52.1237  Stack Height Regulations
     The State of Minnesota has committed to conform to the Stack
Height Regulations as set forth in 40 CFR Part 51.  In a letter to
Mr. David Kee, EPA, dated Jarviary 14, 1987,  Mr. Thomas J. Kalitowskl
of the Minnesota Pollution Control Agency stated:
     Minnesota does not currently have a stack  height  rule,
     nor do we intend to adopt such a rule.  Instead,  we will
     conform with the Stack Height Regulation as set forth
     in the July 3, 1985 Federal  Register in issuing permits
     for new or modified sources.  In cases where that rule
     is not clear, we will  contact U.S. EPA Region V and
     conform to the current federal interpretation of  the
     item in question.

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REFERENCES FOR SECTION 5.5

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5864	Federal Register / Vol. 47, No. 26 / Monday. February 8._1982jjlule8 and Regulations
ENVIRONMENTAL PROTECTION
AGENCY

40 CFR Part 51

[AO-FRL 2010-1; Docket No. A-79-01 ]

Stack Height Regulation*

AOENCY: Environmental Protection
Agency [EPA).
ACTIOM; Final rulemaking.	

SUMMARY: Section 123 of the Clean Air
Act requires EPA to promulgate
regulations to assure that the degree of
emission limitation required for the
control of any air pollutant under an
applicable State Implementation Plan
(SIP) is not affected by that portion of
any staok height which exceeds good
engineering practice (GEP) or by any
other dispersion technique. Regulations
to implement Section 123 were proposed
on January 12.1979 at 44 PR 2608 and
reproposed October 7,1981 at 46 FR
49814. Today's action incorporates
changes to the reproposal and finalizes
these regulations.
DATE These rules are effective March
10.1982.
        : Docket A-79-01. containing
material relevant to this action, is
located in the Central Docket Section
(A-130), U.S. Environmental Protection
Agency, 401 M Street SW.. Washington,
D.C 20480.
FOB FURTHER IMPOftSMTJOA CONTACT!
Mr. Bruce Pelkowsky, MD-15. Office of
Air Quality Planning and Standards,
U.S. Environmental Protection Agency.
Research Triangle Park, North Carolina
27711. Telephone: (919) 541-5540.
SUPPLZMCNTANV INfOWBATlOM:

Docket Statement
  All pertinent information concerning
the development of these regulations is
included in Docket No. A-79-01. The
Docket is open for inspection by the
public between the hours of 8:00 a.m.
and 4:00 p.m., Monday through Friday.
at the EPA Central Docket Section. West
Tower Lobby. Gallery One. 401  M
Street SW., Washington. D.C.
Background documents normally
available to the public, such as Federal
Register notices and Congressional
reports, are not included in the docket.
A reasonable fee may be charged for
copying documents.

I. Background

A. Statute

  Section 123 was added to the  Clean
Air Act by the 1977 Clean Air Act
Amendments. It prohibits stacks taller
than good engineering practice (GEP)
height and other dispersion techniques
 from rffectiny to emission limitations
 requirad-to meet the national ambient
 air quality standards (NAAQS) or
 prevention of significant deterioration
 air quality increments (PSD increments).
 Section 123 requires EPA to promulgate
 regulations which define GEP stack
 height and which restrict the use of
 other dispersion techniques, including
 intermittent or supplemental control
 techniques. This rulemaking fulfills this
 requirement In the near future. EPA
 also intends to propose rules on the use
 of intermittent control techniques.
 B. Rulemaking
   On January 12.1979 (44 FR 2808), EPA
 published a notice proposing limitations
-on stack height credit and other
 dispersion techniques. The notice
 proposed specific rule* to be used in
 determining GEP stack height for any
 source and specific  requirements for
 State Implementation Plan (SOP)
 revisions. EPA provided an extended
 period Tor the submission of public
 comments on these  proposed
 regulations. EPA held a pubbc htirinj
 on May 31,1979 followed by a 38-day
 period for the submission of additional
 comments (44 FR 24329, April 25,1979).
 EPA provided foe comments on
 additional technical informatioa (44 fK
 40359, July 11.1879 and 48 FR 24596.
 May L 1981). Finally. EPA recently
 reproposed the regulations with changes
 mad* toreapoBMtto the comments
 recenred (4f FR 4*814, October 7.1981).
   Fotjy individuals  and groups
 comauaMd en the October 1981
 proposal EPA hm considered afl
 comments and has made a number of
 changes in the regulations in response to
 these comments. Most of these changes
 simply clarify the proposed rules. The
 revisions are outlined in Section IV:
 "Changes in the Regulations from the
 October 1981 {¥000881" In addition.
 EPA has prepared a document entitled
 "Summary of Comments and Responses
 on the October 7.1981 Proposal of the
 Stack Height Regulations." This
 document has been  placed in Docket A-
 79-01. and depending upon available
 supplies, copies may also be obtained
 from: EPA Library (MD-35). U.S.
 Environmental Protection Agency,
 Research Triangle Park. N.C 27711. A
 copy of this document will be sent to all
 persons who submitted comments on the
 October 1981 proposal.
 C. Documents
   In conjunction with the regulations.
 EPA developed several technical and
 guidance documents. These served as
 background information for th'e
 regulations and all are included in
 Docket No. A-79-C1. The following
documents have been placed in the
National Technical Information Service
(NTISJ system and may be obtained by
contacting NTIS at 5285 Port Royal Rd.
Springfield, Virginia 22161.
  (1) "Guideline for Determination of Good
Engineering Practice Suck Height (Technical
Support Document for Stack Height
Regulations)." July 1981. U.S. Environmental
Protection Agency. Office of Air Quality
Planning and Standard*. EPA-450/4-80-023
(NTIS PB82145301)
  (2) "Guideline for Use of Fluid Modeling to
Determine Good Engineering Practice Stack
Height" July 190L U.S. Environmental
Protection Agency, Office of Air Quality
Planning and Standards.JS>A-450/4-«i-003
(NTIS PB82145327]
  |3) "Guideline for Fluid Modeling of
Aftnospheric Diffusion." April 1961. U.S.
BnvironmraUi Protection Agency,
Ebvironmental'Sciencef Research
laboratory. EPA-«00/8-ei-009. (NTIS PBfll
201410)

IL Program Overview

A. The Problem

  There are two general methods for
preventing violations of the NAAQS and
PSD increments. Emission controls
reduce, on a continuous basis, the
quantity, rate, or concentrations of
pollutants released into the atmosphere
from a source. In contrast dispersion
techniques rely on the dispersive effects
of the atmosphere to cany pollutant
emissions away from a source and to
prevent kigh concentrations of
pollutants near the source. The Clean
Air Act requires pollution sources to
meet the NAAQS and PSD increments
by complying with emission limitations
instead of relying on dispersion
techniques.1 Section 123 defines stack
height exceeding GEP as a dispersion
technique.
  Tall stacks and intermittent or
supplemental control systems (ICS or
SCS) are the two basic types of
dispersion techniques. Tall stacks
enhance dispersion by releasing
pollutants into the air at elevations high
above ground level increasing the
volume of air through which pollutants
must travel to reach the ground.
Releasing pollutants from a tall stack
allows a source to reduce the ambient
levels of its pollution as measured at
ground level without reducing the
amount of pollution it releases.
Intermittent and supplemental control
systems vary a source's rate of
emissions to take advantage of
                                                                               '$•• Section 110|«H2)tB). 123. 302(k|. and 302(m)
                                                                              of the Act 42 U.S.C 7410<«X2)rB), 7423. 7«K(k), and
                                                                              78021 m). Tht Notiet a/ PtupoMd Rulemaking
                                                                              contain! I mor* deuUed ducuxion of the Act«
                                                                              prohibition of the UM of dupenion technique*. See

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FedateJ ftegator / V»I. 47. No. 26  / Monday. February & 1982 / Rules and Regulations      5865
meteorological conditions. When
atmospheric conditions do not favor
dispersion and an NAAQS may be
violated, the source temporarily reduces
its pollutant emissions. When conditions
favor rapid dispersion, the source emits
pollutants at higher rates:
  Use of dispersion techniques instead
of constant emission controls can result
in additional atmospheric loadings
which may  contribute to undesirable
environmental effects. The use of tail
stacks increases the possibility that
pollution will travel long distances
before it settles to the ground.
  Although dispersion techniques may
produce adverse effects, some stack
height is needed to prevent excessive
concentrations of pollutant emissions
created  by airflow disruptions caused
by structures, terrain features, and
ground-level meteorological phenomena.
These excessive concentrations result
from interference with the plume.
Section 123 responds to this problem by
allowing EPA to give a source credit for
that portion of its stack height needed  to
prevent  excessive concentrations near
the source. This height is called GEP
stack height
  The regulations promulgated today
define "excessive concentrations.''
"nearby." and other important concepts.
They also establish methods for
determining the GEP stack height for aJJ
stationary sources to which these
regulations  apply.

B. T^ Program
  These regulations do not omit the
physital stack height of any source, nor
requrre any specific stack height for any
source. Instead, they set limft*' on the
maximum stack height credit to be used
in ambient air quality modeling for the
purpose of setting an emission limitation
and calculating the air quality impact of
a source. Sources are modeled at the
physical stack height unless that height
exceeds their GEP stack height The
regulations spply to all stacks
constructed and all dispersion
techniques  implemented since December
31. 1970.
  1. Methods of Determining GEP Stack
Height. The regulations establish three
basic methods of calculating a source's
GEP stack height
  (a) De minimis height—EPA is
adopting 05 meters as the-mininium GEP
stack height for ail sources regardless of
the size  or location of any structures or
terrain features. Sixty-five meters
represents a reasonable estimate of the
height needed to insure that emissions
will not  be affected by common ground-
level meteorological phenomena  which
may produce excessive poilutant
concentration*. Typical
                            phenomena include surface roughness
                            and the temperature changes caused by
                            the solar heating and terrestrial cooling
                            cycle (see page 26 of the Technical
                            Support Document).
                              Virtually all significant sources of SOi
                            can justify stack height credits greater
                            than 65 meters. Accordingly, this de
                            minimis height will have little effect on
                            atmospheric loadings of sulfur dioxide.
                              (b) Mathematical Formulas-
                            Excessive concentrations may be
                            produced by downwash. wakes, and
                            eddies caused by structures located near
                            the stack. EPA is adopting two formulas
                            with which to calculate the GEP stack
                            height One  for stacks in f*jf»fnct on
                            January U. 1079 (the date of publication
                            of EPA original proposed rules), and one
                            for stacks constructed after that date.
                              For stacks in existence on January 12.
                            1979. EPA has sdopted the traditional
                            engineering  formula of two and one-half
                            times the height of the nearby structure
                            (H, —iSH) as the  formula for
                            determining the GEP stack height. For
                            stacks constructed after January 12,
                            1979, EPA has established a refined
                            formula of the height of the nearby
                            structure plus one and one-half times  the
                            height or width of the structure,
                            whichever is less  (H.-H+UL) as the
                           . formula for determining the GEP stack
                            height
                              (c) Physical Demonstration—In some
                            case*, a source may need a stack taller
                            than the height predicted by the
                            formulas to prevent excessive
                            concentrations of a pollutant due to
                            downwash.  wakes, or eddies created  by
                            structures or terrain obstacles. In such
                            cases. Section 123 provides that a source
                            may obtain credit for all of the stack
                            height necessary to avoid excessive
                            concentrations provided it demonstrates
                            to the satisfaction of the reviewing
                            authority that  the additional height is
                            necessary.
                              EPA is requiring such a source to
                            demonstrate that m^^n*mn
                            concentrations caused by the source's
                            emissions from its proposed stack
                            height without consideration of nearby
                            structures or terrain obstacles, •will
                            increase by  at least 40 percent when the
                            effects of the structures or terrain
                            obstacles axe considered. This
                            difference in concentrations must be
                            shown either by a fluid model study
                            conducted in accordance with guidelines
                            published by EPA or by a field study
                            which has been approved by the
                            reviewing authority.
                              Before a source can obtain credit for a
                            GEP stack height  determined  by a fluid
                            model or field study demonstration.
                            Section 123(c) require* that me
                            reviewing authority must notify the
                                   -
demonstration ntudy and must provide
an opportunity for a public hearing.
  Z Method of Adjusting CEP Stack
Height for Elevated Terrain Areas. As
traditionally defined, plume inspection
occurs when a plume emitted from a
stack interacts with terrain that is taller
than the stack. The contact between the
plume and the terrain can produce high
pollutant concentrations. EPA is
establishing a procedure which will
allow sources to adjust their GEP stack
height to avoid modeled plume
impaction on elevated  terrain causing
one to predict violations of the NAAQS
or applicableJ8e> increments which will
not occnr.fsUsjfrocedure is explained
in Section FV.Cj The predicted
violations will not occur because the
physical stack-height is sufficient to
ensure that the plume passes over the
elevated terrain.
  Before a source can obtain credit for a
GEP stack height based on  allowances
for terrain impaction. the reviewing
authority must notify the public of the
availability of the source's
demonstration study and must provide
an opportunity for a public hearing.
  3. Grondfathend Stack Height The
1970 dean Air Act became effective on
December~31,1970. Prior to that date
some sources had constructed stacks
taller than their GEP height In Section
123. Congress -recognized this and
exempted those sources' stack heights.
Section 123 allows credit for stack
height in existence on December 31.
1970. A source's stack  is considered to
be "in existence" if that stack was part
of the design of a facility on which
construction commenced prior to
December 31.1070.
  4. Other Dispersion  Techniques. The
regulations prohibit the use of other
dispersion techniques  to attain or
maintain any NAAQS or protect a PSD
increment Those techniques include
major alteration of phune characteristics
such as  the manipulation of exhaust
flow rates or temperatures for the
purpose of enhancing plume rise. The
regulation defines three types of
dispersion techniques: (1) tall stacks. (2)
use of ICS or SCS, and (3) addition of a
fan or reheater  to obtain a  ress stringent
emission limitation. However, the
regulations exempt (1) reheating of a gas
stream following the use of a pollutant
control system, (2) smoke management
in agricultural or silviculrural programs.
and (3) combining exhaust ga*e* from
several  stacks into one stack.

m. State Iniiilin;	•*""•
                           i i nil in

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Fedeosl  Bagurter / Vol. 47. Na 28  /  Monday. February 8. 1982  /  Rales and Regulations
 regtaatians. All States muat review ana!
 revise, at necessary, their SIPi to
 include provisions that Knot stack height
 credits and dispersion techniques m
 accordance with these regulations.
 Section 404dX2) of the Clean Air Act
 Amendments of 1877 requires that these
 SIP revisions be submitted within nine
 months of pronnuganon of these
 regulations.
  After EPA approves a Stale's stadc
 height rotes, the State most review
 existing lisattatioa* to avtarmne
 whether these limitations have been
 affected by stack height credit above
 GEP leieis or any other dispersion
 technique. If so. the State must revise
 the emission limitations to be consistent
 with as BBvised SfP.
 IV. Changes in me RefuUBons From the
 October 7,1981 Proposal
  EPA has made several changes in the
 proposed regulations as a result of the
 public comments on the rearoposed
 regulations. These changes are noted
 below.
 A. Prospective Application of the New
 CEP Formula
  On February 1& 1ST* fil PR 3450).
 EPA pubkahed the "Stack Height
 Increase Oniiltiltna" which provided
 guidance on its poJief for the use «f tall
 stacks. The gmidelioa jmrniftnri credit
 for stacks ap to two and eae-aalf limas
 the height of the facility it served. On
 Novemfaae* 1877, after passage of the
 Gleam Ainjjtct Ameadments af 1977.
 EPA promabjated a final rule oaanmr
 changes t£its prevention of «ig»jfc>«t>»
 deterioration (PSD) program f42 FR
 57458). As part of the preamble to that
 notice. EPA denned GEP as "two and
 one-half times the height of the source"
 (2.5H).
  On January 12.1979 (44 FR 2600), EPA
 proposed regulations to implement
 Section 123 which refined the two and
 one-half times rule by A-fi"i-g GEP
 stack height as the height of a nearby
 structure plus one and one-half times the
 lesser of the height or width of the
 nearby structure (H+1.5L). That
 proposal and the repropoaal of that
 regulation on October 7,1881 (46 FR
49814) would have made the aew
to.-muia retroactive to December 3L
 1970.
  Four commenters argued that EPA's
iefjiiuon of GEP, until January 12.1879,
r-dd been based on two and one-half
•..•nes  the building height and that
»Turces  in good faith had constructed
?:acks in accordance wfth that
definition. Applying the new formula
retroactively would be unfair to those
sources. The comnMOten argued that
                            the new iarnola shouM be applied
                            prospectiverjr.
                              IB lesposjss to these comments. EPA
                            has developed two formulas for
                            determining GEP stack height: (1) For
                            •tacks in existence on January 12.1079,
                            the formsJe » H, « 2.5H: (2) for all other
                            stack*, the formula iaH,«H+1.5L
                            Bi Defixutioo of "in ex/a&E&ce w
                              Section 129 does not affect stack
                            heights In existence" on December 31,
                            1970. b October 1981, BPA proposed to
                            define "ta existence" to mean that the
                            owner or operator of a stack had
                            obtvteed an necessary preconstnction
                            permits or appro? ids required by
                            Federal.  State or race! air pwraflon
                            cuulrul agencies, and eflber ft) ectneBy
                            commenced construction, or ft) entered
                            into 9 ufninQg commitment for
                            coustiuutlt11:.
                              Comme: i on the reproposed
                            definition stated that this new definition
                            would discriminate unfairly against
                            sources located m the few States or
                            local Jurisdictions which required
                            construction permits for air pofiuoon
                            sources to 1970. (There were no Federal
                            permit programs In 1970.} EPA agrees
                            that the ceproposad rtaflnfflrm might
                            operate unfairly. EPA oas deleted the
                            requirement for such approvals or"
                            permits in determining *"^M>*hftr a
                            source's  stack is "in existence" as of
                            December H. WTO.
                              However, the regulations now apply
                            the two and one-half time*, formula for
                            ffloW^niffijnp I jLWft* Only tO •ta^lry "ip
                            existence" on January 12.1879.federal
                            requirements for preconstructian
                            permits for air pollution sources were
                            effective well before 1878. Accordingly,
                            EPA is M»«»itiinf the permit requirement
                            for sources which want to claim credit
                            for stacks "in existence" aa of January
                            12.1979.  EPA has changed  f 51O(ii).
                            which defines GEP, to require sources
                            wishing to use the two and one  half
                            times formula to show thai they had
                            obtained, prior to January 12.1878. ail
                            preconatuction permit* required by 40
                            CFR Parts 51 and 62,
                             The i-MMuung porttooa of the
                            definition of "in existence" an identical
                            to the October 1881 proposal
                            C Impactian Czwfft
                             Many comments on the January 1879
                            proposal aaked EPA to provide  stack
                            height credit for a source which
                            experiences plume inspection. Plume
                            impaction occurs when a plume emitted
                            from a stack interacts  with a terrain
                            feature that is taller than the stack. The
                            contact between the plume and the
                            terrain feature ceo predvce high
                            poUutant concentrations, especially
under stable atmospheric conditions m
which the phuae disperses slowly.
  EPA decided that sources should
receive stack height credit when
impaction produces concentrations high
enough to violate an NAAQS or
applicable PSD increment EPA included
in its October 1981 reproposal a
procedure for determining the amount of
credit needed to prevent plume
impaction.
  EPA has received three types of
comments on the proposed impaction
credit Environmental groups  claimed
that Section 123 does not authorize
impaction credit^ Several industrial
commenters asketffiPA to clarify the
proposed procedures for impaction
credits. Finally, some industrial
commenters asked EPA to modify a
portion of Its proposed procedures. To
respond to these comments, EPA is
presenting below a brief description of
its rationale and procedures for
impaction credits. EPA is- also providing
a brief explanation of its reason for
declining to make procedural
modifications.
(1) Rationale
  Plume impaction resembles
downwash, wakes, and eddies.  In all of
these events, structures or terrain
features interfere with plume  dispersion.
If me Interference occurs relatively dose
to the stack, before the plume has had
adequate opportunity to disperse, high
concentrations of pollutants can occur.
  In enacting Section 123, Congress
decided thai sources should be allowed
•ufpKjtpt stack neight credit to prevent
high pollutant concentrations caused by
downwash. wakes, and eddies.
Congress called this height "good
engineering practice." Any additional
stack height was to be legarded as a
dispersion technique that might allow a
source to relax its emissions limitations
Section 123 doe* not mention impaction
However, neither the language of the
statute nor the legislative history show
that this omission was deliberate. EPA
considers impaction to be enough like
downwash that the same rationale
should apply. GEP stack height should
include credit needed to avoid high
concentrations caused by impaction.
Accordingly. EPA has decided to
exercise general rulemaking authority  to
establish stack height credit needed to
prevent high concentrations caused by
plume impaction.
  EPA recognizes Congress did  not
want the stack height rules to grant too
much credit to sources locating in
complex terrain, for "the result could be
an opec invitation to raise stack heights
to unreasonably high elevations." rLR

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           Federal Register / Vol. 47. No. 26 / Monday.  February A 1982 / Rules,  aad Regulations      58£
Rep. No. 95-294. 95th Cong, 1st S«ai. at
93 (1977). Therefore, EPA hai carefully
tailored impaction credit procedure* to
provide only the minimum stack height
credit needed to avoid high
concentrations 'produced by impaction.
These procedures are described in more
detail below.
  EPA is convinced that its narrowly
drawn rules represent a reasonable
solution for a plume effect that closely
resembles the phenomena of downwash,
wakes, and eddies. Credits for plume
impaction. when carefully limited
should not be regarded as a dispersion
technique. Although the promulgated
procedure allows for the use of some
•tick height to avoid high pollutant
concentrations on elevated terrain, it
does not permit excessive dispersion
credits.
(2) Explanation of Procedure!
  EPA has developed a three-step
procedure for determining the amount of
stack height credit appropriate for a
source with a predicted impaction
concentration violating an NAAQS or
applicable PSD increment
  First a source must determine its
downwash GEP height—the amount of
suck height that can be Justified baaed
OB downwash. wake*, nr artrtins  Tiling
any of the three method* described in
Section ILB. above Using this GEP
height the source must snow that its
plume would come into contact with
elevated terrain (defined as terrain taller
than this GEP*eigbt) and together with
background concentrations cause a
violation of a* NAAQS or applicable
PSD incremea*. If the source cannot
show that a violation would occur, it
cannot claim any impaction credit Its
stack height credit would be limited  to
the GEP height already calculated
  If a violation is modeled the second
step is to determine  the source's
maximum allowable emission limitation.
In this step the source would model its
air quality impact using the previously
determined GEP height and •
that the terrain features) causing
impaction is no taller than its
downwaah GEP height Using the
appropriate maximum concentration
from this modeling scenario, the source
would calculate an emission limitation
which would become its maximum
allowable emission limitation
  The third step allows the source to
adjust its GEP stack height to account
for the plume impaction on actual
terrain features above the downwash
GEP stack height The source cannot
adjust its m««tnum allowable emission
limitation. The source would model its
air quality impact again, this time using
actual terrain elevations, but limiting its
emissions to the rate fixed by the
emission limitation developed in step
two. The source would increase the
height of the stack in the model to the
height at which the nienrfumm
concentration predicted to occur on
elevated terrain equaled the tn
  'EPA consideri "high coacenMbont" to be a
violation of u NAAQS or applicable PSD
increment Unlike "excewtvt concenff»Soni"
cau*ed by downweth. high coneenffiBooi ouaed
by plume xnpaction occur la different
meteorological condition* than downwtah and are
longer at dunoon. High coaceatreaooa due 10
plume impiictioo can b< compared eauty to an
NAAQS or applicable PSD mcranwaL Therefor*.
EPA hai required that the coocentratioc cauaed by
plume impection muti be in exceu of *n NAAQS or
applicable PSD meremem before a aourca can
admit in CEP §t«e» be<«at.
concentration predicted to occur in step
two. This increased stack height is the
source's m»»imitm Qjp height to avoid
high concentrations due to impaction.
  Like the downwash GEP height this
stack height will represent ma^amm
allowable credit The source would not
be able to daim this credit if its physical
(actual or proposed) stack height were
not as tail as its m^xJunT"'* creditable
height In that case, the source would be
able to claim only Its physical stack
height A source win physical stack
height lower than its allowable GBP
height would have to adjust its emission
limitation downward to prevent a
violation of an NAAQS or applicable
PSD increment

(3) Modification Requested by
Commenten
9
  The electric utilities requested that
EPA assume. during the Step two
modeling, that all terrain feature* are no
taller than ground elevation at the base
of the stack or. in other words, that the
source is located in absolutely flat
terrain. The utilities believe that this
assumption is necessary to ensure
equity between sources located in
elevated terrain and sources in flat
terrain.
  EPA has decided not to make this
change to its procedure. EPA's objective
is to provide the minimum stack height
credit needed to allow a source to avoid
high concentrations caused by plume
impaction. A source in assumed flat
terrain would obtain a less restrictive
emission limitation than a source in
terrain assumed to be as tall as its
downwash GEP height The flat terrain
assumption would thus allow a source
to obtain more stack height credit than
needed to prevent impaction. It would
also have a greater negative impact on
air  quality by allowing taller stacks and
more relaxed emission limit*.
D. Dispersion Technique

  EPA received numerous comments or
the definition of the term "dispersion
technique." Most of these comments
stated that wording concerning the
enhancement of plume hse was vague.
Comments specifically mentioned that
many changes in operation or equipmer.
made for engineering purposes, to
improve reliability or efficiency, could
be construed as a disperison technique.
This is not the intent of the definition.
EPA has changed the definition of
dispersion technique to prevent the
addition of a fan or reneaJer to obtain a
leas stringent emission limitation. The
purpose of this change le to prevent oah
the installation of equipment deariy
intended to enchance plume hse. The
new definition should not prevent
equipment changes intended to improve
reliability mad efficiency.

£ Definition of "Stack"

  Comments on. the January 1978
proposal  urged EPA to exempt "flares"
from the definition of "stack." EPA
agreed that flares, which are designed to
dispense heat and vent emissions
intermittently for safety purposes, do _^
not serve the same purpose as stack*^l|
which are typically a source's major flP
moat constant emieaiona point EPA
announced that it would exempt flare*
from the stack height regulations in the
preamble to the October 1961
reproposal New comments urged EPA
to include this exemption in the
regulations themselves to eliminate any
potential for confusion or
misunderstanding. In response to these
comments, EPA is incorporating a
specific exemption for flares into the
definition of "stack."

F. Section 123 and Physical Stack
Height

  EPA received several comments on
the October 1961 reproposal which
indicated that the commenters "believed
that the proposed regulations would give
EPA authority to limit a source's actual
stack height EPA did not intend to
create this impression. In fact EPA
stated in the preamble to the reproposaJ
that Section 123 expressly prohibits the
Agency from limiting physical stack
height Section 123 limits only the
theoretical stack height used in
determining a source's emission
limitation. However, to eliminate this
confusion. EPA is adding a statement :o4tt
15  51.12(j) and 51.18(1) of the  regulation^
stating that these regulations do not   ^
restrict in any manner the actual height
of any stack at any source.

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G. Measurement of Stack Height

  In the proposed definition of a
"stack." EPA stated that the "stack
height is the distance from the ground-
level elevation of the plant to the
elevation of the stack outlet." Several
commenters requested clarification in
the establishing the ground-level
elevation of the plant For instance, the
commenters noted that where a plant
was built oh a slope the regulation could
have varying interpretations. Also, some
commenters asked whether the entire
plant site should b* indudad or }ust the
portion of the plant site considered
"nearby" the stack
  EPA is Changing th« regulation! tO
clarify this point EPA deleted from the
definition of a "stank." the statement
        stack hg»gh* However. EPA
clarified the methods for determining
GEP stack height by stating that aH
stack and structure heights are
measured from the ground-level
elevation at the baac-of At stack
  If a stack is on top of a building. Ina
ground-level elevates) of to* buiklsaf i*
used as the ba*a elevation. bi«*d*r to

nearby siructuxM OB th* stack hook.
the height of struotiues is also
determined rekcwt |
elevation of too <
H. Minor Wording Change*
  Sgunral ..n.aw^.t.^- kl^rf
typographical anoni
"""MTT *rHing change* cossn clarify tiss
regulations. These and <
changes hare been mad* to <
to clarify the regulation*. These <
did not have any significant affect <
the regulations.
V. Impact Analysis

  EPA has prepared a series of impact
analyses on these regnl*tiena. These
analyses are in Docket A-99-VS. The
analyses show thai the expected "mm*-
case" national animal costs to faesfl-fael
fired-power plants shonid be lew fcaa
$45 million per year. These costs niseJt
from conservative estimates
purchases of lower sulfur coal and
estimates of required retrofit of
electrostatic precipitators at some plants
which purchase the lower sulfur coal.
The worst-case analyses show that the
expected reduction in SOi emissions is
less than 20CUXJO tons per year.
Nationally, these costs could increase
ejectnc utility rate charges
approximately 0.1 to 0.2 percent.
Increases for individual power company
rates could range from 0.5 to 90 percent
 VLKeynauny FkxgnBry Analysis
   Pursuant to tha provisions of 5 U.S.C.
 605(bJ, I hereby certify that the attached
 rule win not have significant economic
 impact on a substantial number of small
 entities. This rule applies only to large
 sources. The impact assessment
 predicted that these regulations would
 not have significant impact on any smaD
 entities. Based upon our Impact
 analysis, only electric trtffity plants and
 possibly one smeher wffl be
 significantly affected by these
 mteecotiv* Onto 12291
   Under Exaarttv* Order 1291. EPA
 must joslg* whether a regulation is
    sjsr" ana1 therefore cab*** to the
 Anatjsjsi HB» regulatioB to aat "MBTJOT"
 becaas* «t don not remit m an asovoal
 effect oa ska economy of S100 miUkm.
 nor d*es It sssnstt is a major increase in
 cosUor BBC** Car coaaiunecs. Federal,
 State* of local governments or individual
 mduatdos. iod«iiog the electric power
  "EPAbalieve* mat this rule is based, aa
 detsntlfialiaBS ctf oattonwide scop* artl^
 effect. Sotting Is Section 123 limits Its
"              » particular locality,
 State, or region. On the contrary, Section
 123 appOea to soutcaa wherever located
'Because of *r rule's national
 applicability, Section 3G7(b) (C U.S.C.
 7807{b)) reqalBs* that asy petinot Set
 review of the promulgated rub be fiiad
 only in the United States Court of      *
 Appeals for the District of Columbia and
 within 80 day* of the date of
 pUfuuCA QOB*
 (Sect. Ufl, 123. 301. dean Air Act u
 •mended «2 U.&C 7410, 7423. and 7001)
  Dated January 31. 19B2.
 )oha W. Baoandsa. Ju
 PART 51— AEQUIREMENTS FOR
 PREPARATION, ADOPTION, AND
 SUBWTTAL OF IMPLEMBfTATION
 PLANS
   Part 51 of Ckapter L Title 40 o/ the
 Code of Fedflrai Regulation* is amended
 as follows:
   1. S^rti"B su is amended by revising
 paragraph (z) and by adding paragraphs
 (ff). (ggj. (hh), (ii). Ofl. (kk). (11). and (mm)
 as follows:

 §51.1  OefMBons.
 *     *     •    •    •
   (z) "Emission limitation" and
 "emission standard" mean a
 requirement established by a State, local
 government or the Administrator which
limits the quantity, rate, or
concentration of emissions of air
pollutants on a continuous basis,
including any requirements which limit
the level of opacity, prescribe
equipment, set fuel specifications, or
prescribe operation or maintenance
procedures for a source to assure
continuous emission reduction.
*.*•••
  (5] "Stack" means any point in a
source rf»"g"H to emit solids, liquids.
or gases into the ait including a pipe or
duct but not '"^vftiTifl Hares.
  (ggj "A stack iuatiaience" means that
thr  niimrr nr njinajlnr liml (1) begun, or
caused to baguv*«mtinuous program
of physical on-«iJBconstruction of the
stack or (2) eotend into binding
agreements or contractual obligations.
which could not be cancelled or
modified without substantial less to the
owner or apatator, to undertake a
profcam of conatructiao of the stack to
be conpietad in a roaaaaable time.
  (hh) "Dispaatoa technique" means
any tecaniqu* which attempts to affect
the  concentration of a pollutant in the
ambieat air ay oasBf that portion of a
staek wairii oirrsodsyod angmeenag
                 ht. vaiywg the rate of
concantraMas» al taett aeUiilaA or by
addition srf a iaa or raaeatar to obtain a
less striagent naJsatini tanitatUa, The
pracsidsasj saBasoca do** not incivie: (l)
ThavheaMsagofagasatnam. fioUewiag
use of a poUBti**. eontroi systam. for the
purpose, of easuBias; tb* gas to the
temperature at waica. it was eciginally
discbar§edfreaala«iaciinygeoei»b»g
the gas strean: (2) the aae of smoke
              aandilniral or
silviculniral programs; or (3) combining
the exnausH gisns from srvaraJ stacks
into one stack.
  (if) "Good eaasa**riag practice (GEP)
stack height" means nw greater of:
  (DfiSowtars:
  (2J(i) For stacks hi existence on
January 12. 1879 and for which the
owner or operator had obtained ati
applicable pncoastruction penmts or
approvals required under this Parts 51
and K. of this Titl* 4tt H,=i5H
  (ii) for all other stacks.
H.-H+1.SL. where
H, »good engineenag practice sUci; height
   measured from the ground-level
   eievation at the b«M of the itack.
H»be»fbt of nearby Mructuref*) meacnred
   from the ererod kvf 1 elevation at the
   b«se of me MMK.
L= iesser dimension {height or projected
   wid±) of nearby ftructure(s):
  (3) The bejgirt aemenitrated by a fkwd
modal or a field study approved by the

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FedereJ sUffrfcr / V& 17. Ho.  » /'.Monday. February B,  1962 / Rules and  Regulationa       5869


                                                                   concentration associated with the
                                                                   emission limit which results from
                                                                   modeling the source using the CEP stack
                                                                   height as determined in f Sl.l(ii) and
                                                                   assuming the elevated terrain features to
                                                                   be equal in elevation to the CEP stack
                                                                   height If this adjusted GEP stack  height
                                                                   is greater than the stack height the
                                                                   source proposes to use. the source's
                                                                   emission limitation and air quality
                                                                   impact shall be determined using  the
                                                                   proposed stack height and the actual
                                                                   terrain heights.
                                                                     3. Section 51.18 is amended by adding
                                                                   paragraph (1) as follows;

                                                                   |81.1«  Review oif new
reviewing agency, which ensure* that
the emissions from • stack do not result
in excessive concentrations of toy air
pollutant at a result of atmospheric
downwash. wakes, .or eddy effects
created by the •ource itself, structures.
or terrain obstacles.
  (jj) "Nearby" as used in f Sl.l(ii)(2) is
that distance up to five times the lesser
of the height or the width dimension of a
structure but not greater than 0.8 km
(one-half mile). The height of the
structure is measured from the ground-
level elevation at the base of the stack.
  (kk) "Excessive concentrations" for
the purpose of determining good
engineering practice stack height hi a
fluid model or field study means a
miiyiTTiiim concentration due to
downwash wakes, or eddy affects
produced by structures or terrain
features which is at least 40 percent in
excess of the maximum concentration
experienced in the absence of such
downwash. wakes, or eddy effects.
  fll) "Plume impaction" means
concentrations measured or predicted to
occur when the plume interacts with
elevated  terrain.
  (mm) "Elevated terrain" means terrain
which exceeds the elevation of the food
engineering practice stack as oaknlatad
under paragraph (ii) of this section.
  2. Section 51.12 is amended by adding
paragraphs (j). (k), and (1) as fallows;

fill*  Controlefreteev:Genets!
  (j) The pla* must provide that the
degree of emiasion limitation required of
any source for control of any air
pollutant must not be affected by so   _
much of any source's stack height that
exceeds good engineering practice or by
any other dispersion technique, except
as provided in f 51.12(k) aad (!)• The
plan must provide that before a State
submits to EPA a new or revised
emission limitation that is based on a
good engineering practice stack height
that exceeds the height allowed  by
i Sl.l(ii) (1) or (2). the State must notify
the public of the availability of the
demonstration study and must provide
opportunity for public hearing on it This
Section does not require the plan to
restrict in any manner, the actual stack
height of any source.
  (k) The provisions of || 51.12Q) and
51.180) •fc»D not apply to (1) stack
heights in frlf^PCT, or dispecsion
techniques implemented prior to
December 91,1970. or (2) coal-fired
steam electric generating units, subject
to the provisions of Section 118 of the
Clean Air Act which commenced
operation before July 1,1957, and whose
stacks were constructed under a
construction contract awarded before
February*, 1974.
  (1) The good engineering practice
(GEP1 stack height for any source
seeking credit because of plume
impaction which results  m
concentrations in  violation of national
ambient air quality-standards or
applicable prevention of Mfl"lHMnt
deterioration increments can be
adjusted by determining the stack height
necessary to predict the  same mainim^
air pollutant concentration on any
elevated terrain feature as the mayimnm
                                                                     (I) Such procedures must provide that
                                                                   the degree of emission limitation
                                                                   required of any source for control of any
                                                                   air pollutant must not be affected by so
                                                                   much of any source's stack height that
                                                                   exceeds good engineering practice or by
                                                                   any other dispersion technique, except
                                                                   as provided in { S1.12(k) and (1). Such
                                                                   procedures must provide that before a
                                                                   State issues a permit to a source based
                                                                   on a good engineering practice stack
                                                                   height that exceed* the height allowed
                                                                   by I 51,l(ii) (1) or (2), the Stats must
                                                                   notify the public of the availability of
                                                                   the demonstration study and must
                                                                   provide opportunity for public hearing
                                                                   OB it This section does not require sue*
                                                                   procedures to restrict in any manner.
                                                                   the actual stack height of any source.
                                                                   (PR Doc tt-tZU RM i-t-tt *««Bi

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                                                            PN 123-85-10-28-01C
             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                   Office of Air Quality Planning and Standards
                  Research Triangle Park, North Carolina 27711
                         OCT 2 8 1965


MEMORANDUM
SUBJECT:  Determining Stack Heights "Lrf9Ex1stence" Before December 31,  1970
FROM:     Darryl D. Tyler, Director/-
          Control Programs Development'Dillon (MD-15)

TO:       Director, Air Management Division
          Regions I-X

     The following guidance is provided to'describe how  the definition of
"in existence" should be implemented and to assist States  and  emission
source owners and operators in providing appropriate evidence  of commitments
to undertake stack construction on or before December 31,  1970.   Please
note that this is guidance; States may submit alternative  demonstrations
in support of grandfathering claims, if they feel  the circumstances
warrant.

     We intend to rely on the general provisions of this guidance to
determine eligibility for grandfathering exemptions from certain other
provisions of the revised stack height regulations:  restrictions on the
use of GEP formulae for cooling towers, use of the refined GEP formula,
fluid modeling to justify GEP formula stack height, credit for merged
stacks, credit for new sources tied Into grandfathered stacks, and credit
for stacks raised to GEP formula height.

Background

     Section 123 of the Clean Air Act, as  amended, contains a  grandfather
clause intended to exempt stack heights and techniques for pollutant
dispersion that *ere in existence on or before December 31, 1970, from
general provisions of Section 123 restricting the degree to *hicn emission
limitations may be affected by dispersion.  When EPA promulgated stack
height regulations pursuant to Section 123 in 1932, it adopted a definition
of "stack heights  in existence before December 31, 1970."   This definition
allowed the grandfathering of stacks on which construction had not yet
commenced, but for which binding contracts had been signed that could not
be modified or cancelled without substantial loss to the owner or operator.
The EPA's definition was upheld by the U.S. Court of Appeals for the D.C.
Circuit in Sierra Club v. EPA, 719 F.2d 436, and has not been  modified in
any way by the rule revisions promulgated  on Ju.ly 3, 1935, except to
restrict its applicability to facilities that have not undertaken major
•nodifications or reconstruction, and have  not ducted tne effluent gas
streams fron pcst-1970 units into prs-1971 stacks.

-------
     Subsequent to the recent revisions, questions have been raisea  about
how the definition should be implemented, i.e.,  what EPA should  consider
to 5e a binding contract, and what should constitute a "substantial  loss"
for determining whether a stack should be grandfathered.

General Provisions

     The burden of proof for showing that a stack 1s eligible for
grandfathering exemption lies with either the State or the  source owner or
operator, as appropriate, and documentation in support of exemptions must
be made available for public review during the rulemaking process.   In the
event that no case for exemption under this provision is made, or that
satisfactory support for such a request is not provided,  the stack is
presumed not to be grandfathered, and therefore subject to the requirements
of Section 123 and the stack height regulations  promulgated by EPA.

     Grandfathering exemptions may be supported in one of three  ways:  by
showing that the stack was completed or was physically in existence  prior
to December 31, 1970; by showing that actual on-site continuous  stack
construction activities began on or Pefore December 31, 1970; or by  showing
that a binding contract'for stack construction was executed on or before
tnat date.

Documenting Stack Construction

     In cases where a stack was completed prior to December 31,  1970,  the
State may make a summary determination that the stack 1s grandfathered,
but must provide an explanation of the reasons for its determination.
One way in which it can be documented that the'stack was physically  in
place before December 31, 1970, is to provide a copy of the 1970 Federal
Power Commission report Form 67, which includes stack height,  among  other
information.  Evidence that may be submitted to support the date of
commencement of stack construction can include virtually any contemporaneous
documentation that cliarly indicates that construction activities were under
way as of December 31, 1970.  This could consist of building inspection
records, construction materials delivery receipts, correspondence,
interoffice memoranda, photographic records, or news clippings.  In the
event  that documentation  is  lacking or weak, EPA will consider affidavits
wnich  include detailed descriptions of efforts that ware undertaken  to
obtain contemporaneous supporting documentation.

Documenting Contractual Obligations

     The  date of  signature on  a contract for stack construction will be
acceptable for  applying grandfathering exemptions if the contract itself
meets  certain minimum qualifications.  A "binding contract," under the
previously-discussed provisions is considered to be one that commits the
source owner or operator  financially to  undertake stack construction and
that did  not have  in effect  on December 31, 1970, an "escape" provision
that  allows cancellation  by  the  owner  or  operator without  penalty.

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                                    3

     In the event that a contract contains provisions  for  assessing
penalties for modification or cancellation by the owner or operator,  and
those provisions were'in effect on December 31, 1970,  then the  provisions
must be reviewed to determine whether the penalties and other costs of
cancellation would have imposed a "substantial  loss" on the owner or
operator.  For new facilities, EPA will presume that a substantial  loss
would have resulted where the penalties exceed  ten percent of the project
cost.  Where the project involves only stack construction  or replacement,
EPA will review claims on a case-by-case basis.

     If a contract does not contain provisions  which impose financial
obligations on the owner or operator for contract modification  or
cancellation, then any determinations of whether liability to the owner
or operator resulting from such modification would constitute substantial
losses must be made on a case-by-case basis.  In general,  EPA's  rule of
thumb relying on ten percent of the project cost will  be used.

     If you have any questions r -arding application of this guidance  in
specific instances, please contact Eric Ginsburg at (FTS)  629-5540  or
Sharon Reinders and (FTS) 629-5526.

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             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                   Office of Air Quality Planning and Standards
                   Research Triangle Par*. North Carolina 27711


                               OCT 1 0  I9SS
MEMORANDUM

SUBJECT:  Questions and Answers on Implementing  the
          Revised Stack Height Regulation

FROM:     S. T. Helms, Chieff' L^   *•
          Control Programs Operations  Branch  (MD-15)

TO:       Chief, A1r Branch, Regions I-X

     A number of questions have arisen 1n several  areas  of the revised
stack height regulation since Its  promulgation on  July 8.   The following
answers have been developed 1n response.   The questions  and answers are
arranged under the general topic headings of interpretation of the regul a
tion, State Implementation plan (SIP)  requirements, and  modeling analyses
Please continue to call Sharon Reinders at 629-5526 1f you have further
comments or additional questions.

Interpretation of the Regulation

1.  Q:  What criteria should be used to determine  when a stack was '1n
existence" with respect to the various grandfathering  dates 1n the
regul ation?

    A:  The recent promulgation of revisions to  the stack  height regulati<
did not change the definition of "in existence.'  The  definition is provic
in 40 CFR Sl.l(gg) and includes either the commencement  of continuous
construction on the stack or entering  into a binding contract for stack
construction, the cancellation of which would result 1n  "substantial
loss" to the source owner or operator. The definition of  what constitute!
a "substantial loss" will be the subject  of future guidance.

2.  Q:  What "source" definition should be used  1n determining whether  tie
ins to grandfathered stacks should be permitted  or prohibited?

    A:  The term "source" in this instance means a single emitting unit.
Thus, credit for tying a single post-1970 unit(s)  Into a grandfathered
stack serving a number of old units is prohibited  under  the regulation.

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                                   -2-


3.  Q:  What is meant  in  the  regulation by "facility"?

    A:  For purposes of this  regulation, the definition contal-ned in
40 CFR 51.301(d) should be  used.  That definition essentially defines the
term as the entire complex  of emitting activities on one property or
contiguous properties  controlled by a single owner or designee.

4.  Q:  Must good engineering practice (SEP) stack: height be established
separately for each pollutant?  If not, how should it b« determined?

    A:  It is not necessary to calculate a separate SEP stack height for
each pollutant.  Since "6EP"  is defined by Section 123 of the Clean Air
Act as the height necessary to ensure against excessive concentrations of
any air pollutant, it  follows that 6EP should be established for each
source based on the pollutant requiring the greatest height to avoid
excessive concentrations.

5.  Q:  How should "reliance" on the 2.5H formula be determined?
                                                          •
    A:  First, "reliance" on  the 2.5H formula applies only to stacks in
existence before January  12,  1979.  Credit for "reliance' on the 2.5H
formula, can be granted under  the following cases:  (a) Where the stack
was actually built to  a height less than or equal to 2.5H; (b) Where the
stack was built taller than 2.SH and the emission limitation reflects tMM
use of 2.5H in the SIP modeling analysis; or (c) Where evidence is  proviB
to show "reliance" as  discussed in the following paragraph.  If no model 1r
was used to set the emission  limitation for the source, then it cannot be
argu-ed that there was  "reliance" on the formula, since EPA's guidance was
specifically aimed at  using stack height credit in establishing mission
limitations.  Once it  is  determined that the emission limitation was in
fact based on estimates of  dispersion from the stack, then the source can
be said to have properly  "relied" on .the 2.5H formula.   In the event that
it cannot be determined that  the emission limit is based on  "reliance" on
the 2.5H formula, then the  refined  H * 1.5L formula must be  used.

     Where a clear relationship between a 2.SH stack height  and the
emission limitation cannot  be shown, where the emission  limitation  was
not calculated based  precisely on the 2.5H height, or where  the stack
height used in modeling cannot be verified, then additional  evidence will
be needed.  Preferred  would be written documentation, such  as  copies of
the original engineering  calculations or correspondence  between the State
or the emission source owner  and EPA indicating that the 2.5H  formula
should be used to derive  the  mission limitation.  However,  recognizing
that  such evidence 1s  often not retained  for more  than  a few years,
"reconstructed" documentation may  be considered, but should  only  be used
as a  last resort.  This  evidence should  include  explanations by those
individuals who were  involved in designing  the facility, calculating
emission  rates, and who  represented the  facility  in  dealings with the    M

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                                   -3-


State and EPA on how the emission limit  was  derived,  including  a discussion
of how the fopmula was originally used in deriving  the  source emission
limitation, a discussion of the analytical method applied, and  a listing
of any contacts OP discussions with EPA  during  that period.  This  listing
will aid EPA in searching its own files  to find  any records of  communication
OP coppespondence that may beap on the issue.

     In no case should a source be allowed after Januapy 12, 1979, to
obtain a relaxation in the emission limitation  by arguing that  1t  "relied*
on past EPA guidance endorsing the 2.5H  formula.  In  cases where a relaxation
based on GEP formula height is sought 1n the future,  the refined H + 1.5L
formula must be used.

6.  Q:  The ppeamble specifically discusses  cooling towers as structures to
which the formula should not be applied.  Will  the  Office of Air Quality
Planning and Standards be specifying other structures that are  not well
represented by the formul a?

    A:  The discussion in the preamble and SEP  guideline is not intended to
be all-inclusive; judgment should be used 1n determining when fluid
modeling should be used to estimate the  effects of  structures with rounded,
domed, or tapered shapes.  Water towers  and  storage tanks are additional
examples of such structures.  As additional  Information becomes available
on the aerodynamic effects of specific building shapes  and configurations,
we will evaluate the need to revise the  GEP  guidance.  However, at present,
there are no plans to Issue a "laundry 11st" of structures to which the
formulas do not apply.

SIP Retirements
7.  Q:  Should a compliance averaging-time be explicitly  stated  in  a
SIP revision fop sulfur dioxide (SOg) emission limits  that  are revised  to
meet the stack height regulation?

    A:  A compliance averaging time need not be specified as  an  enfopceable
SIP provision as long as a stack test compliance method is  in place in  the
underlying fedepally approved SIP.  EPA's current national  policy requires
that SIP's and permits contain enforceable "short-term" emission limits
set to limit maximum emissions to a level which ensures protection  of the
short-term national ambient air quality standards (NAAQS) and prevention
of significant deterioration (PSD) Increments.  EPA relies  upon  a short-terra
stack test provision in the SIP as the method of determining  compliance
with the emission limits.  In lieu of a stack test, EPA has accepted fuel
sampling and analysis and continuous emission In-stack monitors  (CEM's).
When compliance is to be determined fpom Information obtained by fuel
sampling and analysis and CEM's, shopt-term avepaging  times should  be
specified.

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                                   •4-
8.  Q:  Are all  States  required  to have  "stack height regulations"?

    A:  limitations  on  creditable stack  height and dispersion techniques
impact the SIP program  in  two  areas--SIP emission limits for existing
sources and SIP provisions covering  new  source review (NSRJ/PSD  permitting
procedures.  For existing  sources, State regulations limiting credit 'for
stack height and other  dispersion techniques (stack height regulations)
are not necessary as long  as the SIP emission limits are not affected  in
any manner by so much of the stack height as exceeds GEP, or any other
dispersion technique.  Where a State has stack height regulations, those
regulations must be  consistent with  EPA's regulation.  Where a SIP contains
regulations that are inconsistent with EPA's regulation, the State must
either adopt a stack height regulation that is consistent with EPA's or
incorporate the EPA  regulation b; reference.

     For the NSR/PSD programs, it is essential that the plan contain
limitations on the amount  of creditable  stack height and other dispersion
techniques.  The following cases have been developed to illustrate what
action(s)  may be required  of the State since promulgation of the stack
height regul ation.

CASE All):  A fully  or  partially delegated PSD program that references but     ^
            does not define GEP  where the delegation agreement does not contaidll
            a date to define which version of the PSD rule 1s being oTeTegated.

ACTION:     Notify the  State that all permits issued henceforth  must be
            consistent  with EPA's stack  height regulation.  All  permits
            previously  issued  must be reviewed and revised as necessary
            within 9 months.

CASE A(2):  A fully  or  partially delegated PSD program that references
            but does not define  GEP  where the delegation agreement
            does contain a date  to define which version of the  PSD rule
            is being del egated.

ACTION:     update the  delegation agreement to reflect agreement with  EPA's
            stack height regulation  as of July 8, 1985.  Notify the  State
            that all permits  issued  henceforth must be consistent with
            EPA's stack height regulation.  All permits previously issued
            must be  reviewed  and revised as necessary within 9  months.

CASE 8:     The current federally approved SIP for NSR/PSD does not
            contain  a reference  to GEP or dispersion techniques,, I.e.,
            provisions  assuring  that emission limitations  will  riot be
            affected by stack  height in  excess of GEP or any prohibited
            dispersion  techniques do not exist  in the current SIP.               M

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                                   -5-
ACTION:     Notify the State that  such provisions must be adopted and
            submitted as a SIP revision within 9 months.  This' can be
            acccompl ished by adopting stack height regulations at the
            State level  or by adopting the appropriate reference and
            commitment to comply with EPA's stack height regulation as
            promulgated on July 8,  1985.  Interim permitting should be
            consistent with EPA's  stack height regulation.**

CASE C:     The current federally  approved SIP for NSR/PSO contains
            references to, but does  not define, GEP or dispersion techniques.

ACTION:     Notify the State that  a  comraltoent to comply with EPA's stack
            height regulation n promulgated on July 8, 1985, is required.
            If a State is unac * to  make  such a commitment, State regulations
            must be revised to be  consistent and submitted to EPA as a  SIP
            revision within 9 months and  interim permitting should be
            consistent with EPA's  stack height regulation.  No "grace
            period" will be allowed  for sources receiving permits between
            July 1985 and April 1986.**

CASE 0;     The current federally  approved SIP for NSR/PSO contains stack
            height regulations that  are Inconsistent with EPA's regulation.

ACTION:     Notify the State that  such regulations must be revised to be
            consistent and submitted as a SIP revision within 9 months
            and that interim permitting should be consistent with EPA's
            stack height regulation.**

CASE E(l):  A SIP for NSR/PSO has  been submitted to EPA, or will be
            submitted to EPA before  the due date for stack height revisions.
            The submittal contains provisions that conflict with EPA's
            stack height regulation.

ACTION:     Notify the State that  EPA cannot approve the submittal until
            it is revised pursuant to EPA's July 8, 1985, regulation.
**In the event that a State does not have legal  authority  to  comply with
  EPA's regulation in the interim (e.g.,  because  1t must enforce State
  rules that are inconsistent with EPA's  regulation)  and is compelled to
  issue a permit that does not meet the requirements  of the EPA revised
  stack height regulation, then EPA should notify the State that such
  permits do not constitute authority under the  Clean A1r  Act to corareence
  construction.

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                                   -6-
CAS£ £(2):  As in Case 1(1),  a  SIP  for NSR/PSD has been submitted to EPA
            or will  be submitted  to EPA before the due date for stack
            height revisions.  The  submittal is not Inconsistent with
            EPA's stack height  regulation, but portions of the existing
            approved SIP that relate to the submittal are inconsistent.

ACTION:     Approve  the SIP submittal based on a commitment by the State
            to correct the inconsistencies 1n Its existing SIP to comport
            with EPA's July 8 regulation and submit the corrections as a
            SIP revision within 9 months.  Interim permitting should be
            consistent with EPA's stack height regulation.** If the exist-
            ing SIP  is ambiguous, i.e., the SIP references but does not
            define terms relating to SEP or dispersion techniques, the
            action steps outlined in Case C above should be followed.

CASE F:     In nonattalnment  areas, emission limits or permits do not always
            include  modeling, but rather are based on lowest achievable
            mission rate (LAER)  and offsets.

ACTION:     If no modeling is used  1n the Issuance of a penult, the emission
            requirements for  the  source are not "affected" by stack height$
            or dispersion techniques, and no action 1s needed.  However,
            modeling was used 1n  the process of preparing and issuing a
            permit,  such as cases where offsets were obtained offsite, that
            modeling must be  reviewed for consistency with the stack height
            regul ation.

9.  0:   What must all States  do now that EPA's stack height regulation is
promulgated?

    A:   States must  review and  revise.their SIP's as necessary to  include  or
revise  provisions to limit stack  height credits and dispersion techniques
to comport with the  revised regulations, and, in addition, review  and
revise  all emission  limitations that are affected by stack height  credit
above GEP or any other dispersion techniques.  In accordance with  Section
4Q6(d)(2) of the Clean A1r Act, States have 9 months from promulgation to
submit  the revised SIP's and  revised SIP e«1ss1on limitations to EPA.

     In an August 7, 1985, memo titled 'Imp 1 mentation of the Revised
Stack Height Regulation—Request for  Inventory and Action Plan  to  Revise
SIP's," Regional Offices were requested  to begin working with each of
their States to develop States' Action Plans.  Each Action Plan  should
include the following:  (1) An  Inventory of  (a) all stacks greater than
65 meters (m), (b) stacks at sources  which exceed 5,000 tons  per year
total allowable SO? emissions;  and  (2) A reasonable schedule  of dates  for
significant State actions to conform  both State stack  height  rules and
emission limitations to EPA's stack height  regulation.   Schedules  should
include increments of progress.  Regional Offices  should  be  satisfied
that each of their States provide scnedules  fcr completion  of the  tasks

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                                   -7-


as outlined in the August memo  and  report the status of schedule  commitments
to then on a monthly basis.   Regional Offices have been asked to  forward
monthly status reports to the Control Programs Development Division on
the States' progress to meet scheduled  commitments and also report the
results of followup with the States  on  schedules that are not met.  In
order to facilitate tracking the States monthly progress, guidance on a
standardized format will be  issued  shortly.

Modeling Analyses

10.  Q:  Is there any restriction or prohibition against, or demonstration
required for, raising an existing (or replacing) stack up to 65 m?

     A:  No, as long as prohibited  dispersion techniques are not  employed.

11.  Q:  Are flares considered  to be stacks?

     A:  No, flares are excluded from the regulation.

12.  Q:  What load should be used for a fluid modeling demonstration?

     A:* One hundred percent load should generally be used unless there
is a compelling argument otherwise..

13.  Q:  Can new or modified sources who have agreed to a case-by-case
best available control  technology (BACT) emission rate be required to use
this rate for fluid modeling rather than a  less stringent new source
performance standard (NSPS)  emission rate?

     A:  As set forth in 40  CFR 51.1 (kk),  the allowable emission rate to
be used in making demonstrations under  this  part shall be prescribed by
the NSPS that is applicable  to  the  source category unless the owner or
operator demonstrates that this emission rate is infeasible.

14.  Q:  Must the exceedance of HAAQS or PSD increment due to downwash,  wakes,
or eddies occur at a location meeting the definition of ambient air?

     A:  No, the exceedance  may occur at any location, including  that  to
which the general public does not have  access.

15.  Q:  Is a source that meets NSPS or BACT emission Units subject to
restrictions on plume merging?

     A:  Yes.  However, in a majority of such cases, there will be  no  practical
effect since BACT or NSPS limits will be sufficient to assure attainment
without credit for plume rise enhancement.

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     Q:  wnat stack parameters  are  to be  used  in modeling when the actual    ^^
stack neignt is greater than  GEP height?

     A:  Where it is necessary  to reduce  stack height credit below what  is  in
existence, for modeling purposes, use existing stack gas exit parameters--
temperature and flow rate — and  existing stack top diameter and model at
SEP height.

17.  Q:  How should a stack that 1s less  than GEP height be modeled when
dispersion techniques are employed?

     A:  In order to establish  an appropriate  emission limitation where  a
source desires to construct less than a GEP stack but use dispersion
techniques to make up the difference in plume  rise, two cases should be
tested.  First, conduct a modeling  analysis Inputting the SEP stack
height without enhanced dispersion  parameters, then conduct a second
analysis inputting the less than SEP stack height with the increased
plume rise.  The more stringent emission  limitation resulting from  each
of the two runs should be the one specified as the enforceable limitation.

18.  Q:  How are the effects  of prohibited dispersion techniques to be  excluded
for modeling purposes?

     A:  Where prohibited dispersion techniques have been used,, modeling to
exclude their effects on the  emission limitation will be accomplished by
using the temperature and flow  rates as the gas stream enters the  stack, and
recalculating stack parameters  to exclude the  prohibited techniques
(e.g., calculate stack diameter without restrictions 1n place, determine
exit gas temperatures before  the use of prohibited reheaters, etc.).

19.  Q:  How are single flued merged stacks and multlflued  stacks  to be
treated in a modeling analysis?
     A:  This is a multistep process.  First,  sources with allowable
emissions below s.OOO tons/year may be modeled accounting for any plume
merging that has been employed.  For larger sources, raulti flued stacks
are considered as prohibited dispersion techniques in the same way as
single flued merged gas streams unless one of  the three allowable conditions
has been met; i.e., (1) the source owner or operator demonstrates that
the facility was originally designed and constructed with such merged gas
streams; (2) after date of promulgation, demonstrate that such merging is
associated with a change in operation at the facility that Includes the
installation of pollution controls and results 1n a net reduction 1n the
allowable missions of the pollutant for which credit 1s sought; or (3)
before date of promulgation, demonstrate that such merging did not result
in any increase in the allowable emissions (or, in the event that no
emission limit existed, actual emission level) and was associated with a
change in operation at the facility that Included the Installation of

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                                   -9-


emissions control equipment OP was carried  out  for  sound  economic  or
engineering reasons, as demonstrated to EPA.  Guidelines  on  what constitutes
sound economic OP engineering justification will  be issued shortly.

     If plume merging from siultiflued stacks  is not allowable,  then  each
flue/liner must be modeled as a separate source and the combined impact
determined.  For single flued merged stacks where credit  is  not allowed,
each unit should be modeled as a separate stack located at the  same
point.  The exit parameters, I.e. velocity  and  temperature,  would  be the
same as for the existing merged stack conditions and the  volume flow rate
based on an apportionment of the flow from  the  Individual units.

20.  Q:  What stack height for point sources  should be Input to air  quality
dispersion modeling for the purpose of demonstrating protection of the
NAAQS and PSD increments?

     A:  A discussion of the maximum stack  height credit  to  be  used  in modeling
analyses is provided in the "Guideline for  Determination  of  Good Engineering
Practice Stack Height" and ppovldes that the  SEP stack height should be
used as input to the model assessment.  If  a  source is operating with a
less than GEP stack height, then the actual stack height  should be input
to the "model.

21.  Q:  What stack height should be used for background  sources in
modeling analyses?

     A:  The GEP-stack height for each background source  should
be input to the model assessment.  If a background  source is operating
with a less than GEP stack height, then the actual  stack  height should be
input to the model.

22.  Q:  Can credit for plume merging due to  installation of control
equipment for total  suspended paniculate (TSP) matter be allowed  when
setting the SOg 1irait?

     A:  To state the question another way, the concern  is what Impact
the merging and installation of control equipment have on the emission
limit for another pollutant, and whether the  merging occurred before or
after July 8, 1985.  After July 8, 1985, any  exclusion from  the definition
of "dispersion techniques11 applies only to  the  emission  limitation for
the pollutant affected by such change in operation  and 1s accompanied by
a net reduction in allowable emissions of the pollutant.  For example, a
source tears down two old stacks and builds one new GEP  stack with an
electrostatic precipitator (ESP).  This results in  a net  reduction 1n TSP
emissions.  This source could model using stack gas characteristics
resulting from merging the two gas streams  in setting the TSP emission
limit, but may not so model and receive the credit  for stack merging when
evaluating the $03 emission limit.

-------
                                   -10-


     Be'ore July 8, 1985, installation of  TSP pollution control equipment
generally justifies the merging  of the stacks for TSP.  However,  if  a
source's emission limitation  for $63  increased after the merging, then
crecit would generally not be allowed since  it is presumed that the
merging was to increase dispersion.

     A source with no previous $03 emission  limit that merges  stacks and
installs an ESP for TSP control  may consider the effects of merging  on
compliance with the TSP NAAQS but may not  use merging to justify  setting
an S02 emission limit less stringent  than  its actual emission  rate before
the merging.

23.  Q:  If, after determining SEP stack height by fluid mo-deling,
dispersion modeling under other  than  "downwash" meteorological conditions
shows that a lower emission limit than that  from the fluid model  SEP
analysis is necessary to meet ambient air  quality constraints, should a
new stack height be defined for  the source?

     A:  No.  GEP stack height is set.  Ambient air quality problems
predicted by dispersion modeling at the fluid modeled height means that a
more stringent emission limit is necessary.

24.  Q:  Does EPA intend to issue additional guidance on fluid modeling
demonstrations?

     A:  See the attached memo from Joseph A. Tikvart,  Chief,  Source
Receptor Analysis Branch, to  David Stonefield, Chief, Policy Development
Section, on guidance for a discussion of  existing  and additional  guidance
on fluid model denonstrations.

Attachment

cc:  Stack Heignt Contacts
     Gerald Entison
     Ron Campoel 1
     8. J. Steigerwald

-------
REFER.. .CES FOR SECTION  5.6

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Monday
July 8, 1985
Part II

Environmental
Protection Agency
40 CFR Part 51
Stack Height Regulation; Final Rule

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27892
Federal  Register  / Vol. SO.  No. 130  / Monday.  July  8. 1985 / Rules and Reaulationj
ENVIRONMENTAL PROTECTION
AGENCY

40 CFR Pirt 51
Stack Height Regulation

AOIMCY: Environmental Protection
Agency (EPA).
ACTtOM: Final rulemaking.

•UMMAftv: Section 123 of the Clean Air
Act. as amended, requires EPA to
promulgate regulations to ensure that
the degree of emission limitation
required for the control of any air
pollutant under an applicable State
implementation plan (SIP) is not
affected by that portion of any stack
height which exceed* good engineering
practice (CEP) or by any other
dispersion technique. A regulation
implementing section 123 was
promulgated on February & 1982. at 47
FR 5604. Revisions to the regulation
were proposed on November 9. 1964. at
49 FR 44678. Today's action incorporates
changes to the proposal and adopts this
regulation IB final form.
Wltrivi DATE This regulation
becomes effective on August 7, 1985.
•on narrHBjH wpotniATtON CONTACT:-
Eric O. Ginsburg. MD-15, Office of Air
Quality Planning and Standards. EPA.
Research Triangle Paik. North Carolina
27711. Telephone (919) SO-IMsX
           r Ajrr MMMSATIOW
Docket SketaaeeBl
  Pertinent information concerning this
regulation is included in Docket Number
A-83-49. The docket is open for public
inspection between the aowra of MO
a.m. and 4:00 p.m.. Monday through
Fnday. at the EPA Central Docket
Section. West Tower Lobby, Gallery
One. 401 M Street SW.. Washington.
D.C. Background documents normally
available to the public, such as Federal
Register notices snd Congressional
reports, are not included in the docket
A reasonable fee may be charged for
copying documents.

Background

Statute
  Section 123. which was added to the
Clean Air Act by the 1977 Amendments.
regulates the manner in which
techniques for disperson of pollutants
from a source may be considered in
setting emission limitations. Specifically.
section 123 requires that the degree of
emission limitation shall not be affected
by that portion of t stack which exceeds
CEP or by "any ether dispersion
technique." It defines CEP. with respect
to stack haagtas as:
the height necessary to insure that eanssions
from tht stack do not result in excessive
concentrations of any sir pollutant la the
immediate vicinity of the source a* a result ef
atmospheric downwash. eddies or weaes
which msy be crested by tht source ft
nearby structures or nearby terrain <
.  . . (Stctioa 123(c)|.
Section 123 further provides that CEP
stack height shall not exceed two asvi
one-half times the height of the soorcx
(2.5H) unless a demonstration is
performed showing that a higher stack is
needed to avoid "excessive
concentrations." As the legislative
history of section 123 makes clear, deal
reference to a two and one-half •nsee
teat reflects the established practice of
using a formula for determaitng aee GBP
stack height needed to avert exeaaatve
downwash. Finally, sectioa 123 pronidea
that the Administrator shalllaaloss
only stack height credits  flies) n, tea
portion of the stack height used to
calculating an emission  limitation—
rather than actual stack heights.
  With respect to "other disper
techniques" for which emission
limitation credit It restricted the statute
is lesa specific. It states only that net
term saall indado intermittent anal
supplemental control systems (ICS.
SCS), but otherwise leaves the definition
of that  term to the discretion of the
                                                                 cevt decision is provided later in this
                                                                   ace.
  Than flat statute delegates to ate
Administrator the responsibility for
oafaant loqr phraaes. including
"exceeatve concentrations" and
"aaarby," with respect to both
structures and tasrain obstacles, and
"other dispersion techniques." Tin
ArttasnanTatnr mast slso define the
requirements of an adequate
demonstration justifying stack baajat
credits in excess of the 2.5H fonMsU.

RuJemaJung and Litigation
  On February 8.1982 (47 FR 58M). EPA
promulgated final regulations liaoiting
stack height credits and other diauetanau
techniques. Information concerning (&e
development of the regulation wea
included in Docket Number A-78-OI and
is available for inspection at the EPA
Central Docket Section. This regulation
was challenged in the U.S. Court of
Appeals for the D.C. Circuit by the
Sierra Club Legal Defense Fund. lac: tan
Natural Resources  Defense Council, Inc;
and the Commonwealth  of Penneylvantn
in Sierra Club v. EPA. 719 F. 2d 436. Oa
October 11.1983. the court issued its
decision ordering EPA to reconsader
portions of the stack height regulation.
reversing certain portions and uphotriing
other portions. Further discussion of the
                                                                 Administrative Proceedings Subsequent
                                                                 ic the Court Decision

                                                                   On December 19.1983. EPA held a
                                                                 patiic meeting to take comments 10
                                                                 aswist the Agency in implementing the
                                                                 mandate of the court. This meeting was
                                                                        ed in the Federal Register on
                                                                         • S. 1983. at 48 FR 54999.
                                                                 Comments received by EPA are
                                                                 included in Docket Number A-63-49. On
                                                                 February 28.1984. the electric power
                                                                 industry filed a petition for a writ of
                                                                 eartiorari with the U.S. Supreme Court.
                                                                 Waila Iha petition was pending before
                                                                 dea ooen. the mandate from the U.S.
                                                                 Court ef Appeals was stayed. On July 2.
                                                                 MM. the Supreme Court denied the
                                                                 petition (104 S.Ct. 3571).  and on |uly IB.
                                                                 19M. the Court of Appeals' mandate
                                                                 W formally issued, implementing the
                                                                 camrt's decision and requiring EPA to
                                                                 promulgate revisions to the suck height
                                                                 mulations within 4 months. The
                                                                 promulgation deadline was ultimately
                                                                 extended to June 27.1985. in order to
                                                                 provide additional opportunities for
                                                                 pafcu'c comment to allow EPA to hold a
                                                                 pefalic hearing on January 8.1985. and to
                                                                 provide additional time for EPA to
                                                                 csBBplete its analysis of  rulemaking
                                                                 alternatives.
                                                                 Documents

                                                                   fa conjunction with the 1982
                                                                 laajoBUfcon and this revision. EPA
                                                                 developed several technical and
                                                                 gaudance documents. These served as
                                                                 background information for the
                                                                 regulation, and are included in Dockets
                                                                 A-79-01 and A-83-49. The following
                                                                 documents have been or will be placed
                                                                 as the National Technical Information
                                                                 Service (NTIS) system and may be
                                                                 obtained by contacting NTIS at 5285
                                                                 Pert Royal Road, Springfield. Virginia
                                                                 am.
                                                                   n) "Guideline for Use of Fluid
                                                                 Modeling to Determine Good
                                                                 Bagineering Stack Height" July 1961,
                                                                 H»A. Office of Air Quality Planning and
                                                                 liamfrrria EPA-450/4-81-003 (NTIS
                                                                 PBK145527),
                                                                   (2) "Gvdeline for Fluid Modeling of
                                                                 Atmospheric Diffusion." April 1961.
                                                                 EPA. Environmental Sciences Research
                                                                 Laboratory. EPA-dOO/8-81-009 (NTIS
                                                                 PB81 201410).
                                                                   (3) "Guidance for Determination of
                                                                 Good Engineering Practice Stack Height
                                                                 (Technical Support Document for the
                                                                 Suck Height Regulation)." June 1985.
                                                                 EPA. Office of Air Qualify Planning and
                                                                 ftt—^—A, EPA-150/4-60-023R.
                                                                   (4) "Determination of Good
                                                                 Engineering Practice Slack Height—A

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              Federal Register  /  Vol. 50. No.  130 / Monday, fuiy 8.  1985 / Rules and Regulations
                                                                        ,•893
Fluid Model Demonstration Study fcr a
Power Plant." April 1983. EPA.
Environmental Sciences Research
Laboratory. EPA-600/3-83-024 (NTIS
PB83 207407).
  (5) "Fluid Modeling Demonstration of
Good-Engineering-Practice Stack Height
m Complex Terrain.'' Apn) 1983. EPA
Atmospheric Sciences Research
Laboratory. EPA/600/3-85/022 (NTIS
PB8S 203107).
  In addition, the following documents
are available in Docket A-83-49.
  "Economic Impact Assessment for
Revisions to the EPA Stack Height
Regulation." June 1985.
  "Effect of Terrain-Induced Down wash
on Determination of Good-Engintnng-
Practice Stack Height" July 1984.

Program Overview

General
  The problem of air pollution can be
approached in either of two ways:
through reliance on a technology-based
program that mandates specific control
requirements (either control equipment
or control efficiencies) irrespective of
ambient pollutant concentration*, or
through an air quality baaed system  that
relies on ambient air quality levels to
determine the allowable rate* of
emissions. The Clean Air Act
incorporates both approaches, but the
SIP program under section 110 uses an
air quality-based approach to establish
emission limitations for source*.
Implicitly, this approach acknowledges
and is based on the normal dispersion of
pollutants from their points of origin into
the atmosphere prior to measurements
of ambient concentrations at ground
level.
   There are two general methods for
preventing violations of the national
ambient air quality standards (NAAQS)
and prevention of significant
deterioration (PSD) increments.
Continuous emission controls reduce on
a continuous basis the quantity, rate, or
concentrations of pollutants released
 into the atmosphere from a source. In
contrast, dispersion techniques rely on
 the dispersive effects of the atmosphere
 to carry pollutant emissions away from
 the source in order to prevent high  .
concentrations of pollutants near the
source. Section 123 of the Clean Air Act
 limits the use of dispersion techniques
 by pollution sources to  meet  the NAAQS
or PSD increments.
   Tall stacks, manipulation of exhaust
gas parameters, and varying  the rate of
 emissions based on atmospheric
 conditions (ICS and SCS) are the basic
 types of dispersion techniques. Tall
 stacks  enhance dispersion by releasing
 pollutants into the air at elevations  high
above ground level, thereby providing
greater mixing of pollutants into the
atmosphere. The result is to dilute the
pollutant levels and reduce the
concentrations of the pollutant at ground
level, without reducing the total amount
of pollution released. Manipulation of
exhaust gas parameters increases the
plume rise from the source to achieve
similar results. ICS and SCS vary a
source's rate of emissions to take
advantage of meteorologic conditions.
When conditions favor rapid dispersion.
the source emits pollutants at higher
rates, and when conditions art adverse.
emission rates are reduced. Use of
dispersion technique* in lieu of constant
emission controls results in additional
atmospheric loadings of  pollutants and
can increase the possibility that
pollution will travel long distances
before reaching the ground
  Although overrtiiance on dispersion
techniques may product adverse effects.
some use of the dispersive properties of
the atmosphere has long been an
important factor In air pollution control.
For example, some stack height is
needed to prevent excessive pollutant
concentrations near a source. When
wind meets an obstacle such as a hill or
a building, a turbulent region of
downwash. wakes, and eddies is
created downwind of the obttadt as the
wind passes ovtr and around it This
can fore* a plume rapidly to the ground.
resulting in excttaivt concentrations of
pollutants near the source. A* discussed.
previously, section 123 rtcofoiZM mttt
phenomena  and responds by allowing
calculation of emission limitations with
explicit consideration of that portion of
a source's stack that is needed to ensure
that  excessive concentrations due to
downwash will not bt created near the
source. This height is called CEP stack
height
Summary of tht Court Decision
  Petitions for review of EPA's 1962
regulation were filed is the D.C Circuit
within tht statutory time period
following promulgation of the regulation.
On October 11.1983. tht court issued its
decision ordering EPA to reconsider
portions of the suck height regulation.
reversing certain portions and upholding
others. The  following is  a summary of
the court decision.
   The EPA i 1982 rule provided three
ways to ctrermine CEP stack height
One way was to calculate the height by
using a formula based on tht
dimensions of,nearby structures. Tht
other two were a de minim is height of 85
meters, and the height determined by a
 fluid modeling demonstration or Reid
 study. The court endorsed the formula
 as a starting point to determine CEP
 height. However, it held thdt EPA has
 not demonstrated that the formula was
 an accurate predictor of the stack
 needed to avoid "excessive
 concentrations of pollutants due to
 downwash. Accordingly, the court
 directed EPA to re-examine in three
 ways the conditions under which
 exceptions to the general rule of formula
 reliance could be justified.
   First the 1982 rule allowed a source to
 justify raising its stack above formula
 height by showing a 40-percent increase
 in concentrations due to downwash.
 wakes, or eddies, on the ground that this
 was the percentage increase that the
 formula avoided. Tht court found this
 justification insufficient and remanded
 tht definition to EPA with instructions
• to make it directly responsive to health
 and welfare considerations.
   Similarly, tht 1982 rule allowed a
 source  that built a stack to less than
 formula height to raise it to formula
 htight automatically. Once again, the
 court required more notification that
 such a  step waa needed to avoid
 advent health or welfare effects.
   Finally, the court directed EPA either
 to allow tht authorities administering
 tht suck htight regulations to require
 modtling by sources in other cases as a
 check on poasibla error in the formula.
 or explain why the accuracy of the
 formula made such a step unnecessary
   Tht 1982 rule provided two formulae
 to calculate CEP suck htight For
 source* conatructed on or before
 January 12.1979. the data of initial
 propoeei of tht stack htight regulations.
 tht applicable formula waa 2.5 tunes  the
 height  of tht source or other nearby
 structure. For sources conatructed after
 that date, the nde specified a newer,
 refined formula, the height of the source
 or other nearby structure plus l-S times
 tht height or width of that structure.
 whichever is leas (H-H1.5L). The EPA
 baaed  Its decision- to include rwo
 formulae on the unfairness of applying
 the new formula retroactively. In its
 examination of this issue, the court
 specified four factors that influence
 whtthtr an agency has a duty to apply «
 rule retroactively. They are:
   1. Whether th« new rule reprmnta an
 abrupt  departure from wtU titabaahtd
 practice or manly aiumpta to fill a void .n ;n
 unsettled area of law.
   i The extent to which tht party against
 whom the new rule it applied rtiitd on me
 former rule.
   3. Tht dtfTM of burdtn which a retro»c::it
 order impoMJ on a party, and
    4. Tht itamtory inttreit in applying i new
 ruJt dtapitt tht rehanc* of a party on :f.t :.d
 itandard.

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 27ifl4       Federal  Raystac / Voi SO. No. 13O / Monday, frifr a. 19B5 I R»fe» and Regulations
 719 t2d at 46? (citations omitted).
 Applying this «nalyu» to the two
 formulae, the court upheld EPA'i basic
 decision.
   However, the court also held that
 sources constructed on or before
 January IZ 1979. should not be
 automatically entitled to fu»l credit
 calculated under the 2.5H formula  unless
 they could demonstrate reliance on that
 formula. The court remanded this
 provision- for revision to take actual
 reliance on the 2.5H formula tmo
 account.
   The slarate limits slack height eredW
 to that needed to avoid excemiv*
 concentration* dv* to downwaen caused
 by "nearby" stnctune or terrein
 feature*. TB* 19*2 regulation defined
 "nearby" far GEP fonnoia epaKcatfoM
 as Eve tines the leaver of either the
 height or projected width of the
 structure --•nrng dowowtak Dot to
 exceed one self nik, No suck dietuc*
 limitation we* placed oa struclwrea or
 terrain features waa*a effect* wen
 being considered in Quid -"•*•*-».
 demonstrations or field studies. The*
 court held that section 123 explicitly
 applies the "nearby" limitation to
 demonstrations and studies u weU aa
 formula applications, and *y*»~m the
 rule to ETA to apply the limitation  in
 both contexts.
   The  198? rule defined 'dispersion
 techniques" ae those techniques which
 attempt to affect poQutant
 coneentnttom bywmg that purtfun of a
 stack exceedJnf GEP. by verywf
 emission niee accordi** te> amiuspfteik.
 condition* or pollutant eoncentrettene,
 or by the eddirfo* el a fan or feheeiei to
 obtain e lees  stringent enuefen
• limitation. Th* court fbwnd this
 definition too narrow because enp
 techniow •sierBficamiy Motivate*) ey an
 intern  to gjun enusaions credit for
 greater dispersion" shocJd be baited
 "19 F.2d 462. As a resale the covt
 directed EPA to develop iuh»»
 disallowing credit for ail SMC*, diaperran
 techniques oniess the Agency
 adequately im&fied excapataae oa the
 basis of administrative necaeeny or m «e>
 rr:nimi3 result.
   The  CEP formulae  established in in*
 1982 rule do not consider peaaae nsa.«*
 the ground that plume nse is not
 significant under downwash conditions.
 In its review of thti provision, the court
 affirmed this  judgment by EPA.
   The  1982 rule addressed pnJIutant
 concentrations estimated to occur whan.
 a plume impacts efevated terrain by
 auowini credit for stack height
 necessary to avoid ait quality vtoLuiana
 ..i such cases. However, the court ruied
 •.hat secijoo 123 did not allow EPA to
 grant credit for plume irrptcnon in
setting auction liauti. tod nwernd tkta
part of the regulation.
  Tb« prcjeabk (0 tha 1942 nfMkben
provided a 22 aoota proceaa fat Stale
iBipiaBcntation of the refuUtwo. The>
couct found this penod to ba> coBtrary to>
secnon 406(d)(2> of the CUaa Air Ac*
and rrrersed tL
  The reguUtJoa. foUcwinf toe statute.
excluded stack* "in existence" oa or
before Oecenber tt. 1870. froei th* GEP
requirements. However, the reguUtoej
did not praiubit sourcee coaetracled
after Oeceaber 11. IBTtt rreat lecatviBg
credit for tying into pr*-19Jl stacks.
Although the court upbeM EPA's
definition of "ia existence," it aot«d> tbe4
EPA had tailed to eddies* taa> tte-ia)
issee.
this issue to EPA for juatifiatiem.
  One other BfovieMi of the leaxiiannai
was challenged is th* Siarro CU> svifc
The sxriusiofi of flare* {ream th*
defiant?  ol "sUck." IA Ua review el that
pmvtswv  ih* court h«4d th*t BPA haei
acted properly.
  Other provisions of th* nark height
regulation, euch aa. th*. a* nintmm stack
height attaMahed, under i 41.U»JMD.
were noi cneilcaged in tae> suit said t*e»
reman ia effect.
Summary of ttnt Mj*mitm ft
Notict ofFtopoiKfflaJmaicxnt
  In th* Novamfaar 9t IflOa. notica.
responding to the court dadaun, EPA
proposed to redaflne a. aumbar of
specific tacns. "y['"^i«a "exceasiva.
coocaniraiiona*" k*ditepeie4ttii
tefhnimiaa." "nearby." aaaiothe*
unpoctanLconcapei* andi oraattaad u>
            of the h**ea> tst
         nft GEP StACk hfli^L TW
following ia. a auaaaacy of th* Mviaiaau
that wan proposed
  The Court of Appeals held that EPA
erred in defixnae "ewceeai*1*
concentratian*" d«« u> «a%vmwe**w la*
purpoMe of jwatifyiaf a, slack pee tea
than formui*. height a* nothiag DMT*
than a 40-pejcent mcreaa* t* pnlUlaajt
coaceotratzoea over wh*l weoid eccur
in the ihetnrt of dowvweak k
remaadeck thia. veua to, EPA us r«We th*
dtfimnae, 10 son* ebeokt* k«ei ef ear
polludoa that could be in*sr»«eted to
endanger health and wellac*. and
to be "exenssiv*."
  The EPA proposed two. aitomativt
approach** to defining "exceaene
concentrations." Fit*. EPA reqnantad
commcot oo whether th* eJVeeron*
appraeck adopted a* p*et of in* MM
reguiajtam HI tact pen* en* eejaiaal rhn
dangers to aetlrii end w«inue>
envisaoned by Coaejree* when it
section 129. In tns> rreat that seen •
 showing catfd not b* made. EPA
 proposed a two-part dcfettioa at*
 excessive coacntnbaoe. re^uinnf ths (
 the downwvaA. wakas. oreddws
 induced by nearby structure* or terrain
 feeturee reaeal ia inaieees in gtewnd-
 levil poUmtant concmfritioos than
  (*) Ceuee or ce»tribote to an
 exceedaner of e NAAQS or appflnbfe
 PSO mcrenwnt and
  (b) Are at least 40 percent in excess of
 concentration* projected to occur in the
 absence of such structures or terrain.
 features.

Definition of CEP Stack Hfigfit

  EPA piaajoaed to find that th*
 traditional (iSH) „* refined (H-M.5L)
formulae remained proper methods for
calculating CEP stack bvtgnt except EPA
 proposed to revise its regulation to
allow EPA, the State or local air
pollution eon trot agency discretion to
require a farther demonstration using a
field study or Quid model to
demonstrate CEP stack height for a
 source to a case where, it waa believed
 that the fbnmria may not rettably predict
GEP height to the case of structures that
are porous ot aerodynamicaHy smoother
 than block-shaped structures, it would
require a source to demonstrate the
downwash effect* of such structures
using a flefd study or fluid model before
receiving credit for stack height based
on the structures. EPA also proposed
generally to aJow saunas to nis*
existing stacks up to Cbnaula t-^v height
without further demonstration*, with the
exceptfoo no^a/j shove fiu dSacntiAnary
Rilianc* oa th* 23H Formula

  In its 1982 ittie* EP A attawed sowce*
buik befew January U. MV9, th* date OB
which it propeeed m* reftaed H-t-l^L
formulae, to cakaUt* thwir enueswak
liout* e*Md ea UM tradetteMi UH
formui* thai existed, peamoueky. Ta*
court apfvoved this dia*neao«t bwl
ruled thai U should- be uouted to sowrces
that "reaVed" oa ta* Bediboaai fonmfa.
nimasrm. fat axaaxiie. that sources
that bad ci*i*ied o«Mt for stack* \*e
taller them th%fana»i* provideat etmid
not b* said t* a*** "reksd" am it
  b respenv* to me eoert decwea EPA
propovad is revuw rte Hgalertnai »
requve thai fcr T*t fls euateace 00
January 12,  1979.  source* deaMOBtrace
that their aetnaJty relied OB the S.SH
formal ia> I*** dsMgsi of their steci0
before recerraag credtt for ta«t an*M '»

propose*. EPA ispiseia' CBBXBMK on
              eaarier •* ecceauseie
        etf andl  rs4i

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                                                                                                   *

             F*daw»J RagJatar / Vol.  5ft No. 130 /  Monday. July a 198S  / Rules and Regulation.
                                                                      27895
DtfiniUtmof'Wtortrr"

  In iti 1982 rule*, EPA allowed source*
that modeled the effects of terrain
obstacle* on downwash to include any
terrain features in their model without
limiting their distance from the stack.
The court though persuaded that this
was a sensible approach, since it
allowed the model to best approximate
reality, ruled that Congress had
intended a different result namely that
terrain features beyond H  mile from the
stack should not be included in the
model.
  In respoBM. EPA proposed to revise
i 51.1(ii)(3) o/it* regulation to limit the
consideration of downwash. wake*, and
eddy effects of structure* and terrain
feature* to thoae feature* «-J*««ifUH M
being ••nearby" aa defined  ia | SLlfjj).
Under this propoaal structure* and
terrain feature* would be considered U>
be "nearby"*!/ they occur within a
distaaca of not more than O3 km (V4
mile): terrain features that  extead
beyond 04 km could be cooatdered it at
a distance of &4 lea. they achieved a '
height greater than or equal to 40-
percent of th* CEP stack height
calculated by applying the CEP formula
to actual nearby structure*. In other
word*, a terrain feature would be said to
"begin" within tt mil* if it reached at
least the height of nearby building*
within that distance. Suoh feature* could
be considered only out to a distance"
equal to 10 time* the •»•»»"""« K^W»M gf
the feature, not to *xca*d 2 mile*.
  The EPA propoeed two option* for
distinguishing bvtweea source*
constructed before and a/tar th* date ol
promulgation of the** revisjoae. Th*
first opboa wodd treat both categori**
of SOUTCM th* sam*. The second option
would unit th* coasio*r*tion of terrain
for new source* to only due* pordosu of
terrain feature* that fail entirely withia
0.8  km. thereby removing the poaaihilltj
of including feature* extending bcyood
  Finally, EPA propoeed I
 alternative* for conducting Aetd
 modeling to evaluate th* dow*na*ali
 effect* or nearby tetrem feaaesa*, Th***
 alternative* described vanoa*,w*r* at
 Iinuting terrain m the modd beyond th*
 proposed distsnr* limitation*.
  To establish a baaeiin* for
 comparison, two alternative* would
 initially modd the stack on a flat plan*
 with no structure or terrain influence*.
 To anaiyu downweeh effect*, the first
 approach would then insert nearby
 terrain, with ell terrain beyond th*
 distance limrt "rat off" horizontally The
 second eporoech would gradually
 smooth and slope the terrain beyond the
distance limit down to th* elevation of
the base of the «fack.
  The third approach would proceed in
a somewhat different manner. A
baseline would b* established by
modeling all terrain beyond the di»t*nce
limit waootaing aad *loping neerby
terrain to minima* it* influence. To
analyze downwaah effect*, th* nearby
terrain would than b* inserted into the
model end th* difference ia effect
rneesured to d*t*rrain* appropriat*
downwaah credit for stack height
Definition of "Ditpenitui Technique*"
  Ia th* 1082 rale*. EPA identified two
practices, ia addition to ataeka above
CEP and 1CS/SCS, aa having ao pvpo**
other thaa ta obtaia a l*ee strtngnt
cmi*noa limitatioa. te so doing. It
allowed credit for any other practice
that had tb* raaolt of increasing
dispersion. Th* court concluded that
Congress h*d intended at a "inlm-if
to forbid any dispersion enhancement
practice that was significantly
motivated by aa intent to obtaia
additional credit for greater dispersion.
and remanded th* question to EPA for
^examination,
  Tb* EPA proposed to revise it*
definition of "dispersion techniques"
generally to iadad*. ia *ddrboa to ICS.
SCS aad stack hctgnta ia *xc*a* of CEP.
any tadmkraa* that hav* IB* effect of
enhaactaaj cxhavat fa* atoaa* ria*.
Combining **v*reJ existing rtack* Into
on* a*w *teck can hav* each an effect
However, sue* oacabiaattoa* aieo oftea
hav* rnriensiiJent •economic an*)
anguMeftng juaHncatioo. Aooordingry.


combining of g*a •tnaca* snauM a*4 b*
         ta allow eoufLes to tak* unlit
           taattatfoae for N
               w*w ortgin*iOjr dtsi^Md
•IFWUU W tVIMfV QW QMf^Of OOCQTB
with tb* iactallatioa of *ddKtonai
ooatfoie ywidiag * net redvcooa ia total
entt**iOB* of ta* effected pouotaat The
EPA retained exerottoa* from it*
definition or* prohibited dl*p*r*iea
tecaaipva* for *aiok* p*nag*fli*nt ia
egneurroral and aihricuiranl prescribed
bunung proejram* and also proposed to
exciude episodic restrictions oa
residential woodbuming aad debris
 New Sources Tied into Pre-l&l Stack*
   Section 123 exempts stacks "in
 existence" at th* end of iflTO from it*
 requirements. EPA's generel approach to
 implementing this language was upheld
 by the court However, tr its :982 rule
 EPA had also allowed thif credit to
source* built after mat date that had
tied into stack* built before that date
EPA failed to respond to comments
objecting to this allowance, and so the
court remanded the question to EPA lot
the agency to address.
  Upon ^examination. EPA saw no
convincing justification for granting
credit to these sources. Consequently.
for sources constructed after December
31.1970. with emissions ducted into
graadfathered  stack* of greater than
CEP height and for sources constructed
before that date but for which major
modification* or reconstruction have
ben carried out subsequently. EPA
proposed to limit suck height credit to
only so much of the actual suck height
as conforms to CEP. Sources
constructed prior to December 31.1970,
for which modifications are earned out
that are not classified as  "major" under
40 CFR Sl.ia(j}(i). 5U4(6N2)(i). and
51Jl(e)(2)(i) would be allowed to retain
fail credit for their existing stack
height*.

Plume Impocuon

  In it* 1982 rule*. EPA illowed stack
height credit for "piome impacrion." a
phauueanon tnet is distinct from
downwash. wakes aad eddies. The
court though sympathetic to EPA's
policy position, reversed  this judgment
as beyond tb*  scop* of the statute.
Accordingly, EPA propoead to delete the
allowance of plum* impaetioa credit
from, it* regulation ia compliance with
the court i*~if*"' However. EPA also
recogaawd that soarca*. in complex
terram fee* addltioaai analytical
^rn^jt^. wam 4UI*«pCB*t to conduct
modeling ta deteeBiaa appevemate
e*ai*aioa liamitatiaaa. Coaaaaaently. EPA
r*qu**l**l TV"*"* oa whether eny
aliowaac* saooid be mad* for
impiaauatattoai probletM that may
molt from th* application of revised
CEP stack height assumptions end. if so.
how such ellowance should b* made.

State ImpiemetaSJoa Plan Reqummru

  EPA's 19RZ nde* gave state* a total of
22 month* to revise their rules and to
establish source emission limitations
based on new stack height credits. The
court found this, too, to go beyond the
language of the statute. In response.
EPA suted in th* proposal that Slates
 would b* required, pursuant to section
408(d)(2Kb) of the Clean Air Act. to
review their nriee and existing emission
limiUUona. revising them as na*ded to
comply with th* new  regaiaoee within 9
 months of the da to of IB

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27896       Federal Register / Vol. 50. No.  130 / Monday. July 8.  1965 / Rules  and Regulations
Response to Public Comments on the
So vember ft 1984. Proposal

  The EPA received over 400 comment!
during the public comment period and at
the public hearing, addressing a number
of aspects of the proposed
regulation.These comments have been
consolidated according to the issues
raised and are discussed, along with
EPA's responses, in a 'Response to
Comments" document included in the
rulemakmg docket. Certain comment*
can be characterized at "major" in that
they address issues that art
fundamental to the development of the
final regulation. These comments an
summarized below, along with EPA's
responses. Additional discussion of the
issues raised and further responses by
EPA can be found in the "Response to
Comments" document

I. Maximum Control of Emissions in Lieu
of Dispersion
  A central legal and policy question
addressed in this rulemaking waa raised
in the comments of the Natural
Resources Defense Council (NROC) and
the Sierra Club. They contend that
section 123 requires ail sources to install
the maximum feasible control
technology before receiving any credit
for the dispersive effects of a stack of
any height or for other practices that
may enhance pollutant dispersion.
  The NRDC argument is summarized
fully in the Response to Comments
document together with EPA'* response.
Very briefly, NRDC contends that
litigation prior to the 1977 Clean Air Act
Amendments had eatablished that
dispersion can never be used aa aa
alternative to emission control and that
this understanding was carried forward
and strengthened in the 1977 Clean Air
Act Amendment*. Accordingly, no rule
that doe* not require full control of
emissions a* a prerequisite to any stack
height credit would be consistent wife
Congressional intent
   EPA disagrees. During the a yean
between 1977 and NRDC* comment*, a
period covering two Administrations
and three Administrator!. NRDCs
position has never been either adopted
by EPA or seriously advocated before it
The pre-1977 cases cited by NRDC-do
not bar all stack credit but only credit
for stacks beyond the historical norm.
Finally, the text and legislative history
of section 123 contain essentially no
support for NRDCs "control first"
position.

II. Discussion of Other Major Issue*
  The EPA i position on the "control
first" comment* provide* the necessary
background against which the remaining
major issues in this rulemaking are
discussed. These issues are: the
definition of "excessive concentration*"
due to downwash. wake*, and eddie*;
the definition of "nearby:" and the
definition of "dispersion technique." A
question that affect* several of the**
decisions, and that i* addressed where
it arise*, concern* the extent to which
any change* made in the stack height*
regulation* should be applied
prospectively rather than retroactively.
  This discussion of "excessive
concentration*" i* in turn divided into a
discussion of the physical characteristic*
of downwash. followed by a discussion
of the significance of those
characteristic* a* they pertain to the
CEP formulae, to stack* above formula]
height to *t*ck» being  raited to formula
height and to stacka at formula height
being modeled at the choice of the
administering authorities.
Definition of "Excessive
Concentrations"
  Tht Physical Natun of Downwash. A
number of commenter*. including the
Utility Air Regulatory Croup (UARC),
have argued that the court decision doe*
not obligate EPA to revise the definition
adopted in the 1982 regulation, but only
direct* EPA to ensure that the «K
percent criterion protect* againat
concentration* due to downwaah that
could be related to health and welfare
concern*. They point out that when
emiition* from a source become  trapped
in the wake region produced by the
source itself or upwind structure* and
terrain feature*, tho*e auiaaiona  an
brought rapidly to earth, with little
dilution. Thia. the coaunaatan argue,
can produce short-term peak
concentrations at groundlevel that an
many time* greater that the
concentration level* of the NAAQS.
BecauM their duration is relatively
short averaging theee concentration*
over the time* specified by the NAAQS
doe* not reault in NAAQS violation*.
Nonetheless, the-commenter* argue thai
the** concentration* should be regarded
as nuisance* that section 123 waa
specifically enacted to avoid
Accordingly, the commenter* held that
EPA would be justified in retaining the
40-percent criterion without requiring
that such increases result in
exceedance* of the NAAQS
  These same commenters argued that
severe hardship* would result if EPA'*
second proposed definition of
"excessive  concentrations" is adopted.
and that by limiting stack height credit
to that just  necessary to avoid
exceedance of NAAQS or PSO
increment*, die definition would  set to
limit actual stack design and
construction in a way that would
increau the likelihood of NAAQS or
PSD exceedance*. Thi* would occur.
they argue, because, by building only so
tall a *tack a* they can receive credit
for. sources would be eliminating a
"margin of safety" that would normally
be provided otherwise. Furthermore, it
waa argued that due to the changing
nature of background air quality.
inclusion of absolute concentrations
such as the NAAQS or PSD increments
in the definition would render
determination* of CEP stack height
constantly subject to change.
  NRDC argued on the other hand that
only a violation of air quality standards
can be conaidered the type of
"cxccMivt concentration" for which
downwaah credit can be justified, the
EPA had failed to specify the health or
welfare significance of the short-term
peak* that it might consider as meeting
this deteription. and that in any event
UARG's attempt to show that short
stack* could cause a large number of
short-term peaks was technically flawed
in several different way*.
  Response. Extensive discussion of the
downwash phenomenon,  as well ss the
aerodynamic effect* of buildings and
terrain feature* on wind/low patterns
and turbulence, i* contained in the
technical and guidance document*
previously listed in this notice. To
.iimmjMa briefly, numerous studies
have shown that the region of
turbulence created by obstades to
windflow extend* to a height of
approximately iS time* the height of the
obstacle. Pollutant* emitted into this
region can be rapidly brought to the
ground, with limited dilution. Though
thia tendency decrease* the higher
vertically within dM downwaah region
that the plume i* released, because of
the highly unpredictable nature of
downwaah and the lack of extensive
quantitative data, it is extremely
difficult to reliably predict plume
behavior within the downwash region.
Aa noted in the comments submitted.
the distinguishing features of downwash
do not show up well over an averaging
time aa long aa 1 hour or more. Pollutant
concentration* resulting from
downwaah can erica and subside vary
quickly aa meteorological conditions.
including wind speed and atmospheric
stability vary. Thia can result in inort-
term peak*, lasting up to 2 minutes or so.
recurring intermittently for up to several
hour*, that significantly exceed the
concentrations of the 3- end 24-hour
NAAQS. Uttle quantitative information
la available on the actual levels of these
peak*, or on the frequency of their
occurrence since moat stacks have been

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             Federal Register /  Vol.  so. No. 130 / Monday. JuJy 8. 1985  /  Rules and Regulations
designed to. a void downwash and
because downwash monitoring it not
typically conducted.
  A number of modeling and monitoring
studies in the record assess the
significance of downwash when plumes
are released into the dowmvash region.
The most important of these are a
number of studies cited m the November
9 proposal showing that for sources with
sulfur dioxide (SOi) emission rate* of 4
to 5 rounds per million British Thermal
Units (Ib./mmBTU), stack* releasing th«
plume into  the downwash region can
significantly exceed the 3-hour NAAQS.
  The utility industry submit ted
monitoring result* from four site*
showing that facilities with *hort sucks
(ranging from 23 to 80 percent of formula
height) generated many short-term
peaks in the vicinity of the plant at
concentration* at least 2 time* the
highest concentration of the 3-hour SOi
standard. i.a» 1  ppm for up to 10
minutes. Those  concentration* are the
maximun that could be recorded by the
monitors used. There is no way to
determine from these data the true peak
ground-level concentration*.
  The NRDC. in commenting on this
subject ha* argued that downwash- •  '
related concentration* are largely
theoretical since stack* have generally
been built to avoid downwash. and  that
actual concentration* occur under other
meteorological conditions auch as
"inversion breakup fumigation*" and
"looping plums," that can equal these
"theoretical" concentrations predicted
under downwash,' The NRDC also
en tinted the utility data on numeroos
technical grounds,
  EPA'* itudie* indicate that, whee
stacks are significantly less than GBP
formula height high short-term
concentrations can indeed occur doe to
downwash that are in  the range of the
values reported by the utility industry.
Concentrations produced by the other
conditions cited by NRDC, though high.
may be lower by an order of magnitude.
and occur less frequently by a* much a*
two orders of magnitude, than tho*e
produced by downwash.' A* (tack .'
  ' In 'mvtmon brufcup fuoiiftuon,' la in»
layer diuipcttt du* to fli«uo| of Kit ground. Itmaf
tne poiluiiiui ilui weft tripped in » 0*Ktad
suddenly 10 pound Itvel. in "toopini plumm." •
p.'uine ii broufht down ta ih« frouad do** w (S»
lourci m the form ol uiMfmiiMM pWfs vuuor *«*y
unstable itmovphtne eondjoaw.
  '' Commend on P»ik Creund-Uvel
Concintri tiom Ou« to Buildinf Downwiia ReUuvi
>o Pejfc Conccnmiioni Under Aimoipnene
0 joeoton proceiiet." Aim H. Hub«r ind Princu
»oo'er ,'f JUM 10. 19B*.
height approaches the height determined
by the CEP formula, the expected
frequency and severity of short-term
peaks due to downwash becomes less
certain. This is to be expected since it is
the purpose of a formula height stack to
avoid excessive downwash. While it
might theoretically be possible for EPA
to revise the CEP formula-downward
(e.g.. from H+1JL to H+13L or some
other value), such a revision would hava
little purpose. By moving the release
point further into the downwash region.
such a change would increase the
probability of high down wain-caused
peaks. On the other hand such
relatively snail change* in stack height
are not likely to appreciably affect the
emission limitation for the sooro*. This
i* because emission limitations are
calculated based on  physical stack
height and associated plume rise under
atmospheric conditions Judged meet
controling for the source. Increasing or
decreasing stack height by a email
fraction will not greedy change the rate
or extent of dl*penion and thus will not
affect the ground-level concentration.
Moreover, as EPA noted in its
November 9 proposal, no data presently
exist on which to base a revision to the
formula.
  The NRDC submitted data to EPA
which It believed to support the
conclusion* that it urged EPA to adopt
concerning short-term peak
concentrations under other
meteroiogical conditions.'However,
these data were not presented la a form
that could be readily interpreted and
EPA ha* thus far been unable to draw
any conclusion* from then.4
  In reviewing NRDC* coeaments OB
building downwash. EPA agrees that
there is greet uncertainty about oar
present understanding of thi»
phenomenon, and this is supported by
the range and variation of downwasa
effects ubseind la recent stadias.
However, no information has been
presented which would convince EPA to
abandon the present CEP formulae IB
favor of any alternative.
  The health and welfare significance of
downwash concentrations that result in
violations of the ambient standard* are
documented end acknowledged in the
standards themselves. The significance
of short-term peaks at the levels that
EPA'* analyse* predict is more
judgmental. However, a number of
studies cited in EPA's "Review of the
National Ambient Air Quality Standard*
 for Sulfur Oxides: Assesimem of   jeb
 Scientific and Technical Informatioi^H
 f.EPA-wo/3-82-007. November 1982™
 indicate that concentration* of one ppm
 sustained for duration* of 5 minutes or
 more can produce bronchoconstnction
 in asthmatics accompanied by
 symptom* such a* wheezing and
 coughing. Such concentrations are well
 within the range of concentrations that
 can result from downwash. When
 sources meet the ambient standards, the
 frequency of occurrence for these
 concentration* under the other
 conditions cited by NRDC Is
 substantially lower than for downwash
 whan stacks an less than CEP.
  GSP Formula Stack Height Some
 coaaaatara. '•"•''"*'«$ NRDC stated
 that EPA cannot justify retention ol the
 traditional (1SH) and refined (H-rl.SL)
 CEP formula* baaed aimply on their
 relationship to the 40-percent en tenon.
 and argued that the formulae provid*
 too much credit in many or moat caies.
 This, they argue, results in allowing
 sources to obtain unjustifiably lament
 emission limitations.
  Other cosmmentar* argued that
 Cftngree* explicitly reaffirmed the
 traditional CEP formula, and that EPA
 should allow """H«»"n reliance on it
 (and by implication, OB the refined
 formula that vraa rabaequendy denned
 from it).
  Response. The use of EPA's refined
 formula as a starting Point for
 determining GBP was not called Into
 question by any litigant m the Sierra
flub ease. The court1* opinion Ukewite
 does not question tne use of the formula
 as a starting point A detailed discussion
 of the court's treatment of the formula.
 showing bow it endorsed the formula s
 presumptive validity, la contained in the
 Response to Comments document
  Despite this limited endorsement ETA
 might need to revisit the formula on it*
 own if it* reaxamination of the
 "excessive concentratien" and modeling
 issues indicated that me formula dearly
 and typically misstated the degree of
 stack height needed to avoid downwatb
 concentrations that caoaa taaaJth or
 welfare
  ' Mtmercntfya from Oind C. Hiwkmi. NtOC M
 Williim F Pederacn. jr. Office ol GtfwrmJ CaunML
 L'SBPA. Mi? 2*. ISO,
  • M*mor»n*im from A)in H Hubw ASM. to
 Oivid Sionefleis. OAQPS. Ion* n. :*SS
   However, no such result has emerged
 frost our reexaminatioa. Stacks below
 formula height are associated with
 dowBwaaa-reiatad violations of the air
 quality standard* themselves where
 emission rates significantly exceed the
 levels specified by NSPS, Even where
 emissions are low. downwash
 conditions at stack* below formula
 height can be expected unlike other
 condition*, to generate nianerou* ihorf-
 term peak* of air pollution « high leveii

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27896        Federal Register  /  Vol. 50.  No. 130 / Monday. July a.  1965 / Rules and  Regulations
that raise a real prospect of local health
or welfare impacts.
  As EPA stated in the proposal, it is
impossible to rely primarily on fluid
modeling to implement the stack height
regulations, particularly under the
timetable established by the court. 49 FR
44883 (November 9.1984). No
commenter other than NROC even
suggested a different formula that in
their eyes would be better, and NRDCs
suggestions were premised on their
"control first" position, which EPA has
found inconsistent with the statute and
has rejected. EPA considers the refined
formula to be the state-of-the-art for
determining necessary suck height
  Given the degree of presumptive
validity the formula already poss*sa«a
under the statute and the court opinion.
we believe that this record amply
supports its reafftrmation.
  Stack* Abon CEP Formula Height.
The EPA's 1979 stack height guidelines
[cite] imposed special  conditions on
stacks above formula height—the
installation of control  technology—that
were net imposed on lower stacks.
Similarly. EPA's 1973 proposal had
made credit above formula height
subject to a vaguely defined "detailed
investigation" (38 FR 25700). The
legislative history of the 1077 dean Air
Act Amendments cautioned that credit
for stacks above formula height should
be granted only in rare cases, and the
Court of Appeals adopted this aa oaa of
the keystones of its opinion. The court
also concluded that Congress
deliberately adopted very strict
requirements for sources locating in
hilly terrain.
  For these reasons. EPA la requiring
sources seeking credit for stacks above
formula height and credit for any stack
height justified by terrain effects to
show by field studies or Quid modeling
that this height is needed to avoid a 40-
percent increase in concentrations due
to down wash and that such an increase
would result in exceedanca of air
quality standards or applicable PSD
increments. This will restrict stack
height credit in  this context to cases
where the downwash  avoided ia at
levels specified by regulation or by act
of Congress as possessing health or
welfare significance.
  To  conduct a demonstration to show
that an absolute air quality
concentration such as NAAQS or PSD
increment will be exceeded, it la
necessary to specify an enusaion rate for
the source in  question.' The EPA
 conecnvioaw" ln»o will
continue to result in excessive
concentrations when the source-
emission rate ia consistent with NSPS
requirements, additional stack height
credit may be justified through fluid
modeling at that enuseion rat*.
  A source, of course, always remain*
free to accept the emission rate that ia
associated with a formula height stack
rather than relying on a demonstration
under the conditiona described here.
The third alternative mentioned in the
proposal—using the actual emission
limit for the source—has been rejected
because, to the extent that limit relied
on greater than formula height it would
amount to using a tall stack to justify
itself.
  The EPA's reliance on exceedance*,
rather than violations of the NAAQS
and PSD increments, ia deliberate. Fluid
modeling demonstrations are extremely
complicated to design and carry out
even when the most simple
demonstration criteria—that is, a
percentage increase in concentrations.
c*uMd by downwua it independent of
mio.
  'Ttw EPA wul raiy on IU Bnt Aviilabto lUtroflt
Tteftnotogy CiudcHiM la r*vwwut« wjr rvbwult
wtd ilt«m*Dv« miMioa 'tnuution*.
with no consideration of absolute
values—are assumed. Adding
consideration of an absolute
concentration such as a NAAQS or PSD
increment substantially complicates this
effort further and introduces the
scientific uncertainties associated with
predicting an exceedancc of a 3-hour or
24-hour standard based on 1 hour or less
of modeling data. Using an hour or less
of modeling values, based on one set of
meteorological data, to draw the
distinction between only one
exceedance of the standard during  the
S700 hours in a year, and the two or
more that constitute a violation pushes
that uncertainty beyond reasonable
limits. EPA therefore does not find the
additional difficulties that would be
created by requiring violations instead
of exceedances to be  warranted. That is
particularly so here, given that the
regulations require sources seeking
credit above the formula to be well-
controlled as a condition of obtaining
such credit
  Use of an absolute concentration m
the test of "excessive concentrations"
can leed to problems  of administering
the program, in that it can have a
"zoning" effect Since a source can only
get stack height credit to the extent that
it is needed to avoid a PSD Increment or
NAAQS exceedance. an emissions
increase in the area of that source may
increase concentrations beyond the
controlling limit thereby making it
difficult for new sources to locate in the
area, or for sequential construction of
additional emitting units at the source in
question.
  This effect cannot be avoided under
any teat for "excessive concentrations"
that is tied to absolute concentrations.
However, that effect will be mitigated
by the fact that the use of this approach
is voluntary and limited to sources
wishing to rely on fluid modeling to
justify stack height credit Moreover, the
effects of downwash  tend to occur very
near the source, usually on fenced  .
company property. Since concentrations
measured at such locations sre not used
to evaluate NAAQS attainment or PSD
increment consumption, new sources
wishing to locate in the area are less
likely to be affected.
  Sources planning sequential
construction «f sew emitting units at
one location or contemplating future
expansion can reduce the uncertainties
noted  above by initially obtaining
permits for the total number of units
anticipated and by planning for
expansion in the calculation of
necessary physical stack height. In the
latter instance, only the allowable stack
height credit would be revised as

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             Federal Register / Vol. 50. No.  130 / Monday. July 8. IMS / Rules and Regulations
                                                                     27899
expansion is earned out—not actual
stack height
  An additional theoretical
complication is presented when an
absolute concentration is wed where
meteorological conditions other than
downwash result in the highest
predicted ground-level concentrations in
the ambient air. In such cases, a source
that has established CEP at a particular
height, assuming a given emission rate.
may predict  a NAAQS violation at that
stack height  and emission rate under
some other condition, e.g.. atmospheric
stability Class 'A.' Reducing the
emission rate to eliminate the predicted
violation would result in stack height
credit greater than absolutely necessary
to avoid an excessive concentration
under downwash. Howevtr. reducing
stack height places the source back in
jeopardy of a NAAQS violation under
the other meteorological condition, and
to on. "ratcheting" stack height credit
and emission rates lower and lower. The
EPA has eliminated this "ratcheting"
potential in the CEP guideline by
providing  that once CEP is established
for a source, adjusting the emission rate
to avoid a violation under other
conditions does not require
recalculation of a new CEP stack height
  EPA is making this part of the
regulations retroactive to December 31.
1970. In the terms of the court's
retroactivtty analysis, stacks greater
than formula height represent a situation
that Congress did affirmatively "intend
to alter" in section 123.  Moreover. EPA
regulatory pronouncements since 1970
have placed a stricter burden on source*
raising stacks above formula height than
on others.
   N.o source is precluded from building
a stack height greater than formula
height if such height is believed to  be
needed to avoid excessive downwash.
However, the design and purpose of
section 123 prohibit SIP credit for that
effort unless a relatively rigorous
showing can be made.
   Given the ability of sources to avoid
modeling  and rely on validity of the CEP
formulae and requirement for further
control of emissions in  coniunctioa with
stack heights in excess of formulae
height, the result predicted by UAKC—
exceedances of the NAAQS or PSD
increments due to inadequate stack
height—is highly unlikely.
   The potential effect of changes in
background air quality on stack height
credit is not substantially different from
the effect that such changes in
background can have on source
emission limitations in nonattainment
 areas. In the first case, however, sources
 may be able to address these effects
 through greater stack height if such
changes affect the concentrations under
downwash. Moreover, the possibility
that shifting background air quality can
yield different calculations of CEP is
significantly limited by the feet that
consideration of background in CEP  '
calculations is restricted to those cases
where credit for greater than formula
height is being sought or source* are
seexing to raise stacks to avoid
excessive concentration*.
  Raising Stackt Below Formula Height
to Formula Height In response to EPA'a
proposal to allow automatic credit for
CEP formula height seven! commentera
have argued that EPA hea failed to
adequately respond to the court's
directive to "reconsider whether, in light
of its new understanding of 'exceaaive
concentrations,' demonstrations an
necessary before stack height* may be
raised even if the final height will aot
exceed formula height"
  Re$ponM9, F using a stack below
formula heigi to formula height is not
in EPA's judgment subject to the sea*
statutory reservations as building stack*
greater than formula height However.
as the court has cautioned, it may still
be necessary for these sources to show
that raising stacks is necessary to avoid
"excessive concentrations" that raise
health or. welfare concerns.
  For these reasons, sources wishing to
raise stacks subsequent to October 11.
1963. the date of the O.C Circuit
opinion, must provide evidence that
additional height is necessary to avoid
downwash-related concentration*
raising health and welfare concern*.
These rules allow source* to do mi* in
two way*.
  The first way is to rebut the
presumption that the short stack we*
built high enough to avoid dewnwash
problem*: L*» to show, by tita-epecific
information such a* monitoring data or
dtixea complaint*, that the short stack
had in fact caiued a toeal nuisance tad
mnat  be rai*ed for thi* reason. The EPA
believe* that both the historical
experience of the industry and the data
on short-term peaks discussed earlier
show that short stack* can cau*e local
nuisance* due to downwash. However,
where a source has built a short stack
rather than one at formula height it ha*
created a presumption that thi* i* not
the case. General data on saort-term
peak* may not be strong enough to
support by themselves and IB the
abstract a conclusion that the stack
must be raised (eravoid local advene
effect*. Instead, that proposition must be
demonstrated for **ch particular source
involved.            .
  In the event that a source cannot
make such a  showing, the second way to
justify raising a stack is to demonstrate
by fluid modeling or field study an
increase in concentration* due to
downwaih that in at least 40-percent in
excess of concentration* in the absence
of such downwash and in excess of the
applicable NAAQS or PSD increments.
In making this demonstration, the
emission ret* in existence before the
•tack is raised must be used.
  Since raising stacks to formul* height
i* not subject to the same extraordinary
reservation* expre**ed by Congress and
the court with respect to stacks being
rai*ed above formula height EPA doe*
not believe that the use of presumptive
"well-controlled" emission rat* is
appropriate hen. Aa discussed in EPA's
ntponae to NRDCs "control first"
argument the back: purpo** of section
123 was to take source* a* it found them
and bated on thoae drcumstaace*. to
a**ura that they did not avoid control
requirement* through additional
disiperefoa. Use of a source's actual
emiMion rate in thin Instance is
consistent with that b'asic purpose and
abeent special indications of a different
intent *nould be u*ed in stack height
  The EPA believe* that it i* most
unlikely that any source with • current
emiaeioa limitation ha* failed to claim
full formula credit for a stack of formula
height Accordingly, the question
whether a source can receive stack
height credit op to formula height will
involve only source* that want to
actually raise their physical suck, not
source* that amply went to claim more
credit for a stack alnady in existence. A
source will presumably not go to me
trouble of raiting aa existing stack
without *ome reaeoa. If a source cannot
•how that the rea*oa waa in fact the
desire to avoid a problem caused by
downwash. then the Inference that it
waa inatead a deeire for more dispersion
credit i* hard to avoid A nuisance
caueed by downwashed emissions could
include citizen or employee complaints
or property damage. A source would be
expected to (how that complaint* of this
nature wen reasonably widespread
before getting credit under this section.
  The EPA doe* aot intend to make taw
rule retroactive to stack* that
"commenced construction" on
modification* that would raise them to
formula height prior to October 11. 1963.
Applying the court's ntroactivity
analyst*. it appear*:
   1. The aew rule doe* depart from prior
practice. The SPA'* 1873 proposed rule
affirmatively encouraged sources with
 shorter stack* to raise them to formula

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27900        Federal Register / Vol. sa No.  130 / Monday. July 8.  1965 /  Rules and Regulations
height.'Though EPA'i 1976 guideline
can be read u imposing a "control first"
requirement on some stack height
increases. Us general thrust gave
automatic credit for all stacks that met
the "2.5" times formula.'Automatic
permission was similarly set forth in the
1979 proposal, in the 1981 reproposal.
and in the 1982 final rule. Only a notice
published in 1980. but later withdrawn.
departs from this trend, requiring the use
of field studies or fluid modeling
demonstrations to justify stack height
increases up to CEP formula height*
Even then, the notice would have made
this policy prospective in its application.
  2. Sources that raised stacks in
reliance on this paat EPA guidance
assuming the availability of dispersion
credit cannot be distinguished from the
sources, in the example approved by the
court that built stacks to the traditional
formula in an identical expectation of
dispersion credit
  3. It cannot be said that the raising of
stacks to formula height is a practice
that Congress "affirmatively sought to
end." It is not mentioned in the text of
the statute or its legislative history.
Further, as the court haa already noted,
the statute attributes a degree of
presumptive validity to the formula on
which sources that raise their stacks
will have relied.
  DnentioH to Rfquin Fhifd Modt/lng.
Several ceonenten argued thai EPA's
proposal to allow egenaea to require the
use of fluid modeling wu anneressary.
since EPA had already doconeated tao
validity of the GEP tennis*.
Furthermore, these conaentara argoe
that this allowance would make (tad
modeling the rule, rather thaa the
exception. This would result, the
commanten state, became it wee their
expectation that agendes or
environmental groups would nearly
always call for fluid m~<«n«g
demonstrations during the permit
application and review process.
  Other commentsrs stated that
providing the discretion to require fluid
modeling was appropriate, since EPA
had failed to  demonstrate that the CEP
formulae represented the m^mnm
height necessary to avoid excessive
concentrations.
  Reiponn. The Court of Appeals -
directed EPA to reexamme whetfier its
rules should silow States, as a matter of
discretion, to require even sources that
planned to rely on the formula to show
instead by fluid modeling that a stack
this high wu required to avoid danger*
to health and welfare caused by
downwash. The court suggested that
EPA should include such a provision
unless it could find that the formula was
so accurate, or tended so much to err on
the low side, as to make discretionary
authority to adjust formula height
downward unnecessary.
  The EPA believes that the court wes
mistaken in its conclusion that a stack
at formula height is likely to generate
downwash concentrations as great as 40
percent only in uncommon situations. In
fact EPA's observations indicate that
when sucks an built to GEP formula
height an increase in concentrations
due to downwash can still be expected
to occur that ia between 20 and 80
percent greater than the concentratioa
that would occur in the absence of
building influences. '*
  Never,.'  . ess. in response to the
court's r«.  Jid. EPA is including in this
final rule a provision for the authority
adminiataring these rules to require field
studies or fluid modeling
demonstrations, evea for stacks built to
formula height ia caaea where U
believes that the foraoU mey
significantly overstate the appropriate
stack height credit11
  While BPA believes the formula to a
reasonable rule of thnsnb inchesting the
stack height needed to avoid sosae
probability of a etududa violation tad
a significantly greater probability «* •
local nuieonoa, acfcul reaan* la any
given ose- may vary sonewnet beeesi
on specific circumstances. The BPA haa
attempted to •«•*••*•• tola possibility
withia the limits of available data by
identifying two particular siftsanons) la
which it believes thai the fomaJae mmy
not be ranabie tadksrtors of C» Poroee
strueanes and frHMpgr wages shapes
are aendyasuniceUy smoother tfaea the
simple block-shaped strecturee en
which the fonnelae are beted.11
                               Tfatoto
            •• tJw mim» onUiiMd or om
OC UOf9 InWBt
ef MctM ns «f dM Q«u Air A*.

wMrvio0nB •toGMt lev MovnQp it uw foieflSs
ohM tppttt* M rauadad, tmcnav. >lln««< ito M»
for c*n«ln upend itruaum tad eeoUoa I
-
  ' Tbt UM of *«Mk )M«fiM «p • *« Ivrvl of i«o4
enfmwnnt pnetie* n tncoui«f>d by IPA • *nMr
10 tvaid local otuuacm' (3* Fl U70B).
  • 41 PR 7481 (Ftbnuuy is. UPSk "inrf-'-r
s*ttwi» 8.1. aim tan
  • O F* 4ZP» ff«M M. USBfc **afc lUfiimtiam W
•tick hoe* cndlt tt rhir»»«d «t <
                              Mr Mt
                             tar M*
•tructum IMI WOT* gnnud prior w NuniifcaS.
i»4. Sinct EPA puduuM to* M«r tl\mt4 cr»dt>
for ponu* rmenm. itx mtneti<« la thl« rai* for
tuc* tovcnrm •<**•• M *U ••<*»
i, no* OMBBOV n. ISTa
 However. EPA acknowledges thai other
 situations, of which the Agency is not
 presently aware, may anse wherein the
 formulae may not be adequate.
   The EPA intends to "grandfather" any
 source that relied on the formula in
 building its stack before the date of
 EPA's 1B79 proposal bom the effect of
 this discretionery ^examination
 requirement
   Only in that proposal did EPA first
 suggest that such a discretionary
 reexamination provision might be
 included In the final rule. The
 retroactivity analysis set out earlier
 therefore supports exempting stacks
 built In reliance on EPA guidance before
 that data, from discretionary
 reexamination. Indeed, a failuct to
 "grandfather" these sources would lead
 to the paradoxical result that a source
 that had built a GEP stack under the
 traditional EPA formula would have its
 direct reliance interests protected by the
 "grandfather" provision previously
 upheld by the cowl but could then lose
 that ••graadfatbered" credit through a
 rsse  specific desnonstration rsqasrement
 showing that the traditional formeia was
 somewhat inaccurate— ** MMtaB MS

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             Federal Register /  Vol.  SO. No. 130 /  Monday. JuJy 8. 1983  / Rules and Regulations
                                                                                                             2T901
  If such sources had to show that use
of a formula height stack was needed to
avoid exceedances of the NAAQS or
PSD increments, that might prove
difficult for many of them. The
likelihood of such exceedances tends to
decrease as the emission rate for the
source decreases. By the same token.
the incremental emission reductions
available from the sources that are at
issue here tend to be small and among
the most expensive available. In terms
of emission reductions, little is at stake
where these sources are concerned.
  Accordingly, the rules will require
such sources, if a reviewing authority
calls for a demonstration, to the rules
show that the use of a formula stack
height is needed to avoid a 40-percent
increase in concentrations due to
downwash. This will provide • rough
check on whether the formula, as
applied in the particular case at issue,
produces the result it was designed to
produce.
  The EPA is not providing here for
sources to justify their formula height
stacks by arguing that the height in
excess of that needed to avoid NAAQS
violations is needed to avoid a local
nuisance. The discretionary modeling
requirement is designed for application
to stacks before they were built Beyond
that, there is no way to determine based
on the-absence of a local nuisance that a
formula height stack is not too tail in
the way that At presence alt nuisance
shows that a stack under formula height
in fact is too short Accordingly, there
will be no way. as there was with short
stacks being raised, to determine from
actual experience whether a local
nuisance would occur at a shorter stack
height Though avoiding local nuisance
is a legitimate purpose for which stacks
are built, it would be very difficult to
show by modeling what stack height
was needed to avoid it,
  Some commenters have
misunderstood EPA's allowance of
discretion to require fluid modeling as
requiring such modeling whenever any
individual or entity called forsucb a
demonstration. This discretion rests
explicitly with the reviewing aftncies
who have always had the prerogative to
.-•quire more stringent analyses in thr
S!P process.-and no obligation is implied
for rnese agencies to require fluid
modeling simply because it has been
:*'Aed tot by some individual during the
permit review process. It is EPA's
expectation that technical decisions to
require such additional demonstrations
wouid be based on sound rationale and
valid data to show why the formulae
may not be adequate in a given
situation. In any case, given the burden
of reviewing a fluid modeling
demonstration, an agency it not likely to
exercise this option abiant sufficient
justification. Consequently. EPA
disagrees with the commenters'
contention that fluid modeling will
supplant the use of the CEP formulae.
except in what EPA believes will be
unusual instances.
  Reliance on the 2.SH Formula. In
limiting the applicability of the 2.SH
formula to those cases where the
formula was actually relied upon, the
November 9 proposal defined such
reliance in terms of suck design. A
number of comments indicated that
actual stack design and construction
may ultimately be control not by the
2.5H engineennf rule, but by
construction materials specifications.
Consequently, while 2JH rule may have
provided an initial starting point in
stack design, the rule may not have
dictated final stack height In other
cases, it was argued that a number of
source owners may have constructed
their stacks in excess of what was
determined to be minimum CEP for
precautionary reason*, for process
requirements, or in anticipation of
additional growth in the ana
surrounding the facility, even though
emission limitations  for theee sources
would have been limited then. M now.
to formula height Consequently, it we*
argued that EPA should allow source* to
demonstrate reliance on the formula in
the calculation of emiaaion limits a* well
as in the design of the stack.
  In response to EPA's requeet for
comments on what evidence should be
considered acceptable in determining
reliance on the &5H formula, sane
commenttrs  urged EPA to consider
reconstructed evidence, t.g, affidavits
from design engineers or copies of
correepondeace indicating past reliance
on EPA guidance. Other eoouaentan
stated that "reliance" should be very
strictly construed, that EPA should be
circumspect in its review of reliance
demonstrations, and that only
contemporaneous documentary
evidence, such as blueprints and facility
design plans, be accepted as evidence.
  Response. The EPA is in genera]
agreement with the view that reliance
should be considered in relation to the
emission limitation for the source, not
the design. Since section 123 specifically
prohibits EPA from regulating actual
stack heights and rather regulates stack
height credits used in setting emission
limitations, it would be illogical to
require that  sources demonstrate
reliance on the 2.5H formula for actual
stack design. Moreover, such an
approach would contradict principles of
sound planning, in that it would
those source* that have built taller
Hacks in anticipation of facility
expansion or other growth in the area
that could influence CEP
determination).
  If a stack has been built taller than
2.5H formula provides, while the
emission limitation has been calculated
assuming 2.5H credit a convincing
demonstration has been made that the
source properly relied on the formula.
Conversely, if die emission limitation for
the source it based on some other stack
height credit such as 24H. 3.SH or some
other number, it would be difficult to
show that the CEP formula had in fact
been relied on.
  In some caees the emission limit
information may  be unavailable or
inconclusive, la such cases. EPA will
allow reliance on reconstructed
evidence of construction intent
  In comments submitted during the
public comment period and in response
to questions raiaod by EPA at the public
hearing held on January & 1385, industry
repreaantadvae repeatedly stated that
contemporaneouii evidence of reliance
on the 2JH formula, such as facility
design plans, dated engineering
calculations, or decision  records an
rarely. If ever, retained for more than a
few yean after construction of the
facility it completed. Consequently, they
arfued that moan cases of legitimate
reliance would be denied if
contemporaneous evidence ware
required to order to retain for the 2.5H
formula.
  The EPA agree*. Additionally, credit
afforded by the 2JH formula in excess
of that resulting from the use of the
H+1JL darivativ* is likely to be small
except when the building on which
stack height credit It baaed is
subatantially taller than it is wide.
Finally, it is EPA'a view that the court
did not intend mat sources be subject to
a rigorous or ovarry stringent of reliance,
but only that they be accorded a
reasonable opportunity to show reliance
on the 2.SH formula. For these reasons.
EPA will allow the iiubmission of
reconstructed, l.a- noncontemporaneous
documentary evidence to demonstrate
reliance on the Z5H formula.
  Definition of "Nearby". Comments
wen submitted by UARG and others.
arguing that effectively, no  limitation
should be placed on the consideration of
terrain-induced downwash.
Alternatively, some of these
commenters argued that the court
decision requires that a limitation be
adopted that does not apply any
distance restriction of H mile in
moaeiing terrain effects  such as is

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27M2        Fadatai Ragbtar /  Vol. 5ft  No. 130  /  Monday.  luiy 8. 1988 / Rule*  tad Regulation!
applied to structure* in the UM of CEP
formula*, but rather allows
consideration of all terrain that'result*
in the tame downwash effect as those
structures within Vi mile of the stack.
  Other commenters have argued that
the court decision snd legislative history
preclude EPA from allowing
consideration of any terrain beyond a
distance of H mile, regardless of where
it begins.
  Response. For the reasons
summarized below. EPA does not accept
either the interpretation that the court
decision authorizes EPA to adopt a
definition based solely oa effect or that
it limits consideration exclusively to
terrain features falling entirety within H
mile.
  When Congress dJacaaeed tb*
allowance of credit for stack height to
addreea dowawaah. It stated that th*
term "nearby wa* to be "strictly
construed" noting that If the tenm ware
to be interpreted "to apply to maa-nada
structure* or terra/n/eeairs* * to Vfc
mil* away fran the source* or more, the
result could be aa opea invitation to
raise itack heights to unreasonably high
elevations and to defeat the basic
underlying oomnuttee intent" »«
  In its opouon, thceoort held that EPA,
could not give unlimited credit when
meuuitmg lamia f««tm» because that
would conflict with the Cimajeeaionsl
intention to imao** artificial Units oa
that credit The court waa not presented
with, and did not addreea, the question
of what to do about terrain feature* that
"bssjaa" witk4& V*. sail* and *xaiad*d
outside it The approach adopted by
EPA carried out doe rmigreaeinsiel
purpoae to impoaa aa artificial limit hot
at the same time reflects tha real facts
more doaely than aa absolute V4 miia
limitation.
  Unlike man-made, structure*, tazraia
feeturea do not have readily definable
dimenaioae other than height For thia
reason. EPA has defined "nearby" aa
generally allowing inclusion of
consideration of terrain feature* that fafl
within a distance of % mil* of the stack,
EPA's definition wiO peanft
consideration of such tannin that
extends beyond the tt mile Omit if the
terrain begins within % mile, allowing
that portion within 10 time* the  -
maximum height of the feature, dot to
exceed 2 miles, ai described in tha
proposal
  To define when a terrain feature
"begins" within H mile. EPA has related
terrain height et the H mile distance to
the maximum stack height that could be
justified under the other two methods
for determining CEP. Accordingly. EPA
will require that terrain featurea reach a
height at tha ft milt di'Mnca limit of
either 28 maters (Le. U maters divided
by 2.5) or 40 percent of tha stack height
determined by the CEP formula* applied
to nearby buildings.
  Treatment of New venui Butting
Source* Under the Definition of
"Nearby". In the proposal, EPA
requested comment on whether new
sources should be treated differently
from existing sources and presented two
options for addressing them.
  Few comments were received on
these options. Several questioned the
logic of distinguishing between new and
existing sources in the regulations. One
coffimeater argued that new and existing
sources should both b* subject to the
strict 7% mile limit proposed under oa*
option for aew eoureee onry. This hat
already b**n discussed under EPA's
response to comments on the general
definition of "nearby" and I* not
addressed further here.
  Reeponee. New sources ere initially
subject to more stringent control
requirements than many existing
source*. Consequently, it ia lee* likely
that tha emission limitation* and stack
height credits for the** source* will  b*
affected by terrain feature*.
Furthermore, EPA believe* that tb*
effect of applying a more restrictive
         antatioa will b*
and will result only ia mine* change* ia
siting, ratnar man suoetantia. raJocaOoa
of sosnesv For this reason. EPA ha*
selected the second option, treating i
and existing soon** IdttticaMjr <
to* definition of "nearby."
  EPA ia giving thia definition of
"nearby" retroactive; application to
December 31 1870, Th* court's d*d*ie*
main* clear it* coooUieion that Conaraea
affirmatively focused on this iaeue and
                              aa of
(1977).
the enactment data) proper.
  Definition of Othet Daaeniaa
recAiuaiM*. The EPA received many
comments oa tha proper scope of th^
definition of "dispersion tachmquas,"
and perhaps more oifthe appropriate
tm«if»/H« of the exclusions. Industry
commentars generally argued that EPA
had improperly proposed to deny
consideration for plume-enhancement
effects that are "coinddeataT with
techniques and practices routinely
carried out for sound «"g<"Mri''g and
economic reason*. They argued that
EPA should prohibit credit only when a
technique or practice was decisively
motive ted by e desire  for dispersion
credit Such an approach would create a
"but for" test using tha intent of the
source owner or operator as tha basis
for EPA't decisions.
  Other commenters argued thai EPA
must osa a tett baaed purely on »ffacu
prohibiting credit where a technique «
practice has the effect of enhancing
dispersion, regardles* of any other
justification.
  Ruponte. In tha final regulation. Eft
has rejected tha polar positions
discussed above. Th* argument that
dispersion effects are forbidden
regardless of motive Is discussed and
rejected as a pan of the general
response to the argument that only
"well-controlled" sources can receive
any dispersion credit
  Conversely, a pure "but for" test runs
the risk of Greeting exclusions that
effectively swallow the rule itself. The
EPA (udges that few, if any,
                      (0 STiM in
which some other benefit or justification
cannot b* assarted aa the basis for s
practice, and therefor* for such an
exclusion*
  Where prospective evaluation of
merged gas streams, or combined
stacks, ia concerned, there is no reason
to assume the serious administrative
burdens investigating such ^*<"<* might
entail Th* court directed EPA to eppiy
an mrftt test "at a >«<»ttminn " «n«< Left it
free to take an approach that may be
less generous toward credit for
         stack*. ^|r"~f sources in the
future wiU b* able to plan against the
background of rules that define
penmaeibie credits pntiMly, little
unfairn*** results from a restrictive
approach*
  Wham ratmepectiv* application ia
""n^wrt^L however, the retroactiviry
analysts spaded out by tha court directs
that aa intent-baaed taat be employed u
described later.   '
record en the** matters. EPA has
determined \Q take a "middle-ground"
approach to this queation. Tha final
regulation retains the same bread
prohibition found In the proposal on
increasing, exhaust gaa plume rise by
manipulation of parameters, or the
combining of exhaust gases from several
existing, stacks into one stack, with
several classes of exclusions. These
exclusion* recognize the existence of
independent Justifications based on
engineering and/or economic factors.
and include:
  (1) Demonstration of original faculty
design and construction with merged
gaa stream*;
  [2] Demonstration that merging after
July a, 196S ia part of e change in
operation that includes the install* non
of pollution controls and results  in t net
reduction tn allowable emisaioos of the
pollutant for which credit  is sought cr

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              Federal Resists* /  V0j.  sa No. 130 /  Monday. July a. 1965  /  Ruje9 ,nd Radiations
  (3) Demonstration that merging before
July 8.1905 writ pert of • change, uo
operation that included the installation
of control equipment or wit camad out
for lound economic or engineering
reason*. An allowable emissions
increaM creates the presumption that
the merging was not earned out for
sound economic or engineering
reasons."
Of these exclusions, the first is identical
to the proposal, and the second and
third are modifications of the second
exclusion included in the proposal with
a refinement based on prospective/
retroactive application.
  The first exclusion was retained for
the reasons stated in the proposal After
reviewing the comments submitted. EPA
determined thet its previous
conclusion—that standard practice in
designing and coostntctiag facilities
routinely includes venting emissions
from several units into a common or
multiflued stack—is correct Sound
engineering and economic reasons.
based on costs of constructing and
maintaining separate stacks, availability
of land and cost savings for pollution
control equipment support facility
design and construction considerations.
Even if air pollution requirements did
not exist at ail sources would have
incentive* to use as few stacks as
poasible.
  Since sacntuwg plume rise, rather
than phune rise itselt is a "dispersion
technique" and original design and
construction define the Initial base, such
original design aad construction of
merged gas streams is not considered a
dispersion technique. Moreover, In
designing the facility, a source can
usually choose to build one larger unit
rather than sevenl smaller units.
Therefore, prohibiting credit for ortgina/
design generally only effect the design
of units and not the phune rise.
  Objections have been raised to
applying this logic to sources which are
constructed orer e period of time, bat
use a single stack. However, the same
factual arguments just listed would
apply is the same, if the original design
included provision for the additional
units in the plans for the facility, and in
the design and construction of the stack.
In such  a ease, the later units merged  .
into the stack would be included within
the exclusion.
   In addition, it would be logically very
difficult to apply a rule* denying credif to
s.-final design stacks. EPA or the State
would have to assume how many stacks
                       Uatt tuod far •
                              if an M
would have been built absent a desire
for dispersion credit where they wodd
have been located and bow high they
would have been. Since these
alternative stacks would be portly
hypothetical then wodd be no clear
way of answering these questions: the
answer would simply have to be
selected arbitrarily from the wide rug*
of possible answers. This problem is
absent when existing stacks have been
combined
  In contrast EPA finds change* from
the ongmal design of a facility in order
to include merged stacks to require •
narrower judgment The EPA cooduded
that where prospective application ia
concerned the exclusion should be
available only to sources that -^fpHifft
stacks reduces allowable •miftfrmt of
the pollutant tot which the credit is
granted There art obnoui
advantages in combining stacks to
reduce the number o/enuaaio* oomtrol
units that must be purchased la
addition, the installation of pollution
control for die pollutant ia question
provides fuhetantial assurance '**?* the
purpose of the combination ia not to
receive a more lenient tnusaioo limit
  However, given past EPA gvfr^Ftf? OB
merging of stacks. EPA has concluded
that retroactive application of this tear
would not be proper. The EPA guidance
documents uniformly teak the view that
merging of separata stacks into a singia
stack "Is generally not considered a
dispersion technique'' absent other
factors such as excessive use of fans or
other devices.'* Each document
provided guidance to a source of a
Regional Office retarding the proper
treatment of merged sucks ia
calculating emission limitations.  •
Considering these statements, EPA must
consider the standards expressed by the
court as previously discussed ia this
notice, ia judging the propriety of a
differing standard for retroactive
application. Given the nature aad
applications of the guidance which it
issued in the past EPA judges the first
two criteria—that la. whether the new
rule represents an abrupt departure from
well-estabtished practice, and whether
the parties against whom the aew rule ia
spplied relied on the former rule—to be
satisfied m addition, applying the
prospective criteria to past practice
would require significant change* in fuel
and/or control equipment for parties
whose emission limits were based on.
previous guidance. Finally, and
particularry where source* have not
been allowed to increase their
emissions as a result of the combining
stacks, EPA doe* not judge the statuto
interest to be overriding in this instan
since the rale even in its retrospective
version only exempts sources that can
show e reasonable non-dispersion
enhancement ground for combining
stacks, and thereby implements the
"intent" test suggested by the court. On
the other hand; EPA has never suggested
that combined stacks that cannot meet
such a test are proper. Sources whose
actual emissions an increased, or
whoee emission limitations are relaxed
in connection with the combining of
stacks create a strong presumption that
tat combination waa carried oat in
order to avoid me installation of
controls. Soch conbtnations would
indeed ran counter to die statutory
purpoe*. aad retrospective application
of a test thsit forbids them is therefore
proper.
  Sxtmptiont from tht Definition of
Duptnian Ttchivqutt. The EPA
recalfwl maaereu* comments in
response) to its request for input on what
consideration, if any, should be given to
exciudBf aowcm from the definition of
TJtipanfoB Techniques" whose
•"ri*T*TPt are below a specified level or
whoee stacks an less than the dt
atiniaat height These commenters
argued that combining gis streams in
particular often had aa economx
Justification independent of its effect!
oa dispeietea. aad therefore should not
be geoienirf ftgpMUen. Other comments
stated tot m considering any such
exduatea. BPA should consider the
effect on tetol etmoepheric loadings.
  Response. Some limitation on the
number of sources affected by the
deflaitiaa at "dispersion techniques'
necessary (or EPA to carry out the itack
height program. There are currently
estimated to be over 23JOO sources of
SO, m the United States with actual
emisaiona exceeding 100 tons per year. It
would not be possible for EPA or States
to review the emission limits of even a
significant friction of this number
within a reasonable lime period
Twenty-two thousand of these sources
have emietions lees than 5.000 tons per
year aad contribute a total of less than
13 percent of the to taJ annual SO»
emtsswo.lf For dais reason, and for
reasons of administrative necessity
discomed carter. EPA is adopting en
exemption from prohibitions on
manipolatifif plume rise for facilities
with allowable SOt emissions below
  •Mcaonadwa fra Ouryl Tyter w
 •otbbl«R. A«WI A rasa SM tito (MOT tai Wift
 Butar Inm Hav** Ota. Oewtor » II
 D««4 StoiMtatt » *MC* PUM. tarn 9.IMS,
                                                                   MS. mi tnm   D«nd!
              to* lite ciM(xn. OAQPS
              •*r»ttflc«eiao of SO, Poun

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27B04       Fed***1 Regutar / Vol. 50. No.  130 / Monday.  July  8. 1965  /  Rule* and Regulations
5.000 tons per year. Tbt EPA believe*
the effect of thi* exemption on total SOt
emissions to be de minima in nature.
Even if these sources wen able to
increase their emission rates as the
result of an exemption from the
definition of dispersion techniques, their
combined effect would not be
significant. Indeed, because these
sources are exempt on the basis of their
annual emissions, there exists an upper
limit to the extent to which they may
obtain relaxed emission limitations, Le,
to maintain an. exemption, the annual
emissions of a source may never exceed
5.000 tona per year. For these reason*.
the 5.000 ton limit passes a rV aunimit
test even more dearly  than _« aft-malar
limit included without challenge in the
prior version of this role. Moreover, EPA
believes that a large majority of the**
sources would not be inclined to seek
lese stringent emission limitations. IB
part because a substantial portion of
them en baited by SUM and local fuel
useratee.
  The EPA believe* at this time that a
d*mmimii state exemption is justified
only for sources of SOi and that the
number of small sources for which
emlsekm limitations for other pollutants
are a eiaBiflcant coocarn would not
support a similar exemption. The EPA
will (anrtaii* to review the need tor soca
exemption* and, if deemed appropriate.
will propose them for review and
comment at a ataixtat*.
  Pfuaiflntpoction. The EPA received •
Dumber of comments pt^wf**"* chat
credit far piume uapacttoa be retained
on the (rounds that •itm*n»Hng fach
credit would have severe 'T***? OB
existing sources. Several approach**
were offered for overcoming plume
impaction effects in ">«dr%g to
determine omission limitations baaed on
CEP stack height Generally, thea*  «
approaches focused on modifying thet
stack-terrain relationship repieeantad •
the models. Several commanter* argued
along these Unas that th* court
recognized and approved*** IRA's
attempt to avoid the efajcts-ef phnna
impaction. but only illesgoiiinil of
EPA's regulatory msthaj In allowing
sources to avoid impac    ~~
commanters argued that the court did
not preclude EPA from allowing credtt
to avoid plume impactioa. but eauy from
allowing credit for stack height is
excess of CEP; this, it was argued, could
be remedied in a way that waa
consistent with the court decision by
incorporating impactioa avoidance
within the definition of CEP. It
suggested that EPA give its "later*!
approval* to the use of certain refined'
complex terrain models, in particular the
Rough Terrain Display Model (RTDM).
to calculate emission limitations for
sources affected by changes to the stack
height regulation.
  Response. The.EPA agrees that the
court was cognizant of the problem of
plume impacooo and noted that there
was much to recommend EPA's
allowance of credit for impactioa
avoidance. However, the allowance of
credit for plume impactioa was not
remanded to EPA for revision or
reconsideration, but was reversed by
the court es exceeding EPA's authority.
  The EPA doee nor agree that it would
be possible to redefine CEP in a manner
that allowed credit for avoiding
impactioa. since CEP it explicitly
denned in terms of preventing excessive
concentrations dae to down wash.
wakes, and eddies. Pram* impactioa is a
phenomenon completely unrelated to
dcrwnwash and. rather, is a consequence
of effluent gase* being emitted at aa
insuffldeat height to avoid their striking
downwind hillsides, cliffs, or
mountainaides prior to dilution.
Manipulation or "adjustment" of
modeling parameters to avoid predicting
theoretical plume impactioa where
actual stacks have bean constructed
above CEP would be tantamount to
granting the same impactioa credit that
was Invalidated by the court.
Furthermore. EPA believes that the
manipulation of modeling paremetan
for no other reason than to avoid aa
undesirable result la tfotoacally.
  The EPA is In the peocees of revising
lt« "(Adeline oa Air Quality jabdel*7
A number of iadtviduaJe emamaotiBg oa
the guideline haw taojiaeiad that EPA
approve the us* of m* CIX7M modal aa a

of this iaeue caa oe food m documeata
associated with EPA's action oa the
modeling guideline (Docket Wo. A-«B-
46). With respect to (he revised stack
height regoiatioa. EPA has not refected
the use of KTDM,To ta* extent that
appropriate and complete data bases
and information on modal accuracy are
available. EPA may approve the aae of
RTOM oa a. ca**-by-ca** basis when
executed m accordance with th*
guideline requirements.  Sponsors of
RTDM and presently developing more
extensive support for broader
applications of the model Wbea such
support 1* received and  reviewed by
EPA. consideration will be given to
allowing more genera] use of RTDM in
regulatory activities such aa compliance
with the suck height rale.
  TlaiftabJf for Stuff lapltatatation.
A cumber of commenten suted that it
was not possible to conduct the
 necessary analyse*, prepare and
 revised State rules and source-ipecific
 emission limitations within the 9-mont.
 tiaefraaie referred to in the November
 proposal A variety of alternative
 schedule* wen proposed by these
 commenten for consideration by EPA.
  ResponM. A* with EPA's previous
 allowance of credit for plum* impactioi
 the timetable for preparation and
 submittal of revised SIP'S was not an
 issue remanded by the court The EPA i,
 in agreement that these revisions to the
 suck height regulation will require
 significant efforts by Sute and local
 agencies, individual emission source
owners and EPA Regional and
Headquarters offices in order to comply
 within the 0-aoam ttmefranu required
 by section 40B(d)W of the 1977 Clean
Air Act Amendment!. It was based on
 this concern that EPA originally
 provided'a two-etap process for Sutes
 to follow m revising their plans and
 submitting them to EPA for approval
 However, the court found that this effort
 was explicitly contrary to section
 406(dK2fand ordered EPA to follow the
 ••month schedule provided in the dean
 Air Act
  Afar SOvrctt Tl»d into Pr9-187fk
 Stacks. A* indicated earlier, in response
 to the coot opinion. EPA proposed to
 deay "graadfathered" sutus to post-
 1970 source* tying into pre-1971 stacks.
 Some commentan stated that EPA wac
 in no way prohibited from allowing
 credit lor new source* ducted Into pre-
 1971 stack* exceeding CEP height
 Rather, they indicated that EPA simply
 had to provide Justification for such
 allowance.
  Other oosnmeatan indicated general
support tar EPA'* proposal with respect
to aew source* tying into graadfathered
•tack*, bat enggiiM that several
expansion* or dexStcatioB* be
provided moat notably that la additioa
to raw and major modified sources.
reconstructed sources not be allowed
greater than CEP stack height cadi*
when tying into gieatar than CEP stacks.
  Aavpona*. In further review of this
Issue. EPA caa find no convincing
rationale to allow eswcas constructed
after December 31. ttTOi to «v«4d CEP
restrictions simply by dacang their
imlsslnns iato a stack that is
-grandfathered" under section 123. On
the contrary,  m* iataat of section 123 to
limit credit Cor stack height in excess of
CEP suggests that EPA should not allow
credit for such stack height sxeept to
honor financial commitments mad* prior
to the end of  1970. Source* In existence
after that date should be treated equally
under the regulation and not allowed ta
avoid legitimate control requirement*

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              FadajraJ Reystar  /  V0L 50. No. 130 / Monday. July a. 1965 /  Rules M(2)(E) hss bera added
to exclude from the definition of
prohibited "dispersion techniques" the
use of techniques affecting final exhaust
gas plume ns« where the resulting total
allowable emissions of SO» from the
facility do not exceed 5.000 tons per
year.
  Section 51. l(ii)(11 has been revised to
specify that the 65 meter de minims'
height i« to be measured, as in other
aetenmaations of CEP stack height.
from '£e ground-level  elevation at the
base s' the stack. This does not
represent a substantive change in the
rule :: in its application relative to past
practices, but rather a simple
clarification.
  Section St.l(ii)(2) has been  revised  to
require that source owners demonstrate
that the 2.3H formula was relied on in
establishing the emission limitation.
  Section 51.1(ii)(3) has been revised a*
discussed elsewhere in this notice to
specify that an emission rate equivalent
to NSPS most be met before a source
may conduct fluid modeling to Justify
stack height credit in excess of that
permitted by the CEP formulae.
  Section 51.1(jj) now defines "nearby"
for purposes of conducting field studies
or fluid modeling demonstrations as OJ
km (H mile), but allows limited
consideration of terrain fsatuns
extending beyond that distance If such
features "begin" within 04 km, aa
defined in the regulation.
  Section Stl(U) hss been revised to
provides separate discussions of
"excessive  concentrations" for the
separate situations discussed earlier in
this preamble. As that discussion makes
clear. EPA believes that the differing
categories of sources subject to this rale
an best addressed by requirements tiiat
vary somewhat with those
circumstances. This definition embodies
that approach.
  Section 51,12(k) has been corrected to
provide that the provisions of I 51.12(0
shall not apply to rtodr AsujgAo; in
existence before December ft. 107& The
proposal had mconettly stated that
". . . I 51.12 shall not apply to itoda
existence.. .  ."
  This regulation dots not Hmrt the
physical stack height of any source, or
the actual ose of dispersion technique*
st a source, nor dose it require any
specific stack height for any soarca.
Instead, it seta limits on the aaxtsma
credit for stack height and othar
dispersion techniques to be used in
ambient air modeling for the purpose of
setting an emission limitation and
calculating the air quality impact of a
source. Sources an modeled at their
actual physical stack height unless Out
height exceeds their CEP stack height
The regulation applies to all stacks in
existence and all dispersion techniques
implemented since December 31.1970.
State hnpiacoeatadon Plan
Requirements
   Pursuant to section 406(dK2) of the
dean Air Act Amendments of 1997,
EPA is requiring that all States (1)
review and revise, as necessary, their
SIP'S to include provisions that limit
stack height credits and dispersion
techniques in accordance with this
regulation and (Z) review all existing
emission limitations to determine
whether any of these limitations have
been affected by stack height credits
above CEP or by any other dispersion
techniques. For any limitations that
have been so affected. States must
prepan revised limitations consistent
with their revised SIPs. All SIP
revisions and revised emission
limitations must be submitted to EPA
within 9 months of promulgation of this
regulation.

Interim Guidance

  In its proposal. EPA stated that it
would use the proposed regulation to
govern stack height credits during the
period before promulgation of the final
regulation. Thai EPA further stated that
any stack height credits that an granted
based on this interim guidance would bt
subject to review against the final rules
and may seed to be revised.
Consequently, with these final rules.
EPA is requiring that any actions that
wen taken on Hack heights and stack
height credits during this intern penod
be reviewed and revised as needed to
be consistent with this regulation.

HsfoLatory neodbtBry Analysis

  Pursuant to the provisions of 5 U&C.
606(b). I hereby certify that the attached
rule will not have "g"'fr^m  economic
impacts on a substantial number of
snail entities. This rule is structured  to
apply only, to Una) sources; La- those
with stacks above 06 maters (213 feet).
or with annual SOk emissions in excess
of MOO tons, a* further noted in the rule.
Based on aa analysis of impacts, electric
utility plants and several smelters and
pulp •"** paper mills will be
significantly afflicted by this regulation.

Exacatfv* Older 122*1

  Under Executive Order 12291. EPA
must Judge whether a regulation is
"major" and therefore subject to the
requirement of a regulatory impact
analysis. EPA's analysis of economic
impacts predicts a potential cost to
emission source owners and operators
exceeding StOO million: therefore, this is
a major rale under Executive Order
12291. However, due to the promulgation
deadline imposed by the court. EPA did
not have sufficient time to develop a full
analysis of costs and ber.efits as
rrcmnd by the Eixscut:ve Order.
Consequently, it is not possible to judge
the annual effect of ih:s rale on the
economy. A pnttminarv economic
impact analysis and s ^ejuent revision
wen prepared and a:- i  ie docket.
   For any facility, the a .• r:alify and
economic impact of Lk.<; siack height
regulation genersJly de^tr.it on ths
extent to which  the scv;d! stack at that
facility conforms to CE? s^dc height.

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27906
Federal  Register / Vol. 50. No. 130 / Monday.  July 8. 1965 / Rules and ReguJe lions
Thus, when tht regulation it applied to
large sources. ie~ those with itaek
height gnater than CEP and emissions
greater than 5.000 tons per year, it will
have the potential for producing
emission reductions and increased
control costs.
  A preliminary evaluation of the
potential atr quality impacts and a cost
analysis of the regulation was
performed at the time of proposal. The
impacts identified were established in
isolation of other regulatory
requirements. The report predicted a
range of impacts, from a "low impact"
scenario that presumed that many
potentially affected source* would be
able to justify their existing suck
heights, configurations, and emission
limitations to a "high impact" scenario
which assumed that all of the potentially
affected sources would be required to
reduce their emissions to some degree.
  In the development of its final
rulemaking action, EPA refined its-
evaluation of potential impacts,
producing revised estimates of the
probable coets of the changes to the
regulation and  expected reductions in
SOi •missions. As a result of this
refinement EPA estimates that the nrie
will yield reductions in SQt emissions  of
approximately 1.7 million tons per year.
The annualizad cost of achieving these
reductions will be aproximateiy $790
million, and  the capital coat is expected
to be approximately S700 million.
  This regulation waa reviewed by the
Office of Management and Budget, and
their written comments and any
responses are contained in Docket A-
83-48.

Judicial Review

  The EPA believes that this rule  is
based on determinations of nationwide
scope and effect Nothing in section 123
limits its applicability to a particular
locality, State,  or region. Rather, section
123 applies to sources wherever located.
Under section 307(b)(l) of the dean Air
Act [42 U.S.C 7607(b)(l)i, judicial
review of the actions taken by this
notice is available only by the filing of a
petition for review in the United States
Court of Appeals for the District of
Columbia and within 60 days of the date
of publication.

List of Subjects in 4fl CFR Part 51

  Air pollution control Ozone, Sulfur
dioxide. Nitrogen dioxide. Lead,
Paniculate matter. Hydrocarbons.
Carbon monoxide.
                          Dated: June 27.1915.
                          UeMTheaua,
                          Adminntntor.

                          PAP/T 51-freOUMCMENTS POH
                          PREPARATION, ADOPTION, AMD
                          SUBMrTTAL OP IMPLEMENTATION
                          PUNS

                            Part 51 of Chapter L Title 40 of the
                          Code of Federal Regulations is amended
                          as follows:
                            1. The authority citation for Part 51
                          continues to read as follows:    j
                            Authority: Sec. 110. 301 ft), and 123. Oeaa
                          Air Act is amended (42 VAC. 7410, 7*n(»)
                          •ad 7429 J.
                            2. Section 51.1 is amended by revising
                          paragraphs (hh). (U), Oft and (kk) as
                          follows:
                            (hfe'fi) "Dispersion technique" means
                          any (  onique which attempts to affect
                          the concentration of a pollutant in the
                          ambient air by:
                            (i) Using that portion of a stack which
                          exceeds good engineering practice stack
                          height:
                            (ii) Varying the rate of emission of*
                          pollutant according to atmospheric
                          conditions or ambient concentrations of
                          that pollutant or
                            (iii) Increasing fl"fl exhaust gaa
                          plume rise by manipulating source
                          proceee parameters, exhaust gas
                          parameters, stack parameters, or
                          cftffihin'Be •'*^>"fft gases from several
                          existing sucks into on* stack; or otaee
                          selective handling of exhaust gat
                          streams so aa to increase the exhaust
                          gas plume tie*.
                            (2) The preceding sentence doe* not
                          include:
                            (i) The reheating of • gas stream.
                          following use of a pollution control
                          system, for the purpose of returning the
                          gu to the temperature at which it waa
                          originally discharged from lite facility
                          generating the gaa stream:
                            (ii) The merging of exhaust jaa
                          streams when:
                            (A) The source owner or operator.
                          demonstrates that the facility waa
                          originally designed and constructed with
                          such merged gas streams;
                            (B) After July S. 1983. such merging is
                          part of a change in operation at the
                          facility that includes the installation of
                          pollution controls and is accompanied
                          by a net reduction in the allowable
                          emissions of a pollutant. This exclusion
                          from the definition of "dispersion
                          .techniques" shall apply only to the
                          emission limitation for the pollutant
                          •ffectec- by such change in operation: or
                            (C) Be/ore July & IMS. such merging
                          was part of a change in operation at  the
facility that included the installation of
emissions control equipment or wai
carried out for sound economic or
engineering reasons. When there wai
an increase in the emission limitation o
in the event that no emission limitation
was in existence prior to the merging, ai
increase in the quantity of pollutants
actually emitted prior to the merging,  thi
reviewing agency shall presume that
merging was significantly motivated by
an intent to gain emissions credit for
greater dispersion. Absent a
demonstration by the source owner or
operator that merging was not
significantly motivated by such intent
the reviewing agency shall deny credit
for the effects of such merging in
calculating the allowable emissions for
the source:
  (iii) Smoke management in
agricultural or stlvicultural prescribed
burning programs;
  (iv) Episodic restrictions on
residential woodbuming and open
burning; ee
  (v) Techniques under I Sl.l(hh)(i)(iii)
which increase final exhaust gaa plume
rise where the resulting allowable
•missions  of sulfur dioxide from the
facility do not exceed 5400 tons per
year.
  (ii) "Good engineering practice" (CEP)
suck height means the greater of:
  (1) 65 meters, measured from the
ground-level elevation at the base of the
aUdc
  (2) (i) For sucks in existence on
Janoary 12, 1978, and for which the
owner or operator had obtained all
applicable permits or approvals required
under 40 CFR Parts 51 and 52,
H.-13H
provided the owner or operator
produces evidence that this equation
was actually relied on in establishing an
cmisMoa limitation:
  (ii) For all other sucks.
H.-H+1JL.       »
whore
H,-r»od •nemMrtaf practice Mick height
    measured from the ground-level
    •levstioa »r the base of the luck.
H - height of nearby •tructur*(i) tMMurcd
    from the srouod-kvei eleveuon it tht
    hue of the ttack.
L-lnMT Hi«»««»«*"«t height or protected
    width, of nearby §trucnirtd)
provided that the EPA, State or local
control agency may require the use of •
field study or fluid modal to verify CEP
suck height for the source: or
  (3) The height demonstrated by a fluid
model or a field study approved by the
EPA State or local control agency. *n'cil
ensures that the emissions from a itacic
do not result in excessive

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             Federal Register  /  Vol. 50.  No. 130 / Monday. July 8.  1985 / Rules and Regulations
                                                                                                              2790'
concentrations of any nr pollutant as a
result of atmospheric downwaah. wakes.
or eddy effects created by the source
itself, nearby structures or nearby
terrain features.
  (jj) "Nearby" as used in | Jl.l(ii) of
this part is defined for a specific
structure or terrain feature and
  (1 j for purposes of applying the
formulae provided in i 5M(n)(2) means
that  distance up to five times the lesser
of the height or the width dimension of a
structure, but not greater than 0.8 km (H
mile), and
  12) for conducting demonstrations
under | 31.1(ii)(3) means not greater '
than 04 km (H mile), except that the
portion of a terrain feature may b«
considered to be nearby which fails
within a distance of up to 10 times the
maximum height (H,) of the feature*, not
to exceed 2 miles if such feature
achieves a height (HJ 04 km from the
stack that is at leest 40 percent of the
GEP stack height determined by the
formulae provided in f 51.1(ii)(2)(ii) of
this  part or 28 meters, whichever is
greater, as measured from the ground*
level elevation at the base of the stack.
The height of the structure or terrain
feature is measured from the ground*
level elevation at the base of the stack.
  (kk) "Excessive concentration" la' '
defined for the purpose of determining
good engineering practice stack height
under f Sl.l(ii)(3) and mean*:
  (1) for sources seeking credit for stack
height exceeding that established under
I 51.1(ii)(2), a "»•*'"""» ground-level
concentration due to emissions from a
suck due in whole or put to downwash,
wakes, and eddy effects produced by
nearby structures or nearby terrain
features which individually is at least 40
percent in excels of the maximum
concentration experienced  in the
•b»ence of such downwash. wakes, or
eddy effects and which contributes to a
total concentration due to emissions
from all sources that is greater then an
ambient air quality standard. For
sources subject to the prevention of
significant deterioration program (40
CFR SIJ4 end 52.21). an excessive
concentration alternatively means a
maximum ground-level concentration
due to emissions from a stack due in
whole or part to downwash. wakes, or
eddy effects produced by nearby
structures or nearby terrain features
which individually is at least 40 percent
in excess of the maximum concentration
experienced in the absence of the
maximum concentration experienced In
the absence of such downwash, wakes.
or eddy effects and greater than a
prevention of significant deterioration
increment The allowable emission rate
to be used in "r*Mnt demonstrations
under this pert shall be prescribed by
the new source performance standard
that is applicable to the source  category
unless the owner or operator
demonstrates that this emission rate is
infeasible. Where such demonstrations
are approved by the authority
administering the State implementation
plan, an alternative emission rate shall
be established in consultation with the
source owner or operator;
  (2) for sources seeking credit after
October 11063, for Increases in existing
stack heights up to the heights
established under } 3Ll(ii)(2), either (i)
a ***TT»"r> ground-level concentntioo
due in whole or part to downwaah.
wakes or eddy effects as provided in
paragraph (kkXl) of this section, except
that the emission rate specified by any
applicable State implementation plan
(or. in the absence of each a bait the
actual emission rate) shall be used, or
(ii) the actual presence of a local
nuisance caused by the existing stack.
as determined by the authority
administering the State iapleaastatfoa
plan: and
  (3)  for sources seeking credit after
January 12.1979 for a stack height
determined, under f SLl(ii)(2) where the
authority administering the State
implementation plan require* the use of
e field study or fluid model to verify
CEP stack height for sources seeking
stack height credit after November 9.
1984 based on the aerodynamic
influence of cooling towers, and/or
sources seeking stack height credit a/
December 31.1970 based on the
aerodynamic influence of structures not
adequately represented by the equations
in 151.1(10(2), a maximum ground-level
concentration due in whole or part to
downwash. wakes or eddy effects that
is et least 40 percent in excess of the
maximum concentration experienced m
the absence of such downwash. wakes.
or eddy effects.
  3. Section 91.1 Is further emended by
removing paragraphs (11) and (mm).
fltlj (Amende*)
  4. Section 31.12 is amended by
removing paragraph (1).
  9. Section fll.!2(J) is amended by
removing "and (1)" from the first
sentence.
  & Section 91.1200 to revised as
follows?
  (k) The provisions of i 51.12(j) ihail
not apply to (1) stack heights in
existence, or dispersion technique*
Implemented on or before December 31.
1970. except where pollutants are being
emitted from such stacks or using such
dispersion techniques by sources, as
defined la section lll(e)(3) of the Clean
Air Act which were constructed  or
reconstructed or for which major
modifications, as defined in
f I 9L18«XlMvWaJ, 91J4(bK2Ki) and
9Z2I(bM2)fl). wan carried out after
December 91 J97tt or (2) coal-fired
steaa electric generating units subject
to the provisions of Section 118 of the
Clean Air Act which commenced
operation before July 1.1887, and  who*e
stacks were constructed under s
construction contract awarded before
February *. 1974.


  7. Section 91.13(1) is amended by
moving "and (1)" from the first
 |F* Deo. aa-taOM filed f-4-8* • « •m]

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                          EPA-450/4-80-023R
Guideline for Determination of Good
  Engineering Practice Stack Height
(Technical Support Document for the
      Stack Height Regulations)

               (Revised)
          US ENVIRONMENTAL PROTECTION AGENCY
              Office of Air ana Radiation
           Office of Air Quality Planning ana Standaras
             Research Triangle Park. NC 27711

                  June 1985

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              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                    Office of Air Quality Planning and Standards
                   Research Triangle Park, North Carolina 27711
•sffi*;

                           OCT  2 8 1985


 MEMORANDUM

 SUBJECT:   Implementation of Stack  Height .Regulations  -  Presumptive  NSPS
           Emission Limit for Fluid Modtfffng StacK'Above  Formula GEP  Height
 FROM:      Darryl  D.  Tyler,  Director   /
           Control Programs  Development Division (MD-15)

 TO:        Director,  Air Management Division
           Regions I-X

      The following guidance is provided to explain the general emission
 control  requirements for sources  conducting fluid  modeling to justify  stack
 height in excess  of  that provided by the GEP formulae.   While some of  the
 discussion and examples contained herein focus  on  utility sources, the
 procedures outlined  in tnis memorandum are generally applicable  to all
 stationary source categories.   Please note that this 1s  guidance.  States
 may present any other demonstrations that they  may feel  are warranted  in
 individual circumstances.

 Background

     .The revised stack height regulations published on July 8, 1985, define
 three methods for determining good engineering  practice  (GEP) stack
 height.   These methods include:

      1-  a 65 meter de mini mis GEP height;

      2-  the height determined by using an applicable formula  based on  the
         dimensions of nearby buildings; and

      3- the height  necessary to avoid excessive concentrations due to
         downwash as  shown using a field study or fluid modeling
         demonstration.

      As  the preamble to the regulations points out, the  revised  definition
 of "excessive concentrations," a 40-percent Increase in  concentrations
 due to downwash  resulting in a NAAQS or PSD increment exceedance,
 necessitates that an emission rate be specified for purposes  of  evaluating
 fluid modeling.  The regulations require that a presumptive emission rate
 equivalent to the new source performance standards (NSPS) be  established
 for the source in question before modeling may be conducted to determine

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stack height needed to avoid excessive concentrations due to downwash.*
This emission nte is described as "presumptive" because it is EPA's
presumption that all  sources seeking to justify stack heights exceeding
those provided by the GEP formulae are capable of controlling their
emissions to NSPS levels.  However,, the regulations also allow source
owners or operators to rebut this presumption, establishing an alternative
emission rate that represents the most stringent level  of control  that
can feasibly be met by that source in excess of the NSPS level.  In the
preamble to the regulations, EPA Indicated that 1t will rely on the
"Guidelines for Determination of Best Available Retrofit Technology for
Coal-Fired Power Plants and other Existing Stationary Facilities,
EPA-450/3-80-009b" (SART Guidelines) whan reviewing these rebuttals.

     If it is infeasible for a source to control Its emissions to  NSPS
levels, then an alternative limit representing the lowest feasible emission
limit must be met before obtaining credit for stack height in excess of
GEP formula height.  Sources may consider such factors as remaining plant
life and the cost of modifyin;  existing equipment when determining NSPS
feasibility.

Procedures

     The general procedure that is described in the BART Guidelines for
analyzing control alternatives should be followed to identify and  evaluate
alternatives for sources seeking credit for stack heights in excess of
those produced by the applicable GEP formulae.  Because the guidelines
were originally written to address visibility Impairment, however, not all
of the analytical steps or applicability criteria—such as analysis of
visibility impairment or exemptions for power plants below 750 megawatts—
will be appropriate, and need not be addressed.

     General steps in the analysis described in Section 2.0 of the
guidelines can be summarized as follows.

     1.  Identify a range of control alternatives, including both  pre- and
post-combustion controls.  In this regard, several fuel substitution and
alternative fuel blends  should be considered, as well  as technological
alternatives, such as coal c'eaning and flue gas desulfurization.

     2.  Calculate tie cssi, emissions, and other  environmental and energy
impacts of the  alternatives  ^including those meeting NSPS objectives).

     3.  Select  the  alternative that represents  the most stringent level
of emissions control  feasible.
      *Where the  HS?S  ias  been subject  to  revision, and the source in
 question  is not  subject  to  the  revised  NSPS, the earliest standard will be
 applied;  e.g., for po*er  plants a  rate  of 1.2  Ib/mm3tu would be used.

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     In performing these analyses, it is important to keep in mind that
EPA's presumption is that the NSPS emission limit is feasible unless
demonstrated otherwise.  When carrying out evaluations, source owners or
operators may consider such factors as remaining useful plant life,  the
remaining life of any equipment affected by revised emission rates
(including any control equipment), the cost of modifying boilers, control
equipment, and fuel handling facilities, and the cost of modifying or
cancelling existing fuel supply contracts (remaining useful  plant life,
if a significant factor in determining NSPS feasibility, may necessitate
restrictions on the period of applicability of less stringent emission
limits).  Finally, it is important to analyze, not only a range of alter-
native controls, but several combinations of alternatives,  since such
combinations may yield a greater and more cost-effective degree of
emissions control.

     Since determinations of the adequacy of any rebuttals  of the NSPS
emission limit and the reasonabl* "ess of control alternatives considered
must be made on a case-by-case bs-is, and will be subject to public  review
and comment during the rulemaking process, all technical and economic
analyses, as well as any claims of infeasibility, must be fully documented
and supported by any information that may be available.

     If you have any questions regarding the application of this guidance
in a particular set of circumstances, please contact Eric Ginsburg at
(FTS) 629-5540 or Sharon Reinders at (FTS) 629-5526.

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\
                UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                     Office of Air Quality Planning and Standards
                     Research Triangle Park, North Carolina 27711
                                      AP??
     Mr. John P. Proctor
     Bishop, Cook, Purcell and Reynolds
     Law Offices
     1400 L Street, N.W.
     Washington, D.C.  20005-3502

     Dear Mr. Proctor:

          Your letter of February 23, 1989 to Administrator Reilly was
     referred to roe for response.  The issues you describe were
     previously raised to the attention of the Environmental
     Protection Agency's (EPA's) Region III Office.  You now  question
     Region Ill's rejection of your position that the best available
     retrofit technology (BART) emission rate used in determining the
     creditable stack height can be ignored for purposes of setting
     the facility's operating rate as long as the operating rate is
     consistent with the national ambient air quality standards
     (NAAQS).  The response provided to you by Region III on  October
     6, 1988 was extensively discussed with this office and with the
     Office of General Counsel, and we fully endorse Region Ill's
     conclusions and supporting rationale.

          In your letter you stated that the sole basis for conducting
     a fluid modeling study is to justify credit for stack height
     above formula height, and that nothing requires States to rely on
     the BART emission rate to determine the appropriate operating
     rate.  Actually, as noted by Region III, before such credit may
     be considered, the preamble to the stack height regulation is
     clear that the operating rate must be limited to the BART or new
     source performance standards (NSPS) rate.  The preamble  to the
     stack height regulation also notes that an emission limit more
     stringent than BART/NSPS may be needed because the sources must
     also meet the NAAQS and prevention of significant deterioration
     requirements.

          We agree with Region Ill's conclusion that NRDC v.  Thomas.
     838 F.2nd 1224 (D.C. Cir 1988), does not support your position.
     In your February 23, 1989 letter to Administrator Reilly, you
     raise a new argument not presented to Region III.  You argue that
     the court recognized that operating emission limitations are to
     be determined after stack height credit has been calculated,
     based on the court's acknowledgement that Congress imposed
     technology-based limits in some situations, and EPA has  authority
     to mandate such limits for modeling demonstrations to determine
     stack height credit.  From this you conclude that a technology-
     based emission rate used for fluid modeling is relevant  only to
     rhat modelina.

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     In response, we point out first that the court's discussion
of technology-based emission limitations (838 F.2d at 1241) was
in reference to NRDC's control-first position and not related to
fluid modeling as you suggest.  We believe that the opinion
indicates clearly that the court regarded the presumptive NSPS
emission limit as a limit that must be complied with once the
fluid modeling was completed ("We find the attempt of industry to
bar control-first no stronger than NRDC's effort to require it in
the within-formula context."  838 F.2d at 1241; "... industry
petitioners assert that in order to use the NSPS presumption, EPA
must be able to point to substantial evidence that it is attain-
able by most of the affected sources.  But as EPA allows any
source to use a higher emissions rate when NSPS is infeasible,
there is no need for any sort of generic demonstration that it is
normally so." id at 1242).

     Second, in quoting EPA's statement about the significance of
fluid modeling demonstrations, the court was merely citing with
approval EPA's rationale for refusing to grandfather demonstra-
tions undertaken and approved prior to adoption of the 1985
regulations.  This in no way implies a finding by the court that
the presumptive NSPS requirement (or higher BART limit) is not
the constraining limit.  Neither of these references provides
support to your position.

     In conclusion, we are in full agreement with the position
taken by Region III that sources seeking credit above formula
height must meet an emission rate consistent with BART/NSPS.
While final action as to any particular source would necessarily
await a State implementation plan revision, I hope the above
responds to your inquiry.  Staff in our Region III Office are
available to assist you and your client, and I suggest that you
contact them directly if you have further questions.

                                        Sincerely,
                                        Gerald A. Emison
                                            Director
                                 Office of Air Quality Planning
                                         and Standards

cc:  Charles Carter. OGC
     Thomas Maslany, Region III
     Marcia Mulkey, Region III

bcc:  Robert Bauman, AQMD                    Pat Embrey, OGC
      Jesse Baskerville, Region III          Eric Ginsburg, AQMD
      John Calcagni, AQMD                    Doug Grano, AQMD

SDPMPB:DGrano:DataTech/PROCTOR2:PFinch:RTP(MD-15) -.629-5255: 4-4-89
Control Number OAQP5--5-      Due Date:   4-3-89

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                                 i_*w crriCES

                   BISHOP, COOK, PURCELL & REYNOLDS
                                  L STREET.- N W

                           WASHINGTON. DC 2OOO5-35O2
                                (202) 37I-570O
WHITER s OIPCCT oi»i_                February  23,  1989                 TELEX *»os7i INTLAW ui
                                                           TELECOPIER (2OJ) 371 S95O
     William K. Reilly
     Administrator
     United States Environmental
       Protection Agency
     401 M Street, S.W.
     Washington, D.C.  20460

     Dear Mr. Reilly:

         The purpose of this  letter  is  to  request  EPA's
     concurrence with a conclusion reached by  this firm
     pertaining to the setting  of emission limitations for
     existing sources that receive credit  for  stack height above
     Good Engineering Practice  ("GEP")  stack height.

         Specifically, I am seeking  your concurrence with the
     following conclusion:  that a facility which  uses a Best
     Available Retrofit Technology ("BART") emission rate in a
     fluid model to determine GEP stack height may ultimately
     receive a different operating emission rate as long as that
     rate is demonstrated by  a  dispersion  model as being
     consistent with the National Ambient  Air  Quality Standards
     ("NAAQS").  EPA's consideration of this issue and response
     is extremely important since the Agency's position  will have
     an immediate and long-term economic impact on one of our
     client's operations.  As pertinent here,  our  client must
     make a major business decision  regarding  equipment
     purchases, a possible shutdown  of  operations  and technical
     operating requirements.  That decision is inextricably
     linked to the stack height issues; it will be primarily
     determined and affected  by your response  to this query.

         For purposes of this discussion and request, I  am
     setting forth our analysis and  position below as to what
     legally appropriate procedures  must be followed in
     establishing operating emission rates pursuant to
     Section 110 of the Clean Air Act for  facilities receiving
     credit for stack height  above GEP  formula height.   In brief,
     I believe this analysis  supports our  position that  a
     facility is not required to conduct a dispersion modeling
     study that uses the same emission  rate for a  particular
     pollutant that was used  by the  facility in justifying st^'jk

                                                                  *."• ,
                                                                V'' '"

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winiam K. Re illy
February 23, 1989
Page 2

height above GEP formula height; i.e., fluid and dispersion
modeling emission rates are to be developed and applied
independently.  Thus, a state may authorize an emission rate
for a particular pollutant at a facility as long as the
emission rate is demonstrated by a dispersion model as being
consistent with the attainment and maintenance of the NAAQS.
Our analysis follows:

    (a)  In order to receive credit for stack height above
GEP formula height, a facility must conduct fluid modeling
studies to analyze the effects of terrain obstacles on
downwash, and to show that the additional height is needed
to avoid "excessive concentrations"; i.e., a 40 percent
increase in concentrations due to downwash that cause or
contribute to an increase or.an exceedance of air quality
standards or PSD increments.

    (b)  To complete the fluid modeling studies and to show
that there will be excessive concentrations, a facility must
obtain a BART emission rate from tne applicable state agency
for each source.  Although EPA's stack height regulations
initially require a source seeking to conduct a fluid
modeling study to use an emission rate equivalent to that
New Source Performance Standards ("NSPS") applicable to the
industrial source category ("presumptive NSPS emission
limit"),  a source is permitted to rebut the applicability
of the presumptive NSPS emission limit.

    (c)  The sole basis for conducting a fluid modeling
study, and for obtaining an alternative emission rate to
complete the study, is to.justify credit for stack height
above GEP formula height.    The rate is but one aspect of
justifying stack height above GEP formula height, and GEP
stack height is but one aspect in determining an appropriate
operating emission rate.  See Section 123(a)(1) of the Clean
Air Act, 42 U.S.C. § 7423(a)(1).    In short, there is
nothing in either the Clean Air Act or the implementing
regulations that requires or advises the states to use or
rely upon the BART emission rate, used for a fluid modeling
U  40 C.F.R. § 51(kk).

2/  50 Fed. Reg. 27892, 27898  (July 8, 1985).

3/  50 Fed. Reg. 278?2, 27898  (July 8, 1985).

I/  In this section, Congress  limits the degree to which tall
    stacks may be considered in setting emission limitations.  As
    is apparent from the statutory language used in Section 123,
    Congress intended to allow the states to consider other
    factors, in addition to stack height, in setting emission
    limitations.

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William K. Reilly
February 23, 1989
Page 3

study, in conducting a dispersion study to determine an
appropriate operating emission rate.

    (d)  States are required to ensure the attainment and
maintenance of the NAAQS by establishing emission
limitations for facilities within their boundaries.
Moreover, with respect to existing sources, states have the
discretionary authority to determine and enforce whatever
mix of emission limitations it deems best for these sources,
as long as the overall effect is compliance with the NAAQS.
Train v. N.R.D.C.. 421 U.S. 60,79 (1974).

    We believe our analysis and conclusion are supported by
the District of Columbia Circuit Court of Appeals' recent
decision in N.R.D.C. Inc. v. Thomas. 838 F.2d 1224 (D.C.
cir. 1988) in which the court reviewed EPA's stack height
regulations and the NRDC's argument that a source must apply
all available emission controls before it may justify a
stack height above GEP formula height.  The Court of Appeals
rejected NRDC's "control-• vrst" argument fid, at p. 1235)
because it recognized tha^. BART (stack height) emission
rates and source-related emission limitations have
independent purposes:  "Although the record does not allow
us to infer exactly the impact of the baseline emissions
rate on the emissions rate that would emerge  (after the
stack height credit were calculated and then used to
determine the permissible emissions),  all parties agree that
the impact is substantial.   Indeed,  that is what the issue
is all about.  If Congress in Section 123 prescribed the use
of such a baseline emissions rate, with all its implications
for ultimate emission ceilings, it did so in a remarkably
cryptic way."  Id. at p. 1236.

    As is evident, the Court of Appeals recognized that
operating emission limitations are to be determined after
stack height credit has been calculated pursuant to
Section 123 of the Act.  This conclusion is supported by the
Court's consideration of the following facts.  First, the
Court observed that Congress imposed technology-based
emission limitations (including NSPS,  BACT, LAER, RACT and
BART)  in a variety of situations,  and that EPA has the
authority to mandate a specific technology-based emission
limit  (e.g., the presumptive NSPS limit) for GEP fluid
modeling demonstrations (id. at p. 1241) used for
calculating stack height credit.  Second, the Court noted
that a "* * * xfluid modeling demonstration has no
significance apart from showing whether the source qualified
for credit under the stack height guidelines than in
effect.'" (emphasis in original).   Id. at p. 1249.  As
pertinent here, the Court's analysis supports the conclusion
that a specific technology-based emission rate used by a
facility in a fluid modeling demonstration is significant
only to the extent that it demonstrates whether a source

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william K. Reilly
February 23, 19S9
Page 4

should receive credit for stack height above GEP formula
height.  A different conclusion; i.e., that the emission
rate used to calculate stack height (either a BART rate or
the presumptive NSPS rate) should be used by a facility,as
its operating emission rate, is contrary to the Court's
holding which rejected the "control-first" argument.

    Please be advised that an EPA staff person, contacted by
our firm, appears to have reached a different conclusion.
Specifically, we have been advised by this staff member that
an existing source is required to operate at the lowest
emission rate resulting either from the -stack height
demonstration or dispersion study — even though another
(i.e., higher) emission rate will assure compliance with the
NAAQS.

    It is our opinion that this position is inconsistent
with Sections 110 and 123 of the Clean Air Act, the stack
height regulations, and existing case law.  Therefore, we
are requesting EPA's analysis of this issue and official
agency position.  We would appreciate your prompt review of
tnis issue due to the impact that your response will have on
our client's operations and financial planning.

    If you have any questions regarding this issue, please
feel free to contact me directly.  Also, I have enclosed an
extra copy of this letter and a stamped, self-addressed
envelope.  Would you please stamp this extra copy and return
it to me for our files.
JPP:cas

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             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                   Office of Air Quality Planning and Standards
                   Research Triangle Park. Nortn Carolina 27711


                               OCT 1 0 1985
MEMORANDUM

SUBJECT:  Questions and Answers on Implementing  the
          Revised Stack Height Regulation

FROM:     G. T. Helms, Chieff' L U**—*
          Control Programs Operations Branch  (MD-15)

TO:       Chief, A1r Branch,  Regions  I-X

     A number of questions have arisen in  several  areas  of the  revised
stack height regulation since its promulgation on  July 8.   The  following
answers have been developed in response.   The  questions  and answers  are
arranged under the general topic headings  of interpretation of  the regula-
tion, State implementation plan (SIP) requirements,  and  modeling analyses.
Please continue to call Sharon Relnders at 629-5526  if you have further
comments or additional questions.

Interpretation of the Regulation

1.  Q:  What criteria should  be used  to determine  when a stack  was "in
existence" with respect to the various grandfatherlng dates in  the
regul ation?

    A:  The recent promulgation of revisions to  the  stack  height regulatic
did not change the definition of "in  existence."  The definition is  provic
in 40 CFR Sl.l(gg) and includes either the commencement  of continuous
construction on the stack or  entering into a binding contract for stack
construction, the cancellation of which would  result 1n  "substantial
loss" to the source owner or  operator. The definition of  what  constitutes
a "substantial loss" will be  the subject of future guidance.

2.  Q:  What "source" definition should be used  in determining  whether  tie
ins to grandfathered stacks should be permitted  or prohibited?

    A:  The term "source" in  this instance means a single  emitting unit.
Thus, credit for tying a single post-1970  unit(s)  Into a grandfathered
stack serving a number of old units is prohibited  under  the regulation.

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                                   -2-


3.  Q:  What is meant  in  the  regulation by "facility"?

    A:  For purposes of this  regulation, the definition contai-ned  in
40 CFR 51.301(dj should be  used.   That definition essentially defines the
term as the entire complex  of emitting activities on one property  or
contiguous properties  controlled  by a single owner or designee.

4.  Q:  Must good engineering practice (SEP) stack height be established
separately for each pollutant?  If not, how should it be determined?

    A:  It is not necessary to calculate a separate 6EP stack height  for
each pollutant.  Since "SEP*  is defined by Section 123 of the Clean Air
Act as the height necessary to ensure against excessive concentrations of
any air pollutant, it  follows that GEP should be established for each
source based on the pollutant requiring the greatest height to avoid
excessive concentrations.

5.  Q:  How should "reliance" on  the 2.5H formula be determined?
                                                          •
    A:  First, "reliance" on  the  2.5H formula applies only to stacks  in
existence before January 12,  1979. Credit for  "reliance* on the 2.5H
formula, can be granted under  the  following cases:  (a) Where the stack
was actually built to  a height less than or equal to 2.5H; (b) Where  the
stack was built taller than 2.5H  and the emission limitation reflects
                                                                        ^
use of 2.5H in the SIP modeling  analysis;  or  (c) Where  evidence  is  proviaB
to show "reliance" as  discussed  in  the  following paragraph.   If  no  model™
was used to set the emission limitation for the source, then  it  cannot  b€
argued that there was  "reliance"  on the formula, since  EPA's  guidance was
specifically aimed at  using stack height credit in  establishing  emission
limitations.  Once it  is  determined that the  emission limitation was in
fact based on estimates of dispersion from the stack, then the source can
be said to have properly "relied" on .the 2.5H formula.  In the event that
it cannot be determined that the emission limit is  based  on  "reliance"  on
the 2.5H formula, then the refined  H +  1.5L formula must  be  used.

     Where a clear relationship  between a 2.5H stack  height  and  the
emission limitation cannot be shown, where the emission limitation  was
not calculated based precisely on the 2.5H height,  or where  the  stack
height used in modeling cannot be verified, then additional  evidence will
be needed.  Preferred would be written  documentation, such  as copies of
the original engineering calculations or correspondence between  the State
or the emission source owner and EPA indicating that  the  2.5H formula
should be used to derive the emission limitation.   However,  recognizing
that such evidence is often not retained for  more  than  a  few years,
"reconstructed" documentation may be considered, but  should  only be used
as a last resort.  This evidence should include  explanations by  those
individuals who were involved in designing the  facility,  calculating
emission rates, and who represented the facility  in dealings with the

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                                   -3-


State and EPA on how the emission limit  was  derived,  including  a discussion
of how the formula was originally used in deriving  the  source  emission
limitation, a discussion of the analytical method applied,  and  a listing
of any contacts or discussions with EPA  during  that period.  This  listing
will  aid EPA in searching its own files  to find any records of  communication
or correspondence that may bear on the Issue.

     In no case should a source be allowed after January 12, 1979, to
obtain a relaxation in the emission limitation  by arguing that  1t  "relied"
on past EPA guidance endorsing the 2.5H  formula.  In  cases  where a relaxation
based on GEP formula height is sought 1n the future,  the refined H + 1.5L
formula must be used.

6.  Q:  The preamble specifically discusses  cooling towers  as  structures to
which the formula should not be applied.  Will  the  Office of Air Quality
Planning and Standards be specifying other structures that  are  not well
represented by the formul a?

    A:  The discussion in the preamble and SEP  guideline is not intended to
be all-inclusive; judgment should be used 1n determining when  fluid
modeling should be used to estimate the  effects of  structures  with rounded,
domed, or tapered shapes.  Water towers  and  storage tanks are  additional
examples of such structures.  As additional  Information becomes available
on the aerodynamic effects of specific building shapes  and  configurations,
we will evaluate the need to revise the  GEP  guidance.  However, at present,
there are no plans to issue a "laundry 11st" of structures  to which the
formulas do not apply.

SIP Requirements

7.  Q:  Should a compliance averaging-time be explicitly stated in a
SIP revision for sulfur dioxide (S02) emission  limits that  are  revised to
meet the stack height regulation?

    A:  A compliance averaging time need not be specified as an enforceable
SIP provision as long as a stack test compliance method is  in  place  in the
underlying federally approved SIP.  EPA's current national  policy  requires
that SIP's and permits contain enforceable "short-term" emission limits
set to limit maximum emissions to a level which ensures protection of  the
short-term national  ambient air quality  standards  (NAAQS) and  prevention
of significant deterioration (PSD) Increments.   EPA relies  upon a  short-term
stack test provision in the SIP as the method  of determining compliance
with the emission limits.  In lieu of a  stack test, EPA has accepted  fuel
sampling and analysis and continuous emission In-stack  monitors (CEM's).
When compliance is to be determined from information  obtained  by  fuel
sampling and analysis and CEM's, short-term  averaging times should be
specified.

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                                   -4-


8.  Q:   Are all  States  required to  have "stack height regulations"?

    A:   Limitations  on  creditable stack height and dispersion techniques
impact  the SIP program  in two  areas— SIP emission limits for existing
sources and SIP provisions  covering new source review (NSR)/PSD permitting
procedures.  For existing sources,  State regulations limiting credit 'for
stack height and other  dispersion techniques (stack height regulations)
are not necessary as long as the SIP emission limits are not affected in
any manner by so much of the stack  height as exceeds SEP, or any other
dispersion technique.  Where a State has stack height regulations, those
regulations must be  consistent with EPA's regulation.  Where a SIP contains
regulations that are inconsistent with EPA's regulation, the State must
either  adopt a stack height regulation that is consistent with EPA's or
incorporate the EPA  regulation Sy reference.

     For the NSR/PSD programs, it is essential that the plan contain
limitations on the amount of creditable stack height and other dispersion
techniques.  The following  cases have been developed to Illustrate what
action(s)  may be required of the State since promulgation of the stack
height  regulation.

CASE All):  A fully  or  partially delegated PSO program that references but   ^
            does not define 6EP where the delegation agreement does not con tall
            a date to define which  version of the PSO rule is being
ACTION:     Notify the State  that  all  permits Issued henceforth  must be
            consistent with EPA's  stack  height regulation.  All  permits
            previously issued must  be  reviewed and revised as necessary
            within 9 months.

CASE A(2):  A fully or partially delegated  PSO program that references
            but does not define GEP where the delegation  agreement
            does contain a date to  define which version of the PSD  rule
            is being delegated.

ACTION:     Update the delegation  agreement to reflect agreement with  EPA's
            stack height regulation as of July 8, 1985.   Notify  the State
            that all permits  issued henceforth must be consistent with
            EPA's stack height regulation.   All permits previously  Issued
            must be reviewed  and  revised as necessary within  9 months.

CASE 8:     The current federally  approved  SIP for NSR/PSD does  not
            contain a reference to SEP or cispersion techniques, i.e.,
            provisions assuring that emission limitations will  not be
            affected by stack height 1n excess of SEP or  any  prohibited
            dispersion techniques  do not exist in the current SIP.

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                                   -5-
ACTION:     Notify the State  that  such provisions must be adopted and
            submitted as a SIP  revision within 9 months.  This can be
            accomplished by  adopting stack height regulations at the
            State level  or by adopting the appropriate reference and
            commitment to comply with EPA's stack height regulation as
            promulgated on July 8,  1985.  Interim permitting should be
            consistent with EPA's  stack height regulation.**

CASE C:     The current federally  approved SIP for NSR/PSD contains
            references to, but  does  not define, GEP or dispersion techniques.

ACTION:     Notify the State  that  a  coranrftjnent to comply with EPA's stack
            height regulation as promulgated on July 8, 1985, is required.
            If a State is unar* to  make  such a commitment, State regulations
            must be revised tc  je  consistent and submitted to EPA as a  SIP
            revision within 9 months and  interim permitting should be
            consistent with EPA's  stack height regulation.  No "grace
            period" will be allowed  for sources receiving permits between
            July 1985 and April 1986.**

CASE D;     The current federally  approved SIP for NSR/PSD contains stack
            height regulations  that  are inconsistent with EPA's regulation.

ACTION:     Notify the State  that  such regulations must be revised to be
            consistent and submitted as a SIP revision within 9 months
            and that interim  permitting should be consistent with EPA's
            stack height regulation.**

CASE E(l):  A SIP for NSR/PSO has  been submitted to EPA, or will be
            submitted to EPA  before  the due date for stack height revisions.
            The submittal contains  provisions that conflict with EPA's
            stack height regulation.

ACTION:     Notify the State  that  EPA cannot approve the submittal until
            it is revised pursuant  to EPA's July 8, 1985, regulation.
**In the event that a State does  not  have  legal  authority to  comply with
  EPA's regulation in the  interim (e.g., because  1t must enforce State
  rules that are inconsistent with EPA's regulation)  and is compelled to
  issue a permit that does not meet the requirements  of the EPA revised
  stack height regulation, then EPA should notify the State that such
  penrits do not constitute authority under the  Clean Air Act to commence
  construction.

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                                   -6-
CASE E(2):   As  in Case £(1),  a  SIP  for  NSR/PSD has been submitted to EPA
            or  will  be submitted  to EPA before the due date for stack
            height revisions.   The  submittal is not Inconsistent with
            EPA's stack height  regulation, but portions of the existing
            approved SIP that relate to the submittal are inconsistent^

ACTION:     Approve  the SIP submittal based on a coranrittaent by the State
            to  correct the inconsistencies in its existing SIP to comport
            with EPA's July 8 regulation  and submit the corrections as a
            SIP revision within 9 months.  Interim permitting should be
            consistent with EPA's stack height regulation.** If th« exist-
            ing SIP  is ambiguous, i.e., the SIP references but does not
            define terms relating to SEP  or dispersion techniques, the
            action steps outlined in Case C above should be followed.

CASE F:     In  nonattalnment  areas, emission limits or permits do not always
            Include  modeling, but rather  are based on lowest achievable
            emission rate (LAER)  and offsets.

ACTION:     If  no modeling is used  1n the Issuance of a permit, the emission
            requirements for  the  source are not "affected" by stack heights
            or  dispersion techniques, and no action is needed.  However, 1 f
            modeling was used 1n  the process of preparing and issuing a
            permit,  such as cases where offsets were obtained offsite, that
            modeling must be  reviewed for consistency with the stack height
            regul ation.
9.  0:  What must all
promulgated?
                      States do now that  EPA's  stack  height  regul ation  is
    A:  States must review and revise. their SIP's  as  necessary to  include or
revise provisions to limit stack height credits  and dispersion techniques
to comport with the revised regulations, and,  in addition,  review  and
revise all emission limitations that are affected  by  stack  height  credit
above GE? or any other dispersion techniques.   In  accordance with  Section
AQ6(d)(2) of the Clean A1r Act, States  have 9  months  from promulgation  to
sunmit the revised SIP's and revised SIP emission  limitations to EPA.

     In an August 7, 1985, memo titled  "Impl anentation  of the Revised
Stack Height Regulation — Request for Inventory and Action PI a/i to  Revise
SIP's," Regional Offices were requested to begin working with each of
tneir States to develop States' Action Plans.   Each Action Plan should
include the following:  (l) An Inventory of (a)  all stacks greater than
65 meters (m), (b) stacks at sources which exceed  5,000 tons per year
total allowable $03 emissions; and (2) A reasonable schedule of dates for
significant State actions to conform both State stack height rules and
emission limitations to EPA's stack height regulation.   Schedules  should
include increments of progress.  Regional Offices should be satisfies
that each of their States provide schedules for completion of the  tasks

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                                   -7-


as outlined in the August memo  and  report  the status of schedule  commitments
to them on a monthly basis.  Regional  Offices have  been asked  to  forward
monthly status reports to the Control  Programs  Development Division  on
the States' progress to meet scheduled commitments  and also  report the
results of followup with the States on schedules that are not  met.   In
order to facilitate tracking the States monthly progress, guidance on  a
standardized format will be issued  shortly.

Modeling Analyses

10.  Q:  Is there any restriction or prohibition against, or demonstration
required for, raising an existing (or  replacing) stack up to 65 m?

     A:  No, as long as prohibited  dispersion techniques are not  employed.

11.  Q:  Are flares considered  to be stacks?

     A:  No, flares are excluded from the  regulation.

12.  Q:  What load should be used for  a fluid modeling demonstration?

     A:- One hundred percent load should generally  be used unless there
is a compelling argument otherwise..

13.  Q:  Can new or modified sources who have agreed to a case-by-case
best available control  technology (BACT) emission rate be required to use
this rate for fluid modeling rather than a less stringent new  source
performance standard (NSPS) emission rate?

     A:  As set forth in 40 CFR 51.1 (kk), the  allowable emission rate  to
be used in making demonstrations under this  part shall be prescribed by
the NSPS that is applicable to  the  source  category  unless the  owner  or
operator demonstrates that this emission rate is infeasible.

14.  Q:  Must tne exceeddnce of NAAQS  or PSD increment due to  downwash, wakes,
or eddies occur at a location meeting  the  definition of ambient air?

     A:  No, the exceedance may occur at any location, including  that to
which the general public does not have access.

15.  Q:  Is a source that meets NSPS or BACT emission limits subject to
restrictions on plume merging?

     A:  Yes.  However, in a majority of such cases, there will be no practical
effect since 3ACT or NSPS limits will  be sufficient to assure  attainment
without credit for olume rise enhancement.

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                                   -8-


     Q:  What stack  parameters  are  to be used  in modeling when the actual
stack neicnt is greater  than  GE? height?

     A:  Where it is necessary  to reduce stack height credit below what  is  in
existence, for modeling  purposes, use existing stack gas exit parameters--
temperature and flow rate--and  existing stacic  top diameter and model  at
GE? neight.

17.  Q:  How should  a stack that 1s less than  GEP height be modeled when
dispersion techniques are employed?

     A:  In order to establish  an appropriate  emission limitation where  a
source desires to construct less than a GEP stack but use dispersion
techniques to make up the difference in plume  rise, two cases should  be
tested.  First, conduct  a modeling  analysis Inputting the GEP stack
height without enhanced  dispersion  parameters, then conduct a second
analysis inputting the less than GEP stack height with the increased
plume rise.  The more stringent emission limitation resulting from each
of the two runs should be the one specified as the enforceable limitation.

18.  Q:  How are the effects  of prohibited dispersion techniques to be excludes
for modeling purposes?

     A:  Where prohibited dispersion techniques  have been used,, modeling to
exclude their effects on the  emission limitation will be  accomplished by
using the temperature and flow  rates as the gas  stream enters the  stack,  and
recalculating stack  parameters  to exclude the  prohibited  techniques
(e.g., calculate stack diameter without restrictions 1n place, determine
exit gas temperatures before  the use of prohibited reheaters, etc.).

19.  Q:  How are single flued merged stacks and  multiflued  stacks  to  be
treated in a modeling analysis?

     A:  This is a mul Vistep  process.  First,  sources with  allowable  S02
emissions below t.OOO tons/year may be modeled accounting for  any  plume
merging that has been employed.  For larger sources, multi flued  stacks
are considered as prohibited  dispersion techniques  in the same  way as
single flued merged  gas streams unless one of  the three allowable  conditions
has been met; i.e.,  (1) the source  owner  or  operator demonstrates  that
the facility was originally designed and  constructed with such  merged gas
streams;  (2) after date of promulgation,  demonstrate that such  merging is
associated with a change in operation at  the  facility that  includes  the
installation of pollution controls  and  results in  a net reduction in the
allowable emissions of the pollutant for  which credit 1s  sought; or  (3)
before date of promulgation,  demonstrate  that such merging did  not result
in any increase in the allowable emissions (or, in  the  event that no
emission  limit existed, actual  emission level) and  was  associated with a
change in operation at trie facility that  included  the  installation of

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                                   -9-


CTissions control  equipment OP was carried  out  for  sound  economic  or
engineering reasons, as demonstrated to EPA.  Guidelines  on  what  constitutes
sound economic or engineering justification will be issued shortly.

     If plume merging from multiflued stacks  is not allowable,  then  each
flue/liner must be modeled as a separate source and the combined  impact
determined.  For single flued merged stacks where credit  is  not allowed,
each unit should be modeled as a separate stack located at the  same
point.  The exit parameters, i.e. velocity  and  temperature,  would  be the
same as for the existing merged stack conditions and the  volume flow rate
based on an apportionment of the flow from  the  Individual units.

20.  Q:  What stack height for point sources  should be Input to air  quality
dispersion modeling for the purpose of demonstrating protection of the
NAAQS and PSD increments?

     A:  A discussion of the maximum stack  height credit  to  be  used  in modeling
analyses is provided in the "Guideline for  Determination  of  Good  Engineering
Practice Stack Height" and provides that the  SEP stack height should be
used as input to the model assessment.  If  a  source is operating  with a
less than GEP stack height, then the actual stack height  should be input
to the "model.

21.  Q:  What stack height should be used for background  sources  in
modeling analyses?

     A:  The GEP-stack height for each background source  should
be input to the model assessment.  If a background  source is operating
with a less than GEP stack height, then the actual  stack  height should be
input to the model.

22.  Q:  Can credit for plume merging due to  installation of control
equipment for total  suspended particulate (TSP) matter be allowed when
setting the SOj 1imit?

     A:  To state the question another way, the concern  is what impact
the merging and installation of control equipment have on the emission
limit for another pollutant, and whether the  merging occurred before or
after July 8, 1985.  After July 8, 1985, any  exclusion from  the definition
of "dispersion techniques" applies only to  the  emission  limitation for
the pollutant affected by such change in operation  and 1s accompanied by
a net reduction in allowable emissions of the pollutant.  For example, a
source tears down two old stacks and builds one new GEP  stack with an
electrostatic precipitator (ESP).  This results in  a net  reduction in TS?
emissions.  This source could model using stack gas characteristics
resulting from merging the two gas streams  in setting the TSP emission
limit, but may not so node! and receive the credit  for  stack merging wnen
evaluating the Sty emission limit.

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                                   -10-
     Before July 8, 1985, installation  of TSP pollution control equipment
generally justifies the merging of the  stacks for TSP.  However,  if  a
source's emission limitation  for SOj  increased after the merging, then
credit would generally not be allowed since it is presumed that the
merging was to increase dispersion.

     A source with no previous SOj emission limit that merges  stacks  and
installs an ESP for TSP control  may consider the effects of merging  on
compliance with the TSP NAAQS but may not use merging to justify  setting
an S02 emission limit less stringent  than its actual emission  rate before
the merging.

23.  Q:  If, after determining SEP stack height by fluid modeling,
dispersion modeling under other than  "downwash" meteorological conditions
shows that a lower emission limit than  that from the fluid model  SEP
analysis is necessary to meet ambient air quality constraints, should a
new stack height be defined for the source?

     A:  No.  GEP stack height 1s set.  Ambient air quality problems
predicted by dispersion modeling at the fluid modeled height means that  a
more stringent emission limit is necessary.

24.  Q:  Does EPA intend to issue additional guidance on fluid modeling
demonstrations?

     A:  See the attached memo from Joseph A. Tikvart, Chief,  Source
Receptor Analysis Branch, to  David Stonefield, Chief, Policy Development
Section, on guidance for a discussion of existing and additional  guidance
on fluid model demonstrations.

Attachment

cc:  Stack Height Contacts
     Gerald Emison
     Ron Campbel 1
     B. J. Steigerwald

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                                                         PN 123-85-09-19-006
              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                     Office of Air Quality Planning and Standards
 y*                  Research Triangle Park. North Carolina 27711

                              September  19, 1985
MEMORANDUM

SUBJECT:  Guidance on Fluid Model Demonstrations  for Determining GEP
          Stack Height in  Complex Terrain

FROM:  „  Joaeph A. Tikvart,  Chief
          Source Receptor  Analysis Branch, MDAD

TO:       David Stonefield, Chief
          Policy Development   ;ction, CPDD

     The recently promulgated stack height regulation requires  that a  source
that wishes to receive credit for the effects of  vakes, eddies  and dovnvash
produced by nearby terrain for  the purpose of calculating GEF stack height
must conduct a fluid model demonstration or a field study.  Recent guidance
for fluid modeling these terrain effects is contained in Section 3.6 of  the
"Guideline for Determination  of GEF Stack Height  (Reviaed)," EFA 450/4-80-023R,
June 1985, available from  NTIS  as PB 85-225-241.   In addition,  the report
"Fluid Modeling Determination of Good Engineering Practice Stack Height  in
Complex Terrain," EPA 600/3-85-022, available from NTIS PB 85-203-107,
provides an actual case of how  EPA conducted a GEP determination, short  of
performing the "excessive  concentration" criteria test.  Requests to conduct
field studies in lieu of fluid  modeling demonstrations* will be  evaluated on
a case-by-case basis; refer to  pp. 46-47 of' the GEP Guideline.

     Previously, EPA published  three documents which form the basis for
conducting fluid model demonstrations, particularly in flat terrain
situations:  (1) "Guideline for Fluid Modeling of Atmospheric Diffusion,"
EPA 600/8-81-009, April 1981, available from NTIS as PB 81-201-410; (2)
"Guideline for Use of Fluid Modeling to Determine Good Engineering Practice
Stack Height," EPA 450/4-81-003, July 1981, available from NTIS as PB  82-145-
327; and (3) "Determination of  Good-Engineering-Practice Stack  Height:   A
Fluid Model Demonstration  Study for a Power Plant," EPA 600/3-63-024,  April
1983, available from NTIS  as  PB 83-207407.

     Lastly, EPA conducted a  4-day work shop on fluid modeling and GEP
determination at the Fluid Modeling Facility at RTF in February 1981,
attended by staff from each Regional Office.  Although some attendees  are
no longer with the Agency, we believe at least one person in each Region
who attended is still "on  board," except for Regions II and VIII, and  could
serve as a resource person.   At the Regional Workshop on the Stack Height
Regulation next month, we  will  poll the attendees concerning the need  for

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another fluid modeling workshop for Regional Office and State technical
•taff.  If a need is expressed and specific attendees can be identified, we
will request the Meteorology and Assessment Division, ASRL, to present such
a workshop at RTF within the next few months.

     The above documents together with staff that have some knowledge of
fluid modeling should enable most Regions to provide initial technical
assistance to the States and enable the States to increase their own level
of expertise.  Note that document (2) contains a report checklist in Section
5, outlining what a fluid model report should contain,  additional items
explicitly related to complex terrain studies may be required on a case-by-
case basis, especially after reviewing EPA's example study carefully.  Hore
detailed procedures for implementing the excessive concentration criteria
calculations, using data from a fluid model demonstration, are being developed
and will be provided at the upcoming Regional Workshop.

     Should technical questions arise regarding CEP determinations or fluid
model demonstrations, please contact Jim Dlcke or Dean Wilson of my staff,
FTS 629-5681.  We assume the Regional Office staffs will attempt a first-cut
resolution of technical issues before requesting our assistance.

cc:  S. Relnders
     R. Rhoads
     F. Schiermeier
     D. Wilson

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United States
Environmental Protection
Agency
Office of Air Quality
Planning and Standards
Research Triangle Park NC 27711
EPA-450/4-81-003
July 1981
Air
Guideline for Use of
Fluid Modeling to Determine
Good Engineering Practice
Stack Height
         ENVIRONMENTAL PROTECTION
             AGENCY

           OCT 30 1981
                      UBRARY SERVICES OFFICE

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&EFK
                     Pwk MC 27711
                           EPA-600/3-83^2
                           April 1983 ^2
Determination of
Good-Engineering-
Practice Stack
Height
    •
A Fluid Model
Demonstration
Study for a Power
Plant

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                        EPA-450/2-78-027R
                           SUPPLEMENT A
                             JULY 1987
         SUPPLEMENT A
              TO THE
            GUIDELINE
                ON
AIR QUALITY MODELS (REVISED)
      U.S. ENVIRONMENTAL PROTECTION AGENCY
          Office Of Air And Rodiotion
     Office Of Air Qualify Planning And Standards
    Research Triangle Park.  North Carolina 27711

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                                                                PN iic-85-0i-O'-::

      \           UN/TEO STATES ENVIRONMENTAL PROTECTION AGENCY
      9                  Offict of Air Quality Planning and Standards
V   IX                  fl«s«arch Triang/e Park. North Caro/ina 2777 1
 *' «»•*
                                  January 2, 1985
  MEMORANDUM

  SUBJECT:   Regional  Implementation of Modeling Guidance
  FROM:      Joseph A.  Tilcvart, Chief
             Source Receptor Analysis Branch, MDAO  (MO-14)

  TO:        Regional Modeling Contact,  Regions  I-X

       Attached for your use is information on  the implementation of modeling
  guidance.   Attachment 1 is an excerpt of a memorandum from J. tfilbum to 0. Tyler
  (dated November 13,  1984) which identifies several  issues.  Attachment 2
  provides our response to these issues.

       It is our intent that the response merely reiterate the way in which we
  understand modeling  guidance to be routinely  implemented by all Regional Offices.
  however, having formalized that understanding, we believe that its circulation
  is  desirable.  If you have any questions, please call  me.

  Attachments
                                               *
  cc:  Chief, Air Programs Branch, Regions, I-X
       B. Turner
      yo. Wilson

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                                Attachment 1

(Excerpt of Memorandum from J. Wilburn to D. Tyler, Dated November 13, 1984)
     As discussed in this memo, we are quite concerned as to our credibility
regarding the development and approval of SIP revisions and bubbles which
consider complicated and involved modeling.  While our Armco experience may
be viewed by some as atypical, we feel that the problem is real  enough to the
point that we request guidance on the following three .questions:

     1.  When do changes in EPA modeling procedures become official Agency
         policy?  Do such forms as informal modeling protocols and consensus
         opinions developed at meteorologist meetings and workshops constitute
         official Agency policy?  If so, how is management at the regional
         division and branch level informed of those decisions (i.e., are such
         decisions communicated by policy memorandum or must regional manage-
         ment be dependent upon regional participants at such meetings and
         workshops to accurately convey OAQPS's policy decisions)?

     Z.  How do changes in Agency modeling policy affect in progress modeling
         analyses?  Do policy changes in modeling procedures invalidate
         modeling protocols which accurately reflected modeling policy at the
         initiation of ongoing modeling analyses?  If so, we would appreciate
         copies of all policy memorandums which communicated such policies.

     3.  Will it be necessary in order for Armco1s bubble application to be
         concurred with by OAQPS, for Region IV to require Armco to submit a
         fourth revision to their modeling procedures which would provide an
         analysis of the 46 days with more than 6 hours of calm which have
         thus far been deleted for the submittal pursuant to the original
         protocol?  If so, we would like an explanation of the rationale for
         this requirement in light of our discussion in this memo.

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                           Attachment 2
                                 •

(Excerpt of Memorandum from R. Rhoads to J.  Mil burn, Dated December 24, 1984)
     Regarding your first question:  Changes 1n EPA modeling procedures
become official Agency guidance when (1) they are published as regulations
or guidelines, (2) they are formally transmitted as guidance to Regional
Office managers, (3) they are formally transmitted to Regional Modeling
Contacts as the result of a Regional consensus on technical issues, or
(4) they are a result of decisions by the Model Clearinghouse that effec-
tively set a national precedent.  In the last case, such issues and deci-
sions are routinely forwarded to all of the Regional Modeling Contacts.
In order for this system to work, the Regional Modeling Contacts must be
actively Involved in all Regional modeling Issues and they must be con-
sulted on modeling guidance as necessary by other Regional personnel.

     Regarding your second question:  The time at which changes in
modeling guidance affect on-going modeling analyses is a function of the
type of agreement under which those analyses are being conducted.  On-going
analyses should normally be "grandfathered" if (1) there is a written pro-
tocol with a legal or regulatory basis (such as the Lovett Power Plant) or
(2) the analysis is complete and regulatory action 1s Imminent or underway.
If the analysis is based on a less formal agreement and Is underway, the
Regional Office should Inform the source operators of the change and deter-
mine whether the change can be implemented without serious disruption to
the analysis.  If for some reason any previous analysis must be redone,
then it should be redone in accordance with current modeling guidance.  In
any event, consequences of falling to Implement current guidance should be
discussed with the OAQPS staff (Helms/11kvart) to ensure that Inappropriate
commitments are not made by the Regional Office.

     Regarding your third question:  As previously discussed with your
staff, the recent Armco modeling analysis 1s technically  inadequate and
not  approvable so long  as the approximately 46 days with  calms are
ignored.  At the time the original protocol was developed, the deletion
of calms was common practice because we had no consensus  on technically
valid procedures for addressing calms.  However,  (largely due to the
assistance of RO IV staff 1n developing a technical solution to the
calms issue) this practice was discontinued by consensus of the Regional
Modeling Contacts who recommended'immediate Implementation of the new
procedures (see Joe Tikvart's June 13, 1983, memo to Regional Modeling
Contacts).  The subsequent Armco analysis which ignored calms was, there-
fore, deficient since there is no rationale for "grandfathering" an analy-
sis which was initiated after the new calms guidance was disseminated.
This Issue is no longer an issue since Armco has already  submitted a
reanalysis that addresses the calms issue.

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                               June 7, 1988
MEMORANDUM

SUBJECT   Revised Model Clearinghouse Operational Plan
FROM:     Joseph A. Tikvart, Chief
          Source Receptor Analysis Branch (MO-14)

TO:       Chief, A1r Branch, Region VII
          Chief, Technical Support Branch, Region I
          Chief, Air and Radiation Branch, Region V
          Chief, Air Programs Branch, Regions II, III, IV, VI, VIII, IX, X


     On February. 9, 1988 I notified you of the expansion of the Model
Clearinghouse to include all criteria pollutants.  That memorandum
explained briefly how the expanded Clearinghouse would operate and
identified individuals in the Technical Support Division and in the Air
Quality Management Division who would be involved in resolving Agency
regulatory modeling issues.  The memorandum also promised that we would
be revising the 1981 Operational Plan for the Model Clearinghouse to reflect
the current operation.  Attached is a copy of that revised plan.

     To highlight major functions of the operational plan which you should
become most familiar with, please note the structure of the Clearinghouse
contained in Section 3, particularly Figure 1.  Also you should become
familiar with the procedures for referring modeling issues to the
Clearinghouse, described in Section 4.  Appendix B identifies the contacts
in the Regions for various types of modeling problems.  Please check over
these lists for accuracy and keep us informed of any changes of these
personnel in your Region.

     It should be remembered that the Model Clearinghouse is a service
we provide to the Regional Offices.  We do not normally deal directly with
the State/local agencies or with industry since this would compromise our
function as second level reviewers and would interfere with your function.
However we have discussed access by States to Clearinghouse expertise
through the Regional Offices.  Where a State wishes such a contact, we
urge your staff to work closely with their State counterparts to establish
a mutally agreed-upon position on the issue-.

     Finally, for purposes of responding to questions from States and local
agencies about the Clearinghouse and its operation, we have no problem if
you wish to furnish them with a copy of this plan.  For questions from the
public we would prefer that you instead provide them with a copy of Appendix C,
a separate copy of which is attached.  This Appendix is a revised version
of a flyer we have distributed for a number of years at the EPA booth at
the annual APCA meeting.

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                              EPA Model Clearinghouse
                                      Summary

     The Model Clearinghouse is the single EPA focal point for reviewing the use of
modeling techniques for criteria pollutants in specific regulatory applications.
The Clearinghouse also serves to compile and periodically report for Regional
Office benefit Agency decisions concerning deviations from the requirements of the
"Guideline on Air Quality Models (Revised)."

Need for the Model Clearinghouse
     The Guideline states that when a recommended model or data base is not used,
the Regional Administrator may approve the use of other techniques that are demon-
strated to be more appropriate.  However, there is also a need to provide for a
mechanism that promotes fairness and consistency in modeling decisions among the
various Regional Offices and the States.  The Model Clearinghouse promotes this
fairness and uniformity and also serves as a focal point for technical review of
"nonguideline" techniques proposed for use/approval by a Regional Administrator.

Functions of the Model Clearinghouse
     The major function of the Clearinghouse 1s to review specific proposed actions
which involve interpretation of modeling guidance, deviations from strict interpre-
tation of such guidance and the use of options in the guidance, e.g., Regional
Office acceptance of nonguideline models and data bases.  This is handled in two
ways:  (1) the Clearinghouse, on r  jest from the Regional Office, will review the
Region's position on proposed (specific case) use of a nonguideline model for tech-
nical soundness and national consistency, and (2) the Clearinghouse will screen
Federal Register regulatory packages for adherence to modeling policy and make
recommendations for resolution of any Issues identified.
     A secondary function of the Model Clearinghouse is to communicate to regu-
latory model users in EPA significant decisions involving the interpretation of
modeling guidance.  This is accomplished through an annual "Clearinghouse Report"
which itemizes the significant decisions that have been made and the circumstances
involved.  This report serves to improve consistency in future decisions and as
a source of technical information for the Regional Offices.  In addition to the
annual report the Clearinghouse informs users on a contemporary basis of signi-
ficant decisions through copies of written decisions and briefings at various
meetings and workshops.

Structure of the Clearinghouse
     The Clearinghouse is formally located in the Source Receptor Analysis Branch
(SRAB) of OAQPS.  However, the Air Quality Management Division (AQMD) also parti-
cipates in Clearinghouse matters involving SIP attainment strategies and other
regulatory functions.
     The primary responsibility for managing the Clearinghouse and ensuring that
all of its functions are carried out is performed by a person full-time within
SRAB.  The responsibility for responding to requests for review of modeling
issues is assigned, on a pollutant/program basis to three SRAB individuals.  In
addition, AQMD supports the Clearinghouse with staff who are also knowledgeable in
modeling policy.  These individuals are responsible for screening SIP submittals
and related documents, referring modeling issues to SRAB through the Clearinghouse
and documenting the final (and any significant interim) decision on disposition of
tne issues.

Communi cati on Chai n
     The Model Clearinghouse functions within the organizational structure of EPA.
As such the Clearinghouse serves the EPA Regional Offices.  It coordinates with
and communicates decisions to the Regional Offices.  Any coordination with State
and local agencies and individual sources on Clearinghouse activities is a function
of t.^e EPA Regional Offices.

                                         Cl

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REFERENCES FOR SECTION 4.3

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                              EPA-450/2-78-027R
Guideline On Air Quality Models
               (Revised)
         U.S. ENVIRONMENTAL PROTECTION AGENCY
              Office of Air and Radiation
         Office of Air Quality Planning and Standards
            Research Triangle Park. NC 27711

                   July 1986

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.-,
£1 \         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                    Office of Air Quality Planning and Standards
                   Research Triangle Park, North Carolina 27711


                           February 15,  1989
   MEMORANDUM

   SUBJECT:  Modeling Requirements  for Pennsylvania Power  and Light
             (PP&L), Martins Creek, Pennsylvania
   FROM:     Robert D. Bauman, Chief
             SO,/Particulate Matter Programs Branch (MD-15)

   TO:       Joseph Tikvart, Chief
             Source Receptor Analysis Branch  (MD-14)

        This is in response to a memorandum dated January 4, 1989 from
   Al Cimorelli, Region 3, to Dean Wilson of your branch.   Since this
   appears to be  more of  a policy than a technical issue,  my branch
   agreed to prepare a response.

        Region 3 is asking  if EPA policy would  allow  PP&L's modeling
   analysis  to  address  only the  designated nonattainment area  in
   Warren  County, New  Jersey.   If  so,  it might  be  possible  to
   reclassify  the  warren  county  area  to  attainment  without  an
   evaluation of PP&L's impact outside the Warren County nonattainment
   area.  Additionally, the Region  has asked if a redesignation for
   Warren County  could  proceed  independent of  any  revision to  the
   Pennsylvania SIP, in the event the modeling  analysis shows warren
   County  to  be  attainment  but  shows   a  modeled  violation  in
   Pennsylvania.
        The Guide, j-ine on Air Quality Models  ( Revised^  ( guide lir|e^  on
   page 1-3 states that the current guidance should be followed in all
   air quality analyses relative to State implementation plans and in
   analyses required by EPA, State and local agency air programs.  This
   policy is consistent with  stack height implementation policy and
   general guidance found in  a  January 2, 1985 memorandum  from  SRAB
   to the  regional modeling  contacts.   Guidance  contained  in  the
   Guideline recommends  on  page 9-8  that "all  sources expected  to
   cause a significant concentration gradient  in  the vicinity of the
   source or sources under consideration for  emission  limit (s) should
   be explicitly  modeled."   On page 8-4,  the Guideline states  that
   "Receptor  sites  for  refined  modeling  should be  utilized  in
   sufficient  detail to  estimate  the  highest  concentrations  and
   possible violations of a NAAQS or a PSD increment."

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     I believe that application of  guidance  noted above does not
allow a  partial modeling  analysis.   If  a modeling  analysis is
required for any reason, that analysis Bust meet the requirements
of the Guideline.

     Redesignation policy is generally contained in the April 21,
1983 memorandum from Sheldon Meyers  to  the Regional Air Directors.
That  policy  includes  requirements   for  a  modeling  analysis
demonstrating attainment  and evidence of  implementation  of the
approved SIP.   As noted  by Region 3, PP&L's analysis  may show
violations at locations outside of the designated nonattainment
area, while  demonstrating  an  absence  of  violations within the
nonattainment area.   In such an  event, the  existing SIP  may be
judged adequate to demonstrate attainment in Warren county and an
action to redesignate the area to attainment could proceed before
the State completes the  necessary  effort to resolve the violations
outside the nonattainment area.  While  separate rulemaJcing actions
are  possible,   it may  be  more  efficient  to  consolidate  the
redesignation and SIP revision actions whenever possible.

     I trust  that this  memorandum  is responsive to Region 3's
concerns.  If you need any additional information, please call me.

cc:  A.  Cimorelli, Region 3
    vJH'Ginsburg, OAQPS/AQMD
     D.  Grano, OAQPS/AQMD
     S.  Sambo1,  Region 2
     D.  Wilson,  OAQPS/TSD

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REFERENCES FOR SECTION 4.7

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                              EPA-450/2-78-027R
Guideline On Air Quality Models
               (Revised)
         U.S. ENVIRONMENTAL PROTECTION AGENCY
              Office of Air and Radiation
          Office of Air Quality Planning and Standards
            Research Triangle Park, NC 27711

                   July 1986

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REFERENCES FOR SECTION 5.1

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2T8S2
Federal Register / Vol. SO. No. 130 / Monday. |uly 8.  1985 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY

40CFRPartS1

IAD-FRL-2S47-6)

Stack Height Regulation

AGENCY: Erv. .ror.nerr ,! Protection
ABC?.C> (EPA).
ACTION: Find! rulemaking

SUMMARY: Section 123 of the Clean Air
Art. as amended, requires EPA to
promulgate regulations to ensure that
;.-.e aegree of emission limitation
reared for tne control of any air
pollutant under an applicable State
implementation plan i.SIP] is not
affected by that portion of any stack
height which exceeds euod engineering
practice (GEP; or by any other
dispersion technique. A regulation
implementing section 123 was
prorr.^is-ite^ on February a. 1982. at 47
FR 5864. Revisions to the regulation
M ere proposed on November 9.1964. at
49 FR 44878. Today's action incorporates
changes to the proposal and adopts this
regulation in final form.
f wtcnvt DATE This regulation
becomes effective on August 7.1985.
POM PUMTHtft INFORMATION CONTACT:
Enc O. Gmsburg. MEM5. Office of Air
Quality Planning and Standards. EPA.
Research Triangle Park. North Carolina
27711. Telephone (919) 541-5540.
               IMPOMMATIOM:
Docket Stat
  Pertinent information concerning this
regulation is included in Docket Number
A-83-49. The docket it open for public
inspection between the hours of 8.-00
a.m. and 4.00 p.m.. Monday through
Friday, at the EPA Cential Docket
Section, West Tower Lobby. Gallery
One. 401 M Street. SW.. Washington.
D C. Background documents normally
a-, ailable to the public, such as Federal
Register nonces and Congressional
reports, are not included in the docket
A reasonable fee may  be charged for
copying uocumenis.

Background

SfO.'l'.'S

  Section 123. which was added to the
Clean Air Act by the 1977 Amendments.
regulates the manner in which
techniques for disperson of pollutants
from a source may be considered in
setting emission limitations. Specifically.
section 123 requires that the degree of
emission limitation shall not be affected
by that portion of a  stack which exceeds
GEP or by "any other dispersion
                          technique." It defines GEP. with respect
                          to suck height* as.
                          the height necusMry to insure that emissions
                          from the suck do not result in excesMve
                          concentrations of any air pollutant in the
                          immediate vicinity of the source i> a revuli of
                          atmospheric downwash eddies or wakes
                          which m*> b« crtnted &> the source ittelf.
                          nearby structures or nearby terrain obstacles
                          . . . (Section 123|c||
                          Section 123 further provides that CEP
                          stack height shall not exceed two and
                          one-halt times the height of the  source
                          (2.SH) unless a demonstration is
                          performed showing that a higher stack is
                          needed to avoid "excessive
                          concentrations." As the legislative
                          history of section 123 makes clear, this
                          reference to a two and one-half times
                          test reflects the established practice of
                          using a formula for determining the GEP
                          stack height needed to avoid excessive
                          downwash. Finally, section 123 provides
                          that the Administrator shall regulate
                          only stack height credits—that is. the
                          portion of the suck height used in
                          calculating an emission limitation—
                          rather than actual stack heights.
                            With respect to "other dispersion
                          techniques" for which emission
                          limitation credit is restricted, the statute
                          is less specific It state* only that the
                          term shall include intermittent and
                          supplemental control system* (ICS.
                          SCS). but otherwise leaves the definition
                          of that term to the discretion of the
                          Administrator
                            Thus the sutute delegates to the
                          Administrator the responsibility for
                          defining key phrases, including
                          "excessive concentrations" and
                          -nearby." with respect to both
                          structures and terrain obstacles, and
                          "other dispersion  techniques." The
                          Administrator must also define the
                          requirements of an adequate
                          demonstration justifying stack height
                          credits in excess of the 2.5H formula.
                          Ruiemaking and Litigation
                            On February 8.1982 (47 FR 5864). EPA
                          promulgated final regulations limiting
                          stack height credits and other dispersion
                          techniques. Information concerning the
                          development of the regulation w«t
                          included in Docket Number A-79-01 and
                          is available for inspection at the EPA
                          Central Docket Section. This regulation
                          was challenged in the U.S. Court of
                          Appeals for the D.C. Circuit by the
                          Sierra Club Legal  Defense Fund. lac; the
                          Natural Resources Defense Council. Inc.:
                          and the Commonwealth of Pennsylvania
                          in Stem Club v. EPA. 719 F. 2d 438. On
                          October 11.1983. the court issued it*
                          decision ordering  EPA to  reconsider
                          portions of the stack height regulation.
                          reversing certain portions and upholding
                          other portions. Further discussion of the
court decision is provided later in th:s
notice.
Administrative Proceedings Subscqun-t
to tne Court Decision

  On December 19.19S3. EPA held a
public meeting to take comments to
assist the Agency m implementing trie
mandate of the ecu".. This meeting was
announced in the Federal Register on
December 8.1983. at 48 FR 54999
Comments r*ce-ved by EPA are
included in Docket Nurr.r.nr A-83-49 On
Februar. 2a.1984. the e.ect:: power
industry filed a petition fjr a \\n\ of
certiorar. with the U.S Si-prerr* Court
While the petition was pen .':r.g before
the court, the mandate frj.-  tne U.S.
Court of Appeals Mas staved. On juiv 2.
1984. the Supreme Cour denied  the
petition (104 S.Ct. 3571). and on ful> 18
1984. the Court of Appeals  mandate
was formally issued, implementing the
court's decision and requiring EPA to
promulgate revisions to the stack height
regulations within 6 months. The
promulgation deadline was ultimate*;
extended to June 27.1985. in order to
provide additional opportunities for
public comment to allow EPA to hold a
public hearing on January 8.1985. and to
provide additional time for EPA to
complete its analysis of rulemaking
alternatives.

Documents
  In conjunction with the 1982
regulation and this revision. EPA
developed several technical and
guidance documents. These served as
background information for the
regulation, and are included in Dockets
A-79-01 and A-43-49. The following
documents have been  or will be placed
in the National Technical Information
Service (NTIS) system and may  be
obumed by contacnng NTIS at 5283
Port Royal Road. Springfield. Virginia
22161.
  (1) "Guideline for Use of Fluid
Modeling to Determine Good
Engineering Stack Height." July 1981.
EPA. Office of Air Quality Planning and
Standard*. EPA-4SO/4-81-003 (NTIS
PB62 145327).
  (2) "Guideline for Fluid Modeling of
Atmospheric Diffusion." April 1981.
EPA. Environmental Sciences Researc.*:
Laboratory. EPA-600/8-01-009 (NTIS
PB81 201410).
  (3) "Guidance for Determination of
Good Engineering Practice Stack Height
(Technical Support Document for the
Stack Height Regulator.)." June 1985
EPA. Office of Air Quality Planning and
Standards. EPA-«50'4-*0-0:3R.
  (4) "Determination of Good
Engineering Practice Stack Height—A

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             Federal Register /  Vol.  SO.  No. 130 / Monday,  fuiy 6.  1983 / Rules and Regulations        2?893
Fluid Model Demonstration Study for a
Power Plant." April 1983. EPA.
Environmental Sciences Research
Laboratory. EPA-600/>«3-024 (NTIS
PB83 207407).
  (5) "Fluid Modeling Demonstration of
Cood-Engineenng-Practict Stack Height
in Complex Terrain." Aphl 1985. EPA
Atmospheric Sciences Research
Laboratory. EPA/600/3-85/022 (NTIS
PB85 203107).
  In addition, the following documents
are available in Docket A-83-48.
  "Economic Impact Assessment for
Revisions to the EPA Stack Height
Regulation." |une 1981
  "Effect of Terrain-Induced Downwash
on Determination of Good-Enginering-
Practice Stack Height" July 1984.
Program Ovarviaiw

Central
  The problem of air pollution can be
approached in either of two ways:
through reliance on a technology-baaed
program that mandates specific control
requirements (either control equipment
or control efficiencies) irrespective of
ambient pollutant concentrations, or
through an air quality baaed system that
relies on ambient air quality levels to
determine the allowable rates of
emissions. The .dean Air Act
incorporates both approaches, but the
SIP program under section 120 uses an
air  quality-based approach to establish
emission limitations for sources.
implicitly, this approach acknowledges
and is based on the normal dispersion of
pollutants from their points of origin into
the atmosphere prior to measurements
of ambient concentrations at ground
level
  There are two general methods for
preventing violations of the national
ambient air quality standards (NAAQS)
and prevention of significant
deterioration (PSD) increments.
Continuous emission controls reduce on
a continuous basis the quantity, rate, or
concentrations of pollutants released
into the atmosphere from e source. In
contrast, dispersion techniques rely on
the dispersive effects of the atmosphere
to carry pollutant emissions swey from
the source m order to  prevent high  .
concentrations of pollutants near the
source. Section 123 of the Clean Air Act
limits the use of dispersion techniques
by pollution sources to meet the NAAQS
or PSD increments.
  Tall stacks, manipulation of exhaust
gas parameters, and varying the rate of
emissions based on atmospheric
 conditions (ICS and SCS] are the basic
 types of dispersion techniques. Tall
 stacks enhance dispersion by releasing
 pollutants into the air at elevations high
 above ground level, thereby providing
 greater mixing of pollutants into the
 atmosphere. The result is to dilute the
 pollutant levels and reduce the
 concentrations of the pollutant at ground
 level without reducing the total amount
 of pollution released. Manipulation of
 exhaust gas parameters increases the
 plume rise from the source to achieve
 similar results. ICS and SCS vary a
 source's rate of emissions to take
 advantage of meteorologic conditions.
 When conditions favor rapid dispersion.
 the source emits pollutants at higher
 rates, and when conditions are advene.
 emission rates are reduced. Use of
 dispersion techniques in lieu of constant
 emission controls results in additional
 atmospheric loadings of pollutants and
 can increase the possibility that
 pollution will travel loaf distances
 before reaching the ground.
   Although overreUance on dispersion
 technique • may produce edverse effects.
 some us* -f the dispersive properties of
. the atmosphere has long been an
 important factor in air pollution control
 For example, some stack height is
 needed to prevent excessive pollutant
 concentrations near a source. When
 wind meets an obstacle such as a hill or
 a building, a turbulent region of
 downwaah. wakes, aad eddies is
 created downwtnd of the obstacle aa the
 wind passes over aad around it Thia
 can force a plume rapidly to the ground,
 resulting in excessive concentrationa of
 pollutants near die source. As discussed
 previously, section 123 recognizes these
 phenomena aad responds by allowing
 calculation of emission limitations with
 explicit consideration of that pardon of
 a source's stack that is needed to ensure
 that excessive concentrations dae to
 dowawash will not be created near the
 source. This height is called CEP stack
 height
 Summary of th» Court Oteiuon
   Petitions for review of EPA's 1982
 regulation were filed in the D.C Circuit
 within the statutory time period
 following promulgation of the regulation.
 On October 11.1983. the court issued its
 decision ordering EPA to reconsider
 portions of the stack height regulation.
 reversing certain portions and upholding
 others. The following is  a summary of
 the court decision.
   The EPA's 1982 rale provided three
 weys to  determine CEP  stack height
 One way was to calculate the height by
 using a formula based on the
 dimensions of^nearby structures. The
 other two were a dt minimi* height of SS
 meters, and me height determined by a
 fluid modeling demonstration or field
 study. The court endorsed the formula
 as a starting point to determine CEP
 height However, it held that EPA has
 not demonstrated that the formula was!
 aa accurate predictor of the stack heighr
 needed to avoid "excessive
 concentrations of pollutants due to
 downwash. Accordingly, the court
 directed EPA to re-examine in three
 ways the conditions under which
 exceptions to the general rule of formula
 reliance could be justified.
   First the 1962 rule allowed a source to
 justify raising its stack above formula
 height by showing a 40-percent increase
 in concentrations due to downwash.
 wakes, or eddies, on the ground that this
 was the percentage increase that the
 formula avoided. The court found this
 hiatifieatioa iaaufficieat aad remanded
 the definition to EPA with instructions
• to make It directly responsive to health
 aad welfare considerations.
   Similarly, the 1982 rule allowed a
 source  diet built a stack to  less than
 formula height  to raise it to formula
 height automatically. Once again, the
 court required more justification that
 such a  step wan needed to  avoid
 adverse health or welfare effects.
   Finally, the court directed EPA either
 to allow the authorities administering
 die stack height regulations to require
 modeling by sources in other cases as »
 check oa possible error in the formula.
 or explain why the accuracy of the
 formula made such a step unnecessary.
   The 1982 rule provided two formulae
 to calculate CEP stack height For
 sources cosuuractad oa or before
 laaoary 12,197ft  the date of initial
 proposal of the stack height regulations.
 the applicable formula was 2J times tht
 height of die source or other nearby
 structure. For sources constructed after
 that data, the nde specified a newer.
 refined formula, the height of the sourct
 or other nearby structure plus  1.5 times
 die height or width of that  structure.
 whichever is lew (H+UL). The EPA
 baaed its decision- to include two
 formulae oa that unfairness of applying
 the new formula retroactively. In its
 examination of this issue, the court
 specified four factors that influence
 whether aa agency has a duty to apply *
 rule  retroactively. They are:
   t Whether the new rule represent! in
 abrvpt departure from well established
 practice or merely attempt* to fill a void m an
 unsettled area of lew.
   2. The extent to which the party against
 whom me new rale is applied relied on the
 former rule.
   3. The d*trw  at burden which a reireictivi
 order tmpoeea on a party, and
   4. The statutory interest la applying t new
 rule dttpite the riihance of e party on tht oid
 standard.

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27M4      Federal JUeJster / Voi 50. No. 130 / Monday, hjfr a. 19B& / Rries and Regulations
TO F-Zd at 467 (citation* omitted}.
Applying this snalysis to tit two
formulae the court upheld EPA'* basic
decision.
  However, the court also held that
sources constructed on or be/on
January 12.1979. should not be
automatically entitled to fuQ credit
calculated under the 2.5H formula unless
they could demonstrate reliance on that
formula. The court remanded this
provision- for revision to take actual
reliant* on the 2.5H formula into
account.
  The statute limits stack hetgnt credit
to that needed to aveid excessive
concentrations da* t* Ju*n»esh caused
by "nearby" suuuura* or terrain
features, Tb* 19*2 leeuletfaui defined
"nesrhy" for GEPforsnola epancelfoas
as five tina* the, lesser of either tb*
height or projected width of th*
structun --"^-fl dowawash. aot te>
exceed oaa halt nit*. Na such djetaaca
limitation was pieced am structures or
terrain feature* whose effects warn
being considered ia Quid ^^^Htt
demonstrations or field srariies Tha>
court held that section 123 explicitly
applies tha "aaarby" limitation to
demonstrations and studies as watt aa
formula applications, and •••^•H*'* tha
rule to EPA. to apply the Umiatfra ia
both contexts.
  The 1982 rule defined "dispersion
techniques" a* those techniques which
attempt to affect poButant
coDcentrstfans by effing met portfoii of a
stack exceeding GEP. by vuryinf
emission rate* accordta* te> attuuepaeih.
condition* or* pollutant concentration*.
or by th* eddttfoa ol a ran or refceatar ta>
obtain a tees strmgewi sBusvtew
limitation. Th* court found this
definition too aarrow because an*
technique "sianHlcairtrr eionvuted by aa)
intent to gain emissions credit for
greater dispersion" should be barred.
719 F.2d 462. As a reseJU (he court
directed EPA to develop ruses
disallowing credit for all each dUpenwa
techniques unless tb* Agency
adequately justified excacesuua on th*
basis of adamistrative necessity or ee*>
minimis result
  The CEP formulae established in the.
1982 rule do not consider paeaae rise.**
the ground that plume nse is aot
significant under downwaah candltiana,
In its review oJT this provision, tha court
affirmed this judgment by EPA.
  The 1982 rule addressed pollutant
concentration* estimated to occur whan.
a plume impacts elevated terrain by
allowing, credit Cor stack heighi
necessary to avoid air quality violations
in such cases. However, the court ruled
that section 123 did not allow. EPA to
grant credit for plume impaction ia
setting esMseic* units, sad ravened thta
part ol tk» regulation.
  The praaaabktaifa* 1982 refMklMn
provided a 22 DMBXB pinnies tar Stele
iaaplaaentation ol th* refuiatiea Tbe
court found this period ta becoatrery t»
section 4i)6(d)(2> of the. dee* Air Act
and reversed it
  The regukboav foilawiat *• stehrfaw
excluded stack* "i» austnce" ea of
before Oecesnber 3L iva from the CEP
requirements. However, the regvktMet
did not prohibit source* coaatncted
after Oecaaber 31.1000. freaa raceiviacj
credit for tying into pr*-19Xl stacks.
AJthougft th* court uobaid EPA's
defiaiaonaf"iBexiataQc*.-UBa4cdthe4
EPA bad hiiad to addtesa (k* oe-te,
issa*. AfiGOidasfM tee emit!
this issue to SPA fa* justificsttesv
  On* othar Btonatosi of tbe i
was challenged! in the Siena C/uo suit:
Th* exclusion ol flare* frost the)
defiaiatan ol "suck," la. Us review el tkte
previaieo. th* court h*4d thai BPA bed-
acted properly.
  Other provJausBsof th* stack haisjbt
regulation, such a* the d* mim'ssie stack
height esasbliahed uadat | SLKuMlk
were not challenged in tha suit sad the*
reaaia in affect.
Summary of ttio thvwuittr at J99i.
  m the November a, Iflai, node*
responding, <" ta* court daaaioa EPA
praposed tn redefine asumbar of
specific teems. i*f'f'"fi"t "exeassUv*

technique*." "ttearfau." and other
important, ranatpss. and prnpnaeri ta
            oftfanbaacafat
                          £,Th*
foOowutiaa
that were, proposed.
 JThe Court of Appeals held that EPA
erred IB defirnaij ^SMoessrVe
concentrations" ea* tn enwawaah tea
purpose* of jmtifyiag a stack
than formuia, beiahu ea aothiasj i
than a OVoarcee tinaee.
coaceBtntsooa over whet weaid <
in the absence ol dowsvaak ft
remanded this, MSUS to EPA let reieAe th*
dafiataon to sosa* aoeoMtt* l*w*i ol ear
pollution that could be inta rate tad to
endanger health and weilere* a*d tea
to be •••xceaawe.-
  The EPA pronoeed tw* sltarnefl^*
appcMcha* to denaiat "exe*a*i»*
concentration*," Fin*. EPA requested
conunsat oa whether the 4O>|
aperMch adcptvd a* pest i
reguUdoa ia lacs BRMee
dangert •» heaMi end wekmr*
envtaaaaad by Cooate**
section 123. hi ta* sweat that raeh *
showing eonid itot be made. EPA
proposed a two-part definition of
excessive ceaceetrsnaae, requiiiM* that
the dnwnwusa, wakes, or eddies
induced by nesrby structure* or terrain-
feature* result in inaesees in grewid-
level p^hler* conceesratioas that:
  (sj Cause or eesriribule to sn
exceedanee of * NAAQS or applicable

  (b) Are at least 40 percent in excess of
concentrations projected to occur in the
absence of such structures or terrain
features.

Definition of CEP Stock Htig/it

  EPA proposed to find that tha
traditional (2JH1 and refined (H4-1JL)
formulae remained proper methods for
calculating CEP stack betgnf except SPA
proposed to revise its regulation t»
allow EPA. the Slat* or local air
pollution control agency discretion to
require c farmer demonstration using s
fieU study or fluid model to
demonstrate GZPstsck height for a
source tea case where it was believed
that the formats may not rsBaaly predict
CEP height In the case of structures that
are porous or aerodyaamicaJIy smoother
than block-shaped structures. R would
require s source to demonstrate the
downwaah effects of suck structures
using s field study or fluid model before
receiving credit for stack height based
on the structures. EPA also proposed
generally to aBow sources to raise
existing, stacks up to formula GEP height
without further demonstrations with tha
sxoptton anted above far rfismtinnary


Ae/jone* on t/t* iSH Formula

  rnial9sttiuia>gA*Mn»iuii sources
bnik be/at* (aauary 12. un. the det* on
which it proposed marsneedH+VSL
formulae, tn i*Ti*nlitT t>*w eraiesMa
limits based ea the trerfhlanel XJ5H
forssui* that existed previously. Th*
court approved this dise'nerino but
ruled met it should be uautad t* sources
that "rehsd" oa the trsdibeaai foreMia.
sngaaeting, tor exasspie. that sources
that bad claimed credil for stacks aw
taller thea thaioramla psvnded«
not be. eaki ta bava "ratted" oa it
  IB reepoasB to the coast deoawa, EPA
propaaeatsei
reejuvethas for stacks ini
January 12,1979, i
that thar aemaJtf raUsd ea th* Z3H
tormakt m the deatga of thesr stecst>
before recsavaag oedtl far that s«*hi»

proposes. EPA r*ea***»d i
whataahnuldi
        ittfi

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             Federal  Register / Vol 30. No.  130 / Monday. July 8.  IMS / Rules  and Regulation
                                                                      27895
  In its 1M2 mitt, EPA tllowtd sources
that modeled the effects of terrain
obstacle* OB downwash to include any
terrain features in their model without
limitinf their distance from the stack.
The court though persuaded that this
was a sensible approach, since it
allowed the model to best approximate
reality, ruled that Congress had
intended a different result, namely that
terrain features beyond Vi mile from the
stack should not  be included in the
model
  In response, EPA proposed to revise
15L1(UM3) of Us regulation to limit the
consideration of downwaaa, wakes, and
eddy effects of structures and terrain
feature* to those) features classified aa
being "nearby" aa defined in |«.!(«).

terrain features would be considered to
be "aearby"*if they occur within a
distance of not more than O8 km (Vfc
mile): terrain feature* that extend
beyond 04 km could be considered if. at
a distance of 04 km, they achieved a '
height greater than or equal to 40-
percent of the CEP stack height
calculated by applying the CEP formula
to actual nearby structures. In other
words, a terrain feature would be said to
"begin" within V* mil* if it reached at
least the height of nearby buildings
within that <**«*»««*^ Such filatures ^414
be considered only out to a 


propoMd to tiilow •otsVOef 10 tUeff cFkvdH
10 •aflHeVOgl UlaUtslIlOBef fOef MMB
wherre fedHty wee orighuOy
and oonetracted wHh merged gee
with the metaHattea of additional
COBtTMel yteMtOf at 881 rVuBCtSOB D tOfeV
•OtiMIOCsV 01 tM eufOCtM pOflOtetOL Tut
EPA retained exclusions from its
definition of prohibited dispenioo
techniques far smoke management la
 burning programs and also proposed to
 exclude episodic restrictions on
 residential weedbuming and debris
sources built after that date that had
tied into stacks built before that datr
EPA failed to respond to comments
objecting to this allowance, and so the
coon remanded the question to EPA for
the agency to address
  Upon reexamination. EPA saw no
convincing justification for granting
credit to these sources. Consequently,
for sources constructed after December
31. igTO. with emissions ducted into
grandfathered stacks of greater than
CEP height and for sources constructed
before that date but for which major
modifications or reconstruction have
bean carried out subsequently. EPA
proposed to limit stack height credit to
only se much of the actual stack height
as oonforms to CEP. Sources
constructed prior to December 31.1970,
for which modifications are carried out
that are not classified as  "major" under
40 CFR SLiaOKi). Sl.24
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27896       Federal Register / Vol. 50. No.  130 / Monday.  July 8. 196S / Rules and Regulations
Response to Public Comments on the
November 9.1984. Proposal

  The EPA received over 400 comment!
during the public comment period and at
the public hearing, addressing a number
of aspects of the proposed
reguiation.These comments have been
consolidated according to the issues
raised and are discussed, along with
EPA's responses, in a "Response to
Comments" document included in the
rulemaking docket Certain comments
can be characterized as "major" in that
they address issues that are
fundamental to the development of the
final regulation. These comments are
summarized below, along with EPA's
responses. Additional discussion of the
issues raised and further responses by
EPA can be found in the "Response to
Comments" document

I. Maximum Control of Emissions in Lieu
of Dispersion
  A central legal and policy question
addressed in this rulemaking was raised
in the comments of the Natural
Resources Defense Council (NRDQ and
the Sierra Quo.  They contend that
section 123 requires all sources to install
the m««j«mt» feasible control
technology before receiving any credit
for the dispersive effects of a stack of
any height or for other practices that
may enhance pollutant dispersion.
  The NRDC argument is summarized
fully in the Response to Comments
document together with EPA's response.
Very briefly. NRDC contends that
litigation prior to the 1977 Clean Air Act
Amendments had established that
dispersion can never be used as an
alternative to emission control and that.
this understanding waa carried forward
and strengthened in the 1977 dean Air .
Act Amendments. Accordingly, no rule
that does not require full control of
emissions es a prerequisite to any stack
height credit would be consistent with.
Congressional intent
  EPA disagrees. During the • yean
between 1977 and NRDCa comments, a
period covering two Administrations
and three Administrator*. NRDCs
position has never been either adopted
by EPA  or senousiy advocated before it
The pre-1977 ca»ea cited by NRDCdo
not bar all stack credit but only credit
for stacks beyond the historical norm.
Finally,  the text and legislative history
of section 123 contain essentially no
support  for NRDCs -control first"
position.

II. Discussion of Other Major Issues
  The EPA1**position on the "control
first" comments provides the necessary
background against which the remaining
major issues in this rulemaking are
discussed. These issues are: the
definition of "excessive concentrations"
due to downwash. wakes, and eddies;
the definition of "nearby:'' and the
definition of "dispersion technique." A
question that affects several of these
decisions, and that is addressed where
it arises, concerns the extent to which
any changes made in the stack heights
regulations should be applied
prospectively rather than retroactively.
  This discussion of "excessive
concentrations" is in turn divided into a
discussion of the physical characteristics
of downwash. followed by a discussion
of the "gpfp^nef of those
characteristics aa they pertain to the
CEP formulae, to stacks above formula
height to stacks being raised to formula
height and to stacks at formula height
being modeled at the choice of the
administering authorities.
Definition of "Exceuive
Concentrations"
  The Phytical Nature ofDownwath. A
number of commenter*. including the
Utility Air Regulatory Croup (UARC),
have argued that the court decision does
not obligate EPA to revise tile definition
sdopted in the 1982 regulation, but only
directs EPA to ensure that the 40-
percent  criterion protects against
concentrations due to downwash that
could be related to health and  welfare
concerns. They point oat that woes
emissions BOB a source become  trapped
in the wake region produced by the
source itself or upwind structures and
terrain feature*, those ^ifniTirt  an
brought rapidly to earth, with little
dilution. This, the coaanenters argue.
can produce tbort-teni peak
concentrations at growndlevel that are
many tinea greater that the
concentration levels of the NAAQS.
Because their duration ie relatively
short averaging these concentrations
over the tines specified by the NAAQS
doea not result in NAAQS violations.
Nonetheless, the-conunenten argue thai
these concentrations should be regarded
as nuisances that section 123 waa
specifically enacted to avoid.
Accordingly, the commenten held that
EPA would be justified in retaining the
40-percent criterion without requiring
that such increases result in
exceedances of the NAAQS.
  These same commenters argued that
seven hardships would result if EPA's
second proposed definition of
"excessive concentrations" is adopted,
and that by limiting suck height credit
to that just necessary to avoid
exceedance of NAAQS or PSD
increments, the definition would  act to
limit actual >tack design and
construction in a way that would
increase the likelihood of NAAQS or
PSD exceedance*. This would occur.
they argue, because, by building only 10
tall a stack aa they can receive credit
for. source* would be eliminating a
"margin of safety" that would normally
be provided otherwise. Furthermore, it
was argued that due to the changing
nature of background air quality.
inclusion of absolute concentrations
such as the NAAQS or PSD increments
in the definition would render
determinations of CEP stack height
constantly subject to change.
  NRDC argued on the other hand that
only a violation of air quality standards
can be considered the type of
"excessive concentration" for which
downwash credit can be justified, the
EPA had failed to specify the health or
welfare significance of the short-term
peak* that it might consider as meeting
this description, and diet in any event
UARC's attempt to show that short
stacks could cause a large number of
short-term peaks waa technically flawed
in several different ways.
  Retponte. Extensive discussion of the
downwash phenomenon, as well as the
aerodynamic affects of buildings and
terrain features on windflow patterns
and turbulence, is contained in the
technical and guidance documents
previously listed in this notice. To
summarise briefly, numerous studies
have shown that the region of
turbulence created by obstacles  to
windflow extends to e height of
approximately iS times the height of the
obstacle. Pollutants emitted into this
region can be rapidly brought to the
ground, with limited dilution. Though
this tendency decreases the higher
vertically within the downwash region
that the plume la released, because of
the highly  unpredictable nature  of
downwash and the lack of extensive
quantitative data, it is extremely
difficult to reliably predict plume
behavior within the downwash region.
As noted in the comments submitted.
the 4{ti| wind ipeed and atmospheric
stability vary. This can result in short-
term peak*, lasting up to 2 minutes or so.
recurring intermittently for up to several
hours, that significantly exceed the
concentrations of the 3- and 24-hour
NAAQS. Little quantitative information
Is available on the actual levels  of thete
peaks, or on the frequency of their
occurrence since most stacks have been

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             Federal  Register / Vot. 50.  No. 130  /  Monday. July 8. 1965 / Rules and  Regulations
designed to. avoid down wash and
because downwesh monitoring i* not
typically conducted
  A number of modeling and monitoring
studies in the record assess the
significance of downwssh when plumes
are released into the downwish region.
The most important of these are a
number of studies cited in the November
9 proposal showing that for sources with
sulfur dioxide (SOi) emission rates of 4
to s rounds per million British Thermal
Unas (Ib./mmBTU). stacka releasing the
plume into the downwash region can
significantly ixceed the 3-hour NAAQS.
  The utility industry submitted
monitorial results from four sites
showing that facilities with short stacks
(ranging from 23 to 80 percent of formula
height) generated many short-term
peeks in the vicinity of the pleat at
concentrations at least 2 times the
highest concentration of the 3-hour SOi
standard. Le> 1 ppm for up to 10
minutes. Those concentrations ere the
maximun that could be recorded  by the
monitors used. There is no wey to
determine from these data the true peek
ground-level concentrations.
  The NRDC  in commenting on this
subject has argued that dowawash- •  •
related concentrations are largely
theoretical since stacka have generally
been built to avoid downwash, and that
actual concentrations occur under other
meteorological conditions such as
"inversion breakup fumigations"  end
"looping plums." that can equal these
"theoretical" concentrations predicted
under downweah.' The NROC also
criticized the utility data on numeroas
technical grounds.
  EPA's studies indicate net wheat
stacks are significantly less then GBP
formula height high short-term
concentrations can indeed occur doe to
downwesh that are in the range of the
values reported by the utility industry.
Concentrations produced by me other
conditions cited by NROC dtough high.
may be lower by an order of magnitude,
and occur less frequently by as much as
two orders of magnitude, than those
produced by downwash.' As stack  *
  1 In 'laumoa tmaiup fiuiieioon." MI tawMo
Uytr dittip*M> dy* to buiiflf ol th« yniuid. Icmag
ihi polluiaiiu (Mi •»«• trtpoid IB it dttciad
luddttiir 10 pound Icvtt. In "looping phuiM*.* •
ptunt t« bfoueftt Sown to id* fmuad doot 
However* ao iaformattoa nee boea
presented which would convince EPA to
abandon die present CEP formulae m
favor of any alternative.
  The health and welfare significance of
downwesh concentrations that result la
violations of the ambient standards are
documented and acknowledged m the
standard* themselves. The significance
of short-term peeks at the levels that
EPA's analyses predict is more
judgmental.  However, e number of
studies cited in EPA's "Review  of the
National Ambient Air Quality Standards
for Sulfur Oxides: Assessment of,
Scientific and Technical Informal
(EPA-tSO/S-B-OOr. November 1982
indicate thet concentrations of one p;
sustained for durations of 5 minutes c
more can produce bronchoconstnctio
in asthmatics accompanied by
symptoms such as wheezing and
coughing. Such concentrations are we
within die range of concentrations tha
can result from downwash. When
sources meet the ambient standards. •
frequency of occurrence for these
concentrations under the other
conditions cited by NROC Is
substantially lower tiiaa fordownwaj
when stacks are lea* thaa CEP.
  CEP formula Stack Htught Some
eommeatera, '•"•'•""•g NROC stated
thet EPA cannot justify retention of (h>
traditional (2JH) aad refined (H+tsi.
CEP formulae based simply on their
relationship-to die eO-pereeat criterion
aad erased thet the formulae provide
too much credit in many or moat cases.
This, they argue, results in allowing
       to *™y** muusonabiy lenient
            i from Oarid C. HawkMn. N»OC tt
Willitm f. PtdMMn. |r Offtet of C^Mni Count*.
US»A. M«y 2S. IMS.
  •Mtfnonndvn frem Altn H. Hubor. ASM. to
David Stonifitld. OAQPS. (urn 21. ISIS.
emission limitat
  Other msseisntsts argued that
fnngfeen expUdtry raafflrmed the
traditional (rVP hjmraii, eiH thet EPA
sheeld allow maximum reliance <
(aad by tmpttcatfon. oa the i
{brands Ifaet wee subsequently derii
froait).
  Aspens*. The nee of EPA's refined
fufuule as a stalling potat for
determining CEP wee not called Into
question by any litigant • the 5/erro
Club case. The court's opinion likewise
does not question the use of the formul.
es e starting point A detailed discussic
of the court's treatment of die formula,
showtnf bow it endorsed the formula'*
presumptive validity, is contained in th
Reeponee to Comments document
  Despite this limited endorsement EP
might aeed to revisit the formula on its
own if its reereminenon of the
"excessive eoBttentraUeB" aad modelk
issues indicated that the formula deari
aad typically misstated the degree of
stack  height needed to evoid downwas
concentrations that cease baelth or

  However, no such result has emergec
from oer reexamiaatioa. Stacks beiow
formula height an assooated with
dowawaahorelated vjolattone of the air
quality standards themselves where
emissioa rates significantly exceed the
levels specified by NSPS. Even where
emissioas an low, downwash
conditions at stacks below fort
height caa be expected unlike odic  _
conditioea. to generate numerous short-
term peeiu of air pollution at high level:

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27896
Federal  Regular / Vol. 50. No.  130 / Monday. July 8. 1985  /  Rules and Regulations
thai raisa a real prospect of local health
or welfare impacts.
  As EPA stated in the proposal, it is
impossible to rely primarily on fluid
modeling to implement the stack height
regulations, particularly under the
timetable established by the court 49 FR
44883 (November 9.1984). No
commenter other than NRDC even
suggested a different formula that in
their eyes would be better, and NRDCs
suggestions were premised on their
"control first" position, which EPA has
found inconsistent with the statute and
has rejected EPA considers the  refined
formula to be the state-of-the-art for
determining necessary stack height
  Given the degree of presumptive
validity the formula already possesses
under the statute and the court opinion.
we believe that this record amply
supports its reafllrmatioa.
  Stadu Abon CEP Formula Height.
The EPA's 1978 stack height guidelines
[cite] imposed special conditions on
stacks above formula height—the
installation of control technology—that
were not imposed on lower stacks.
Similarly. EPA's 1973 proposal had
made credit above formula fctight
subject to a vaguely defined "detailed
investigation" (38 FR 25700). The
legislative history of the 1977 dean Air
Act Amendments cautioned that credit
for stacks above formula height  should
be granted only in rare cases, and the
Court o/Appeals adopted thia as one of
the keystones of its opinion. The court
also condoded that Congress
deliberately adopted vary strict
requirements for sources locating in
hilly terrain.
   For these reasons. EPA la requiring
sources seeking credit lor stacks above
formula height and credit for any stack
height justified by terrain effects to
show by field studies or fluid modeling
that this height is needed to avoid a 40»
          reese in concentrations due
 to downwesh and that such an increase
 would result in exceedance of air
 quality standards or applicable PSD
 increments. This will restrict stack
 height credit in this context to cases
 where the downwssh avoided la at
 levels specified by regulation or by act
 of Congress as  possessing health or
 welfare significance.
  To conduct a demonstration to show
 that an absolute sir quality
 concentration such ss NAAQS or PSD
 increment will be exceeded, it la
 necessary to specify en emission rate for
 the source in question.*The EPA
                          believes that in cases where greater
                          than formula height may be needed to
                          prevent excessive concentrations,
                          sources should first attempt to eliminate
                          such concentrations by reducing their
                          emissions. For this reason EPA is
                          requiring that the emission rate to be
                          met by a source seeking to conduct a
                          demonstration to justify stack height
                          credit above the formula be equivalent
                          to the emission rate prescribed by NSPS
                          spplicabie to the industrial source
                          category. In doing thia. EPA la making
                          the presumption that thia limit can be
                          met by all sources seeking to justify
                          stack heights above formula height
                          Sources may rebut thia presumption.
                          establishing an alternative emission
                          limitation, on a eaaa-by-caM  basis, by
                          demonstrating to the reviewing
                          authority that the NSPS emission
                          limitation may aot feasibly be mat given
                          the characteristics of the particular
                          source.' For example, it may be possible
                          for a source presently emitting SOt at a
                          rate of 14 lb./mmBTU to show that
                          meeting the NSPS rate of 14 Ib./mmBTU
                          would be prohibitive in that it would
                          require scrapping existing scrubber
                          equipment for the purpose of '"«^'"«g
                          higher efficiency scrubbers. Similarly, a
                          source may be able to show that due to
                          space constraints and plant
                          configuration, it is not possible to inatail
                          die necessary equipment to moat tba
                          NSPS emission rate. India event that a
                          source believes dut downwaaa* will
                          continue to result in excessive
                          coocentraoona woea toe source/
                          emission rate is consistent with NSPS
                          requirements, additional stack height
                          credit may be justified through fluid
                          modeling at that  emission rate.
                            A source, of course, always remains
                          free to accept the emission rate that ia
                          associated with a formula height stack
                          rather diaa relying on a demonstration
                          under the conditions described hate.
                          The third alternative mentioned ia the
                          propossl  using the actual emission
                          limit for the source—has been rejected
                          because, to tba extant mat limit relied
                          on greater than formula height it would
                          amount to using a tall stack to justify
                          itself.
                            The EPA's reliance on sxcsedancas.
                          rather than violations of die NAAQS
                          and PSD increments, is deliberate. Fluid
                          modeling demonstrations are extremely
                          complicated to design and carry out
                          even when the most simple
                          demonstration criteria—that ia. a
                          percentage increase in concentrations.
                                        emMd by downwufc it t
                                        rttw.
                                         •Th« EPA wtll raty CM IU BM< Avwlibto (Uonftf
                                        tad •ItMTUov*
                                                          Umit
with no consideration of absolute
values  are assumed. Adding
consideration of an absolute
concentration such ss a NAAQS or PSD
increment substantially complicates this
effort further and introduces the
scientific uncertainties associated with
predicting an exceedance of a 3-hour or
24-hour standard based on 1 hour or less
of modeling data. Using sn hour or less
of modeling values, based on one set of
meteorological data, to draw the
distinction between only one
exceedance of the standard during the
8760 hours in a year, and the two or
more that constitute a violation pushes
that uncertainty beyond reasonable
limits. EPA therefore does not find  the
additional difficulties that would be
created by requiring violations instead
of exceedances to be  warranted. That is
particularly so here, given that the
regulattona require sources seeking
credit above the formula to be well-
controlled aa a condition of obtaining
such credit
  Use of aa absolute concentration in
the teat of "excessive concentrations"
can lead to problems  of administering
the program, ia that it can have a
"zoning" effect Since a source can only
get stack height credit to the extent that
it ia aaadad to avoid a PSD increment or
NAAQS exceedance. an emissions
increase in the area of that source may
increase concentrations beyond the
eontroiong limit thereby making it
difficult for new sources to locate in the
area, or for sequential construction of
additional emitting units st the source in
question.
  Thia effect cannot be avoided under
any teat for "excessive concentrations'*
that ia tied to absolute concentrations.
Howevec. that effect will be mitigated
by die fact that the use of this approach
ia voluntary aad limited to sources
wishing to rely on fluid modeling to
justify stack height credit Moreover, the
effects of downwesh tend to occur  very
near the source, usually on fenced  .
company property. Since concentrations
measured at such locations are not used
to evaluate NAAQS attainment or PSD
increment consumption, new sources
wishing to locate in the area are less
likely to be affected.
  Sources planning sequential
construction of new emitting units st
one location or contemplating future
expansion can reduce the uncertainties
noted above by initially obtaining
permits for the total number of units
anticipated and by planning for
txpension in the calculation of
necessary physical stack hsight In the
latter instance, only the allowable  stick
height credit would be revised ss

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             Federal Register /  Vol. SO.  No. 130  /  Monday. July 8. 1985  / Rules and Regulations
                                                                      27899
expansion it carried out—not actual
stack height
  An additional theoretical
complication is presented when an
absolute concentration is wed where
meteorological conditions other than
downwash result in the highest
predicted ground-level concentrations in
the ambient air. In such cases, a source
that has established CEP at a particular
height assuming a given emission rate.
may predict a NAAQS violation at that
stack height  and emission rate under
some other condition. «.g~ atmospheric
stability Class 'A.' Reducing the
emission rate to eliminate the predicted
violation would result in stack height
credit greater than absolutely necessary
to avoid an excessive concentration
under downwash. However, reducing
stack height  places the source back in
jeopardy of a NAAQS violation under
the other meteorological condition, and
so on. "ratcheting" stack height credit
and emission rates lower and lower. The
EPA has eliminated this "ratcheting"
potential in the CEP guideline by
providing that once CEP is established
for a source, adjusting the emission rate
to avoid a violation under other
conditions does not require
recalculation of a new CEP stack height
  EPA is making this part of the
regulations retroactive to December 31
1970. In the terms of the court's
retroactivtty analysis, stacks greater
than formula height represent a situation
that Congress did affirmatively "Intend
to alter" in section 123. Moreover. EPA
regulatory pronouncements since 1970
have placed  a stricter burden on sources
raising stacks above formula height than
on others.
  No source is precluded from building
« stack height greater than formula
height if such height is believed to be
needed to avoid excessive downwash.
However,  the design and purpose of
section 123 prohibit SIP credit for that
effort unless a relatively rigorous
showing can be made.
  Given the  ability of sources to avoid
modeling and rely on validity of the CEP
formulae and requirement for farther
control of emissions in conjunction with
stack heights in excess of formulae
height the result predicted by UARG—
exceedances of the NAAQS or PSD
increments due to inadequate stack
height—is highly unlikely.
  The potential effect of changes in
background  air quality on suck height
credit is not  substantially different from
the effect that such changes in
background  can have on source
emission limitations in nonattainraeat
areas. In the first case, however, tources
may be sble to address these effects
through greater stack height if such
changes affect the concentrations under
downwash. Moreover, the possibility
that shifting background air quality can
yield different calculations of CEP is
significantly limited by the fact that
consideration of background in CEP
calculations is restricted to those cases
where credit for greater than formula
height is being sought or sources are
seeking to raise stacks to avoid
excessive concentrations.
  Ratting Stada Mow Formula Hftfht
to Formula Htight. In response to EPA's
proposal to allow automatic credit tot
CEP formula height several commentera
have argued mat EPA baa failed to
adequately respond to the coon's
directive to "reconsider whether, m light
of its new understanding of 'syceeaive
concentrations.' demonstrations are
necessary before stack heights may be
raised even if the final height will not
exceed formula height"
  tUipoiu*. Raiaing a stack below
formula he  M to formula height la not
in EPA's judgment subject to the same
statutory reservations aa building stacks
greater than formula height However.
as the court has cautioned, it may still
be necessary for these sources to show
that raising stacks is necessary to avoid
"excessive concentrations" that raise
health or. welfare concerns.
  For these reasons, sources wishing to
raise stacks subsequent to October 11
1961 the date of the aCOrcait
opinion, moat provide evidence that
additional height la necessary to avoid
downwesb-related concentrations
raisinf health and welfare concerns.
These rules allow sources to do this in
two ways.
  The first way is to rebut the
presumption thai the snort stack was
built high enough to avoid dewnwaah
problems: La, to show, by site-specific
information each aa monitoring data or
dtixaa complaints, that the abort stack
had in fact caused a local nuisance and
must be raised for this reason. The EPA
believes that both the historical
experience of the industry and the data
on short-term peaks discussed earlier
show that short stacks can .cause local
nuisances due to downwash. However.
where a source has  built a short stack
rather than one at formula height it has
creeted a presumption that this is not
the case. General data on short-term
peaks may not be strong enough to
support by themselves and in the
abstract a conclusion dtat the stack
must  be raised tcravoid local advene
effects. Instead that proposition most be
demonstrated for each particular source
involved.            .
  In the event that a source cannot
make such a showing, the second way to
justify raising a stack is to demonstrate
by fluid modeling or field study an
increese in concentrations due to
downwash that is at least 40-percent in
excess of concentrations in the absence
of each downwash and in excess of the
applicable NAAQS or PSD increments.
In nuking this demonstration, the
emission rate in existence before the
stack is raised must be used.
  Since raising stacks to formula height
is not subject to the same extraordinary
reservations expressed by Congress and
the court with respect to stacks being
raised above formula height EPA does
not believe that the use of presumptive
"well-controlled" emission rate is
appropriate here. As discussed in EPA's
response to NXZXTs "control first"
argument the basic purpose of section
123 waa n take sources aa it found them
and. based OB thoae circumstances, to
assure mat they did not avoid control
requirements through additional
dispersion. Use of a source's actual
•»
-------
27900       Federal Register / Vol  50. No. 130 / Monday. )uly 8. 1965 / Rules and Regulations
height T Though EPA'i 1976 guideline
can bt rttd as imposing • "control first"
requirtmtnt on some »uck htifht
increases. its general thrust gave
automatic credit for all ttacka that met
the "ZJ" times formula.' Automatic
perminioa was similarly set forth in the
1979 proposal, in the 1981 reproposaL
and in the 1982 final rule. Only a notice
published in 1980, but later withdrawn.
departs from this trend, requiring the use
of field studies or fluid modeling
demonstrations to justify stack height
increase* op to CEP formula height*
Even then, the notice would have made
this policy prospective ia its application.
   2. Sources that raised stacks ia
reliance on this past EPA guidance
assuming the availability of (tispersifm
credit cannot be distinguished from the
sources, in the erampk approved by the
court, that built stacks to the traditional
formula in an identical expectation of
dispersion credit
   3. It cannot be said that the raising of
•tacks to formula height is a practice
that Congress "affirmatively sought to
end." It ia not mentioned in the text of
the statute or its legislative history.
Further, as the court has already noted.
the statute attributes a degree of
presumptive validity to the formula on
wnicB sourcee that raise their stoCBe
will have ratted.
   Dnentioit to Aaovif* FttM ModfUng.
Several oosasseotan argued thai BPA'a
proposal to allow agencies to require the
use of fluid modeling was unnecessary.
since EPA had already dotanenlsd the
validity of the GBP formula*:
0MSBftftt^feSBBBMI^M  frthA^^ flMMBBieBBh^MSlA^^aa* M^^BMA
r uRMnBOf^  UMOT GDQaMnmV VfQaV
that this allowance wouid make floid
modeling the rule, rather than thai
exception. TDia would result the
rnntmenters state, becauae it waa their
expectation that agendas or
environmental groups would nearly
always call for fluid modeling
demonstrations during the permit
application and review prnraas
   Other commenters stated that
providing the discretion to require fluid
modeling was appropriate, since EPA
had failed to demonstrate that the CEP
formulae represented the
 height necessary to avoid excessive
 concenttationa.                   -
   AMPOAM. The Court of Appeals
 directed EPA to reexamine whether its
 rules should allow States, as a matter of
 discretion, to require even sources that
  ' Th* <••
 tmmwnin pnote* t* MCMnfrt by IPA • •*<*•»
 10 ivttd local MIMBCM.- (3* F* ttTOBl
  •«i n. 74ii (Fcbrauy IS.lank " -rltfcii
 Sccwni at. citn can
  • U ra
planned to rely on the formula to show
instead by fluid modeling that a stack
this high waa required to avoid dangers
to health and welfare caused by
downwash. The court suggested that
EPA should include such a provision
unless it could find that the formula was
so accurate, or tended so much to err on
the low side, aa to make discretionary
authority to adjust formula height
downward unnecessary.
  The EPA believes that the court waa
mistaken in its conclusion that a stack
at formula height ia likely to generate
downwash concentrations aa great aa 40
percent only ia uncommon situations. In
fact EPA's observations indicate that
when stacks are built to GBP formula)
height aa increase in coocaatnttoaa
due to downwaah can still be expected
to occur that ia between 20 and go
percent greater than the concen&atioo,
that would occur in the absence of
building irn"-"'tt M
  Nevertheless, in response to the
court's remand. EPA ia including ia this
final rule a provision for the authority
administering these rules to require field
studiea or fluid n««*uHi«f
demonstrations, even for stacka built to
formula height ia caaes whan it
believea that the formula may
significantly overstate the appropriate
suck height credit"
  While EPA believea the formula to a
reasonable rule of thumb frr***"***? ths>
stack height seeded to avead
probability of a staadarda vtoktton and
a significantly greater probability of •
locali              •
given ca*» may very
on specific drcnmatancea. The BPA baa
withia the hatts of rratiabto d«t« by
identifying two particular simafloa* ia
which it believea that the formulae BBS*
not be ranabia mdfcetora el GU>.
are earadyuamically
which the formulas are
                            maathe
                               Ifctoto
                                       However. EPA acknowledges that other
                                       situations, of which the Agency is not
                                       presently aware, may arise wherein the
                                       formulae may not be adequate.
                                         The EPA intends to "grandfather" any
                                       source that railed on the formula in
                                       building its stack before the date of
                                       EPA's 1979 proposal from the effect of
                                       this discretionary reexamination
                                       requirement
                                         Only in mat proposal did EPA first
                                       suggest that such a discretionary
                                       reexamination provision might be
                                       included in the final rule. The
                                       retroactivity analysts set out earlier
                                       therefore supports exempting stacka
                                       built in reliance on EPA guidance before
                                       that data, from discretionary
                                       reexamination. Indeed, a failure to
                                       "grandfather" these sources would leed
                                       to the paradoxical result that a source
                                       rfmt >»«/4 built a GEP stack *irH" the
                                       traditional BPA formula would have its
                                       direct reliance intaneu protected by the
                                       "grandfather" provision previously
                                       upheld by the court but could then lose
                                       that "graadfethered" credit through e
                                       caoa*epeoBc daawnatration nquereinent
                                       showing that the traditional formula waa
                                       somewhat inaccurate—
-------
             Ftderal Register / Vol. SO. No.  130 / Monday. July 8. 1983 / Rults and Reactions        27901
  If such sources had to show that use
of a formula height stack was needed to
avoid exceedances of the NAAQS or
PSD increments, that might prove
difficult for many of them. The
likelihood of such exceedances tends to
decrease as the emission rate for the
source decreases. By the same token.
the incremental emission reductions
available from the sources chat are at
issue here tend to be small and among
the most expensive available. In terms
of emission reductions, little is at stake
where these sources are concerned.
  Accordingly, the rules will require
such sources, if a reviewing authority
calls for a demonstration, to the rules
show that the use of a formula stack
height is needed to avoid a 40-percent
increase in concentrations due to
downwash. This will provide a rough
check on whether the formula, as
applied in the particular case at issue.
produces the result it -was designed to
produce.
  The EPA is not providing here for
sources to justify their formula height
stacks by arguiag that the height in
excess of that needed to avoid NAAQS
violations is needed to avoid a local
nuisance. The discretionary modeling
requirement is designed for application
to stacks before they were built Beyond
that there is no way to determine based
on th»aow/ie* of a local nuisance that a
formula height stack is not too tall in
the way that the presence of a nuisance
shows that a stack under formula height
in fact is too short Accordingly, there
will be no way. as there was with short
sucks being raised, to determine from
actual experience whether a local
nuisance would occur at a shorter stack
height Though avoiding local nuisance
is • legitimate purpose for which stacks
are built it would be very difficult to
show by modeling what stack height
was needed to avoid it
  Some commenters have
misunderstood EPA's allowance of
discretion to require fluid modeling as
requiring such modeling whenever any
individual or entity called forsuch a
demonstration. This discretion, reets
explicitly  with the reviewing agencies
who have always had the prerogative to
require  more stringent analyses  in thr
SIP process.-and no obligation is implied
for these agencies to require fluid
modeling simply because it has been
called for by some individual during the
permit review process. It is EPA's
expectation that technical decisions to
require such additional demonstrations
wouid be  based on sound rationale and
valid data to show why the formulae
may not be adequate in a given
situation. In any case, given the burden
of reviewing a fluid modeling
demonstration, an agency is not likely to
exercise this option absent sufficient
justification. Consequently, EPA
disagrees with thecommtnten'
contention that fluid modeling will
supplant the use of the CEP formulae.
except in what EPA believes will be
unusual instances.
  Rtlianet on the 2.SH Formula, In
limiting the applicability of the 2JH
formula to those cases where the
formula was actually relied upon, the
November 9 proposal defined such
reliance in terms of stack design. A
number of comments indicated that
actual stack design and construction
may ultimately be control not by the
ZJH engineering rule, bat by .
construction materials specifications
Consequently, while 2JH rule may have
provided an initial starting point in
stack design, the rule may not have
dictated final stack height In other
cases, it was argued that a number of
source owners may have constructed
their stacks in excess of whatwas
determined to be tntnitntmi CEP for
precautionary reasons, for process
requirements, or in anticipation of
additional growth in the area
surrounding the facility, even though
emission limitations for these soureee
would have bean limited than, aa now.
to formula height Consequently, it was
argued that EPA should allow sources to
demonstrate reliance on the formula in
yl^ Tfjffniation of emission limits aa wall
as in the design of the stack.
  In response to EPA's request for
comments on what evidence should be
considered acceptable in determining
reliance on die 2JH formula, some
commentefs urged EPA to consider
reconstructed evidence, e.g, affidavits
from design enmneers or copies of
correspondence indicating past reliance
on EPA guidance. Other <
stated that "reliance" should be vary
strictly construed, that EPA should be
circumspect in its review of reliance
demonstrations, and that only
contemporaneous documentary
evidence, such as blueprints and facility
design plans, be accepted as  evidence,
  Rttpoiuf. The EPA is in general
agreement with the view that reliance
should be considered in relation to the
emission limitation for the source, not
the design. Since section 123 specifically
prohibits EPA from regulating actual
stack heights and rather regulates stack
height credits used in setting emission
limitations, it would be illogical to
require that sources demonstrate
reliance on the 2JH formula  for actual
stack design. Moreover, such an
approach would contradict principles of
sound planning, in that it would penalizj
toosa sources chat have built taller
stacks in anticipation of facility
expansion or other growth in the area
that could influence CEP
determinations.
  If a stack has; been built taller than
iSH formula provides, while the
emission limitation has been calculated
assuming iSH credit a convincing
demonstration has bean made that the
source properly relied on the formula.
Conversely, if the emission limitation for
the source is based on some other stack
height credit such as 2JK. 3JH or some
other number, it would be difficult to
show that the CEP formula had in fact
been relied oo.
  In some cases the emission limit
information may be unavailable or
inconclusive. In such cases. EPA will
allow reliance on reconstructed
evidence of construction intent
  In comments submitted during the
public rnmment period and in response
to questions raised by EPA at the public
hearing held on January 8.1988. industry
representatives repeatedly stated that
con tern poraneoufl evidence of reliance
on die 1SH formula, such as facility
design plans, da tad engineering
calculations, or decision records are
rarely, if ever, retained for more than a
few years after construction of the
facility is completed Consequently, they
argued that most cases of legitimate
reliance would be denied If
contemporaneous evidence ware
required in order to retain for the 13H
formula.
  The EPA agrees. Additionally, credit
afforded by the 2JH formula in excess
of that resulting from the use of die
H+UL derivative is likely to be small
except whan the building on which
stack height credit is based is
niffttatiH  y ****** HI«« it ig wide.
Finally, tt is EPA's view that the court
did not intend that sources be subject to
a rigorous or overly stringent of reliance.
but only that they be accorded a
reasonable opportunity to show reliance
on  the 24H formula. For these reasons.
EPA win allow the submission of
reconstructed. Ls, noncontemporaneous
documentary evidence to demonstrate
reliance on the 2JH formula.
  Definition of "Nterbr" Comments
were submitted by LTARG and others.
arguing that effectively, no limitation
should be placed on the consideration of
terrain-induced downwash.
Alternatively, some of these
commenters argued that the court
decision requires that a limitation be
adopted that does mat apply any
distance restriction of H mile in
modeling terrain afflicts such as is

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             Federal  R»gat»jr / Vol. sg No. 130 / Monday.  July 8. 1065  /  Rain and Regulations
ipplied to •tnctum ia the UM of CEP
formulae, but nthet «Uowt
considsration of iQ terrain that results
in tht Mm* downwaah ffftct u those
•troctures within Vfc mile of tht stack.
  Other commenten have argued that
tht court decision and legislative history
preclude EPA from allowing
consideration of any terrain beyond a
distance of H milt, regardlnt of when
it begins.
  Response. For tht reasons
summarized below. EPA does not accept
either the Interpretation that the cowl
decision authorizee ci*A to adopt a
definition baeed solely on effect or that
it limits consideration txefosrvery to
terrain reatwes faJlinf entirely within H
mile,
  When Congests rflscissed tba
allowance of credit for stack height ta
address downwaah, It staled that the)
term -nearby"  was to be "strictly
construed," noting that if the tern
to be mtarpnted "to apply to m
for dttenninini CEP. Aocordinfly. EPA
will nquin that terrain features reach a
height at tha V% mile dit^itft limit of
either 28 metan (La. 65 oaten divided
by IS) at 40 percent of tha stack height
determined by tha CEP formulae applied
to nearby buildings.
  Tmtmtnt o/A/ew w*u* Editing
Sources Undtt tht Definition of
•WeoToy". In the proposal EPA
requested comment on whether new
sources should be treated differently
from existing sources and presented two
options for addressing them.
  Few comments were received on
these options. Several questioned the
logic of distinguishing between new and
existing sources m the regulations. One
K
rasshi
          argued that new
          old both
                                                         DO soofect to tn*
structures or terram/boftifw % to H
mile away from die sources or more, the
result could be an open invitation to
raise stack heights to unreasonably high
elevations and to defeat the basis
underlying coomittee intent" "
  In its opinion, tbcoMft held Ant EPA
could not ghr* anumitea credit whan
modeling terrain features because that
would conflict with the Cmigneaional
intention tn impoee artificial Umita on
that credit The coot waa not preeenled
with, snd did not sddrees. tfae queetios)
of what to do about terrain feai
"beajan" witkte Vfc mil* sad
outside it The approach adopted by
EPA carried out ttta congressional
purpose to impose. SB artificial ****** bet
at the same time reflects da real facts
men closely than u absolute tt mil*
limitation.
strict
option ror new sources only* Tni* haa
already been discussed under EPA's
response to comments on the general
definition of "nearby" and ia not
addressed further here*
  AeaPOM* New sources are initially
subject to more stringent coutrui
requirements than many existing
sources. Consequently, it ia lees likely
that the emission limitations and stack
height credits for these sources will be
affected by terrain features,
Furthermore, EPA believes Out tbe
effect of applying a sore restrictive/
disnueeUmttatioawillbamAgnifkant
and will molt only m minor changes in
sitt
                                       the definition of -nearby.
                                         EPA ks giving
  Unlike man-made stnctona,'
fsaturaa do not have readily definable
dimensions other than height. For tola
reason. EPA has defined "nearby" as
generally allowing inrhurton of
consideration of terrain features that fafl
within a distanca of ft mile of the stack.
EPA's definition win peart
consideration of such terrain that
extends beyond the K mile Omit if the
terrain begins within * mile, allowing
that portion within  10 timea the   -
mammum height of the feature, not to
•xceed 2 miles, si described In the
proposal.
  To define when a terrain featnn
"begins" within * mile. EPA has related
terrain height at the H mile distance to
the maTimiftfl itack height that could be
justifisd under the other two methods
"nearby" retroactive sppUoatioa to
December 31. 1VU The court's <
makea clear its cottdneion that GaBSfoa
affirmatively focused on this issue aad
decided thaa making application aa ol
the enactment data proper.
  Otfittitjaa efQtlMt Duftniaa
rscAn/fiiaa. The EPA received many
comments mi *^^ piw^p t&MBt of tbe
definition of "dispersion terhiriquaa."
and perhaps more ojfthe apprapfUta
bounds of ^^ o^ftfasiftn
  "HJL
            No. a* SMS CM*, in:
commcntars generally argued that EPA
had improperly proposed to deny
consideration for plume-enhancement
effects that are " coincidental" wrd»
techniques and practices routinely
carried out for sound •"g'"a«»<"g and
economic reasons. They signed that
EPA should prohibit credit only whan a
technique or practice was decisively
motivated by a desire for dispersion
credit Such en approach would create a
"but for* test using tha intent of the
•ource owner or operator u the basis
for EPA's dscuiona.
  Other eommanten argued that EPA
must as* a teat based purely on fffacu.
prohibiting credit whan a technique or
practice baa tbe effect of enhsncing
dispersion, regardless of any other
justification.
  AeejMiraw. In the final regulation. EPA
has njactad the polar poaitiona
discussed above. Th* argument thai
dispersion ffftett an forbidden
regardless of motive is discussed and
rejected aa a part of tbe general
response to the argument that only
"well-controlled" sources can receive
any dispersion credit
  Conversely, a pun "but for" test runs
die risk of creating exclusions that
effectively swallow tha rule itself. Tha
EPA judge* that few. if any.
circumstances an likely to arise in
which some other benefit or justification
cannot be asserted a* the basis for s
practice, and thenfdn for such an
                                                                               When prospective evaluation of
                                                                             merged gaa stnama. or combined
                                                                             stacks, ia concerned, than is no reason
                                                                             to assume the serious administrative
                                                                             burdens iin^t^i* hin t such **!•'*»• night
                                                                             entail Tha court directed EPA to apply
                                                                             an tot«fft test "at a «"*•'"»"'•' " «t»< i«ft n
                                                                             free In take an approach that may be
                                                                             less generous toward credit for
                                                                                           s st"«* sources in tht
                                                                             futun wul be able to plan against tht
                                                                             background of rules that define
                                                                             pataiaaiU* credits pncisely. little
                                                                             unfslrneei neulta from a restrictive
                                    VVbaanttoepactive application is
                                  co9jQBB*B\ however, the ntroactivity
                                  analysis speflad out by tha court directs
                                  that a&itttant*baaad teat be tmploytd as
                                  described later.   '
                                    AcBOfdineiyt after considering the
                                  record on those matters. EPA haa
                                  deteoamed to take a "middle-ground"
                                  approach to this question. Tha final
                                  regulation retains the same broad
                                  prohibition found in the proposal on
                                  increasing exhaust gaa plume rise by
                                  manipulation of parameters, or the
                                  combining of exhaust gases from several
                                  •^riattiM stacks into ""^  stack, with
                                  seven! clssses of exclusions. These
                                  evrlusiona recognise tha existence of
                                  independent justifications based on
                                  •"e*"«"<''g and/or economic factors.

                                    (1) Demonstration of original facility
                                  design and construction with merged

                                    (2) Demonstntion that merging after
                                  July a. 1988 la part of a change in
                                  operation that includes  the installation
                                  of pollution controls and results in s net
                                  reduction m allowable emissions of tht
                                  pollutant Car which credit is sought: or

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Federal Ra-gialar / Vol 50.  No. 130  / Monday. July a. 1885  /  RuJea Md Regulation.
  (3) Demonstration thst merging befora
July 8. 19U was part of a change ia
operation that included the iaatailatioa
of control equipment or was carried oat
for sound economic or engineenng
reasons. Aa allowable caussions
iacnaae creates the presumption that
the merging was not carried out for
found economic or engineering
reasons.1*
Of these exclusions, the first is identical
to the proposal, aad the second aad
third an modification* of the second
exclusion included ia the proposal with
a refinement based on prospective/
retroactive application.
  The first exclusion was retained for
the reasons stated in the propoaal After
reviewing the «•"•""•"*• submitted EPA
determined that it* previona
conclusion—that standard practice la
designing aad constntctiag fadlitiea
routinely fr*fl'i/iaf venting emissions
from several units iato a common or
multijQued stack—ia cornet Sound

baaed on costs of constructing aad
maintaining separate stack*, availability
of land aad coat savings for pofluoon
control equipment support facility
design sad construction conaidatattena.
Even if air pollution requirements did
not exist at aH sources would have
incentives to nee aa taw stacks aa
poaeibla.
  Since iaenouag phone rise, rather
than phone rise itaatt ia a "dispersion
technique" aad original design aad
construction «<**•* the <•<**•! ba>tt t*vh
original design aad eoaatraeflon of
merged gas streams is aot considered a
dispersion technique. Moreover, ia
designing the facility, a source can
usually choose to build one larger unit
rather thaa several smaller unit*,
loerefore, prohibiting credit for origiaal
design generally only effect the design
of units aad aot the phone rise.
  Objections have been raised to
applying this logic to source* which an
constructed over a period of time, but
use a single stack. However, the same
factual arguments just listed would
apply ia the same, if the oriffnaJ design
included provision for the additional
units ia the plans for tha faaHty. sad m
the design and construction of the stack.
In such a case, the later units merged  .
into the stack would be included within
the exclusion.
  In addition, it would be logically very
difficult to apply a rale denying eredif to
original design stack*. EPA or the State
would have to assume how many stack*
                          would have beea built absent a desire
                          for dispersioa credit where they would
                          have beta located, aad bow high they
                          would have been. Siace these
                          hypothetical there would be	
                          way of answering theae Questions; the
                          answer would simply have to be
                          selected arbitrarily froa the) wide raage
                          of possible aaewera. This problem ia
                          abseat when existing stacks have beea
                          combined.
                           Ia coatraat EPA fiads rhangea froa
                          the onghttl design of a facility n order
                          to include merged atacks to nqojra a
                          narrower judgment The EPA condsjdod
                          that where pioepecliva application ie
                          concerned. *JT axclaaioa thtmld be
                          available only to aoenea that coaabte*
                          stacks radacea allowable rrfffmr el
                          tha polhitaat tat which the credit i*
                          greeted Then an obvioea <
                          advaatagaa • coaabiiaag stacfe
reduce die number of <
unit* that most be pureaaaad m
addition, the iastailatioa of paUuaoa

provides substantial assurance that the,
purpose of the combination ia aot to
receive a aura lenient —r-1+m hatit
  However, given past EPA g"**4"*"- on
merging of stack*. EPA ha* "TfrriM
that retroactive application of ttta tear
would aot be proper. The EPA frHrr
^f^^jyn^Btf uniformly took the view that
merging of separate stacka into a single
stack "I* generally not conaidend a
dispersion technique" abeani other
factors each aa excessive aae of fan* or
other device*. "Ea«a document
provided gddaace to a source of a
Regional Offlca regerdiag the proper
treatment ofi

                                      iluiMl Hlml
                                          » Umitadoaa.
                          Considering these statements, EPA nuet
                          conaidar tha standards expreeeed by the
                          court aa previously discussed la this
                          notice, m jvigtnf the piupriety of a
                          differing standard for retroactive .
                          appUcaioo. Given the nature aad
                          •ppttcaoona of the guidance which it
                          issued m the peat EPA judges the first
                          two criteria— that ia, whether the new
                          rule represents aa abrupt departure from
                          weH-estabhahed practice, aad whether
                          the parties against whom the new rale ia
                          applied rebed on the former rule— to be
                          satisfied, to addition, applying die
                          prospective criteria to past practice
                          would require significant changes ia fuel
                          and/or coatrai equipment for parties
                          whose emission limits wen baaed oa
previous guidance. Finally, aad
particularly where so
                                             urces have not
                                       beeaallewed to increase their previoi
                                       emissions as a result of the combuun;
                                       stacks. EPA does aot judge the statute  ,
                                       interest to be overriding ia this Instance
                                       siace the rale even ia its retrospective
                                       version only nxempts sources mat can
                                       show a reasonable non-dispersion
                                       cnhaacemeat ground for combining
                                       stacks, and thereby implements the
                                       "Intent" test suggested by the court. On
                                       the other hand. EPA has never suggested
                                       that combined stacks that cannot meet
                                       such a teat art proper. Sources whose
                                       actual eauaeiaaa an increased, or
                                       whose endaaiOB limitations an nlaxed
                                       ia connacfloB with the CTfnfrfrfr'g of
                                       stacks create a strong presumption that
                                       the QOBsMuooB waa caiiieU out la
                                       ordarm avoid me installation of
                                       ooBtroia, Seen isombmstions would
                                       iadeed m counter to the statutory
                                       pejrpoee. ana retrospective application
                                       of a taet that forbid* them is meref ore
                                                                      rtptiott* fnm tht Definition of
                                                                DiMpunoa Ttehniquft. The EPA
                                                                                        its in
                                                                        i ID its request for input on whet
                                                                eaaatdaraooa. a" any, should be given to
                                                                excmdmy aonrow from the definition of
                                                                        t arv Below a specifled level or
                                                                               i lees thaa the dt
                                                                       i height These commenten'
                                                                ergBod mat combining gas* streams in
                                                                particular ones had aa economic
                                                                jifttlrlt tftttti independent of it* effect*
                                                                               rfOerennebouidaot
                                                                be generally fororadeB> Otaar coauacnts
                                                                stated met m i
                                               . VA should consider me
                                              i fatal atnoephertc loadings.
                                                      i maitarJOB on the
                                      Bomber of amarcw affected by the
                                      ttmft*ttiga at "dispersion techniques'*
                                      neceaaary mr EPA to carry out the stack
                                      height program. Than an currently
                                      estimated to be over OJOO sources of
                                      SCb m the United States with actual
                                      emfesiOB* exceeding 100 tons per year. It
                                      would not be possible for EPA or States
                                      to review the endsakm Omits of even a
                                      significant fraction of this Bomber
                                      within a reasonable time period
                                      Twenty-two thousand of these sources
                                       have trnfrtHmt let* thaa &000 ton* per
                                       year and contrtbutt a total of less than
                                       13 percent of me total aasual SOi
                                       eatieeioB." Par than naaoa. aad for
                                       reason* of sdmteistretlve oeceaaify
                                       dieeuaaed earlier. EPA i* adoptnnj aa
                                       exemption from prohibtttoBa on
                                       manipojattef prom* rise for facilities
                                       with allowable SO» emissions below
                                                                             ftwi IX« Cia*^. OAQ«
                                                                             -9BwBfle«M« rf SOi

-------
2790*       Federal  Regiatar  / Vol SO. No. 130 / Monday. July a.  1965 / Rules acd Rggulatioua
5.000 toot per year. The EPA believes
the effect of this exemption on toUl SOi
emissions to be ofe minima in aaturt.
Evtn if these source* were able to
increase their emission rates u the
result of an exemption from the
definition of dispersion techniques, their
combined effect would not be
significant Indeed, because these
sources are exempt on the basis of their
annual emissions, there exists an upper
limit to the extent to which they may
obtain relaxed emission limitations. La,
to ""'it^'i an.exemption, the annual
emissions of a scarce may never exceed
5400 tone per year. For these reasons.
the 5,000 ton limit passes »d»aiauau
teat even more clearly than the oS-metar
limit included without challenge in the)
prior version of this rule. Moreover, EPA
believes that a large majority of theee
sources would not be inclined to sack
less stringent emissioo limitations, ia
part because a substantial portion of
them an baited by State and local fuel
  ThtEPA beUevee at this time that a
d&ssiBUR/f sate i^'tniptfoH ia justified
only for sources of SOi and that me
number of snail sources for which.
astiasiOB limitations for other pollutants
are a significant concern would not
rapport a similar exemption, The EPA
will continue to review the need far each
namntlfiis and. if deemed appropriate,
will propose thea for review and
comment at a ntertdate.
  Hum* lafoetioa. Tie EPA received »
number of comments rtiiwil'"i thr*
credit tat plume impacOoa b* retained
on the grounds that eihnmating sack
endit would haw seven impact* OB
              .Scvenli
           I for overcoming pfaa*
impactton effects in """*•""! to
determine emission limitations baaed OB
CEP stack height Generally. I
approaches focused on modifying th*
•tack-terrain relationship rspisseiiieil hi
the models. Several commentan i
along thea* Unas that the court
recognized and approvaaVof EflA'a
attempt to avoid the dsjcts-of phaa*
impacaoa. but only 
-------
             Fadaral Ragiatar / Vol SO. No.  130 / Monday. July a. 1965 / Rule* and Regulation*
through tht OM of "grandfathered" stack
height*.
  Soorets undertaking major
modification, or reconstruction became
subjaet to additional control
requirement* undar tht Qau Air Act
and an traatad a* "new source*" for tha
purpoaa of naw sourca raviaw  aod PSD
requireme-.ts. EPA finds it appropriate
that CEP requirement* should  be
invoked at the time that other
requirements for new. modified, or
reconstructed sourca* become
applicable.

Summery of Modification* to EPA'»
PfopoioJ Atsulting front Public
  Baaed on comments received during
tha public comment period, EPA haa
made a number of raviaion* to ita
proposed regulation in addition to thoa*
discussed above. The** revisions an
summarized below.
  Stetioa 3l.l(hh)(2)(9)(ii) of tha
regulation ha* bean clarified to nqmn
sources merging gaa stream* after July ft.
1989 to achieve a net reduction In
allowable emissions. This change waa
mad* to make it dear that the effect* of*
merging should not be aaad aa a way of
achieving compliance with present
emiaeion Umite and to avoid peoali&nei
source* who an presently emitting at
less than allowable laves*.
  Sect/on SLXMWXBXui) allow*
credit for a source that merged gaa
streams in a change of operation at the
facility prior to |uly a 1988 that included
the installation of control equipment or
had other *^ift^ ^^gfy't'^ng or
economic reason*. Any increase in tha
emission limitation, or in the pieitoue
actual emissions when no T**!f"ff"
limitation existed created a presumption
that those sound reasons wan not
present
  Section Sl.l(hh)(2l(E) ha* been added
to exclude from the definition of
prohibited "dispersion techniquea" tha
use of techniques affecting final fhMH
gas plume rue where the raanlfing total
allowable emissions of SO* from the
facility do not exceed 5.000 ton* par
year.
  Section 51.1(ii)(l) ha* been revised to
specify that the 65 meter de minimi*
height is to be measured, as in other
determinations of CEP stack height
from the ground-level elevation at tha
base of the stack. This doe* not
represent a substantive change in the
rule or in its application relative to pact
practice*, but rather a simple
clarification.
  Section St.l(ii)(2) has bean revised to
require that sourca owners demonstrate
that tha 2JH formula was relied on in
establishing tha emission limitation.
  Stetion 3Ll(ii)(3) haa bean revised aa
discussed elsewhere in this notice to
specify that an amiaaion rate equivalent
toNSPSorastbametbefonasourc*
may conduct fluid modeling to hwtify
•tack height credit in excess of that
permitted by tha CEP formula*.
  Stctioa SLXjj) now defines "nearby"
for purpoaa* of conducting field audio*
or fluid modeling *iiTin rnsfn tiffn* aa 01
km (H mile), but allows limited
conaideration of terrain factor**
extending beyond that diatanc* if Men
feature* "begm" within OJ km, aa
defined in tha regulation.
  Station SLlfkMj haw bean nviaad IB  •
provide) *apant* dlaeuaaiona of
"excessive conoantrationa  lor tha
separata situation* diaeueaad earlier m
thi* preamble. Aa that dbcwaion make*
dear. EPA Selieve* that tha differing
calagoriei  f sources subfect to thi* rale
are beat addressed by requirement* that
vary eomawhat with thoa*
        mit^f TTii* definition tirHHtfT
                                       that approach.
                                         Stetim 31.12(k) haa been corrected to
                                       provide that tha provtaion* of 1 5L12Q)
                                       shaU not apply to ttodc fafefto to
                                       existence before December n. UTtt Tha
                                       propoaal had incorrectly stated that   .
                                       -. . . 1 5LU shall not apply to atoeto
                                         Thi* refutation doaa not UaH ma
                                       phyataal stack height of any
                                       tha actual aee
                                       at a source, nor doaa it nquin any
                                       specific stack height for any scarce.
                                       Instead. it sets limit* on tha laanrtmaai
                                       credit for stack height and othar
                                       dispersion technique* to ha uaad in

                                       setting en emission limitation and
                                       calculating tha air quality impact of a
                                       sourca. Sources an modeled at their
                                       actual physical stack height unlaaa that
                                       height exceed* their CEP stack haigfat
                                       Tha regulation applie* to all stacks in
                                       existence and all dispersion techniquea
                                       implemented since December n. 1970.
                                       Stale
                    Plaa
                                         Pursuant to section 406(dX2) of the
                                       dean Air Act Amendments of 1977,
                                       EPA i* requiring that all State* (1)
                                       review and revise, a* necessary, their
                                       Sip's to Include provisions that limit
                                       stack height credits and dispersion
                                       techniques in accordance with thi*
                                       regulation and (2) review all existing
                                       emission limitations to determine
                                       whether any of these limitations have
                                       been affected bv stack height credits
 above CEP or by any other dispersion
 technique*. For any limitations that
 have bean ao affected. State* must
 prepara revived limitation* consistent
 with their nviaad STF*. All SIP
 revision* and revised emission
•limitation* muat be submitted to EPA
 within 9 riff**1" of promulgation of this
 regulation.
  In it* propoaal EPA stated that it
would UM (ha proposed regulation to
govern stack height credits during the
period bate* promulgation of tha final
regulation, Tha EPA further stated that
any atnck height credit* that an granted
baaed on thi* interim guidance would be
subject to nview against tha final rules
and m*y need to be nviaad.
Conaaqvjeotiy. with theea final rale*.
EPA at requiring that any actions that
wan taken on atack height* and stack
height cndtta during tin* intern period
be reviewed and nviaad aa needed to
be cunaialaBl with dn* ngulation.
                                         Purmaat to A* provision* of 5 USX.
                                       a08(b). I hereby carttfy that tha attached
                                       role will not have ajanificant CCOOOSMC
                                       impact* on a aobatantial number of
                                       aaaaO antinaa. Tm* rale i* structured to
                                       appiy only to large soorcea: Law UOM
                                       with (taeka above M matan (2X3 feet).
                                       or with annual S0» emission* in excess
                                       of MOD ton*, aa further noted in the rule.
                                       Baaed OB aa analysts of impacts, electric
                                       utility plants and several smelters and
                                       pulp and paper mill* will be
                                       significantly affected by thi* regulation.
  Undar Executive Order 12291. EPA
mast Judge whether a regulation is
"major" and therefore subject to the
requirement of a regulatory impact
anaiyaia, EPA'* analysis of economic
impact* predict* a potential coat to
^»
-------
27906
F«dwaTR«fi*t*r/VoL SO. No. 130 / Monday. July 8. 1985 / Rules  and Regulation*
Thus, whan the regulation ii applied to
large sources. La~ those with flack
height greater than CEP tad emissions
greater than 5.000 tons per year, it will
have the potential for producing
emiuion reductions and increased
control costs.
  A preliminary evaluation of the
potential air quality impacts and a cost
analysts of the regulation was
performed at the time of proposal. The
impacts identified were established in
isolation of other regulatory
requirements. The report predicted a
range of impacts, from a "low impact"
scenario that presumed that many
potentially affected sources would be
able to justify their existing stack
heights, configurations, and emission
limitations to a "high impact" scenario
which MTiimtd that all of the potentially
affected sources would be required to
reduce than* emissions to some degree.
  In the development of its final
rulemaking action. EPA refined it»
evaluation of potential impacts.
producing revised estimates of the
probable coats of the changes to the
regulation and expected reductions in
SOt emissions. As a result of this
refinement EPA estimates that the rode
will yield reductions in SO* emissions  of
approximately 17 million tons per year.
The annualixed coat of achieving these
reductions will be apnntimataly $790
million, and the capital coat is expected
to be approximately S700 million.
  This regulation waa reviewed by the.
Office of Management and Budget and
their written fltfin Hunts and any
responses are contained in Docket A-
83-40.

Judicial Review

  The EPA believes that this rule is
based on determinations of nationwide
scope and effect Nothing in section 123
limits its applicability to a particular
locality. State, or region. Rather, section
123 applies to sources wherever located.
Under section 307(b)(l) of the dean Air
Act [42 U.S.C ro07(b)(l)l judicial
review of the actions taken by this
notice is available only by the filing'of a
petition for review in the United States
Court of Appeals for the District of
Columbia and within 00 days of the. data
of publication.

List of Subjects in 41CFR Part $1

  Air pollution control. Ozone. Sulfur
dioxide. Nitrogen dioxide. Lead.
Psrtcuiaia matter. Hydrocarbons.
Carbon monoxide.
                          Dated- June 27. 198*.
                          Adminutntor.

                          PAHT SI— mOUWCMENTS FOP)
                          PWfPAJUTJOM, ADOPTION, AND
                          SUMUTTAL OF IM*1£MCNTATION
                          PLANS

                            Part 51 of Chapter I Title 40 of the
                          Code of Federal Regulations is amended
                          as follows:
                            1. The authority citation for Part 51
                          continues to read as follows:    j
                            Artfcarily Sec. 110. *»(•>. sad 123. Oeaa
                          Air Act as sanded (42 UAC 7410, raoi(«j
                          •ad 7423).
                            2. Section SL1 is amended by revising
                          paragraphs (on). (ii). (JfJ. and (kk) aa
                          follows:
                          1 11.1
                            (hh)(l) "Dispersion technique'* means
                          any technique which attempts to affect
                          the concentration of a pollutant in the
                          ambient air by:
                            (i) Using that portion of a stack which
                          exceeds good engineering practice stack
                          height
                            (ii) Varying the rate of emission of a
                          pollutant according to atmospheric
tant or
            xt
                          that
                            (ill)
                          plume rise by manipulating
                          process parameters, exhaust gas
                                    , stack parameters, or
                          combining exhaust gases from several   •
                          existing stacks into one stack or othec
                          selective handling of exhaust gas
                          streams so ae to increeaa the exhaust  .
                          gee plnBM rise*
                            (2) The preceding sentence doee not
                          include:
                            (i) The repeating of a gas stream.
                          following use of a pollution control
                          system, for the purpoee of ratuminf the
                          gee to the temperature at which it waa
                          originally discharged from the facility
                          generating the gaa stream:
                            (ii) The merging of exhaustjaa
                          streams where:
                            (A) The source owner or operator.
                          demonstrates that the facility waa
                          originally designed and constructed with
                          such merged gaa streams;
                            (B) After July a. 1983. such merging is
                          part of a change in operation at the
                          facility that includes the installation of
                          pollution controls and is at
                          by a net reduction in the allowable
                          emissions of a pollutant. This exclusion
                          from the definition of "dispersion
                          techniques" shall apply only to the
                          •mission limitation for the pollutant
                          affected by such change in operation: or
                            (C) Before July 8. 1988. such mergisg
                          was part of a change in operation at the
facility that included the installation of
emissions control equipment or wtt
carried out for sound economic or
engineering reasons. Where there wn
an increase in the emission limitation or
in the event that no emission limitation
was in existence prior to the merging, in
increase in the quantity of pollutants
actually emitted prior to the merging, the
reviewing agency shall presume that
merging was significantly motivated by
an intent to gain emissions credit for
greater dispersion. Absent a
demonstration by the source owner or
operator that merging was not
significantly motivated by such intent
the reviewing agency thail deny credit
for the effects of such merging in
calculating the allowable emissions for
tKnl •VMMV^sB*
  (ill) Smoke management in
•griodtural or sUviculmnl prescribed
burning programs?
  (hr) Episodic restrictions on
residential woodbuming and open
burning} ee
  (v) Techniques under | 51.1(hh)(l)(iii)
which increase final exhaust gaa plum*
(toe where the resulting allowable
•mieaiona of sulfur dioxide from the
facility do not exceed 54300 tons per
year.
  (ii) "Good engineering practice" (CEP)
stack height means the greater oft
  (1) 88 meters, measured from the
ground-ievei elevation at the base of the
stack
  (#(i) For stacks in existence on
Janoaryrtt, 197B, and for which the
owner or operator had obtained ail
applicable permits or approvals required
under 40 CFR Parts 51 and 52.
H.-UK
provided thai owner or operator
produces evidence that this equation
waa actually relied on  in establishing sn
emiseioa limitation:
  (ii) For all other stacks.
H.-M+1A.       *
                         Mack height
                              H.-feod<
                                  •ievattea at the hue of KM itsck.
                              H-heiatt of MerBjr Mractmfa) awuurwi
                                  boat tbe gouad toval •Jevrton •( the
                                  b*» of the neck.
                              L-IMMT rttMieinn  oatffat or projected
                                  wtda, of neaifey Mractund)
                              provided that the EPA. State or local
                              control agency may require the use of a
                              field study or fluid modal to verify CEP
                              stack height for the source: or
                                 (3) The height demonstrated by a fluid
                              model or e field study approved by the
                              EPA State or local control agency, which
                              insure* that the MUMiooi from • stack
                              do not result in excessive

-------
             Federal Rapstar / Vol.  50. No. 130 /  Monday. July 8. 1985 / Rultt and Regulations
concentrations of any air pollutant as a
result of atmospheric downwash, wakes.
or eddy effects created by the source
itself, nearby structures or nearby
terrain features.
  01) "Nearby" as used in I Sl.l(ii) of
this part is defined for a specific
structure or terrain feature and
  (1) for purposes of applying the
formulae provided in I 51.1(ii)(2) means
that  distance up to five times the leaser
of the height or the width dimension of a
structure, but not greater than 04 km (H
mile), and
  (2) for conducting demonstrations
under | S1.1(U)(3) means not greater  *
than 04 km (tt mile), except that toe
portion of e terrain feature may be
considered to be nearby which fall*
within a distance of up to 10 times the
maximum height (HJ of the feature* not
to exceed 2 miles if such feature
achieve* a height (HJ 04 km from the
stack that is at leeet 40 percent of the
CEP stack height determined by the
formulae provided in 151.1(ii)(2MU) of
this part or 28 meters, whichever is
greater, aa measured from the ground*
level eievetion at the base of the stack.
The  height of the structure or terrain
feature is measured from the ground-
level elevation at the base of the stack.
  (kk) "Excessive concentration'' is* *
denned for the purpose of determining
good engineering practice stack height
under 13Ll(ii)(3) and i
  (1) for sources seeking credit for stack
height exceeding that established under
I 3Ll(ii)(2). a maximum ground-level
concentration doe to emissions from a
stack due in whole or part to downwaah,
wakes, and eddy effects produced by
nearby structures or nearby terrain
features which individually is at least 40
percent in excess of the •"•^'•"ip
concentration experienced in the
absence of such downwash. wakes, or
eddy effects and which contributes to a
total concentration due to emissions
from all sources that is greater than an
ambient air quality standard For
sources subject to the prevention of
significant deterioration program (40
CFR 51 J4 and Sia), an axceaaive
concentration alternatively means a
maximum ground-level concentration
due to emissions from a stack due in
whole or part to downwaah. wakes, or
eddy effects produced by nearby
structures or nearby terrain feature*
which individually is at leaat 40 percent
in excess of the maximum concentration
experienced in the absence of thai
maximum concentration experienced in
the absence of such downwaah, wakee,
or eddy affects and greater than •
prevention of significant deterioration
increment The allowable emisaion rate
to be used a making demonstrations
under mis part shall be prescribed by
the new source performance standard
that ia applicable to the source category
unless the owner or operator
demonstrates that ***** emisaion rate ia
infusible. Where such demonstrations
an approved by the authority
admin:  sring the State implementation
plan, an alternative emisaion rate shall
be established In consultation with me
source owner or operator.
  (2) for sources seeking credit after
October 1. 1983. for increases in existing
stack heights up to the beighta
established under i 3Ll(ilK2). either (I)

due in whole or part to downwaah,
wakee or eddy enacts aa provided ia
paragraph (kkMl) of this section, except
that the emiseioa rate specified by any
applicable State implementation plan
(or. in the abeeace of such a limit the
actual enttaaioB rate) shall be need, or
(ii) the actual presence of a local
nuisance caused by the existing stack.
aa determined by the authority
                 State implementation
plea; and
  (3) for sources seeking credit after
January 12. 1979 for a stack height
deteraunedunder | SLKUX2) where the
authority administering the State)
implementation plan require* the use of
a field study or fluid model to verify
CEP stack height for sourcee seeking
stack height credit after November 9.
1984 baaed on the aerodynamic
influence of cooling towers, and for
sources seeking stack height credit af
Decembers 1970 baaed on the
aerodynamic influence of structures not
adequately represented by die equation*
in | M.KUM2), a maximum ground-level
concentration due in whole or part to
downwash. wakee or eddy effects  that
ia at leaat 40 percent in excess of the
maximum concentration experienced in
the absence of such downwaah, wakes.
or eddy effects.
  X Section 3U la further amended by
removing paragraphs (11) and (mm).
I81.1t It
  4. Section 51.12 is amended by
removing paragraph (1)*
  5. Section 81.12TJJ is amended by
removing "and (IT from the first
  8, Section IH.12(k) ia revised as
fallow*
  (k) The prorviskms of 151.12(j) shaU
not apply la (1) stack heights in
exietence. or dispersion techniques
implemented on or before December 31,
1970. except when pollutants are being
emitted front such stacks or using sues
               k*ues by source*, ss
defined I
      I in section lll(aM3) of the Qesn
Air Act which were constructed or
reconatnctad or for which major
modifications, aa fietffleil in
II ItliaXDMM 5L24fb)(2Xi) "d
5T2KbX2Xl). »•*• carried out after
Deceeabern. 1970s or (2) coal-fired
steam electric generating units subject
to OS) previsions of Section 118 of the
dean Air Act. which commenced
operation before Jury 1.1997. and whose
stacks ware constructed under a
           i contract awarded before
February 8,1974.
Mt.1t
  7. Section 81,180) ia amended by
removing -and (1)" from the first

(P* Dee. eft-MOM Pued 7-4-e* eas «a|

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     WORKSHOP ON IMPLEMENTING THE STACK
             HEIGHT REGULATIONS
                  (REVISED)

           OCTOBER 29 TO 30,  1985
                     by

            PEI Associates, Inc.
      505 South Ouke Street, Suite 503
     Durham, North Carolina  27701-319£
    CONTROL PROGRAMS DEVELOPMENT DWISION
OFFICE OF AIR QUALITY PLANNING AND STANDARDS
    U.S. ENVIRONMENTAL PROTECTION AGENCY
RESEARCH TRIANGLE PARK, NORTH CAROLINA  27711
                October 1985

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-------
REFERENCES FOR SECTION 5.2

-------
                          EPA-450/4-80-023R
Guideline for Determination of Good
  Engineering Practice Stack Height
(Technical  Support Document for the
      Stack Height Regulations)

               (Revised)
          U S. ENVIRONMENTAL PROTECTION AGENCY
              Office of Air and Radiation
           Office of Air Quality Planning and Standards
             Research Triangle Park. NC 27711

                  June 1985

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REFERENCES FOR SECTION 5.4

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 X
                                 Attachment A
                   UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                   WASHINGTON, D.C 20460
                                 APR 22 S88
                                                                              or
                                                                              MAT
MEMORANDUM

SUBJECT:   Interim Policy on Stack Height Regulatory Actions

FROM:
             for Air and Radiation  (AflR-443)
TO:        Director,  Air Management Division
             Regions  I,  III,  IX
           Director,  Air and  Waste Management Division
             Region II
           Director,  Air, Pesticides, and Toxics Management Division
             Regions  IV, VI
           Director,  Air and  Radiation Division
             Region V
           Director,  Air and  Toxics Division
             Regions  VII, VIII,  X


     On January 22, 1988, the U.S. Court of Appeals for the District of
Columbia issued its.decision  in  NRDC v. Thomas. 838 F. 2d 1224 (D.C. C1r.
1988), regarding the  Environmental Protection Agency's (EPA's) stack height
regulations published on July 8, 1985 (50 FR 27892).  Subsequent petitions
for rehearing were denied. Although the court upheld most provisions of the
rules, three portions were remanded to EPA for review:

     1. Grandfathering  pre-October 11, 1983 w1thin-formula stack height
increases from demonstration  requirements [40 CFR 51.100(kk)(2)j;

     2..Dispersion credit for sources originally designed and constructed
with merged or multiflue stacks  [40 CFR 5l.lOO(hh)(2)(11)(A)]; and

     3. Grandfathering  of pre-1979 use of the refined H + 1.5L formula
[40 CFR 51.100(11)(2)J.

     A number of pending State implementation plan (SIP) and other rulemaking
actions may be affected  by this  decision in advance of EPA's promulgation of
further revisions of  the stack height regulations.  This Includes not only
rulemaking packages developed to respond to the 1985 stack height regulations,
but also such actions as Issuance of new source review (NSR) and prevention
of significant deterioration  (PSD) permits, permit modifications, SIP revisions

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dealing with specific source emission 1 Imitations,  and  redes1 gnatIons under
section 107 of tne Clean A1r Act.  Consequently,  until  resolution  of litigation
and completion of any rulemaking activity to respond  to the court:  decision,
the following policy will be applied.

     In general, actions to approve States'  rules may proceed  provided appropriate
caveat language 1s Inserted which notes  that the  action Is potentially subject
to review and modification as a result of the recent  court decision.  Actions
addressing State permitting authority should require  States to provide notice
that permits are subject to review and modification If  sources are later
found to be affected by revisions to stack height regulations.  Where States
currently have the authority to Issue permits under fully-approved or delegated
NSR and PSD programs, any permits Issued prior to EPA's promulgation of
revised stack height regulations should  provide notice  as described above
that they may be subject to review and modification.  Regional Office staff
are requested to contact their State officials and  notify then accordingly.
Where EPA has retained authority to issue permits,  It should also  Insert
appropriate cautionary language in the permit.

     The EPA will try to avoid taking source-specific actions  that may need
to be retracted later.  Such actions may include  certain emission  limitations
and good engineering practice demonstrations which  reflect dispersion credit
affected by the remand.  The EPA may approve these  State subrittals on a
case-by-case basis, with the explicit caution that  they and the sources
affected by them may need to be evaluated for compliance with  any  later
revisions to the stack height regulations, as a result  of the  litigation.
The EPA will continue to process, under normal procedures, any source-specific
actions which do not involve the remanded provisions.

     Requests for redesignation of areas from nonattalnment to attainment
which are affected by any of the remanded provisions  of the stack  height
regulations will be put on hold until EPA has completed any rulemaklng
necessary to comply with the court's remand.  This  1s due to the Issue of
whether EPA has authority to unilaterally change  attainment designations.

     During this interim period, the Regional Office  staff should  review with
their States all regulatory actions Involving dispersion credits and Identify
those actions or sources affected by the remanded provisions.  The Region
should consult with their States on appropriate action  for all such packages,
consistent with this policy.

     If you have any questions regarding the application of this policy,
please contact Doug Grano at FT3 629-0870 or Janet  Metsa at FTS 629-5313.

cc:  0. Clay
     A. Eckert
     J. Emison
     0. Grano
     J. Hetsa
                                                                                   i

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             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                   Office of Air Quality Planning and Standards
                   Research Triangle Park, North Carolina 27711
                               WAV 1 ? 1953
MEMORANDUM

SUBJECT:  Appl 1eiMjBSf^tht Interim Policy for Stack Height
                        ions
FROM:     (IWrn"Cafcagni, 01 rector
         /Air Quality'Management Division (MD-15)

70:    {,'  Chief, Air Branch
          Regions I-X

     On April 22, 1988, J. Craig Potter, Assistant-Administrator for Air
and Radiation, issued a memorandum entitled,  "Interim Policy  on Stack
Height Regulatory Actions" (Attachment A).  The memorandum requests that
the Regional Offices review with their States all  regulatory  actions
involving dispersion credits and determine  the appropriate action consistent
with the policy.  The purpose of today's memorandum is to  provide guidance
in carrying out the interim policy.

     In general, actions taken at this time to approve or  disapprove
statewide stack height rules which are affected by the remand must include
the qualification that they are subject to  review and modification on
completion of EPA's response to the court decision.  Permits  issued under
the prevention of significant deterioration or new source  review programs
should also contain caveat language for sources which may  be  affected by
the remand.  Attachment B contains example  boilerplate language to be
inserted Into permits and regulatory packages.  Note that  States must
commit to including the caveat before EPA will take final  action on packages
affecting permitting authority.  Those actions not Involving  the remanded
provisions may proceed as usual.

     In contrast to our policy regarding the  processing of stack height
rules, our policy for source-specific State Implementation plan (SIP)
revisions is to avoid proceeding with actions which may need  to be
retracted later.  You are advised to consult  with my staff and the Office
of General Counsel staff prior, to submitting  such rulemaklng  packages.
Affected sources must be deleted from negative declaration packages prepared
under the 1985 stack height regulations before EPA can proceed with action
on them.

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     My staff has applied the policy when reviewing packages currently 1n
Headquarters (Attachment C).  While proposals to approve (or disapprove)
State rules will remain on the Headquarters clock, the Regional  Offices are
requested to review these packages and provide appropriate boilerplate as
soon as possible.  Negative declaration packages and final actions  on State
rules are being returned to the Regional Office clock as more substantial
revisions and commitments may be required.   The redesignation packages
currently in Headquarters which contain sources affected by the  remand are
being placed on formal hold.

     If you have any questions regarding the April 22 policy, today's
guidance, or disposition of the SIP's, please contact Janet Metsa
(FTS 629-5313} or Doug Grano (FTS 629-0870).

Attachments

cc:  R. Bauman
     R. Campbell
     C. Carter
     G. McCutchen
     J. Pearson
     J. Sableski

bcc:  B. Armstrong
      P. Embrey
      G. Foote
      E. Ginsburg
      D. Grano
      N. Mayer
      J^Metsa   •
     I^K Reinders
      R. Roos-Colllns
      SO? SIP Contacts
      Stack Height Contacts, Regions I-X

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                                 Attachment A
        i
        I          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                   WASHINGTON, D.C 20460
                                 APR22B88
MEMORANDUM

SUBJECT:   Interim Policy  on  Stack Height Regulatory Actions
TO:        Director,  Air Management Division
             Regions  I,  III,  IX
           Director,  Air and  Waste Management Division
             Region II
           Director,  Air,  Pesticides, and Toxics Management Division
             Regions  IV, VI
           Director,  Air and  Radiation Division
             Region V
           Director,  Air and  Toxics Division
             Regions  VII,  VIII, X


     On January 22, 1988,  the U.S. Court of Appeals for the District of
Columbia issued its .decision  in NRDC v. Thomas. 838 F. 2d 1224 (D.C. Clr.
1988), regarding the  Environmental Protection Agency's (EPA's) stack height
regulations published on July 8, 1985 (50 FR 27892).  Subsequent petitions
for rehearing were denied.  Although the court upheld most provisions of the
rules, three portions were remanded to EPA for review:

     1. Grandfather/ing pre-October 11, 1983 wi thin-formula stack height
increases from demonstration  requirements [40 CFR 51.100(kk)(2)3;

     2. .Dispersion credit for sources originally designed and constructed
with merged or multiflue stacks [40 CFR 5l.lOO(hh)(2)(1i)(A)]; and

     3. Grandfather! ng of pre-1979 use of the refined H + 1.51 formula
[40 CFR 51.100(11)(2)].

     A number of pending State implementation plan (SIP) and other rulemaking
actions may be affected  by this decision in advance of EPA's promulgation of
further revisions of  the stack height regulations.  This includes not only
rulemaking packages developed to respond to the 1985 stack height regulations,
but also such actions as issuance of new source review (NSR) and prevention
of significant deterioration  (PSD) permits, permit modifications, SIP revisions

-------
dealing with specific source emission limitations,  and redesIgnatlons under
section 107 of the Clean A1r Act.  Consequently,  until resolution of litigation
and completion of any rulemaking activity to respond to the  court decision,
the following policy will be applied.

     In general, actions to approve States'  rules may proceed provided appropriate
caveat language 1s Inserted which notes that the  action Is potentially subject
to review and modification as a result of the recent court decision.  Actions
addressing State permitting authority should require States to provide notice
that permits are subject to review and modification If sources are later
found to be affected by revisions to stack height regulations.   Where States
currently have the authority to Issue permits under fully-approved or delegated
NSR and PSD programs, any permits Issued prior to EPA's promulgation of
revised stack height regulations should provide notice as described above
that they may be subject to review and modification.  Regional  Office staff
are requested to contact their State officials and  notify them accordingly.
Where EPA has retained authority to Issue permits.  It should  also Insert
appropriate cautionary language 1n the permit.

     The EPA will try to avoid taking source-specific actions that may need
to be retracted later.  Such actions may Include  certain emission limitations
and good engineering practice demonstrations which  reflect dispersion credit
affected by the remand.  The EPA may approve these  State subrnlttals on a
case-by-case basis, with the explicit caution that  they and the sources
affected by them may need to be evaluated for compliance with any later
revisions to the stack height regulations, as a result of the litigation.
The EPA will continue to process, under normal procedures, any source-specific
actions which do not Involve the remanded provisions.

     Requests for redes1 gnat1 on of areas from nonattalnment  to attainment
which are affected by any of the remanded provisions of the  stack: height
regulations will be put on hold until EPA has completed any  rulenaklng
necessary to comply with the court's remand.  This  1s due to the Issue of
whether EPA has authority to unilaterally change  attainment  designations.

     During this Interim period, the Regional Office staff should review with
their States all regulatory actions Involving dispersion credits and Identify
those actions or sources affected by the remanded provisions.  The Region
should consult with their States on appropriate action for all such packages,
consistent with this policy.

     If you have any questions regarding the application of  this policy,
please contact Doug Grano at FTS 629-0870 or Janet  Hetsa at  FTS 629-5313.

cc:  0. Clay
     A. Eckert
     J. Etnlson
     D. Grano
     J. Metsa

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                               Attachment B

     The following boilerplate, or variations tailored to suit particular
situations, should be used In rulemaking actions affected by the stack
height remand.


                             General Addition

     "The EPA's stack height regulations were challenged  In NRDC v.
Thomas. 838 F.2d 1224 (D.C. C1r. 1983).  On January 22, 1988,  the U.S.
Court of Appeals for the D.C. Circuit Issued Its decision affirming  the
regulations 1n large part, but remanding three provisions to the EPA for
reconsideration.  These are:

   1.  Grandfatherlng pre-October 11, 1983 w1thin-formula stack height
       Increases from demonstration requirements [40 CFR  Sl.lOO(kk)(2)];

   2.  Dispersion credit for sources originally designed  and constructed
       with merged or multlflue stacks [40 CFR 5l.lOO(hh)(2)(11)(A)];  and

   3.  Grandfatherlng pre-1979 use of the refined H + 1.5L formula
       [40 CFR 51.100(11)(2)].'


                Addition for Stack Heights Rules Packages

     "Although the EPA generally approves [State's] stack height rules on
the grounds that they satisfy 40 CFR Part 51, the EPA also provides  notice
that this action may be subject to modification when EPA  completes
rulemaklng to respond to the decision In NRDC v. Thomas.  838 F.2d 1224
(D.C. Clr. 1988).  If the EPA's response to the NRD(Tremand modifies the
July 8, 1985 regulations, the EPA will notify the~SFate of [  ] that  its
rules must be changed to comport with the EPA's modified  requirements.
This may result in revised emission limitations or may affect  other
actions taken by [State] and source owners or operators."


            Additions for Stack Negative Declaration Packages

     "The EPA is not acting on ___ sources (Identified fn table form  or by
asterisk) because they currently receive credit under one of the provisions
remanded to the EPA 1n NRDC v. Thomas. 838 F.2d 1224 (D.C. C1r 1988).
The [State] and EPA will review these sources for compliance with any
revised requirements when the EPA completes rulemaklng to respond to the
NRDC remand."

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        Additions for Stack Height Emission Limitation  Changes or
                 Good Engineering Practice Demonstration

     The OAQPS and OGC will provide language on  a  case-by-case basis when
the EPA Is acting on a source-specific package which  Is affected  by  the
remand.


             Language for Proposed NSR and PSO SIP Approvals

     "Under this program, [State] will  be  Issuing  permits and establishing
emission limitations that may be affected  by the court-ordered reconsideration
of the stack height regulations  promulgated on July 8,  1985 (50 FR 27892).
For this reason, EPA requires that the State Include  the following caveat
1n all potentially affected permit approvals until the  EPA completes Us
reconsideration of remanded portions of the regulations and promulgates any
necessary revisions:

     'In approving this permit,  [name of agency] has  determined that the
     application complies with the applicable provisions of the stack
     height regulations as revised by EPA  on July  8,  1985 (50 FR  27892).
     Portions of the regulations have been remanded by  a panel of the  U.S.
     Court of Appeals for the D.C. Circuit In NRDC «/. Thcaas. 838 F.2d
     1224 (O.C. Cir. 1988).  Consequently, this  permit  may be subject  to
     modification if and when EPA revises  the regulation In response to
     the court decision.  This may result  in revised  emission limitations
     or may affect other actions taken by  the source  owners or operators.'

     [State] must make an enforceable commitment to Include this  caveat in
all affected permits before the  EPA can take final action approving the
[NSR or PSD] progsam."


               Language for Final NSR and  PSD SIP  Approvals

     "Under this program, [State] will  be  Issuing .permits and establishing
emission limitations that may be affected  by the court-ordered reconsideration
of the stack height regulations  promulgated on July 8,  1985 (50 FR 27892).
For this reason, the EPA has required that the State  Include the  following
caveat in all potentially affected permit  approvals until the EPA completes
its reconsideration of remanded  portions of the  regulations and promulgates
any necessary revisions:

     'In approving this permit,  [name of agency] has  determined that the
     application complies with the applicable provisions of the stack
     height regulations as revised by the  EPA on July 8, 1985  (50 FR
     27892).  Portions of the Regulations  have been remanded by a panel of
     the U.S. Court of Appeals for the D.C. Circuit  in  NRDC v. Thomas, 838
     F.2d 1224  (D.C. Cir. 1988).  Consequently,  this  permit may be  subject
     to modification if and when the EPA revises the  regulations  in

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     response to the court decision.  This may result in revised emission
     limitations or may affect other actions taken by the source owners
     or operators.'

     [State] has made an enforceable commitment to include this caveat in
all affected permits by letter dated [  ].  This commitment is  being
incorporated into the Code of Federal  Regulations for the State of C^_j as
part of EPA's approval  action."

     See Attachment 0 for sample CFR amendment.

     The Regional Offices are requested to contact those States that
currently have permitting authority and request that  they include similar
language in any permits issued until EPA has .completed Its reconsideration
of the stack height regulations and has promulgated any necessary revisions,

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Attachment C
State
AZ/CA/NV
AZ/CA/NV
SC
MS
NJ/NY/VI
WA
MD
AR
OH
TX
LA
DE
OH
SO
CO
AQMD i
3059
3210
3243
3330
3418
3480
3543
3548
3570
3572
3592
3600
3334
•
3618
3623
Description
Promulgation of Stack Height Regs.
App. and Olsapp. of Stack Height Req.
Negative Declaration
Mississippi's Negative Declaration
Stack Height Revisions
Stack Height Rules
Negative Declaration
Stack Height Rules
Stack Height Regulations
Stack Height Regulations
Revisions to Stack Height Rules
Stack Height Regulations '
Redes 1 gnat ion of Sail a County to
Attainment
Administrative Rules
Negative Declaration
Disposition
HQ
RO
RO
RO
RO
HQ
RO
HQ
HQ
HQ
HQ
HQ
Hold
RO
RO

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         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                Office of Air Quality Planning and Standards
               Research Triangle Park, North Carolina 2771V
                        1 2 NCV  iwa?


MEMORANDUM

SUBJECT.  Incorporation by  Reference

FROM:     G. T.  Helms,  CMif"*^—
          Control Programs  Operations Branch

TO:       Chief, A1r Branch
          Regions I-X


     The Office of the Federal Register  (OFR) has recently advised us
that commitment  letters are not  acceptable for incorporation by reference
because they are not regulatory  in nature.

     Instead, the OFR has informed us that the Code of Federal Regulations
(CFR) can be amended by adding a new section or amending an existing section
to add the commitment; the  "Identification of Plan" paragraph should not
be amended.

     Attached is an example of a CFR page that the OFR has reviewed and
approved and the commitment letter from  the State of Minnesota that was
the basis for this sample regulatory text.  Please note that the core
paragraph from the letter should be quoted in the new section that 1s
being added to the CFR.

     If you have any questions on incorporation by reference procedures,
call Denise Gerth at 629-5550.   Thank you for your cooperation.

Attachments

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cc:  Betty Abramson
     Walter Bishop
     Ted Creeicmore
     Tom D1ggs
     Pat Enbrey
     Greg Poote
     Denlse Girth
     Dean 6111 an
     Laurie Krai
     Carol  LeValley
     Sandy  McLean
     Bob Miller
     Rich Osslas
     Carolyn Payne
     Sharon Relnders
     Julie Rose
    John Sllvasl
    Hard a Spink
    Rebecca Taggart
    Paul Truchan

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40 CFR Part 52, Subpart Y. 1s amended as follows:
1.   The authority citation fop Part 52 continues to read as follows
     AUTHORITY:  42 U.S.C. 7401-7642
2.   A new Section 52.1237 is added as follows:
     §52.1237  Stack Height Regulations
     The State of Minnesota has committed to conform to the Stack
Height Regulations as set forth in 40 CFR Part 51.  In a letter to
Mr. David Kee, EPA, dated January 14, 1987,  Mr. Thomas J. Kalitowskl
of the Minnesota Pollution Control Agency stated:
     Minnesota does not currently have a stack  height  rule,
     nor do we intend to adopt such a rule.   Instead,  we  will
     conform with the Stack Height Regulation as  set forth
     in the July 8, 1985 Federal  Register 1n Issuing permits
     for new or modified sources.  In cases  where that rule
     is not clear, we will contact U.S. EPA  Region V and
     conform to the current federal Interpretation of  the
     item in question.

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REFERENCES FOR SECTION 5.5

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 5864
Federal Register / Vol. 47. No. 26 / Monday. February 8.1982 / Rules and Regulations
 ENVIRONMENTAL PROTECTION
 AGENCY

 40 CFR Part 51
 [AD-rat 2010-1; Docket No. A-7V41]

 Stack Height Reguiationa

 AOKNCY: Environmental Protection
 Agency (EPA)..
 ACTION: Final rulemaking.	

 SUMMARY: Section 123 of the dean Air
 Act requires EPA to promulgate
 regulations to aasure that the degree of
 emission limitation required for the
 control of any air pollutant under an
 applicable State Implementation Plan
 (SIP) is not affected by that portion of
 any stack height which exceeds good
 engineering practice (GEP) or by any
 other dispersion technique. Regulations
 to implement Section 123 were proposed
 on January 12.1979 at 44 PR 2608 and
 reproposed October 7.1981 at 46 FR
 . 49814. Today's action incorporates
 changes to the reproposai and finalizes
 these regulations.
 DATC These rules are effective March
 10.1982.
         : Docket A-79-01. containing
 material relevant to this action, is
 located in the Central Docket Section
 (A-130), U.S. Environmental Protection
 Agency, 401M Street SW- Washington,
 D.C. 20460.
 PON FIKTTM8H I
 Mr. Bruce Polkowsky. MD-1B. Office of
 Air Quality Planning and StanHsrHfi
 U.S. Environmental Protection Agency.
 Research Triangle Park. North <^»miinm
 27711. Telephone: (919) 541-5540.


 Docket Statement
   All pertinent information concerning
 the development of these regulations is
 included in Docket No. A-79-01. The
 Docket is open for inspection by the
• public between the hours of 8.-00 ajn.
 and 4.-00 pan., Monday through Friday.
 at the EPA Central Docket Section. West
 Tower Lobby. Gallery One. 401M
 Street SW.. Washington. D.C.
 Background documents normally
 available to the public, such as Federal
 Register notices and Congressional
 reports, are not included in the docket
 A reasonable fee may be charged for
 copying documents.

 I. Background

 A. Statute
   Section 123 was added to the Clean
 Air Act by the 1977 Clean Air Act
 Amendments. It prohibits stacks taller
 than good engineering practice (GEP)
 height and other dispersion techniques
                          from affeetinf tht emission limitations
                          requiraoUo meetthe national ambient
                          air quality standards (NAAQS) or
                          prevention of significant deterioration
                          air quality increments (PSD increments).
                          Section 123 requires EPA to promulgate
                          regulations which define GEP stack
                          height and which restrict the use of
                          other dispersion techniques, including
                          intermittent or supplemental control
                          techniques. This rulemaking fulfills this
                          requirement In the near future. EPA
                          also intends to propose rules on the use
                          of intermittent control techniques.
                          B. Rulemaking
                            On January 12,1979 (44 FR 2808}. EPA
                          published a notice proposing limitations
                         -on stack height credit and other
                          dispersion techniques. The aotiee
                          proposed specific roles to be used m
                          determining GEP stack height for any
                          source and specific requirements for
                          State Implementation Plan (jSIP)
                          revisions. EPA provided an extended
                          period lor the submission of public
                          comments on these proposed
                          regulations. EPA held a public hming
                          on May 311979 followed by a 3*-day
                          period for the euhmisaian of additional
                          comments (44 FR 24328. April 2aV 1879).
                          EPA provMiJCl UK oonuDsttttc OB
                          additional technical informatioa (441*
                          40330, July 11.1979 and 46 FR 24896.
                          May 1.1981). Finally. EPA recently
                          reproposed the regulations with changes
                          made s&reapoBWto *h* r*n*yn*ntf
                          received (46 FR 48814. October 7,1881).
                            Foijy individuals and groups
                          comnuRtad ea the October 1981
                          proposal HP A has considered afl
                          comments sad he* made a number of
                          changes in the. regulations in response to
                          these comments. Most of these changes
                          simply clarify the proposed rules. The
                          revisions are outlined in Section IV:
                          "Changes in the Regulations from the
                          October 1981 Proposal- In addition.
                          EPA has prepared a document entitled
                          "Summary of Comments and Responses
                          on the October 7,1981 Proposal of the
                          Stack Height Regulations." This
                          document has been placed in Docket A-
                          79-01, and. depending upon available
                          supplies, copies may also be obtained
                          from: EPA Library (MD-35). UA
                          Environmental Protection Agency,
                          Research Triangle Park, N.C 27711. A
                          copy of this document will be sent to all
                          persons who submitted comments on the
                          October 1981 proposal

                          C Documents
                            In conjunction with the regulations.
                          EPA developed several technical and
                          guidance  documents. These served as
                          background information for th'e
                          regulations and all are included in
                          Docket No. A-79-01. The following
documents have been placed in the
National Technical Information Service
(NTIS) system and may be obtained by
contacting NTIS at 5285 Port Royal Rd..
Springfield. Virginia 22161.
  (1) "Guideline for Determination of Good
Engineering Practice Stack Height (Technical
Support Document for Stack Height
Regulations).'' July 1981. U.S. Environmental
Protection Agency. Office of Air Quality
Plaantat sad Standards. EPA-4SO/4-BO-023
(NHS PBB214S301)
  (2) "Guideline for Use of Fluid Modeling to
Determine Good Engineering Practice Stack
Height" July 19BL UA Environmental
Protection Agency, Office of Air Qualify
Planning and Staadarda..EPA-450/4-0i-003
(NITS PB82146327)   .
  P) "Gakieline for Fluid Modeling of
Atmospheric Diffusion." April 19B1. U.S.
Buvu'omMBtai Protection Agency,
BMroninental'£ciancei Research
Ukontoiy. EPA-«00/o-Bl-OQB. (NTIS PBffi
201410)

IL Program Overview

A. The Problem

  There are two general methods for
preventing violations of the NAAQS and
PSD increments. Emission controls
reduce, on a continuous basis, the
quantity, rate, or concentrations of
pollutants released into the atmosphere
from a source. In contrast dispersion
techniques rely on the dispersive effects
of the atmosphere to carry pollutant
emissions away from a source and to
prevent high concentrations of
pollutants near the source. The Clean
Air Act requires pollution sources to
meet the NAAQS and PSD increments
by complying with emission limitations
instead of relying on dispersion
techniques.1 Section 123 defines stack
height exceeding GEP as a dispersion
technique.
  TaH stacks and intermittent or
supplemental control systems (ICS or
SCS) an the two basic types of
dispersion techniques. Tall stacks
enhance dispersion by releasing
pollutants into the air at elevations high
above ground level increasing the
volume of air through which pollutants
must travel to reach  the ground.
Releasing pollutants from a tall stack
allows a source to reduce the ambient
levels of its pollution as measured at
ground level without reducing the
amount of pollution it releases.
Intermittent and supplemental control
systems vary a source's rate of
emissions to take advantage of
  >Sw Sectiem HOdlUHB). 121 S
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                             / Vel 47, No. 26  /  Monday, February a, 1082  /  Rules and Regulations      5BS5
meteorological conditions. When
atmospheric conditions do not favor
dispersion and an NAAQS may be
violated, the source temporarily reduces
its pollutant emissions. When conditions
favor rapid dispersion, the source emits
pollutants at higher rates;
  Use of dispersion techniques instead
of constant emission controls can result
in additional atmospheric loadings
which may contribute to imttttrahlt
environmental effects. The use of tall
stacks increases the possibility that
pollution will travel long d^inrrt
before it settles to the grand.
  Although dispersion techniques may
  •educe advene effects, some stack
Might it needed to prevant«xce**ive
concentrations of p™i«t**«it emissions
created by airflow disruptions censed
by •tinctures, terrain features, and
ground-level meteorological pbi
These excessive concentrations result
from interference with the plume.
Section 123 responds to this problem by
allowing EPA to give a source credit for
that portion of its stack height needed to
prevent excessive concentrations near
the source. This height, is called CEP
suck height.
  The regulations promulgated today
define "excessive concentrations,"
        ' and other important concepts.
They alsoestebliahmethodjlor
determining the CEP stack height tor all
stationary sources to which these
regulations apply..          " "*'

O. Tf^rfOgrOSn          •      ~
  Th Jee regulation! do not nmit the
physical stack height of any source, nor
require any specific stack height for any
source. Instead, they set limits OB the
maximum stack height credit to be used
in ambient air Quality modeling for the
purpose of setting mn emission limitation
and calculating the air quality impact of
a source. Sources are modeled at the
physical stack height unless that height
exceeds their GSP stack height- The
regulations apply to all stacks
constructed and all dispersion
techniques implemented since December
31.1970.
  I. Method* of Determining GSP Studs
Height The regulations estabbsh three
basic methods of calculating a source's
GEP stack height
  (a) De minimis height—EPA is
adopting 65 meters as thrminimum GEP
stack height for all sources regardless of
the size or location of any structures or
terrain features. Sixty-five meters
represents a reasonable estimate of the
height needed to insure that emissions
will not be affected by common ground-
level meteorological phenomena which
may produce excessive poilntant
eoncentraoona. Typical <
 phenomena Include surface roughc
 and the temperature changes caused by
 the solar heating and terrestrial cooling
 cycle (see page 26 of the Technical
 Support Document).
   Virtually all significant sources of SO*
 can justify stack Might credits greater
 than 65 meters. Accordingly, this de
 minimis height will have little effect on
 atmospheric loadings of sulfur dioxide.
   (b) Mathematical Formulas—
 Excessive concentrations may be
 produced by downwash, wakes, and
 eddies caused by structures located near
 the stack. EPA is adopting two formulas
 with which to calculate the GEP stack
 height One for stacks in existence on
 January U, 1879 (the date at publication
 of EPA original proposed rules), and one
 for stacks constructed after that data.
   For •*•"*?• in existence on January 12.
 1979. EPA has adopted the traditional
 engineering formula of two and one-half
 times the height of the nearby structure
 fHj-iSH) as the formula far
 determining the GEP stack height For
 stacks constructed after January 12.
 1979. EPA has established a refined
 formula of the height of the nearby
 structure plus one and one-half times die
 height or width of the structure,
 whichever is leas (H.-H+1JL) aa the
. formula for determining the GBP stack
 height.
   (c) Physical D«
      , a source may need a stack taller
 ttto the height predicted by the
 formulas to pieveut excessive

 downwash. wakes, or eddies created by
 structures or terrain obstacles. In such
             1123 provides that a source
 may obtain credit for all of the stack
 height necessary to avoid excessive
 concentrations provided it demonstrates
 to the satisfaction of the reviewing
 authority that the additional height is
 necessary.
   EPA is requiring such a source to
 concentrations caused by the source's
 fifift^f from its proposed stack
 height without consideration of nearby
 structures or terrain obstacles, -will
 increase by at least 40 percent when the
 effects of the structures or terrain
 obstacles are considered. This
 difference in concentrations must be
 shown either by a fluid model study
 conducted in accordance with guidelines
 published by EPA or by a field study
 which has been approved by the
 reviewing authority.
   Before a source can obtain credit for a
 GEP stack height determined by a fluid
 model or field study demonstration.
 Section 123(c) nquires that the
 nviewing autborityauet notify *«^.
demonstration study and must provide
an opportunity for a public hearing.
  Z Method of Adjusting GEP Stack
Height for Elevated Terrain Areas. As
traditionally defined, plume impaction
occurs when a plume emitted from a
stock interacts with terrain that is teller
than the stack. The contact between the
plume and the terrain can produce high
pollutant concentrations. EPA is
establishing a procedure which will
allow sources to adjust their GEP stack
height to avoidmodeled plume
impaction on elevated  terrain causing
one to predict violation* of the NAAQS
or eppficaaieJaW increments which will

in Section IV.CJ The predicted
violations wifi not occur because the
physical stecLheight is sufficient to
ensure that the plume passes over the
elevated terrain.
  Before e source can obtain credit for a
GBP sUck height based on allowances
for terrain impaction. the reviewing
authority must notify the public of the
availability of the source's
demonstration study and must provide
an opportunity for a public hearing.
  3. Gnadfathured Stack Height. The
1970 Clean Air Act became effective on
December"*!. 1970. Prior to that date
some sources had constructed stocks
taller than their GBP height In Section
laCoogresareoogntaed this and
exempted those sources' stack heights.
Section 123 allows credit for stack
ft**y*^ in existence on December 31.
1970. A source's stock is considered to
be "to existence" if met suck wes part
of the design of a facility on which
construction commenced prior to
December 31.1970.
  4. Other Dispersion Techniques. The
regulations prohibit the use of other
dispersion techniques to attain or
•»•'•*•«" any NAAQS  or protect a PSD
increment Those techniques include
major alteration of phune characteristics
such as die manipulation of exhaust
flow rates or temperatures for the
purpose of Tfv>*|^ff*p|g plume rise, il&e
regulation defines three types of
dispersion techniques: (1) tell stacks. (2)
use of ICS or SCS. and (3) addition of a
fan or rebaater to obtain a mas stringent
emission limitation. However, the
regulations exempt (1) reheating of a gas
stream following the use of a pollutant
control system. (2) smoke management
in agricultural or silviculture! programs.
and (3) combining exhaust gases from
several sucks into one stack.

nLsuts

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            Fedacal g»gtatar / Vol 47. No. 26 / Monday.  February 8. 1982  /  Rales and Regulations
 regusetione, Ail States must review
 revise, n necessary, their Sffi to
 include proviaaM that fink slack height
 credits and dispersion lachpjquas m
 accordance with these regnletioaa.
 Section 406(dH2) of fee Clean Air Act
 Amendmeots of 1877 requires that the**
 SIP revisions be submitted within nine
 months of pronwlgaaon of the**
 regulations.
   After EPA approves • SUte'i stack
 height rales, the State mast review
 existing lismtatinaM to eetarmne
 whether these bmitations have been
 affected by itack height credit above
 GEP levels or ajqroeWdispersian
 technique. If M. the Slate nraat revise
 the emission limitations to be uousJetaart
 with Us aavieed SB*.
 IV. Changes In die Regulations From the
 October 7,19n Proposal
   EPA has OMde several changes in the
 proposed reflations as a result of the
 public comments on the reafopoaed
 regulations. These «*•»»•• are aotod
 below.

 A. Protpecttn Application of the Now
 CEP Formula
   OB February U. 19m fit ¥R 7490).
 EPA pubiuhed the "Stack Height
 Incnase Guideline" whine ptevUed
 guidance on it* potter lor the use ef till
 stacks. The guideline pamittadendit
 for stacks ap to two aad aaeeslf tinea
 the height of the facility it awed. On
 NovwnbeeA 1977. after passage of me
 Clean Auyfcct Aaaadneets ei 1977.
 EPA proisjalgated a final ruleea>sceM
 changes teaUptgveadon of •ifl^&~"»t
 deterioration (PSD) program {42 ER
 57459). As part of the preamble to that
 notice. EPA denned GEP as "two and
 one-half times the height of the source"
 (2.5H).
   On January 12.1979 (44 PR 2908). EPA
 proposed regulations to implement
 Section 123 which refined the two and
 one-half times rule by tl*finng GEP
 stack height as the height of a nearby
 structure plus one and one-half times the
 lesser of the height or width of the
 nearby structure (H+1.5L). That
 proposal aad the repropoaal of that
 regulation on October 7,1881 (40 FB
 49614) would have made the new
 formula retroactive to December 31.
 1970.
  Four commenters argued that EPA'i
definition of GEP. until January 12.1979.
r.dd been based on two and one-half
*..-nei the building height and that
kources in good faith had constructed
sucks in accordance wfth that
definition. Applying the new formula
rsiroactivety would be unfair to those
•ourcet. The comnMnters argued that
the newiKXMla should be applied
proepecoveiy<«
  la leaponse to these comments. EPA
has developed tw« formulas for
determining GEP stack height (1) For
stacks M existence on January 12. 1979,
the female is H.-2JH; (2) for all other
stacks, the female, is H.-H+1.3L.

B. Definition of "in txiittoct"
  Section 129 does not effect stack
heights In existence" on December 31.
1970. ta October 1981, EPA piuuoseJ to
define In existence" to mean that the
owner or operator of a static had
obtateaxi an necessary prfMTflnstHiCiiBii
permtle orasjpronis recjoffeo oy
Peoeral. State or local air pautnon
cootrof agencies, and eianf fly actaafly
commenced cuusti action, or ft) entered
             commlnnent for '
into a
construction.
  Comments on the reproposed
definition stated that this new defimTJon
would discriminate onfsJriy •*•<»•*
sources located m the few States or
local Jurisdictions which required
construction permits for air poOafion
sources in 2970. (There were no Federal
permit programs m 1970.) EPA agrees
that the apropoaed definition might
operate unfairly. EPA oas deleted the
reouirement for sech approvals or
permits in <^ff*^rt*'*'>^"g n«kaAa> g
souica's stack Is "In existence" as of
December XL. 1870.
  However, the regulatians now apply
the two and one-half OBM formula for
Amt»rminina GEP ""fy U> «*»>**r* "in
existence" on January 12. 1979.Pedaeal
tequirements for preconstraction
permits tot airpollnttan sources ware
effective well before 1978. Accordingly.
EPA is retaining the permit requirement
for sources which want to claim credit
for stacks "in existence" aa of Jaaaiary
12. 1979. EPA has changed i 51 Alii).
which defines GEP. to require sources
wishing to use the two and tmt half
times formula to show that they had
obtained, prior to January 12.  1870. all
praconstnction pamita required by 40
CTR Parts 51 and 42.
  Tie remaining portteaa of the
definition of "in nTirtance" are idanticai
to the October 18*1 prapoaai.
C Impact/on Credit

  Many comments on the January 1879
proposal asked EPA to provide stack
height credit for a source which
experiences plume impection. Plume
impaction occurs when a plume emitted
from a stack interacts with a terrain
feature that is taller than the stack. The
contact between the plume and the
terrain feature can pradmce high
poUutant conceotratiou. espeoafly
under stable atmospheric conditions m
which the phune disperses slowly.
  EPA decided that sources should
receive stack height credit when
impaction produces concentrations high
enough to violate an NAAQS or
applicable PSD increment EPA included
in its October 1981 reproposal a
procedure for determining the amount of
credit needed to prevent plume
impaction.
  EPA has received three types of
comments on the proposed impactkm
               ental group
credit Enviro
                                                          groups claimed
that Section 129 doe* not authorize
impaction credits, Several industrial
commenters asLsuBPA to clarify the
proposed pioceduras for impaction
credits. Finally, some industrial
commenters asked EPA to modify a
portion of Its proposed procedure*. To
respond to these comments. EPA is
presenting below a brief description of
its rationale and procedures for
impaction credits. EPA is also providing
a brief explanation of its reason for
declining to make procedural
modifications.
(1) Rationale

  Phone impaction resembles
downwash, wakes, and eddies. In all of
these events, structures or terrain
features inter/ere with plume dispersion.
If the Interference occurs relatively close
to the stack, before the plume has had
adequate opportunity to disperse, high
concentrations of pollutants can occur.
  In enacting Section 123, Congress
decided that sources should be allowed
sufficient stack height credit to prevent
high pollutant concentrations caused by
downwash. •rakes, and eddies.
Congress called this height "good
engineering practice." Any additional
stack height was to be regarded as a
dispersion technique that might allow a
source to relax its emissions limitations
Section 123 does not mention impaction.
However, neither the language of the
statute nor the legislative history show
that this omission was deliberate. EPA
considers impaction to be enough like
downwash that the same rationale
should apply. GEP stack height should
include credit needed to avoid high
concentrations caused by impaction.
Accordingly, EPA has decided to
exercise general rulemaking authority to
establish stack height credit needed to
prevent high concentrations caused by
plume impaction.
  EPA recognizes Congress did not
want the stack height rules to grant too
much credit to sources locating in
complex terrain, for "the result cooid be
an open invitation to raise stack heights
to unreasonably high elevations." rLR.

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           Federal Register / Vol 47. No. 28 / Monday.  February A 1882 / Rules  aad Regulation
Rep. No. 95-294.95th Cong, lit Set*, at
93 (1977). Therefor*, EPA has carefully
tailored impaction credit procedures to
provide only the """'"""« stack height
credit needed to avoid high
concentration* * produced by impaction.
These procedures are described in more
detail below.
  EPA is convinced that its narrowly
drawn rales represent a reasonable
solution for a plume effect that closely
resembles the phenomena of downwash,
wakes, and eddies. Credits for plume
impaction, when carefully limiU-i
should not be regarded as a dispersion
technique. Although the promulgated
procedure allows for the use of some
stack height to avoid high pollutant
concentrations on elevated terrain, it
does not permit excessive dispersion
credits.
(2) Explanation ofProctdunt
  EPA has developed a three-step
procedure for determining the amount of
stack height credit appropriate for a
source with a predicted impaction
concentration violating an NAAQS or
applicable PSD increment
  First a source must determine its
downwash GEP height  the amount of
•tack height that can be Justified bated
on downwaab, wakes, or sHrties Bring
any of the three methode described in
Section LB. above. Using late GBP
height the source must show that its
plume would come into contact with •
elevated terrain (defined as terrain taller
than this GEMeighr) and together with
background CMcentrations cauee a
violation of aa NAAQS or applicable
PSD iacremesR. If uu (ooroe cannot
show that a violation would occur, it
cannot claim any impaction credit Its
stack height credit would be Iteitrd tc
the GEP height already calculated.
  If a violation is modeled, the second
step is to determine the source's
maidtHtmt allowable emission limitation.
In this  step the source would modal its
air quality impact using the previously
determined GEP height aad assuming
that the terrain featurefs) causing
impaction is no taller man its
downwash GEP height Using the
appropriate maximum concentration
from this modeling scenario, the source
  'EPA eooMdor* "Wfh cooctontion*" to b* •
vioUtiea of «fl NAAQS or •pplkabt* PSD
incrtmnt. Unlik* 'men*** eooenntfoa*"
cauMd by dowaoMh. high eoaentnOoat c*u**d
by plum* impicBon occur ta dUftmt
m«twralope*J eondlOoa* than domnvuk «ad «n
lontvr ta duration. Hied oomotmtMoi out to
plum* unoccnaa cu b* canporad Mwly to «o
NAAQS or •poljc.bU PSD amm.ut Ttavfora.
EPA IMI raqwnd that lfa« caaunmaon r>u»«d by
plume imp«etw»i ««»' *>• « nan* of *n NAAQS or
            incrMMU tMiora « MUK. ou
would calculate an emission limitation
which would become its magfamim
allowable emission limitation.
  The third jtep allows the source to
adjust its GEP stack height to account
for the plume bnpaction on actual
terrain features above the downwaah
CEP stack height The source cannot
adjust its Tn^lf**"1 allowable "r't"""
limitation. The source would model its
air quality impact again, mis time using
actual terrain elevations, but limiting its
emissions to the rate fixed by the
*mjttion limitation developed in slap
two. The source would increase the
height of the stack m the modal to the
height at wUeh thai
oooceptistioo.preoicted to <
elevated tanain equaled the i

two. This increased stack height is the
source's maximum GEP height to avoid
high concentrations due to unpectioo.
  Like the downwaah GEP height this
stack height will represent maximum
allowable credit The source would not
be able to data this credit if its physical
(actual or proposed) stack height were
not aa tall -at its maximum creditable
height In that ease, the source would be
able to claim only ito physical stack
height A some with physical stack
height lower than its allowable GBP
height would have to adjust Its aariaatea
limitation downward to prevent a
violation of aa NAAQS or applicable
PSD increment

(3) Modtficatioa Rtqanttd by
CoouMBiefv
  The electric
iqnestadthat
EPA assume, during the Step two
modeling, that all terrain feature* are no
taller than ground elevation at the base
of the stack or. m other words, that the
source is located hi absolutely fiat
terrain. The utilities believe that this
assumption is necessary to ensure
equity between sources located ta
elevated terrain aad source* in flat
terrain.
  EPA has decided not to make this
change to its procedure. EPA's objective
is to provide the *"*"<""«« (tack height
credit needed to allow a source to avoid
high concentrations caused by plume
impaction. A source in assumed flat
terrain would obtain a lees restrictive
emission limitation than a source in
terrain assumed to be as tall as its
downwash GEP height The fiat terrain
assumption would thus allow a source
to obtain more stack height credit than
needed to prevent impaction. It would
also have a greater negative impact on
air quality by allowing taller stacks and
more relaxed emission limits.
                 D. Ditpenioa Tfchniqu*
  EPA received numerous comment* o:
the definition of the term "dispersion
technique." Most of these comment*
stated that wording concerning the
enhancement of plume rise was vague.
Comments specifically mentioned that
many changes in operation or equipme:
made for engineering purposes, to
improve reliability or efficiency, could
be construed ae a disperison technique.
This is not the talent of the definition.
EPA has changed the definition of
dispersion technique to prevent the
addition of a fan or rehea tor to obtain a
leas stringent emission Invitation. The
purpose of this change la to prevent onJ;
the installation of equipment clearly
tatoodad to enchance plume rise. The
new definition should not prevent
equipment changes intended to improve
reliability •««< efficiency.

£ Definition of "Stack"

  Comments on. the January 1979
proposal urged EPA to exempt "flare*"
from the definition of "stack." EPA
agreed that flares, which are designed to
dispense heat and vent emissions
intermittently for safety purpose*.
not serve the same purpose as stae   _
which an typically a source's major ana
moat constant emieaions point EPA
announced that it would exempt flare*
from the stack height regulations in the
preamble to  the October 1901
fOpfOpOsML IMvW COIDBDB&tfl QT^ftu EPA
lO SDCIOCaW tsUst CXstOlDuOfl BQ tOC
regulations themselves to eliminate any
potential for confusion or
misunderstanding. In response to these
comment*, EPA is incorporating a
specific exemption for flares into the
definition of "stack."

F. Section 129 and Physical Stack
Height

  EPA received several comments on
the October  1961 reproposal which
indies ted that the commantars "believed
that the ptoposed regulations would give
EPA authority to limit a source's actual
stack height EPA did not  intend to
create this impression. In  fact EPA
stated in the preamble to the repropotaJ
that Section 123 expressly prohibit* the
Agency from limiting physical stack
height Section 123 limits only the
theoretical stack height used in
determining a source's emission
limitation. However, to eliminate this
confusion. EPA is adding a statement
ii  51.120') aad 51.18(1) of the regulation*
stating that these regulations do not
restrict in any manner the actual height
of any stack at any source.

-------
           -rtdarri **&**} VA. 47t Tfo.*«» f--Monday. February 8,  1982 / Rules  and RegureHcm
 G. Measurement of Slack Height
  In the proposed definition of •
 "stack." EPA stated that the "stack
 height is the distance from the ground-
 level elevation of the plant to the
 elevation of the stack collet" Seven!
 commenters requested clarification to
 the establishing the ground-level
 elevation of the plant For tnitann*. (ha
 commenten noted that when a plant
 was built oh a slope (he regulation could
 have varying interpretations. Also, soma
 commenters asked whether (he entire
 plant site should be included or just the
 portion of the plant site considered
 "nearby" the stack.
  EPA is **M»flfa»fl tha reguLttioas to
 clarify this point EPA deleted from the
 definition of a "iiaok." the statement
                    However. .EPA
 clarified the methods for determining
 GEP stack height by stating that aD
 stack and structure heights art
 measured from tha ground-level
 elevation at the basexif lee stack.
  If a stack is on top of a attiidaig, tha
 ground-level eieveaea of the hoU***
 used as tha heae nle«enon. ev order ts>
 appropriately aeaai
tfa* height ofi
determined rateon to tee ipmed lasel
deration of loci
H. Minor Wording Cnanaw*
typographical
minor wording changes
regulations. These and
changes here been mad* to
to clarify the regulations. These
did not have any significant effect en
the regulations.
V. impact Aaaryeis

  "EPA has prepared a series of impact
analyses on thew regaietiens. These
analyses are in Docket A-9B-**.. The
analyses show that the a*peUe«l "mini-
case" national amraaJ costs to feeafl-niei
fireo/power plants should be* leva van
$45 miffion per year. These eoeta I'teeft
from conservative estimates of required
purchases of lower sulfur coal and
estimates of required retrofit of
electrostatic precipitaton at some piants
which purchase the lower sulfur coal
The worst-case analyses show that the
expected reduction in SOt emissions is
less than 200000 tons per year.
Nationally, these costs could increase
ejectnc utility rate charges
approximately 0.1 to 0.2 percent
Increases for individuaJ power company
rates could range from 0.5 to 90 percent.
 VL lUfuiaUny PhadbiBty Analysis
   Pursuant to tha provisions of 5 U.S.C.
 e05(bj, I hereby certify that the attached
 rule win not have significant economic
 impact on a substantial number of small
 entities. This rule applies only to large
 sources. Tha impact assessment
 predicted that these regulations would
 not hart significant impact on any small
 entities. Based upon om* firtpaflt
 analysis, only electric otfBty plants and
 posvlbrjr one smarter wffl be
 significantly affected by these
 regulations.
 V1L afeeevttve Onist 12241
   Under Exaoonv* Ordar 122*1. EPA
 moat jealge whether a regulation to
          en thereto nbteot to th»
        i tt doaa not reentt • an aanoal
 effaot 0vi aha aoonaBBV of SlOO mMncn.
 nor dee* M seentt m a major incEeese in
 costs or BBcee iar oocMumen, Federal*
 State, at lose! governments or individual
 induatqr.
                   tha electric powar
  VAoaHavn ftaJ thianle is ttesadoa
 detanmlriBflnns of naaogwiae scope and
>affseVttiBddBf la SecOoo 123 BmiU III
"irjpjjcabjlfty w %parflcular locality,
 Slata, or raddn. OB ma contrary. Secflon
.123 apoBat to somxaa waarever located,
 Becauae otfisf roia'a "HVnal
 applicability. Saetion 3Q7(b) (42 TJ.S.C
 7«07(b)) reqator thai 09 patfnoa ior
 review of the promulgated rust be filed
 only in tha United State* Court of       *
 Appeals far (Be District of Columbia  and
 within 60 day* of (ha date of
 pQuuCBuOB*
 (Sees. 100.123.301. dean Air Act as
 amended (42TTAC 7OO, 7423. sod 7001)
  Dated; lamwrjr 31. UK.
 Joea W. H^naadsa. )h
 Acting AdmiaiMttator.

 PART 51-flCQOmEMEKTS FOft
 PREPARATION. ADOPTION, AND
 SUBIirTTAL OF IMPVEMCKTATIOM
 PLANS

  Part 51 of Chapter I Title 40 of tha
 Coda at Federal Baguictiona is  amended
 as follows:
  1. "ortion 51,1 is amended by revising
 paragraph (z) and by adding paragraphs
 (ff). (ggl (hh). (ii), Ui). (kk). (11). and (mm)
 as follows;

 {51.1  DeflnMone.
 •     •    •    •    •
  (z) "Emission limitation" and
 "emission standard'* mean a
 requirement estabhahed by a State, local
 government, or the Administrator which
limits the quantity, rate, or
concentration of emissions of air
poflutasts on a continuous basis,
including any requirements which limit
the level of opacity, prescribe
equipment, set fuel specifications, or
prescribe operation or maintenance
procedures for a source to assure
continuous emission reduction.
  18) "Stack" ""»•"« any point in a
source designed to emit solids, liquids.
or gases into the ak, including a pipe or
duct fait not including flares.
  (gfj "A •*f'fV <" miittnrn" means that
the owner or opaavavhad (1) begun, or
caused to beggyaejeillnuous program
of physical o»«iu*.OBnatniction of the
•tack or (2j Trti**** into binding
agreements or contractual obligations.
which could not be cancelled or
modified without substantial leva to the
owner or epetator. to undertake a
progcaa of conatructian of the stack to
be completed in a reeeeaable time.
  (hh) "Dneentioa technique" means
any tecJinkaiB which attemptt to affect
the concentration of a pelhitent in the
ambient air ey namg that portion of a
stack vjUea evaseee good engineeriag
             •eigatveirwgmeiateof
concanamMeasi ef tsan polkuauB, or by
addltiOQ srf at lea or reeeeter to obtaai a
                 i does net mdnde: (1)
The nbjaacMg ef a gee stream, following
use of a paleatfcm eootroi system, for the
purpose of leenrnin me gee to me
tempereture at which il was eriginelly
discaarged freet Ike ieoiUty geneotoag
the gas etreenc (2) the aae of smoke
management in eerjcttltnrei or
silviculture! pt*yM"«; or (3) combining
the •^~*'^ gases fross several stacks
into one ****}*
  W "Good eiamueering practice (GEP)
stack height" means the greater ot
  (l)aCeMtan:
  (2Mi) POT stacks m existence on
January 1Z law and for which the
owner or operator had obtained ail
applicable praooastruuUun pemrits or
approvals raqoired naoer tins Parts 51
and CZ ef this Tnle 40, Ht-t5H
  (ii) for all other stacks,
H.-H+I.5L wbm
H, -good tnxineenng practioe slack height
   maasured from UM (round-lev*!
   eievation at UM DM* of th« stack.
H •»a«*ht el MMbr MvetunH) maMnred
   own the giuaiMJ >*v«l elevation at the
   base of the (tick.
Lm tester dimension (height or projected
   wtd*Ji) of ntarby structure(s);
  (3) The beigat oemenstrated by a fhnd
modsl or a field study approved by the

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                             / VoL IT, Mo.  » £Monday, February ft. 1982  / Rule* and Regulation*      5889
reviewing agency, which ensures that
the emissions from • stack do not result
in excMtive concentrations of any •*
pollutant as a neult of atmoepherie
downwash. wakes..or eddy effect!
created by the eource itself, structures.
or terrain obstacle*.
  UJ) "Nearby a> uMd in 151.1(ii)(2) is
that distance up to five times the leeeer
of the height or the width dimension of a
structure but not greater than OJ km
(one-half mile). The height of the
structure is measured from the ground-
level elevation at the base of the stack.
  (kk) "Excessive concentrations" for
the purpose of determining good
fiuid model or field study means e
maximum concentration due to
downwesh wakes, or eddy effects
produced by structures or terrain
features which is at least 40 percent in
excess of the maximum concentration
experienced in the absence of such
downwash. wakes, or eddy effects.
  (11) "Plume impaction'' means
concentrations measured or predicted to
occur when die plume interacts with
elevated terrain.
  (mm) "Elevated terrain'' means terrain
which exceeds the elevation of the good
engineering practice staak as eakxdated
under paragraph (U) of this seotton.
  2. Section 51.12 is ameavded by eddmg
paragraphs (J). (k). and (1) as foOowe:

flt.11  ConMstrseearOemrst
poOntaat most not be affected by so   _
much of any source's stack height that
exceeds good engineering practice or by
any other dispersion technique, except
as provided in |S1.12(k) and (I). The
plan must provide that before a State
submits to EPA a new or revised
emission limitation that is baaed on e
good engineering practice stack height
that exceeds the height allowed by
I 51.1(11) (1) or (2). the State must notify
the public of the availability of the
demonstreaoo study and must provide
opportunity for public htsrinf on it This
Section does not require the plan to
•sBSl4¥ta*t fat AVSiV VPUMHtsVP tikes) eia*tMsil SBtsatftlV
rH"jfnf Off flfly 00VOB*
  (k) The provisions of || 51.1*0) "no1
51.180) shall not apply to (1) stack

tednriqnes hnpUmented prior to
December 31.1970, or (2) coal-fired
       ectric genentini units, subject
                                       to the provisions of Section 118 of the
                                       dean Air Act which commenced
                                       operation *~wfbre July 1.1957. and wfaoee
                                       stacks we  constructed under a
                                       construction contract awarded before
                                       February* MW.
                                        (1) The good engineering practice
                                       (CEP) stack height for any
                                       seeking credit because of]
                                       •imnaction which reeults m
                                               •bone in violation of national
  (I) The plea must provide that the
degree of emission limitation required of
any source for control of any air
smhient air quattty-standards or
applicable prevention of ^g"'*""*
deterioration increments can be
adjusted by determining die stack height
necessary to predict the same maximum
air pollutant concentration on any
elevated terrain feature ea die maximum
concentration sasociated with the
emission limit which results from
modeling the source using the CEP stack
height as determined in 151.1(ii) and
assuming the elevated terrain feetures
be equal in elevation to the GEP steck
height If this adjusted CEP stack height
U greater than the stack height the
source proposes to use. the source's
emission limitation and air quality
impact shall be determined using the
proposed stack height and the actual
terrain heights.
  S. Section 5U8 is amended by adding
paragraph (1) as followc

Ml.lt
  (I) Such procedures must provide that
the degree .of emission limitation
required of any source for control of any
air pollutant munt not be affected by so
much of any source's stack height that
exceeds good engineering practice or by
any other dispersion technique, except
as provided in | 31.12(k) and (!)• Such
procedures must provide that before a
State issues a permit to a source baaed
on e good engineering practice stack
height mat exceeds the height allowed
by | SLKU) (l) or (2). the State must
notify the public of the availability of
the demonstrattcp study and must
provide opportunity for public bearing
on it This section does not require nice
procedures to restrict in any manner.
the actual stack height of any source.
BW OH.

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                                      EPA-450/2-89-019
         SO  Guideline
           Appendices
                 by
           Doug Grano (EPA)
             Jill Vitas (EPA)
       Susan Templeman (Radian)
        Richard Pandullo (Radian)
         Contract No. 68-02-4392
         Work Assignment No. 44
           Radian Corporation
             P.O. Box13000
 Research Triangle Park, North Carolina 27709
  U.S. Environmental Protection Agency
 Office of Air Quality Planning and Standards
     Air Quality Management Division
Research Triangle Park, North Carolina 27711

             October 1989

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       APPENDIX A



S02 GUIDELINE REFERENCES

-------
REFERENCES FOR SECTION 2.1

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                                                                PN 107-83-04-2'-C
4.
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     For nonattainment designations which were originally based solely on
modeling, redesignation to attainment is possible even if less than four (4)
quarters of ambient data are available provided that a reference modeling
analysis considering the sources' legal emission limits shows attainment of
the standards.  Information must also be presented showing that the sources
causing the problem are in compliance with the enforceable SIP measures.

     Although the current ozone standard implies the need for three years
of data for attainment designations, two years of data with no exceedances
is an acceptable surrogate.  As discussed previously, this should be
accompanied by evidence of an Implemented control strategy that EPA had
fully approved.

2.  Projected Future Violations;  Projections of future violations can
provide the basis for continuing nonattainment designations.  This
concept is-particularly important because of the current economic downturn.
Information submitted to support attainment redes1 gnations must adequately
and accurately reflect anticipated operating rates.  Areas should remain
nonattainment where such projections reveal air quality violations.

3.  Modeling:  In most S02 cases, monitoring data alone will not be
sufficient for areas dominated by point sources.  A small number of ambient
monitors usually is not representative of the air quality for the entire
area.  Dispersion modeling employing the legally enforceable SO-2 SIP limits
will  generally be necessary to evaluate comprehensively the sources' Impacts
as well as to  identify the areas of highest concentrations.  If either the
modeling or monitoring indicates that S02 air quality standards are being
violated,  the  area should remain nonattainment.

4.  Boundaries:  Current policies on appropriate boundaries for designation
of nonattainment areas by EPA remain in effect, i.e., generally political
boundaries such as city or county for TSP and S02, county as a minimum for
rural  ozone,  entire urbanized area and fringe areas of development for
urban ozone,  and urban core area for CO.  When States redesignate, EPA
will  continue  to accept reasonable boundaries which are supported by
appropriate data,  such as specific new monitoring and/or modeling data or
evidence of improvement due to control strategy implementation.  Nonattain-
ment  areas for ozone  should include the significant VOC sources.

5.   Dispersion Techniques:  Areas which are projected to attain the TSP
or S02 standards  because  of the  use of unauthorized dispersion techniques
should continue to be designated as nonattainment.
                                 107
                                 8-2

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Policy for Processing 107 Redeslgnations

^  SIP Review Actions:  Section 107 designations have generally been
classified as minoY actions, with only a few of the more significant
ones being processed as moderate.  In the future, redesignations of Tier II
nonattainment areas should be classified as major actions so that they
can receive a comprehensive review to help ensure regional consistency.
Redesignation of Tier I nonattainment areas should continue to be handled
as minor or moderate actions, as appropriate.

2.  "Unclasslfiable"	Areas:  Since EPA and the States have had nearly five
years to resolve discrepancies for nonattainment designations, 1t is now
inappropriate to redesignate any area from nonattainment to unclassi-
•  ?!?;  ™ere has been amp1e t1mc Slnce th« f1pst designations were made
in 1978 to thoroughly study each nonattainment area.  Sufficient data
should now exist to either make a redesignation to attainment or to Iceeo
the nonattainment designation.

     If you have any questions, please contact Tom Helms at (FTS) 629-5525.

cc:  Regional Administrator, Regions I-X
     Chief, Air Programs Branch, Regions I-X
                                    107
                                    8-3

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                  UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                          Office of Air Quality Planning and Standards
                         Research Triangle Park, North Carolina 27711

                                 2 3  DEC 1983
\222 *                  ^Office of Air Quality Planning and Standards
 %-•*«•'
MEMORANDUM
Subject:  Section 107 Questions and Answers
From:     G. T. Helms,
          Control Programs Operations Branch (MD-15)

To:       Air Branch Chief
          Regions I-X

     The April 21, 1983 memo from Sheldon Meyers on Section 107 Redesignation
Policy has generally resulted  in more consistent redesignation packages.
However, a number of questions have  developed  since then  and  it seems
worthwhile now to share with everyone the responses that  have been developed.
These questions have arisen in a number  of  areas.

1.   Is air quality data alone  sufficient for a redesignation  from
nonattainment to attainment?

Answer:  No.  Valid air quality data showing no NAAQS  violations  must  be
supplemented with a demonstration that the  esproved SIP control strategy
which provides for attainment  has been implemented.  The  April 21 memo
describes the requirements  in  detail.  In most cases the  submittal will
 include  the most  recent eight  quarters of data showing attainment and
evidence of an implemented  control  strategy that EPA had  approved.   This
demonstration need not  necessarily  be  quantitative.  Rather,  it  need
simply confirm that the control  strategy approved  in the  SIP  to  address
the  problem has  indeed  been implemented. Where only the  most recent four
quarters of data  showing  attainment are  available, a state-of-the-art
modeling analysis must  be provided  which quantifies that  the SIP  strategy
 is sound and  that actual  enforceable emission  reductions  are responsible
 for  the  air quality  improvements.

 2.  Are  the  same requirements discussed  in  answer number 1 applicable to
 secondary  TSP redes i gnat ions?

 Answer:  Yes.   As for primary  standards,  some   reason has to be shown for
 the improvement  in  air quality.   This  can  consist of  an implemented
 control  strategy, some other Federally enforceable statewide regulations,
 or a well -documented explanation that the circumstances which resulted in
 the initial  designation have changed or were  incorrect.  The integrity of
 the designation  process should be preserved,   for  both primary and secondary
 pollutants.   Further, it should be  noted that States  are not penalized by
 remaining secondary nonattainment.   Therefore, a  control  strategy or
 other demonstration needs to be included with thes? redesignation requests.
                                        209

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3.  Can a control  strategy that has not been approved by EPA as part of
the SIP be used -tff support a redesignation?

Answer:  In general, no.  However, an exception will  be made if the
physical circumstances and long-term economic factors are such that the
implemented measures have the same weight as a SIP:  for example, the
permanent closing of the major emitting sources, road paving to eliminate
fugitive emissions, or other irreversible measures.   Submittals including
such changes, even though not formally approved as SIP revisions, have
the practical impact of an EPA approved strategy and can be the basis for
approval of the redesignation.

4.  Are the same criteria required to reduce the size of a nonattainment
area as are required for redesignat ing the entire area?

Answer:  In general, yes.  However, if a sound case  can be made that the
State  "overdesignated" initially -- that is, designated a larger area
than EPA required -- then the aree 'an be reduced.  The remaining nonattain-
ment area must be compatible with ; A boundary requirements (see April 21,
1983 memo) and.it must be convincingly demonstrated that the area going
from nonattainment to attainment should not have been designated non-
attainment.  Other than this specific kind of exception, however, boundary
changes require the same analysis as any nonattainment to attainment
redesignation.  When a portion of a nonattainment area is redesignated
attainment, it would help the public if a statement was included in the
notice which explains that a nonattainment portion remains.

5.  What criteria are used in redesignating from unclassifiable to attainment
for TSP and S02?                                      """"

Answer:  Redesignations from unclassifiable to  attainment generally  require
the most recent eight consecutive quarters of air quality data  demonstrating
attainment.  No control strategy  demonstration  is required since there
would  have  been no  SIP  requirement for an unclassifiable area.  The SC>2
redesignations will  generally  continue to  require dispersion modeling.

6.  What  is  required for  reclassifications from unclassifiable  to attainment
for ozone,  carbon  monoxide, and  nitrogen oxides?

Answer:   Redesignations  from  unclassifiable to  attainment do  not involve
any  regulatory change.   If  a  State wishes  to  make such  a  redesignation,  it
should be sent forward  as  a  brief explanatory Federal  Register  notice
documenting the information.   However, the formal table containing  the
designation status is not  changed since  the  attainment  and  unclassifiable
designations  are  combined  for these  pollutants.

 7.  Is there,  or has there ever been,  a  50 km policy for ozone nonattainment
 areas?

 Answer:  No, this was only discussed"as  an option some years  ago but it
 never achieved the status of Agency  policy.
                                      210

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     These questions and answers  hiahiinm-
that have come up  since  the April 2?g9^ IT °fD?he s19""'«"t  issues
or John Calcagni  (FTS  629-5665) If yiu Sw-T0^  1eaSe ca11  Bin  Beal
on Section 107 issues.         '    y°U have furt"er comments  or questions
cc:   B. Bauman
     D. White
     R. Campbell
     S. Meiburg
     0. Ulfelder
                              211

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                              EPA-450/2-78-027R
Guideline On Air Quality Models
               (Revised)
         U.S. ENVIRONMENTAL PROTECTION AGENCY
              Office of Air and Radiation
          Office of Air Quality Planning and Standards
            Research Triangle Park, NC 27711

                   July 1986

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        Ti        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
         S                Office of Air Quality Planning and Standards
        /               Research Triangle Park, North Carolina 27711
't'.
                                  StP  0 3  )981
    Mr.  Ralph  C.  Pickard
    Technical  Secretary
    Indiana  Air  Pollution  Control  Board
    P. 0.  Box  1964
    Indianapolis, Indiana  46206

    Dear Mr. Pickard:

         This  is  in  response  to your  letter of July 9, 198] to
    Mr.  Valdas V. Adamkus  regarding the use of ambient monitoring data
    in making  Section  107  area designations.  I am also providing comments
    on the use of modeling in setting of  source emission limits.

         I am  in  agreement with your  position that, when available, adequate
    ambiert  monitoring data should be given preference over modeling  results
    in designating areas as attainment/nonattainment under Section 107  of
    the  Clean  Air Act  (CAA).  EPA  has always held this position and has
    promoted this approach in the  guidance we have issued on the subject.  A
    model  letter prepared  by  my staff in  October 1977 that was sent by  the
    Regional Administrators of EPA to the various State governors or  environ-
    mental agency heads emphasized the use of monitoring data for designation
    purooses.

         A follow-up memorandum issued on January 12, 1978 from my staff to
    th=  E.rA  Regional Offices  responded to various questions regarding Part D
    plan requirements. It contained  the  following response to the question
    of whether preference  should be given to either monitored ambient data
    or dispersion modeling results in designating areas under Section 107.
    "If  there  is  a conflict between adequate monitoring data and modeling
    results, monitored values should  be used.  However, if the monitoring
    data are inadequate, the  modeling results should be used."

         It  is the desire  of  the Agency to base Section 107 designations on
    the  best possible  data that are reasonably obtainable.  In most cases,
    especially for isolated point  sources, it is difficult for a few  ambient
    monitors to  adequately reflect the true air quality conditions surrounding
    the  source,  especially the areas  of maximum impact or hotspots.   In many
    such situations, dispersion modeling  would be an alternative to the
    total  reliance upon a  limited  monitoring network.

-------
     With regard to the referenced Indiana designations, there is not,
in an administrative sense, a significant difference between unclassified
and attainment.  However, as I understand it, there exists in these
counties a more significant issue; that is, setting of new emission
limitations for power plants.

     The use of diffusion modeling is now the accepted way of establishing
emission limits for individual sources such as power plants.  Most air
pollution control agencies have accepted modeling as the only practical
alternative of establishing emission limits for large sources such as
power plants.  The courts have also recognized the validity of using
modeling in setting emission limits even where monitoring data are also
available.  Recent data indicate that a number of models are proving
to be reasonable predictors of ambient impact.  One recent study has
shown that the EPA reference model for rural power plants, CRSTER,
appears to have no inherent bias; it neither over- nor underestimates
air quality levels routinely.

     It is EPA's belief that, in most cases, the use of models is the
most effective and efficient way to properly represent the impact of
varying meteorology.  To properly evaluate a prospective emission limit
solely by the use of monitoring, a very extensive and costly air quality
£rc meteorological monitoring network would have to be established.
This network may have to be operated for a long time to ensure that the
var-iocs meteorological conditions were actually experienced during each
of the various operating regimes.  I do not believe the situation
surrounding the Indiana power plant emission limit changes argues for
an exception to the use for modeling contained in current EPA guidance.

     I trust this response adequately explains EPA's considerations in
i::th the Section 107 area designation process and the requirement: for
moreliic •,•.-£.? settinc new emission limits.
                                             Sincerely
                                             Walter C. Bai
                                                 Director
                                      Office of Air Quality Planning
                                               and Standards
Enclosure

cc:  Mr. Harry  D. Williams

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         UNITED STATUS ENVIRONMENTAL PROTECTION1"

                          WASHINGTON, D.C.  20460
                              SEP  1 6  t982
                                                             OFFICE OF
                                                      AIR. NOISE. AND RADIATION
MEMORANDUM


SUBJECT:  Milwaukee SO* Nonattainment Designation
FROM:    ^Sheldon Meyers, Director
         . Office of Air Quality Planning and Standards  (ANR-443)

TO:       David Kee, Director
          Air Management Division, Region V


     Thank you for your August 9, 1982, memorandum to Assistant
Administrator Bennett regarding Wisconsin's request for a redesig-
nation to attainment of the sulfur dioxide ($02) standard for the
Milwaukee area.

     You asked four (4) separate questions i-n your memo.   Those questions
are repeated in full below along with my responses.

Q)   In nonattainment areas with no emission limits, what is required to
support a redesignation to attainment?  (It does not appear to be
sufficient to accept eight'quarters of data showing no violations, even
if the monitors were located in the expected high concentration areas.)

A)   The fact that no Federally enforceable emission limits are in place
does not affect the criteria applied in determining the area's attain-
ment status.  In general, Section 107 designafio.! changes should utilize
all available data, including both monirorir..: ?.-,d modeling data.
Whatever is available should certainly be ussc.  Monitoring data should
be used only within the limits of being representative for a specific
geographic area.  The object of any designation should be to make the
best decision based upon the maximum amount of available information.

Q)   What is the role of modeling in redesignations?

A)   The need for dispersion modeling for Section 107 designation
purposes is especially important when dealing with areas dominated by
point sources of SO*.  In these cases, a small number of ambient air
                                  107
                                  7-1

-------
quality monitors will not be able to tell the whole story.  Modeling Is
essential to evaluate comprehensively and thoroughly the sources'
impacts as well as identify the areas of highest concentrations.   It
must be included in a redesignation analysis where feasible.

     For all other areas, if modeling already exists, it should be
considered.  However, dispersion modeling is generally not required to
be performed strictly for the purposes of Section 107 redesignation
requests for such areas.

Q)   Is a redesignation to attainment acceptable if there are eight.
quarters of monitored data showing no violations but there is modeling
that predicts violations?  (Note, this is not to say that the modeling
contradicts the monitoring since the modeling shows attainment at  the
monitor locations, but nonattainment at other, nonmonitored locations.)

A)   There is no answer that fits all possible situations.  However,
where valid dispersion modeling has been performed, such modeling
results should set the designation status.  When the appropriateness
of the model is of some concern, Regional Offices must exercise judgment
after considering such things as how many monitors-are in the network;
is complex terrain (terrain greater than stack height) involved; what
model is being used; is it a guideline model, if not, has it been
oersns'rated to be appropriate; does the model tend to over- or under-
predict for the situation at hand?

     Again, it should be emphasized that the objective is to make  the
best determination possible using all relevant information as to what
the attainment status of an area really is.

Q)   Mr. Barber's letter says that adequate monitored data are necessary.
How is "adequate" defined?  (We suggest that a determination of adequate
monitoring data involve reference modeling.  That is, monitors must be
located in the areas of expected high concentrations, based on a
reference modeling analysis.)

A)   Your suggestion is what ideally should be required.  However,
monitors are seldom sited at the locations shown by later dispersion
modeling to be those of maximum impact.

     Again, the responsibility lies with the Regional Office to make  the
necessary judgments as to whether or not the existing monitor locations
are sufficient both in number and spctial arrangement to allow them to
be representative of the air quality for the area.  Some judgment  as  to
whether the potential problem is of a localized  or more general areawide
nature should be made.  This judgment will  influence whether modeling or
monitoring should be given  preference in the particular situation  in
question.  How much  information  is needed before such  a judgment  can  be
made  is subject to the  complexity  of  the situation.
                                 107
                                 7-2

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     I would like to add the following cormients regarding the particular
situation in Milwaukee, Wisconsin, as described in the background portion
of your August 9, 1982, memo.

     In a situation where an area was originally designated nonattainment
based on measured violations but subsequently has air quality measure-
ments less than the ambient air quality standard, common sense would
recognize the need for a study of the situation, including modeling.  It
could not reasonably be expected that violations would disappear by
themselves.  If a source has voluntarily made some emission reduction
changes that eliminate violations, these changes need to be embodied
into regulation and then be made part of the approved State Implementa-
tion Plan (SIP) control strategy.  The approval of such emission limits
as part of a SIP must be based on an adequate demonstration that ambient
air quality standards will be protected.  Such a demonstration must
include a dispersion modeling analysis under worst case conditions.

     If you have any other questions, please let me know.
                                   107
                                   7-3

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I §§2? |     UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                         WASHINGTON, D.C. 20460
                           rrr « - ryje.
                                                           orricc OP
                                                        GCNCMAU COUNS

MEMORANDUM


SUBJECT:  Redesignations  That  Would  Change^-the  SIP

FROM:     Darryl  D.  Tyler,  Director     £^/    f
          Control  Programs  Development "\  '/Zfylfsf
             division                   ^    >^ ^

          Peter H. Wyckoff,  Assistant .General.Counsel
          Air  and  Radiation Division V*#nj. ^-a
                                              '
TO:       Air  Division  Directors,  Regions I-X

     Our staffs recently  discovered, in reviewing a Federal
Register package  that embodied a redesignation from nonattain-
mert to attainment,  that  the redesignation would have relaxed
the relevant SIP,  because the  SIP  specified one set of control
requirements for  "nonattainment" areas  and" a less stringent set
for "attainment"  areas.   The package, however,  treated the
redesignation  merely as a redesignation and not also as a SIP
relaxation.

     We therefore  ask you in the future (1)  to examine each
redesignation  to  determine whether it would have a .substantive
effect on the  stringency  of the relevant SIP and (2) to state
your conclusion in the  Action Memorandum for the Federal Register
package.  If the  redesignation would have such an effect, you
should treat  it as a SIP revision and draft the package in accord-
ance with the  relevant  Agency guidance, including guidance on SI?
relaxations  and attainment demonstrations.  Please forewarn your
state counterparts that EPA will be  treating redesignations that
would affect  SIP  stringency as SIP revisions.   Thank you.

cc:  Air Branch Chief's, Regions..I-X
     Regional  Counsel  Regions I-X

     Bill Beal
     Gerry  Emison
     Tom Helms
     Betsy  Home
     Joan La  Rock
     Bill Pedersen
     John Topping
     John Ulfelder

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REFERENCES FOR SECTION 2.2

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                                                         PR-123-80-12-19-001
                                  Q£C 1 9 1280
Honorable Jennings Randolph
Chairman, Committed on Environment
  and Public Works
United States Senate
Washington, D.C.  20510

3ear Mr. Chairman:

     Thar.ic you for your letter of October 2*.  12CH exorsssinfl -/our continued
interest in the Agency's definition of "anbient air."  Durina the tine
since Oavid Hawkins, ny Assistant Administrator for Air. .Noise, and
Radiation, net with you last February, the definition has been extensively
reviewed and debated.

     After rsviewinc the issues and alternatives, I have determined  :hat
no change frca the existino policy is necessary.  We are rctainino the
sol icy  that the excfnotion free ambient air fs  available only for the
arsosnners over land owned or controlled by  the source and to which
aublic  access is precluded by a fence or other nnysical tarrisrs.  £?".
will continue to revie* individual situations  on a case-bv-case basis
to ensure that the public is ade
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•
                             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                   Office of Air Quality Planning and Standards
                                  Research Triangle Park, North Carolina 2771 1
                                              t 1 JUL 1987


                   MEMORANDUM

                   SUBJECT:  Ambient Air  Issue from New Jersey
                            Department of Environmental Protection (DEP)
                   FROH:      6.T.  Helms.  Chief
                             Control  Programs Operations Branch

                   TO:        William  S. Baker, Chief
                             A1r Branch,  Region II

                        In  response to your  request, we have reviewed your position with
                   respect  to a determination of ambient air applicability in the vicinity
                   of the proposed EF Kenil worth, Inc.  (EFKI) cogeneration unit in Union
                   County,  New Jersey.  As we understand it, EFKI will build and operate the
                   plant on property  leased  (long-term lease) from Sorter ing Corporation.  As
                   we see it  the EFKI operator will be completely separate from the Schering
                   operation  and except for  the land owned and operated by a different
                   Company.  The fact that EFKI has entered into a contract to supply
                   electricity/ steam  to Schering is not really relevant to the ambient air
                   Issue.

                        We  agree with your position that all property outside of the property
                   leased and controlled  by  EFKI would be considered ambient air.  The word
                   "controlled" is anphasized since nothing is said 1n either your memorandums
                   or New Jersey's letter to Region II about what, if any, fence or other
                   physical barrier would be installed to prevent public access to the EFKI
                   leased property.   If such physical barrier 1s not erected, then all land
                   including  the leased site would have to be considered as ambient air.

                        If  you have any questions, please contact Sharon Relnders,
                   at 629-5255.

                   cc:  D.  Tyler
                       J.  Tikvart
                       0.  Wilson
                       G.  McCutchen

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                                                         PN  110-83-03-18-063
                                 MAR 16  1983
Mr. Harry H. Hovey, Jr.  P.E.
Director, Division of Air
New York State Dept. of
  Environmental Conservation
50 Wolf Road
Albany, New York  12233

Dear Mr. Hovey:

     In response to your letter of January  11,  please  be  advised  that
there has been no major  change in EPA policy with  regard  to  ambient  air
and the associated requirements of a SIP  demonstration.   We  have  defined
"ambient air" at 40 CFR  §50.1(e) to include "that  portion of the  atmosphere,
external to buildings, to which the general public has access."   Our general
policy is that the only  exemption to compliance with the  provisions  of
ambient air is for the atmosphere over land owned  or controlled by the
source and to which public access 1s precluded  by  a fence or other physical
barriers.

     The national ambient air quality standards are designed to protect
the public health and welfare and apply to  all  ambient air which  does include
the rooftops and balconies of buildings accessible by  the public. While
EPA has the responsibility to develop the air quality  standards,  the
States have the initial  responsibility to implement them.  In effect, the
States have the prime responsibility, to protect public health and welfare.

     While EPA considers ambient air to include elevated  building receptor
sites, it is not practical to analyze the air quality  at  every such  existing
location.  Therefore, both EPA and the States must exercise  their best
technical judgment as to when such sites  must be evaluated so as  to
protect public health and welfare.  Thus, we do not expect States,  in
most circumstances, to evaluate the impact  on elevated building receptors.
However, if the State has reason to believe that such  an  evaluation  is
necessary to protect public health and welfare, then  it  is incumbent upon
the State to conduct such an analysis.
                                    110
                                   63-1

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it furthe            l           "    S '"" "fl » ""»"« « <"««

                                 Sincerely yours,
                                Kathleen M. Bennett
                              Assistant Administrator
                           for Air, Noise,  and Radiation

cc:   R.  Campbell
     J.  Schafer
                                   no
                                   63-2

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                   ENVIRONMENTAL PROTECTION AGENCY
                           WASHINGTON. D.C. 204CO
                      OFFICE  OF THE GEKERAT, COUNSEL
 }}„:,•   ncptr.a'.bor  27,
                 .
       Air CV;.u.ity and Radiation Division

.$,..;,;„.<•   Attair.r-cnt  of National Standards in Open  AJ r Parking  Lots

   Tc:   Conca-i  Simon, Chief
       Air rrrcrrarns Branch
       F.cgion  II


                            MEMORANDUM OF LAV7

                                   FACTS
                         •
             Your memorandum of  September  1,  1972 raiser,  the i:;nuc
       of  the  air pollution impact of a proponed sports  cornp.! .-:J-.'e  men
       be  <-:-:c'.;u;>.!d  in  the parkin:? lot of  thc> cc'".plr;x  each tun^  it
       ir  u-cd for  a major event.

                                  QUr.STIOU

             Is the  atmosphere  above an ^open-air parking lot \:'iich
       is  part of  a sports complex  "ambient air" under  the  Clean
       Air A:;t and  EPA regulations?

                                   ANSWER

             Yes.   Under  tho  dcfjniti.on of " nti-bi^n'-. air" in  JTA
        ro-j'.ilatj or.r; , n-iticnal /T.-bient  'i.ir cjna: itv  "tandard.':  •..•-»_!Id.
        ap~'.y  to  ti'at portion of  the a'.i :ir^'!ir:rc  r. < -ice it ir-  c::torn-.1.1
        to buildinas and  the  acneval pul.vl i r  has  ar.ceus to  it.

                                 DISCUSSION

        1.   ri'A  has prescribed'  the  applicability of  the national
        pr.V" iry  -'ind secondary f-rrb.icnt air quality standard:; ! ii'r.-n "that |-jortio:.
        of i'ir. ••.tncr.piic.vo ,  •".:•: tern a I  to )nn..l din'*jr.,  i-o  v.-liicU  '"'
-------
                             -  2 -
iilr  which  \i; the r; u 1*. j - ': t of  your  .inquiry is  a  portion of
the  ••itrorsplu- re  extern^.1 l-.o  buj 1 dinq:; .   A somewhat:  more
crCricult  quo:- 1- Aon  i •;  vlio  Liu: qor.erol  public is and whether
i. I.  can be  .'•••! id  to luv-\: «':ccc:;r.  u>  Lhii;  .facility.

2.    The d i rti.onory  d-.-f i.ncrr-  "p-.ibj .i c"  to mean "the  people
as  ci '.-.'hole", cincl noLc"-; that' cii--  term jpciy contemplate "a
cjroTjp 'of  people disVip-ju '-.sbru  b/  common interests  or
charnctcri.'U-.j.e.:;"  (v.'c''isf-cr ' r. Third New  .International Dic-
tionnry  (190G)).  Siiv-.c: (i3n.j(,.)  attache ::  the modifier
"'jcpr.-rrii"  ,  it  iivJicc'iLvr;  that  i :;•;  broad1.;.'.: definition v.-cis
in'-~;id'rJ  by  L!\c roquK'i tion .   Ti".'  carrn "accc.ss"  is  defined
-is  me -.in ing  "rcrr.iir:sion ,  libc-rty,  or  obiliLy to  enter...."
 (U'eb"i or ' s  Tlijrd  Ncv/  J nlotn.'.i. U-M.I]. Dic!:.:.onary  (1966)).
While:  the pax king  lot  in  <-;iv.-;: i".i inoy b-.s  fenced and/or
gu-T'.^d  yo  ns  to  prcv-mf:  tlv-  -MI:' once c-1!  the: ycncral  public
curin-r -ill  times  cxo'T)':  .tl:o-. •  u-.ruudiato.ly  preccdiny,  durinc),
inv.l irunediaLely  Col.lou-.u\'i ntlii: :  ; «.:  evi-ni:-; ,  it  is clear that
t'ne cTciic-.rcil i>u'u.lic  mny readily f.-.ter the  lot on foot  or  by
vr:h.i.<:]e dui:.irKr  the  prr.io-.l ol  )ii •jlirv.t pollution levels.   The
c^'-enL.i.t-'.l clic'racter of thia  c-. •-.• • !--.x  i:*>  public,  nnd  it is
ci:'TJc:ult to i ni'itjinc  l'n-;-t tJ!1^ ••: ''';•' nnc"  of  inc'nibers of  the
 co:>' "-J;vi. Vy al. l;n";^  v/c-»n]ci 1,^.  •_.:.•  -,-:.cteci  on "riamr; days'1,
u-iic 1. !u-v pcr-.onr; . who nc"!i cnl'v -.!•:  so  Lo r;irchase  ti.chcts,
 '.:a'_rh crnv::lr , or pick pcchcU.   '1'lii.u  s.i i-.un t: i on may  be con-
 trif. Led v/if.li fh:%t of  prj.vato nv-^r-rty  outdoors v;hcro only
 •L:PJ son:; havinq  >;c->inc  Sf-i'.ci'il  r.--J.<' ionslnp ;;j Uh  the  jsroperty
 c'-T'T, or hi"  a'.jcnls  or J (?  p-irl: i iv: 1'<;   "1 ; .->);i.n |  i i. apply to  co
 dc>-'J. l.f>».'n ."». feiu: v.-hert-  r'-nb'Hi  r < >'\:<:: \ 'Jo C'^i'-Mi'-.rattonr. due  to
 he .•••/  Ural  f i 'j av:  a.V/o  a  pro'i',  i.   An  year nujmorandum sug-
 (jc.'.'U:: ,  oven  .i L  !:he  al.n )•;, !•.:•>•! : .!•.,•••• I-!T:  fnv^iny lot v/cre
 not  '.' vinbient  air"  it  vvil'l b" IK-'  ••;:;rivy  lf.>r tlic St.ntc1';
  ii;:i)i .•,•,'.•;•.'•.' i; i e?i  r>iap.  t ">  c:--;)':. > ''   'i1; ii^i'"".  . of  omic."ioi'i3  at
  Lh'-  f-u-Jli.';  up. MI  th~ ->i -i./pu- •  .  '.,.-jy;nil  i 'i:.: lot's  fence line.

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                      rTED STATES ENVIRONMENTAL PROTECTION AGENCY
                                        REGION V

            1 6 1SE5
   CATS.

SUBJECT,         Air

                            »r
       : Regional Meteorologists,  Regions I-X
                                                                 ••v.'-c *      *

     705 Joseph Tikvart, Chief (MD-14)
        Source Receptor Analysis Branch

        At the recent Regional Meteorologists'  meeting 1n Dallas, we Identified
        inconsistencies among the Regional  Offices on what areas are to be
        considered as snoient air for regulatory  purposes.  The existing Incon-
        sistency on ambient air is due to both the lack of clear National
        guidance and the allowed Regional Office  discretion.  A standardized*
        approach is necessary both to satisfy the consistency requirenents of
        Section 3Q1 of the Clean Air Act and in order  for those
                                               "
                                                                           _
        Regional modeling activities to pro vide effective and efficient review
        of and  guidance on modeling analyses.  Accordingly, the Regional Meteor-
        •clogists have decided to address the problem at the working level
        through the use of a consistent modeling approach.

        40 CFR Part 50. He) defines asbient air as "... that portion of the
        atmosphere, external to buildings, to which the  general public has
        access."  A letter dated December 19, 1980, from Douglas Costle to
        Senator Jennings Randolph, clarified this definition by stating that
        the exetnption from ambient air is available only for the atmosphere
        over  land owned or controlled by the source and  to which, public  access
        is precluded by a fence or other physical barriers."  The codified
        definition plus the 1980 clarification essentially constitute the
        National policy on ambient air.

        The Regional Meteorologists propose that for Modeling purposes the  air
        everywhere outside of contiguous plant property  to which public  access
        is precludeo sy a  fence  or  other effective physical  barrier should  be
        considered TT, locating receptors.   Specifically, for stationary  source
        modeling, r creators should  be  placed anywhere outside  Inaccessible  plant
        property.  For example,  receptors should be included over  bodies of
        water,  over  in fenced plant  property, on buildings, over roadways, and
        over  property owned by other sources.  "For mobile source modeling (i.e.,
        CO modeling), receptors  should continue to be sited in accordance with •
        Volume  9 of  tne  "Guidelines  for Air Quality feintenance Planning*.

        Unless  you disagree with our position, we will require new actions with
        modeling analyses  submitted  to EPA  after January 1,  1986,  to conform to
        this  modeling  policy.   Please  note  that  all 10 Regional Meteorologists
        have  reviewed  and  concur with  this. nemo.
         cc: Regional Meteorologists, Regions I-X

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                                                             r-N :iG-S7-0
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                                   -2-


     Case 3 (Wayne County, MI):   This-ease involves the air over the
Detroit River, the Rouge River and the Short-cut Canal.  We agree that
the air over all  three of these  is ambient air, since none of the companies
owns them or controls public access to them.  Note, however, that one
source's property—regardless of whether it Is fenced—is the "ambient
air* relative to another source's emissions.

     Case 4 (Cuyahoga County, OH):  This cast involves LTV Steel's iron
and steel Mill located on both sides of the Cuyahoga River.

     We do not feel that LTV Steel "controls" the river traffic  1n that
area sufficiently to exclude the public fro* the river, whether  it be
recreational or Industrial traffic.  The fact that there Is little or no
recreational traffic 1n that area 1s not sufficient to say that  all  river
traffic there 1s LTV traffic.  The public also Includes other Industrial
users of the river that are not associated with LTV.

     It 1s difficult to tell from the map whether the railroad line is a
through line or not.  If the railroad yard serves only the plant then it
would not be ambient air but the railroad entrance to the plant  would
have to be clearly marked and patrolled.  However, if the line 1s a
through line then that would be ambient air.  We would need additional
Information to make a final determination.

    The unfenced river boundaries should meet the same criteria  as in
Case 2 above.

     Case 5 (involves the placement of receptors on another source's
fences-property):  As mentioned above in Case 2, we feel that present
policy does require that receptors be placed over another source's property
to measure the contribution of the outside source to Its neighbor's
ambient air.  To reiterate, Plant A's property Is considered "ambient
air" in relation to Plant B's emissions.

     I hope that.these comments are helpful to you and your staff.  This
memorandum was also reviewed by the Office of General Counsel.

cc:  S. Schneeberg
     P. Wyckoff
     R. Rhoads
     0. Stonefield
     Air Branch Chiefs, Region I-X

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             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                   Office of Air Quality Planning and Standards
                  Research Triangle Park, North Carolina 27711

                                 22 JAN 1936
William F. O'Keefe, Vice President
American Petroleum Institute
1220 L Street Northwest
Washington, 0. C.  20005

Dear Mr. O'Keefe:

     Mr. ElMns has asked me to respond to your letter of December 18, 1985,
1n which you perceive a change 1n our policy with regard  to the  location of
receptors for air quality dispersion modeling.

     Let me assure you there 1s no change 1n our long-standing national
policy with regard to the definition of ambient air.   That policy Is based
on 40 CFR Part 50.1 (e) which defines ambient air as  "... that portion
of the atmosphere, external  to buildings, to which the general public has
access."  A letter dated December 19, 1980, from Douglas  Costle  to Senator
Jennings Randolph, reaffirmed and clarified this definition by stating the
exemption from ambient air is available only for the  atmosphere  over land
owned or controlled by the source and to which  public access  1s  precluded
by a fence or other physical barriers.  A copy  of Mr. Costle1s letter is
enclosed.  The codified definition plus the 1980 clarification essentially
constitute the national policy on ambient air.

     The Regional Meteorologists' memorandum to which you refer  does not
imply any change in this national policy and simply harmonizes modeling
procedures with our long-standing policy.  It 1s Intended to  ensure con-
sistent Regional implementation of that policy  and to dispel  any questions
about pollutant concentrations at locations where the general public has
access.

     Thus, since the Regional Meteorologists' memorandum  does not Imply any
change in our policy, I do not believe there 1s any need  for  policy review
at this time.
                                          Sincerely,
                                          €erald A. Eaison
                                              D1rector
                                   Office of Air Quality Planning
                                            and Standards
Enclosure

cc:  W. Quanstrom
     C. Elkins

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                                                                 PN  110-87-04-30-
            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
 1                 Office of Air Quality Plannin'g and Standards
./                Research Triangle Park, North Carolina 27711
f
                                   2 C X*


    MEMORANDUM

    SUBJECT:  Alibi ent Air

    FROM:     G. T. Helms, Chief 'f**""
              Controlled Programs Operations Branch (MD-15)

    TO:       Bruce Miller, Chief
              Air Programs Branch, Region IV


         My staff and I have discussed the  five situations Involving the
    definition of ambient air that you sent on December 18,  1986.   The
    following comments represent our Interpretation -of the ambient  air
    policy.  However, this memorandum 1s not a discussion of the technical
    Issues Involved 1n the placement of receptors for modeling.  Our comments
    on each scenario follow:

         Scenario One:  We agree with you that the road and  the unfenced
    property are ambient air and could be locations for the  controlling  receptor

         Scenario Two:  We agree with your determination 1n  this case  also.

         Scenario Three:  We agree with" you that the road 1s ambient air.
    However, Area B 1s not ambient air; 1t Is land owned or  controlled by the
    company and to which public access 1s precluded by a fence or other
    physical boundary.

         Scenario Four:  We do not think that any of the barriers mentioned
    here are sufficient to preclude public access so as to allow the source
    to dispense with a fence.  An- example of an unfenced boundary that would
    qualify is.a property line along a river that Is clearly posted and
    regularly patrolled by security guards.  Any area, such  as grassy  areas
    that might even remotely be used by the public, would have to be fenced
    even 1n this situation.  We would not think that a drainage ditch  would
    meet these criteria.

         Scenario Five:  Both fenced pieces of plant property, even though
    noncontiguous, would not be considered ambient air (see  Scenario Three).
    The road, of course, would be ambient air.  Again, ownership  and/or
    control of the property and public access are the keys to ambient  air
    determination.

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                               -2-
                               hjlpf,, t,

-t  if /ou h,,. an1" Off'" »
s.	
P. Wyckoff
R. Rhoads
0. Stonefield
Air Branch Chiefs, Regions  I-X

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                       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                    ioc:
                   of  Ambient  Air for
    FROMDarryl  D.  Tyler,
        Control  Programs  Development 01'vision  (MD-15)

      TOAllyn Davis,  Director
        Air 4 Waste Management Division,  Region VI

             This  is  in response to your  memorandum of  May 23,  1983,  to
        Sheldon Meyers.  In  that memorandum,  you indicated that the Texas  Air
        Control  Board. (TACB) believes that an ambient lead monitor 1n El Paso
        1s not located in the ambient air, and therefore the data from that
        monitor should not be used to develop a control  strategy for  lead.

             The monitor is  located at the International Boundary Water
        Commission's  (IBWC)  property, about 1000 feet from the  edge of the property
        of ASARCO's primary  lead smelter.  TACB believes that the monitor  is  not
        in the ambient air because public exposure  at the IBWC  property wou'.d at
        most be only  daily for a period of not more than eight  hours, and  there-
        fore no one person is expected to be at the IBWC site continuously for a
        full three months, the exposure time inherent in the lead standard.

             TACB's logic runs counter to EPA's policy  on ambient air.  In
        40 CFR 50.1(e), ambient air includes "that  portion of the atmosphere,
        external to buildings, to which the general public has  access."  "hat
        definition does not  account for any time limitation or  averaging time.
        Regardless of whether any member of the public  is expected to remain  at
        a particular  place for a specific period of time, ambient air is defined
        in terms of public access, not frequency of access, length of stay,  age
        of the person or other limitations.  The only exemption in EPA policy to
        compliance with the provisions of ambient air is for the atmosphere  over
        land owned or controlled by the source and  to which public access1  is
        precluded by  a fence or other physical barriers.  Since ASARCO does  not
        own the site  of the IBWC monitor, it clearly falls within our definition
        of ambient air.

             Furthermore, any monitor can give only an estimate of the actual
        maximum concentration of a pollutant in the vicinity of the monitor.
        There"may actually be higher concentrations of lead in  the area  oetween
        ASARCO's boundary and the IBWC monitor, such as on the  highway that  runs
        between the ASARCO smelter property and the IBWC property.  The general
        public may have more frequent or  longer access to this  location  than to
        the  IBWC property itself.  Therefore, t^ie fact that the general  public
        may  not be expected to remain at  the I3.VC site itself continuously for
        three months   is no reason to disallow tne use of the monitor's data for
        developing a  control strategy.
EPA foim 1320-6 (R... J.76)

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                                                                if
cc:   J. Calcagni
     J. Divita
     K. Greer
     T. Helms
     J. Silvasi
     D. Stonefleld
     J.  Ulfelder

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                      UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
   DATE.      DEC 1 8 1986
FROM

SUBJECT    ^ Definition Of j^bient Air

           Bruce P. Miller, Chief  )b-> — «- I
           Air Programs Branch
           Air, Pesticides & Toxics Management Division
           Tom Helms, Chief
           Control Programs Operation Branch (MD-15)
           SUMMAR?

           The North Carolina Division of Environmental Management has asked
           for a clarification of ambient air in regards to a certain source
           located in North Carolina.  The Regional Meteorologist's memorandum
           dated May 16, 1985, provides that for modeling purposes receptors
           are located everywhere outside of the contiguous property of a
           plant to which the public is precluded due to a fence, or other
           effective physical barriers.  Attached are a number of scenarios
           for the source where we request a response on whether the receptors
           at certain locations are considered anbient air and whether the
           calculated modeling result at these receptors are to be considered
           in establishing an emission limit if one or more of these receptors
           is controlling.  The Region IV opinion for each scenario is provided.

           Most of the scenarios we believe are dealt with adequately in the
           May 16, 1985 memorandum, however, there is a major concern on our
           part about how to interpret the modeling results in scenario numbers
           three, four and five.

           Please provide us with a written response by January 27, 1987.  Please
           contact me or Mr. Lewis Nagler of my staff at FTS 257-2864 if you re-
           quire additional information.
           Enclosure  (1)
           cc:  Joseph Tikvart  (MD-14)
                RTF, NC
 PA Fwm 1320-4 («•». 3-76)

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NORTH CAROLINA AMBIENT AIR SCENARIOS

Scenario One

The plant property is divided by a public road.  The portion  >f the
property on which a point source is located (Area A) is completely
fenced.  The property on the other side of the road (Area B) is
unfenced.

The Region IV position is that the road and the unfenced property
are ambient air and if air quality modeling locates the control-
ling receptor in Area B, the emission limit will be determined
based on the calculated concentration at that receptor.

Scenario Two

This scenario is the sane as scenario one except that Area B is
fenced except for the property along the public road.

The Region IV position is identical to that provided in scenario
one.

Scenario Three

This scenario is the sane as scenario one except that all of
Area B is fenced.

The Region IV position is that the road is ambient air and that
Area B should have receptors located there for modeling purposes.
We also believe that since Area B is not contiguous to that prop-
erty that is needed for plant operation, even though fenced, Area B
is anbient air.  We further believe that if a receptor located in
Area B is found to contain the controlling receptor for establishing
the source emission rate then that receptor value must be used.

There is a concern on our part that the Nay 16, 1985 .memorandum
could be interpreted to allow the Air Quality Management officials
to discard the-calculated concentrations within Area B.  We believe
a clarification of the anbient air policy on this point is needed.

-------
Scenario Four

Area A is fenced except for the property along the public road.

The Region IV position is that Area A is ambient air unless the
source can demonstrate that the public is precluded to entry by an
effective physical barrier.  However, since a physical barrier
other than a fence is subject to various interpretation, we are
seeking advise on what we can accept as meeting • that requirement.
For instance, a drainage ditch alongside a road with no shoulder
for parking or the use of "NO PARKING* signs could be "considered
an effective barrier.  As you can see, the concept can be quite
subjective and we require additional guidance in this area.

For this actual situation, would you concur or non concur that no
parking signs in association with no shoulder to park upon consti-
tute a physical barrier?  IT  Region IV position is that this
situation does not constitute an effective physical barrier, but
the addition of a drainage ditch would constitute an effective
barrier.

Scenario Five (Hypothetical)

The entire plant is fenced.  As a result of the county or state's
power of eminent domain, a road is built through the property.
Does the area that is no longer contiguous to the plant operation
area lose its exemption fron the ambient air definition even if
the source fences off the area taken by the road?

The Region IV position is that the area should be grandfathered in
that situation.

-------
                                                    PN 165-84-06-11-014
 r** ',
r^-.'7 -•        i  \ui !• -i \p.> !.N\ii;nNMK\r\i.n;
-------
                           -2-
     Given this conclusion, one could argue, based on the text
of the relevant regulations and the Clean Air Act, that the PSD
increments apply wherever the NAAQS apply, and that both must
apply throughout the "ambient air."  However, the PSD system,
unlike the NAAQS system, does not aim at achieving.one single
goal.  Rather it represents a balance struck first by Congress
between a given level of protection against degradation and a
given potential for economic growth,  it appears that the
calculations on which that balancing judgment was based all
assumed that PSD increments would be measured at ground level.

     A number of 'State officials who are now administering PSD
have argued to me that by measuring PSD increments on rooftops
as well as at ground level, EPA would make the PSD system
appreciably more stringent than Congress contemplated.  Although
major urban areas are all Class II areas, this approach, it is
argued, could result in constraints on growth comparable to
those that apply in Class I areas - national parks and wilderness
areas.  Such an outcome would not, it is argued, be consistent
with Congressional intent.

     In these circumstances, I think that preserving the status
quo is particularly advisable because:

     •  It is likely that Alabama did not contemplate adopting a
"rooftops* approach to PSD when it took over the PSD program.
That expectation, though not decisive, does provide some reason
not to change the situation without formal rulemaking.

     •  The consequences of an erroneous decision to consider
increment consumption on rooftops will be more severe than those
of an erroneous decision not to consider them.  The adoption of
such an approach will present at least a procedural, and, probably
a substantive obstacle to development in urban areas, while in
its absence air quality will still be protected by the NAAQS, by
the PSD increments applied at ground level* and by the other
aspects of PSD review such as Best Available Control Technology.

     Therefore, I have concluded that since the State of Alabama
has authority under an approved implementation plan for adminis-
tering the PSD program within Alabama, it is their responsibility
to apply this principle of maintaining the status quo to this
case, taking all the relevant facts into account.

     Please advise the State of Alabama of the Agency's position
on these'points as our response to  the issues which they raised
in meetings with both of us.                                          _

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cc:   A. Aim
      P. Ang«ll
      T. Devine
      G. Emison
      w. Pedersen
      P. Wycfcoff
      S. Meiburg

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•I-•••»,
                UNITED STATES ENVIRONMENTAL PROT=:TION AGENCY
                       Office of Air Quality Planning and Standards
                       Researcr, Triangle Park, North Carc'he 27711
                                      .pK 7  1987
        MEMORANDUM

        SUBJECT:   Wyoming--Definition  of  AmbieTnt) Ai r

        FROM:
        TO:
Darryl  D.  Tyler,  Director  —.,   ,/^
Control  Programs  Development Division  (MD-15)

Irwin Dickstein,  Director
Air and Toxics Division,  Region VIII
             This memorandum confirms  and  clarifies our recent conversation on
        Wyoming's proposed change to their definition  of  ambient air.  After our
        conversation, my staff further reviewed the proposal and your office's
        assessment of it.  While we agree  with the  final  position you take--viz.,
        opposition to the change--my staff believes that  several other points
        should be made in comments to Wyoming.

             1.  In Christine Phillips'  memorandum  of  March  20, 1987, two reasons
        are given to oppose the revision.   While  we agree with the thrust of the
        first reason (ineffectiveness of exterior fencing to exclude public
        access because of the public highway and  towns in the enclosed area),
        there may be a problem in boldly stating  the second  reason.  We have
        never either flatly stated that land acquisition  in  general is acceptable
        or unacceptable under section 123  of the  Clean Air Act.  As the memorandum
        points out, the December 19, 1980, letter from Douglas Costle to the
        Honorable Jennings Randolph indicates that  we  will review  individual
        situations on a case-by-case basis.  Therefore,  I believe  we should not
        automatically categorize land acquisition as proposed in Wyoming  as a
        dispersion technique prohibited by section  123,  although further  analysis
        may in fact lead us to that conclusion.  In  at least two instances, we  have
        tolerated land acquisition to "contain" modeled  violations of national
        ambient air quality standards.  We have,  however, avoided  formulating
        criteria for acceptability of land acquisition,  although such criteria
        (such as size of area and relevance to operation) were  at  one time  con-
        sidered.

-------
REFERENCES FOR SECTION 3.1

-------
United States       Office of Air Quality
Environmental Protection  Planning and Standards
Agency         Research Triangle Park NC 27711
                            EPA-450/4-87-OCP
                            May 1987
Air
Ambient Monitoring
Guidelines for
Prevention of
Significant
Deterioration (PSD)
  RADIAN LIBRARY
  RESEARCH TRIANGLE PARK. NC

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&EPA
             United States
             Environmental Protection
             Agency
            Office of Air Quality
            Planning and Standards
            Research Triangle Park NC 27711
EPA-450/4-87-013
June 1987
             Air
On-Site Meteorological
Program Guidance for
Regulatory Modeling
Applications
                                AUG L>:> is


                              LIBRARY SERvlbu

-------
REFERENCES FOR SECTION 3.2

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-------
United States
Environmental Protection
Agency
Office of Air Quality
Planning and Standards
Research Triangle Park NC 27711
EPA-450-4-87-OC"'
May 1987
Air
Ambient Monitoring
Guidelines for
Prevention of
Significant
Deterioration (PSD)
  RADIAN LIBRARY
  RESEARCH TRIANGLE PARK. NC

-------
REFERENCES FOR SECTION 3.4

-------
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REFERENCES FOR SECTION 3.7

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,	\        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
I rW^7 1              Off'ce of Air Quality Planning and Standards
\«4Wy              Research Triangle Park, North Carolina 27711
 
-------
     this, or any other/ analysis must be redone  in  the  future,      fl
     then it should be redone in accordance with  current modeling
     guidance.

     If you have any questions regarding these policies,  please
contact Doug Grano of my staff at 8-629-5255.

Attachment

cc:  Ron Campbell, OAQPS
     John Calcagni, AQMD
     Pat Embrey, OGC
     Eric Ginsburg, AQMD
     Dean Wilson, TSD
     Regional Modeling Contact, Regions I-X

bcc: *^D\ Grano
      J. Vitas

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                  UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                    Office of Air  Quality Planning and Standards
                    Research Triangle Park,  North Carolina 27711


     DATE:  SEP  1    1981

   SUBJECT:  Ambient Monitoring Networks  for Model  Evaluations


     PROM:  Richard G.  Rhoads, Director
           Monitoring  and  Data Analysis Division

       TO:  Ronald  C. Campbell, Assistant Director
             for Program Operations,  OAQPS

                Under  favorable conditions our  available air quality models can
           provide errors  of from  ±10 to ±40 percent.   Under unfavorable conditions
           the errors  can  be much  worse.  For these reasons, we have been consi-
           dering  how  to use ambient  monitoring data to supplement or improve
           model estimates on a case-by-case basis.

                It is  generally not feasible to establish  emission limits for
           point sources based solely on monitoring data.   Thfs is because current
           programs require that emission limits  be based  upon a fairly rare event
           (i.e.,  the  second maximum  concentration anywhere in the area, at anytime,
           and with the facility operating at full  capacity) and to capture that
           event on a  monitor would normally require a prohibitively large and
           expensive network.

                An alternative approach is to establish a  monitoring network of
           reasonable  size, use the resulting monitored data to evaluate the models
           for applicability to those particular  conditions, and then use the result-
           ing "best available" model  to establish the emission limitation.

                One problem with this  approach  is  defining the "network of reasonable
           size" which would be used  to evaluate  the models.  If the network is too
           small,  the  data would be inadequate  to  distinguish between models and the
           evaluation  would have no validity.   If the  network is too large, the cost
           would be excessive.

                Although our experience with evaluations of this nature is very limited,
           I  have  recently recommended  to Region  V that, for a variety of power plants
           in the  Midwest, networks consisting  of approximately 15 monitors each should
           be considered.   This recommendation  was based upon the following knowledge:

                    • My  staff and the technical  modeling staff of Region V estimate
                that,  in-moderate  terrain, a network of 25-30 monitors would be desirable
                to obtain  "reasonable scientific  credibility."

                    * The Electric Power Research Institute has conducted one phase of
                a  major model evaluation study  (called Plume Model Validation) around the
                Kincaid Power Plant.   The PMV network  consisted of 30 ambient monitors
                supplemented by several hundred tracer monitors for special stud1'**.
"> 1320-4 (R.». 3-76)

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          ' The model evaluation program around the Westvaco Luke Mill  in
     Maryland is using nine monitors.  The issue at Luke Mill involves  on1yJ|
     one wind direction (quadrant):  If all wind directions were pertinent,™
     a larger network would have been necessary.

          • The model evaluation program around the Ashland Oil  facility in
     Kentucky used a network consisting of 18 monitors.  The issue involved
     complex terrain in a valley situation.

          • The model evaluation program around the Simplot acid plant  in
     Idaho used a network consisting of five monitors.  The issue at Simplot
     involved only one wind direction and one set of meteorological  conditions.

          * The model evaluation program around the Big Bend Power Plant on
     the coast of Florida used a network consisting of eight monitors supple-
     mented by sophisticated plume measurements.  The issue at Big Bend
     involved only a single wind direction.

     Based on our experien" with these programs (all of .-which were reasonably
successful but, with the e  option of EPRI, none of which were "data rich"), I
believe that approximately  15 monitors operating for one year is probably the
minimum network size to obtain a valid data base under normal circumstances.
Fifteen would probably be too few in rugged, complex terrain; fifteen would
probably be too many if the issue involved only a single specific location
(e.g. a single isolated hilltop) or single meteorological condition.

     It is necessary to minimize the number of monitors because the cost of
network of 15 monitors, plus an adequate meteorological station, plus emiss
monitoring, could range from S300K to over $1 million.  The wide range in costs
is influenced primarily by the availability of power at the monitoring sites,  b
the ease of servicing the monitors, and by the complexity of both the terrain
and the meteorological conditions.  Based on preliminary discussions between
Region V staff and electric utility r presentatives, I believe that most large
utilities would be willing and able to bear this cost if they perceive that me
evaluation would result in a relaxation of stringent emission limitations.

     In the past many utility representatives held a strong opinion that the
CRSTER model (most commonly used to evaluate power plants in level to moderate
terrain) tended to overestimate the magnitude of concentrations, i.e. that the
model had a strong conservative bias.  The preliminary data from the EPRI
model evaluation disprove that opinion:  the EPRI results indicate no signi-
ficant bias (at least in level terrain).

     Also the preliminary data from Westvaco (involving  the  SHORTZ model),
the results from-Ashland Oil (involving the VALLEY model), and  the results
from Big Bend (involving the CRSTER model), all tend  to  confirm the model
predictions, although Ashland Oil  showed VALLEY to be  somewhat  conservative
as expected.  I would classify the Simplot results as  "inconclusive."

-------
I believe that it is to everyone's advantage to hive ai"east a few sci^n'
tifically valid model evaluation programs so that we can either
accuracy of the models or establish 'reasonable "edfbi9!^ w th
cc:  »
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£ . •*:•» _  i       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
           $               Office of Air Quality Planning and Standards
                           Research Triangle Park, North Carolina 27711
   DATE: AUG 7   1981

SUBJECT: Monitoring Around Mid-Western  Power  Plants


   FROM: Richard  G.  Rhoads, Director/d-^  r
         Monitoring and Data Analysis Division  (MD-14)

     10: David Kee, Director
         Air and  Hazardous Materials Division,  Region V

               We  have previously discussed  the  requests  of  several utilities to
         conduct  air quality monitoring around  their power  plants  located in
          Illinois,  Indiana and Ohio.  The purpose  of the monitoring would be to
         provide  a  data base suitable for evaluating air quality models and to
         select the most reliable model for setting emission  limits.

               No  widely accepted performance  standards are  available with which
         to judge the acceptability of  a single model.   Thus, to determine the
         best  model for a specific application, we must  rely  on a  comparison of
         the relative performance of two or more models  using a variety of
         statistical tests.  Such an approach has  been recommended by  the American
         Meteorological Society and is  incorporated in an OAQPS report entitled
          "Interim Procedures for Evaluating Air Quality  Models" that was provided
          to your  staff last week (see attached  memorandum).

               These interim procedures  are  the  best available basis for discussions
         with  the utilities on the monitoring programs and  subsequent  analyses.
          The procedures involve (1) identification of applicable models; (2) selection
         and weighting of statistical performance  measures; and  (3) determination of
          an appropriate ambient monitoring  program.   I  suggest that you forward  this
          information to the utilities and  set up meetings where  these  issues can
          be discussed.

               At such meetings it will  be  necessary for  the utility  representatives
          to propose alternative models  that they believe to be more  reliable  than
          the standard EPA models.  Statistical  tests  and performance measures  must
          be agreed upon to determine  the relative  performance of the models  under
          consideration.  These performance  measures must be adequate to evaluate
          the entire range of meteorological conditions  which  affect  the  source
          area, as well as appropriate averaging times.   While these  meetings  will
          involve highly technical issues,  management  personnel may be  required to
          make  decisions relative to the most important  evaluation tests  and  the
          best  measures of uncertainty.

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     It will be necessary to agree on an adequate air quality monitoring
network composed of continuous monitors with quality assurance meeting
the requirements of 40 CFR 58.  Although our experience with networks
for this purpose is limited, we believe that an appropriate balance
between the technical requirements of the analyses and the costs would
result in approximately 15 monitors, depending upon the type of terrain,
meteorological conditions, prior knowledge of air quality in the area,
etc.  For the specific case of the Baldwin plant which you mentioned,
it is likely that 11 monitors would be adequate if the monitors were
carefully located at predicted points of maximum impact under the full
range of meteorological conditions.  (Location of the monitors at points
of maximum impact only under unstable conditions would not provide
adequate coverage.)

     It will be necessary to agree on an adequate on-site meteorological
data collection program.  As a minimum, these measurements should be
similar to those available from National Weather Service Stations and
should be consistent with the PSD Monitoring Guideline requiremerts.
It may be necessary to collect additional data in order to satisfy
the input requirements of proposed alternative models.

     It will be necessary to agree on an adequate program to collect
plant operating data.  Ideally, this would consist of continuous in-stack
emission monitors supplemented by routine operating characteristics.  Many
plants'are willing to install emission monitors for a variety of purposes.
However, if continuous emission monitors are considered to be too exoensive,
it is usually possible to construct adequate emissions data from a carefully
planned as-fired fuel sampling program.

     We assume that the utility will be responsible for all data collection,
data reduction, ana quality assurance.  Once a protocol for the specific
statistical performance measures and their weighting are established,
we further assume that the utility will also be responsible for all calcu-
lations and model evaluations.  Once the analysis is complete, we can  joint:;
review the  results with the utility and come to a reasoned decision as to
the most appropriate model for setting emission limits for that  source.
Thus, the crucial part of this exercise  is establishing  in a written
protocol the  data to be collected, the procedures to be  followed,  and the
basis for judging the  relative performance of  the models being  considered.

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     We must emphasize that the general procedures which are proposed
are interim.  They will evolve in future applications as we gain
experience with developing protocols.  We expect, though, that useful
and meaningful protocols can result at this time from good faith
negotiations between EPA and the utility and its consultants.  My
staff will be happy to provide you with technical support in developing
protocols and in analyzing the model comparisons.  Please contact
Joe Tikvart or me if you desire further assistance.

Attachment

cc:  W. Barber
     T. Oevine
     R. Smith
     E. Tuerk
     S. Wassersug

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                   UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       Office of Air Quality Planning and Standards
                       Research Triangle Park, North Carolina  27711


       DATE:  7/30/81


     SUBJECT:  Interim Procedures for Evaluating Air Quality Models


       FROM:  Joseph A. Tikvart, ChiefQ   _
             Source Receptor Analysis Branch"
         TO:  Chief, Air Programs Branch, Regions  I - X

                  Attached is a report entitled "Interim Procedures for Evaluating
             Air Quality Models."  The purpose of the report is to provide a general
             framework for the quantitative evaluation and comparison of air quality
             models.  It is intended to help you  decide whether a proposed model, not
             specifically recommended in the Guideline on Air Quality Models, is
             acceptable on a case-by-case basis for specific regulatory application.
             The need for such a report is identified in Section 7 of "Regional
             Workshops on Air Quality Modeling:   A Summary Report."

                  An earlier draft  (Guideline for Evaluation of Air Quality Models)
             was provided to you for comment in January 1981.  We received comments
             from four Regional Offices and have  incorporated many of the suggestions.
             These comments reflected a diversity of opinion on how rigid the pro-
             cedures and criteria  should be for demonstrating the acceptability of a
             nonguideline model.   One Region maintained that EPA should establish
             minimum acceptable requirements on data bases, decision rationale, etc.
             Others felt that we should be more flexible in our approach.  This
             report defines the steps that should be followed in evaluating a model
             but leaves room for considerable flexibility in details for each step.

                  The procedures and criteria presented in this new report are con-
             sidered interim.  They are an extension of recommendations resulting
             from the Woods Hole Workshop  in Dispersion Model Performance held in
             Setpember 1980.  That workshop was sponsored under a cooperative agree-
             ment between  EPA and. the American Meteorological Society.  Thus, ^.hile
             some of the performance evaluation procedures may  be resource intensive,
             they reflect most of  the requirements  identified by an appropriate
             scientific  peer group.  However, since  the concepts are  relatively  new
             and untested,  problems may be  encountered  in their' initial application.
             Thus,  the report provides suggested  procedures;  it is  not  a  "guideline."

                  i-.'e "recommend  that you begin using  the procedures  on actual  situations
             within  the  context  of the caveats expressed  in  the Preface and  in  Section
             5.2.   Where  suggestions are  inappropriate, the  use of  alternative  techniques
             to  accomplish  the  desired goals  is encouraged.   Feedback on  your experience
             and problems  are  important  to  us.  After  a period  of  time  during which
             experience  is  gained  and  problems are identified,  the  report will  be
-orm T37C S 'fl»v 3 761

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                                  2
Attachment

cc:
     D.  Fox
     T.  Helms
     W.  Keith
     M.  Muirhead
     L.  Niemeyer
     R.  Smith
     F.  White

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                                  EPA-450/4-84-023
Interim  Procedures for Evaluating Air
        Quality Models (Revised)
            U.S. ENVIRONMENTAL PROTECTION AGENCY
              Monitoring and Data Analysis Division
             Office of Air Quality Planning and Standards
            Research Triangle Park, North Carolina 27711

                    September 1984

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REFERENCES FOR SECTIONS 4.1 AND 4.2

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2138
Federal  Register / Vol. 54, No.  12 / Thursday. January 19. 1989 / Proposed Rules
  Authority: Sees. 1-19. 48 Slat. 31. as
      d 7 L'.S C 601-674
  2. Section 959.229 is added to read as
follows:

$ 959.229 Expenses «nd assessment rat*.
  Expenses of $379.675 by the South
Texas Onion Committee are authorized
=?nd an assessment rate of $0.055 per 50-
pound container or equivalent quantity
of regulated onions is established for the
Fiscal period ending July 31. 1989.
Unexpended funds may be carried over
ds a  reserve.
  Patcd  |a:v>a"y 13. 1989.
William I. On I*.
 ' vi :•- £>-!*'••  B,Trr:nr. Trait cri.'
 '.  •  -:;» D,  s.". n.
' * Uoc  aS-'.JSO Filed 1-1&-69: 8:45 am)
PILING cooe vi«o-ua-«
DCPADTMENT OF THE TREASURY

3< CFH Part 103

Extension of Time for Comment* on
Pioposed Bank Secrecy Act
Regulations

AQBNCV: Departmental Offices.
ACTION: Advance notice of proposed
 •.IsiimRinjz. extension of comment
SUMMAMV: Notice is hereby given that
:rv Department of the Treasury is
• • v 'ending the comment period on the
-1  tvance Notice of Proposed
>  ;emaking Relating to Identification
  .•quirements Required to Purchase
1   r.iv Checks. Cashier's Checks.
   i: eler s Checks and Money Orders.
_ ,':,ished in the Federal Register on
' )-<.pmber 23 1988  (53 FR 51846). The
 ; 'udsury Department has determined
in it more time is needed for the public
'.i review and comment on the proposal.
DATE: Comments now will be accepted
rr-rough February 15.1989.
ADDRESS: Comments should be
•tiuressed to Amy G. Rudnick. Director.
Office of Financial Enforcement.
'^rtpdrtment of the Treasury. Room 4320.
1 '00 Pennsylvania Avenue.  NW..
Washington. DC 20220.
FOR FURTHER INFORMATION CONTACT:
Knthleen A. Scott. Attorney Advisor.
Office of the Assistant General Counsel
(Enforcement). (202) 566-9947.
  Dated. January 13. 1989.
       i R. MwtodM.
      n: Secretary {Enforcement/.
KR Doc. 89-1204 Filfd 1-16-49: &45 am)
a :fc;iugh Friday.
The EPA may chsr;j- a :t^;onHSIe fe^
for copying
FOB FUKTM6P INFORMATION CONTACT:
Mr  lames VVeig^i.. Off.ce of A:r
Quality P!;,nry.n2 «r,c S^r.dards (MD-
11). U.S. Env.rcn.T.i.-io! Protection
Agencx. Resea:cri Triangle Park. North
Carolina 27711: Telephone (919) 541-
5642 or (FTS) 629-5642.
               INFORMATION:
Background

  The 1970 Clean Air Act (CAA)
established the air quality management
process as a basic philosophy for air
pollution control in this country. Under
this system. EPA establishes air quality
goals (National Ambient Air Quality
Standards — N'AAQS) for common
pollutants. There are now standards for
6 pollutants: ozone, carbon monoxide.
sulfur dioxide, nitrogen dioxide.
paniculate matter fPM,o. and lead.
States then develop control programs to
attain and maintain these NAAQS
These programs are defined by  State
Implementation Pliins (SIPs) which are
approved formally by EPA and  are
legally enforceable by the Agency.
Under section noU)(2). a SIP must
demonstrate at!di-.mem. deic.-.be d
control strategv contain legally
enforceable regulations, include an
emission inventor;  and procedures for
new source rev inw. ou'.lire a  program
for monitoring jnJ shov. adequate
resources. In ddJi'.ion  there can be
many other requirements specific to the
pollutan: being ccns.Jered. Under
section Il0!a,i3; re\ isiur.b to a  SIP must
not interfere with the SIPs abilit\ to
meet these retirements. The
consequence* of Stdic failure to get SIP
approval ;TM\   • se.nojs: they include
Federa: promu.j.ition of control
regulations art! economic sjncfons.
  Affirrndtr. e action is required by EPA
on essentiully all aspects of every SIP
and SIP revision. Since EPA's final
decision comes after a regulation
already is adopted and implemented at
the State level, excessive delay in the
review process often is a major source
of friction in EPA s relations with State

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               Federal Register  / Vol. 54. No. 12 / Thursday. January 19. 1989  / Proposed Rules
                                                                        2139
and local agencies. SIP processing at
EPA has a schedule goal of 5/2-5/2 for
final action. That is. the Regions
nominally have 5 months to review
submittais in both the proposal and
promulgation phases: Headquarters
nominally has 2 months in  each phase.
However. SIP actions often take
considerably longer than the total 14
months allocated to publish a final
decision.1
  The lengthy decision process has
resulted in strong criticism from sources
both inside and outside the EPA. In
response, the Deputy Administrator
commissioned in |uly 1987  a senior level
task group to assess the problems
inherent in the process and to
recommend solutions. The  task group
conducted its assessment and presented
recommendations to the Deputy
Administrator. The recommendations
were approved  fully and are described
in a companion notice in today's Federal
Register. One of these recommendations
concerns a procedure and criteria for
identifying a "complete" SIP package,
thereby providing States with guidance
on preparing adequate SIP revisions and
EPA with a clearly defined mechanism
to keep essentially unreviewable SIP
revisions out of the review process.
  This is important because if a State
submits a SIP change without properly
staled  emission limits, legal authority'or
compliance schedules, or which
contains  other obvious deficiencies, it
can enter the full EPA review system.
Such a SIP either will be eventually
aisaoproved. or languish while the State
;s required (perhaps months later) to
suppiv essential data. Heretofore. EPA's
procedures did  not provide in any
comprehensive  way prompt rejection for
incompleteness. Independently,
nowever. some  Regional Offices have
tried to deal with this problem, and have
developed procedures wherein SIP
submittais are judged against a set of
completeness criteria. The purpose of
these procedures has been to keep
incomplete packages out of the more
extensive review system, thereby saving
Doth EPA and the State valuable  time
and resources. Today, EPA is proposing
to institute an EPA-wioe procedure for
    uU' tnai section iKXjii:! of the Clean Air At t
    es ihai The Admmistraior snau wiinm four
     « diier the dale required for suummi.on of H
     .I'-reve or disdpprove such IS1PI for each
    >n -hereof" Unaer me Agency s prwrnt
    ssms workload, sucn * time limit is liierallv
      ne 10 meet for »U but me rooit trivial of
    ru I.H mamutns thai thu deadline does not
    v •'•> SIP revisions but rather only to 'he initul
    •.  'mined after EPA promulgates a NAAQS
    • -Jurti have supported EPA i potmon other
    - nave rind inji a 4-monin review penou
    »s 'o o SIP -evuion
completeness review of all SIP
submittais.

Completeness Review

  In order to free EPA resources that
would otherwise be consumed in
processing incomplete and inherently
unapprovable SIPs, EPA hat created a
completeness review process. Under this
process. EPA will review a SIP for
completeness when it is initially
submitted to determine if all the
necessary components have been
included to allow the agency to properly
review and act on the substance of the
SIP revision. This will be a quick screen
that will assess the reviewability of a
SIP submittal. not its ultimate
approvability. EPA will then promptly
inform the submitting State whether the
agency will proceed to process the SIP
revision or if it must be modified by the
State  because it is incomplete.
  There are several benefits to an early
determination of completeness. First, the
State  is informed promptly as to the
reviewability of the submittal. a current
source of uncertainty in the SIP process.
Second. SIP submittais that are
inadequate for processing are returned
to the State to be corrected, rather than
going through the review process only to
be disapproved because of a lack of
information. Third, unreviewable SIPs
are removed from the process early so
that resources at the Federal level are
allocated to processing only SIPs that
are adequate for review. Finally, the
completeness criteria! provide the States
with guidelines on how to prepare
reviewable SIPs. It is expected that once
the agencies involved (State and local
EPA)  become accustomed to the
completeness review process, the
number of unreviewable submittais will
diminish sharply.
  Screening cntena have been
developed that  define the essential
elements of an acceptable  package, that
will avoid obvious inadequacies, and
that can be applied uniformly with
limited subjective judgement and
review. The cntena were developed by
EPA Regional Offices already using a
list of cntena to determine completeness
of SIP packages in an informal way. On
March 18.1988  a policy for determining
completeness of SIP submittais was
issued by  Gerald A. Emison. Director.
Office of Air Quality Planning and
Standards (OAQPS). to the Regional
Offices (a copy has been placed in the
docket as  item IMM). The policy
includes basic cntena for determining
completeness, and sample  letters for
accepting  and rejecting SIP submittais.
This policy will be followed by EPA
until today's proposed regulation is
made final.
  As part of this action, the
Administrator is proposing to add these
criteria for determining the
completeness of State submittais to 40
CFR Part 51 as Appendix V. In addition.
EPA proposes to modify { 51.103(a) such
that State submissions that do not meet
the criteria are not considered official
plan submissions for purposes of
meeting the requirements of Part 51. In
order to be considered as a complete SIP
submission or an official submission for
Part 51. each plan must meet the cntena
descnbed below and in Appendix V.
The basic criteria are adaptable for use
in parallel processing of State
regulations by EPA.2
  EPA is creating this completeness
review process under the authority  of
Section 301 of the Clean Air Act. which
authorizes the Administrator to
prescribe such regulations as are
necessary to carry out his functions
under the Act. EPA is interpreting the
terms "plan" in section 110(a)(l) and (2)
and "revision" in Section 110(a)(3) to be
only those plans and revisions that
contain all of the components necessary
to allow EPA to a adequately review
and take action on such plan or revision
under section 110 (and. where
applicable. Part D). EPA believes rhat
Congress would not have intended  to
require EPA to review and take action
on SIP submittais that were simply  not
reviewable because they were lacking
important components. Therefore, the
Administrator concludes that Section
110(a) requires him to act only on
complete State submittais.

Completeness Criteria

  The cntena for determining whether a
submittal by the State is complete have
been separated into two categories: (a)
Administrative information and (b)
technical support information.
Administrative information includes the
documentation necessary' to
demonstrate that the basic
administrative procedures have been
adhered to by the Stale during the
adoption process. Technical support
information includes the documentation
that adequately identifies all of the
required technical components of tnp
plan submission.

Administrative Information

  The administrative information
required by the cntena are those basic
                                    i
  1 Parallel processing is * procedure bv which EPA
processes as a propose Suie ruies which nave noi
yet Oeen fuiiv adouieo D%  ihe Slate in order 10
expedite 'Jie final review proces*.

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 2140
Federal  Register / Vol. 54. No.  12 / Thursday,  January 19, 1989 / Proposed Rules
 documents that demonstrate that the
 State has properly followed the
 administrative requirements called for
 b> the Clean Air Act for the adoption of
 State implementation plans. These
 include a letter from the Governor or his
 dcsignee requesting that EPA approve
 the SIP revision, and evidence that the
 revision has been adopted by the State
 in final form, either as part of the State
 code if the revision is a  regulation, or as
 appropriate source specific
 documentation in the form of a permit.
 order, or a consent agreement. The State
 also must provide documentation that
 the necessary legal authority exists
 within the State to adopt and implement
 the plan revision, must include the
 requisite copies of the actual revision
 (regulation, permit, order, etc.). and must
 indicate that the revision is enforceable
 by the State. Finally, the State must
 submit information indicating that the
 program administrative procedures have
 been followed, including evidence of
 public notice and hearings, a
 compilation of the public comments, and
 the State 3 response to these comments.

 Technical Support
   The purpose of the technical support
 information is to identify the State's
 view of the impact of the revision on the
 environment. The components are
 intended to demonstrate that the
 applicable requirements, such as those
 for attainment and maintenance of
 ambient standards, increment
 consumption, and control technology,
 are in conformance with basic statutory
 and EPA requirements.  In order for EPA
 to  make a reasonable decision
 concerning the adequacy of a proposed
 SIP revision, certain information at a
 minimum must be included in each
 submittal. Therefore, for purposes of
 determining the completeness  of a SIP
. submission the implementation plan
 revision must include an adequate
 description of the:
   |a| Pollutants involved:
   (b) Source location and attainment
 status of the area:
   (c) Emissions chances:
   (d) Demonstration that standards/
 increments are protected:
   (c) Information used for any modeling
 demonstration:
   If) Evidence of continuous emissions
 controls;
   [g) Evidence of emissions limitations
 ana other restrictions necessary to
 en«ure emission levels:
   (h) Compliance strategies: and
   (ij Technological and  economic
 justification for the change where
 applicable.
   Upon rece'pt of the pian revision, the
 Regional Office wili obiectively examine
                         the revision for inclusion of the
                         administrative and technical support
                         information. When the revision is
                         determined complete, the formal review
                         of the adequacy of the information and
                         the approvability of the revision will
                         proceed. In those situations where the
                         submission does not meet the basic
                         criteria as discussed above and set forth
                         in Part 51. Appendix V, the submission
                         will be returned to the State with a letter
                         indicating the deficiencies found. In
                         accordance with the change proposed in
                         40 CFR 51.103(a). any submission that
                         does not meet the criteria of Appendix V
                         will not  be considered an official
                         submission triggering the Act's
                         requirements for EPA review and action.
                         The basic requirements are similar for
                         sequential and parallel processing.
                         varying  only in form dictated by the
                         method  of processing. In order to be
                         effective, the determination of
                         completeness should be made
                         expeditiously. The Regional Office
                         generally will make a determination of
                         completeness within 45 days of
                         receiving a SIP revision, using the
                         criteria to make an objective decision.
                           After the decision has been made on
                         completeness, the Regional Offices will
                         process  the SIP revision if the
                         submission is complete, or return the SIP
                         revision to the State if it is  incomplete.
                         A letter  will be sent to the State.
                         informing the State of the completeness
                         status of the SIP revision. If a SIP
                         submittal is incomplete, the deficiencies
                         will be detailed in the letter to the State.
                         If a SIP submittal is complete, the
                         Regional Office will include EPA's
                         expected processing schedule in the
                         letter to  the State.

                         Administrative Requirements
                           The docket is an organized and
                         complete file of all the information
                         considered by EPA in the development
                         of these SIP processing changes. The
                         docket is a dynamic file because
                         material is added throughout the notice
                         preparation and comment process. The
                         docketing system is intended to allow
                         members of the public and industries
                         involved to identify and locate
                         documents so that they can effectively
                         participate in the process. Along with
                         the statement of b isis and  purpose of
                         the SIP processing changes and EPA
                         responses to significant comments, the
                         contents of the docket, except for
                         mteragency review materials, will serve
                         as the record in case of judicial review
                         (see Clean Air Act. section 307(d)(7)(A).
                         42 U.S.C. 7607(d)(7)(A).
                           Section 317(a) of the Clean Air Act. 42
                         U.S.C. 7617(a), states that economic
                         impact assessments are required for
                         revisions to standards  or regulations
when the Administrator determines such
revisions to be substantial. The changes
described today do not change the
substantive requirements for preparing
and submitting an adequate SIP
package. No increase in cost as a result
of complying with the changes described
today is expected: moreover, the
monitoring, recordkeeping. and reporting
requirements have been determined to
be insubstantial. Because the expected
economic effect of the changes is not
substantial, no detailed economic
impact assessment has  been prepared.
  The information collection
requirements of these changes are
considered to be no different than those
currently required by the Clean Air Act
and EPA procedures. Thus, the public
reporting burden resulting from today's
notice is estimated to be unchanged
from existing requirements. The public
is invited to send comments regarding
the burden estimate or other aspect of
information collection, including
suggestions for reducing any burden, to
the docket and the following: Chief.
Information Policy Branch. PM-223. U.S.
Environmental Protection Agency. 401 M
Street SW.. Washington. DC 20460: and
to the Office of Information and
Regulatory Affairs. Office of
Management and Budget.  Washington.
DC 20503. marked "Attention: Desk
Officer for EPA."
  Under Executive Order  12291. EPA is
required to judge whether an action is
"major" and therefore subject to the
requirement of a regulatory impact
analysis (RIA). The Agency  has
determined that the SIP processing
changes announced today would result
in none of the-significant adverse
economic effects set forth in section l(b)
of the Order as grounds for a finding of
"major." The Agency has. therefore.
concluded that this action is not a
"major" action under Executive Order
12291.
  This rule was submitted to OMB for
review consistent with section 307(d) of
the Clean Air Act. A copy of the draft
rule as submitted to OMB. any
documents accompanying the draft, any
written comment received from other
agencies (including OMB), and any
written responses to those comments
have been included in the docket.
  The Regulatory Flexibility Act of 1980.
5 U.S.C. 601-612." requires the
identification of potentially adverse
impacts of Federal actions upon small
business entities. The Act requires the
completion of a regulatory flexibility
analysis for every action unless the
Administrator certifies that the action
will not have a significant economic
impact on a s-bstanuai number of small

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                Federal Register /  Vol. 54. No. 12 / Thursday.  January 19.  1989  / Proposed Rules           21 ?1
entities. For reasons described above. I
hereby certify that the final rule will not
have a significant impact on a
substantial number of small entities.
  DJte  jdnuary 9.1989
Lee M. Thomas.
Administrator
  For the reasons set  out in the
preamble. 40 CFR Part 51 is proposed to
be amended as follows:

PART 51—(AMENDED]

  1. The authority citation  for Part Si
continues to read as follows:
  Authority: Thu rulemaking  it promulgated
under authority of Section* 101(b)(1). 110.
160-69. 171-178. and 30l(aj of  the Clean Air
Act. 42 U-S.C. 7401fb)(l), 7410. 7420-7429.
7501-7506, and  7601(a).

  2. Section 51.103 is proposed to be
amended by revising paragraph (a)
introductory text to read as follows:

§ 51.103 SubmiMton of ptan*. prtttmtiwry
review of plan*.
  (a) The State makes an official plan
submission to EPA when the plan
conforms to the requirements  of
Appendix V to this part, and the State
delivers five copies of the plan to the
appropriate Regional  office, with a letter
giving notice of such acnon. The State
must adopt the plan and the Governor or
his designee must submit it to EPA as
follows:
•    «     t     •     »

  3. Part 51 is proposed to  be amended
by adding Appendix V to read as
follows:

Appendix V—Criteria for Determining
the Completeness of Plan Submissions.

1 0  Purpose
  This  Appendix V Beit  forth  the  minimum
criteria for determining whetner a State
imolementanon pian submitted for
consideration by EPA is an official
submission for purpose of review under
{ 51.103.
  1 1 The EPA shall return to  tne submitting
official any plan or revision thereof which
fans to meet the criteria  set forth  vn this
Appendix  V. or otherwise request corrective
af.ion  identifying the component!?! anseni
or insui'f.cient to perform a review of the
submitted plan.
  1.2 The EPA shall mi'orm the submitting
official when a plan suomission meets the
requirements of this Appendix V. sucn
ijc'ermmation resulting in the  plan beins an
nf'"i..,dl submission for purposes of } 51 103.

Jf  C.-nena
  The following shall be included in pian
'...^missions for review by EPA
  -1 Administrative Materials
  'a' A formal letter of submntal  from the
Governor or his designee. requesting EPA
approval of tne plan or revision thereof
 -.  L'jfter  "the  p.an ')
  (b) Evidence that the Stale has adopted the
plan in the State code or body of regulations:
or issued the permit, order, consent
agreement (hereafter document) in final form.
That evidence shall include the date of
adoption or final issuance as well as the
effective date of the plan  if different from the
adoptmn/nsuonce date.
  (c) Evidence  that the State has the
necessary legal authority under Stale law to
adopt and implement the  plan.
  (d) A copy of the actual regulation, or
document submitted for approval and
incorporation by reference into the plan.
including indication of the changes made to
the existing approved plan, where applicable.
The submittal shall be a copy of the official
State regulation/document signed, stamped.
dated by the appropriate State official
indicating that  it is fully enforceable by the
State. The effective date of the regulation/
document shall, whenever possible, be
indicated in the document itself.
  (e) Evidence  that the State followed all of
the procedural  requirements of the State's
laws and constitution in conducting and
completing *' r  adoption/issuance of the plan.
  (0 Evider   that public notice was given of
the proposed change consistent with
procedures approved by EPA. including the
date of publication of such notice.
  (g) Certification that public heanngfs) were
held ID accordance with the information
provided in the public notice and the State's
Laws and constitution, if applicable.
  (h) Compilation of public comments and
the State's response thereto.
  12.  Technical Support
  (a) Identification of all regulated pollutants
affected by the plan.
  (bj Identification of the locations of
affected sources including the EPA
attainment/nonattainment designation of the
locations and the status of the attainment
pian for the affected areas(s).
  (c) Quantification of the change* in plan
aliowaoie emissions from the affected
sources; estimates of changes in current
actual emissions from affected sources or.
where appropriate, quantification of changes
in actual emissions from affected sources
through calculations of the differences
between certain baseline levels  and
allowable emissions anticipated as a result of
the revision.
  (d) The State's demonstration that the
National Ambient Air Quality Standards.
prevention of significant deterioration
increments, reasonable further progress
demonstration, and visibility, are protected if
the pian is approved and implemented.
  (ej Modeling information required to
support the proposed revision, including input
data,  output data, models used,  justification
of model selections, ambient monitoring data
uses,  meteorological datd used,  justification
for use of offsite date (where used), modes of
models used, assumptions, and other
information relevant to the determination  of
adequacy' of the modeling analysis.
  (f) Evidence, where necessary, that
emission limitations are based on continuous
emission reduction technology.
  (g) Evidence that the plan contains
emission limitations, work practice standards
and recordkeeping; reporting requirements.
where necessarv to ersure emission levels.
  (h) Compliance/enforcement strategies
including how compliance will be determine
in practice.
  (i) Special economic and technological
justifications required by any applicable EP\
policies.

2.3. Exceptions
  2.3.1. The EPA. for the purposes of
expediting the review of the plan, has
adopted a procedure referred to as "parole!
processing." Parallel processing allows a
State to submit the plan prior to actual
adoption by the State and provides an
opportunity for the State to consider EPA
comments pnor to submission of a final pun
for final review and action. Under these
circumstances the plan submitted will n"t be
able 10 meet all of the requirements of
paragraph 2.1 (all requirements of pdraer :oh
2.2 will apply). As a result, the followi-.i
exceptions apply to plans submitted
explicitly for parallel processing:
  (a) The letter required by paragraph 2.1'*)
shall request that EPA propose approval of
the proposed plan by parallel processing
  (b) In lieu of paragraph 2.1(b) the State
shall submit a schedule for final adoption or
issuance of the plan.
  (c) In lieu of paragraph Zl(d) the plan *.-.„:!
include a copy of the proposed /draft
regulation or document.
  (d) The requirements of paragraphs 2 1!H-
2.1(h) shall not apply to pian* submitted for
parallel processing.
  2-3.2. The exceptions granted in paragrnph
2-3-1 snail apply only to EPA s determindtiun
of proposed action and all requirements of
paragraph 2.1 shall be met pnor to
publication of EPA's final determination of
plan approvability.
(FR Doc 89-1001 Filed 1-18-89: 8:45 am]
•4UJMO COOT «SSO-iO-«l
FEDERAL EMERGENCY
MANAGEMENT AGENCY

Federal Insurance Administration

44 CFR Part 67

[Docket No. FEMA-0946]

Proposed Rood Elevation
Determinations

AGENCY: Federal Emergency
Management Agency.
ACTION: Fronted rule.

SUMMARY: Technical information or
comments are solicited on the proposed
base (lOO-year) flood elevations and
proposed base flood elevation
modifications listed below for selected
locations in the nation. These base (100-
yearl flood elevations  are the basis  for
the floodplam management measures
that the community is  required to eithe--
adopt or show evidence of being alrebc v
in effect in order to qualify or remain
qualified for participation in the

-------
                              EPA-450/2-78-027R
Guideline On Air Quality Models
               (Revised)
         U.S. ENVIRONMENTAL PROTECTION AGENCY
              Office of Air and Radiation
         Office of Air Quality Planning and Standards
            Research Triangle Park, NC 27711

                   July 1986

-------
c/EPA
                United States
                Environmental Protection
                Agency
                        EPA-600/8-81-009
                        April 1981
Research  and

Development

Guideline for
Fluid Modeling of
Atmospheric Diffusion
                                         ENV«ONM£NTAl PROTECTION
                                              AGENCY

                                            OCT 3u 1981
                                          UMARY SERVICES OFFICE
                Prepared for

                Office of Air Quality
                Planning and Standards
                Prepared  by


                Environmental Sciences Research
                Laboratory
                Research Triangle Park NC 27711

-------
              NC 27711
Fluid Modeling
Demonstration of
Good-Engineering-
Practice Stack
Height in Complex

-------
REFERENCES FOR SECTION 5.7

-------
                                                              PN  123-85-10-28-008
 -NrtO ST4,
0 -  *         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                      Office of Air Quality Planning and Standards
                      Research Triangle Park, North Carolina 27711


                               OCT Z S J985
   MEMORANDUM

   SUBJECT:   Implementation of Stack He 1gj>.f)Regulates -  Exceptions From
             Restrictions on Credit  for

   FROM:     Darryl  D. Tyler, Director/  ^^_
             Control Programs Development Dlyrslon (MD-15)

   TO:       Director, A1r Management Division
             Regions I-X

        This guidance has been prep  -ed  to  address two Issues  pertaining to
   credit for merged stacks prior  to July 8, 1985.   It establishes a procedure
   that should be used to prepare  and to review justifications for merging gas
   streams for economic or engineering reasons,  and to address the presumption
   that merging was  significantly  motivated by an Intent to gain credit for
   Increased dispersion.   Please note that this  1s guidance; States may submit
   alternative demonstrations 1n support of merged stack exemptions 1f they
   feel the  Individual circumstances warrant.

   Background

        Recent revisions  to EPA's  stack  height regulations place certain
   restrictions on the degree to which stationary sources  may  rely on the
   effects of dispersion  techniques  when calculating allowable emissions.
   One such  restriction 1s provided  for  the merging of gas streams, or
   combining of stacks.   Several exemptions have been provided 1n the regula-
   tion, however.  More specifically, 40 CFR Part 5l.l(hh)(2)(11) allows
   credit under circumstances where:

        A.  The source owner or operator demonstrates that the facility was
   originally designed and constructed with such merged gas streams;

        B.  After July 8, 1985, such merging 1s  part of a  change 1n operation
   at the facility that Includes the Installation of pollution controls and 1s
   accompanied by a  net reduction  1n the allowable emissions of a pollutant.
   This exclusion from the definition of "dispersion techniques" shall apply
   only to the emission limitation for the pollutant affected  by such change
   1n operation; or

        C.  Before July 8, 1985, such merging  was part of  a change 1n operation
   at the facility that Included the Installation of emissions control equip-
  ment or was carried out for sound economic  or engineering reasons.  Where
   there was an Increase  1n the federally-approved emission limitation for any

-------
pollutant or, 1n the event that no emission limitation was 1n existence
prior to the merging, an Increase 1n the quantity of any pollutants actually
emitted from existing units prior to the merging, the reviewing  agency
shall presume that merging was significantly motivated by an Intent to gain
emissions credit for greater dispersion.  Absent a demonstration by the
source owner or operator that merging was not significantly motivated by
such an Intent, the reviewing agency shall deny credit for the effects of
such merging 1n calculating the allowable emissions for the source.

General Requirements

     Figure 1 Illustrates a framework for evaluating claims for  merged
stack credit.  Because merged gas streams are generally regarded as prohibited
dispersion techniques under the regulations, 1t 1s Incumbent on  the State
or the source owner or operator to demonstrate that such merging was conducted
for sound economic or engineering reasons, and was not significantly motivated
by an Intent to avoid emission controls.  Consequently, the first step
should entail a review of State and EPA files to determine the existence of
any evidence of Intent on the part of the source owner or operator.
Information showing that merging was conducted specifically to Increase
final exhaust gas plume rise serves as a demonstration of dispersion Intent
that justifies a denial of credit for merged gas streams.  Demonstrations  that
merging was carried out for sound economic or engineering reasons are
expected to show that either the benefits of merging due to reduced
construction and maintenance costs outweigh the benefits relating to lower
emission control costs or that relevant engineering considerations showed
the merging to be clearly superior to other*conf1gurat1ons.

Demonstration Requirements

     Several exemptions from prohibitions on gas stream merging  are provided
for existing sources 1n the stack height regulations:

     1- where sources constructed their stacks before December 31, 1970,

     2- where the total facility-wide emissions from the source  do not
exceed 5,000 tons per year,

     3- where the facility was originally designed and constructed
with merged gas streams, and

     4- where the aerglng was part of a change 1n facility operation that
Included the Installation of pollution control equipment and resulted 1n
no Increase 1n the allowable emissions of any pollutant.*  Where there
was an Increase in emissions 1n conjunction with the nerglng and Installation
of control equipment, the regulations require that source owners also make
an affirmative demonstration that the merging was not motivated  by dispersive
Intent.

     *Where there was no federally-approved emission Hm1t prior to merging
gas streams, there must be no Increase  1n the actual emissions of any
pollutant.  Moreover, U 1s  Incumbent on  the State to  demonstrate  that  there
was a  logical relationship between the merging of existing gas streams  and
the  Installation of  controls.

-------
     Sources that are not covered under these criteria may still qualify for
exemption 1f they can show that merging was conducted for sound economic
or engineering reasons.  Such demonstrations should Include justifications
for having replaced existing stacks.  This may be done, for Instance,  by
documenting through maintenance records, correspondence, or other
contemporaneous evidence, that the existing stacks had reached the end of
their useful life, were prematurely corroded, had sustained other damage
making them unservlcable, were of a height less than that regarded as
good engineering practice, thereby causing downwash problems,  or that  the
addition of new units at the facility necessitated additional  stacks and
Insufficient land was available.  The absence of any evidence  supporting
the need for stack replacement creates a strong presumption that merging
was carried out specifically to avoid the Installation of pollution
controls, I.e., was "significantly motivated by an Intent to gain emissions
credit for Increased dispersion."

No Increase 1n Allowable Emissions

     Once this Initial criterion 1s satisfied, demonstrations  may show
that merging was based either on sound economic or sound engineering
reasons.  Claims based on strict engineering justifications nay be more
difficult to show, since the existence of more than one reasonable
engineering solution generally leads to a decision based on economics.
However, 1f1t can be documented that the merged stack configuration was
clearly superior to other stack configurations for purely engineering
reasons, without consideration of cost, then credit for merging may be
granted.

     In order to most reliably Implement the provisions of the regulations
regarding the merging of gas streams for sound economic reasons, It would
be necessary to ascertain the actual Intent of the source owner or operator
at the time the decision was made to merge gas streams.  Recognizing that
the difficulty of doing so was the basis for EPA's rejection of an "Intent
test" 1n the rule, the following approach provides a surrogate demonstration
of Intent.  This approach 1s summarized 1n Figure 2.

     Because the potential savings attributable to the avoidance of
pollution controls can significantly Influence decisions to Merge stacks,
one way to show the absence of dispersion Intent 1s to conduct an analysis
of the annual1zed capital and maintenance costs for merged stacks and  for
Individual stacks, and compare the results to the compliance costs (fuel
and operation and maintenance of any control equipment) calculated based on
the emission limitations derived with and without merged stack credit.   If,
when the difference 1n capital and maintenance costs 1s compared with  the
difference 1n compliance costs over the period of capital amortization, the
capital and maintenance cost saving 1s greater than the compliance cost
saving, then merging can be accepted as having a sound economic basis.

     In establishing this rule of thumb, we are aware that a benefit of as
little as 10-20 percent could be considered "significant* 1n the context of
the court's holding on this matter—I.e., such a benefit could have been
considered to be a relevant factor 1n decisions to construct merged stacks.

-------
However, recognizing that documentation of cost analyses after an extended
period of time--up to 15 years— 1s likely to be limited, we believe that
the 50 percent test articulated above would constitute a more reasonable
basis for initial determinations (that 1s, a level  at which we believe that
there was likely a significant Incentive to merge stacks to avoid control
requirements).

Affirmative Demonstrations of Nond1spers1on Intent

     In some Instances, a State or emission source  owner may not be able to
make a demonstration as described above, or believe that sound economic
reasons existed for merging stacks, regardless  of the relationship between
financial savings attributable to reduced emission  control  requirements
versus lower stack construction cost.  In such  cases, an opportunity should
be provided to affirmatively demonstrate that merged stacks were not
"significantly motivated by an Intent to obtain emissions credit for
increased dispersion."  The burden of proof rests solely with source owners
or operators attempting to make this showing.

     Demonstrations may rely on any relevant evidence, Including but not
limited to the following:

     - construction permits, or permits to operate  from pollution control
       agencies
     - correspondence between the source owner  or operator and government
       agencies
     - engineering reports relating to the facility
     - facility records
     - affidavits
     - any other relevant materials

     For Instance, such a demonstration could be made by submitting
documentary or other evidence (e.g., Internal company memoranda presenting
the alternative construction opportunities available to the company) that
indicates the Intent of the source owner or operator and shows that
consideration of dispersion advantages was conspicuously absent.

     Alternatively, 1t night be shown that either action by the State 1n
approving a revised emission limit followed actual  Merging sufficiently
later 1n time to suggest that dispersion credit was not considered by the
source at the time of merging or the State approved 11n1t was unrelated to
the merging.

     In attempting to make demonstrations, source owners or operators
should present as much evidence as can be located,  with the understanding
that demonstrations based on any single category of evidence (such as
affidavits) presented 1n Isolation are less likely to constitute acceptable
showings than demonstrations based on cumulative bodies of evidence.
        discussed below, affirmative showings will be required of sources
whose merged stacks were associated with an Increase 1n allowable emissions
as well as some sources whose mergers were not associated with such

-------
Increases.  However, EPA expects sources whose emission limits Increased
subsequent to the merging to present stronger showings than those with no
Increase, since the regulatory definition of "dispersion technique" views
such Increases as an explicit Indication that the merged stacks were
significantly motivated by an Intent to gain credit for Increased disper-
sion.  Sources who do not Increase their emissions, but who have difficulty
making other demonstrations, such as the Installation of pollution controls,
or merging for sound economic or engineering reasons convey a more Implicit
Indication of dispersion Intent that must be rebutted; for such sources,
however, the presumption of Intent 1s not as compelling.

Increases 1n Allowable Emissions

     As stated above, 1n cases where the allowable emissions of any
pollutant Increased In conjunction with the merging of gas streams, such
an Increase provides even stronger circumstantial evidence that merging
was not carried out for sound economic or engineering reasons, but was
"significantly motivated by an Intent to gain emissions credit for greater
dispersion."  This presumption may be rebutted by making one of the
following demonstrations.

     1- by showing that the cost savings associated with reduced compliance
costs for merged stacks are less than 50 percent of the total  savings  due to
merged stacks (I.e., annual compliance savings plus annual 1 zed capital
and maintenance savings), and by making an affirmative showing, as described
above, that there was no significant motivation to gain credit for the
Increased dispersion provided by merged stacks; or

     2- by showing that alternatives to stack merging were reasonably
precluded strictly for engineering reasons, and by affirmatively demon-
strating the absence of significant dispersion Intent, as noted above.

     In the absence of such a showing, 1t should be presumed that avoidance
of emissions control was a significant factor 1n the decision to merge gas
streams, and credit should be denied.

     If you or your staff have any questions regarding the application of
this guidance 1n specific Instances, please contact Eric Glnsburg at
(FTS) 629-5540 or Sharon Relnders at (FTS) 629-5526.


Attachments

-------
                                      FIGURE  1
  NO
Credit
Granted
Credit
Granted
                                    Pre-  7/8/85
                               Retrofit Merged Stacks
                                  Record of Intent
                                   for Dispersion
                                     Purposes
              res
                                                 res
                    No
                  Credit
                          Installed
                      Pollution Controls
Increased
Emissions
        Yes
                Affirmative
                 Showing
        No
                                            Reason to
                                          Replace Stacks
Credit E
R
nm

Engineering
Reasons make
No Merging Clearly
Credit No | Superior

nglneerlng
easons for
Merging


Increased
Emissions



fTe

                     run
                                              Tes
                                                                   Economic
                                                                 Reasons for
                                                                   Merging
                                                                     See
                                                                   Figure 2
                                                        Engineering Reasons
                                                        to Preclude Alternatives
                Credit
                Granted
                    fYes  I
                               Credit
                               Granted
                               Yes
                             |NpJ
Affirmative
 Showinq
No
Credit
                                                     No
                                                   No
                                                   Credit

-------
                           Figure 2

                    Economic  Justification

                      for Merged  Stacks
Savings due to Avoidance
of More Stringent
Emission Limit
No Increase
In Emissions
Increase
In Emissions
Less than 50* of Total
Savings due to Merged
Stack Construction
Credit
Granted
 Affirmative
 Showing
Exceed 50* of Total
Savings due to Merged
Stack Construction
Affirmative
Showlng
  No
  Credit

-------
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-------
REFERENCES FOR SECTION 5.8

-------
     WORKSHOP ON IMPLEMENTING THE STACK
             HEIGHT REGULATIONS
                  (REVISED)

           OC  3ER 29 TO 30, 1985
                     by

            PEI Associates, Inc.
      505 South Duke Street, Suite 503
     Durham, North Carolina  27701-3196
    CONTROL PROGRAMS DEVELOPMENT DIVISION
OFFICE OF AIR QUALITY PLANNING AND STANDARDS
    U.S. ENVIRONMENTAL PROTECTION AGENCY
RESEARCH TRIANGLE PARK, NORTH CAROLINA  27711
                October 1985

-------
                                                            PN 123-87-10-09-01-
              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                     Office of Air Quality Planning and Standaras
                     Research Triangle Park, North Carolina 27711
                             9   OCT 1987

      MEMORANDUM

      SUBJECT:  Processing  of  Stack  Height  Negative Declarations

      FROM:     G.  T.  Helms, Chief   /I ^  \^Jit^<^/
               Control  Programs  Operations Branch

      TO:       Chief, Air  Branch
               Regions  I-X


           The  purpose of this memorandum is to  clarify  and  revise some points
      in  my September  3,  1987, memorandum entitled "Technical Support for Stack
      Height Negative  Declarations."  That  memorandum  included a list of minimum
      requirements  for determining adequate documentation with three additional
      guidance  documents  attached.   One of  the attachments was the August 28,
      1987, memorandum from Charles  Carter  of the Office of  General Counsel (OGC)
      and me to Bruce  Miller of Region IV,  entitled "Documentary Support for
      Deficiencies  in  Stack Height Review Packages."   Because several actions
      are being delayed  by  inadequate documentation, we  sent copies of the
      August 28 memorandum  to  all ten Regions as examples to alert them to
      these problems.

           The  Tennessee State implementation plan (SIP) was used as an example
      because we  believed it had  deficiencies that were  common to other negative
      declaration packages. The  use of the Tennessee  evaluation as an example
      was  not intended to single  out Region IV as having more problems with
      documentation than other Regions, although the tone of the memorandum
      might have  given-this impression. I  am sorry for  this misrepresentation.

           In a recent conference call  with OGC  and Region IV, Region IV
      suggested three  clarifications and revisions to  the guidance that we
      included  in the  August 28,  1987,  and  September 3,  1987, memorandums.  We
      believe these should  be  incorporated.  They are  as follows:

           1.  The requirement for a list of sources evaluated for
               negative  declarations applies only to sources greater
               than 65 meters.

           2.  For grandfathering documentation, the date the
               source  was built is not  essential, but  the type and
               date of the  documentation that the source was built
               prior to  December  31, 1970,  must  be listed.   However,
               whenever  the actual construction  date is  submitted
               by the  State, it should  be included.
NOTE:  Attachments 1 and 2 are not
       included in the Policy and
       Guidance Notebook.

-------
     3.  It is not necessary that a Region give assurances  that
         they ars confident the documentation is adequate;  however,
         regional  management should be satisfied that  the State
         submission meets the requirements of the stack height
         regulation.

     We also agreed during the conference call that the Delaware negative
declaration (#3356) (See Attachment 1) includes a good tabular form  to
present the good engineering practice (GEP) review in  a Federal  Register
notice or the accompanying technical support document  (TSD).   Attachments
2 and 3 present expanded tables for stacks over 65 meters and for sources
over 5000 tons per year.  The notice does not have to  include tables in
these formats, but the information required in them should be discernable
from the notice and/or TSD.  For example, the Delaware table in Attachment
is a shortened version of Attachment 2, since no stacks exceeded GEP.

     I hope this memorandum clarifies my past correspondence and gives
you a better understanding of the documentation necessary for processing
stack height negative declarations.  If you have any questions, please
call Ted Creekmore  (629-5699) or me (629-5526).  Thank you for your
patience during the processing of these complex SIP revisions.

Attachments

cc:  Charles Carter
     Pat Efflbrey
     Sharon Reinders
     Richard Rocs-Collins
     Ted Creekmore
     Dave  Stonefield
     'Eric  Ginsberg
     John  Silvasi

-------
                       //' 777?
                              Table  1
       A surjnary of applicable sources and the States  review.

       ^* ^ ^i*»«^ a f*i*                  _
                                   Grancfather
  •"•iir.ir.ff ten "inishing Company
  C-elrr.arva Power & Light
  (idge.T.oor)
       Unit 13
       unit M
       Ur.it *5

  Delaware City

  Indian River
       Unit *1
       Unit *2
       Unit f3
       Unit *4

 ?u?ont Seaford

 Texaco
  Sulfur Recovery Unit
  ~luid Ccker

  Crude Unit

  Catalytic Cracker

 Sun  Olin  Chemical Co.
  Seller Stack
Allied Corporation
 Boiler StacJf East
Delaware Trust Building
American International' Building
                                            X
                                            X
                                           X
                                           X
                                           X
                                           X

                                           X

                                           X
                                          X


                                          X


                                          X
  FERC report 195
  ;ERC r«Port 196
  State Air Fermi
                                                             report 195
 j[£RC report  195'
 ££RC report  195;
 JrRC reP°rt  1S7C
 State Air Permit

 Craving dated
 1939

 State Air Perr.it
 Drawing dated
 12/2/55
 Drawing dated
 5/28/55
 Drawing dated
 5/10/60

 Purchase  order
 4/6/61
Drawing dated
9/28/59

Drawing dated
1/12/59

"Drawing da,ted
  10/8/65
«

-  Stack was in place or binding contract before 12/31/70.
- Source Follows Good E.-.c ir.eeri
  vi-..i -.h. July 8, ises
                                a ?-.r«-^« ,•
                                L!:"::c:j?.;ccordt""

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                                                            PN  123-86-02-11-012
               UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                     Office of Air Quality Planning and Standards
                     Research Triangle Park, North Carolina 27711
MEMORANDUM

SUBJECT:  Clarification of Existing Guidance on Dispersion
          Modeling Requirements for Plapts With "Tall  Stacks"
          and Other Prohibited Disper/fon Techo/ques

FROM:     Darryl D. Tyler. Director&<&%{
          Control Programs Development Dynsion  (MD-15)

TO:       Director, Air Division, Regions I-X

     The purpose of this memo is to clarify EPA's guidance on  the dispersion
analysis requirements that are necessary to implement  the revised stack
r.eignt regulations (see EPA's Stack Height Workshop Manual dated October
1985) and, second, to respond to questions on whether  dispersion modeling
is required in the context of checking for prohibited  dispersion credit
if a source's emission limitation was not developed by means of a case-
specific dispersion analysis.

     In cases where stac'k height credit and/or dispersion credit changes
and a dispersion analysis has been performed in any context, that
analysis must to be reviewed to determine if the model inputs  reflect
credit for stack heignt(s) above good engineering practice (GEP) or any
otner prohibited dispersion tecnmque(s).  (Review of  the model inputs
applies to botn tne> specific source(s) for which the analysis  is conducted
and nearby point sources as performed for a new or renewed-permit, a new
source review/ prevention of significant deterioration national ambient
air quality standard attainment or increment analysis, a State plan to
propose revision of its federally approved State implementation plan
(SIP) emission limitations, justification of the current SIP limitations,
or any attainment/nonattainment redesignation(s), etc.)

     If the analysis reflects credit for prohibited dispersion techniques,
tnen the source(s) need to be remodeled without the prohibited credit(s)
and revised emission limitation established in tne event that  the analysis
snows an attainment or increment problem.  If a source's emission limit
was established by ambient air quality considerations  such as  rollback,
mooeling is required to demonstrate consistency with the stack height

-------
                                   -2-
regulation because credit for prohibited dispersion techniques  is  reflected
in the monitored value.  If a source has never been analyzed for dispersion,
then it is' not necessary to conduct a dispersion analysis  now.

     It is a State responsibility to demonstrate (1) that  the SI?  limit
does not consider the results of dispersion analyses, (2)  that  the source
has never been evaluated for dispersion credit, or (3)  that  existing  or  new
analyses are consistent with guidance.  Regions are encouraged  to  provide
assistance to States in this endeavor if the impacted agency so desires.
It is always appropriate for an individual  State or Region to request  or
initiate a modeling analysis where one does not exist if there  is  reason
to believe that a source's emission limitation is inconsistent  with the
stack height regulations.  However, EPA is  not calling  for an across  the
board modeling analysis from every source.

     Please pass this information along to  your States.  If  you have  any
questions on implementing this guidance, please call Sharon  Reinders  at
FTS 529-5525 or Eric Ginsourg at FTS 629-5540.
cc:  Regional Ad-inistrator, Regions I-X
     Chief, Air Branch, Region I-X
     Regional Stack Height Contact, Regions I-X
     R. Brenner
     R. Campbell
     C. Carter
     C. Elkins
G. Emison
T. Helms
D. Rhoads
B. J. Steigerwald
J. Tikvart
P. Wyckoff

-------
REFERENCES FOR SECTION 5.9

-------
 480        Federal Register /  Vol  53. No. 4.  /  Thursday. January  7. 1988  / Rules and Regulationi
 ENVIRONMENTAL PROTECTION
 AGENCY

 40CFRP»rt51
 Stock He4gh1 Emissions Balancing:
 FmaiPoNcy

 AOIMCV: Environmcaul Protection
 Agency (EPA).
 ACTION: Final policy statement
         r. Reproduced below is a
 memorandum which «eu forth EPA'*
 national policy authorizing use of
 "emissions balancing" (EB) for
 compliance with the Agency'* revised
 •tack height regulation profflulgated July
 B. IMS (50 FR 27882). Thia policy
 provide* aa alternative compliance
 option which can reeult in substantial
 coat savings to electric utility or other
 source* affected by these regulation* or
 to their customers. while aaauring
 equivalent or greater environmental
 benefit*. It makes final and responds to
 major comment* on a policy proposed
 December 23. 1885 (SO FR 52418). .
 WPtcnvi DATE This policy is effective
 on January 7. 1988.
 POM PUMTHCBJ MPOHMATIOM CONTACT:
 For information  concerning the policy
 issues addressed herein, contact J.
 David Foster. Office of Air and
 Radiation, (202)  475-4580. For
 information concerning implementation
 and processing of emission*  balancing
 state implementation plan revisions,
 contact C.T. Helm*. Office of Air
 Quality Planning and Standard*. (919)
 541-5527.
 Docket Statement

   Pertinent information concerning this
 policy Is included in Docket Number A-
 85-05 which ha* been established as the
 record of these proceedings. This Docket
 is maintained in EPA's Central Docket
 Section. South Conference Center. Room
 •4. 401 M Street SW. Washington. DC
 and may be inspected between 840 a.m.
 and 4:00 p.m. on weekdays, A
 reasonable fee may be charged for
 copying materials in this Docket

 L Introduction and Summary

   The stack height regulation revisions
 promulgated on July 8. 1985 (50 FR
 r*8S:; implement the previsions of
 itci.on 123 of the Clean Air Act which
 reevires that the degree of emission
 Limitation required for control of any air
b poilutant under an applicable state
 ;Tp'»ment»tior> plan (STP] shali not be
     ted by (1) ttadc heigr.u in excess of
      engineering practice (CEP1,, or (2)
any other dispersion technique. For
more detailed discussion, see the July 8.
1985 notice.
  Stationary sources of sir pollution are
subject to emission limitations to assure
attainment of the national ambient air
quality standards (NAAQS) and to
protect prevention of significant
deterioration (PSD) increments. These
limitations  are derived from prediction*
of ground-level pollutant concentrations
that will occur in the area of maximum
impact a* a result of pollutant emissions
from one or more sources. Dispersion-
enhancing practices, including
excessively tall stacks, lower the
predicted ground-level concentrstiona
and may result la emission  limitations
which allow sources to emit greater
total amounts of pollution thin If such
practices wen not employed
  Under th« revised stack height
regulation  *me sources »ay be swbfsct
to emission .jnitations which are more
stringent than those which currently
apply. Today's final policy has been
developed in consideration of the fact
that emission reductions mandated by
the stack height regulation may be
obtained more cost-effectively by
allowing such a source to secure these
reductions et (another sourcefs). la lieu
of reducing emissions at it* own facility.
For purposes of this policy, the source
which is subject to more stringent
emission limits is called the "affected
source"; the source which provides the
emission reductions needed to satisfy
such limits  is called the "providing
source1*. This joint satisfaction of aa
emission reduction obligation is referred
to as aa "emissions balance."
  Under dean Air Act section 110 and
40 CJH Part 5L a SIP revision
establishing emission limits for affected
sources must provide for full
implementation of (Le. ultimate
compliance with) any required emission
reduction as expeditiously  as
practicable but not later than 3 years
from the date EPA approves the SIP
revision.
  Emission* balances will also be
approved through this SIP revision
process. To allow sufficient time for
arranging balances while assuring
prompt ultimate compliance, the final
policy requires EB SIP revisions to be
submitted to EPA within 9  months after
EPA final approval of the stack height
SIP revision for the relevant affected
source. Use of an emission balance will
not be  permitted to delay compliance
beyond 3 years from the date EPA
approves the relevant (tack height sip
revision.
  The EPA is limiting the period during
which  emission balances can be
submitted to avoid delays in compliance
with CEP emission limitations.
Depending on the extent of required
emission reductions, significant lead
time may be necessary before actual
compliance can be achieved If a source
sought to apply for an emission balance
later than 9 months after receiving a
revised emission limitation, it might not
be possible for the balance SIP revision
to be approved and for the providing
source to reduce it* emission* within the
time required for ultimate compliance
with the CEP emission limitation.
  To ensure that balance* will have
environmental effect* equivalent to
stack-by-suck compliance with the July
8 refutation. EPA has concluded that in
light of potential complexities involved
la the stack height regulation, the
emission reductions from the providing
source must be greater than the
reduction* required of the affected
source by the stack height regulation. In
order to facilitate prompt approval of
sound application* for emission
         without the potential delay
that might otherwise result from
intensive verification of baseline and
other factors bearing on equivalent
emission reductions, the final policy
requires 20 percent more emission
reductions from the providing source
than would have been required from the
originally affected source (La. a
"balancing ratio" of 1 to 1.2). on an
annual avenge basis.
  The proposal would have barred
balance credit from shutdowns or
production curtailments. The final policy
similarly does not allow general use in
balances of emission reductions from
plant shutdowns or operation
curtailments, but authorizes their
consideration in individual cases
employing "lower emissions dispatch"
(LED) where stated criteria are met The
concept of LEO. which explicitly couples
the curtailment of operations at high
emitting facilities with the increased use
of well-controlled facilities, is currently
being analyzed by various  state* under
EPA's State Add Rein (STAR) grant
program, in part to determine whether
that approach could be generally
authorized in future Agency actions.
However, because EPA does not yet
know how reductions from LED could be
adequately calculated, monitored, and
enforced, this epproach can only be
considered on a ease-by
-------
            Federal Register /  Vol.  53. No. 4.  / Thursday. January  7.  1988 / Rules and Regulations
that inquiries needed to satisfy such
concern* may add delays to an already
tight timetable, aad that in no case will
these delays be considered a
(unification for extending the 3-year
ultimate compliance deadline.
  EPA's December 23.1965 proposal
considered placing limits on the relative
difference in stack heights of the
providing and affected sources. The
Agency has subsequently determined
that any such limit would both
unnecessarily increase the policy's
complexity and decrease the
effectiveness of the program. The final
policy therefore imposes no constraints
based on actual or effective suck height
differences.
  Becauae of potential administrative
and en/oresjmeat difficulties with
balances that transcend a single  state's
jurisdiction, today's policy generally
limits balances to facilities  within state
boundaries. However, this policy
recognizes a specific exception in the
case of interstate air quality control
regions (AQCR's). In such interstate
areas, states nave already developed
enforceable interstate processes  for
attaining and maintaining ambient air
quality standards. Therefore, this policy
also allows the baJanong of eolation
reductions among source* within aa
interstate air quality control region.
  In brief, today's policy allows aa
affected source to meet more stringent
emission limitations required by  the
revised stack height regulation by
securing emission reductions from
another source or sources within the
same state or interstate AQCR. subject
to a "balancing ratio" of 1 to U and
other safeguards  (see sections A and B
of the policy] designed to assure  that
reductions at least equivalent to  those
expected from stack-by-etack
compliance will be obtained.
  Analyses of the likely effects of such
•missions h»i»"^^g have consistent})'
indicated that it will produce equal or
greater emission  reductions at
substantial* leas coet than conventional
compliance without *"ta>i^»«
  EPA receded 24 comments addressing
the proposed policy. Minor comments
have beesi uasiiklsie-iJ accerdaag to me
issue* raised and are summaRzed along
with EPA's responses in a detailed
revponve to i j ipiiMj»u>« document
incradetf B ne deckel Comments which
edcrceevu huraea rsnds^DeDtBJ to
demlapuaeut of the final policy are
briefly summarized and responded to
below.

A. Legality
  Three commenters asserted that use
of emissions balancing would not square
with the statute, claiming that section
123't bar on crediting "excess" stack
height (Le. suck height exceeding CEP)
when developing applicable SIP
emission limits also requires compliance
with those limits at the specific tuck.
They additionally cited 5/esre Qub v.
EPA. 718 FJd 436 (D.C Or. 1983). which
did not addreaa the issue* ben but
generally cautioned EPA to interpret
section 123 in a manner which cm on
the aide of prottctiai public health.
  EPA disagrees with that«
commenters. It is quite true that excess
•tack height may aot be taken into
account whan developing SIP fnfM>**i
limits: these limits must treat such
sucks exactly as though they wan not
excessively "talL" However, these
comments ignore the fact that once such
limits art properly developed, the
requirements of section 123 an fulfilled.
Resulting emisaion limits art thereafter
no different than any other SIP emission
limitation under dean Air Act section
110. and may generally be satisfied in
the same broad range of way*.* That is
particularly true where, at here,
balances may only be used in areas
which have either attained and art
maintaining the relevant NAAQS and
PSD increments, or are "pp|eiPa**tf*if
EPA-approved plans for doing to (t*e
today's policy section AJ). Section 123
was not written or intended to
physically eliminate all dispersion of
pollutants, but rathar to eliminate
reliance on undue dispersion whan
calculating nec**tary levels of •"»«•««"
control Thus, beyond the need to assure
the protection of public health and
welfare from actual air quality levels In
excns of the NAAQS or PSD
increments, there it no need to require
sits'Specific control tinea. ID conjunction
with the ruck height regulation, the
policy enure* that BO none reliance on
dispersion exist*.
   No different mult to amiiied by tone
comjneoters' rebence OB statutory and
regulatory language prohibiting emission
limitations that are •affected m any
manner" by "so much of the stack height
of any source" tnal exceed* CEP.
Section 123 rtvetf refers to "the degree of
emission InnrtatJoa* required for control
of any air poQutnt andier an applicable
Implementation plan." not for control of
any sir pollutant emitted by a specific
source under such a plan. Moreover, the
cited passages uniformly refer to the
process by which initial SIP limitation
mutt be developed under section 123—
process which is necessanly source-
specific. since it turns on such factors a
the individual source's stack height.
plume rise, and interplcy with emission
from other nearby sources. See. e.g.. 40
CPR 51.120) (IMS). These previsions
•imply dp not reach the question of ho*
such limits, once properly set. may be
satisfied Once those limits are properly
act. •minion balance* change neither
the overall degree of emission lisritatioc
nor the amount of total reduction
required under the applicable plan.
other than to provide greater reduction,
  Nor is a different resuh required by
comments that "grandfatfaered" tuckf
not subject to aeetion 123 should aot tx
allowed to provide reductions for
emissions balances. That Congress
refused to mandate further restriction!
OB sucks constructed before 1871 say*
nothing about their abQttjr to voluntarily
reduce emissions further aa part of an
emisaion balance. Indeed, securing
further, coal-effective reductions from
exempted stacks constituus an
additional fusntification for allowing
these source* to be providing sources in
             balance.
         Wta v* Wraa*Cjnn**m
   . bK. AufnM 1MB. Doowi hrw «|V-A
  ' Com»«« 14. Fts
 11 TO 4U14 (Owe. i. 1MB).
B. £ma*ja0* SoJeocing Ratio

  Toe) propoeajd policy reqvefted
comment on a rang* of ratios between l
to 1-2 and 1 to 2, noting without
explanation that EPA -piefeiieu*" the
higher ratio. Two comments supported
this 1 to 2 ratio. Ten comments
supported a 1 to l ratio, asserting that
EPA iecked authority to require more
than equivalent emission reductions.
Three cocDDentert supported 1 to 1^.
suting that this ratio should provide
more than adequate ausiiuysu*ataJ
equivalence end that any higher ratio
would dcMcnarage balances and could
therefore recult m lee* owrall
environmeBlaJ benefit Seven
eoameater* auggevtad other ratios or
ratioing techniques.
   Providing *e*eree
-------
462
Federal  Register / Vol. S3. No. 4. / Thursday. January 7. 1988  /  Rules and Regulations
1.2 ratio it needed to help ensure overall
em ironmental results at least
equivalent to those which would result if
all emission reductions had occurred at
the affected source. Given that NAAQS
and PSD increments are  required to be
attained, that real reductions from a
lower-of-actuals-or-SIP-allowables (or
remodeled SIP allowables, if remodeling
is required) emissions baseline are
required from each providing source.
and that the policy contains other
safeguards. EPA believes that a 1 to 1.2
ratio provides adequate assurance of
equivalence and that no  higher ratio is
required The 1 to 1.2 ratio would also
yield the least costly reductions  from the
range of ratios evaluated.

C. Credit for Shutdown* Curtailments
or Lower Emissions Dispatch (LED)

  The proposed policy would have
barred balancing credit for these
possible emission-reducing actions at
providing sources, noting potential
monitoring and enforcement problems. It
further noted that, assuming constant
demand, reduced electricity production
at one providing facility could result in
parallel increases elsewhere.
  Eleven of thirteen cotnmenters of this
issue recommended that emissions
balance credit be given for reductions
derived from lower emissions dispatch
or some other form of enforceable
curtailment of operations at high
emitting facilities. One commenter
suggested that such credit be given on a
case-by-case basis, and one commenter
f upported the proposed policy.
  "Lower emissions dispatch" is the
term used in this policy to describe a
utility company, holding  company, or
powerpool management  strategy to
control emissions by decreasing.
electricity production at higher emitting
(e.g~ higher Ibs/10 • Btu) power plants.
and increasing electricity production at.
lower emitting (cleaner)  power plants.
rather than distributing (dispatching]
electricity production solely oa the basis
of least cost.
  Creditable emission reductions In this
section 123 context depend not so much
on the production level at a given
facility as on a detailed analysis of the
change in emissions resulting from the
transfer of production from one facility
with one set of controls to another
facility with another set of controls.
Without detailed enforceable provisions
relating not only to the curtailment of
production at a h'gh emitting facility, but
I also to the transfer of production to and
emission limits at an identified second
facility, reductions claimed from UT>
would not in general. b» sufficiently
reliable.
                              None of the commenter*
                            demonstrated how these emission
                            reductions could be reliably enforced.
                            Without assurance that emission
                            reductions derived from curtailments at
                            high emitting facilities would be
                            enforceably coupled with increased
                            production at low emitting facilities, or
                            would otherwise assure equivalent or
                            lower emissions. EPA cannot generally
                            authorize emissions balances relying
                            upon curtailment EPA presently does
                            not know how to calculate reduction*
                            from or how to adequately enforce LED.
                            However. EPA will review such
                            proposed methods of achieving
                            reductions for aa emissions balance  on
                            a case-by-case basis, where applicants
                            fully document and commit to use
                            enforceable, easily monitored
                            procedures for assuring equivalent
                            emission reductions. Applicants should
                            be aware that they bear die burden of
                            proof on such showings, which will not
                            constitute grounds for extending the
                            three-year ultimate compliance date
                            described above and in more detail at
                            subsections  F and G below.
                            D. Relative Stock Hfight Umitt

                             The proposed policy requested
                            comments on four possible options for
                            relative stack height limitations, ranging
                            from no additional restrictions to •
                            requirement that the effective height
                            (i.e.. physical stack height plus plume
                            rise) of the providing source be at least
                            equal to that of the affected source.
                            Eighteen comments supported no stack
                            height restriction. One commenter
                            advocated the most stringent option
                            requiring equal or greater effective stack
                            height, citing concerns that balancing
                            might otherwise increase long range
                            transport
                              The final policy does not restrict the
                            relative stack heights of affected and
                            providing sources. The thrust of section
                            123 is to limit reliance oa undue
                            dispersion when calculating appropriate
                            levels of emissions control No
                            restriction en relative stack height
                            appears necessary to effectuate mat
                            purpose, and such restrictions would
                            likely result in fewer and more costly
                            emission reductions that balances could
                            otherwise secure. EPA analyses suggest
                            that emissions balancing without
                            additional stack height restrictions
                            could secure up to 30.000 tpy more SO*
                            reduction (with savings up to $50 million
                            per year more) than balancing with
                            additional stack height restrictions.1
                              EPA concludes that balances with no
                            restrictions  on relative stack height  are
                            likely to provide greater emission
                            reductions and cost savings, ss well as
                            being easiest to implement and enforce
compared to the other alternatives
evaluated.
£ Geographical Boundaries

  The proposed policy would have
limited balances to sources within the
same state or same interstate AQCR.
Twelve comments were received
discussing the geographical boundaries
app'ropnate for emissions balancing.
Five urged interstate balances with few.
if any restrictions. Three favored
allowing balances in bordering states as
well as within the same state. One
favored the EPA proposal Others
suggested limiting balances to a  single
state, or to a geographic area defined to
assure that benefits  were obtained in
the airshed of the affected source.
Several of these comments were based
oa assumptions regarding localized
ambient concerns or specialized
transport concerns which are not
relevant hen.
  Hie final policy allows balancing as
propoaed. The language of section 123
refers to "Jtjhe degree of emission
limitation required * * * under an
applicable implementation plan  *  *  *."
(underlining added). EPA believes that
authorizing emissions balancing within
a single state or within a single
interstate AQCR will appropriately
maintain the policy's environmental and
compliance usefulness without
sacrificing administrative feasibility.
More than half the potentially affected
sources are located  within interstate
AQCR's and many others offer potential
balances within single states. Allowing
full interstate balancing with no
restrictions aa to state lines could result
in undue administrative and
enforcement problems because many
state* may not be able to enforce and
implement aa Interstate balance in a
timely manner. Conversely, limiting
balances  to a single AQCR or part of a
state could severely limit the use and
environmental benefits of the policy.
That approach would sharply reduce the
number of potential providing sources.
and could therefore limit the speed and
ease with which an affected source
could meet the conditions of this policy
and of the revised stack height
regulation.
F. Emissions Balancing SIP Revision
Deadline
   The proposal requested comment on
the appropriateness of an October 1
I960 proposed deadline for submittal of
emission balancing (EBj SIP revisions as
well as alternative  approaches. Eleven
comments were received on this topic
Ten asserted that the October B. 19M
deadline for suomittal 10 EPA of EB SI?

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            Federal Register  /  Vol.  53.  No. 4.  / Thursday. January  7.  1988 / Rules and  Regulations
revisions w«« too «hort to be met in light
of past experience with the SIP revision
process. One commenter supported th*
proposed deadline. Several of these
comments supported • deadline of nine
months after final policy promulgation.
They further requested clarification that
balances ne«d not be submitted with the
initial stack height SIP revisions  and
that this deadline was not for actual
source compliance, but only for SIP
submittal.
  EPA has concluded that sufficient
time for development of balances can be
accommodated without delaying
compliance, in a manner different than
that suggested in the proposal To
provide adequate time for development.
approval and implementation of
emission balances, states will be
allowed nine months from the date of
EPA final approval of the relevant suck
height SIP revision to submit the
emissions balancing SIP revision. EB SIP
revisions need not be submitted with the
stack height SIP revisions. However, in
order to assure that required emission
reductions are known, a stack height SIP
revision for an affected source most be
submitted prior to or coincident with an
EB SIP revision for that source. EPA
agrees that the nine month deadline
only applies to submittal of an EB SIP
revision, not to actual scarce
compliance, which is not later than three
years from the date that EPA approve*
the  affected  source's stack height SIP
revision.
  This approach  will not delay ultimate
compliance, since the date by which an
affected source must meet its rtviaad
emission limits will aot change a< a
result of emissions balancing- EPA
encourages stale* to submit EB SIP
revisions expeditiously. to proviaV
affected source* sufficient time to
comply with these requirements.

C. Source Compliance Date

  Two commenters generally slated that
the  compliance rlaadtine (of a source
should be determined on a ca**>by<«*M
basis. One also indicated that case-by-
case compliance date determinations
were evpeciaihy appropriate for sources
proposing to QM  innovative technologies
as part of balances.
  Under the final policy, the compliance
date for an emissions balance hi the
same as provided by 40 CFR SUlO(b}—•
as expeditious as practicable, but aot
more than three years from  EPA
approve] of the relevant stack height SI?
revision.
  Date. December 23. ipar
UvM.Tfcomas.
Ai1rr>tm*tretor.
Memorandum
Sub/ect: Stack Height Emissions
  Balancing Policy
from: The Administrator (A-100)
To: Regional Administrator. Regions I-X
/. Background
  On July 8.1965 the Environmental
Protection Agency (EPA) promulgated
the revised stack height regulation
required to implement section 123 of the
Clean Air Act 90 FR 27882. The
regulation principally affects  sources
emitting SOi and limits the credit these
and certain other sources can receive for
the height of their stack* and  the u*e of
other dispersion techniques in
calculating emission limits.
Consequently, some of these sources
will be required to secure emission
reductions in order to comply with the
stack height regulation.
  The likelihood that some required
emission reductions could be obtained
in a more coat-effective manner from
other sources has given rise to the
concept known as "emissions
balancing" (EB). This concept would
allow sources subject to the stack height
regulation to comply in a more cost-
effective manner while achieving an
equal or greater overall environmental
result
//. Policy Difotuion
  This policy authorizes a source
directly affected by the stack height
regulation ("affected source") to obtain
any required emission reduction from
another source or sources ("providing
source"). However, any source which
must reduce Its emissions becauae of
reliance on a prohibited suppiemanul or
intermittent control strategy cannot
meet its requirements by obtaining
reductions from (an) other sonnets).
  Providing sources) must reduce
emissions of the same pollutant.
calculated on en annual average basts,
to an extent 12 times (La. twenty
percent more than) the emission
reduction required of the affected source
(or 1.2 tines that portion of the required
reduction for which the affected source
is seeking an emiaaions balance). This
balance  factor hn been chosen because
of the difficulty of ensuring equivalent
emission reduction*, given the very
short time available for affected sources
to submit receive approval of. and
implement indrvdiual balances.
   Partial balancing and balancing with
more than one source are also
suthonzed. This means that  an affected
source may combine emission
in^"
 reductions at its own facilities with
 emission reductions from (a) provid
 source(s) lu secure the total reduction
 required. For example, if an affected
 source is required to reduce its
 emissions by 10.000 tons per year, it
 reduce its own emissions by S.OOO tons
 per year and develop an emissions
 balance providing for an addition*!
 6.000 (5.000 limes 1.2) tons per year from
^another source, or it may establish a
'balance with more than one source to
 secure the entire reduction.
   This policy applies to sources affected
 by the revised stack height regulation
 promulgated at SO FR 27882 (July &.
 1985). which sources were in operation
 aa of that dote or for which permits to
 construct or operate had been issued as
 of that date.

 Ill Detoi/t of Policy
 A. General Conditions for Approvabit
 Emission* Balances
   1. Emission* beJaneing may be
 permanent or may be need to comply
 with the regulation* temporarily until
 permanent compliance can be achieved.
 With respect to temporary balancing.
 the requiresumU of this policy would
 apply for the duration  of the temporary
 balance.                          ^^
   2. An approveble emissions balanct^H
 must require that the providing source(!V
 reduce emission* of the same pollutant
 calculated on an annual average basis.
 to an extent 1.2 tines the emission
 reduction required of the affected source
 by application of the stack height
 regulation (or 1.2 time* that portion of
 the required reduction for which the
 affected source is seeking an emissions
 balance).
   3. An emissions balance most take
 place entirely within the boundaries of s
 •ingle state or singJe interstate AQCR.
 With respect to the latter, interstate
 balance* within the same air quality
 control region: will be  acceptable if an
 enforceable mteragency agreement or
 equivalent provision is incorporated into
 the SIP*s of both States end is approved
 by EPA. Howtver. the appropriate
 Regional Office may limit balances to
 •mailer area* on a case-by-case basis if
 necessary to assure protection of the
 national ambient air quality standard
 (NAAQS) or the prevention of
 significant deterioration (PSD)
 increments.
    4. Emission reductions from tie
 providing source(s) mu*t be suck
 emission*, not fugitive emissions
    5. Other eordition* of sn approvsoie
 emissions balance are:
    • Both the affected and providing
 sources must be in compliance or on ar.

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4&4	Federal  Register / Vol. S3. No-  •»• /  Thursday.  January  7. 1908 / Rules  and  Regulations
enforceable schedule for compliance
*v.:.*i nil applicable federally-approved
SIP requirements:
  • Ail NAAQS for the pollutants
>m oK ed in the balance must either be
attained and maintained within the area
of the emissions balance, or that area
must be implementing an EPA-approved
SIP providing for such attainment and
maintenance:
  • PSD increments must be protected:
  • Any applicable SIP requirements for
visibility protection must be met: and
  • Slates and/or EPA must assure the
adequacy of emission limitations for the
affected and/or providing source(s).
This may necessitate ease-by-ease re-
evaluation of emission limitation* to
protect NAAQS or PSD increments. If
any remodeling is required to ensure
protection of NAAQS or PSD
increments, as part of this re-evaluation.
it must conform with EPA's current
modeling guidelines '. except that the
affected source shall be remodeled using
its actuaJ stack height and current SIP
(not new CEP) limits. This remodeling is
not intended to allow relaxation of the
affected source's allowable SIP limits.
  6. In addition to any emissions limits
needed to ensure protection of NAAQS
and PSO increments, sources must
demonstrate the following. If the
providing source is used to cover the full
emission reduction required by
application of the stack height
regulation to the affected source, that
reduction must equal 1.2 times the tons
per year of reduction required at the
affected source absent the emissions
balance.1 Possible ways to achieve this
are by placing an enforceable annual
"cap" on the production level of the
affected souws. together with a "floor"
on the production level (i.e., a minimum
production level) on the providing
source: or by use of a weighted rolling
annual average emission limit for the
affected aad providing sources
combined, etc. Because of the long
averaging time (anflual) involved in
emissions balancing. spetiaJ care should
be taken to assure that enforceable
means of monitoring compliance are
included in the EE SIP revision.
  7. The emissions balance must not
cause or contribute to adverse impacts
on the air quality-related values of any
  1 Cuidttint en Air Quality Moetlt fK
EPA/490/Z-rs-CSrX. U.S. EPA. R»»«.rc* Tn*n*M
Ptn. North Giroltiu. July 1986 lor Uwr rdmontl
  1 TtXM «ft rtdurtieiu »v»r »na bryond tny
reauirei lor the purpoM of praitetinf S'AAQS or
PSO ;ncr*menu. SM Section U Policy DiteuMion in
the fiiwl EB policy nwenorudum (or th« neutrni
toni per year tmuiton reduction for I pc'iii
b*.«nc« Cuidtne* which  ie pubuui.on 01' th  i pci
class 1 area. The Federal Land Manager
of the class ( area shall receive timely
formal notification of any emissions
change that  may affect management of
such lands.
  8. Sources involved in an emissions
balance, like all other sources, may later
be required to make further emission
reductions as a result of future SIP
revisions determined necessary to attain
or maintain NAAQS or PSO increments.

B. Calculation of Emissions Balances
  1. The baseline from which emission
reductions may be credited at the
providing source must be the lowest of
actual current SIP allowable or
remodeled SIP allowable emissions, if
remodeling is needed, and shell be
determined using procedures consistent
with those in the EPA Emissions Trading
Policy (51 FR 43814. Dec 4. IMS). Actual
emissions are determined by averaging
the emissions of the providing source
over the most recent representative two
calendar years *  unless circumstances
(e.g.. the recent installation of a
permanent control device) warrant a
different period of record. Allowable
emissions are those emissions allowed
by a federally enforceable SIP limit
preconstruction permit or other
equivalent document which la currently
approved by EPA as sufficient to
provide for attainment and maintenance
of NAAQS and PSO increments.
  2. Reductions from the providing
source(s) must be obtained through use
of control equipment lower-emitting
process changes, or cleaner fuels.
Emission reductions from intermittent or
supplemental control strategies, or any
other strategy inconsistent with the
stack height regulation are not
acceptable for emissions balances.
  3. If at some later date, (a) providing
source(s) shuts down or curtails its
operations in ways which breach the
terms of an emissions balance, the
emissions balance will be totally or
partially negated, and the affected
source must make up the difference by
reducing its  own emissions and/or by
arranging an emissions balance w.th
another source, as explained in C3
below.
  4. The emission reductions from (a)
providing source(s) in an emissions
balance may not be derived from a
control measure: (1) Which is already an
approved part of a SEP. (2) for which a
commitment for reductions has been
approved as a pan of a SIP. (3) which
  ' The final polio- cftingvi the •clutl cmnfiotu
•vtnfinf period from thrt* rein 10 two >ein 10 tw
continent with the EPA Modeling Guideline!  ind
the Emittioiu Tr.a.rvd Policy 31 FR 4M14 Om. 4
18*6
 h4S been proposed and is currently
 under consideration for adoption as a
 pan of a SIP. or (4) which has been
 adopted at the state or local level as *
 necessary SIP contro' measure. As
 explained in item C2. below, however.
 any new emission limitations needed to
 ensure protection of NAAQS and PSO
 increments or limitations needed to
'ensure that the required tons/year
 emission reduction is achieved by the
 souree(s) as a result of an approved
 balance will become an enforceable pan
 of the SIP. These provisions arc
 necessary to assure that an emission
 reduction made for and credited in an
 emission* balance ia not used for other
 purpose* (Le~ is not double-counted).
  5. Because of concerns related to
 potential delay in processing
 applications and the poaaibHiry that
 emisaions night increase elsewhere
 within the same utility system, emission
 reduction* from shutdown* or load
 shifting (including lower emissions
 dispatch (LED), by which ntility sources
 enforceabJy direct production to better
 controlled facilities rather than
 dispatching solely on the basis of least
 cost) eanaoi generally be authorized for
 balance credit et this time (see Preamble
 Section ILC above). EPA will consider
 propoead emissions balances involving
 credit for LED or other load shifting
 technique* only on a ea*e-by-case basis
 in which individual applicants
 demonstrate how and by what
 procedure* the** concerns will be
 satisfied or do not epply. The burden of
 justifying such proposals by complete.
 adequate aad coherent documentation
 rest* on individual applicants, who
 should be aware that additional delays
 in processing  balances may result  from
 such proposals and will not be
 considered grounds for extending the 3-
 year compliance deadline. Because of
 this,  and other reason* stated at C4. any
 affected source must submit a
 contingency plan that would take effect
 and be enforceable if the t-En proposal
 is disapproved.

 C. Procedural Requirements

   1. An emissions balance must be
 approved through the SIP revision
 process. Any new emission limitations
 needed to ensure protection of NAAQS
 and  PSD increments, or limitations
 needed to ensure that the required tons/
 year emission reduction ia achieved by
 the sources in an emission balance mutt
 be submitted to EPA as a SIP revision
 within 9 months o! approval of the SIP
 revision required by the revised stack
 height regulation. This provision in no
 way extends  the requirement to compiy
 with the suck heifr.t repuianor, not later

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             Federal  Register /  Vol. 53. No.  4.  /  Thursd.iv.  )jnuar\  7. 1'Jbti  / Rulus .md Rt?»ul«jiion»
            -.^—^^^^^^^^^^^^^^^^^—..—^^—-.^^^^^^^^^^^^^^^M^^^^^HB^—^^^^MBMfMIBBBHBHBIIia^Bail^^^^^^^^^M^B^BaHMMM^B^B^BHmHiaiMaa^BMM^^^^^M^^^^^^^^^^^
th.in 3 years 4,'ter approval of the sU'.k
h.nght SIP revision. Emission* bal.ini.u'v
proposals must t>e open to public
scrutiny. *nd ihe proi.css  must pron'i*
for full public participation «is p*rt of
normal SIP revision procedures. To
expedite EB SIP approval, states ar*
encouraged to use the SIP p;irjIJr-l
processing procedures explained at p..-,-'
27073 of th« June 23.1082 Federal
Regisur.
  2, Any new emission limitations
needed to ensure protection of NA.AQS
and PSD increments or limiUMuns
needed to ensure that th? required tors/
yenr emission reduction is achieved by
the source in an emissions balance will
be enforceable SIP limiu. The balance
must be incorporated into the StP with
an explanation of the interrelationship
of these emission limitations. The
providing source muy not be rclicv^ of
its obligations under the emission
balance except through the prnr»« »r *
subsequent SIP revision.'
      if ti»» EB SJP Pfrrtwwi *»<
tllow th* pTWHlmt taurrf , fir. mat •m«*..in
limiif Ki b*h«M tfloclrv* «p
fUM «nd t^A if IK*
down, or th* IwUnat n lrm>i»«!i*
tuh> (ml r>A ilwwifHi rtuii no NAACJh »• PSO
  J. The SIP ••mwH'un limits r»»jtm>>".
        soun t if thit
shuts liuvtn i>r ihi
l>y the soun.c* <>•• !r. >'
                « SI?
                 fur ..'
to
Thi*
                          is i.-.:T!.n. «:.
       .* its cmJMtdns :o the limits
         by th« tMc*> h««ight Sil' revision
        rd unt:!  such js thi> substitution of
lownr rjlf-j* fut>!.
  4. Umission n»dui:tions by * priividing
sour;e which are currently used to meet
uny other ntfiuireni^nts 01* the Act shall
not b<* crrUitiibli* for *n emissions
hwUnce.
  5. Emission reductions fiom «
providing nource will not be c
against HSO increments or PSD
  ft. Neither this policy nor individual
applications under it shall in any K«y
delay compliance with the revised stack
height SIP limitations. In particular, this
poliry shall not create independent
grounds for postponing the ultimate
compliance date b?. which the emission
reductions required bv the vt.icl hmsht
         on .ire to be
 I'tfnipor.nx i)<«!.ini'.i>s m;iv be usod u
i..)rr>'r»l\, with t^r ileHjIine for cmijMv
ri>d:n .'S'jn* .11 thr jfi.;; ted SOurc» uPi'
p.'rni.iai-;it miMp.i of romplunce L.IT.
*..hi.iv.i-d: hi)M**vi!r. the tenpor.irj
h.il.mrx vv.>i>ld h^vi* to be fullv
        l .ind impI.'.Tienied tjy in*
        ij»fiipli.i.»('e iUi» for in« j.*''-.
0. FJT;!..I .if fill* PollCV

   rhi- emissions balancing pol:i:> »*u
out general principles for approving
individual  balance* affording affected
•miroe mot* flexible. cost-eflec:ive
tx aj s to meet the retirements of EPA
revised stack height regulation. As A
policy' statement, it neither alters
applicable lef al requirements nor
i*nublisn
-------
REFERENCE? rOR SECTIONS 6.1 AND 6.2

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                                         EPA-450/2-89-014
     Analysis of State and Federal
Sulfur Dioxide Emission Regulations
 for Combustion Sources (Revised)
                      by
                 Jill B. Vitas (EPA)
              Richard F. Pandullo (Radian)
               Dorothy Picket! (Radian)

               Contract No. 68-02-4392
               Work Assignment No. 43
                 Radian Corporation
                  P.O. Box13000
        Research Triangle Park, North Carolina 27709
         U.S. Environmental Protection Agency
        Office of Air Quality Planning and Standards
           Air Quality Management Division
       Research Triangle Park, North Carolina 27711

                September 1989

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                              EPA-450/2-78-027R
Guideline On Air Quality Models
               (Revised)
         U.S. ENVIRONMENTAL PROTECTION AGENCY
              Office of Air and Radiation
          Office of Air Quality Planning and Standards
            Research Triangle Park, NC 27711

                   July 1986

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                                                     PN
           UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                         ttAJHINGTON.D.C. 20460
                                                          OFFICE OF

                                                        AIR
Ms.. Nancy Maloley
Commissioner, Department
  Environmental Management
Suite 319
311 west Washington Street
Indianapolis, Indiana  46204

Dear Ms

     I enjoyed our recent meeting and I have received your
followup letter of April 28, 1986 requesting clarification of
the Environmental Protection Agency's policy on use of 30-day
averaging as a compliance method for the Indiana State
Implementation Plan (SIP) for sulfur dioxide (S02).  In this
connection, you raised the question of the use of a statistically-
based method such as the one approved by EPA in the Arizona
SC'2 SI? for smelters and upheld in Kamo v. Hernandez, 752 ?.2d
1444 (?th Cir. 1985) .

     I understand the importance of this issue to th-e coal
industry in your state, and of the concern that the significance
of coal variability be factored into the establishment of emission
limitations and appropriate compliance methods.

     As you know, the current National Ambient Air Quality
Standard (NAAQS) for SC>2 has both short term (i.e. 3-hour and
24-hour averages) as well as annual average components.  Because,
under the Clean Air Act, State Implementation Plans (SIPs) must
demonstrate-attainment of these short-term standards, EPA has
had a long-standing policy to require emission limitations to be
enforceable on a short-term basis to protect the short-term
NAAQS.  In recent years, EPA has not approved SC'2 30-day averaging
as a compliance method, unless accompanied by a short-term SC>2
limit established by a reference dispersion modeling analysis.

     The Agency cur~ently is in the process of reviewing the
NAAQS for SC>2, incl-ding consideration of a statistical .revised
standard.  As part of thai review, EPA also is reviewing the
feasibility of using alternative, statistically-based demon-
strations related to any such, revised SC>2 standard.  Because
ury change in our policy on methodology would have nationwide

-------
                            - 2 -
implications for NAAQS attainment, we do not expect to change
the current position, if at all, prior to our completion cf"
the SAACS review.

     You specifically have asked for our position on whether
multipoint rollback or other statistical techniques cou-ld be
used to justify approval of 30-day averaging.  As a general
matter, we require analytical techniques that are technically
ans scientifically sound and that are practical and consistently
applied in similar circumstances.  Based on my current under-
standing, it appears that multipoint rollback itself would
not be applicable for the type of situation presented by the
Indiana SIP.  You should be aware that EPA approved the
multipoint rollback SIP in Arizona several years ago only
after expending considerable time and effort on the particulars
of each Arizona smelter.  Although in most circumstances EPA
considers the rollback approach to be technically less sound
than approved modeling methods, the Agency finally approved
that approach for Arizona as a result of a wide range of
factors stemming, from the very unusual nature of the smelter
emission problems.  As you know, the problems of smelters
have proven particularly difficult, as demonstrated by
Congress' own special treatment of smelters in section 119
:: the Clear. Air Act.

     The Arizona shelters are isolated and are characterized
2y extrer.e variations in emission levels, resulting from tne
particular characteristic of the smelting process, tr.e chemical
composition cf the ores, and other factors.  Use of traditional
modeling methods for these sources was complicated by the
presence of associated fugitive emission sources and complex'or
mountainous terrain.  Due to these limitations on the use of
ssancarc modeling techniques, the State turned to the Arizona
rrlloack approach, which included, for example, collection cf
additional monitoring -and emission data, additions to the
existing monitoring network, study and commitment to a State
fugitive emission control program, 80-90 percent emission
control, and running 3-hour average compliance determined by
continuous emission monitors (CEMs).

     My understanding is that the Indiana SIP for SC>21 in
contrast, is .dominated by utility power plants and large
industrial boilers, whose emissions do'not vary nearly so
much as smelters and which do not have large associated
fugitive emissions sources or complex terrain.  Approved models
already exist and have been used nationally to account for
multiple source interactions and stack height adjustments
(where stack heights greater than GEP must be discounted).
The existing air quality modelling methods for establishing
err.ission limitations have been used successfully in different
state SI?s wnich have sources similar to Indiana.

-------
     At this point, I cannot give you much encouragement  on
trying to use the multipoint rollback approach  or  a similar
method for the Indiana SIP.  Any attempt to develop a  statistical
approach, as demonstrated by the Arizona experience, would
require significant time and resource commitments  from both
the state and EPA for activities such as data development
and analysis &nd program review.  However, extensive attempts
in the past to develop ar. alternative- statistical  approach
to-utility power plant attainment demonstrations did not
produce an acceptable technique, so success is  unlikely.
The end result of any analysis still must be a  successful
demonstration of compliance with short-term standards  vhfr.
coal sulfur coru^-it er^ceecs th*» average limit.  We  pr*fsr
that develop^--*=:••:. of a possible statistical approach not be
attempted on an ad hoc basis because of the significant
nationv.-i.1-* Implications and the possible r«?lct:•.•-•-.s'nij)  with
the SC>2 standard review.  We also are concerned that there
not be further delay in the time when Indiana will  have a
federally approved SIP.

     The most straightforward way of resolving  this issue
weal-* i>e for the state to remove the 30-day averaging  irrethod
from the state SC>2 rule.  Any subsequent ly developed compliance
srrr-.ac'"  •-:'1." '•:•* ii'.:i-.i tted as a source specific SI? revision
--.ier the alternative compliance method provision of the
spplica-le Indiana regulation.  Short-term SI?  limitations
fsr each source should be consistent with methods contained
in EPA reference guidelines, using source test  methods to
-easjre cur-.pliance as specified in 40 CFR Part  60 Method  6.
The IPA's policy and modeling guidance with regard  to  the
requirements for approvable attainment demonstrations  is
contained in its Guideline on Air Quality Models.

     As a final note, I want to point out a factor  which,
although unrelated to'the merits of the methodology questions,
is of concern tc me and also should be o? csncsrn to your
state.  A new bill to establish acid rain control plans,  H.R.
4567, was recently introduced in Congress with  150  co-sponsors.
The Administrator t«sT-: * •'•=••! 7.1 the bill, opposing  its  passage,
while arguing a restrained approach to controls, based on the
present uncertainties in our knowledge of acid  precipitation.
One of the principal reasons advanced by the Administrator
for deferring action is that current evidence suggests that
SC'2 emissions in the midwest *r<5 staMe.  Thus, we  have
t\ne for the required further research without  the  need for
r'citional SO? controls at this time.  It would be  unfor-
tun«r.ri ;-, Because of methodology changes or other  reasons,

-------
                            - 4 -
sone states were perceived to significantly increase SO-.
emissions sc thai overall SC>2 emissions in tn* *!:»..vst
were to begin to trend upward, since su«~h a trend would
support those in Congress who are pressing for additional
S02 controls before the facts are in.  I am "sure you are
as concerned aioct :Vls as I am.

     I stand ready to discuss these matters further, or to
assist you in any way I can to resolv* the Indiana SC>2 SIP
:ssue.  I am sorry that I cannot be no.-:* encouraging on the
particular approach used for Arizona smelters, but I hope
:;.st at least I have clarified EPA's current policy.  ?lease
*. •> not hesitate to call on ne if I can u.<-- ci z»-;..^r *orvicc

                           Sincerely,


                             A/

                           J. Craig Potter
                        Assistant Administrator
                         for Air and Radiation
                                                                   i

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                                                            PN  165-86-11-24-015
                             NOV241S66
MEMORANDUM
SUBJECT:  Need for A Short-term Best Available  Control Technology  (BACT)
          Analysis for the Proposed William A.  Zimmer  Power Plant

FROM:     Gerald A. Emison, Director
          Office of Air Quality Planning  and Standards (MD-10)

TO:       David Kee, Director
          Air Management Division,  Region V (5AR-26)

     This is in response to your November 17, 1986, memorandum, in which
you requested comment on Region V's belief that prevention of significant
deterioration (PSD) permits must contain  short-term emission limits to
ensure protection of the applicable national  ambient air quality standards
(NAAQS) and PSD increments.  I  concur with your position and emphasize to
you that this position reflects our current national policy.  Consequently,
I recommend that you continue to identify this  apparent deficiency to the
Ohio Environmental Protection Agency and  seek correction of the draft
permit for the William A. Zimmer Power Plant.

     The PSD regulations clearly require  that the  application of BACT
conform with any applicable standard of performance under 40 CFR Part 60
at a minimum.  However, this should not be taken to supersede any additional
limitations as needed to enable the source to demonstrate compliance with
the NAAQS and PSD increments.  In the case of sulfur dioxide (SOg), source
compliance with the 30-day rolling  average emission limit under subpart Da
does not adequately demonstrate compliance with the short-term NAAQS and
PSD increments.  Consequently,  enforceable limits  pertaining to the
performance of the flue gas desulfurization system on a short-term basis
must also be established.  Note, however, that the short-term limits can
result from either BACT analyses or the need to protect air quality.
Therefore, the short-term limit could be  more stringent than the BACT
limit.

-------
     I recognize that the sulfur variability issue tends to complicate
the setting of short-term $63 emission limits, but such limits must be
defined nevertheless.  Continuous emission monitoring data from comparable
sources can be used in order to estimate worst-case short-term SO?
emissions that could occur at the plant.  The modeling techniques  used to
determine compliance with the short-term NAAQS and increments should
employ the enforceable short-term 503 emission limits which the permitting
agency establishes.

-------
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                                                                  L u - O / - U I ~
          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                Office of Air Quality Planning and Standards
                Research Triangle Park, North Carolina 27711

                               JUL 2 9 1987
MEMORANDUM

SUBJECT:  State Implementation PI ans for Sulfur Dioxide
FROM:     Gerald A. Enrfson, D1rec1
          Office of A1r Quality pfannfng and'Standards  (MD-10)

TO:       Director, A1r Management  Division
            Regions I, III, V, IX
          Director, Air and Waste Management Division
            Region II
          Director, Air, Pesticides, and Toxics Division
            Regions IV, VI
          Director, Air and Toxics  Division
            Regions VII, VIII, X


     A number of sulfur dioxide (SOg) State  implementation  plan  (SIP)
revision rulemaking actions with potential problems  have  recently been
submitted for SIP processing.  Several of these rulemaklng  actions
establish $03 emission limitations  but lack  enforceable S0£ compliance
test methods and procedures.

     The Environmental Protection Agency (EPA)  requires that $03 SIP
emission limitations be established consistent  with  the short-term 3-hour
and 24-hour S02 national ambient air quality standards  (NAAQS).   When  a
State adopts an SOg emission limitation for"its SIP  without a stated
averaging period associated with it, EPA has accepted a Method 6 stack
gas test as the SIP compliance test method.   The EPA also accepts continuous
emissions monitoring and short-tern fueling  sampling and  analysis (3-hour
and 24-hour) as S0£ SIP test methods.  The EPA  will  accept  separate
emission limitations with approved  test methods associated  with  each
limitation.

     As a minimum, make sure that there 1s a stack gas  compliance test in
the State's plan when you review and forward $03 ruleroaking packages for
Headquarters approval.  If the action 1s an  S02 SIP  revision, 1t may
reference the underlying EPA approved SIP for compliance  test methods.
If so, make sure the underlying SIP contains acceptable test methods and
that the methods have been approved by EPA In the SIP.

cc:  Air Branch Chief, Regions I-X
     John Seitz, SSCD
     Darryl Tyler, CPDD

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REFE^NCES  FOR SECTION 6.3

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                                                 PN 113-88-03-31-049
            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                         WASHINGTON, D.C 20460
                              MAR 3 I 1988
                                                        A1E AND BAMAT1OII
MEMORANDUM

SUBJECT:  Implementation of Rule Effectiveness Studies
FROM:     John S. Seitz, Director
          Stationary Source Compliarfoi"7Division
          Office of Air Quality Planning and Standards

TO:       Air Management Division Directors
          Regions I, III and IX

          Air and Waste Management Division Director
          Region II

          Air, Pesticides,  and Toxics Management Division
            Directors
          Regions IV and VI

          Air and Radiation Division Director
          Region V

          Air and Toxics Division Directors
          Regions VII, VIII and X


    This memorandum transmits the final rule effectiveness
protocol and requests that you implement the protocol beginning
in FY 89 in your region.

    The protocol is the result of several months of development
through discussions with many regional, state and local air
pollution control personnel and incorporates the study concepts
and procedures that are being used successfully in Region IX
and California.

    As many of you are aware,  we initially proposed this
procedure as a part of the ozone strategy and it-was to be
used in large part as the rebuttal for an eighty percent
effectiveness for all new ozone SIPs.  However, we have made

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                             -2-

the decision to implement this protocol independent of the
ozone strategy because of the general applicability of the
procedural "And the protocol's usefulness as a logical follow
on to tMRltfanning and implementation process of any SIP.

    I am requesting that each region commit to at least one
rule effectiveness evaluation in an ozone non-attainment area
for FY 89.  The FY 89 regional stationary source budget
allocates 15 FTE for 12 evaluations.  In addition we earmarked
Section 105 monies for the state's use in participation of
these studies.

    We have not identified a rule or category of sources for
evaluation, however, we do recommend that you select a part
of the SIP in the nonattainment area that either has suspected
problems or contributes at least 5% of the emission reductions
of the SIP strategy.  I urge you to work closely with your
states to identify that part of the program with the highest
potential payback.

    Lastly, I direct your attention to the national overview
section on page three of the protocol.  Please forward your
proposed final protocol to the national overview manager for
comment before going final with a specific study and feel
free to consult the manager as questions or issues arise
during development of a final study.

Attachment

cc: Jerry Emison
    John Calcagni
    Air Branch Chiefs

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                                                        March 24, 1988
                         Rule Effectiveness Study Protocol
 (1)   Purpose and Goals
     The purpose of thl» protocol is to provide the State* and EPA with criteria
 and proc«dur««  for conducting a rule effectiveness study.   In the context of
 this protocol,  "rule effectiveness"  means the extent to which a rule actually
 achievee (or  haa the capability of achieving)  desired emission reductions,  both
 in tezna of the reductions  projected for that rule, as well as the reductions
 that would ordinarily be achieved if the rule were properly implemented.

     Principal  goals of a rale effectiveness  study conducted according to this
 protocol are:   (1)  to determine the  effectiveness  of rules for a specific source
 category in a specific  nonattainment area according to the quantitative criteria
 set forth in  this protocol,  and (2)  to identify specific implementation problems
 that should be  addressed by the State and EPA to achieve greater rule effective-
 ness in  the future.

 (2)  Application

     A State  or EPA may use  this protocol at  its own initiative to evaluate a
 rule, and to  take or require corrective action based on that evaluation.   Zf a
 State wishes  to claim new emissions  reduction credits in its SIP based upon
 corrective action in response to a rule effectiveness study,  these credits  must
 first be verified in a  subsequent study.

     This protocol may  not be used to justify a relaxation of plniBMB program
 implementation  requirements  (including,  for example,  the frequency and quality
 of inspections,  timely  enforcement,  and the correct application of rules  through
 testing,  permitting and other source specific determinations).

 (3)  General Approach

     Any  rule effectiveness  study conducted by the State or EPA must be conduct-
 ed in accordance  with the provisions of this  protocol.

     Each studywill occur in two phases:  a  field inspection phase, in which
 inspections are* conducted (after a selective  file  review)  and compliance  deter-
minations are made (to  the extent possible) for a  representative sample of
 sources  in a nonattainment area;  and an office investigation  phase,  in which
 further analysis  is  undertaken  of program implementation elements that are  not
susceptible to  comprehensive evaluation in a  field inspection study.

     Field inspections  will  be  used  to  calculate or measure emissions at sources
included  in the sample,  and  to  determine  the  percentage effectiveness of the
regulations involved by  comparing the actual  to the allowable emissions at each
source.   A separate program  effectiveness  determination will also be made by
comparing the State's projected reductions for'the source  category to the
reductions actually  achieved.

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                                                            Effectiveness Study Prote
                                                       March 24, 1988
                                                       Page 2


     A follow-up office investigation will supplement field inspections for the   ™
purpose of identifying specific program implementation problems that should be
addressed by the State and/or EPA.  The following potential program problem
areas will be evaluated in both phases of the study:  regulatory standards,
regulation enforceability, permits, variances, inspection procedures, compliance
determinations, enforcement procedures, source and emissions inventories, source
files and data management, training, and agency resources management.

     This protocol requires that detailed criteria and procedures be developed
for conducting each area of evaluation.  Example checklists and guidelines for
developing these criteria and procedures are included as attachments to the
protocol.  All detailed criteria and procedures developed as a part of a speci-
fic study will be incorporated in the protocol.

(4)  Coordination between the State and EPA

     Whenever the State or EPA has decided to conduct a rule effectiveness
study, the following coordination shall occur.

      (a)   Opportunity to Participate

     An opportunity to participate in the study shall be given to all non-
initiating agencies with jurisdiction over the nonattainmeat area.

      (b)   Preliminary Notice and Meeting

     The initiating agency shall notify other affected agencies of the decision
to conduct the study and identify the purpose of the study, the source cate-
gory (s) and rule(s) affected, and the anticipated study schedule.  At the
election of any affected agency, a preliminary management level meeting may be
called to discuss the study.

      (c)   Final Protocol Preparation and Review

          1.   Preparation of Proposed Final Protocol

     Whenever a rule effectiveness study will be conducted by the State or EPA,
the initiating ageacy shall prepare and submit to the other agency(s) for prior
review a propoavft final protocol including the detailed procedures and criteria
that will be faCooed when conducting the study.  These criteria and procedures
shall address each element of this protocol and shall incorporate, at a minimum,
the criteria and procedures included in Attachments A-G, which may be modified
as necessary to incorporate unique considerations that apply to 'the  specific
State.

     The reviewing agency shall review and respond to the proposed final proto-
col within two weeks of its receipt.  In the  response, the  reviewing agency
shall indicate all areas of disagreement or areas warranting clarification and
specify areas where the proposed criteria and procedures are considered defec-
tive.  The initiating agency should then confer with the reviewing agency  to
resolve all areas of potential disagreement and take appropriate  corrective
steps to ensure the validity of the study.

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                                                       Rule Effectiveness Study Proto
                                                       March 24, 1988
                                                       Pag* 3
          2.   National Overview
     Rule effectiveness study overview will be conducted by the Compliance
Monitoring Branch of EPA's Stationary Source Compliance Division.  The overview
objective will be to promote rule effectiveness study quality and consistency on
a national level through protocol review and comment.

     Following the completion of a proposed final protocol (including all
revisions resulting from prior review), the initiating agency shall forward the
protocol to the National Rule Effectiveness Study Overview Manager.  The Over-
view Manager will provide written comments, if any, within two weeks of receipt
of the proposed final protocol.  He will also forward the protocol to selected
State and EPA reviewers, who based on their experience and knowledge may also
provide additional verbal or written comments.

     Correspondence concerning national overview should be addressed to the
National Rule Effectiveness Stud-  overview Manager, Stationary Source Compliance
Division (EN-341), U.S. Environmental Protection Agency, 401 M Street, S.W.,
Washington, D.C., 20460.

          3.   Final Protocol

     The initiating agency is responsible for the development of a final proto-
col that ensures the validity of a rule effectiveness study.

     A State's failure to correct protocol deficiencies identified during
protocol review may restrict the use of study results as support for emission
reduction credits.  Likewise, EPA's failure to correct protocol deficiencies may
restrict the use of study results as a justification for requiring corrective
action by the State.

     A protocol may be revised or amended during a study by agreement of the
initiating and reviewing agencies.  Following adoption by the initiating agency,
a copy of the final protocol, and any revisions or amendments, shall be for-
warded to the National Rule Effectiveness Study Overview Manager.

     (d)  Additional Areas Requiring Prior Coordination and Review
               •
     The following areas, in addition to those indicated in subparagraph 4(c),
require coordiasition and review prior to initiating the study.

          1.   Study Team Identified.  The initiating agency shall identify its
study team, and provide a description of the background and qualifications of
the lead investigator; the specific inspectors included in the study shall also
be identified.

          2.   All Regulations and Policies Identified.  All regulations and
policies affecting the study should be identified and clearly defined in terms
of their applicability to sources included in the study.  For example,  all
express or implied exemptions should be specifically indicated} compliance test
procedures should also be specified, along with applicable averaging tines,  and

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                                                       Rule Effectiveness Study Prot:
                                                       March 24, 1988
                                                       Page 4


all limitation* affecting source compliance.  In addition, all legal require-
ments limiting iaapection and enforcement activities should be specified.

          3.   Sources Identified.  Sources selected for the field study shall
be named, and the reviewing agency shall be) given an opportunity to propose
further sample stratification to ensure that the sample is representative.

     (e)  Conflict Resolution

          1.   During the Investigation

     If a conflict occurs during the study regarding the interpretation of
agency policies, regulation requirements, inspection procedures, compliance
determination criteria, file data, and similar matters, the issue shall be
immediately raised to EPA and State managers for resolution.  If the conflict
must be resolved to complete a specific investigation, the specific investiga-
tion shall stop until agreement between the State and EPA is reached.  In such a
case EPA and State managers shali •aeet to resolve the conflict within 48 hours.
If after 48 hours the conflict is still unresolved, the conflict shall be
presented for resolution to the highest level agency managers with direct
program implementation responsibility (the EPA Regional Administrator and the
State Department Director).

          2.   After the Investigation

     If an unresolvable study team conflict occurs after completion of the
investigation phase regarding specific findings and conclusions, and the con-
flict affects the final percentage effectiveness determination, the conflict
shall b* resolved in one of two manners:  (1) EPA and State managers may resolve
the is£   ay agreement, without further evaluationt or  (2) the study team may
conduce  .. additional evaluation to resolve the conflict.

(5)  Study Teaa Selection

     The study team may include members of the local. State and Regional agen-
cies with jurisdiction over the specific nonattainment area.  However, the team
shall include a lead technical investigator, who will be responsible for all
technical findings.  To the extent possible, the lead technical investigator
should have no osrrent responsibility for inspecting sources  included in the
study.

     The lead investigator shall be highly skilled and experienced  in the  imple-
mentation of the rule selected for study.  Qualifications  shall include the
capability to conduct all levels of inspection and compliance analysis, includ-
ing the ability to conduct emissions testing.  Qualifications shall also  include
significant, recent field inspection experience  for all or most types of  facili-
ties subject to the regulation, and should include enforcement case development
experience.
     To ensure an effective evaluation  of  the  State's field inspection proce-
dures , the study team .should  include  the  inspector normally responsible for ii
specting each source selected as  a  part of the field study.

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                                                       Kale Effectiveness Study Protoec
                                                       March  24, 1988
                                                       Pag* S
 (6)  Source Category Selection
     An agency may select any source category for a rule effectiveness evalua-
tion using this protocol.  If an agency wishes to study a limited number of
source categories to support a.SIP call, SIP revision, or other agency action
related to a need for additional VOC reductions, the selection of these cate-
gories should be based on the following criteria:

     o    Categories representing the largest quantities of emission credits in
          the existing SIP.

     o    Categories where known or suspected implementation deficiencies are
          correctable and will provide significant emission reductions.

     o    Categories where implementation deficiencies are identifiable and
          measurable with a reasonable commitment of agency resources based on
          the study approach selected.

     o    Categories where study findings will be transferable to other similar
          categories.

(7)  Source Selection

     The following source selection procedure is intended to ensure that a
representative sample of sources is selected for the purpose of quantifying the
percentage effectiveness of specific regulations.

     (a)  Sample Selection

     Utilizing the best available source inventory for the selected category,
select a sample of sources that is representative for the category, unless a
representative sample cannot be obtained.  In the latter case, select all
sources in the inventory.  See Attachment A.  This selection will be used for
the purpose of quantifying emissions and calculating a percentage effectiveness.

     (b)  Sample Review
     Review the>'source sample prior to initiation of the  study  to determine
whether major problems throughout the source category have been excluded  from
consideration.  It so, redesign the sampling procedure to include the  additional
stratification required to ensure appropriate consideration of  major problem
areas.  In such a case, the initiating and reviewing agencies should agree on
the modified selection procedure.  See Attachment A.

(8)  Preliminary File Review

     The study team should collect and review all relevant State and EPA  regula-
tory information relating to sources included in the sample.  This  includes all
regulations, permits, variances, enforcement agreements,  etc.,  that establish
specific requirements.-  The study team should also collect and  review  all State
and EPA regulation interpretation guidelines that apply to each source, as well

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                                                       Rule Effectiveness Study Proto-
                                                       March 24, 1988
                                                       Page 6


as procedural aafcpolicies governing inspections, compliance testing, and
enforcement.

(9)  Field Inspection Phase

     Each source included in the saaple will be inspected by the Study Team.  If
conditions at the source prevent an inspection during normal operating conditions,
this should be noted in the inspection report, but the best inspection that is
reasonable under the circumstances should occur in any case.

     All inspections should be unannounced and designed to apprehend ongoing viola-
tions (especially those susceptible to operator control during an inspection).
Exceptions may be justified to ensure that a source is operating, to allow for
necessary preparation at the source, to ensure that key plant personnel or records
will be available, etc.  Zn such a case, prior communication with the source should
be made as close in time as possible to the actual inspection.

     During the field inspections, the study team shall conduct the following
evaluations.

     (a)  Rule Application Evaluation

          1.   Deviations from State Requirements

     The team shall determine whether the State regulatory requirements that
apply to a facility do in fact apply, or whether they have been applied in a
that results in less or greater than the anticipated control.

          2.   Deviations from Federal Guidelines

     Where the State requirement is different from the Federal guideline  (where,
for example, the State requirement is more stringent, or the State interprets its
requirement so that it is less stringent than EPA's interpretation), the  team shall
also determine the extent to which the State requirement, as applied, results in
less or greater than th« control that would be achieved if the Federal guideline
applied.

     (b)  State. Inspection Procedures Evaluation

     Inspector* abould be asked to conduct a normal inspection, or if * normal
inspection would not be adequate for the study, to describe how the  inspection  is
normally conducted at each facility.  The lead investigator will  observe  the
inspection, but take the necessary steps to ensure that the inspection is adequate
to achieve the field inspection study objectives.

     The team shall determine whether the normal State  inspection procedures  are
adequate to identify actual or potential violations.  Specific failures  should  be
documented and evaluated in terms of potential excess emissions.  Failures related
to faulty agency guidelines or policies, faulty rules, or  faulty  procedures  con-
ducted at a specific site should be clearly differentiated.

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                                                        Rule Effectiveness study Protoc
                                                        March  24,  1988
                                                        Pag* 7
      (c)  Complias>ce) Determinations
     The study team shall determine the compliance  status of  the  facility with the
SIP, differentiating between procedural requirements and emission requirements.  If
the SZP is inconsistent with Federal policy on SZP  content, the study  team  shall
also determine whether the facility would be in compliance if the SZP  were  consis-
tent with Federal policy.

     Each SZP violation shall be separately identified and documented.  The study
team may use its discretion in conducting or requiring stack  testing;  however, a
decision not to require stack testing  (where relevant) shall  be clearly supported
in each inspection report.

     (d)  Emissions Quantification

     The actual and allowable emissions shall be calculated  (to the extent  pos-
sible)  for all sources inspected during the study,  according  to the detail-
ed criteria and procedures reflected in the final study protocol.  Allowable
emissions shall be defined by the SZP.  Zf the SZP  is inconsistent with Federal
policy on SZP content, the study team  shall also calculate the emissions that would
be allowable if the SZP were consistent with Federal policy.

     Zf the study team wishes to identify other reducible emissions for the purpose
of documenting potential additional emission reduction credit*, these  emissions
shall also be calculated according to  the procedures reflected in the  final study
protocol, and shall be clearly supported by field inspection  results.

     (e)  Quality Assurance

     Effective quality assurance procedures shall be observed in  all emissions
calculation and measurement related activities and  shall be  included as a part of
the detailed criteria and procedures included in the final protocol.

     (f)  Znventory Evaluation

     Operating and emissions data in the EPA and State source/emission inventories
shall be verified by an actual, on-site investigation, and discrepancies shall be
clearly identified.  Discrepancies affecting the State's attainment strategy shall
also be clearly indicated.

(10) Office Investigation Phase

     (a)  Follow-up to Field Znvestigations

     Deficiencies identified in the field that are  related to agency procedures  and
policies should be confirmed by an office review of the appropriate written docu-
ments and by interviews with agency managers responsible for the  development and
implementation of the procedures and policies.

     (b)  Minimum Program Implementation Requirements

     The detailed criteria and procedures included  in the final protocol  shall
address EPA's minimum program implementation requirements.   Where continuing

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                                                       Rule Effectiveness Study Protc
                                                       March 24, 1988


                                                                                  e
deficiencies areridentified, specific corrective measures shall be proposed in the
final study report.

     Zf EPA initiates the study, EPA may elect to rely on the most recent National
Air Audit as a basis for identifying program implementation deficiencies.  Zf the
State conducts the study, the State may propose to rely on the most recent National
Air Audit.  However, EPA may elect, instead, to conduct a new audit; and if EPA so
elects, the latter audit will be controlling.

     The State may use this study, if the results so indicate, as- support for
proposing the modification of EPA minimum program implementation requirements
applicable to that State and submit a proposal to that effect as a part of the
study report.

     Zt is essential that a State meet minimum EPA program implementation require-
ments whether or not additional emission reduction credits are justified based on
the results of a field study conducted pursuant to this protocol.

(11) Inventory Accuracy Demonstration

     An inventory accuracy demonstration for the selected source category shall be
conducted as a part of the rule effectiveness study.  This demonstration shall
include the following elements:

     (a)  Field Investigation Follow-up

     where the field investigation resulted in inventory discrepancies, the State
shall take the following actions.

          1.   Reconciliation

     Reconcile the individual discrepancies and, if appropriate, revise the emis-
sions inventory to reflect this reconciliation.

          2.   Representativeness Evaluation

     Determine whether the discrepancies represent a more extensive problem with
the inventory fee other sources not included in the sample.  Zf  so, taXe one of the
following corrective actions:

     o    identify and resolve each individual source discrepancy * or

     o    adjust the inventory baseline and revise the SZP  in  accordance with  EPA
          guidelines to reflect the reconciliation, assuming that  the  discrepancies
          are representative of the entire source category.

     (b)  Search for Potentially Omitted Sources

          1.   Survey of Exempt Sources

     Conduct a letter survey of exempt sources to determine whether the  grounds for
exemption still apply.  For a large source category,  an  initial  survey may  be

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                                                        Rule  Effectiveness Study Protect
                                                        March 24,  1986
                                                        Page  9


conducted for a SMll sample of the  sources.   Zf  the  response indicates  a need for
general agency follow-up  (i.e., exemptions  are unwarranted in other than an  un-
usual, isolated case), a  complete survey of all exempt sources shall be  undertaken.

          2.   Ground Survey

     Conduct a ground survey in a sample grid  of  the  study area to determine
whether unregistered sources exist.

          3.   Other Measures

     Conduct a comparison of alternative source lists and  take other appropriate
steps to determine whether unidentified sources or emissions exist.

          4.   Results

     Zf the ground survey sample i.  *icatas  that one percent  or more of the real
emissions have been omitted from the inventory base for that area, the State shall
increase the entire inventory baseline by the  percentage identified and  revise the
SIP in accordance with EPA guidelines.  All new emissions  identified by  the  letter
survey of exempt sources, the ground survey, and  other measures shall  be included
in the State's emissions  inventory.

(12) Corrective Action

     (a)  Minimum Program Implementation Requirements

     where the study identifies implementation problems that are  inconsistent with
EPA minimum program implementation requirements,  the  problems shall be corrected
whether or not they may result in additional emission reductions.

     (b)  Correctable Problems

     The study team should determine and identify which problems  are clearly
correctable, and propose;  feasible corrective action options, with comments on the
advantages and disadvantages of each option.   Specific consideration should  be
given to the relative/ costs and benefits of each  option to the agency.  Specific
consideration shmilil also be given to options  requiring the  adoption of  more
effective control requirements, and  to regulation changes  that will alleviate
compliance monitoring and enforcement constraints (for example, improved record
keeping and reporting requirements).

     The study team should calculate the emissions reduction that can  be achieved
by the recommended corrective action, if possible, and state the  assumptions upon
which this calculation is based.

     (c)  Uneorreetable Problems/Correctability Unknown

     Zf problems are known not to be correctable, or  if the  correctability of a
problem cannot be determined, this should be clearly  indicated along with  the basis
for that determination.

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                                                       Rule Effectiveness study Protoco
                                                       March 24, 1988
                                                       Page 10
     (d)  Study
     The study shall include a planned follow-up audit within one year after its
completion to determine if corrective action* were implemented and whether the
actions resulted in the improvements anticipated.

(13) Reports

     (a)  Inspection Summary Report

     A separate summary report shall be completed for each source inspection.  This
report should include a summary of specific findings and recommendations, and all
compliance or emissions calculations with supporting data.  See Attachment P..

     (b)  Final Study Report

     A final study report shall be completed which identifies the percentage
effectiveness of each regulation evaluated in the study, and which describes all
source compliance and agency implementation problems that were identified, whether
they are correctable or not, the proposed corrective action, any other required or
proposed program implementation improvements, a summary of reasons for why other
problems are not (or may not) be correctable, and a summary of reducible emissions
associated with specific corrective action and other implementation improvements.
The final study report shall also include the schedule for a planned follow-up
audit.  See Attachment G.

     Any deviations from the study protocol should be identified and explained in
the final study report.

     Members ?f the study team may provide nonconcuring opinions which will b«
included as -  attachment to the report.
Attachments

Attachment A:

Attachment B:

Attachment C:


Attachment D:

Attachment E:

Attachment F:

Attachment G:
Source Inspection Selection Procedures

        Field Inspection Procedure Checklists — Graphic Arts
        Compliance Determination and Emissions Calculation
Checklists — Graphic Arts

Percentage Effectiveness Calculation Guideline

Minimum Program Implementation Requirements

Example Inspection Summary Report Checklist  — Graphic Arts

Example Final Study Report Outline

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                                                  March 24,  1988
                         Rule Effectiveness Study Protocol

                             SUMMARY OF ATTACHMENTS



Attachment At  Sourc« Inspection Selection Procedures

     This attachment describes procedures for selecting, a statistically repre-
sentative sample of sources in each category.  Zt is expected as a part of the
final protocol development and review process that the initiating and reviewing
agencies will agree on the final selection as "representative"' for the purposes
of each study.


Attachment Bi  Example Field Inspection Procedure Checklists — Graphic Arts

     This attachment provides checklists for use by a lead investigator in
evaluating the adequacy  of inspection procedures at facilities covered by CTG's.
In addition to outlining compliance evaluation checks, the checklists also
provide for an evaluation of agency source files* previous regulation applica-
bility determinations, exemption status, inventory adequacy, and other deter-
atinationa useful to the  overall study.


Attachment C:  Example Compliance Determination and Emissions Calculation
Checklists — Graphic Ares

     This attachment summarizes accepted EPA methods for measuring emissions and
determining compliance for the graphic arts CTG categories as an example to be
followed in protocols for other source categories.  Only compliance test methods
approved as part of a SIP .or promulgated by EPA may be used to measure emissions
and determine compliance status as part of a rule effectiveness study.  These
methods should be clearly identified prior to initiating any field investiga-
tions and should be incorporated within the final study protocol.


Attachment Pi  tsaccentage Effectiveness Calculation Guideline
     This attao^ssnt outlines the procedure and assumptions  for  calculating the
overall percentage effectiveness of a rule as a result of a  rule effectiveness
study conducted pursuant to this protocol.


Attachment E;  Minimum Program Implementation Requirements

     This attachment provides guidance on how to  identify relevant EPA minimum
program implementation requirements for purposes  of a rule effectiveness study.

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                                                          of Attachments
                                                  March 24, 1988
                                                  Page 2
Attachment Ti  BsslPle Inspection Summary Report Checklist — Graphic Arts

     This attachment provides an outline of the report for each inspection
conducted during th« study.  Th« graphic arts category is used for illustration,


Attachment C:  Exaaple Final Study Report Outline

     This attachment provides a generic outline of a final rule effectiveness
study report.

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REFERENCES FOR SECTION 6.4

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Wednesday
November 2, 1983
Part V



Environmental

Protection Agency

Compliance With the Statutory Provisions
of Part D of the Clean Air Act, Final
Rule

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50686     Federal Register / Vol. 48. No. 213 / Wednesday. November 2.1963 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY

40 CFR Parts 51 and 52

[AD-FRU 2432-3, Doctctt A-tS-01 1

Compliance With the Statutory
Provisions of Part D of the Clean Air
Act

AGENCY: Environmental Protection
Agency.
ACTION: Final action on rulemaking
proposals and announcement of policy.

SUMMARY: On February 3. 1983 (48 FR
4972 and 48 FR 5022) the Environmental
Protection Agency (EPA) published two
rulemaking proposals relating  to
implementation of the primary national
ambient air quality standards under the
Clean Air Act. The first package
proposed to disapprove State
implementation plans and impose
construction bans in nonattamment
aruas that were required to attain the
standards by December 31, 1982. but
were still experiencing violations. This
package also proposed to disapprove
plans and impose bans in nonattainment
areas that had not received full EPA
approval for plan revisions due in 1979.
  The second package proposed  action
on implementation plans submitted in
1982 by nonattainment areas that had
obtained extensions of the 1982 deadline
for the carbon monoxide or ozone
standards.  EPA proposed to impose
bans in all  areas where it was proposing
to disapprove 1982 plans.
  After evaluating the comments
submitted in response to its proposal.
KPA has  reused its views as to the legal
i n:)s"q-.:pnc,fcs of a failure to meet the
!9bJ deadline. Today's notice contains
two  final actions reflecting these
rhdneed  views. In addition, in Section
IV of this notice EPA sets out a general
policy for correcting a!l of the  problems
identified in both of the proposals
published on February 3.
EFFECTIVE DATE: November 2.  1983.
ADDRESSES: Background matenal for
this  jction  is located in Docket Xo. A-
f.3-01. West Tower Lobby. Gallery 1.
I' S. Envi-or.niental Protection Agency.
C""Tdl Dorke'  Section. 401 M Strent."
s U  . Wrfshinston. n.C. 20460. The
i'. ' h f! "MV bi- examined bp'wppp. H 00
.; -•  H<.i'4iw;p-"  on weekdn\s.  A
:i  ••" ::.''>'•• fee rmv UP ch-wci fur
      •:  \  iJu1 '. ' uV cnp\ of the  do' '»ri
.- ,ii,tn i'.,i- ir, rarh EPA
FOR FURTHER INFORMATION CONTACT
U,:\:,iS',.>npf>': i-.ihlf rruMSures needed tn HSSJM
a:'rttPTpp.t no hiti»r than December V
3. l-'u::,liii>. Hi .-,;." , •• >;•> ..-4 /;..- r  ••:<-'
Plar. Rp\ ;.s'/i/,"i

  As a furthpr incentive to the revision
of nians for nonattginment areas.
Ccngress provided funding restrictions
in Section 176(a) and 316(b). Under

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        Fedeial Register /  Vol.  4&  No. 213  / Wednesday.  November 2. 1983  /  Rules  end  Regulations   50687
Section 176(a). EPA and the Department
of Transportation must restrict funding
 n arn area where transportation
(.ontrols are needed to provide for
attainment by the applicable deadline
and a State fails to submit or make
rpesondbie efforts to submit a plan thai
 considers" each of the Part D
requirements Under Section 316(b). EPA
h«s discretion to limit funds for
construction of sewage treatment
facilities in any area  where a State does
not have in effect a plan that
accommodates emissions associated
with sewage treatment facilities.

4 Restrictions as Incentives for
Implementation
  Congress also sought to ensure that
SIPs for nonattamment areas, once
revised, would be implemented, ty added
two construction bans and two hmdmy
restrictions that apply in areas where
State or local agencies have failed to
r drry out the  SIP Section 173(4) requires
each SIP for a nonattamment area to
contain regulations that prohibit new
source construction and modification in
arn area where a State or local agency
has failed to carry out its SIP. In
addition. Section 113(a)(95) authorizes
EPA to prohibit the construction of any
rr.a|or stationary source in any such
area Section 17B(b) prohibits EPA from
awarding  any grants under the Gean
Air Act to any such area. EPA may also
apply Sectron 316(b) in such areas.
5 Cay/5 for Plan Revisions
  Finally.  Congress retained Section
no(a)(2j(H). the remedial mechanism
F.PA used  in 1976. Section 110(a)(2HH)
1.: i reu;.irps each SIP to require  its own
rpi :s.or. if EPA finds that a plan is
  substantially inadequate" to achieve
tmieK  attainment of the national
ooibier.! air quality standard that it
implements. In 1977 Congress addH
new language allowing EPA to call for a
revision when a plan fails to comply
with any requirement of the 19T7
amendments
B. Implementation of the 1977
 •\trenaements
 \ Drs'Auction;
  IT. March 1978. EPA designated over
400 areas  as nonattamment for  one or
rrore primary or secondary NAAQS. 43
FR 8  1.1979 almost none of the
 -onattdinment areas had in effect an SIP
 proM»ion that met the requirement! of
 Sections llOiaK2)(I) and  173(4). As a
result, on July 2.1979 (44 FR 39471). EPA
published a regulation that inserted the
Section 110(a)(2)(l) and Section 173(4)
construction bans into SIPs that lacked
them and clarified the scope of bans in
SIPs that had them. EPA described the
regulation as an "interpretive rule" that
merely implemented the requirements of
Section 110
specific deadlines. Some of these
deadlines have not been met. either
because the States have not submitted
the necessary corrections, or because
EPA has not yet determined whether the
submitted material meets the relevant
Part D requirements
  The approval status of the
nonattainment areas that received
attainment date extensions parallel?
roughly the approval status of the
nonextension areas. As noted abo\e
these areas had to submit Part D
revisions m 1979 and supplemental
revisions in 1982. In a very few areas tne
section 110(a)(2)(I) moratorium remains
in effect because EPA disapproved a
portion of a 1979 submission. In most
cases. EPA approved fully or
conditionally the 1979 submissions :
  Each of the States with extension
areas has submitted at least a draft of
its supplemental revision, and EPA has
proposed action on  each submittal. Or.
February 3. EPA proposed to disapprove
plans for 17  States. See 48 5022-5148
EPA has proposed to approve the
remaining 14 submissions.
4. Funding Restrictions
  (a)  Section 176faJ. On April 10.^.980
(45 FR 24692). EPA and the Department
of Transportation published a joint
policy for the implementation of the
Section 176{a) funding restrictions. In
this policy, the two  agencies took the
position that the restrictions would
apply only in regions that had not
submitted (or made reasonable  efforts to
submit) Part D SIPs for rransporTation-
related pollutants. The policy stated that
EPA would judge each region's efforts
on a case-by-case basis
  The policy gives EPA  discretion u
determine whether  funding re«!nc::i. --
should applv throughout an entire 3.:
  'EPA • authority to punt condition*! app-mals
 has, been upheld although the US Court of Appeals
 for th« Second Circuit h»» ruled that EPA mm noi
 [•ft the Section llCXalllllll Construction bun upon H
 conditional appnnal. Connecticut Fund lor tt>r
 En\ irormeni \ £. n.-i>< n.v
 implemented th(-r 19T- p!.-n< O-AUBUS! 3 ^s*1  <>)
 FR 35311] EPA proppse-d "0 find lhat 11 Siites »::"
 ev'fns'on «re«t »ere not implementing \ernue
 inj"peonon.ni»irj*r.ance pronmnj EPA propose r
 impose contraction moratoriums under Secuo"
 1"3|4| and fnndinf nmnctions n«o>: Sectior

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50668  Federal Register  /  Vol. 48. No. 213 / Wednesday. November  2. 1983 / Rules  and  Regulations
quality control region, or only in those
portions of the region designated
nonattamment for a transpoTlation-
reidted pollutant. If restrictions are
imposed. EPA has discretion to continue
'o award air pollution control funds to
agencies not directly responsible for the
failure to submit a plan. The Department
of Transportation has discretion to fund
proiects meeting the exemptions listed
in Section I76(a). The policy provides
additional criteria for determining which
projects should be exempt.
  The policy also sets out procedures
for imposing the restrictions, including
notice and opportunity to comment. The
policy suggests, but does not require.
that removal of the restrictions should
wait until EPA approves a revised SIP
as meeting the Part D requirements. The
policy notes that, since Section 176(a)
requires action by the State. Federal
promulgation of a Part D SIP would not
justify removal of the restrictions.
   (b) Section I76(b). EPA has not issued
•A formal policy for Section 176(b), which
applies when State or local agencies fail
to carry out a SIP. However. EPA has
taken positions on some issues in its
proposals to use Section 176(b). For
example, where different levels of
government share SIP responsibilities,
EPA has stated that it may continue to
fund agencies in the level of government
that is not responsible for the
implementation problem. See 47 FR 9477
(March 5,1982) and 48 FR 35312 (August
3.1983). EPA has requested comment on
alternative formulas for computing the
amount of funding that is intended for
use in the area where the SIP is not
being carried out. Under one of these
formulas. EPA would withhold the
amount of funds EPA needs to
implement the program that the State
has not implemented. See 48 FR 35312.
   Proceduraily, EPA has determined
that  it should provide notice and an
opportunity to comment on both the
factual basis of its finding and the
amount of funding to be withheld. See 47
FR 9477 and 48 FR 35312. EPA will also
provide an opportunity for a hearing as
required under Section 105(e).
   (c) Section 3l6(b). EPA published a
policy for Section 3l6(b) on August 11.
1980 (45 FR 53382). The Policy adopts a
•'reasonable efforts" approach to judging
St.itp efforts to submit and implement
Pd;t  D plans. It aiso exempts from any
:'istr:ftions projncts needed lo mee!
• •• >-.::ng hiMlth needs  thai will not
evpand capacity by more than 1 million
Sol-ins per day. and projects  that would
ir prove treatment, but not expand
Lunacity The policy adopts the
p::cedures developed for imposing and
removing Sr ction 176(a) restrictions.
C. EPA s February 3 Proposals for
Nonattainment. Nonextension Areas

1. Proposals to Disapprove and Impose
the Section 110(a)(2)(l) Construction
Ban
  On February 3.1983, EPA proposed
two sets of findings for SIPs for
nonattainment. nonextension areas.
First. EPA proposed to find as a factual
matter that many of these SIPs had
failed to meet one or more Part 0
requirements. Second, EPA proposed
that the legal consequences of such
failures  should be disapproval and the
imposition of a construction ban under
Section  110(a)(2)(I). EPA also solicited
comment on applying funding
restrictions.
  EPA's factual proposals addressed
three Part D planning problems.
  (a) Failure To Attain by December 31,
1982. First. EPA proposed to find that
SIPs for 111 areas, many of which had
received approval or conditional
approval of their Part D SIP revisions.
had failed to bring about attainment by
the end  of 1982.' For a list of these areas.
see the first column in "Appendix D"  to
the proposal. 48 FR 5005-5021. EPA took
the position that any area that failed to
attain by 1982 could not be said \o
satisfy Section 172(a)(l), which requires
the plan for any nonextension area to
"provide for" attainment by the end of
1982. Consequently. EPA proposed to
disapprove these SIPs and impose the
ban under Section 110(a)(2)(I).
  Following this logic, EPA also
proposed to disapprove plans for
nonattainment areas that it had
designated nonattainment after the first
round of designations  in 1978 and that it
thought would continue to experience
violations after 1982. EPA announced
that the 1982 attainment deadline would
apply even to areas it  designated as
nonattainment after 1982. EPA also
stated that the Section 110(a)(2)(I) ban
would apply immediately in areas
designated nonattainment after 1982,
since the designation itself would show
that the plan had failed to assure timely
attainment and. therefore, was not
meeting the requirements of Part D.
  EPA earlier had interpreted the Act to
allow areas designated nonattainment
after July 1,1979 one year to develop  a
Part D plan and six months  to obtain
EPA approval before a construction ban
  'EPA based us prrlim-nnn i omlusmn thui !
urc.1;. h.iri fatlrj lu dtt.iin hv th« end 
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        Federal  Register / Vol. 48. No.  213 / Wednesday.  November 2.  1983 / Rules and  Regulations  50689
2 Funding Restrictions and Other
Construction Bans
  In the February 3 nohce. EPA solicited
comment on whether the funding
reMncuons of Sections 176(a), 176(b)
dr.d 316 of the Act should apply in any
ci'ra \\here EPA disapproved a plan for
fri..jre to attain or failure to meet the
Port D planning requirements  EPA also
reo/.iPaied comment on whether there
might be circumstances justifying the
application of these restrictions without
prior notice and opportunity to
comment. EPA did not however.
propose to restnct funds in any area.
Similanly. EPA did not propose to
impose either the Section 173(4) ban or
the Section 113(a)(5) ban.

3 Other Issues
  (a) Requests for Attainment Date
E\:ensions. EPA  also announced that it
would disapprove any new request for
an extension of the attainment date for
tne ozone or carbon monoxide
stdnda.-ds for either an "original" or a
newly-designated nonattainment area.
EPA explained that Section 172(a)(2)
requires all extension requests to have
been submitted on or before January 1,
1979. EPA acknowledged that  it had
approved extension requests submitted
after that date when they accompanied
an areas s ongmal Part D submittaL but
asserted that Section 172(a)(2) could not
be read to permit extensions any later in
the planning process.
  (b) Pending Revisions to NAAQS.
EPA also announced  that it could
provide no exemptions from
construction or funding restrictions for
any nonattainment area  based or.
possible changes to any  of the NAAQS.
  |cl Arecs Expected to Attain bv
December 31. 1982. EPA's February 3
proposal also listed all nonattainment.
nonextension areas that EPA expected
to meet the December 31.1982
attainment deadline.  To confirm that
these areas had in fact attained. EPA
proposed to require each area to submit
by July 1.1964. a request for
redesignation to  attainment. EPA
implied that it would disapprove the
plan for any area that could not
demonstrate that it had attained the
standards by that time. For a list of
a'eas that EPA expected to meet the
19R2 attainment deadline, see
  Arrcnd:* C" of the  Feoruarv 3 notice
46 FK 49*9-5002

C Cc—.Ter.ts on February 3 Proposals
 • • \cr.attair.ment. .\onexiension Areas
; Proposed Disapprovals and
Construction Moratoriums
  (ct) Failure to Attain by December 31.
198:
  • General Legal Issues. Nearly all of
the commenters that addressed these
proposals protested EPA's proposal to
disapprove already approved plans and
reimpose the construction ban for failure
to attain by the end of 1982. The
commenters asserted that the purpose of
Section nO(a)(2)(I) and Part 0 was not
to ensure attainment by the end of  1982,
but to induce States that had missed the
attainment dates set by the 1970
amendments to the Clean Air Act to
revise their plans.
  Some commenters.  focusing on the
language and history  of Section
110(a)(2)(I) and Part D. pointed out  that
Part D merely requires plans to "provide
for" attainment by the end of 1982.  See
Section 172(a)(l). They argued that
Congress easily could have chosen a
stronger word, such as "achieve" or
"assure." if it had meant Part D to
require actual attainment
  One commenter used legislative
history to show that Congress chose to
use "provide for" precisely because it is
less demanding. As originally drafted.
the provision that became Section
172(a)(l) required Part D plans to
"assure"  attainment. The sponsor of the
amendment that replaced "assure" with
"provided for" stated that he wanted to
ensure that States would not have  to
guarantee that their revised plans would
actually bring about attainment
(Transcript of Senate Clean Air Act
Mark-up. May 4.1977. pages 13-14.)
  Other commenters noted that Section
110(a)(2)(I) only requires areas to "plan"
for attainment to escape the
construction ban They asserted that the
legislative history describes the ban as
an inducement to timely planning, rather
than a penalty for unsuccessful
planning.
  Still other commenters. focusing  on
prior EPA action, reminded EPA that.
when SIPs submitted under the 1970
amendments failed to bring about
attainment EPA called for SIP revisions
under Section 110(a)(2)(H) instead  of
disapproving plans for failure to
"provide for" attainment under Section
110(a)(l). Moreover, at that time. EPA
interpreted the Act as prohibiting new
source construction only in areas that
failed to submit revised SIPs within the
deadlines established by EPA. These
commenters argued that EPA should
follow the same process for plans that
failed to  "provide for" attainment under
Section 172(a)(l). They felt that the
existence of this alternative  remedy
made it unnecessary  to adopt what they
regarded as strained  interpretations of
Sections 110(a)(2)(I) and 172(a)(l).
  Most commenters that urged EPA to
use Section HO(a)(2)(H) conceded  that a
construction ban should apply if an area
failed to revise its plan in response to a
notice of inadequacy  A few. however
argued that EPA should promulgate
revisions under Section liO(c|(l")(C)
instead of imposing a ban.
  • General factual issues Mam
commenters protested EPA s use" of
projections based on monitoring data
from 1981 and 1982 They urged EPA •_•
wait until 1933 data becomes avaiiab -
One commenter supported the propos-:
procedure, but argued that EPA had r,  •
made sufficient allowance for unusua
meteorological conditions that might
have caused violations. A few
commenters argued that EPA had not
given enough information on its
selection of data to provide a
meaningful opportunity to comment.
  • Ozone transport issues. Many
commenters supported the proposal to
exempt ozone areas that can
demonstrate that their continued
violations are caused by transported
pollution. Four commenters. however
felt that it was impossible to make sucr.
demonstrations using current  data and
modeling techniques. Others wanted to
expand the exemption to other
pollutants.
  • Compliance date extension issues
All of the comments on this issue
supported the idea of exempting areas
that could demonstrate that they would
have attained but for a source that
received a compliance date extension
beyond 1982. Many commenters urgec
EPA to expand  the exemptions to other
situations. One commenter felt EPA's
two-pronged test was too burdensome
This commenter favored relaxing the
requirement that all other sources in the
area must be in compliance and
eliminating the  requirement for a
demonstration that the area would have
attained but for the compliance date
extension.
  • Removal of construction ban.
Commenters responded variously to
EPA's request for comment on when to
remove construction bans. The most
common suggestion was that EPA
should remove  the ban as soon as it
approved a revised SIP curing the
deficiency that caused EPA to
disapprove the plan. Other suggestions
included removal upon mere submittai
or a revised plan, removal upon
commencement of good faith  efforts
toward submitting a revised pian. ar.c
removal upon submittai of a request for
redesignation to attainment One
commenter also suggested that the Dd^
could be lifted when a source  obtained
sufficient offsets to show a net reduction
in emissions.
  These comments addressed not or.iy
disapprovals for failure to attain, but

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50690  Federal Register /  Vol.  4&  No. 213  /  Wednesday. November 2, 1983 / Rules and Regulations
also disapprovals for failure to fulfill
conditions and disapprovals for failure
to have in effect by now a-fully or
conditionally approved plan.
   b. Failure to Fulfill Conditions. No
comment addressed this issue directly.
Several commenters. however, argued
that EPA should not disapprove a plan
in an area that probably attained in
1982. even if the plan failed to meet
some of the other Part D Requirements.
Since the construction ban and the Part
D requirements do not apply in areas
designated attainment under Section
107(d), the commenters argued that EPA
should not apply them in areas where
attainment is considered likely.
   c. Failure to Have in Effect an
Approved or Conditionally Approved
SIP. Commenters generally agreed that
th'e construction ban should apply in
areas that apparently failed to attain
and that lack fully or conditionally
approved Part D plans. Some
commenters argued however,  that the
ban should not apply in areas which
probably attained the standards in 1982.
   d. Proposals for Newly-Designated
Nonattainment Areas. All of the
commenters that addressed this issue
objected to EPA's proposals to revoke 40
C.F.R. 52.24{k) and require areas
designated nonattainment  after the first
round of designations to meet the 1982
deadline for attainment. They felt that
the proposals would produce absurd
results, especially in areas designated
nonattainment after December 31.1982.
   Many of the commenters argued that
Section 107(d) and Part D do not apply
to these areas. They suggested that EPA
should issue a notice of deficiency under
Section HO(a)(2)(H) if it discovers
violations in an area designated
attainment or unclassified. A few
commenters suggested that EPA should
continue to use  the time intervals
between the specific dates in Section
107(d) and Part  D.
2. Funding Restrictions
   (a) General legal issues. Ail
commenters on this issue opposed the
use of funding restrictions  in areas with
approved Part 0 plans that apparently
failed to attain by December 31.1982.
unless EPA could show that a State had
failed to carry out its plan. These
commenters argued that there was no
ci;pport in the language of  Sections
:T6(a). lT6(bl. or 316 for applying the
restr.c;,ons in an area lhat had
 ".p. •r-.t.r.'ed  an approved  plan but had
ic.ijj t:i ar.din.  Tne comnenters also
asserted that  the legislative history
showed that Conaress intended EPA to
impose Section  176(a) only where a
State failed to suomit a plan, not where
a State failed to bring about attainment.
  (b) Procedural issues. Many
commenters argued that EPA had no
authority to impose funding restrictions
without providing prior notice and
opportunity to comment. Some
commenters added that Section 105(e)
requires EPA to provide an opportunity
for a hearing before it withholds any
grants for air pollution control programs.
Others urged EPA to follow the special
policy and procedures developed by
EPA and the Department of
Transportation for Section 176(a).

3. Other issues
  (a) Attainment date extensions for
carbon monoxide and ozone. All but one
of the commenters addressing this
provision opposed EPA's proposal to
interpret Section 172(a)(2) as prohibiting
extensions  unless requests were
submitted with 1979 plan revisions.
Most of these commenters cited a 1979
policy memorandum which stated that
EPA wou!~ sTant extensions later in the
planning •   :ess. They also argued  that
it would be unfair to penalize areas  that
had carried out approved plans in good
faith.
  The commenter that did not favor
extensions  suggested that areas that
failed to attain should be given an
opportunity to revise  their plans before
any restrictions were imposed.
  (b) Effect of pending revisions to
standards. All comments on this issue
urged EPA to refrain from disapproving
plans and imposing restrictions in
particulate  matter nonattainment areas.
One commenter suggested that EPA
disapprove plans only in those areas
that would  be nonattainment under  a
revised particulate matter standard.
  (c) Areas expected to attain by
December 31,1982. Several commenters
supported EPA's proposal to presume
nonattainment for any area listed in
Appendix C of the February 3 notice
that failed to submit a request for
redesignation by July 1.1984. One
commenter asked EPA to relax the
deadline to October 1984.
  A fairly large number of commenters
asked EPA. to clarify its policy on the
data needed to support a redesignation
request.
E. Congressional Action
  In June 1983 Congress added to the
HUD-Independent Agencies
Appropnations Bill for fiscal year 1984 a
provision which provides:
  None of the funds provided in this Act may
be obligated or expended to impose lanctions
under the Clean Air Act with respect to  any
area for failure to attain any national
ambient air quality standard established
under Section 109 of such Act (42 U.S.C 7409)
by the applicable dates set forth in Section
172(a) of such Act (42 U.S.C. 7S02(aJ).

  Pub. L 98-45. 97 Stat. 226 (July 12,
1983J. The bill, including this measure.
was passed by both houses and signed
on July 12,1983. It will limit EPA's
ability to impose construction and
funding restrictions  during fiscal year
1984.
  The legislative history shows that
Congress enacted this measure largely
as a response to EPA's February 3
proposal to disapprove approved and
implemented plans that failed to bring
about attainment by the end of 1982.
See. e.g., 129 Cong. Rec. S8818 (daily  ed..
June 21.1983 (remarks of Senator
Randolph): 129 Cong. Rec. H3506 (daily)
ed. June 2,1983) (remarks of
Representative Dingell). It also shows
that Congpess intended to prohibit only
those "sanctions" imposed for failures to
attain. Construction bans and funding
restrictions for failures to submit plans
or carry out plans are still authorized.
See 129 Cong. Rec. S8816 (remarks of
Senator Randolph): 129 Cong. Rec.
H3503-3504, (daily ed. June 2.1983)
(remarks of. Representative Waxman):
129 Cong. Rec. H3513 (remarks of
Representative Broyhill). In fact, one of
the chief spokesmen for the Senate
amendment made it clear that EPA
could still limit construction and funding
in an area with an approved and
implemented Part D plan that failed to
bring about attainment if the State failed
to revise the plan within a reasonable
time. See 129 Cong. Rec. S8817 (daily ed.
June 21,1983) (remarks of Senator
Stafford).

ID. Response to Comments

  This section provides EPA's response
to the major comments on legal and
policy issues. EPA will respond to
comments on factual issues in the final
notices of inadequacy and final
disapprovals that it  will publish in the
near future.

A. Proposed Disapprovals and
Construction Bans

1. Failure to Attain by December 31,
1982

  EPA has been persuaded to change its
view on the legal consequences of
finding that a nonattainment,
nonextension area with a fully approved
and implemented Part D plan failed to
atto.n by Decemoer  31  l^.- EPA nou
agrees that tne better interpretation of
the Act is that Section llO(a)(2)(I) and
Part D were intended to produce revised
plans that appeared to "provide for"
attainment by the~l982 or 1987
deadlines. EPA agrees thai the language

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        Federal Register / Vol.  48.  No. 213  /  Wednesday. November 2.  1983 / Rules and Regulations   50691
and legislative history of Section
172(a)[l) suggest that SIPsjwere only
expected to "provide for" attainment in
a prospective or planning sense.
Furthermore. EPA agrees that its
decision not to apply bans immediately
in areas that missed the original
attainment deadlines is a significant
precedent. In fact. EPA has determined
that Congress quite probably endorsed
this approach in enacting the 1977
amendments.
  Moreover. EPA believes that the
legislative history of the construction
ban. while not conclusive, suggests that
the primary purpose of the ban was to
provide an incentive for submitting
revised plans that met the Part D
requirements. Imposing bans in areas
with approved plans that missed the
1982 attainment deadline would do little
to further this goal, because these areas
have already met the requirements of
Part D. This reasoning is set out at
greater length in an opinion of the
General Counsel dated July 12.1983.
which has been included in the docket
for this rulemaking.
  EPA is withdrawing its proposals to
disapprove plans and impose Sectior.
llO(a)(2)(I) bans in areas with approved
and implemented Pan D plans.
Moreover. EPA is promulgating an
addition to 40 CFR 52.24(a) that will
prevent the Section 110(a)(2)(I) ban from
applying in such areas.
  EPA. however, will find that approved
Part D plans that failed to  bring about
attainment by 1982 are inadequate
under Section 110(a)(2)(H). EPA will call
for plan revisions, and impose bans
under Section 173(4) and funding
restrictions under Section  176fb) in any
area that fails to submit a  revision in a
timely manner.
   EPA is retaining the exemptions for
ozone  transport and compliance date
extensions that commenters favored
EPA will not issue findings of
inadequacy  for areas that  can
demonstrate that they would have
attained but for ozone transport or
extended  compliance schedule. EPA.
however,  is eliminating from both
exemptions  the requirements relating to
compliance by other sources These
other requirements are not relevant to
the purpose  of the exemptions. Where
otner sources are not in compliance
because pians are not D»mg carried ou;.
EPA may  impose restr.ctions for failure
'o implement under tne poiicv outlined
m Section IV of this notice

2  Failure to Fulfill Conditions
   EPA is not changing its views on the
legal consequences of a failure to fulfil!
a condition of approval, even for areas
tf>at may have attained by 1982. So long
as an area is designated nonattainment
under Section 107(d). the Act requires
compliance with all of the Part D
requirements. EPA believes the States
should bear the burden of demonstrating
attainment. Furthermore, so long as any
doubt exists, it better serves the Act's
health protection purposes to continue
to require compliance with Part D.

3. Failure to Have in Effect an Approved
or Conditionally Approved Part D SIP
  Commenters generally supported
EPA's proposal to retain existing
disapprovals and bans in these areas.
As explained in Section IV of this
notice. EPA has decided to retain this
proposal.
4. Newly-Designated Nonattainment
Areas
  EPA has been persuaded to retain 40
CFR 52.24(k) and allow newly-
designated  nonattainment areas a
reasonable  time to submit Part D plans
and provide for attainment. EPA is
convinced that Congress could not have
intended the 1979 and 1982 dates to
apply to areas designated attainment
long after the original designations in
1978. Moreover. EPA has concluded that
the best way to provide sufficient time is
to retain the approach long established
by Section 52.24(k) and use the time
intervals suggested by Section
I10(a)(2)(i)  and Part D to establish dates
for plan submittal and attainment.

B. Funding Restrictions
  After reviewing the comments. EPA
agrees that none of the funding
restnctions in the Act apply to areas
with approved and implemented Part D
plans that only missed the 1982
attainment  date. Furthermore, if EPA
imposes restnctions for other reasons, it
will  first  provide notice and opportunity
to comment. EPA will not restrict any
Clean Air Act funds under Sections
176(a) or 176(b) without also providing
an opportunity for a hearing as required
by Section  105(e).
C. Other Issues
1. Attainment Date Extensions
   EPA is modifying the interpretation of
Section 172(a}(2) that it proposed on
February 3 to allow newly-designated
ncnattammen: areas for carbon
monoxide and ozone to obtain
extensions if they submit their requests
with the..- first Part D submissions
Allowing them to request extensions at
this time will be more consistent with
the practice EPA established for the
"ong nal" nonattainment areas.
Furthermore, it is consistent with the
general approach to dates in Part D that
EPA is adopting for newly-designated
areas.
  FPA did not find that any commenter
presented a sound rationale for
expanding Section 172(a](2) to permit
areas to request extensions later in the
process. Although the legislative historx
does not explain why Congress imposed
a January 1,1979 deadline on extension
requests, it seems likely that Congress
wanted to force States to make
decisions on extensions early in the
planning process, to ensure that there
would be sufficient time to implement
the stringent controls needed for an area
where "reasonable measures" would no!
provide for attainment. This purpose
would not be nerved by allowing areas
to obtain extensions after they submit
their initial Pan D plans.

2. Pending Revisions to Standards
  No commenter offered a  convincing
legal rationale that would allow' EPA to
stay  implementation of the existing
particulate matter standard. EPA is
considering the possibility  of focusing
the paniculate matter standard on small
panicles. In an attempt to accommodate
the commenters' equitable  concerns
EPA intends to allow States to structure
their paniculate matter revisions so they
will concentrate on smaller particulates
first.

3. Areas Expected to Attain bv
December 31. 1982
  Although the comments generally
supported the proposal to require
redesignation requests from all areas
considered likely to attain. EPA has-
decided to withdraw the proposal. Some
States might wish to retain the stricter
Part  D regime even in areas that come
into attainment. Section 116 of the Act
makes it clear that States are always
entitled to regulate more stnctly than
the. Act requires. Consequently. EPA
has no clear authority to require a State
to redesignate and give up its Part D
program.
IV. Policy for Correction of Part D SIPs
for Nonattainment Areas

A. Introductory Comments
  This section describes the approach
EPA wants States to take to remedy SIP
deficiencies in nonattainment areas, li
addresses both the specific deficiencies
indentified in  the February 3 proposals
and  deficiencies mat may  be identified
in the future  Also i: describes EPA s
revised view of the legal consequence:
of a  failure to correct a deficiency.
   In most cases. EPA wants to give
States an opponunity either to show-
that their SIPs are not deficient or to
remedv their deficiencies before

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50692  Federal Register  /  Vol. 48.  No. 213  / Wednesday.  November 2. 1983  /  Rules and Regulations
construction and funding restrictions
apply. States may show thaj SIPs are
not deficient by requesting
redesignation to attainment under
Section 107(d). States may remedy
deficiencies by either implementing or
revising their existing SIPs. EPA is
preparing comprehensive guidance for
areas that need to implement or revise
their plans. EPA expects this guidance
to be available later this fall.
  If a State neither submits a
redesignation request nor cures its SIP
deficiencies. EPA will propose
construction and funding restrictions. If
a State commits to remedy its deficiency
by a specific date and, at the same time,
shows that it cannot possibly move any
more quickly. EPA may defer final
action until that date, unless it  learns
later that the State will not meet its
commitment. EPA does not anticipate
that any State will need more than one
year to correct any of the SIP
deficiencies identified in the February 3
proposal.
  If a State fails to redesignate or solve
its problems within the time limits
described beiow. EPA will publish a
notice in the Federal Register
announcing that appropriate
construction and funding restrictions
apply.
  If EPA imposes construction  and
funding restrictions, it will remove them
when it approves a redesignation
request or finds that the State has cured
its deficiency. If the State must submit a
plan revision. EPA will remove
restrictions only when it approves the
State's revision or promulgates a
Federal revision. If the State must
implement an approved plan. EPA will
remove restrictions only when  it finds
that the State has completed all actions
needed to carry out the plan.
  Where a SIP is deficient because it
lacks needed control measures, EPA will
consider promulgating the measures.
Resource constraints will almost
certainly make it impossible for EPA to
promulgate Federal plan revisions
immediately in all areas where they
might be needed. Consequently, EPA
will promulgate first in those areas
where air grant funds have been
restricted and where it believes that
Federal action w.li be most effective.
EPA will remove construction bans if it
promulgates a plan re%ision that brings
t^p area into full compliance with Part
D Promuijiatior however, will  not
rt>mo\e funding restrictions. To remove
t.T".e restrictions States will have to
submit or implement their OVMI clans or
 1.,-r...|1> adopt  tr-.e F.PA plans as their
 uu -  Sop e g.. 46 FR 2465*2 (April 10
 19i"l (Section 176(a) policy).
  EPA will administer this policy in
accordance with the objectives that the
Administrator announced in his June 23.
1983 speech to the Air Pollution Control
Association. These objectives are:
  (1) Carry out the Clean Air Act.
  (2) Move the nation closer to the
health goals of the Act.
  (3) Strengthen Federal. State, and
local air pollution control programs.
  (4) Treat all parties fairly.
  (5) Provide  incentives for States to
fulfill their planning and implementation
obligations rather than  punishments for
failures.
  (6) Avoid unnecessary economic
disruption.
B. Policy
  EPA has classified  SIP deficiencies for
nonattainment areas into the following
categories:
  1. Nonattainment areas without
attainment date extensions.
  (a) Areas with fully approved 1979
plans or portions of plans.
  (i) Areas that failed to implement.
  (ii) Areas that failed to attain by the
end of 198Z
  (b) Areas that failed to fullfill
conditions of approval on 1979 plans.
  (c) Areas lacking approved or
conditionally approved 1979 plans.
  (i) Areas that failed to submit plans.
  (ii) Areas that received disapprovals.
  (iii) Areas that submitted plans that
EPA has not acted upon.
  (d) Areas with approved and
implemented  plans that are expected to
attain.
  2. Nonattainment areas with
attainment date extensions.
  (a) 1979 plans.
  (b) 1982 plans.
  (i) Plans proposed for approval.
  (ii) Plans proposed  for disapproval.
  (iii) Plans not submitted.
  (iv) Areas that do not implement
plans.
  3. Newly-designated nonattainment
areas with and without extensions.
  Each nonattainment area must correct
each deficiency that applies to it. Some
areas will need to correct more than one
deficiency for the same plan. Also, since
some areas are nonattainment for more
than one pollutant, they may need to
revise more than one plan.
1. Noncttainment Areas Without
Attainment Date Extensions
  (a) Areas With Approved 19T9 Part D
Plans or Portions of Plans.
  (i) Areas that did not implement
approved plan provisions. EPA did not
propose on February  3,1983 to find that
any nonattainment. nonextension area
had failed to carry out an approved Part
D plan provision. EPA. however, may
discover that some areas failed to carry
out their plans. If EPA discovers such
problems, it will  propose to find that the
area is not implementing its plan and
propose to limit construction and
funding under Sections 173(4) and
176(b). The timing of restrictions and the
remedy will vary with the type of
provision that is  not being implemented
  • Schedules for adoption of
additional control measures. EPA
approved some Part D plans containing
schedules that required areas to adopt
additional control measures needed to
assure attainment. For example, some
paniculate matter nonattainment plans
require areas to study nontraditional
sources of particulate matter and adopt
additional controls.
  If IPA learns that an area has not
carried out such a schedule, EPA
promptly will propose to find that the
area is not implementing its approved
Part D SIP. Simultaneously. EPA will
propose to limit construction under
Section 173(4) and air pollution control
funding under Section 176(b). EPA will
provide an opportunity to comment and
an opportunity to request a hearing.
  If. during the comment period, an area
commits to a new deadline for adopting
the necessary control measures as
quickly as possible. EPA will defer its
final action until  that deadline. To
ensure that areas implement their plans
expeditiously. EPA will not accept
deadlines more than one year from the
date of the proposed nonimplementation
finding.
  If an area misses its deadline for
submitting new control measures. EPA
will take final action to find that the
area has failed to implement and impose
the construction and funding
restrictions. If. however, an area submits
new control measures within its
deadlines. EPA may continue to defer
action while it evaluates the new
measures. If EPA approves the new
measures as revisions to the Part D plan.
EPA will withdraw the  proposed non-
implementation finding, construction
limitations, and funding restrictions. If
EPA disapproves the measures. EPA
will impose the restrictions immediately.
  • Implementation or enforcement of
existing measures. AH approved Part D
plans require areas to implement or
enforce adopted  control measures. For
example, a plan for an ozone area rn.iv
require a State or local  government to
construct high-occupar,c% \ehtcie lane<-
Other plan provisions may require t.s,e
State  or local government to enforce
emission limitations for stationary
sources. EPA wilLpropose
nonimplementation findings and
construction and funding restrictions for

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         Federal  Register  /  Vol. 48. No. 213  /  Wednesday. November 2. 1983  /  Rules and Regulations   50693
any area that has failed to carry out
either type of requirement EPA will
proceed generally as described above in
the discussion of plans requiring the
adoption of control measures  EPA
experts however, that areas would
nef-d much less than one >edr to adopt
ne\\ policies or procedures or commit
nrv\ resources to implement existing
mt dsures. consequently, it does not
anticipate that it will defer final action
onf lo cornpk with certai" fontr'aitr.
rec.uinr.8 Suit'! 10 me«t new source rt\ ir-» run -
EPA promulgated on August ~ 1980 U5 FR Sib'O
February 19tC EPA signea a settlemen' as'remrr
in which n agre«d to propose to revise »e\p-ai i/
lhe»e rules CtifmicolManu'aauf'.« ».«s>vie<1"-
£TA. D.C Or. No 7&-1V.2. Because of this
aperment. EPA conditional!) apprcueo ic\ern:
Stale programs which jenerall\ met EPA s 19«0
regulation*, but which did not meet some of if
rule* covered by the »eltlement agreement The
conditions requirr the St*ie« to revts* thei-
nonconforming. rule* within one vear umess
channel its own rules to that the Stale rules «.ot
bf acceptable See. e.f.. « FR 9859 (March 9. 19K<
I Alabama new source rwiew regulations I EPA tu
further conditioned approval of these resuidtioii< l .
requiring interim implementation in cor.lormanrt •
the Agenc> s current rules
  The uncertainty crested b\ the s*ttlem*n!
agreement still emsts EPA did promulgate * rn,,r.t-
lo it* deHnnion of "Source'  lot nonatidinmrn: d-r->
but th'S revision was surc^sfulU  choiic-et-n ir •"•
L' S Court of Appeals for the Dis'nc' (if CULT'. .
Circu,; Vfi/JCi Conucr.. 6&S F 2d '18 IOC  C-
196:! The Supreme Court has accepted EPA s
petition for cernoran to review this aension  In
add»ipn on August Z! 1963 l«* FR .W4", Ft'-\
propcwed to m.ikf several other rumont
coniemplxted In the agreement Accoromiirk KI'-\
finds it •ppropriate to postpone cillir.s fnr
regulatory changes lo compK with these condu.i.r^
Howner Statifs mutt continue to meet «!!
conditions concerning requirement* fnr intcnni
implementation
  EPA does nci intend lo pottpont c*!!in: fur
cntr.pluncf »nh earlier condition* imposed un
*:eks th«: h»a not >et begun to arinpt r*Buidi.o'i>.
me*:in|! FPA t IWnn* source r»\'ev» ruii-% \----
Swbie'.' 'o thwe enrlier condi'ion« m^si mrv
e\i«t].-,a di-.iriiinc« for adopting renu.t' i "« 'i«'
u,-< ._ i,, fj.\ s |usc ruifi I: ir.- >i  »-i..- nu , •
ri..' ' ' .'i irf. —  !'• •>'  t"  " ••!"'' F.' ^ - •.u>f  '
 r! -\

                   '!"'* ni rn»-«*
 aS'ti '.:• -.'• El' A vT... issue n*» cura..ion«i
 «p:>-o\.1i«. ~h:;h deal with th» CM A poriiun

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50694  Federal Register /  Volr 48. No. 213 / Wednesday.  November 2. 1983  / Rules  and  Regulations
notify the area and proceed as described
below,
  EPA intends to complete its review of
conditions by the end of 1983. As part of
the review. EPA will consider all
comments on particular conditions
submitted in response to the February 3
proposed.
  • Consequences of not meeting
germane conditions.
  —Disapprovals and Section
:w(a)(2)'(l) bans. EPA expects that it
will find that many areas proposed for
disapproval on February 3 will still need
to meet their conditions.
  Where the condition involves a
serious plan deficiency and is long
overdue. EPA may issue a final
disapproval and impose a Section
110(a)(2)(I) construction ban
immediately after it completes its
review of conditions. If the deficiency is
less serious, and if the area commits to
meet the condition by a new date. EPA
may defer final action until that date.
Areas that want to commit to  new dates
may submit their commitments while
EPA is reviewing the conditions. In no
case does EPA expect to defer action for
more than one year after the completion
of its review of conditions.
  If a State makes a submittal intended
to satisfy the condition before EPA
disapproves the plan. EPA will continue
to defer action while it reviews the
submittal. If EPA approves the
submittal. it will withdraw the proposed
restrictions. If EPA disapproves the
submittal. it will disapprove the plan
and proceed with the appropriate
funding restriction.
  Where a ban is imposed. EPA will
remove it only when it  takes final action
findina that the condition has  been met
or redosignates the area to attainment.
  —Funding restrictions for ozone,
carbon monoxide and nitrogen dioxide
plans. Where an area has failed to meet
a condition for a Part D plan for ozone,
carbon monoxide, or nitrogen dioxide,
EPA will consider restricting highway
and air pollution control funds under
Section 176(a). EPA will propose to
impose Section 176(3) restrictions where
areas have not made reasonable efforts
to fulfil! their conditions. EPA will
provide opportunity to comment and an
opportunity for a hearing before i( takes
final action. As described above for the
( orstrurt-on ban. EPA ma;,  defer final
tf'-t-.-n for up to one year if an area
i.'mrrus to a nex date for nesting its
condition. EPA will remove restrictions
in accordance with  its April 1980 policy.
   —Fur.dmg restrictions for other
Dolhitcms  Sect-.on 176(al does not apply
 to  plans for non-transportation related "
 pollutants. Because EPA believes it is
 essential to have all areas to meet
necessary conditions, it intends to
propose funding restrictions under
Section I76(bj and a construction ban
under Section 173(4) where areas have
not met conditions for other pollutants.
More specifically. EPA  will consider its
conditional approval as the equivalent
of a finding of inadequacy and a call for
a SIP revision under Section
110(a](2)(H). Any area which has failed
to meet the condition has failed to carry
out the provision in its SIP that requires
a revision when EPA makes a finding of
inadequacy. Accordingly. EPA will be
able to use Section 176(b) and 173(4),
which apply in areas that have not
carried out approved plans. EPA will
propose to impose these
nonimplementation restrictions at the
same time it disapproves or proposes to
disapprove a plan. As described above
for the Section 110(a)(2)(I) construction
ban. EPA may defer action if an area
commits to a new date  for meeting its
condition. EPA will review new
submittals. impose restrictions and
remove restrictions as described above
for the construction ban.
  (c) Areas Lacking Approved or
Conditionally Approved 1979 Plans.
  (i) Plan not submitted.
  • Requirements for plan approval. All
areas designated as nonattaimnent in
1978 were required to have in effect by
July 1.1979 plan* that met the Part D
requirements. EPA wants areas that
have not obtained approval or
conditional approval fo their Part D
plans to do whatever is necessary to
obtain approval. In most cases, this will
require new plan revisions.
  Although it will no longer be possible
for these areas to  submit plans that
"provide for" attainment by the end of
1982. EPA has concluded that it may
approve plans that "provide for"
attainment as expeditiously as
practicable while  meeting  all other Part
D requirements. Upon approving such-a
plan. EPA will remove the existing
Section 110(a)(2)(I) ban and withdraw
any proposed or final funding
restrictions.
  • Consequences of failing to submit
plans
  —Section 110(a)(2)(I) construction
ban. In each nonattainment.
nonextension area that has failed to
submit all or part  of a 1979 Part D plan.
the Section 110(a)(2)(I)  ban went into
effect on July 2.1979 and remains in
effect today. As EPA proposed on
February 3. it will leave this ban in
effect until it approves  or promulgates a
plan for the area as meeting the
requirements of Part D.
  —Funding restrictions for ozone.
carbon monoxide  and nitrogen dioxide
plans. Where an area has not made
reasonable efforts to submit a Part 0
plan for an ozone, carbon monoxide or
nitrogen dioxide nonattainment area.
EPA will propose in the near future to
restrict highway and air pollution
control funding under Section 176fa). If
an area commits to submit a Part D plan
at the earliest possible date. EPA will
defer action on the proposal until that
date so long as the area makes
measureable progress. In no case will
EPA defer final action for more than one
year from the date it proposes to impose
funding restrictions. If. however, a State
submits a plan to EPA within one year.
EPA will continue to postpone final
action  on the restrictions until it takes
final action on the plan. If EPA approves
the plan, it will withdraw the proposed
funding restrictions. EPA will impose the
restrictions if it disapproves the plan.
  —Funding restrictions for plans for
other pollutants. EPA intends to use the
Section 176(b)  funding restrictions for
areas that are nonattainment for other
pollutants. For these areas. EPA will
treat the February 3 notice as a
proposed finding of inadequacy under
Section 110(a)(2)(H). As soon as possible
after issuing this policy, EPA will
publish final findings of inadequacy and
call for plan revisions. EPA  intends to
set a deadline for tubmittal  of these
revisions within 60 days from the date of
the final finding. These plans were
originally due over four years ago:
consequently. EPA if providing the
shortest deadline suggested by Section
  If an area does not submit a Part D
plan within this 60 days. EPA will
promptly publish a propose finding of
nonimplementation. propose to restrict
funds under Section 176(b), and propose
a limit construction under Section 173(4).
If an area commits to a schedule for
submitting a revised plan, EPA will
postpone final action on the funding
restrictions for up to one year after the
date of its final finding of inadequacy. If
an area submits a plan revision on time.
EPA will defer action on the funding
restrictions as described above in the
discussion of 176(a).
  (ii) Plan disapproved. In  virtually all
areas that received disapprovals on
their 1979 plans, the Section 110(a)C!(l!
ban remains in effect.* As  proposed or
February 3. these bans will remain ;.-
effect until EPA approves a plan d<
meetiny the requirements of Part D
  EPA irtends to follow the same p« :•
for usinji funding restrictions  to obt*:n
  '•EPA h«s J.tcowvd d few «re«« w^-* :\
J'sHppro< *d a M.iri D oUn bui neg;ected 10 ruTuo-.
ihe Section HOUJUiiT; ban EFA mieids to pub'nh
nonces imposing the bin in tf.pte irem •« soon -is
possible after it IUUM this policy

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        Federal Register / Vol. 48. No. 213 /  Wednesday. November 2.  1963 / Rules and  Regulations   50695
new plans that is outlined above for
nrens that did not sub nut Part 0 plans
The rationale for approving revised
plans described in that section will also
cirply to these areas.
  (in) Plar submitted but no rina! action
s\ £/M  For these areas, too  the Section
llO(a)(2)(I) moratorium is in effect and
w:i! remain in effect until EPA approves
a plan as meeting the Part D
requirements.
  Before EPA and the States can take
further action on these plans. EPA must
complete its review of the submitted
revisions. EPA has proposed action on
all of these plans. It currently intends to
take final action or. if necessary, to
propose different action no later than
December 31.1983. If EPA approves a
plan, it will remove the Section
nO(a)(2)(I) ban. If EPA disapproves a
plan, it will propose funding restrictions
dS described above in the Section on
areas that did not submit Part D plans
  If a State chooses to withdraw a plan
before EPA takes final action. EPA will
return the plan and proceed under the
policy described above for areas that
did not submit Part D plans
  (d) Areas  With Approved and
Implemented 1979 Plans That Probably-
Attained. EPA did not propose to
disapprove plans or impose restrictions
for these areas on February 3. EPA.
however, will continue to monitor air
quality data for these areas to determine
whetner they did attain the standards. If
EPA discovers a violation of the
standard for which the area is
designated nonattamment. EPA will
propose to find the plan to be
inadequate and call for a plan revision
as described above for areas which
foi'ed to ettam.
  These areas may request
redesignation to attainment any time
that  they can submit data meeting EPA's
policy requirements. For more
information on these requirements, see
the April 21.1983 memorandum "Section
107 Designation Policy Summary", from
Sheldon Meyers to EPA Regional Air
Directors.
2 \onartainment Areas Wi/h
 •\::c!nr^er,t Date Extensions
  Part  D required areas with attainment
Qntp extensions for ozone or carbon
•-oroxide to submit plan revisions in
 " "n anc again in 196.1. Ei'.her or both of
•~--,e p:an revisions rr.riv be def cieni
  : .' 7.*'" P!:r, Rc.-iujns.  None nf
-'••\ s F-e:irua:v 3 proposals aad'ebbPd
.it- I9"9 plans for extension areas
Nevertheless, these plans may  suffer
frnrn some of the deficiencies described
above  An area may have fjiled to fulfill
a condition  of approval or may have
      to submit a portion of a plan. EPA
may have disapproved a portion of a
19"9 submittal. If EPA finds such
deficiencies, it will follow the polities
outlined above for nonextension areas
  Extension areas ma\ also have failed
to carry out approved portions of their
19'9 plans. On August 3  1983 (48 FR
35312). EPA proposed IP  find that eleven
areas  were not irr.pleTicnting approved
schedules for motor vehicle inspection/
maintenance programs. EPA proposed to
restrict construction and funding under
Sections 173(4) and l?6(b). EPA will
publish similar proposals if it finds other
implementation failures.
  (b) 1982 Plan Revisions. EPA has
proposed action on all 1962 plans for
extension areas. The second set of
notices published on  February 3
contained EPA's proposals for 27 of the
31 States that have areas with
attainment date extensions.
  (i) Plans submitted and proposed for
approval. EPA did not propose any
construction or funding restrictions for
plans  which it proposed  to approve. EPA
currently intends to consider all
comments and publish final approvals
by March 1.1984.
  In some areas. EPA may find it
necessary to change its course and
disapprove a plan. Where disapproval
will require a reproposal. EPA plans to
publish the new proposal by March l.
EPA expects to take final action on any
reproposal by September 30,1984. If
EPA disapproves the plan, it will
proceed as described below.
  (ii) Plans submitted and proposed for
disapproval. EPA intends to take final
action on all proposed disapprovals
early next year. Where circumstances
warrant. EPA will issue a new proposal
and complete its action before the end
of next year. Disapproval of a 1982 plan
will tngger a construction ban under
Section 110(a)(2)(I).
  EPA wants to encourage areas where
plans are disapproved to submit revised
plans meeting the Part D requirements
Accordingly. EPA will consider
restricting highway and  air grant
funding under Section 176(a). EPA will
propose restrictions where it finds that
an  area has not made reasonable efforts
to submit an approvable plan. If EPA
proposes restrictions, it may defer
art;on for up to one year if an area
commits to an expeditious .schedule fir
the submittal of new revisions.
  Once EPA :mposes construction and
funding restrictions, it will lift them on'v
vvnen it approves or promulgates a ui?r.
as meeting the Part D requirements for
extension areas.
  (in) Plans not submitted. In  many
coses EPA evaluated and proposed
action on draft plans. Some States have
not yet submitted final plans containing
adopted control measures and office
commitments EPA cannot approve
plans that do not contain adopirc
enforceable measures anfl commitnip
If an area fails to submit its  final plan
before EPA's internal deadline for ;>,•
action. EPA will disapprove or. tnt
ground thai the area failed to mee' t-
Pan D requirements for 198^ pliin* T- -
disapproval v.ill trwutr a construc'.'o-
moratonum under Section llOlaltClI!1 I
may also lead to funding restrictions
under Section !T6(a) as described
above.
  EPA will remove anv  construction or
funding restrictions when it  approves  a
final submittal as meeting the applicabi<-
Part D requirements
  (iv) Areas that do not implement
approved plans or portions of plans
Areas with approved plans or portior<
of plans will be subject to restriction
for failure to implement if thrv '«.• tr.
carry out their plans. EPA v\.!! monuo-
closely all approved schedules f"- 'h<
submittal of additional cor.tro;
measures EPA will also monitor
compliance by stationary sources. It *.!.
propose findings of nommplernentatic-
and construction and funding
restrictions under Sections 173(4) anc
176(b) as soon as it sees significant
slippage.
3. Newly-DiscoveredNonattamment
Areas With and Without Extensions

  (a) Deadlines for pJans and
attainment. EPA has concluded thai
Congress intended that newly-
discovered nonattamment areas shoulc
meet the Part D requirements, but have
a reasonable amount of time to do so
According;;,.  EPA intends to requ,-e
newly discovered nonattainrr.ent ared:
to follow the  time periods, but not  the
dates, from Section 110(a)(2)(I) andean
D Any nev\ nonattamment area will
have one year to develop a Part D  pisr
To obtain approval, that plan must
"provide for" attainment as
expeditiously as practicable, but no
later than five years after the date of the
nonattamment designation.
  Althougn EPA does not expect a
significant number of new ozone and
carbon monoxide nonattamment areas
which will be unable to attain s:anca-cb
ir f.'.e vesrs  _.-. attainment  dote
i veis'cr. or. be g-a.-.ted provisos '-. '
or.  fca c?.~ s-n: v\ teat " is irr.posc.n.r •-
sf-:r c.-'1?' " nrncxiof or czone
 al- reasur.cL H ^.InOJfc control
 measures 1 hr extension is not
 a-tor.iitir  ,t ":•>' be requested and it
 must De act.u-:-p«nied b> a
 demonstration of need that is forward
 with the initial Pan D submittal Tne

-------
50696   Federal Register / Vol. 48. No.  213 / Wednesday. November 2. 1983  / Rules  and Regulations
extension may provide up to five
additional years to provide-for
attainment. Areas that receive
extensions will have to submit
supplemental SIP revisions no later than
four and one-half years from the date of
the designation.
   (b) Consequences of failures to submit
plans.
   • Construction ban. Under 40 CFR
52.241k). a Section 110(a)(2)(l) ban will
apply eighteen months after the date of
the designation in any area designated
nonattainment after July 1.1979. unless
the area has in effect an approved or
conditionally approved Part D plan. This
ban will apply automatically, but EPA
intends to publish in the Federal
Register a notice advising the area that
the ban has come into effect
   Approval of an initial plan as meeting
the Part D requirements will lift the ban.
Disapproval will maintain or impose the
ban. Disapproval of a supplemental
submittal for an extension area will also
maintain the ban (or impose it. if EPA
approved the initial submittal).
   • Funding restrictions for ozone,
carbon monoxide and nitrogen dioxide
plans. If an ozone, carbon monoxide or
nitrogen dioxide area fails to make
reasonable efforts to submit either an
original or supplemental Part D revision,
EPA will propose funding restrictions
under Section 176(a). It the area commits
to a schedule for submitting a plan
revision. EPA may postpone action on
final restrictions for as much as one
year.
   • Funding restrictions for plans for
other pollutants. To ensure timely
submittal of plans for newly-designated
nonattainment areas for other
pollutants. EPA  will issue a notice of
inadequacy and call for a plan revision
under Section 110(a)(2)(H) at the time it
redesignates the area as nonattainment.
If the area fails to submit an approvable
Part D plan. EPA will be in a position to
find that the area is not implementing its
SIP and to propose funding restrictions
under Section 176(b) and construction
 restrictions under Section 173(4).
   (c) Consequences of not implementing
approved plans  or not attaining. If EPA
approves the Part D plan for a newly
discovered nonattainment area, but the
 area subsequently fails to implement its
 plan. EPA will propose a finding of
 ror.implementation as described above
 in the discussion of 1979 plans that fails
 to implement. Similarly, if an approved
 \>"tn lulls to bring about attainment by
 the applicable deadline. EPA will
 propose a finding of inadequacy under
 Section 110(a)|2)(H).
   (d) Remedial actions for areas
 des/qrated nonc'.tainment after July 1.
 197V. but before the publication of this
policy. A few areas were designated
nonattainment after July 1.1979, but
before the publication of this policy.
EPA intends, to the extent possible, to
put these areas on equal footing with
areas designated nonattainment in the
future. For example. EPA will approve
qualifying extension requests that
accompanied an area's first Part D
submittal. Also, where uncertainty
about this policy caused a construction
ban to come into effect because EPA
failed to act on a Part D plan submittal,
EPA will move as quickly as possible  to
act on the plan. If EPA approves the
plan, it will remove the moratorium. If
the plan is disapproved, the moratorium
will continue.
  At the same time. EPA wants these
newly-discovered nonattainment areas
to face the same consequences for
failing to submit plans. Accordingly, for
nonattai-~;ent areas for non-
transpc   ' on related pollutants. EPA
will trea une February 3 proposed
disapprovals as proposed findings of
inadequacy. This will allow EPA to
issue a final finding of inadequacy and
propose construction and funding
restrictions under Sections 173(4) and
178(b) if an area misses its deadline for
submittal of a Part D plan.

C. Other Issues

1. Definition of "Reasonable Efforts " in
Section 176fa)

  EPA's April 1980 policy states that
EPA will determine whether a State is
making "reasonable efforts" to submit a
Part D plan on a case-by-case basis. In
making such decisions, EPA will
consider the legislative history of
Section 178(a). This history suggests that
Congress did not intend the funding
restrictions to apply in areas unable to
meet the 1982 or 1987 attainment
deadlines, if those areas make
reasonable attempts to provide for
attainment See 123 Cong. Rec. S9437-
S9439 (June 10,1977).

2. Scope of Restrictions on Clean Air
Act Funding under Sections 17S(a) and
(b)
  As mentioned in Section II of this
notice, on August 3.1983 EPA asked for
comment on the idea of using funds
withheld under Section 176(b) to
implement the part of a plan that a State
is not implementing. CPA cannot take a
final position on this issue until it
reviews all comments. If EPA decides
that this approach is feasible under
Section 176(b). it may use a similar
approach under Section 176(a), using
funds withheld for EPA promulgation.
3. Section 316(b) Funding Restrictions
  EPA has discretionary authority under
Section 316(b) to restrict sewage
treatment funding where an area does
not have a Part D plan in effect or is
failing to carry out its SIP. EPA may
propose to add Section 316 restrictions
in areas where further inducements to
action are needed. EPA is currently
reviewing its August 11.1980 policy (45
FR 53382) regarding implementation of
Section 316. The 1980 policy, however.
will remain in effect until revised or
rescinded. The revised policy will reflect
the current construction grants programs
and identify those types of situations
where sanctions could be imposed. Any
revision will be proposed and will seek
public comment by notice in the Federal
Register.
4. Section 113(a)(S) Construction Ban
  Section 113(a)(5) gives EPA discretion
to impose a construction ban for
nonimplementation. EPA intends
generally not to exercise this authority.
Section 173(4) covers most of the cases
that Section 113(a)(5) covers. In
addition, imposition of a ban in the
remaining cases, where the company
has received a construction  permit
already, would be unnecessarily unfair.
except in extreme cases of
nonimplementation. For example. EPA
might consider using this section where
a State issues a permit in violation of a
construction ban.
5. Emissions Trading
  Current EPA policy allows existing-
source emissions trades in
nonattainment areas lacking adequate
attainment demonstrations 47 FR 15076
(April 7,1982), EPA, however, is re-
examining that policy. On August 31.
1983 (48 FR 39580). EPA requested
further comment on several  issues
concerning this interim emissions
trading policy, including whether, and
under what circumstances. EPA should
approve existing-source trades in
nonattainment areas that lack fully  or
conditionally approved Part D plans or
in areas with approved plans that
missed the 1982 deadline.
  EPA invited all interested persons to
submit comments before October 31.
1983. in response to the August 31.1983
emissions trading notice. EPA will
evaluate all comments en this issue as
quirkly as possible after the close of
that  comment period. EPA eve:'.* f<>
announce its position on this issue in
both the  guidance for correction of Part
D SIP's and the final emissions trading
policy.             »
  In the interim, existing sources
considering trades in sucn areas shouid

-------
        Federal Register /  Vol.  4fl.  No. 213  /  Wednesday.  November 2. 1983 /  Rules and Regulations
                                                                      5069:
be aware that EPA has requested
comment on grand-fathering issues.
However, sources that traded might
eventually be subject to additional
emission reduction requirements needed
to bruna an area into attainment.
depending upon the control strategy
v.nr.h the State selects.

b Pending Review of Standards

  EPA must enforce all existing
standards unless and until they are
revised. However, to accommodate
concerns about the pending review of
the paniculate matter standard. EPA
will consider approving revised plans
that consist of enforceable schedules
that phase in the adoption and
implementation of controls for
paniculate matter sources. States will
be able to address sources of smaller
particles first. EPA. however, does not
intend to allow any paniculate matter
nor.attamment area to relax existing
requirements under this policy
V. Final Actions

  EPA is taking only two final actions
today. First. EPA is promulgating a rule
that sets out the Agency's new  view of
the legal consequences of a failure to
attain by the deadlines in Part D.
Specifically. EPA is amending 40 CFR
52.24(a) to clarify that the Section
I10(a)!2)(l) ban does not apply  in
nonattamment. nonextension areas with
full) approved Part D plans that failed
to attain by December 31.1982. This
amendment also provides that  the
moratorium  will not apply in extension
areas with fully approved 1979 and 1982
Pa't D submittais.
  Second. EPA is withdrawing  its
P'ooo'd! to amend 40 CFR 52.24(k). This
i\:'l continue to postpone construction
!)«ns for eighteen months in areas
designated nonattainment after July 1.
1979.
  EPA regards these actions as
interpretive rules of nationwide scope
and applicability that restate some of
the Act's requirements for all
nonattainment areas. Consequently.
they are effective upon publication.
Under Section 307(b). any petition for
review of these actions must be filed in
the U.S. Court of Appeals for the District
of Columbia Circuit within 60 days of
the date this notice appears in the
Federal Register.

VI. Miscellaneous
A. Executive Order 12291 and
Regulatory Flexibility Act
  Under Executive Order 12291. the
final actions EPA is taking today are not
"Major" because they have no
immediate impact in any area. In
addition, they limit the scope of the
construction ban under the Clean Air
Act. T -   actions have been submitted to
the O. .e of Management and Budget
(OMB) lor review. Any comments from
OMB  to EPA and any response are
available for public inspection in  the
docket.
  Under the Regulatory Flexibility Act. 5
U.S.C. 600 et seq.. EPA must prepare a
regulatory flexibility analysis unless the
Agency certifies that the rule will not
have a significant economic impact on a
substantial number of small entities. As
noted above, today's final actions do not
impose construction bans or have any
other  impacts on any small entities.
Consequently, the Agency certifies that
today's action has no significant
impacts.
List of Subjects in 40 CFR Part 52
  Air pollution control. Ozone. Sulfur
oxides. Nitrogen dioxide. Lead.
Paniculate matter. Carbon monoxide
Hydrocarbons.
  Authority: Sections 101. 1(T 110. m
ITS. 301|») and 316 of the Clean Air Ac:
amended 142 U.S C. 7401. 7407. 7410 Nib
7501-08. 7601 [a), and 7616). Section i:o'ni • •
the Clean Air Act Amendments of IP" 'I'.
L No 95-95 91 St_at 685 (August ~ 19"
  Dated Octobc-r27. 1983
William D. Ruckelshaus.
Administrator

PART 52— {AMENDED]

  Part  52 of Title 40 of the Code of
Federal Regulations is amended as
follows:
  1. Section 52.24 is amended b>
revising paragraph (a) to read as
follows:

f S2.24  Statutory restriction on new
sources.
  (a) After June 30. 1979. no major
stationary source shall be constructeo c>-
modified in any nonattainment area as
designated in 40 CFR Part 81. Subpart C
("nonattainment area") to which any
State implementation plan applies, if tne
emissions  from such facility will cause
or contribute to concentrations of any
pollutant for which a national ambient
air quality standard is exceeded in sue:
area, unless, as  of the time of
application for a permit for such
construction, such plan meets the
requirements of Part D, Title I,  of the
Clean Air Act as amended (42 U.S.C
7501 et set}.) ("Part D"). This section
shall not apply to any nonattainment
area once EPA has fully approved the
State implementation plan for the area
as meeting the requirements of Par! D
MLLIMG cooc

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                              EPA-450/2-78-027R
Guideline On Air Quality Models
               (Revised)
         U.S. ENVIRONMENTAL PROTECTION AGENCY
               Office of Air and Radiation
          Office of Air Quality Planning and Standards
             Research Triangle Park, NC 27711

                   July 1986

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REFER^CES  FOR SECTION 7.3

-------
2138          Federal Register / Vol. 54. No. 12  /  Thursday. January 19. 1989 / Proposed Rules
  Authority Sec* 1-19. 48 SlitSL M
d mended. 7 U S C. 801-874

  2. Section 959-228 it added to read as
follows:

§ B5S.229  Expenaes and stssesment rat*.
  Expenses of (378.675 by the South
Texas Oaion Commute* are authorised
and an assessment rate of »UOS6 per 50-
pound container or equivalent quantity
of regulated onions is established for the
fiscal penod ending July 31. I960.
Unexpended funda may be carriad over
as a reserve.
  Dated. Mo»ry li MSB.
WUliaai |. Doyle,
Associate Deputy Oaeetar. Frail and
V fiietabte Division.
[KR Doc. a»-12SO FiM MS-a* MS tn|
DEPARTMENT OF THE TREASURY

31CFRPe«1«
Extension «l Tkne tar
                             te en
RegulaUeea

AOCMCV: Departmental Office*.
Treasury.
ACTION: Advance notice of proposed
rulemaktng. extenajta of cmesnmt
penod.

SUMMARY: Notice it hereby given that
the Department of the Treasury is
extending the comment period on the
Advance Notice of Proposed
Fiilemaktng Relating to Identification
Requirements Required to Purchase
R-ink Checks. Cashier's Checks.
 r-aveler's Checks and Money Orders.
o jDtished in the Federal Remitter on
December 23. 1988 (53 PR 51848). The
Treasury Department has determined
that more time i» needed for the pubKc
iu review and comment on the proposal.
DATt Comments now will be accepted
through February IS. 1989.
ADOflCM: Comments should be
addressed u> Amy C.  BiH"iir1' Director.
Office of Financial Enforcement.
Department of the Treasury. Room 4320.
1500 Penntytvenia Avenue. NW..
Washington. DC *»»
POM njMTMCIt IMFOMMTtOH CONTACT:
Kathleen A. Scott. Attorney Advisor.
Office of the Assistant General Counsel
(Enforcement). (202) 6«e-B947.
  Daied: (aouary 13. 1H8.
Salvalor* R. MaHsuei,
Awitont Secretary (Enforcement).
|FR Doe. S»-1XM Ellad l-ia-a* Mi sa»|
                                      ENVIRONMENTAL PROTECTION
                                      AGENCY

                                      40CFRP»rt51
                                      Coii
                                            T. Environmental Protection
                                      Agency (EPA).
                                      ACnoit Notice of Proposed Rulemaking.

                                      IUSJSJAHV. Tim notice describe* the
                                      procedure for esscsehig whether e Stete
                                      implementetiett pran fSIFI nbmiOel it
                                      adequate to Brigjti flie Oeen AJr Act
                                      requirement (bet 8PA review end take
                                      action the eelMHillel. *Rie notice
                                      describes, among ofeertUag*. the
                                      crtterie far detemuMreg tke
                                      "comBietRwse" of Ike eebatttel. HPA it
                                      concerne
excessiv
fruttnts the devessenssM ef aa
State/Federal pertncrarup. caese
coofosion fsr saevces (Sfeidiag
applicable rftgrnkation*. and generairjr
dampen inilieiiu m Stsst regaiesory
programs, rmanilaxl oy this otsMsm.
EP A is isBtrtultng e wide range at3B>
processBQg reforat) es oesccsoeai
elsewhere in this MscsiftafiBlsi. The
proposed nseaesoag iescribeal faeiew fc
one of these vefonnsv.
  EPA's pwvion SSf 1
procedtfcs psotrieM ae i
reject er otherwise eiieainete mtemtatilj
unrevieweUe SIP enbeiitts** (t*-. I
missing infomuuon nenaeterylo make
a reasonable decaion es to their
procedure! end eavtronnenul
adequacy). Heretofore. SIP sebnituis
that lacked required basic information
such as evidence of legal authority or of
properly conducted public hearings,  or
technical support ioiomatton sufficient
to describe a proposed change, generally
went through full notice andoonunent
rulemaking (proposed and final) before
being rejected. Today's proposal
provides a procedure and acreeuag
criteria to enable States to prepare
adequate SIP submittala. end to enable
EPA reviewers to promptly screen SIP
submuula. identify those that are
incomplete, and return them to the State
for corrective action without having  to
go through rulemalung.
  EPA believes that this change,
together with those described elsewhere
in this Federal Xegieter. should enable
SIP sebaituls to be prepared and
processed more efficiently sad, overall.
should inarove 
-------
                                / Vol K No.
end local agencies. SIP processing at
EPA ha* a schedule goal of 5/2-5/2 for
final action. That is, the Regions
nominally have 5 months to review
lubmittala in both the proposal and
promulgation phases: Headquarter*
nominally ^*f 2 month* m each phase.
However. SIP action* often take
considerably longer than the total U
month* allocated to publish a final
decision.1
  The lengthy decision process ha*
resulted in strong criaoam from source*
both inside and oatside the EPA. m
response, the Deputy Admiaistretor
comrniMMoed ia )uly Ma7 a senior
task groap to issues the problems
inherent in the process aad to
recommend solution*. The task group
conducted it* *ssessment aad presented
recommendation* to the Deputy
Administrator. The rnromsnemiaftons
wen approved fully aad are rtrerrihed
in • companion notice ia today's Federal
Register. One of these nnmamoTviatinn*
coacemi a procedure aad criteria for
identifying a "compiet*" SIP pertaji
thereby pcovidiag Stales wtthgwiaace
on preparing adequate SIP revision* aad
EPA with a dearly defined mechaottm
to keep eaaenaaily uanweweble  SIP
revisions out of the review proceea.
  Thi* i* important because if a State
lubmit* a SIP change without preoerty
•tsted emission limit*, legal authority or
compliance schedules, or which
contains; other obvious deficiencies, it
can enter the full EPA review system.
Such a BP either will be eventually
disapproved, or languish while the State
i* required (peril*ps month* later) to
supply ettenoaJ data. Heretofore, EPA'*
procedure* did not provide ia any
comprehensive wsy prompt rejection for
incompleteness. Independently.
however, some Regional Office* have
tried to deal with thi* problem, end hcve
developed procedure* wherein SIP
submittai* are judged against a set of
completeness en ten*. The purpose of
these procedure* has been to keep
incomplete packages out of the more
extensive review system, thereby saving
both EPA and the State valuable time
and resource*. Today. EPA is proposing
to institute an EPA-wioe procedure for
                                      complete
                  i of all SD?
  1 Now tfMt MCM IMfiKZI tl Iht OMB Air A«
!«*••*• Uwt Tfta AdBMMHter rittU. mi*u tar
•oaitu *fur tfct *•«• ra«nnd far •»!•>••*» tl»
|S^P^ tpwv*t*or diMeprow weh fSIP) for MCti
•anon (karaaf." ttadw e« Aenqr • •
                                        Ia order to free EPA
                                      tCMMflmd aftftmmMtmmt mm*
UBepprovebtoSfft.EPAha*cfvatad

        EPA win review a 8*7 for
                                                                       thi*
•ubmtttad to
                                                           If aV me
incraded to aflow thai _

SIPreviesoaTTJae" wff We aakk eereez
that will esses* the nuiewaifflrj of a
on* eabmtttaL not itoi aNanate
approvaWHy. EPA wB meet promptly
inform me sobmttttag Slate whether the
egency WAI OTBoasB to proosee tae 8*7
revision orff nan*4 ovfltodbied by toe
State-Decease It ft incomplete.

detexminatioa. trfouspletaaeee. Ptmt the
State istatemad promatry a* to the
reviewabfflty of tha eahaiMal, a canat
source of tocextamiy. m I	,
Secoad. SIP eubmfimlf thai ass
Inarietniate %*r psooeasiBa vn ai	
to the State to aeoaenctasi rather than
gesng t*ir**iTgh the laiioti procees only to
be disapproved beeauea eta lack ef
mfoTOetiOB.Thtra\aafevtg»abkSIPi
an OBmovad nom tha pioaass aany so
that reeoojces at tha Federal leeai an
allocated to jimi teaiet. oalyftIP* that
an adequate for laviaw. Fawlly. the
completeness critaeial provide the Slate*
with gmdeonaa oa how to prepare
reviewabie SIP*. It isexpeoted met once
the agencies involved (State aad local.
EPA) become accustomed to the
completeness review process, the
number of onreviewebie sabmittals will
j44iviiniAh •!••—ilii
  Screeniag criteria have been
developed that define the essential
elements of an acceptable package, that
will avoid obvioas inadequacies, aad
that can be applied uniformly with
limited subjective fadgemoBt aad
review. The criteria wen developed by
EPA Regional Offices already using a
li*t of criteria to determine compUtenes*
of SIP packages in an informal way. On
March 18.1988 a policy for determining
completeness of SIP submittai* was
issued by Gerald A. Emisoa, Director.
Office of Air Quality Plaamag and
Standard* (OAQPSJ. to the BegioaaJ
Offices (a copy ha* been placed m the
docket et item D-»-4J. The poficy
iadudes basic criteria for determining
completeness, end sample laden for
jpfl^ftftM §juj raiactiag SIP *ubmittal*»
Thi* policy wiH be followed by EPA
                                      until today'* proposed regulation U
                                      made ft»**i
                                        A* part of tate action, the
                                      Admima&atori* propoeiag to add these
                                      criteria for determining the
                                      tempi et«neei of State Mbmittali to 40
                                      C» Pert 81 M Appendix V. la addition.
                                      EPA pjBtiuee* to modify i gUOWa) rach
                                      that Kate whailaeiniii that do not meet
                                      the criteria are not considered official
                                      pian nbmiaeiaee) for purposes of
                                      meeting the najmimmeati of Part 31. In
                                      order tDtaamm*stada* a complete SIP
                                      eeonieaioo *YaMgBcb*l lubiRiesion for
                                      Put a. ea^imsjHBBtt meet the crttene
                                      deecrtbed helesiumd ia Appeadoc V.
                                                                                            ere adapteble for uee
                                                                            m peraH*l •tooeaeipg of Slate
                                                                            regabitiOMbyEPA.*
                                                                              BTA to-creating this completeness
                                                                            review process under me authority of
                                                                            Section 3M of the Oeea Air Act which
                                                                            •ottaonm BC AHaTOniMfitof to
                                                                                      to CaUry oot on n&iCuOiu
                                                                            uoderthe Act aTA ie mrnrprettag the
                                                                            tra "plan" m section nefaXl) aad (2)
                                                                            end "nviaoB* m Section 110(e)f3) to be
                                                                            only those piemr ead reiii*sne» nWt

                                                                            tvcfiowEPA to a adeaaately review
                                                                            and take ectioa eocacb plan or revuion
                                                                            under aecoon 110 (and. where
                                                                            applicable. Part D), EPA believe* tact
                                                                            Congrea* would not have intended to
                                                                            reooire EPA to review and take action
                                                                            on SIP submittals that were simply not
                                                                            (•viewable tnrentt they were lacking
                                                                            important component*. Therefore, the
                                                                            Administrator conchidei that Section
                                                                            nO(e) remiire* him to act only on
                                                                            complete State subminal*.
                                        The criteria for determining whether a
                                      submittai by the State i* complete beve
                                      been separated into two categories; (•)
                                      Administrative information and (b)
                                      technical support information.
                                      Administrative information include* the
                                      documentation necessary to
                                      demonstrate that the basic
                                      administrative procedure* have been
                                      adhered to by the State during the
                                      adoption process. Technical support
                                      information include* the documentation
                                      that adequately identifies all of the
                                      required technical component* of the
                                      plan submission.

                                      Admmistratfve mfcrmatfoo

                                                         information
                                                           are those basic
                                                                                       pn*«Mi. Surt nita* -tee* tow M

-------
              Moral Register / Vol. "54. -Nor"» /••fagaday. frmigry 19. 1989 / Proposed Rules
documents that demonstrate that the
State hat properly fallowed the
administrative requirements called for
by the Dean Air Act for the adoption of
State implementation plan*. These
include a letter from the Governor or hi*
designee requesting that EPA approve
the SIP revision, and evidence that the
revision has been adopted by the State
in final form, either as part of the State
code if the revision is a regulation, or as
appropriate source specific
documentation in the form of a permit.
order, or a consent agreement The State
also must provide documentation that
the necessary legal authority exists
within the State to adopt and implement
the plan revision, must include the
requisite copies of the actual revision
(regulation, permit, order, etc.). and must
indicate that the revision is enforceable
by the State. Finally, the State must
submit information indicating that the
program administrative procedures have
been followed, including evidence of
public notice and hearings, a
compilation of the public comments, and
the State's response to these comments.
  The purpose of the technical support
information is to identify the State's
view of the impact of the revision on the
environment The components are
intended to demonstrate that the
applicable requirements, such as those
for attainment and maintenance of
ambient standards, increment
consumption, and control technology,
are in confonnance with basic statutory
and EPA requirements. In order for EPA
to make a reasonable decision
concerning the adequacy of a proposed
SIP revision, certain information at a
minimum must be included in each
submittaL Therefore, for purposes of
determining the completeness of a SIP
submission the implementation plan
revision must include an adequate
description of the:
  (a) Pollutants involved;
  (b) Source location and attainment
status of the area:
  (c) Emissions changes:
  (d) Demonstration that standards/
increments are protected
  (e) Information used for any modeling
demonstration:
   (0 Evidence of continuous emissions
                         limitations
the revision for inclusion of the
administrative and technical support
information. When the revision is
determined complete, the formal review
of the adequacy of die information and
die approvability of the revision will
proceed, to those situations where the
submission does not meet the basic
criteria es discussed above and set forth
in Part 51, Appendix V. the submission
will be returned to the State with a letter
indicating the deficiencies found. In
accordance with the change proposed la
40 CFR S1.10J(a). any submission that
does not meet the criteria of Appendix V
will not be coejieered aa official
submission MgeeriBg the Act's
requirements for EPA review and action.
The basic requirements are similar tor
sequential and parallel processing.
varying only in form dictated by the
method  of processing. IB order to be
effective, the determination of
completeness should be made
expeditiously. The Regional Office
generally will make a determination of
completeness within 45 days of
receiving a SIP revision, using the
crttaeie to make an objective decision.
  After the decision has been made on
i nepli iiiness the Regional Offices will
process  the SIP revision tf the
submission is complete, or return the SIP
revision to the State if it is incomplete.
A letter will be sent-to the State.
informing the State of the oceapletenese
status of the SIP revision, ff a SIP
submtttal is incomplete, the deficiencies
will be detailed in the letter to the Sate.
If a SIP aaeoittai is complete, the
Regional Office will include EPA's
expected processing schedule in the
letter to the State.
Administrative Requirements
  The docket is an organized and
complete file of all the information
considered by EPA in the development
of these SIP processing changes. The
docket is a dynamic file because
material is added throughout the notice
preparation and comment process. The
docketing system is intended to allow
members of the public and industries
involved to identify and locate
documents so that they can effectively
participate in the process. Along with
the statement of basis and purpose of
the SIP processing changes and EPA
responses to significant comments, the
contents of the docket except for
interagency review materials, will serve
as the record in case of judicial review
(see dean Air Act section 307(d)(7)(A).
42 U.S.C. 7807(d)(7)(A).
  Section M7(a) of the dean Air Act 42
"-S-C. mr(a). states that economic
"*•«« eawssments are required for
••*»«eea «o standards or regulations
when the Administrator determines such
revisions to be substantial The changes
described today do not change the
substantive requirements for preparing
and submitting an adequate SIP
package. No increase in cost as a result
of complying with the changes described
today is expected: moreover, the
monitoring, ncordkeeping. and reporting
requirements have been determined to
be insubstantial Because the expected
economic effect cftbe changes is not
f t»«»"^MH a»*ieaiiled economic
impact sjeeaaeaeat has been prepared.
  The infill sealUs! rnllection
ieejtdreejMSjta>dP*Jfeee changes are
eoasidend to be BO different than those
currently required by the Clean Air Act
and EPA procedures. Thus, the public
reporting burden resulting from today's
notice is estimated to be unchanged
from existing requirements. The public
is invited to send comments regarding
the burden estimate or other aspect of
information collection, including
suggestions for reducing any burden, to
the docket aad the following: Chief.
Information Policy Branch. PM-223, U.S.
Environmental Protection Agency, 401 M
Street SW* Washington. DC 20460; and
to the Office of Information and
Regulatory Affairs. Office of
Management end Budget Washington.
DC 20803. marked "Attention: Desk
Officer for EPA."
  Under Executive Order 12291. EPA Is
required to judge whether an action is
"major" and therefore subject to the
requirement of a regulatory impact
analysis (RIA). The Agency has
determined that the SIP processing
changes announced today would result
in none of the significant adverse
economic effects set forth in section l(b)
of the Order es grounds for a finding of
"major." The Agency has. therefore,
concluded that this action is not a
"major" action under Executive Order
12291.
  This rule was submitted to OMB for
review consistent with section 307{d) of
the Clean Air Act A copy of the draft
rule as submitted to OMB. any
documents accompanying the draft any
written comment received from other
agencies (including OMB), and any
written responses to those comments
have been included in the docket.
  The Regulatory Flexibility Act of 1980.
5 U.S.C. 001-412, requires the
identification of potentially adverse
impacts of Federal actions upon smsli
business entities. The Act requires the
completion of a regulatory flexibility
analysis for every action unless the
Administrator certifies that the  action
will not have a significant economic
impact on a substantial number of small

-------
Fodenl
                                  / VoL S4. No. 12 / Thmtdiy. Mumry 19. MM  / Proposed Rolas
entities. For reasons described above. I
hereby certify that the final rale will not
have • significant impact on a
substantial number of small entities.
  Date: January 9.1989.
UeM. Thomas.
Administrator
  For the reasons set out in the
preamble. 40 CFR Part 51 is propoaed to
be amended as follows:

PART S1-* AMENDED]

  1. The authority dtation for Part 51
centimes to read aa follows;
  Aumoriny: Thi* rulemalring is promulgated
under authority of Sections lOlfbKl), 110.
160-ee, in-iTS, and m(a) of the dean Air
ACL 4z U.S.C. TamfbRi). mo. wjo-wm
noi-noo, utd nous).
  2. Section 51.103 is proposed to be
amended by reviling paragraph (a)
introductory text to read as foUowr
111.109
    of plane.
  (a) The State makes an official plan
submission to EPA whaa the plan
conforms to the requirements of
Appendix V10 this part aad the State
delivers five copies of the plan to the
appropriate Bssjiosial office, wtth a letter
giving notice of such action. The State
must adopt the plan and the COM rear or
his deeisnee must submit it to EPA as
follows:
  3. Part 51 is proposed to be amended
by adding Appendix V to reed as
follows:

Appendix V—Criteria for Dotarmiais*
thi rnmplstenees nf Tlsn "iuhmieainiis

1.0.  Purpate
  This Appendix V set* forth th* •>'"'•"•"•
criteria for determining whether a SUM
implementation plan submitted for
conitderanon by EPA u an official
•ubmiasion for purpoM of levww under
I 51.103.
  1.1. The ETA thai] return to the submitting
official any plan or tension thereof which
fail* to meet th* critena act forth in mi*
Appendix V. or otherwiae request umectlve
action, identifying the eoraponent(t) absent
or insufficient to perform a review of the
aubmittad plan.
  1.2. The EPA shall inform the submitting
official when a plan submission meet* the
requirement* of this ArTtitf1" V, such
determination resulting»the plan beinf en
official submission for purpose* of | 51.109.

2.0.  Crruna
  The following shaD be included in plan
submiMion* for review by EPA:
  2.1. AdminiJtrative Meiehai*
  (a) A forma) letter of submittal from the
Governor er hia eawgnea, meeertint EPA
approval of the piae or revwen meraof
(hereafter the plan").
  fb) Evidence mat the State has adopted the
plan m the State code or body of regulations:
or issued the permit order, coasent
agreement (hereafter document) in final form.
That evidence ahaO mctede the dele of
edoptiasj or fisjai ieeuaaee as weO ee me
effective date of the plan if different from the
odoption/issusnos date.
  (c) Evidence ms* the Stale has me
aeceesary legal authority under State lew to
                                                                      (h) CompKnnne/enfarcement ttrateaie*.
                                                                    inrinHi^j bow compliance will be determined
                                                                    in practice.
                                                                      (i) Special economic and technolocicaJ
                                                                    fustincstions required by any applicable EPA
                            (d) A oopy of me actual regulation, or
                                 it submitted tor approval aad
                                  rtion by lefsvaaosinterne plan,
                                  mdicattou of me change* awde to
                          The eabattteJ shall be e copy of the official
                                          13. Exception*
                                            24.1. The EPA. far the purposes of
                                          expediting the review of the plan, ha*
                                          adopted e procedure referred to a* "parallel
                                          Drooesemg.** Parallel processing allows s
                                          SUM to submit the plan prior to actual
                                          adoptiusi by me fleets and provides en
                                                  ey tor me State to consider EPA
                                                  i prior to submission of s  final plan
dated be ate i
todicatma that it ia fatty enforceable by the
Sate. The efleotrte dele of eta leevhrtton/
docnsent shaB. whenever poadbla. be
Indicated m the docament itselt
  |e) jvideoce met the State followed ell of
lot pfootdunl rvi^viiietMBaai of tkbt Statei't
IsW^ UM OOMtttettOB IB OODafsMtlnf BBQ
ee  »«anstbeedopttaa/iaaaaaceofmepian.
  it Blri •!•••• -1---  *^"
  (ii BBTMeelBlBir DaeWI ^ele^Bs?
the proposed ehaaae enaesssant with
                                                                    far final revww and action. Uader these
                                                                    ormimetsanes me plan submitted will not be
                                                                    able to meet ai-of the requirements of
                                                                    parearaph 11 (aD requirements of paragraph
                                                                    11 wtt apply). As a result the fbUowmg
                                                                    exospbons apply to plans submitted
                                                                    exaMtiy far parallel proceeam*:
                                                                     (a) The letter reoutoed by parsanph il(t)
                                                                              t that EPA pnpoea approvaJ of
                            (I)
                          heldi
                ad by EPAjBcMmt the

                                Is) wen
                                                     1 me Bute's
date of |
    ) Certification that |
    liai
provided m the pubBci
tsmendotsksMOjaashlfi
  (h)CeesBUe«JB»>of|
me Siete'si
  li Technical 1
  (s)Ueatificaooaaf.slii
affected by the plea.
  (b) Identification of the location* of
affected sources including the EPA
eminment/nonattaiameat designatioa of the
location* and the stetus of the attainment
pUn for the affected areas(s).
  (c) Quantification of the changes as plan
allowable emission* bom the affected
sources: eetimatse of chenges m cwent
actual emissions from effected source* or.
where appropriate, quantification of change*
         id plan by parallel processing.
  (b) fti lieu of paragraph 2J(b) the State
shall submit e schedule far final adoption or
Issnsnce of the plan.
  (cj in UCB of paiagrapb 2.tfd) the plan shaQ
mdude a copy of the proposed/draft
regulation or document
  (d) The ssHUMS menu of paragraphs llfe)-
2.1(h) ehasl net apply to pan aaceettted for
fferalssi arBsaesssei
  1X2. The exoaptieaa punted ia parearepb
24.1 shall apply only to EPA'* detemunMon
of proposed action ead ell saquuemeais of
paregreph 2.1 shall be met prior to
publication of EPA's final determination of
ptaaapprovebuiy.
(FR Doc. ss-iom Piled l-le-aB-. fctt am]
                                                                    PFPfBAL FiffRflPMCY
                                                                    MANAGEMENT AOENCY
                           rhere snproprieti
                           i actual aauaioi
through calculations of ittf dimwssneo
betwsen certem besenne levels end
allowable emissions anticipated as e result of
the revision.
  (d) The State's demonstrstion that the
National Ambient Air Quality Standards.
prevention of "g-1**"' delsnorettosi
increments, reasonable further progress
demonstration, and visibility, are protected if
the plan ia approved end implemented.
  (e) Modeling infnrmsnon required to
support the proposed revision, indodmg input
data, output data, models need. Justification
of model (election*. "»trfi*'t stonitohng data
used, meteorological data used. ("***«f'^
for use of offsitc date (where used), modes of
models used. saiunipOous. ead other
mfonneooc relevant to the determination of
adequacy of the modeling analysis.
  (f) Evidence, when necessary, that
emission limitations ere based on continuous
*»*""» reduction technology.
  (gj Evidence mat me plan contains
emission limitations, work piaithje standards
and reeoidfceeptng/repartiag requiremenu.
where accessary, to ensure emiseioa leveia.
                                                                    [Docket No. »«U-a»4«l

                                                                    Propoejotf Hootf dovvOon
                                                                           : Federal Emergency
                                                                                 Agency.
                                                                    Acnose ProixMed rale.
                                                                            r. TeiJinicaJ information or
                                                                    comments are solicited on the proposed
                                                                    base (100-year) flood elevations and
                                                                    proposed basw flood elevation
                                                                    modifications listed below for selected
                                                                    locations in the nation. These base (100-
                                                                    year) flood eeveations are the basis for
                                                                    the floodplaae management measure*
                                                                    that the comaeantty to reajoired to either
                                                                    adopt or show evidence of being already
                                                                    in effect in order to qualify or remain
                                                                    qualified for purttcipatfon to the

-------
2214
                  Federal Refrstor /  Vet.  54. Na. 12 / Tharaday. fannary 19. Mt» /  Notice!
Ctrtri-ett*
dock«i No
O87-22
CW7-23
O87-2*
C187-2S
CW'-W
C187-27
C 187-261
CI87-261
CI87-261
CW7-261
Q87-261
CW7-M1
Q87-261
CH7-Z61



do_ 	 	 „.,, __.,,.. 	 „ , „—,.,. 	 	
40 _L ., ,. .,__. 	 	 	 	 	 	
do .. .«•_ i ii
00 -. _...._.,_... . ..__ ._ ..„,,„ 	 ••« i
0Q •. HI !• ...•••
40. ..... „.._- 	 	 , .
flO - — . -r. -. • PMHBBIIH
» - _. ..
no
00 	 , _ . 	 — ^••.,•..•1 .. ...
40 ,, , 	 - ,, -
do ... .... • in - -

 tha notice have
been piaoad ia Docket No. A-66-16 by
EPA and are available for inspection at
the above address between 8:00 a.m.
aad 130 pja.. Monday through Friday
The EPA may charge a reasonable fee
for copying.
•on mmm mmu,itoM COHTACT
                                                                            Mr. >ajses Weigeld. Office of Air
                                                                            Quality Plaanng and Standards (MD-
                                                                            11), U. S. Eovironmentai Protection
                                                                            Agency. Research Triangle Park. North
                                                                            Carolina 27711; Telephone (919) 541-
                                                                            5642 or (FTS) 029-5642.
                                                                                       •AUT WFOMMATION:
                                      Dottet
                                                 j, N«. A-W-W atCentrei
                                                             4;Urfi:
                                                                            Background

                                                                              The 1970 Clean Air Act (CAA|
                                                                            established the air quality management
                                                                            process as a basic philosophy for air
                                                                            pollution control in this country. Under
                                                                            this system. EPA establishes air quality
                                                                            goals (National Ambient Air Quality
                                                                            Standards—NAAQS) for common
                                                                            pollutants. There a re now standards fa
                                                                            A pollutants: ozone (CM. carbon
                                                                            monoxide (CO), sulfur dioxide (SO:).
                                                                            nitrogen dioxide, paniculate matter
                                                                            (PMie). and lead. Stares then develop
                                                                            control programs to attain and matntan
                                                                            these NAAQS. These programs are
                                                                            defined by State Implementation Plans
                                                                            (SiPs) which are approved or
                                                                            disapproved formally by EPA and. to tt
                                                                            extent (hey are approved, are legally
                                                                            enforceable by EPA. A SIP mast
                                                                            demonstrate attainment and
                                                                            RMtfrienenee of iheeppncable NAAQS
                                                                            describe a control strategy, contain
                                                                            -legvtryenrbrcMbte regulations, me luck
                                                                            en eniseron •raocy and procedures
                                                                            lot the pacoaearac*ie»rev«*« of new
                                                                            pollution eeoees. wrtrnw* •program foi

-------
Fed.**!
/ V«L *4. No. 12 / Thursday.  |«auary 18. i9»  /  Nonces
                                                                                          2215
resources for the State to implement the
SIP. In additioa. there can be many
other requirements specific to the
pollutant being considered. The
consequences of State failure to get SIP
approval may be serious, including
Federal promulgation of control
regulations and sanctions.
  Affirmative action is required by EPA
on essentially all aspects of every SIP
action. Since EPA's final decision comes
after a regulation already is adopted
and implemented at the State level
excessive delay in the review process
often is a major source of frlnctton in
EPA's relations with State and local
agencies.
  There can  also be differences of
opinion between EPA's Regionai Offices
and Headquarters. Regions provide
guidance and support to States in
writing SIPs  and then must review them
and recommend approval or
disapproval. The need for flexibility in
dealing with each State and situation is
important to the Regions. On the other
bend. Headquarters' offices have a
maior responsibility to ensmre basic
national consistency on legal policy,
and technical Is eats. Tims. SIP ddtisons
are under constant pressure bacene
they ass vnabte and quantitative teats of
the elusive hslamt sanghl between
State flexibility aad me flmmass and
consistency provided by national
directives.
  More man 1600 SIP i stated actions
hsve been processed from UB to the
present, sveragmg almost 3at) par year.
Many of these involved multiple issaes.
About 75 percent of the actions fall into
three categories: attainment
demonstrations, single source actions,
snd (although technically not SIP
revisions)  actions interring
redesignstion of attainment status. Most
of the remainder involved new sonroe
review actions aad emission trades.
  A rough assessment has bean awda «f
the future SIP load. With the
promulgation of a nstiimal aaebiont air
quality standard for PMi» and the
proposed post-1967 ozone and  CO
attainment policy, the number  of SIP
submittals will increase significantly
over the next few years. About 100
attainment SIPs and more than 160
-committal" type actions for PM* will
have to be reviewed. Shortly thereafter.
attainment SIPs for ozone (60-70 areas)
and for CO (mother 50-60 areas) will be
sumitted. Potential revisions.to-HW»
1985«teck height regulations reearhng
from me court decision ai NJtDC v.
Thomo*. at T. 24.1221 (DiC-Cu. 1MB).
couldao.il
limits far as
sources. IB
abouOB
                    of municipal waste imaWsiois will be
                    developed daring tsde parted. The
                    preceding are t» addition to the average
                    load of 360 eubanttais par year.
                    The Cunent Review Pr
                          is at EPA
                          i has been eel
                      Acompn
                    up for processing SIPs at EPA, involving
                    fall notice and comment msmaknig.
                    The major steps are summarized below.
                      (1) State prepares the SIP. gets
                    necessary approval under State law.
                    provides justification aad
                    documentation, and submits it to the
                    Regional Office for the Governor or his
                    rlssignse The SIP can range in size from
                    s few to hundreds of pages
                      (2) EPA Raglans oaasprahansivaiy
                    evaluate the swbmittal far policy, legal
                    and technical adequacy, prepare a
                    Technical SuoaartDecasneat (TSD). and
                    prepare a proposed final mm mdicerlng
                    The rule is atgvad by the Regional
                    AdmimetBster, if it is a proposal and
                    sent on for review by EPA
                    Headquartan. The-Haadaaarten' efflces
                    thereapon vviertaiBean evaloation of
                    the Regionai Ofllo* package, regardless
                    of the sranrflranos of the SV acton.
                      (3) Tfct Office of AfrQnmtity Planning
                    and Standard) (OAQPS) m Durham.
                    North Carolina manages the
                    Headquarters' review, coordinating the
                    *i*^hnir*^ policy and ^*gn! evaluation
                    with aD rmlavaat Headquartan offices.
                    These may include the Office of General
                    Counsel and the Office of Policy.
                    Planning and Evaluation, as wall as
                    several groups within the Office of Air
                    and Radiation (OAR).
                      Each group, concurs with comment, or
                    nonconcurs. Negotiation with the
                    Regions over SIP issues or interpretation
                    frequently is a part of Headquarters'
                    review.
                      (4) Proposals are sent to the Assistant
                    Administrator for Air and Radiation for
                    commence. Disapprovals and partial
                    approvals of SIPs must undergo Office
                    of Management and Budget review
                    (under Executive Order 12281) before
                    being sent to the Office of the Federal
                    Register (OFR) for publication.
                      (S) Altar review by the Assistant
                    Administrator for OAR. all final actions
                    go to the Administrator for signature
                    and then are sent to the OFR.
                      SlPpcoceeeinf atEPAhaae
                    scheduled goal of t/2-*/3 far fiswl
                    action. That is. the Pegian i
                    haveCmeadavtoi
                    both tin purpose! and <
than the total 14 months allocated to
publish a final decision.1
  The lengthy decision process has
resulted in strong criticism from sources
bora inside and outside the EPA. In
response, the Deputy Administrator
commissioned in July. 1987  a senior level
task group to assess the problems
inherent in the process and to
recommend solutions. The task group
conducted its assessment and presented
recommendations to the Deputy
Administrator* The recommendations
ware approved fifty and are described
herein, tlowevsi. before discussing the
steps batef tafan by EPA to reform its
SIP prucrssiinj procedures,  it is useful to
examine (be approach taken by the task
    p. and the problems uncovered.
                                         Thai

                                           The project involved e three-level
                                         approach, h included (1) formation of a
                                         senior-level task group on SIP
                                         Processing which met throughout the
                                         four-month project (2) direct
                                         discussions with staff intimately
                                         involved in SIP processing, both
                                         individually (or in small groups) and at a
                                         day-long Headquarters/Regional Office
                                         workshop, and (3) interviews with
                                         senior executives (Deputy Regionai
                                         Administrator!. Office Directors) now at
                                         EPA. and former policy  makers with
                                         EPA and State air agencies. In addition.
                                         a few limited analytical assessments
                                         (e.g. historical SIP activity, number and
                                         distribution of SIPs currently st EPA)
                                         were done to better characterize the
                                         issue.
                                           The task group consisted of senior
                                         officials from EPA's Regional Office*.
                                         Headquarters' groups associated with
                                         SIP processing, and State air agencies.
                                         The group met: three times, first to
                                         discuss the general probiem to be
                                         addressed, agree on a course of action.
                                         and assign special short-term protects.
                                         The second meeting was primarily
                                         concerned with process updsie and with
                                         presentations by Regional Office and
                                         State agency representative* to give
                                         their unique prespectives on the issues.
                                           > Molt *M MCtta no)iHZI of the dun Air Ad
                                         l«qinr»« ttwt ~nm MMUttrawr «h»1l. within four
                                         •OB4S*«fMr th*** raqwnd lot OTkmuwon at •
                                         (SIPV »pprov«. •rdiuppfov* Mick |SU>] for wch
                                         portion ibtraaf.- Undtr th< Asncy t prtMni
                                                    ridMd Mth • MM hmt a UtrrttU
                                                 10 «M tor »H b* tm nor mvwl of
                                              . EPA MMUBH Hwi tfan dnAkw^M* m*
                                         •ppr> to SIP nrnMii, b»t tmO»r o«iy Ic ih« muml
                                         SIP. wbmiittd tfitr C* pnMiuls*iu • NAAQS.
                                         VMM count fc»w mffonvt EPA'i ponltoo: olhtr
                                          Rtport of Ik* T«k Ofmfm. SIP
                                                      eaiU.locii
                                                                               i«d la On d*c±« M

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 2216
Federal  RegUter / Vol. 54. No. 12  / Thursday. January 18. 198B / Notice*
 Finally, at the third meeting, result! of
 analytic studies were presented, and the
 range of options for improving the
 process was discussed. These meetings
 led to the SIP processing changes that
 are being announced today.
  The work of the task group was
 reinforced by discussions with people
 directly involved with SIP review in
 order to get an operations view of the
 issues. This included a comprehensive
 one-day workshop attended by
 approximately SO EPA staff personnel.
 This group, intimately familiar with the
 processing and review of SIP packages.
 exchanged ideas on both issues and
 potential solutions during the workshop.
  To gain yet another perspective, a
 series of interviews was conducted with
 persons currently or recently involved
 with SIP processing from a broader
 policy sense. For example, the persons
 interviewed included a former EPA
 Deputy Administrator, the former heads
 of State and local air programs, senior
 industry officials, several past EPA
 Assistant Administrators, and four
 current Deputy Regional Administrators.
 (The complete list of persons
 interviewed and their summarized views
 are contained in an appendix to the task
 group report.)
  Significantly, there was a noticeable
 degree of consistency among those
 interviewed both in terms of their
 perception of major problems and in
 terms of the general thrust of solutions
 to be pursued. Almost all believed that
 EPA is too cautious in making SIP
 decisions, that SIPs vary widely in
 importance and EPA should tailor its
 review accordingly, and that the current
 SIP review system is operated too
 informally. They also believed that the
 "moving target" problem (a change in
 the technical or policy basis for EPA
 decisions after a SIP has been
 submitted) needed to be addressed.
 Problems Identified
  It is clear that the process of
 reviewing and judging SIPs has been a
 constant struggle for EPA and the State*
 and is a source of increasing tension.
 Concerns voiced by participants during
 the assessment indicated  problems at
 each level of SIP preparation  and
 review. Some cited abuse of the system
 by the States to relax source limits.
 Others believed EPA was too inflexible
 and overzealou*. resulting in major
 processing delays for minor benefits.
  It n likely that present problems, if
 left unattended, will become worse
because of continuing resource
constraints and plans that call for
significant increases in SIP activity over
the next few years, particularly in the
complex areas of ozone. CO, and PMt*.
                     In a relatively recent development, some
                     enforcement actions have been affected
                     by courts which have ruled that EPA
                     cannot enforce the current federally
                     approved SIP against a source for
                     violations occurring more than four
                     months after a SIP revision affecting the
                     source has been submitted to EPA,
                     unless EPA has finally acted on the
                     submittal.
                       As a result of the discussions and
                     projects described earlier, it was
                     possible to identify a number of
                     fundamental problems that appear to be
                     associated with SIP processing. Some of
                     these problems are concerned primarily
                     with the procedural aspects of SIP
                     review, while others relate more to the
                     underlying philosophy of the SIP review
                     process (i.e.. what is the process
                     supposed to accomplish), and the
                     attitudes of the SIP reviewers. For
                     example, there is  within EPA a  strong
                     concern for consistency in SIP decisions,
                     and a fear that each decision may have
                     important consequences in terms  of
                     establishing national precedent
                     However, such concern may be
                     appropriate for only a small percentage
                     of actions reviewed. Moreover, it
                     appears that the SIP process has been
                     depended upon as a vehicle to identify,
                     resolve, and articulate national policy
                     issue*, often at the expense of timely
                     decision malting.
                      The issues identified fall into three
                     buic categories: inordinate concern for
                     the consequence* of individual
                     decisions; excessive EPA review,
                     including full review for minor or clearly
                     deficient actions; and uncertainty
                     concerning the outcome of review.
                     These problem categories are discussed
                     briefly below.
                     A. Inordinate Concern for Individual
                     Action*
                      As noted, the current process place*  a
                     premium on consistency, stemming in
                     large part from a fear that a decision
                     statement or explanation concerning a
                     specific State or source may force
                     «iirrii«r decisions in other State* for
                     similar source*. Although there is a need
                     for consistency at some level (e.g-
                     concerning the basic components of an
                     ozone attainment program or a new
                     PMw SIP), it may not be necessary for
                     the result* of all decisions to be similar
                     State to State and source to source. It
                     must be remembered that SiPs are
                     intended to be tailored by the States to
                     their specific air quality problem*, and
                     the mix of sources from which emission*
                     reduction* can be obtained, within the
                     constraints of the dean Air Act (such as
                     the requirement for reasonably
                    available control technology in
                    nonattainment areas). Although it i*
important for policy and broad technical
requirement* to be applied consistently,
it is not necessary that the result of their
application to localized problems turn
out the tame.
  Because of the emphasis on
consistency and the fear of setting
precedent with individual decision*. SIP
reviewers have been reluctant to nsk
making mistakes on any SIP change:
this, considering the number of actions
EPA muat review, inhibit* rapid review
and decision making. There needs to be
a greater wiUingne** on the part of all
concerned with the process to nsk an
occasional noncritieal mistake in return
for more rapid processing and earlier
Identification of the outcome of the
review.
B. Exeeuivt Review

  Some SIP package* deserve the full
attention of EPA staff and management
a* noted certainly the basic State
programs for post-1987 ozone attainment
and program* to achieve the newly
promulgated PM« ambient air quality
standard will need  such review.
Similarly. SO* revision* for new
program* that dictate consistent
national implementation, or that involve
complex and evolving policy issues.
such a* generic bubble regulation*.
ahouid receive review and sign-off by
EPA Headquarters. But the same cannot
be said for change* to an emission limit
on a local printing plant composition of
State board*, or negative declaration*
under section lll(d). Under EPA'*
current approach to SIP review, all
change* receive Regional Office and
Headquarter*' review prior to both
proposal  and final approval (except for
those SIPs, aobut 20 percent of the total,
processed as direct final *). All final
action*, no matter how trivial, currently
are signed by the Administrator.
  There are several problem* with this
multiple review for all action*: it
inherently take* longer than processing
only at the Regional Office level:  It ties
up the scarce Headquarters' resource*
available for SIP review (thus making a
long process even longer); and by
introducing more reviewers into the
process, it increase* the chance of
rejection  for procedural or other reasons
which have no impact on air quality.
  There are other aspect* to the
ex'cenive review problem. If a State
  • Under th» praoMhm. *TA publMha i nn*i«
r«tanl bffMv DOOM ivUch ladieiMt that uw SIP
•ebon will tat (teal to « **y* uniw u
                     to pnmdt advi
      . V •••wqrtatMMfc i» pram* *dvm*
— *— T — *~il nhmiVfca

-------
                                   / Vot  54. No. 12 / Tbuodajr. )
                                     19. 108*  /  Notice*
submits a SEP change without pnspedy
stated emrssaia Imtts, legal aatauerty or
compliance schedules, or which
contains other obvious dancieaciee, U
can enter the system end be subject to
complete EPA review and disapproval
EPA's procedure* did net provide m any
comprehensive way for immediate
rejections for incompleteness.
Independently, however, some Bapooal
Offices have tried to deal with this
problem. For example. Region I has
developed e set el completeness criteria
their Sutes must follow, Irraine VQ
provides States with aa exteaeive
checklist descsjtaag the arfiiiiaetrffs ate
Region will leak for ia a wide range of
SIP actions. The purpose U to keep
incomplete neckaget out of the more
extensive review system.
  On the other hand, even if the
suhmittal is prepared unrecuy. i
ection* seem uannlerl for full i
Examples lachide ample recodification
of regiristtnae. addrees changes, or
changing modeung er sssck test rarthodi
to conform te nwieed SPA guideline*. In
such ectione, the State is doing exactly
what is reqand and appropnala.
Although such changes- caa be
processed as direct final even that is
probably sear* resource tateasive the*
they are worth, llawerat. there is
presently no better wey to Beet each
changes adauaMtretively. er beep them
out of the system entirely.
  Finally, several members of the Task
Croup beeeved that in addition to being
concerned with Sff processing, EPA
•noaiOtfSuso exaauns the SsT process ai e
more basic wey. Specifically,  there was
debate and interest expressed by eosae
in promoting direct acceptance of
operating permits er other State amek
source emauaoa lank*. The* would be
conditioned oa EPA approval ef the
State'* overall framework eod strategy
for  achieving an ambient air quality
standard. EPA's ""•* «*•"""§ rat* would
be to track s State'a everaU progress
and periodically audit the State's
implementation of the permit-process.
takiag cerrackee eca
Someii
direction. For example, ia
the -federal easbraanthty
                                      system owohriM sanrm aooapsaace ef
                                      Slate penabts i
                                      much coaceptael i
                                      State/EPA regutatiBiis east faadamental
                                      changes to ether pans of the-aeoeaal air
                                      program, aad may raausmrhanpee to
                                      the dean Air Act
                                      C. Unctrtuinly Concerning the Oatcomt
                                                                     Mgl
Itaughtbeexsi
                                      reviaioo to a SIP. given the EPA's yean
                                      of experience, would be a midy routine
                                      precea* However, that often is not the
                                      case. The fate of a given SIP revision, in
                                      terms of both the nabjre and timing of
                                      the ultimate decision, can be uncertain
                                      for a number of ieasons> Important
                                      information necessary lor decision
                                      making may be left out oi a SIP package.
                                      or the focmat and.hiatificamaa.fac the
                                      change may be deficient This caa result
                                      not only from inexperience and lack of
                                      training at the State and local level but
                                      also from a lack of dear policy fiiHtrrr
                                      from EPA and timely issue resolution.
                                      Policies important to SIP preparation
                                      and approval may be »"»«»«t««t or poorly
                                      documented. IB some cases, there may
                                      be no policy st«D te address a specific
                                      SIP issue, aad te 9P process itself.
                                      through the aggregation of • series of
                                      similar action*, to used to evolve a
                                      policy. This situation, in part derives
                                      from sporadic management nrrorrement
                                      in tht OPprocew. Constant ituwtion hi
                                      needed to assure that package* are
                                      moved tfamgh the system, that
                                      problem* are promptly identified, end
                                      that policy issues are flu, uses d aad
                                                                      imty
  An overt maniiestetion ef
in the eutceme of SV review is the
moving target *yodiums. Under cnrrev
practice, a 8IP may be under review at
EPA for months and eveatoelly be
           steps are bang taken m this
deemed tattppropnarte beceflse it doeen't
conform te a newly s-»u»vul policy, even
though it confecned te fee policy hj
place wheu H was sebmMrted Tms net
only frotrate* me Stnte but reevhs m
confusioa for the souree because until
the State ectaaUy change* its submitrel
it often oonttooes toimpteBsent the
regulations disapproved by EPA.
  Another factor oaatribuoag to
chslkaga* to BPA'4 new
raguishsai. EPA »oaBssdemg the
       lr hi
informal (
SIP*. Tbe system I
characterised by mmsaVBa, net
judgment*! mteracnaas. Hsadanartar*
and Basnoasl Office persoaaei are
reluctant to formaiy reject packages.
but rather try to work with safe
                        rcaainb*
permMi
into the SIP aad aapiovsaUry H>A.
However, httt avniemeatan'on of a
                                       phonei
                                       nsapuatioa.Th»»j
                                       reluctance te oacaraaee* aanse* that
                                       may have acted iageed tanh, Also, the
                                      documentation needed to support •
                                      more forma) pruoess oa s iarge number
                                      of SIP actions can become an excessive
                                      burden. Unfarauenely. in many cases
                                      the informal process prolong* the review
                                      tune substantially and results in poor
                                      documentation for use m similar
                                      situation*. In addition, the informal
                                      process fieoueuUy is cnncned by Stites
                                      and sources because they can't
                                      adeouefely tMck the profres* of the
                                      change once M gets into EPA review.
                                                                      li^^
                                                       group assessment
                                    and me praHmwUmrrfied. EPA has
                                    devised * nuabet ef etienge* to the SIP
                                          sing system which it win bcpn
                                                - today. The changes are
                                    deilgusd to tailor SfP review to the
                                    significance of the action involved, and
                                    to improve the cerrarnty of tire SIP
                                    review proem. The changes, including
                                    the legal retromle supporting them, are
                                    descrrbetl briefly below and in depth in
                                    the next section of this notice.
                                    A. Tailor A*vjiew to Signtficaace of
                                    Action

                                      EPA has devised a SIP review system
                                    under which increesingly intense review
                                    procedure* wfO be epplied to
                                    increasingly significant actions. Mm
                                    actions will undergo relatively little
                                    review while major  actions will conti
                                    to receive fuD Regional Office and
                                    Headquarters review. By tailoring the
                                    intensity of review to the significance of
                                    the sctioiL tail hierarchy of procedures
                                    will generally decrease SIP procesiiag
                                    times by dramatically shortening review
                                    periods for minor SIPs and freeing EPA
                                    resource* to enable  major SIP
                                    processing to proceed without existing
                                    delays.
                                    1. Compteteness Criteria

                                      EPA found that many SIP revision
                                    submittals ware processed through full
                                    EPA review despite the fact that they
                                    were missing major component* which
                                    effectively prevented EPA approval. For
                                    example, a State might *ubnit an
                                    emission limitation  without compliance
                                    testing procedures. To free EPA
                                    resource* met would otherwise be
                                    consumed processing such deficient
                                    SIP*. EPA ha* created a completeness
                                    review process which is being proposed
                                    for public comment  in sn accompanying
                                    notice in todey's Federal Register. Under
                                    this procsmv a SB^ will be reviewed fw
                                    cc«pleteuauB«fBiam certain basic
                                    criteaa whsmichnaitaUy submitted te
                                    deterrsansUi a*tt» iseueasary
                                                                  tn
                                       allow proper
                                       decision on the
                                                                  tie
                                                           i of the Sff

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2218
FsjdejeJ  RegUtar / Vol «.  No. 12  /  Thmxky.  |«nuary 19. 1969  /  Notices
revision. This will be • quick process
that will look at the reviewabllity of an
SIP submittaL not iU approvability. EPA
will then promptly inform the submitting
State by letter whether EPA will
proceed to process the SIP revision or
whether it must be returned to the State
because it is incomplete.
  EPA is creating this completeness
review process under the authority of
Section 301 of the Clean Air Act which
authorizes the Administrator to
prescribe such regulations as are
necessary to carry out his functions
under the Act EPA is interpreting the
terms "plan" in section H0(a) (l) and (2)
and "revision" in section U0(a)(3) to be
only those plans and revisions mat
contaia all of the components necessary
to allow EPA to adequately review and
take action on such plan or revision.
EPA believes that Congress would not
have intended to require EPA to review
and take action on SIP submittala that
were simply not renewable because
they were lacking important
components. Therefore, the
Administrator oaodudes that section
110(a) requires him to act only on
complete State submittals.
  EPA recently issued a guidance
memorandum to the Regional Offices
establishing this completeness review
procedure, including a list of
completeness criteria, on an interim
basis pending notice and comment
rulemaking. See Memorandum. Gerald
A. Emison. Director. Office of Air
Quality Planning and Standards, to
Regional Office  Air Division Directors.
March 18.1988 (a copy is included  in the
docket as  item U-B-4). The Regional
Offices are currently using this guidance
to conduct completeness reviews.
However, elsewhere in today's Federal
Register. EPA is proposing to codify
these criteria in regulatory form to
provide clear benchmarks for States in
preparing  complete SIP submittals.
Specifically. EPA proposes to add the
completeness criteria to 40 CFR Part 51
as Appendix V. EPA also proposes to
amend 5 51.103(a) to specify that State
submissions will not be considered
official SIP submissions upon which
EPA is required to act under section
llO(a) unless they meet the requirements
of Appendix V. The details of the
completeness criteria are described fully
in the accompanying notice.

2. Letter Notice
  EPA is creating a new SIP processing
procedure for relatively insignificant SIP
revisions that the EPA believes are of
essentially no interest to the general
public. Historically EPA has processed
all SIP revisions through full notice and
comment rulemaking in the Federal
                    Register. For Insignificant actions of no
                    public interest, this has been costly and
                    tune """fuming with no apparent
                    benefit. Under the new tetter notice
                    procedure for such insignificant
                    revisions. EPA will simply inform the
                    State and directly affected parties by
                    letter that the submitted SIP revision has
                    been approved. The EPA may not
                    publish a notice of proposed rulemaking
                    and opportunity for public comment or
                    an individual notice of final rulemaking
                    in the Federal Register.
                      EPA's duties to publish, proposed and
                    final rulemaking notices and provide
                    opportunity for public comment stem
                    from the Administrative Procedures'Act
                    (APA). However, the APA specifically
                    provides that an agency need not
                    provide notice of proposed rulemaking
                    or opportunity for public comment when
                    the agency for good cause finds that it is
                    impracticable, unnecessary, or contrary
                    to the public intent See S V3.C. section
                    653(b). EPA concludes that it is
                    unnecessary to provide for comment on
                    insignificant SIP revisions because they
                    are of no interest to the general public.
                    Further, m such cases, the delays
                    associated with providing for comment
                    where none would be forthcoming
                    would be contrary to the public interest
                    in *<|||*fl Sir processing.
                      The legUlatfve history of section 5S3
                    indicates that the good cease exemption
                    from notice and comment requirements
                    appropriately applies to insignificant SIP
                    revisions. See Senate Comm. on the.
                    Judiciary. Administrative Procedure Act
                    Legislative History. S. Doc. No. 246.78th
                    Cong.. 2dSess. 200 (1M6)
                    ("Unnecessary" means unnecessary so
                    far aa the public is concerned, as would
                    be the case if a minor or merely
                    technical amendment in which the
                    public is not particularly interested were
                    involved. "Public interest" supplements
                    the terms "impracticable" or
                    "unnecessary"; it requires that public
                    rulemaking procedures shall not prevent'
                    an agency from operating and that  on
                    the other hand, lack of public interest in
                    rulemaking warrants an agency to
                    dispense with public procedure). A
                    number of courts have also held that
                    notice and comment procedures are not
                    required in analagoua circumstances.
                    See. «.£, National Nutritional Food*
                    Auociation v. Kennedy, 572 F.2d 377.
                    385 (2d Or. 1978); Texaco. Inc. v. FPC,
                    412 ?2d 740,743 (3d Or. 1979): United
                    States v. US. Trucking Co* 317 F. Supp.
                    69, 71 (SJ).N.Y. 1970).
                      Although EPA will not seek comment
                    on letter notice actions or publish
                    individual notices of final rulemaking. in
                    order to keep the general public
                    informed of all SIP actions EPA will
publish periodically in the Federal
Register a summary list of all actions
taken under the letter notice procedure.
The effective date of all letter notice
actions will however, be the date of the
letter itself rather than that of the
subsequent summary Federal Register
notice.
  EPA will only use the letter notice
procedure for insignificant SIP actions
such as recodifications or minor
technical amendments that EPA feels
confident are of no interest to the
general oubttft Further discussion of the
SIP cateeeria* •» be processed under
letter netice eja> be found below in the
implementation section of this notice.

8. increased Use of Direct Final

  For some time EPA has used a SIP
processing procedure referred to as
direct final nuemaiang. In the past EPA
has generally used this procedure
mostly for ImignifkfT't actions that it
considered noncontroversial and on
which EPA did not anticipate receiving
any adverse comment EPA is now
expanding the use of this historically
effective direct final procedure to speed
processing for a wider range of such
minor SIP actions.
  Under the direct final procedure EPA
still continues to offer the opportunity
for public comment as required by the
APA. As before, the procedure merely
provides a shortcut for final action
when no comment is expected.
Moreover, those insignificant SIP
actions which are truly of no interest to
the public will now be processed under
the letter notice procedure described
immediately above. Further discussion
of the potential categories of SIPs to be
processed under the expanded use  of
direct final procedures is included
below in the implementation section.

4. SIP Decision Authority
  Historically, all SIP revision actions
have been thoroughly reviewed at both
the Regional Offices and Headquarters.
whether or not the action involved  was
truly of national significance. This has
led to the greatest delays in the SIP
processing system, and the task group
assessment indicated that overall such
duplicative review did not appear to
contribute substantially to improved SIP
content in many cases. The EPA has
concluded that all SIP actions that are
not nationally significant and for which
Headquarters has prepared guidance for
SIP processing, will now be reviewed
only at the Regional Offices.
Consequently, the Administrator is
delegating his authority under section
110(a) of the Clean Air Act  to act on
such SIP submittals to the Regional

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                   Federal RayUter  /  Vol M.  No. U / Tbimday. January It. UtO /  Notice*
Administrator*. Both propoaed and final
Federal Register notices for these
actions will henceforth be signed by the
Regional Administrators.
  Section 301(a)(l) of the Act authorize!
the Administrator to delegate any of bii
powen and duties under the Act to
other EPA employees except "the
making of regulations." In an early
interpretation of this statutory provision
EPA concluded that while proposed SIP
rulemaking did not constitute "the
making of regulations", any final action
on a SIP would fall within this
prohibition. Upon further reflection. EPA
now concludes that the prohibition on
delegation applies only to regulation*
initially promulgated by EPA, not to
plans prepared by State* that EPA
merely approves or disapproves.
  The natural reading of the statutory
phrase "the making of regulations"
extends only to regulations that the
Administrator himself promulgates.
Although in approving a SIP revision the
Administrator does incorporate State
promulgated regulations into the
federally enforceable SIP. he still cannot
properly be said to be "making"
regulations within the «"Mt""g of the
section 301(a) prohibition on delegation.
As a practical matter. EPA has
acquiesced in thoae judicial decisions
holding that EPA must follow the
rulemaking procedures of the
Administrative Procedures Act (APAJ, 5
U.S.C 553, when it-approves or
disapproves State implementation plans.
However, even if SIP review is
"rulemaking" under the APA, EPA
believes these actions do not constitute
"the making of regulations • • •" Thus.
while section 301(t)(l) of the Clean Air
Act prohibits the Administrator from
delegating his authority to make federal
regulations, it does not prohibit
delegation of his authority to act upon
regulations made at the State level.
  The implementation section of thit
notice contains a detailed listing of
those categories of SIP actions that the
Administrator currently is delegating to
the Regional Administrators, those
categories the Administrator is
delegating but  which should still receive
some input from Headquarter* at this
time, and those categories that will
continue to receive full Headquarters
review for the time being. These
categories may change over time as
Headquarters prepares additional
guidance and Regional Offices become
more familiar with new issues.

B. Improve Certainty of Process
  The second major focus of EPA's
changes in the SIP processing system is
to improve processing; procedure* so
that individual actions can be handled
with greater certainty. These changes
involve increased management control
and clarified processing guidelines.

1. Adherence to Formal Procedures
  EPA has fat some rime had detailed
procedures for processing SIPi through
the existing SIP review system. These
procedures include time schedule*.
default provisions, and issue resolution
mechanisms. However, for a number of
reasons these procedures have often not
been followed precisely in the paat
With the adoption of the processing
reforms described herein. EPA will be
revising its procedures to establish
guideline* for each type of SIP review
mechanism. When the new guideline*
are iseued. senior management will
make dear that in the future they are to
be adhered to more rigorously. This will
ensure that State submittals move
quickly through EPA'* review procea*,
with any major iasuee being raised
promptly tor resolution.

Z. Grandfathering Policy
  In the paat. a mtmber of State* have
submitted SIP revisions that wan
consistent with EPA requirementi
(regulations, policies, legal
interpretation*, etc.) in affect at the tune
of State adoption «f the revision.
However, in somecaje*. because of
proonetaf delays and policy evolution,
the applicable rao^mmant* would
change before the revision*  received
EPA approval The EPA'* vest
procedure waa to return the plan to the
State for revision or disapprove the
action. Not only did thi* add more  time
to an already lengthy procea*. it also
•trained EPA/State/lccal agency
relations. Moreover, there was the  basic
question of fairness involved. In such
cases, the Stale submitted the revision
in good faith and in accordance with the
rules and policies in effect at the time of
submission, only to see months go by
and find out the change was rejected
due to factor* totally beyond it* control
  EPA has determined that in general it
would better serve the States and the
interests of the SIP processing  system to
continue to process most State
submittals based on the requirementi in
effect at the time the State adopted the
change to the SIP. To thi* end. EPA
recently issued guidance on
grandfathering entitled "Grand/athenng
of Requirements for Pending SIP
Revisions", eent from Gerald Emisoa
Director. OAQPS. to EPA Regional
Office Air Oiviaion Directors, June  V.
1966 (a copy is included in the docket a*
item O-B-6).
  The guidance provide* a structure for
grandfalbering pending SIP actions to
the extent allowed by law. The law in
thi* area indicates that whenever a new
requirement i* created by Congre** (via
Statute) or by EPA (via regulation or
policy), it becomes generally applicable
uniett the authority establishing the
requirement provides otherwise. When
Congress enact* a new atatute. it applies
to all matter* then pending before an
agency uniett Congress specifically
provide* otherwise in the statute. The
EPA ha* no authority to grandfather any
matter from tin new statutory
requirement* Without explicit provisions
in the atatvta.'
  Whan EPA kwue* new regulation*.
they arc also generally applicable unless
the regulations themselves include
grandfathering provisions. If
grandfathering provisions are not
explicit in the regulations, courts will
apply the new rules to matter* pending
before EPA. Thorpe v. Housing
Authority of Durham. 393 U.S. 288
(1980). However, an agency does have
some flexibility to provide
grandfathering provision* in new
regulations. Such provision an eaually
appropriate where they meet a four-pan
tact First the new rule represent* an
abrupt departure from weil-estabhaaed
practice. Second, affected parties have
relied on the old rule. Third, the new
rule* fanpoee a large burden on those
affected. Fourth, there U no strong
statutory interest in applying the new
rule generally. Sierra Club v. EPA. no
F.2d 430 (D.C. Or 1982). cert den. 468
US. 1204 (19841. In the pa*t EPA ha*
included explicit grandfathering
provision* in new regulation* where
appropriate.
  An agency hit* broad authority to
decide how and when to i**ue new
guidance, cine* a* a purely legal matter
guidance i* not absolutely binding on
subsequent proceedings. Pacific Gas
and Electric Co. v. FPC S06 F.2d 33 (D.C
Or. 1974). Historically, however. EPA
ha* provided only limited
grandfathering from significant guidance
primarily due to the importance of the
new guidance to EPA's control
program*.
  EPA's expanded grandfathenng
guidance state* that complete pending
SIP action* generally should be subject
only to the requirements in effect at the
time the Slate submittal was prepared.
However, the guidance includes a
number of exception* to the general
rule. The EPA would not grandfather a
pending acnon_where a court ruling has
changed a requirement where a court
ha* convinced EPA that a requirement U
no longer supportable, where the
Administrator determine* that

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2220
Fadatal R«g»t«r  /  VoL  54. No. 11 / Thursday, frnuary  18. 1MB  /  Nottets
grandfathering is not appropriate, where
an imminent and substantial adverse
environmental impact would result
where grandfathenng would foreclose
EPA'* ability to exercise its authority
under the Clean Air Act or where the
State has not acted in good faith in
submitting a plan.
  The guidance also state* the EPA will
analyze the need for grandfathering
provisions in all new EPA requirements.
and will include such provisions in all
cases to the extent appropriate.

3. Improved Guidance and
Communication

  In order to facilitate implementation
of the various SIP processing changes
EPA is instituting, existing guidance wiH
be upgraded and new guidance prepared
wherever needed. Headquarters offices
have committed to provide adequate
guidance to Regional Office* and to be
available for consultation to assist the
Regions in implementing the new
programs.
  EPA will also be improving
communication* between Headquarter*
and Regional Offices, and among
different Regmwl Office*, to effectively
implement the decefttrenaed SP
processing system, improved
communication technique*, described in
the implementation section, blende
identifying regional SIP contact*, the
"regional staff expert" concept a SIP
clearinghouse, a computerized tracking
system, periodic conference  calls, and
national meeting*.

4. SIP Processing Management System

  The final change EPA is instituting in
the SIP processing system is a new SIP
processing management system. Under
this system EPA managers will maintain
close supervision over the SIP
processing system to ensure that SIP*
move smoothly through the new
procedures. The new management
system, described in full in the final
section of today's  notice, includes both
an internal and external audit system.
an expanded computerized tracking
system, and a SIP  processing deviation
review system.

ImptameBtekkM of the Changes

  The following discussion focuses on
the more significant aspect* of the
implementation of the SIP processing
changes announced today; the .final
portion addresses  improvements in the
m*Mj»m»nt .system which ate being
instituted to assure the ""Mn1""'4
changes are property inplencated.
A. Tartar Review to Significance of
Action
1. Completeness Criteria
  Screening criteria have been
developed that define the essential
elements of an acceptable SIP package,
that win avoid obvious inadequacies.
and that can be applied uniformly with
limited subjective judgment and review.
The criteria were developed by EPA
Regional Office* already using a lilt of
criteria to determine completeness of
SIP packages in an informal way. The
benefits of using completeness criteria
to reject deficient package* include
impioved consistency and quality in the
State snbmtttaJ* received for processing.
fewer SIP* disapproved for fundamental
inadequacies, more effective use of
limited resources at both the Federal
and State level and improved guidelines
for T -w State personnel on how to
pre. .'* adequate SIP*. A* noted earlier.
an interim pobcy for determining
completeness of SIP snbmrMals was
issued to the EPA Regional Offices. The
policy include* basic criteria for
determining completeness, and cample
lettem for acoapttag and »»jetting  SIP
•ubmitaaia.

Register, the AdminlsUaisi ia propoaing
to add thane criteria and atoosdor* for
determining the oomph tain is of State
•ubmitteia 0 4DCPK Part M. EPA  will
cootinoe to «*e the interim policy to
asses* SB> submituis until final
rulemaking action is taken oa today's
accompanying propoaaL
  The. criteria for determining whether a
submittal by the State i* complete have
been separated into two categories: (a)
Administrative information and (b)
technical support information.
Administrative information include* the
documentation necessary to
demonstrate that the ba*ic
administrative procedure* have been
adhered to  by the State during the
adoption process. Technical support
information include* the documentation
that adequately identifies the technical
components of the plan submission.
2. Letter Notice
  Using a letter notice for noo-
substantial  actions, which EPA will
begin doing after today, ia a new
process where EPA will merely inform a
State and directly affected parties by
letter that EPA has approved a given SIP
revision. The objective of the letter
notice approach is to achieve prompt
action by EPA on non-subataotial
action* what* the pablic interest ia not
served by full notice and comment
processing.  By using letter notices.
EPA"* limned resources can b* ahocated
                                                                             to the expeditious processing of more
                                                                             significant SIP actions.
                                                                               Under letter notice, as soon as a
                                                                             revision has been deemed approvable.
                                                                             the Regional Administrator or his
                                                                             designe* will send a letter to the State
                                                                             and affected parties, informing them of
                                                                             the approval The EPA may not publish
                                                                             a notice of proposal and provide an
                                                                             opportunity for public comment beyond
                                                                             that already provided for by the State.
                                                                             In order to keep me public informed of
                                                                             these actions. KPA will publish
                                                                             periodically (aaaBually at a minimum) in
                                                                             the FadMat sBBjJatar a summary list of
                                                          all tetter naonacAons recently taken.
                                                          with mfbnMta concerning the change
                                                          and the sources affected, as appropriate.
                                                          These aetioaw will be effective from the
                                                          date of the letter notice, rather than the
                                                          eventual summary publication date. The
                                                          Regional Offices will make the decision
                                                          whether to process a SIP revision as a
                                                          letter notice.
                                                            EPA intends to use discretion in the
                                                          application of letter notice processing to
                                                          insignificant SIP revision*. The
                                                          following are examples of such
                                                          revisions. Frequency. States/local
                                                          agencies will recodlfy existing
                                                          regvntkuis teto amew structure or to
                                                          improve the understanding of the
                                                          program. These change* are superficial
                                                          from the penpaUlva of the air quality
                                                          management program and are of little
                                                          interest to the general public. Other
                                                          revisions to implementation plans
                                                          incorporate amended or revised national
                                                          guidance documents pursuant to EPA
                                                          directive* and an made merely to
                                                          conform to revised requirements, in
                                                          other cases, many States have programs
                                                          using renewable operating permits for
                                                          the purpose of source regulation.
                                                          Usually, the permit is renewed without
                                                          change and the permit action is of little
                                                          public interest
                                                            Technical amendments,
                                                          administrative actions, and minor
                                                          wording changes are further examples of
                                                          SIP revisions that are suitable for
                                                          processing by letter notice. It is
                                                          expected that the list of SIP revisions
                                                          that can be processed by letter notice
                                                          will be expanded as experience is
                                                          gained with the process. EPA
                                                          specifically request* comment on the
                                                          appropriateness of using letter notice
                                                          processing for these and other potential
                                                          categories.

                                                          3. Increased Uae of Direct Final

                                                            On June 23.1W2 (47 PR 27073). EPA
                                                          announced procedures to shorten and
                                                          streamline the 9P review process. One
                                                          of these pmcadwee was the direct final
                                                          ruiemaazBg approach. This program ha*
                                                          been shewn toteatuce the SIP processing

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                                    / VoL M. No. 12 / Thondty. )uuuy 18. 1888 / Nottem
                                                                     2221
review time by about M percent Since
it* inception, many revisions have been
published M dtncl ftnei rates with very
few receiving notice from the public of
the desire to comment Hie following
•re tome type* of SPi that have been
proceiMd successfully as direct finale
              to definitions to conform
end. thr ***•*••
    to EPA requirement*
• Changes in monitoring/ mod^ting
    procedure* to reference aew EPA
    guidelines
• Revision* to Inrmrnutate new teat
    methods by reference
• Single source SB> revision* that make
    a State's rBojuicenMntB moco
    stringent
• Public availability of emiaeioas data
• Permit fees
• Compliance schedule* for section
    lllfD) plan*
• Visibility plans
• Volatile organic compound (VOC)
    consent orders
• Prevention of significant deterioration
    (PSD) modeling regulations
• Minor changes to Inspection and
    maintenance (1/M) program*
• New opacity regumtioos
• Variances
• Operating permits far lead SPs-
Of 114 SIP reviaiow^Moeaeed i
recently a* dim* finals, only two
required mpabluaeag. a* |
because of public QoeamenL Thtf hiatory
of very little public rmaanenl mi dicect
final rules suggested the* EPA could use
thi* effective tool me*e often to speed op-
the SIP process.
  For this reason. EPA iseced •
memorandum dated Deceaiber 21. 18*7
entitled "Expanded Use of Direct Final
SIP Processing." from Gerald A. Emison.
Director. OAQPS. te EPA'* Regional
Office* (a copy is \p~^*~* in the docket
as item Q-B-2). For the-feaaons stated
above, this TnriPTsiMfin recomaaeaded
that the direct final nilintetiiiu
approach could be uaed more frequently
by the Regional Office*. It is possible
that EPA'* plan to expand the
application of to* direct final rulemakiag
approach may result in an inoreaae in
the number of SIPs being withdrawn
and subjected to full nance a*d
comment fulamaking becauee of the
desire by the public to comment
However, any increase in the number of
direct final  action* withdrawn and
converted to proposal* should be
dekgatag sigMlen authority fethoee
SIPreviiiens lh*l •* not of notional


  Eliminating the serial review by th*
Regional and Headajwrters eAeea for
selected categonavof SIPi to potranctty
the moat ajfoar** recommendation
mad* by the task group. This
recommendation ia designed to delegate
approval/dliapnm*! artnortty for the
majority of 8nH«» to lUgional
AdminiatntoM. A* noted earfter, •& SIP
Office and ll**d»jia«liiii mtaw m the
DMLTheRagteawlOtBoewaeMi
thaftMti
EPA Us a*a»»>aim far eaothat romeVef
technieaitagai end peiiaT review.
Except fart     ~
direct finat i
rule* i siaiei
and!
thai
.attpropoeeaUadftaot
rarely changed lav iaml
than offset by th* overail improvement
in omeiy procesauig 0f total SIP actions.

4. SIP Decisiev AtalbevUr
  A oonwrvtofle oi'ne
recommendations of me SEP processing.
have a i
implemenmtieai of «*noa«i 4
such aa baeic atnlegiee for
demonatntoag^altaflBVjeot vin ejajoiejit
standard*. In addtlieawthefe ate
prognaH when a high ami «f national
consistency la-impertant or wfaefa
involve eaHcgmg proarams what a BM>OT
issue* on progfan imptementation may
as yet be iiaweeelveii SWOB aotie**
should reoeive beea a ReaooaJ Office
and -a Headquartera review, the latter
will ensure imnsistern poMcir aaplifieliaa
for these nationally -jg-ifi~a< SIP*. SIP
action* which ininaly will oomiaue to
be decided by the Adaiaistatar ate
listed in Table 1. This list and the ether
lists deaedbed below m not intended
to be permamem  thst ia. SIP eatagoriaa
may be shifted among them over time:.
For example, M to EPA'a-faMenttoa to
delegate some of the SIP cstegehes ea
Table 1 to the Ragioaal AdauBiMnton
as experience with the aawnrocaaa i*
gained and aoliae* atatur*. Canvareajy,
if the Regional Office* haw difficulty
with a delegated category. MCB SIP
actions may be withdraws bom
delegation and be subject ta- Ui
Headquartan review.
TABLE 1
  1DB TDMrWlVR Mr •dHfH MVi faVfliTpD Dlu
R^onalOtBeseed
                        • Oi rertsslpislimis «nd Ob attainment pltni
                            (indudinf laM programs)
                        • CO attainment plans desDng with irta-
                            wMfcproM***.
                        • CO nrl««ipiiTinni •nccpt MOM rtUung 10
                            pamt-eoatc* only prabieau or hoi t pou
                        • Creep I P>4* piaan (eUBinaMnt
                            BsanMii ittoaa) ialiaitin those resulting
                            horn commit*! SIP*
                        • New sees with VOC nftbtior* 1*4. ptr
                         •  CTC NawraeMeu. or PoM-*7

                        • VOC ie
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2222
Federal Register / Vol.  84.  No. 12  / Thunday. January 19. 19M  / Notice*
opportunity to provide comment! to
Regional Office decistonmaken.

TABLE 2
  The following SIP tctiont are delegated for
Regional Admmtitrator decuior. and signoff
(proposed and fintllbut require a 30-day
opportunity for Heaa'Juerten review before
ngnoff.
• Paniculate matter emieaioni relaxation*
• VOC revinoni with extended compliance
    schedules affecting nonattainraent areas
• CO attainment plans dealing with botspots
• CO redeatgnation* relating to point-source
    only problem* and hot spot*
• SOi area-wide and source-specific SIP
    revisions and redesignationa. where the
    source(s) or background source* in the
    aggregate have allowable emission* of
    25.000 TPY or more (except primary
    nonferroua smelters or emission trading)
 • SOi reviiion* with (a) averaging times
    greater than the short-term SOt-NAAQS;
    (b) reviled emi**ion limit* due to
    change* in slack height credits
• Visibility SIP* involving regional haze
• Direct final rulemaking in categories
    identified for Administrator sigaoff (eee
    Table 1)
• Any other action not liated elsewhere

  Decision authority for all remaining
SIPs is being delegated to the Regional
Administrators, with no requirement for
consultation with Headquarter* prior to
signoff. The primary criterion used to
judge whicti SIPs could be delegated to
the Regional Administrator for decision
was the significance of the action.
Another criterion was the availability of
appropriate policy memoranda/
guidance to the Regions for making
decisions on the approvability of a SEP.
The categories of SIPs initially to be
delegated to the Regional Administrator
for final approval authority are listed in
Table 3. Although these revisions are
being delegated for the Regional
Administrator's signature, the
Headquarters SIP reviewers will be
available  for discussions with the
Regional Offices on any of the
categories of SIP revisions. The Regional
Offices also have the option of sending
SIP submissions which come under any
of these categories to Headquarters for
the full review, especially where the
Regional Office reviews indicate that
national issues may be of concern.

TABLES
  The following SIP action* are delegated for
Regional Administrator decision sad signoff
(proposed and final). Headquarter* review is
not required but may be requested by the
Regional Office.
• AU other bubbles and all other singk-
    •oureereg*.
• VOC extended compliance scbeatalM
    (except those effecting aonattalnmeot
    anas)               	
•  PMM Group n and IH STPi TSP
   redeeujnattona
                     • Lead attainment plans and revision*
                     • All other SOi SIPs. mdudmg
                         radesignationi: ambient monitoring
                         plans: malfunction rules: State AAQS
                     • State stack height regulation* and negative
                         declaration*
                     • AU other PSD/NSR SIP*
                     • AU other nubility plan*
                     • lll(d) plane/negative declaration*
                     • AU other direct final rulemaking
                     • All letter notice action*
                       SIP issues (and revisions) in
                     categories of potential national
                     significance) will continue to be
                     reviewed in Headquarters and signed by
                     the Administrator. The categories, of
                     SIPs delegated to the Regional
                     Administrator for decision and sign-off
                     are inherently localised in scope and do
                     not have potential for national impact
                     (Obviously, an unusual SIP revision in a
                     delegated category could involve broad
                     issues; the changes in procedure
                     announced today provide for full
                     consultation between the Regional
                     Office and Headquarter*, and even for
                     the forwarding of such an unusual
                     action for full Headquarter* review.)
                     Thus, except  for. unusual cases,
                     decisions made by a Regional
                     Administrator will be baaed on local
                     factor*, reflect local iseoee, and may
                     indeed yield varying raaiuhs. although
                     Regional Offices will apply poUdea
                     consistently. Such «*-^«i«-« are,
                     therefore, intended to be non-
                     transferable, La~ do not set precedents
                     for other Regions. For example, an
                     emission limit tor a paniculate matter
                     source in a State may require a specific
                     value to-conform to. the State's
                     demonstration of attainment The same
                     type of plant in another State, however.
                     might have a different limit imposed
                     based on its location and site-specific
                     factors. In short it is expected that the
                     outcome of the decision process for
                     similar SIP actions can vary from Region
                     to Region. Each such local action must
                     be judged on its own merits. This is
                     acceptable, provided that national
                     policy and guidance applicable to such
                     actions are applied consistently by ail
                     Regions involved.
                       To provide the Regional Office with
                     the necessary support EPA is
                     completing a comprehensive
                     compilation of policy statements.
                     guidance, and memoranda applicable to
                     those actions where significant
                     Headquarter* review is being
                     eliminated. Moreover, to mimtiin
                     oversight of this decentralized process,
                     EPA will institute more intensive
                     management systems, designed to
                     ensure national consistency in policy
                     application (see discussion on
                     Management Systems later in this
                     notice).
B. Improve Certainty of the Process
1. Adherence of Formal Procedure*
   Detailed procedures exist for
processing and reviewing SIP revisions.
Among other thing*, the procedures
provide for firm schedules, default
provisions, and mechanisms for issue
resolution. The procedures frequently
are not following for a variety of
reasons. In some cases, a Regional
Office may believe that infernally
working/negotiating with the State
would provide mtomation or result in
change* tathesotttission that would
enable EPA ID apffrove the plan
revisions. This caa occur because there
is an inherent reluctance by reviewers
to disapprove a plan into which a State
or local agency has put considerable
effort The goal of this  informal
approach was to enhance the
relationship with the State, although the
ultimate effect may have been the
opposite.
   The current guidance and procedures
for SIP processing an being reviewed.
modified as necessary to stress the need
for more formal implementation, and
will be republished with a dear senior
management directive on their
importance. Further, the management
system decrioed below will help ensure
that the reviewing offices follow the
formal procedures. This, along with
increased management attention to the
SIP process, should enable those
interested in the results of the SIP
review process, internally and
externally to EPA, to follow more
effectively the progress of individual
actions.

2. Grandfathering Guidance
   EPA issued grandfsthering guidance
to the Regional Offices as described
earlier. The guidance is to be considered
in each rulemaking action on a SIP
revision and in all new or revised
requirements for SIP* issued by EPA.
EPA believes that it deals with the
fairness issue, will not have noticeable
environmental impact and will
strengthen EPA'* working relationships
with the States and local agencies.
Under the guidance, a SIP revision may
remain subject to the requirements in
effect generally on the date of State
adoption of the change. The decision to
grandfather will be made by either the
Administrator or the appropriate
Regional Administrator where decision
authority has boa* delegated.
  All SIP revisions potentially subject to
grandfatherinj ^B be reviewed to
determine to whet extent the submission
complies with the new and revised
requirements. For each revisions. EPA

-------
wall address, tat isipect ef the
grandiatBMUg eiaetaei (peer* v« or
negative) • me SIP i
In eddition. the betes far i
future submriiaU wiU be described in all
new requiramemn iaeaed by EPA.
addressing the impact on prevtoesty
approved pending, aad newly submitted
SIPs. Such grandUtheriag provisions
generally will haw effective dates
which are BO days frear the date of
signature to allow states to have e
reasonable time to complete precaasing
and submit revisions to£PA that may
be subject to grandfathering.
  Although graartfaflMriaa. will be
considered whenever possible, naming
equity considaranans and short term
environmental impacts, it is not
automatic aad may not be appropriate
in all circumstances. These include
situetions where:
1. The State has not acted m good faith
    in submitting a plan;
2. A court ruling has changed e federal
    requirement or beaaoovinead EPA
    that a previous requiraaaant is no
    longer supportable;
3. The Administrator aatenrews that it
    is not appnpaate to gondfathar
    under a new EPA pouay:
4. A deosioo tograadathai madd haw
    an tnyiiinMTt a*?d aaaanusnai
    adverse imnnmasenlsj aapact or
    foreclose the ability of EPA te
    exerose in amoonty andar the
    QeaavAir Act (a*, apply sanctions
    undarPartD).
This guidance builds on existing
grandfa thering guidance (e>g_ air quality
dispersion modeling] to T«*"Hif>' the
general concept of (
equity dtctstes each i
  Where grandfr tbsong would render
the SIP as a wbokt sobataanoHy
inadequate to protect the NAAQS or
otberwtse to comaty-wito the Act.
grandfa thenng may be auawoa onty if
justified by an *"^«iA"' analysis uanar
the four-part Sierra dub test described
earlier, and the grandfathanng action
would have only a limited Hfe (generally
two years). Within that time, the
grandfathered revision must terminate
                                                          vVnVt* HfVVM*
                                                            4H»(KlUK BBO
                                      alternatives fee
                                      systeauthrnnaV
  fnmnWrte*
trsditMaoiteenvof-<
between EPA ltesfts.iianeie i
Regional'
effective CBomusuaaacsrwill-!
more intpoctaot wilh
of the SIP pncesstna j
today, net oob>i
snr> the Baginaal Ofaraa.1
between the Aagj    	
themaaliosa.Jtiaj
                       i-aoaeUiee,
                                                                      • a

                                      problems andncoU
                                      shared paonndy by
                                      theRegi
                                      application olp
(fcg_ expinttOB of a temporar
•anance). or the State must rafamh-a
complete, ssasnisbls remaon to the SIP
to bring it into ni oatnpnnnce sMA nil
statutory)
1 Improved Cuidarrot aad
  hnprnirsd fnalsain and
be assured Several-L___
underwayin this roaacd
  The existing 9V toaoking system, "SIP
TRAX" wfaic&pioianHii only follows
SIP submifoos from aairraraast at
Headquarters, is boma aatBaniiafV to
track a Sff eubmittnl torn ascaipt by the
Regional OtBot to uttuuUa dispoaioao
(see furtaat iftomssinn under the
"Managsauant System' below). Date
contained In the system wfll be rafiaael
and adjusted as experience is gained
under me new procedures. In parallel
with this treckmg system change.
greaterenrphe»i»wiU be placed on the
 key SBT contact persons in the
Regional Officsa. Ataaady to piece, these
persons w4H  have expended
•MAvw^MtfajBi^w ^^ tk^ B^^^^M! ^%CM.^KA jt.»
ivsponei^niiy ar me itamooai uzoces 00
more of ttwoaciaionBHOchnjoirSIP
subniNate. R is ejipaaeil thai men
frequent uee of conference caBs,
between some or afi ftegiom. wfll be
made, and a  workshop on SJP
prooeaalBgj sasaae wui be tastHnteQ in
                                      RegionalOHloe afr orognnt ttoff
                                      txafuianun HiM asareefly m f»nrth
                                      Caronaa.
eetablishmeiii of a Regional Office SIP
Council. Such a Council would be
composed of Regional Office SIP review
staft chaired on a rotating basis by one
of the offices. The chair would establish
a meeting frmqoencyTlsmMeJeconfereace)
which could be monthly or at some
similar regular period The purpose of
the meetings would be for each Region
to discuss SO* processing activities for
the period, to fctgfciigfc* unusual issues
mat arose, and to identify/resolve
points of contention between Regions.
Headquarters staff-would participate in
"•—'	''Tiiiffcp ir itl  i	J
to panvkks*s^[»jBmaical expertise.
_^—.	»*f seen meetings
wauld*be pM«ed en an electronic
bulletin boam" lor future reference and
guidance.
  Other imitatives an being considered
These sneluda cranOon of "policy
hotnnes" astnhtlshrmg Heedouarten
experts in vanoee acogram areas to
provide quick response to Regional
Office imnnrien. As an extension of this
concept. Regional Office "experts" are
expoctad to emerge over time who
would serve the sane fraction for their
colleagues. Alftoean •* f*H scope of
improved conmMcneaOons technkraes
harapt been Myoefmedat this time
{laMnmVBi IDWid anWflaTvC OBttltCCQ §1OCC
commumenaons How julieteTilly shonid
be dyBamse), &PA is aware of the
importance «f Ms hnction and is giving
it high priority.

4. SIP Precaaamg Management System
                                                                                               at of the SIP
                                                                                              r EPA. mcrading
review by both the R«gtan*l Offices and
Hendqenners. is vital to ensure that
implementation plans suLuuiUeil by
State* are pioc essed txpeditiously. As
part of this action to improve SIP
pieueaaiBg wtthin tfA. the management
system-is being revised to monitor the
processing of implementation plan
revisions under the changes described
today. A basic goal of mis revised
management system is to ensure an
appropriate degree of consistency
between all reviewers in interpreting
and tmplemeni:nnj the SIP processing
guidance and nir quality management
program policy. The management
system wiB aiio evaluate the reviewers'
confonnance to established review
procedures, IB addition, an outgrowth of
the managemeiR syetom will  be the
identification of Issues and problems in
unplemeraatianpbouiidance, policies.
and procedure* Bt&Pt& Headquarters
and Regional OOeM. WKb such
information. EMI can ansuze the timely
update of pottcy and processing
guidance.

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2224
Federal  Ihejielnr  / VoL 54.  Fte. 12 / Thanday. January It.  M» / Notices
  The management program is designed
to eniure the adequacy of the processing
procedure! and to facilitate the review
of implementation plans. Identification
of program deficiencies is not intended
to result in recrimuiations but to
improve the process. The effect of the
improved management program should
be increased public confidence in the air
quality management program, and more
certainty on the part of States and
industry regarding the operation of the
SIP review process.
Audits
  A key feature of the management
system is the development of an audit
program. The audit piugran to designed
to review actions, generally after
processing is complete and final action
is taken, to determine whether
processing procedures and program
policy have been adhered to during the
review of the implementation plan. It is
not the intent of the management
program to review, or second-guess,
every SIP action that is processed within
EPA.
   The frequency of program audits will
be based upon several factors. One
factor is the total number of
implementation plan revisions
processed by a particular office. This is
important because significant processing
deviations are more likety to result
when the number of actions is high. A
second factor to be considered in
determining the frequency of the audit
cycle Is the type of actions processed—
newly implemented programs with a
significant level of complexity should
receive greater attention than programs
which are well established. Another
element in determining the frequency of
audits will  be the prior performance o
the reviewing office. Those that have
demonstrated problems should receive
greater attention and thus more frequent
audit than areas with demonstrated
capabilities. As a  corollary, in addition
to examining performance  of specific
organizations, the audit program will
identify program areas where several
organizations are  demonstrating a lack
of understanding, indicating the possible
need for unproved guidance.
  The audit program must be designed
such that the interval between audits is
not too lengthy. With reasonable
frequency, the management system must
be able to obtain an overview of the
basic program and the personnel
responsible for implementing the
program. Such a -review is necessary to
ensure that the skills and knowledge to
effectively process all types of plan
revisions are maintained: this is
necessary even where few and/or
routine plan revisions are received.
                      The audit program will employ two
                    basic sources of information: (1) Records
                    and documents submitted or prepared
                    as part of the formal submittaJ and
                    review process: and (2) discussions with
                    the individuals in Headquarters and/or
                    Regional Offices involved with
                    processing of plans in general and
                    associated with specific SIP actions.
                    Through review of the processing
                    documentation and the implementation
                    plan submittaL the auditor can
                    determine independently the procedures
                    followed, how specific policies wen
                    applied ooofdnaaoce to national policy
                    and guidance, etc. Dbcnssiene with the
                    individual raeponslbiefgr the processing
                    and review of SIP actions wJB provide
                    information related to deflctoiUes that
                    exist in the processing guidance.
                    difficulties in conforming to program
                    policy for specific actions, and elements
                    misaiag from EPA guidance that should
                    receive attention at the national level
                      The Regional Offices wfll need to
                    maintain-the hill documentation and
                    history of each SIP action processed. In
                    the majority of cases this will not result
                    in any extra work load since moat of
                    this information is contained in the files
                    already maintained by the appropriate
                    Regional Office. In addition to the
                    currently maintained manual records.
                    EPA intends to expand, aa operational
                    microoomputer-based system for
                    maintaining the status of currently
                    active implementation plan*. The
                    current system tracks SIP revisions for
                    maint^tpiM (QQ status of SIP actions
                    upon receipt of the package by
                    Headquarters and contains no
                    information on plan revisions at the
                    Regional Office: the system will be
                    expanded to maintain information on
                    the status of SIP actions under review
                    by any EPA organizational element This
                    will permit the rapid transfer of
                    information between Regional Offices
                    and Headquarters on the status of all
                    actions which  are active within EPA.
                      There are two types of audit functions
                    anticipated by this program—internal
                    and external. An internal  program audit
                    involves the routine audit of the SIP
                    review process by those individuals
                    within the reviewing organization who
                    are directly responsible for the review of
                    the SIP. This internal audit will occur at
                    both Headquarters and the Regional
                    Offices on an ongoing basis. Rather than
                    mandate the procedures to be used by
                    each Regional Office and appropriate
                    Headquarters office for the internal
                    audit, each office will establish audit
                    procedures that are appropriate based
                    upon resources, capabilities, and the
                    nature of SB? revisions processed. For
                    example, it may consist of senior staff
familiar with the program requirements
reviewing a selected-portion of the
revisions processed try the SIP review
staff. The Regional Offices will focus
their internal audit efforts on those
actions to be signed by the Regional
Administrators.
  The external audit is designed to
obtain an independent overview of the
program. This audit will be conducted
by Headquarters individuals with
experience ia SIP review but who do not
take aa acttMjeia ia the process. The
external aae»*jB address all facets of
the pnigiasi lertBilliiu adherence to
IMHI eising pserttfiirsi  interpretation of
EPA policy, tist tatpact of air quality
management aad the effectiveness of
the revised procedures in expediting the
prenesalnf of'State submissions. In
addition. Headquarters offices will be
audited oa how well new policy is
distributed and explained to the
Regional Offices. Audit guidelines will
be developed aad  distributed to all
offices responsible for SIP review,
identifying in advance the ma for points
of emphasis ia the audit program. The
external audit will examine not only
program deficiencies but also the
positive-aspects of implementation of
the program, providing a report both on
how program deficiencies can be
improved aad aa bow maovative
soiutioas have increased the efficiency
of the SIP review process. An important
output of the audit prugiem is the
identification of training needs for those
individuals responsible for SIP review.

Reoordkeepiag System

  As previously mentioned. EPA has
implemented a microcomputer-based
data system for tracking toe progress of
SIPs during Headquarters review. This
system. "SIP TRAX" currently tracks
specific milestones of the Headquarters
review process. These include:
(1) When the revision was received in
    Headquarters;
(2) Date of staff concurrence:
(3) Date of approval by the Assistant
    Administrator/ Administrator;
(4) Date published in the Federal
    Register.
The system is accessible by the
Regional  Offices through a
microcomputer-based bulletin board
system and is updated on a weekly
basis. SIP TRAX will be expanded to
incorporate the initial phases of SIP
review that occur in the Regional
Offices before eke implementation plan
is forwarded to-Keadquarten for
review. This i» imports*! since the
process el tianelai uf nfTilai liiim
responsibilities wifl result ia many SIP

-------
                                                                                       Neticet
                                                                                          S25
action* not coming to Headquarter* «nd
thus would.mt.be entered in • system
tracking only Headquarter* review.
  There are several reasons for
maintaining such a system. IB ofdtr for
the various Headquartaca- office*
responsible for program development to
mainuin a sense of the major SIP issue*
being addressed, a method of
summarizing SIP action* processed It
neceeaary. The devalopment of a data
bate lyatem that can provide such
information will reduce the resource
burden of soliciting input from Regional
Office*. In addition. EPA I* frequently
atked about the specific itatu* of
implementation plan revision* In
proce** by the public. Industries, and
member* of Congress. Since the system
will be regularly updated to contain
information on all SIP action*, the data
ba*e will be more complete and
accurate than one *olely relying on
Regional Office*' response* to periodic
inquiries. Overall an integrated system
will allow EPA to determine sure
accurately the atatu* of. and Urn* and
resource commitment* allocated to. SIP
review wherever it ocean.
  In addition to the basic program
overaight an important function of the
audit will be to identify f
cira
      iti
        ng guide
i hi
      ittonstn
Tbeee processing deitaUnee will be
CXJUDBMd (TOO to*} pCHpvKtl W OI tsM
potential impact of the action. The
identification of processing deviation*
could result in varying response*.
ranging from simple improvement* in
the review proce** to tho*e few ca*e*
expected where the State may be
required to submit a corrective SIP
action to resolve a deficiency. The
specific corrective action to be taken
will be determined on a ca*e-by-ca*e
basis.
  The majority  of implementation plan
revisions submitted by State* are
associated with source specific action*.
are administrative in nature, or are in
direct response to EPA mandate* to
incorporate explicit regulatory
provisions or language. In most case*.
the environmental effect of SIP
processing deviation* are expected to be
insignificant, and thus there •hould'be
no need to require the State to tubmit
additional information or to make
further revision* to a ipecific rubmittaL
However, for recurring problem*, the
State will be notified that a particular
aipect of submitting implementation
plan revision* ahould be •»~<<*~< to
avoid the problem* lilsnfiisrl
  Mere important devi an en* may
include action* where the potential
                     exist* for mtftOttamt environmental
                     impact At parrioualy stated. SIP
                     actions that are Ukaty to effect the
                     program OB • national basi* will receive
                     full EPA review and decision by the
                     Administrator. Asa result the actual
                     number iifainiimiimilallj •*••«'•••*
                     deviation* *hould be ttmited.
                                      adit proceed
                                      ' such sitaetii
desigMd to *eanlh>aach situations so
that appropeiato aottons to limit the
impact can be taken promptly, n theee
cese*. corrective action will depead on
the problem. For proposed action*. EPA
may need to withdraw the proposal and
reverse the propoeed approval/
disapproval action. Alternatively, when
EPA ha» folly prooaeeed and approved •
rirlilnn tn tai ImplsaainTattin plan It •
may be necessary to iaaoe a aotic* of
SIP daficiency requiring the State to
submit a revision to correct the
identi* A problem. The response to each
ease * ,* be deaded based moon the
specific merits of me ptaa MviaioB
involved and the potential
environmental impact

Admittistrattve

  the docket la an i
oompietafikofalU	 ._
oonaidand by EPA in the development
of tbttet 8V. BPeMflMteM cbgMLflg«% TlM
docket la a dynanaa Sfe *eeaoae .. .
material la added throughout the notice
preparation afta :ceajMneBt piooa**. Tjks>
docketing ijalaa • Intended te^afiew
member* of the public and mduatrtaa
tavohred to tdanttfy and locale
document* so that they can effectively
participate in the process. Along with
the itatement of ba*i* and purpose of
the SIP processing change* and EPA
responses to mjntflMm comments, the
contents of the docket except for
interegency review materials, will serve
a* the record in case of Judicial review
(see dean Air Act section 307(dX7XA).
42 U.S.C TBOndUTM A)).
  The effective date of these changes is
January 16.1900-
  Section 317(a) of the dean Air Act 42
U5.C 78l7(a). states that economic
impact assessment* an required for
revisions to atandard* or regulation*
when the Administrator determine* *uch
revision* to be substantial. The change*
described today do not change the
substantive requirement* for preparing
and lubmitting an adequate SIP
package. No increase in the cost a* a
result of complying with the changes
described today 1* expected; moreover.
the monitoring, racordkaeping. and
reporting requirement* have bean
determined to be insubstantial Because
the expected economic effect of the
change* is not substantial, no detailed
                                                             Mot has been
  The information collection
requirements of these change* are
considered to be no different than those
currently required by the dean Air Act
and EPA procedure*. Thu*. the public
reporting burden resulting from today'*
notice is estimated to be unchanged
from existing requirements. The public
is invited to send comments regarding
the burden estimate or other aspect of
             ~      . including
                      any burden, to
               rthe following: Chief.
                 Branch. PM-223. U.S
Buvfceamautal Protection Agency. 401 M
Stteat SW, Washington. DC 20400; and
to (he Office of Information and
Regulatory Affairs, Office of
Management and Budget Washington.
DC aoatt. marked "Attention: Desk
Officer for EPA.-
  Undar Executive Order 12291. EPA i*
required to judge whether an action is
"major" and therefore subject to the
requirement of a regulatory impact
anaryaia (RIA). The Agency ha*
determined that me SIP processing
change* anaounosd today would result
in none of tne •»!-<**-•» advene
economic effect* sat forth in section l(b)
of the Order eagreund* tor a finding of
"major." DM Asjeney has. therefore,
concluded that thia action i* not a
"makW acttoa-inder Executive Order
                                                             Thw-notioewaJi submitted to OMB for
                                                           review ormslstmt with section 9O7(d) of
                                                           the dean Air Act A copy of the draft
                                                           notice a* submitted to OMB. any
                                                           document* eccompaayiag the draft any
                                                           written comment received from other
                                                           agencies (including OMB), and any
                                                           written response* to those comment*
                                                           have been included in the docket
                                                             The Regulatory Flexibility Act of 1980.
                                                           S US.C 601-612. require* the
                                                           identification of potentially adverse
                                                           impact* of Federal action* upon small
                                                           business entities. The act require* the
                                                           completion of a regulatory flexibility
                                                           analysis for every action unless the
                                                           Administrator certifies that the action
                                                           will not have a aignificant economic
                                                           impact on a substantial number of small
                                                           entitle*. For reasons described above. I
                                                           hereby certify that the final rule will not
                                                           have a significant economic impact on a
                                                           •ubitantial naaaber of small entitle*.
                                                            LesM.
                                                            IPK Doe. ana»TPH»di-u-ta: «««•}

-------
Environmental Impact Statement*;
Availability
  ResfKHatble Agency: Office of Federal
Activities. General InforaMboa (202)
382-5076 or (202) 382-5075.
  Availability of Environmental Impact
Statements Filed January B. 1989
Through January 13. U8B Pursuant to 40
CFR 1506.8.
OS No. OBOQM. Final. COE. TK
  Applewhite Dem/Reservoir and Leon
  Creek Diversion Den/Lake Water
  Supply Project Penoit Application.
  bnpknentatioB. Section «B4 and M
  Permits. Bexmr County. TX. Doe:
  Febraory 21. 1988, Contact Timothy L
  Tandy (U7) 39+4086.
EIS No. 890005. HMet. ATS. CA.
  EMocado Netwnol Ferest Land end
  Resoajce VUnwfemem Plan. AMOOOC,
  Alpine. Eldorado and Placer Couufes.
  CA. Due: FeeraenrZL 1MB. Contact:
  jeraM R Hutekins 
                                      7565. AoantionBi vsBTSBjaavB eai B^A a
                                      Regulatory f4e((Btnrtio8t.BBBJBOt can be
                                      Kiru  ar;
                                      address a«si
                                      Thomas K*Uy,
                                      Director. Office of SOnOiiifc m«/
                                      Regulation*.
                                      |FR Doe. 8B-12at Pllad l-lC-Ok 8:45 am|
                                      FE00UL4
                                      REVIEW
       : Federal Mine5alety and
Herbh Review CbmmUsioB.
             Commraeioti has adopted
a new method for talndatirn tbe rate of
interest spyrnabte to •monettry vwvrda
in dncnminatjon and compensation
cases.
Dims: This action is effective for
Commission cases in which decisions
are rawed after November 28. 19B8.
AOOWSSCK Requests tor copies of the
Commission'* decision stoowld be
addressed to Richard L Baker,
Executive Director, Federal Mine Safety
and Health Review Commissian. 1730 K
Street NW.. Bth Floor. Washington. DC
20000.
KM WMTMBft USFOSJaUTlOU CONTACT:
L Joseph Feirara. General CouaseL
Office of the General Counsel 1730 X
Street TTW. 6fh Floor. Washington. DC
20000. telephone; 202-053-8610 (202-466-
2673 for TDD Relay). These aw not toll-
free numbers.
         rur wrmmfmnn Tin
Federal fcfcae Saiaty Md Health SUview
Commtssum aai adopted a new malhod
                                      for calculatiag toe rale of interest
                                      applicable to noaetaqr awards to
                                      prevailing cnrnplaiBants in
                                      discrimination endtiompenaaUon cases
                                      •mini oder seatens tQ«e) and 111
                                      re»pect:-«ly of the Federal Mine Safety
                                      and Heaioi Act of MT7. This action was
                                      taken Oiiac.il. ZZJ<. UMWA  v.
                                      Chnchheld Cool Co.. 10 FMSHRC 1493
                                      (November 28. ISOi). pet for review
                                      filed. No. 0B-4e73 {DC. Gr. Dec. M.
                                      1988).
                                       Section JTJB|d»f the  Mine Act 30
                                      U.S.C nri[iTmis>ni1i  discrimination
                                      against ntaeinfr engaging in protected
                                      si Iliiiliin •irieafaii Mine Act  Under
                                      sections 10((e) {£) and (3). a siiner who
                                      haa beea {onod M nave bean
                                      discruHMted againat is statutorily
                                      en«iad-«a» approeriete  nalieL iaxduding
back pay and imarnsl 30 U££,      _
and (3). Section 111 of Ike Mine Act 30
U.S.C. 821. leajeiras an operator to pay
cerieiB anoesiBS ex conpeneaAon to
miners wtwhea* beat idled by a
withdrawal order isee*4 by 1be
Secretary «f Labor, te •^•fioatiow
arising under seUEuit Itl. the
Commission also awaMb ialereat OB
back pay awards. CkacttfieJd Coal Co.
supra.
  In the past laa CasBauaion!* ca4e of
intecaal DA aaeoolavy •Awards in
discriniaatieai jwaceediaga. aa
annouocae) in ffufirtoij  «e behoifof
Bailer^- Avluitmm rmtmma Co, *
FMSHRC 20»Z(Bwaesaber tBBSi was
based om she "•atHMed piisa* »se"
announced aeasvaniaejsy by Bta
Internal Rewme Service rUc?1 aoder
formeriy appliceMe wevsiona of 28 U.S.C
6821 for parpens ef fixing interest on
overpayment and wndcrpgymwrt of
taxes. However, as trf January 1, 1987. as
a result of fne Tax Reform Act of 190B*
Pub. L 99-514. lOOStat 2005 (1908). the
IRS discontinued Its use of the "adjusted
prime rate" and now uses the "short-
term Federal rate" as the rate of interest
on overpayment and underpayment of
taxes. 26 U-S.C-A. 8821 (Supp. 1S68).1
            i Mm! IM ' u 4MimM4 by
MM S»dTHr> «rf aw Tnuvy k>Md a* tb« average
a*riw' ytrU on ouidtndinf narfcet»W« obligations
of MIC UmM 9IM« mfh ranmim( pmwJs to
maturity oT rtMtjnra or IM
        ' le intimmtri far Ik* bet
teok ealendtr gwMrud epplie* dunaf the Hni
                                                                           rale |peid by ll

                                                                           as uicx eta M is**.

-------
>*
             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                    Office of Air Quality Planning and Standards
                    Research Triangle Park, North Carolina 27711


                                M 27 IQoq               PN HO-88-06-27-095
    MEMORANDUM

    SUBJECT:  "Grandfatherlng"  of Requirements Jjor Pending SIP Revisions
    FROM:     Gerald A.  Emison,  Direct	
              Office of  A1r Quality ?Ttnni ng~and Standards  (MO-10)

    TO:       Director,  Air Management  Division
                Regions  I.  Ill,  IX
              Director,  Air and  Waste Management Division
                Region II
              Director,  Air, Pesticides and  Toxics  Division
                Region IV,  VI
              Director,  Air and  Radiation  Division
                Region V
              Director,  Air and  Toxics  Division
                Region VII, VIII,  X


         Recommendations for Improving  SIP processing  generally at EPA were
    presented to the Deputy Administrator  and  approved fully.  It is the
    Intention of the Agency's management that  the recommendations be imple-
    mented promptly.  This  is being done by  an Intra-Agency Work Group
    composed of Headquarters and Regional  Office persons.   This memorandum
    provides guidance on applying  previously applicable standards to pending
    SIP revisions where  the relevant requirements have changed since the
    state prepared the SIP  submittal  (i.e.,  "grandfathering").

         In a number of  cases, States have submitted SIP packages that were
    consistent with the  EPA "requirements"  (i.e., standards,  regulations,
    policies, legal interpretations, guidances,  and clarifications) in effect
    at the time.  As a result of processing  delays  and policy evolution, the
    applicable requirements were revised before  the proposed  SIP change
    received EPA approval.   When the revised requirements did not contain an
    appropriate grandfathering provision (e.g.,  a provision allowing SIP
    packages to be acted upon based on  the requirements, in  effect at the time
    of State adoption),  SIP reviewers assumed  that  the appropriate action was
    to disapprove the SIP revision and/or  return it to the  State for changes.

         Not only can this  delay rulemaking, but It also may  be inequitable
    and serve as an irritant to  effective  EPA/State/local agency cooperation.
    Moreover, such action usually  results  in an  ineffective use of resources
    by the State and EPA.  Consequently, we  are  today  extending the concept

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of grandfathering contained in existing guidance (e.g., for modeling), as
described in the enclosure.  It is the intent of EPA management that
grandfather!ng be applied where it is warranted and appropriate.  Today's
guidance was developed in conjunction with the Regional Offices and the
Office of General Counsel.  We believe that it deals with  the equity
issue, will not have a noticeable environmental Impact overall, will
strengthen the Agency's working relationship with its State and local
partners, and does not conflict with either the Clean Air  Act or the
Administrative Procedures Act.
Attachment

cc:  Air Branch Chiefs, Regions I-X
     Regional Counsel (Air Branch Chiefs), Regions I-X
     Don Clay
     Alan Eckert
     Mike Alushin
     John Seitz
     Robert Cahill
     John Calcagni
     Bob Wayland
     Oick Wilson
     Bill Laxton
     Charles Gray

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bcc:  Work Group Members
      Jack Farmer
      Rich Osslas
      Peter Wyckoff
      Bern Steigerwald

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                      GUIDANCE ON GRANDFATHER ING OF

                  REQUIREMENTS FOR PENDING SIP REVISIONS

                              June 1988
Introduction

     EPA is expanding its guidance on how to apply previously
applicable requirements in two general situations where the issue may
arise:  (1) when new or newly revised "requirements"  (i.e., standards,
regulations, policies, legal  interpretations, guidances, or clarifications)
for SIPs are issued by the Agency and (2) when rulemaking action is taken on
a "SIP revision" (i.e., a State-specific EPA rulemaking under
the Clean Air Act).  This guidance will  be in effect  for complete SIP
revisions submitted to EPA and for requirements issued and/or revised by
EPA after today.  In general, s 1 SIP revisions submitted before today
will continue to be reviewed  ba=>ed on EPA's current policy, which is to
decide each SIP revision based on the requirements in existence at the
time of EPA's rulemaking.

     Grandfathering is not to be considered mandatory or automatic.
In determining whether grandfathering should apply, and what the appropriate
date should be, the decision  maker should keep in mind the thrust of this
guidance, i.e., to' honor good faith effort on the part of the State/local
agency submitting the revision, balancing equity with other considerations.
This guidance expressly is not intended as a vehicle  to allow circumvention
of tighter requirements or to facilitate the-avoidance of difficult
decisions.

Legal Background

     Whenever a new requirement is established by Congress (via statute)
or by EPA (via regulation or  policy), it becomes generally applicable
unless the authority establishing the requirement provides otherwise.
When Congress enacts a new statute, it applies to all matters then pending
before an agency unless Congress specifically provides otherwise in the
statute.  The Agency has no authority to grandfather  any matter from the
new statutory requirements without explicit provisions in the statute.
                                                      i

     When EPA issues new regulations, they are also generally applicable
unless the regulations themselves include grandfathering provisions.  If
grandfathering provisions are not explicit in the regulations and absent
a contrary interpretation by  the Agency, courts will  apply the new rules
to matters pending before the Agency.  Thorpe v.  Housing Authority of

-------
Durham. 393 U.S. 268 (1969).   However,  an  agency does  have some
flexibility to provide grandfathering provisions in new regulations.
Generally, such provisions are appropriate where they  meet a four-part
test.  First, the new rule represents an abrupt departure from well-
established practice.  Second, affected parties have relied on the
old rule.  Third, the new rule Imposes  a large burden  on those affected.
Fourth, there 1s no strong statutory Interest  1n applying the new rule
generally.  Sierra Club v. EPA. 719 F.2d 436 (D.C.  C1r. 1982), cert. den.
468 U.S. 1204 (1984).In the past, EPA has generally Included explicit
grandfathering provisions in  new regulations where  appropriate.  Under
this guidance, EPA will affirmatively consider the  need for grandfathering
provisions in all new regulations.

     An agency has very broad authority to decide how  and when to issue
new guidance, since as a purely legal matter guidance  is not absolutely
binding on subsequent proceedings.   Pacific Gas and Electric Co. v.  FPC,
506 F.2d 33 (D.C. C1r. 1974).  Historically, EPA has provided "only limited
grandfathering from revised guidance.  This document establishes a detailed
framework for grandfathering  pending SIP revisions  from all future EPA
requirements.

The Guidance

     The following will be considered 1n deciding whether to apply grand-
fathering to an Individual SIP revision and in developing appropriate
grandfathering provisions for each 'EPA SIP requirement:

A.  General Guidance:  A SIP  revision generally will remain subject to  the
requirements in effect either (a) on the date that  the State adopts the
SIP revision (provided a complete, fully adopted revision is submitted
promptly, generally within 60 days of the  adoption), or (b) on the date
that the USEPA proposes the SIP revision under the  parallel processing
procedure.  However, in specific cases, EPA will apply different dates  as
appropriate (e.g., see memorandum, J.  TUvart to Regional Modeling
Contacts, January 2, 1985, concerning grandfathering modeling requirements).
A discussion of what constitutes a complete, fully adopted SIP revision is
found  in the memorandum, G. Enrison to Regional Air Directors, March 18,
1988.

B.  There are certain exceptions to the general grandfathering guidance:

    1.  Grandfathering should not be considered if the  State  has not acted
in  good faith in  preparing and submitting  a SIP revision.  For example,
an  incomplete revision hurriedly submitted to  avoid coverage  under a new or
revised EPA requirement should not  be  grandfathered.   Similarly, grand-
fathering should  not  be considered when a  SIP  revision  is  submitted

-------
substantially in excess of 60 days after State adoption as specified in
paragrapn A.

    2.  Grandfathering of SIP revisions may not be appropriate or possible
when a court ruling has explicitly changed a current federal  requirement
or has convinced EPA that a previous requirement Is no longer supportable.
Under these circumstances, the Office of General Counsel  (OGC), in consul-
tation with the Office of Enforcement and Compliance Monitoring (OECM)
and the Office of Air and Radiation (OAR), will define the limits of
the court's decision and how It may affect EPA's requirements and SIP
revisions, Including previously approved SIP revisions, pending SIP
revisions, and SIP revisions which are to be submitted in the future.
OGC will make Its best effort to issue such an opinion within 60 days
from the date of the court's decision.

     Based on this analysis, OAR will Issue a decision on the appropri-
ateness of grandfather!ng and the continued use of the pre-court ruling
requirement on pending and future SIP revisions.  This decision will
generally be issued within 90 days from the date of the court's decision.
OAR will also issue a decision on the appropriate action to take, e.g.,
notice of SIP deficiency or "no action" needed at this time,  on previously
approved SIP revisions.

     3.  The Administrator may determine that grandfathering  is not
appropriate under a certain new policy.  He could conclude that the old
policy was ill-founded, or simply not wish to grandfather due to the importance
of the new policy to EPA's programs.  Where a new policy issued by
the Administrator specifically states that grandfathering is  not appro-
priate or establishes a particular grandfathering provision that differs
from this guidance, such provisions would of course supersede this guidance.

     4.  Grandfathering of a particular SIP revision or requirement is
not appropriate if a decision to grandfather it would have an imminent
and substantial adverse environmental impact or could permanently foreclose
the continued use of the provisions and/or sanctions of Part  0 of the
Clean Air Act, e.g., changes in Section 107 designations or the full
approval of Part 0 plans, both of which may foreclose the future use of
sanctions to assure the correction of any deficiency arising from the
change in EPA requirements.

     5.  Action on a SIP revision which comports with the revised require-
ments but not the original requirements may be based on the revised
requirements.

-------
     6.  If a SIP revision compiles with the original  but not the
revised requirements, and such lack of compliance renders the SIP as a
whole substantially inadequate to assure the attainment and maintenance
of the National Ambient Air Quality Standards (NAAQS)  under the revised
requirements, an Individual analysis of the appropriateness of grand-
fathering under the four-part test established 1n the  Sierra Club case
discussed above under Legal Background oust be conducted.  If the analysis
concludes that grandfathering of the particular SIP revision 1s appropriate,
action may be based on the original requirements.  In  such an event,
however, additional actions may be necessary depending upon the nature of
the SIP revision being considered.

         a.  For SIP revisions (e.g., variances and Interim emission
limits) which would have an effective lifetime of 2 years or less from
the date of EPA final rulemaking, no additional action will generally be
taken, because of the length of time 1t would take for the State and EPA
to change the action to comport with the revised requirements.  Any
subsequent requests for the continuation of grandfathering (i.e., beyond
the effective lifetime of the original SIP revision) should be rejected.

         b.  For SIP revisions which would otherwise have an effective
lifetime of greater than 2 years, other rulemaking actions will be necessary
to assure that the SIP ultimately comports with the revised requirements.

              (1)  Elements 1n plans that have been "conditionally"
approved will be approved subject to the further condition that the
plan as a whole be corrected as necessary to assure full compliance  with
all requirements of the Clean Air Act.  For a discussion of EPA's original
policy on conditional approval, see 44 FR 20372 (April 4, 1979), 44  FR
38583 (July 2, 1979) and 44 FR 67182 (November 23, 1979).

              (11)  Elements in fully approved plans will be approved with
the simultaneous issuance of a CAA Section 110(a)(2)(H) notice of deficiency.

     Under either of these circumstances, the approval of the particular  SIP
revision should contain a sunset provision that terminates the effectiveness
of the approval within a predetermined period, generally 2 years.  In addi-
tion, the Region should make an affirmative effort to  assure that the
timeframe (generally 2 years) for complete, fully adopted State rulemaking
action involved with either the notice of SIP deficiency or conditional
approval is strictly adhered to.  If a State does not  adhere to this
schedule, the Region will initiate appropriate steps to ensure ultimate
compliance, e.g., performance-based grant actions, sanctions, and EPA
promulgations.

-------
      7.  Certain classes of changes are only indirectly related to
attainment and maintenance of national ambient air quality standards.
Such changes may involve PSD/NSR rules, stack height provisions, permit
fees and similar generic requirements which are clearly not intended to
be permanently grandfathered.  Changes of this type are to be handled as
described in paragraph 6 above.

C.  All new requirements issued by OAR or OGC will address their impact
on SIP revisions previously approved or pending, and SIP revisions  to be
submitted in the future.  New requirements will contain provisions  incor-
porating the general grandfathering guidance (paragraph A above) whenever
appropriate and possible.  Generally, changes In EPA's requirements will
have effective dates which are 60 days from the date of signature to allow
States to adjust their pending rulemaking actions before they are finally
adopted and submitted.  Longer effective dates should be used when  the
changed requirements affect fundamental, long-term air quality strategy
development tools and the requirements of the change are resource inten-
sive.

D.  SIP revisions framed to meet major requirements currently being recon-
sidered by EPA or currently under litigation should proceed and will not
be held back from rulemaking until the issues are decided.  SIP revisions
approved under these circumstances will be addressed, if necessary, as
described in paragraph B(6)(b) above for revised EPA SIP requirements and
by paragraph 8(2) for requirements being changed because of court decisions,

E.  Staff personnel making grandfathering decisions should coordinate with
Offices of Regional Counsel or OGC on application of this guidance  as appro-
priate, especially in connection with the analysis required under paragraph
8(6) above.

F.  Each Federal Register notice for action on a SIP revision will  state
the rationale for wnich requirements were applied.

-------
            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
               Office  of  Air  Quality  Planning  and  Standards
               Research Triangle  Park,  North Carolina   27711
DATE
          JMN12 '380

SUBJECT:   Information  Required  in Federal Register Packages
FROM:   Richard  G.  Rhoads,  Director.
       Control  Programs  Development  Division  (MD-15)

  TO;   Director, Air and Hazardous Materials  Division,  Regions  I-V, and VII

            An  April  29, 1980  memo from  Halt  Barber asked  that  all SIP
       revisions dealing with  SO- relaxations  be  submitted through the "special
       action"  procedures.   "  e  purpose  of  that request was  to  allow the Agency
       to more  carefully scrutinize  the  nature of each  relaxation and its
       multi-regional  impact.  A copy of this  memo is attached.

            In  order to  allow  us to  assess  the relative impact  of each S0?
       relaxation  more accurately,  I ask that the following  information be
       included in each  action memo.

            1.   Plant name and location.

            2.   Size of  the facility (including  the number of boilers) expressed
       in megawatts or Btu/hour  firing capacity  (design).

            3.   Amount,  type,  and  sulfur content  of actual fuel  combusted
       during the  previous year.

            4.   The revised SOp  emission limit,  the existing SIP limit,
       and the corresponding averaging times  for  these  limits.
            5.
                  The "paper" as well as actual  increase or decrease  in  emissions,
            The calculations involved in determining the increase of emissions
       should assume status quo operating conditions of the source.   There  is
       no need to consider increased or decreased utilization of the source's
       capacity.

            In addition, because of the ongoing development of policy on the
       issue of good engineering practice (GEP) stack height, all Federal
       Register packages addressing the stack height issue should be suomitted
       through the "special action" procedures.  Furthermore, I ask that
       your staff infonn Bob Schell (629-5365) of my staff of any Federal
       Register packages involving stack -height increases which are currently
       under development and projected to be forwarded for 14-day review
       within the next few weeks.

-------
     The following  information should be included  in each action memo
which involves increased stack height.

     1.  Height of  the old stack as well as that of the new.

     2.  If GEP stack height is determined, the methodo.logy used to
determine it, and the stack height considered to be GEP.

     Your cooperation and assistance in dealing with these sensitive
issues are greatly appreciated.

Attachment
cc:  David Hawkins
     Walt Barber
     Mike Oames
     Ed Reich

-------
REFERENCES FOR SECTION 7.4

-------
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'^>-
       r     -   UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
       '       '                    USHINGTON.D.C. 20*60
                                                                          OFF1CI OF
                                                                         A.KD I
SUBJECT:   Improving New  Source Review  (NSR)  Implementation

FRC*:      J.  Craig Potter
           Assistant Administrator
             for Air and  Radiation  (ANR-443).

TO:        Recio.-cl Administrator
           Recicns I-X
                  1956,  ;  established a special  task  force to address
 growing concerns  about  the consistency and  certainty of permits  issued
 _-.ier tr.e Clear. Air Act's prevention of significant  deterioration and
 r.cnsttainment  area NSR  programs.   Sased on  the  findings and  reccnnnen cat ions
 cf tne tas*  force,  I am today establishing  certain program initiatives
 ces:cr;ec zc  irprove the timeliness,  'certainty,  and effectiveness of these


      A crest ceal of effort will  be  required  to overcome  the probleros
 -T.icr. have developed, cot it is my belief that  these problems", with your
 f.ll cooperation  anc" assistance,  can be resolved so  that  these essential
 =1: management procrajts can fulfill  their intended roles.  Therefore, I
 _rce eecr. cf you  to provide the maximum priority and resource cosTraitroents
 svaiiarle to tne  tas<.

      The o.tstar.cinc concern we now  face in these programs is inaoecuate
 irplementaticn.   l^ne Office cf Air and Radiation intends  to  apply its
 resource ccroiimer.ts so as to enhance its ability to provide technical
 support a,nd  gjicance, training, workshops,  auditing,  and  enforcement
 s.ppcrt to the Regions  and delegated programs.   The  Regional Offices roast
 ~.s
-------
                                  - 2 -
     The fcLlo-inc is £ list cf the specific program initiatives I am
-.ererv institutinc re enne aocct improvements in NS?. implementation:

     Tracnnc Perr.it Actions—Initially and until sue.-, time as permit
quality car. D* ess.red, : a.7. requiring that-eecr. Regional Office establish
("if net already in place) a program to ensure a timely and comprehensive
review cf all State and local agency-issued major source permits and
certain rinor source perr^s.  implementation cf the program will be made
pert of the Regional Office ^ansgsnent System and will require the "real
time" exchange and"review of ir.formation oetween the Regional Off ice'and
the State and local agencies when a key milestone is reached during the
permitting process.

     Effective communication between the permitting agency and the Regional
Office is essential to improving program implementation.  Therefore, the
Regional Offices •-•in need tc ensure'that State and local permitting
agencies fellow certain notification procedures such as:

     -  Notify the Regional Office and other affected parties (e.g., the
Federal land ranager if Class I areas are ;jsactec), within a reasonable
time, of tne receipt cf a new major source penrdt application.  This can
ts
-------
Planr.inc zz£ Star.dares  (CAT: PS) tc start »cr< en tne development cf a
~er~.it review checklist fcr use cy tne Regional Office curing the public
ccmmer.t t>erio-d.  7r>e cnecvlist will alsc be useful tc State and local
acencies" as a tocl for  self-audit and to understand what the Environmental
Protection £oe-.cv  (EPA) emcnasnes when reviewing a proposed permit.

     -  Review any response tc comments and the final permit to ensure
t.-.at any outstanding concerns have been resolved satisfactorily.

     -  Review tne-permit to operate to ensure that it is consistent with
the preconstruction permit.

     -  Take prompt and appropriate action to deter the issuance or use of
permits wnich fail to meet minimal Federal requirements.  I have directed
OAD.PS to work with tne Office of General Counsel and the Office of Enforce-
Tent and Compliance Monitoring to develop guidance for the Regional
C-ffices on the appropriate legal 'mechanisms and procedures for ha,nciing
fi-ficisnt permit actions.

     -  Tc the extent practicable, prior to permit issuance, review
potential minor permit actions which exempt an otherwise major source or
-edification from a major review  (e.g.,"synthetic" minor sources, major
sources netting out cf  review, and 99.9 or 249.9 tons per year sources).

     Tne rest critical element of these initiatives is the Regional Office
review cf proposed permit actions during the public comment period.  The
"":' 1=35 national air audit showed widespread serious permit deficiencies,
many ef which could have oeen corrected without interfering with State
and local agency processing if dealt with by E?A during the public
ccmrent period.  By uniformly reviewing all major source permit actions
during the comment period, EPA is able to address deficient reviews or
permits oefcre tne final permit is issued.  This net only promotes more
ccnsistency in tne permitting process among the States, but also provides
tne .-.igr.est degree cf certainty to the applicant that the permit will not
-* cnallengec by EPA at a later date.  Moreover, if the permit is not
reviewed and comnsnted  en prior to issuance, the possibility of successfully
challenging the action  is greatly diminished, as is the opportunity to
improve the enforceability cf the permit.

     5ACT Determinaticns—Cf all  tne KSR processes, BACT (and LAER)
determinations are pernaps the most misunderstood'and the least correctly
appii'.4,.  The BACT alternatives,  if presented by the applicant at all,
are often poorly documented or biased to achieve the decision the applicant
desires.

     To bring consistency to the BACT process, I have authorized OAQPS  to
proceed with developing specific  guidance on the use cf the "top-down'
accroach to 5ACT.  The fi
fcr a similar or icentica
t-.at t.-.is level of centre
st step in this approach is to Determine/  for
the emission source in cu stion, the most stringent control available
 source or source category.  If it can be  shown
 is technically or economically infeasible for

-------
                                   -  4  -
t~.e source :.r. question,  tner.  the  next  mast  stringent  level cf control is
•determined and sizu.larly evaluated.  This pro-cess  continues until tne
S-.rr level under consideration  cannot  be eliminated by ary substantial or
u-.ique technical, envircn.-e-.tal,  or  econo-r.ic  objections.   Tnus,  tne
"tsp—CD-T." apprcecr. sr.if ts.tne  burden  cf proof  to  the applicant, to justify
w.-.y tne proposed source  is  unable to apply  the  oest technology available."
:: also differs frcr. ctner  processes in that  it requires  the applicant to
analyze a control technology  only if the applicant 'opposes that level of
control; the other processes  required  a full  analysis of  all possible
types and levels of. control above the  baseline  case.

     The "top-down" approach  is essentially already required for municipal
waste combustors pursuant to  the  June  22, 1987,  Administrator's reraand to
Region IX of the S-Power S.J-.CT decision and  the  OA3PS  June 26, 1967,
"Operational Guidance on Control  Technology for New end Modified Municipal
waste Ccrruxstors  (MWC's)."  It  is also currently being successfully
i~le,Tier.ted by rany perr.it ting  agencies and some cf tne Regional Offices
for all sources.  I rave therefore determined that it should be adopted
across tne board.

     In tne interrr., wr.il e  OAQPS  develops specific guidance on the
"top-dovr." process, I a,- requesting  the Regional Office .to apply it to
t.-.eir 5AOT ceterr.inations and to  strongly encourage State and local
agencies to do likewise.  Moreover,  when a  State agency proposes as 3ACT
a  level cf control tnst  appears to be  inconsistent with the "tec—cown"
concept, such as  failure to adequately consider the more  stringent control
options, tne Regional Office  is to provide  comment to that agency,  x
final =\CT deterTsination -r.icn  still fails  to reflect adequate consideration
:£ tne factors that would have  been  relevant  using a  "top^dovn" type cf
analysis snail be considered  deficient by EPA.

     Trair.inc—Nc ferial training workshops specific  to NSH have been
-eld since IrEO.  flany  State  and  local agencies, as well  as tne Regional
::::ces, nave experienced c nigh  rate  of~NSS  personnel turnover since.
t.-.en.  Many cf the casic proclere that are  occurring  in NSR inpieirentation
car. b-e tracec tc  the lac*, r:  comprehensive, continuing training for new
Recicnal -Office and State agency*personnel.

     To rectify this situation, in ry  1988, OAQPS  will work-on developing
-atenals for a ccr.prenensive training program  in  the form cf. Regional
wcr-o'  .j*- State  agencies.  The NSR experts from
Headquarters or KS?.  e>o • •.- from  other Regions  will  be available to assist.

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      In  addition,  Regional  Offices  snocic  reserve  tne  funds  necessary* tc
send  at  least  one  EPA  staff representative to  the  KSR  workshops (for ZPA
rr.ly;  neld  semiannually  at  Denver,  Colorado (February),  and  Soutnern Pines,
Ncrtr  Caroline (July).   Attendance  at  tnese wcrnsncps  plays  a  viral  rcle
in  
-------
VvEPA
United States       Office of Air Quality
tEnvironmental Protection  Planning and Standards
Agency         Researcn Triangle Park NC 27711
                                        EPA-450 4-87-007
                                        May 1987
             Air
Ambient Monitoring
Guidelines for
Prevention of
Significant
Deterioration (PSD)
              RADIAN LIBRARY
              RESEARCH TRIANGLE PARK, NC

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                             NOV  24 TS56
MEMORANDUM
SUBJECT:  Need for A Short-term Best Available Control  Technology  (BACT)
          Analysis for the Proposed William A. Zimmer Power Plant

FROM:     Gerald A. Emison, Director Original Signed By
          Office of Air Quality Planning and Standards  (MD-10)

TO:       David Kee, Director
          Air Management Division, Region V (5AR-26)

     This is in response to your November 17, 1986, memorandum,  in which
you requested comment on Region V's belief that prevention of significant
deterioration (PSD) permits must contain short-term emission limits to
ensure protection of the applicable national ambient  air quality standards
(NAAQS) and PSD increments.  I concur with your position and emphasize to
you that this position reflects our current national  policy.  Consequently,
I recommend that you continue to identify this apparent deficiency to  the
Ohio Environmental Protection Agency and seek correction of the  draft
permit for the William A. Zimmer Power Plant.

     The PSD regulations clearly require that the  application of BACT
conform with any applicable standard of performance under 40 CFR Part  60
at a minimum.  However, this should not be taken to supersede any  additional
limitations as needed to enable the source to demonstrate compliance with
the NAAQS and PSD Increments.  In the case of sulfur  dioxide (SO?), source
compliance with the 30-day rolling average emission limit under  subpart Da
does not adequately demonstrate compliance with the short-term NAAQS and
PSD increments.  Consequently, enforceable limits  pertaining to  the
performance of the flue gas desulfurization system on a short-term basis
must also be established.  Note, however, that the short-term limits can
result from either BACT analyses or the need to protect air quality.
Therefore, the short-term Unit could be more stringent than the BACT
limit.

-------
     I recognize that the sulfur variability  issue  tends  to  complicate
tne setting of short-term SOj emission  limits,  but  such limits  must  be
defined nevertheless.  Continuous emission  monitoring data from comparable
sources can be used in order to estimate worst-case short-term  $03
emissions that could occur at the plant. The modeling techniques  used to
determine compliance with the short-term NAAQS  and  increments should
employ the enforceable short-term SO? emission  limits which  the permitting
agency establishes.
                                                                                 i

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              United States
              Environmental Protection
              Agency
              Office of Air Quality
              Planning and Standards
              Research Triangle Park NC 27711
EPA-450 4-80-031
November 1 980
              Air
r/EPA
Workbook for  Estimating
Visibility Impairment
                               ENVIRONMENTAL PROTECTION
                                    AGENCY

                                 FEB 13 1981
                                UBRMtt SERVES OffiCE

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              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                    Office of Air Quality Planning and Standards
                   Research Triangle Park. North Carolina 27711
                              JUL 5   1988
MEMORANDUM

Subject:  Alp Quality Analysis for Prevention of
          Significant Deterioration (PSD]
From:     Gerald A. Emlson, Dlrectc  _
          Office of Air Quality PTanning and Standards   (MD-10)

To:       Thomas J. Maslany, Director
          Air Management Division  (3AMOO)


     Your memorandum of May 9, 1988,  pointed out that two different procedures
are currently being used by the Regional Offices In certain PSD permit analyses.
The Inconsistency Involves the question of how to Interpret dispersion modeling
results to determine whether a source will  cause -or contribute to a new or
existing violation of a national ambient air quality standard (NAAQS) or PSD
Increment.  This memorandum serves to resolve the Inconsistency by reaffirming
previous Office of A1r Quality Planning and Standards guidance provided 1n a
December 1980 policy memorandum (attached).

     As you know, the regulations for PSD stipulate that approval to construct
cannot be granted to a proposed new major source or major modification 1f 1t
would cause or contribute to a NAAQS or Increment violation.  Historically, the
Environmental Protection Agency's (EPA's) position has  been that a PSD source
will not be considered to cause or contribute to a predicted NAAQS or Increment
violation 1f the source's estimated air quality Impact  Is Insignificant (I.e.,
at or below defined de mlnlmls levels).  In recent years, two approaches have
been used to determine 1f a source would "significantly" (40 CFR 51.165(b)
defines significant) cause or contribute to a violation. The first 1s where a
proposed source would automatically be considered to cause or contribute to any
modeled violation that would occur within Its Impact area.  In this approach,
the source's Impact 1s modeled and a closed circle Is drawn around the source,
with a radius equal to the farthest distance from the source at which a
significant Impact 1s projected.  If, upon consideration of both proposed and
existing emissions contributions, modeling predicts a violation of either a
NAAQS or an Increment anywhere within this Impact area, the source (as proposed)
would not be granted a permit.  The permit would be denied, even If the source's
1mpa<** was not significant at the predicted site of the violation during the
violation period.  You have Indicated that this Is the  approach you currently
use.

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                                   -2-


     The second approach similarly projects air quality concentrations
throughout the proposed source's Impact area, but does not automatically
assume that the proposed source would cause.or contribute to a predicted NAAQS
or Increment violation.  Instead, the analysis 1s carried one step further in
the event that a modeled violation 1s predicted.   The additional  step deter-
mines whether the emissions from the proposed source will have a significant
ambient Impact at the point of the modeled NAAQS or Increment violation when
the violation Is predicted to occur.? If It can be demonstrated that the
proposed source's Impact Is not "significant" In a spatial  and temporal sense,
then the source may receive a PSO permit.  This approach 1s currently being
used by Region V and several other Regional Offices,  and 1s the approach that
you recomnend as the standard approach for completing the PSO air quality
analysis.

     In discussing this matter with members of my staff from the Source
Receptor Analysis Branch (SRAB) and the Noncrlterla Pollutant Programs Branch
(NPPB), 1t appears that different guidance has been provided, resulting 1n the
two separate approaches Just summarized.  He have examined  the history and
precedents which have been set concerning this Issue.  I also understand that
this Issue was discussed extensively at the Nay 17-20, 1988 Regional  Office/
State Modelers Workshop, and that a consensus favored the approach being used
by Region V and several other Regions.  Based on this Input, as well  as your
own recommendation, I believe the most appropriate course of action to follow
1s the second approach which considers the significant Impact of the source 1n
a way that Is spatially and temporally consistent with the  predicted  violations.

     By following the second approach, three possible outcomes could  occur:

     (a)  First, dispersion modeling may show that no violation of a  NAAQS or
PSO Increment will occur In the Impact area of the proposed source.   In this
case, a permit may be Issued and no further action 1s required.

     (b)  Second, a modeled violation of a NAAQS or PSO Increment may be
predicted within the Impact area, but, upon further analysis, It  1s determined
that the proposed source will not have a significant Impact (I.e., will not be
above de minlmis levels) at the point and time of the modeled violation.
When this occurs, the proposed source may be Issued a permit (even when a new
violation would result from Its Insignificant Impact), but the State must
also take the appropriate steps to substantiate the NAAQS or Increment viola-
tion and begin to correct It through the State Implementation plan (SIP).
The EPA Regional Offices' role In this process should be to establish with
the State agency a timetable for further analysis and/or corrective action
leading to a SIP revision, where necessary.  Additionally,  the Regional
Office should seriously consider a notice of SIP deficiency, especially If
the State does not provide a schedule 1n a timely manner.

     (c)  Finally, the analysis may predict that a NAAQS or Increment
violation will occur In the Impact area and that the proposed source will
have a significant Impact on the violation.  Accordingly, the proposed source
1s considered to cause, or contribute to, the violation and cannot be Issued
a permit without  further control or offsets.  For a new or existing NAAQS

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                                     -3-
vlolation, offsets sufficient to compensate for the source's significant
impact musfoe obtained pursuant to an approved State offset program consis-
tent with SIP requirements under 40 CFR 51.165(b).   Where the source is
contributing to an existing violation, the required offsets may not correct
the violation.  Such existing violations must be addressed  in the same manner
as described in (b) above.  However, for any Increment violation (new or
existing) for which the proposed source has a significant impact,  the permit
should not be approved unless the .Increment violation is  corrected prior
to operation of the proposed source (see 43 FR p.26401, June 19,  1978;  and
45 FR p.52678, August 7, 1980).

     Your memorandum also states that other air quality analysis  issues  exist
within the NSR program which need consistent national  guidance.   You  recom-
mend a more coordinated effort between SRAB and NPPB to review outstanding NSR
issues.  We agree; however, rather than establishing a formal  work  group as you
propose, we are optimistic that the formal participation  of representatives
of the NSR program in the Modeling Clearinghouse will  help  resolve  coordination
problems.  Earlier In the year,  the Modeling Clearinghouse  was officially
expanded to Include representation from the NPPB to coordinate PSD/NSR  Issues
which have a modeling component.

     I trust that this is responsive to the concerns which  you have raised.
By copy of this memorandum, we are also responding  to a Region V  request
for clarification on the same Issue (memorandum from Steve  Rothblatt to
Joe Tikvart/Ed Li 111s, dated February 18, 1988).

     Should you have any further questions concerning this  response,  please
feel free to contact Gary McCutchen, Chief, New Source Review Section, at
FTS 629-5592.

Attachment

cc:  Air Division Directors, Regions I-X
     Air Branch Chiefs, Regions  I-X
     0. Clay
     J. Calcagnl
     J. Tikvart
     E. Lillis
     G. McCutchen
     0. deRoeck

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REFER:NCES FOR SECTION 7.5

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43814
Padua!  Rayatat / VoL 51. No. 233 / Thursday. December 4. 198ft /  Notices
ENVIRONMENTAL PROTECTION
AGENCY

(FRL-30H-ar

Emission* Trading PoNcy Statement;
General Principles for Creation,
Banking and Use of Emiaalon
Reduction Credits

AGENCY: Environmental Protection
Agency.
ACTION: Final policy  statement and
accompanying technical issues
document.	

SUMMANV: This Policy Statement
replaces the original bubble policy (44
FR 71779. December 11.1979) and makes
final revisions in an Interim Emissions
Trading Policy which was published
April 7.1982 (47 FR 15076) and on which
further comments were requested
August 31.1983 (48 FR 39580).
  The policy describes emissions
trading and sets out general principles
EPA will use to evaluate emission*
trades under the Clean Air Act and
applicable federal regulations.
Emissions trading includes bubbles;
netting, and offsets, as well as banking.
(storage) oiamitsian redaction- eredHe>
(ERCs) for future-use. These alternatives:
do not alter overall air quality
requirements: they give states and
industry more flexibility to-meet those*
requirements. EPA endorses emissions
trading and encourage* its seund use by
states and industry to BBS*meet tto •
goals of the Clean Air Act more quickly
and inexpensively.
   However. EPA also racegpsses tftat -
without strict accounting practices and
other safeguards-, emissions tradesjaey
cause poieetiaf eitvirenmealaihern. _
Accordingly, this pottcy provide* ant*-
                                       explicit fjidaana on baselines aaeV
                                       raUudtesUiQceaviroameiital  ..
                                       equivalence and environmental
                                       progress. It includes numerous
                                       tightening* and clarifications meant to
                                       assure the future environmental integrity
                                       of bubbles and other trading
                                       transactions.
                                        Among other general steps, the pottey
                                       states that the lower of actual or
                                       allowable emissions must usually be
                                       used as the baseline for emissions
                                       trades. Divergences from this baseline
                                       will be allowed only where the state or
                                       applicant shows that any potential
                                       increase in actual emissions will not
                                       jeopardize National Ambient Air
                                       Quality Standards (NAAQS). PSD
                                       increments or visibility protection
                                        General showings to this effect way
                                       be made only by establishing tha*
                                       allowable values were dearly
                                       incorporated in or assumed by an
                                       approved demonstration of eJUinaea*'
                                       or maintenance. Specific shovaagcat
                                       this effect may be made only in n*nvw
                                       circumstance* described- in the .
                                       accompanying Technical Issues
                                       Document.
                                        Other general matter* addressed' a**
                                       siguifiiaady Uglified by this poliejr
                                       •'ir'nrlr mniirtmaatt for ail i|imlsai
                                       mod*a%aada»p*3vable state
                                       bubble rates, additional enJoreegaant
                                       safeguards; and additional safeguards
                                       related to bubbles involving pollutants-
                                       u'sfed* regulated1 ea> proposed to- bar _
                                       lavsiasaoVMndar Section MZof thesAe* -
                                        This policy aiso-sate forta new* tfgfecer
                                       reajhsossass fits babbles in primes^
                                       nsanffciasMnliirHss wnica-requJee aa<
                                       lack approved demonstrations that
                                       national ambient standards for healthy
                                                            aJtawable-or-RACT-allawaDle emusiom
                                                            baselines in these areas, use of put
                                                            siMsdowns, curtailments or other
                                                            redactions which occurred before
                                                            application for credit it essentially
                                                            eliminated, and a further reduction of at
                                                            least 20 percent beyond the baseline is
                                                            required. Broadly speaking, sources may
                                                            seeare bubble credit in these areas only
                                                            if claimed reductions meet these
                                                            baseline and further reduction
                                                            requirements: were reasonably,
                                                            objectively elicited by the oppor'unny to
                                                            trade; and are accompanied by state
                                                            assurances that the trade is consistent
                                                            with the state's efforts to attain the
                                                            ambient air quality standard. EPA will
                                                            approve bubbles which meet these
                                                            requirements because they are
                                                            consistent with the attainment needs of
                                                            these areas and will yield a net air
                                                            quality benefit Such bubbles can
                                                            produce economic savings and
                                                            environmental improvement at the same
                                                            DIM.
                                                              Tfte policy announced today does not
                                                            coastitute final action of the Agency
                                                            within the meaning of section 307(b) of
                                                            &• Clean Air Act and therefore is not
                                                            fudtaaily reviewable. Rather, it
                                                            establishes general guidance «n
                                                            aoarovabi* voluntary trades. EPA will
                                                            implement this guidance in later
                                                            rulemakmg actions that will be judically
                                                            reviewable. Applicants for emissions
                                                            finds* ranain free, following publication
                                                            of today* notice, to advance the
                                                            appropriateness of different trading
                                                            (aajLurementa in the context of
                                                            nawnaking actions on their individual
                                                            trades.
                                               Kmiaal el ectual-StP
                                                                     I OATH This Policy Statement
                                                             L effective December 4.1988.

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                  Federal  Register / Vol. 51. No. 233 /  Thursday. December 4. 1966  /  Notices
                                                                      43815
PON FUMTHf* Wf ONMAWON CONTACT:
Inquiries regarding the general
implementation of this policy may be
directed to: Barry Gilbert. Office of Air
Quality Planning' and Standards |MD-
15). Research Triangle Park.  NC 27711.
(919) 541-5516.
  Inquiries regarding specific
applications to use this policy may be
directed to the appropriate EPA
Regional Office (see Appendix A of the
Technical Issues Document)
  Inquiries regarding the development
and basis of this policy may be directed
to: Barry Elman. Regulatory Reform
Staff (PM-223). U.S. Environmental
Protection Agency. 401 M Street SW .
Washington. DC 20480. (202) 382-2727
 •MMUMIMTAHY mPOftMATttN: Under
 Executive Order 12291. EPA must judge
 whether this action is "major" and
 therefore subject to the requirement of a
 Regulatory Impact Analysis. This action
 is not major because it establishes
 policies, as opposed to regulations, and
 can substantially reduce the costs of
 complying with the Clean Air Act

   This Policy Statement was submitted
 to the Office of Management and Budget
 for review. Any comments from OMB to
 EPA are available for public inspection
 in Docket G-B1-2. Pursuant to U.S.C
 605(b). I hereby certify that this action
 will not have a significant economic
 impact on a substantial number of small
 entities. As a policy designed to allow
 firms flexibility to meet previously
 established regulatory requirements, it
 will impose no burdens on either smalt
 or large entities.
   The contents of today's preamble are
 indicated in the following outline. The
 outline is followed by the preamble
 itself, and then by the Policy Statement
 dnd accompanying Technical Issues
 Document.
 Table of Contents: Preamble
 I. Introduction
 II. Major Issues
   A. Baselines
     t. Determining Baseline*— General
     Guidance
     2. Comments on B«»eliiM* in
     Nonattamment  Areas with Approved
     Demonstrations of Attainment
     3. EPA's Resolutions on Baseline* in
     Nonattainment  Areas with Approved
     Demonstrations of Attainment
   B. Baseline and Other Requirements for
     Bubbles in Primary Nonattainment Areas
     Which Require  But Lack Approved
     Demonstrations of Attainment
     1. EPA s Resolutions Regarding Saseiin*
     and Other Requirements
      a. Specific "Progress ' Requirements
      b. Additional "Progress" Requirement:
     State Assurances
     2. Basic Rationale
   J. Additional Consideration* Retarding
   the Benefits of Bubbles
lit Additional Policy Changes and
   Clarifications
  A. Cenenc Bubble Rules
   1 Substantive Progress Requirements
   2. Procedural Requirements
  B Bubbles Involving Hazardous or Toxic
   Air Pollutants
  C Banking Emission Reduction Credits
   (ERCsl
  0 OBCRS Protection* and Double-Counting
  E Improved Modeling and Of Minima
   Requirements
   \.DtMinimit Levels
   2. Modeling Requirements
  F Enforcement laaues

PREAMBLE—EMISSIONS TRADING
POLICY STATEMENT
I. Introduction
  Today's policy makes final the
Agency's prior guidance on general
principles lot creating, storing (banking)
and using emission reduction credits in
trading action* under the Clean Air Act
This preamble responds to written
commer' - EPA received on major iaaue*
raised b> us proposed emission trading.
policy statement (47 FR15076. April?.
1982) and subsequent request for further
comment (48 FY 39580. August 31.1983).
It also explain* the Agency's principal
decisions on these issue*.
  Today's notice ia the primacy *oaceei
of EPA guidance on existingfSourca
bubbles, stale generic bubble rule*, and
emission reduction banking. It replaces..
the original bubble policy (44 FR 71779.
December 11.1979) aa well a* the
proposed emissions trading policy
statement which was effective April 7.
1982 as interim guidance. The notice
addresses how emission reduction
credits (ERCs)—the currency of
trading—may be used for bubble*, aa
well aa for netting or offsets. Netting
and offsets are part of emission* trading.
but are governed by EPA and state
regulations for new source review.1
  Nothmg in today's notice alters EPA
new source review requirements or
exempts owners or operator* of
stationary source* from compliance with
applicable preconstruction permit
regulation* in accord with 40 CFR 31.18.
51.24. 31.307. 52.21. 3X24. 5Z27 and 52.28.
Interested parties should however. b*
aware that bubble trades an not subject
to preconstruction review or regulation*
  1 SM. *.f- 40 CFR SI IS. 31.24. S1JO7.1121. f 1V,
 U.Z7 ind U.3S.
  On November T.1988. EPA rectructund CFR Pen
 SI and renumbered nuay of that Pairs MCMM (91
 FR 4O8MU Becauea matt readen will be more
 familiar with pnor deiignanona. today'i nottce
 contain* attnon* tMMd on the orianaanoa of Part
 Si •• it (aiaied before thi* rtttraetunna. Intaneied
 ptrtiit may u*a Appendix F o( today'* Teduucat
 IIIUM Document to convert today'i Pin SI cHetioa*
 10 ih« comipondmf new onat.
where the** trade* do not involve
construction, reconstruction, or
modification or a source within the
meaning of those term* in the
regulations listed above.
  The policy announced today does
constitute final action of the Agency
within the meaning of section 307{b) of
the Clean Air Act and therefore i* not
(udidally reviewable. Rather, it
establishes general guidance for
reviewing and approving voluntarily
submitted trade*. EPA will implement
this guidance in later rulemalung actions
that will be judicially reviewable.
Applicants for emissions trades remain
free, following publication of today's
notice, to advance the appropriateness
of different trading requirements in the
context  of rulemaking actions on their
individual trade*.
  Under today'* notice. EPA continues
to authorize use of bubble*, hanks, and
generic bubble rule* in all areas of the
country, and provides for the fair and
prompt processing  of bubble
application* which have been pending
before EPA under the 1982 policy.
However, baaed on experience under
the 1982 policy, and in order to ensure
the environmental integrity  of future-
emnsion* trade*, today'* notice
significantly ttjhrame. requirement*
applicable to certain trading actions.
particularly exi*ting-*ourc* bubbles in
primary netuttainment area* which
require but lack demonstrations of
attainment It also clarifies approval
criteria  in waya which- should make
review end approval of
ravironmentaily-souad trades more
rapid and predictable. Among other
safeguard* or safeguarding
clarification*, it requires that:
  • Bubble* may no longer  result in any
increase in applicable net baseline
amiaaion* in any are*, whether
attainment or nonattainment except
under stringent condition* which assure
that ambient equivalence will
neverthelee* be achieved:*
  • Baseline* for source* participating
in a bubble in any  area must take into
account all time factors relevant to
total emiaaiona (i.*» emission rat*.
capacity utilization, and hours of
operation) in order to provide an
accurate accounting of emissions before
and after the trade;
  * This chanfe ooatttute* • neniflcantly more
 Mra*BK definition of what may be canadend *
 bubble under the BBIMHB* Tradln* Policy. Specific
 ambient tetu wiuca anal be BMt to qualify for tn
 ticapoon from due netncooa can t* found in iht
 Teohiucai lawea Document. Secnon 1-fl.l.c Action*
 wmcfc may no looter be Meted M bubble* uoccr
 today * neoce mmt be precMaed under general EPA
 criteria applicable to SIP ravuran*.

-------
4MCW
/ Vol. ».-l%«»-A-TfafiJhr. December 4\ T9W/  Notice*
  • Bnitfcetf »
aims needtaf but iado*f spnremd
demonstrmtioae of ana*wnen< meet use
the lowest^-ectoeu^Sa^eitaevsWe-or-
RACT-aliowable emission* baseline. a«
described below. Tor each source
involved in the trade
  • Bubbles in primary nonaltainment
are** needing but lacking approved
demonstration* must contribute to
progress toward attainment by
providing a 20% net reduction in
emission* remaining after application of
the baseline above to all sources
involved in toe trade or. if the bubble is
being processed under a state generic
rule, the greater of a 20% aet reduction
or toe percent reduction which would be
required from all controllable stationary
sources in that area (e-g., taking into
account expected mobile source
reductions and disregarding area-source
contributions) in order to achieve
attainment
  • Bubbles in attainment areas and
nonattainrnent areas with approved
demonstrations must us* the lower of
actual or allowable values for each of
the three basetine components, unless
allowable values higher than
corresponding actual values are dearly
used or reflected in the demonstration or
otherwise shown not to jeopardize
ambient standards. PSD increments or
visibility;
  •lam areas, emission reductions
must be made state-enforeeaWe in order
to qualify as ERCs and be deposited m>
an EPA-spprevebfe be trie
  • In aft area* bubbles- masf meet
more stringent tests for ambient
equivalence, incndfnf additional
ambient significance levels, more
protective air quality nodding
requirements, and mote conserve live-
definitions of de arin/aus trade*
   • In all anas, the total of any
incidental emissions of hazardous or
potentially hazardous air pottntauits
associated with a criteria. potinUnt in a
bubble trade roust remain eqael or be
decreased, whether suefe hazardous
pollutants have been regulated.
proposed for regulation, listed, or the
subject of a notice-of-ioaaat-lD-uat under
Clean Air Act 112;
   • States must provide assurances to
EPA that bubbles submitted for EPA
approval in primary nonattainment
areas needing but lacking approved
demonstrations are consistent with the
state's SIP-planning and attainment
objectives. For generic rules, the state
must make certain assurances in
conjunction wUh its subtnittai of th»
generic rule to EPA. and certain
additional assurances with the state's
proposed and final approval of each
individual bubble under that rule:
      • Bobbles in- such primary
    nonattainrnent areas may not use credit.
    from reductions made before application
    to bank or trade such credit:
      • Where- sources m such- areas seek to
    bank credits in the future, "application
    to bank." for purpose* of evaluating
    credit* for use in bubbles, means the
    time of filing an application to make the
    proposed credits state-enforceable
    through or concurrent with us* of- a
    formal or informal banking mechanism;
      • Bubbles must not impede
    compliance or enforcement (e.g., the
    policy states that compliance extensions
    may no longer be granted1 under generic
    rules in any nonattainmsnt area, and
    that bubble applications do not perse
    suspend underlying SIP limits or defer
    source obligations te achieve those
    limits )t
      • Generic rules' in aft areas wiH  be
    subject to increased EPA oversight;
    including EM participation in the
    state's public notice and comment
    process prior to state approve! of*
    indhrfcfcai trabbfes. subsequent revfew*
    of individual generic approvals, and
    isviews or uregenetBr HBpv0mentBoeii'
    of the rules msunehea. in order to
    assure (feat approved rate* are beanj.
    properly implemented! and
      * EPA uv state nooces or \
    and final bubble approvals, in a/Fanes,
    mast dearfy indicate any changes" in
    actual as well as aJnwa&fe emissions.at
    all sources involved in. the bobble. SQ
    the ambient effects of these trades may.;
    be known.
    These and.other changes announced
    today will generally be applied to all SV
    revision bubble* and state generic
    bubble rules, that have not been
    approved by EPA as of this date.*
      Oe, Juris 25. ISM the Supreme Conit
    unanimously ruled that EPA may allow
    states to use a single. plaAtwida
    definrtioQ of "staHoaary source" lot new
    source review (NSR) purposes in
    nonattainment areas as well as
    attainment areas, provided use of that
    definition would not interfere witk
    attainment and maintenance of national
    ambient air quality standards
    (NAACJSJ.4 Under the "plentwide."
    definition, increases and decieases
    occurring anywhere on plant property
    from emission units within the same
    two-digit SIC code are generally eligible
for netting.* and may be »Md to
each ether wi
      ' Sac hon»r«r. dtoout»o»o»-p«nd»nt bubafcr
    in S*caoa LC. af today's Policy SIMWMIM tub
    Section LAJ.W4J at totteyt T«c*nfc*i IWM*
    DOCUOM*
      • Oiffmn USA. lint ». ffotanfflffoum*
precoasiructiM peotit reqiureaenu fc<
major oew sources «r modifications, so.
long as. actual plantwide emissions,
would not significantly increase.
  States and sources considering the us
of netting should, however, be aware
that applicable New Source
Performance Standards (NSPSJ.
preconstruction review requirements
under 40 CFR 51.18 faHh) and (1).
NESHAPS. and SIP limits continue to
apply to such modifications. EPA is
currently developing guidance for states
that wish to adopt a plant-wide
definition of "source" for none ttainmenf
areas into their new source review
regulations.*
  Pending or future litigation or
rufemaking, particularly final resolution
of the settlement agreement arising from
the industry challenge to ERA'S 1980
promnigatfoo of revised NSR rules
(Chemfcal Manufacturers Association v
EfA. Nb. 79-1112. D.C Or, February
1962); may alter aspects of this policy.
especially regarding certain transactions
under EPA new source review
rsprialtoija See 4ft FR 2»4Z f Augttst 22.
1963) (JSTI ueeaii revnioea ). However.
unease aoatonti EBA finally revises the
mln snf ntpdiBnee die current
  The besettne for a gfven source is tha t
level of emissions below which any
additional reductions may be counted
(credited] for use in trades. Questions
remtfng to appropriate bubble baselines
for particular enrittfng. sources or types
of sources urnonattamment areas
generated the principal fssues reserved
by today's notice. EPA's resolutions
strengthen SIP integrity and states'
ability to make progress toward
attainment by (a) identifying more
  ' SIC Codt mtina codu descnb*d m the
Stindint toriutml C'mifttjnon Manual. 1972.
•Btndid 1977 (U.S. Government Pnncm» Off.ee
flock number* «ISVCDee«iid 003-005-00178-0.
  * Many tutm cumaity eapJoy the totalled
"duel ileiiillea' at *ji«iu»ory loaccr* under wbi -
both *• pU« mad e«c» tnuiBnf piece ol squtpmo"1
wifhm il an "(lauaoacy aaaccea. ' Under tni*
defimtKiBL when any individual piece of equiproe-n
i* largt enougtl in termi of potential emmions 10 br
d(AM*Tta
liliii ml imperial in' lifinniim tndead. where -o
    overruling Natural fttsotrcer DcfHot Conned, fnc.
    v. Comic/i. M5P.2471SL 12 ELR 2OM2 fOC Or.
    1MZ).
stationary «ource. ' the 'dual definition ' ellow> ihr
>ema>opporturuty to 'net" is the 'pianiwiae
definmoa

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                  Federal Register / Vol  51. No. 233  /  Thursday. Decapber 4. l«a / Notice*
precisely the three factors which nuat
be addressed in calculating baseline
emissions; (b) reaffirming dial lor
bubbles in nonattainment areas with
demonstrations of attainment thai have
been approved and not subsequently
found by EPA to be substantially
inadequate to attain ambient standards.
the baseline must be consistent with
assumptions used to develop the area's
demonstration or must otherwise be
shown by appropriate ambient
dispersion modeling to protect air
quality standards: and (c) specifying a
number of special "progress"
requirements for bubbles in primary-
nonattainment  areas needing but lacking
approved demonstrations of attainment
including stringent new baseline
requirements, a ban on the use of
reductions produced before application
to bank or trade, and a mandatory extra
reduction of at  least 20% beyond
applicable baseline emissions. Together
with tightened criteria for modeled
demonstrations of ambient equivalence,
a well as other new requirements for
bubbles, banks, and generic rules, these
resolutions will ass ire contioaed
environmental  progress through trades.

1. Determining  Baselines—General
Guidance
   A source's baseline emissions an
calculated by multiplying three factors;
the source's emission rate (usually
expressed as emissions per quantity of
production or throughput); its ho*n of
operations or hourly usage over tome
representative  time period: and its
capacity utilization (e.g., the units of
production per hour of use).' All three
factors must be addressed,  since a
source's emissions for a given period
may vary widely despite a constant
emission rate, depending, for example.
on whether it is operated at low
capacity for a small number of hours or
utilized near full capacity for a large
number of hours. The product of this
baseline calculation  is generally
expressed in pounds of emissions per
day or tons of emissions per year (TPY).
or both.
   Today's policy clarifies EFA's original
intent regarding appropriate methods for
determining these three baseline factors.
In general, in nonattainment areas with
approved demonstrations, a source's
 baseline emissions for bubble purposes
 must be calculated using the lower of it
 actual emission rate or allowable
 emission Ifanit. phis the lower of its
 actual or allowable capacity utilization
 and hours of operation. That is, baseline
emission* hi that* area* amst generally
be calculated ueinv, lewer of actual or
allowable vaJuee lot ati three huaiaae
factors.*
  Actual values for these factors are
based on some representative historical
time period (generally the avenge of ma
two yean preceding the source's
application to bank or trade).
  Howenr. whan the state or applicant
shows that the SIP. a source-specific
precoosuuction permit, or an equivalent
document dearly aasumes or specifies)
allowable values which an higher than
corresponding actual values for on* or
more baseline factors, and that
document post-dates the baseline
inventory year for a SVs attainsBent
demonstration, thesa values may
replace actual values) for calculating the
bubble haaeiiae. When only oa* vatae
(typically the emission rate) is specified,
the other two baseline factors must
generally be based on actual larrela.*
  Such showings must be baaed oa
either data from the SIP or data used ta
SIP preparation, " Applicants any
alternatively perform appropriate
modeling to deaonatnte that UM of
allowable values which an higher the*
actual values will aot dalay or
jeopardize attainment and majstenanre
of ambieat standards, protectien of PSO
increments, or visibility. Upea either
type of showing, tbeae allowable value*
may be used11
EPA1 usahHiiM it«) CFB M14. tut; SI JOT.
sin. SIM. iur M^saja /tonpttae*'. «•»»
diacnaaioo of baMiuu appliM aoiy to bubbUa.
  • Sut SactfcM LA.1 and Apfandia B of today's
Ttduucal IUUJM Decant for tardur d*toil* on
bM*U0* cakaitatta*.
  "Thai emJd mcluda amaaaaailaa am*•» •»
aeeompaayMi autaruU. or Mdma baa* ifeM
who eotuoocMd tb« danonatraiia*.
  » UM of nek Mghir aflowabte »»lu«. which
mini b« patOMd by Bodaik*j
•bvMi i> to dMriy ne«c»d ta «r
dMMMtnUoa or a* aquralaM doawMM. wwU
nqiun Mwh bobbin ID tuxMtuuuncnl UMI with
approvad dmnnatrMoM to b* proe*M*d M SV
modalini *crtan. m addition *• SVt i
further progrtaa (RFPJ oikulaUoaa would gumtltf
ha^» to b« twviMd.
  Tho fntafml difhranca b*f»Mn BM of aaoh
   ' For dvtrtltd dtocuulon of tuMUat emuiou
 and OBWliiM factor*. M< Tachnical IMUM
 Oocmtnmt. Appendix B.
arm* aad ta atta«uMM <
arM*. Mibimi tvaJiMtlou i
HI modallaj nwy imUfy UM of aack aflowaki*
valuca. Hoa»a»ar. tar bvbbita pumaMii a* can by-
caM SIP rrvuioRa in analnnwnl
ratatnj diaeranoo to rtquirt additiniual tarhii
tupport whan liamad air quaiiqr rfliparimn
modaliBf  *Uow«a^
OBMcaM (L«. tha "want caao°'V in oidcr to u*ura
Hut aoy aa«a*4ai IBOMM « actual imiiiinn* an
fdanbflad aaa) IBM ika» adacta ara coMwttni wit*
apoiiecbl* OaMi Air Act rwjynawMa. SM unayj
Tachuui IMM* Qacitmaat. Swooa IA.1^.

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43813
                 Federal Register  A Vol 81.  No. 233 / Thursday. December 4. 1986 / Notices
  The great majority-of eommenters
supported this 51? foundation for trading
baselines, noting that SZP» are the
cornerstone of the Actl approach to air
quality management These commenters
also asserted that regardless of sources'
actual emissions, measuring reductions
from allowable levels assumed in a
valid SIP demonstration was entirely
appropriate for use in trading, since the
area would still attain ambient
standards in a timely manner. See. e.g..
48 FR 39582 (August 31.1983).
  However, other commenters asserted
this approach was either "too loose" or
"too tight" The first group stated that
credit should only be granted for
reductions below current actual
emissions, provided actual emissions
met applicable SIP limits.1* They
advanced various reasons for this
position, including assertions that
reliance on past reductions, while
consistent with approved plans for
attainment might not comport with
"broader" clean air goals. Some felt that
SIPs wen insufflcenUy precise to serve
as a basis for trading.
  A second group of comments went in
the opposite direction, asserting dial
baselines should always be i
allowable source emissions, regardless
of assumptions used* in SIP
development These commenters noted
that emission rota* (e.s> emissions par
volume of throughput or unit of
production) specified in SIP emission
limits are generally the only enforceable
limits applicable to existing sources.
Since existing sources can legally emit
up to annual levels equivalent to
maximum output and round-the-clock
operations so long aa they meet these
SIP emission-rate limitations, these
commenters reasoned companies
should receive credit for agreeing to
binding limits on output or hours of  .
operations which forgo such production
flexibility.
  Today's notice responds in two
principal ways to these concerns. First
it clarifies the components of baselines.
how these are to be determined, and
who bears the burden oldmonatrating
that a proposed basettnrni consistent
with a particular SIP. Several comments
indicated that confusion related to the
determination of baselines may have
generated unnecessary concern over use
of allowables baselines under approved
SIPs. Second, it reiterates and further
supports EPA's position that when SIP
                                        demonstrations an approved as
                                        adequate, the Clean Afr Act simply
                                        requires trading to be consistent with
                                        assumptions used to develop the area's
                                        SIP.

                                        3. EPA's Resolutions on Baselines in
                                        Nonattainment Areas With Approved
                                        Demonstrations of Attainment
                                          Where a state has demonstrated it
                                        will attain an ambient standard, and
                                        EPA has approved the demonstration
                                        and not subsequently found it
                                        substantially inadequate to assure
                                        attainment bubbles relying on baseline
                                        levels used  or reflected in that
                                        demonstration amount to routine SIP
                                        revisions. The state then has discretion
                                        to maintain its demonstration through
                                        any alternative combination of emission
                                        reductions,  so long as these are
                                        adequate for attainment and
                                        maintenance of the ambient standards.
                                        Sincr EPA cannot require states to do
                                        mot> Shan demonstrate timely
                                        attainment and maintain ambient
                                        standard*. EPA will approve such trades
                                        as long as they are enforceable and do
                                        not undermine the demonstration; See.
                                        e.g. Train v. NRDC. 421UA aa TWO
                                        (1975): Union Electric Co. v. EPA. 427
                                        US. 24fr(1978f. This means that credits
                                        must not be doubled-counted, that they
                                        must be calculated from a baseline
                                        consistent with the approved
                                        demonstration, and that tests of air
                                        quality equivalence to die original SIP
                                        emission limits must be met
                                          In short under the Clean Air Act an
                                        approved attainment demonstration
                                        creates a legal and logical boundary.
                                        The state has met its statutory
                                        responsibility and can substitute
                                        reductions not relied on in the SIP for
                                        those assumed by the SIP, so long aa air
                                        quality impacts are equivalent This
                                        holds  true for all types of emission
                                        reductions—whether derived from
                                        process changes, extra pollution control
                                        equipment  improved operating or
                                        maintenance procedures, or other
                                        actions—as long as the substitute
                                        reductions have not been relied on in
                                        the approved SIP.14
                                          EPA accordingly reaffirms the general
                                        principle that states may grant sources
                                        credit for reductions below levels
                                        assumed by approved demonstrations.
                                        This generally means that where actual
                                        values for emission rate, capacity
  " The 198Z policy aeaumed. but did not rpectfy.
the component! of "Kraal" arafaaioaa. such »*
capraty usaga or numbcrof houn o( optniioa~of •
particular source, ft abo eseumed. but did not
expreeeiy reqtrtre. that actual emission leveia araat
be reduced to compliance lento-baton further
reducliooa -were eligible for credit.
                                          14 H alao hold* trua whan tha Agency may
                                        Mupact but ha* not formally Indicated, that a
                                        previously appravad SIP damoaatntton ia no longer
                                        adaquata to aaaun timaly atlaimnaBt for rtaaona
                                        of policy continuity, regulatory predictability and'
                                        fair notice, until EPA makaa a formal fading of SIP
                                        inadequacy, tha appravad demonstration controls,
                                        Saa Clean Air Act (action !10(a)(2)(H). 110(c)(l(. 4S
                                        FR 38S8Z (August 31. 1963).
 utilization and hours of operation form
 the basis for an approved
 demonstration, sources proposing a
 bubble must use the Tower of actual or
 allowable values for those factcrs in
 calculating baseline emissions, and that
 where an approved demonstration was
 based on allowable values which are
 higher than corresponding actual values
 for any of these baseline factors, those
 allowable values may be used for such
 factors in calculating the baseline.

B. Baseline and Other Requirements for
Bubbles in Primary Nonattainment
Anas Which Require But Lack
Approved Demonstrations of
Attainment

  EPA's 1982 policy proposed two
 baseline mechanisms for bubbles in
 primary nonattainment areas needing
 but lacking approved demonstrations of
 attainment These areas needed
 additional emission reductions to attain
 national ambient health standards, but
 had not yet fully determined what
 amount of reductions would be
 necessary for attainment or which.
 sources would be required to produce
 them. Nevertheless, that policy said.
 states could allow existing sources in
 these areas to trade on an interim basis.
 eidter (I) by using baselines reflecting
 Reasonably Available Control
 Technology (RACT) provisions which
 EPA had already approved, or (2) where
 EPA had not yet approved general state
 RACT provisions, by using "negotiated
 RACT" baselines agreed to between the
 source, the state and EPA.1* Both the
 1982 policy and subsequent notices
 advanced detailed programmatic and
 environmental rationales  for this
 approach, including the fact that RACT
 was the Act's most stringent general
 requirement for existing sources in
 nonattainment areas: that appropriately
 determined RACT baselines were
 consistent with current attainment
 needs: and that trades using such
 baselines could produce faster interim
 progress by providing incentives for
 sources voluntarily to define RACT.
 disclose better emissions  or ambient
 data, or take other steps to do more than
 the minimum required.  See. e.g.. 47 FR
 15078,15080-81: 48 FR 39582-83. 39585.
   Many commentea on the 1982 policy
 approved this "negotiated RACT'
  '• Tha 198Z policy alao authorized limited use al
 higher actual (rather than RACT-allowable)
 baaetinaa in certain nonaltauunant "extension'
 areaa whfeh did not than have complete approved
 SDH. Saa 47 FR 1SOJ7.1SOSO (April 7.1982).
 Expiration of tha fuly.lMZ statutory deadline for
 submitting *udi SSPt vitiated this third baseline
 option. See. t-f- «S Fft at 39SW and n.2. 3SMZ and
 n.7. 39SM-43 (August 31.1963).

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                   Federal  Register /  VoL St. No. 233 /  Thursday. December 4. 1986 / Notices
                                                                         4381 <
approach, finding it innovative and
acceptable. However, two groupa of
commenters again asserted that it was
either "too restrictive" or "insufficiently
constrained." The first group maintained
that for reasons of administrative
efficiency, bubbles should be based
either on existing SIP reduction
requirements or on actual emissions.
without the need to negotiate new
source-specific RACT baselines. Since
trading sources in these areas would
eventually be subject to RACT
requirements in any ease, they
reasoned, no new interim baseline
should be required. la partial support of
this position some alluded to the one
instance in which Congress has
explicitly addressed such baseline
issues—its 1977 declaration that in
nonattainment areas without adequate
demonstrations, existing SIP limits
would for the next several yean be the
baseline for offset transactions, which
were then the only types of emissions
trades.1*
   The second group asserted that no
bubbles should be allowed in such
areas, since regulators could not know
which reductions were surplus until
demonstrations were completed and
approved.
   In August 1983. "in light of formal
comments on the (1982) Policy, the
NRDC v. Gorruch decision [since
reversed).  . . and the need to further
articulate the Policy's approach in this
area." EPA requested further comment
on certain issues relating to credit from
plant shutdowns or production
curtailments for use in existing-source
bubbles, particularly bubbles in primary
nonattainment areas requiring but
lacking demonstration*. 48 FR 39530.
 While most comments on the 1982 policy
supported continued use  of such credits
without further restrictions, some
commenters had special concerns about
shutdowns in these areas. These
commenters stated that shutdowns can
hasten attainment, and suggested that
granting credit for shutdowns that 'might
 have happened anyway'  might not be
consistent with the Act's requirement
 for attainment "as expedtttsHiely as
 practicable."
   '• See. e.g. Dean Afr Act ABiendmems of 1877.
 faction I2SL codified at 42 U S.C 7302 note: 3
 ifyalalnt Hilary of Me Clean Air Act
 Aaiendinenu of 1977. pp. 537. 711 44 FR 2174-79
 (|inu»ry 18,1979). Thu Congressional mandate WM
 largely superseded by eventual stats idopnoa of
 luperveninf SIP limit*. Und*r current EPA
 refutations tuch SIP allowable emission ram nay
 ordinarily b* used lo compute the baaeltna for
 offMta onty where an approved SIP demonstratton
 uaed inventoried allowable enuaaiona in ita
 demonatration of reasonable farther progress. See
 CJe»n Air Act 173(1)(A). 42 U.S.C. 7S03|l)|A).
  la the August 1969 notice SPA
addressed these concerns in detail
noting that:
  . . . Unlike surplus reductions from
additional pollution control or less-polluting
process changes, shutdowns produce a total
reduction of emissions. 100* of which might
benefit air quality if credit were not allowed.
Granting full ar partial credit for their use in
exisung-source bubbles might reduce that
benefit... at least where the source would
have shut down anyway  This reasoning
(reflecting a desire to avwd granting credit
for reductions that may not be "surplus''
because they would have occurred ia any
event) underlies some commenten1
suggestions mat credit be allowed only if
credit wars a sole or principal reason for die
shutdown .. .
  Uolortmiately the issue is not this simple.
So long as it has not been double-counted
and a proper RACT baseline is applied the
shutdown does contribute to air quality
progress, since much less than 100% credit
will be granted. Moreover, the opportunity for
credit may improve air quality by
encouraging early shutdown of high-polluting
facilities that might otherwise be kept
running, either because replacement ia too
expensive or to preserve credit for further
plant expansion.
  In addition, thew comnwnters' smjgestioa
of a test baaed oa subjective motive appeal*
administratively unworkable. EPA and states
would fled it syreafiingly difficult to evahtsxa
or rebut source evidence that a shutdown
was motivated by credit and that the
shutdown facility would odurwise have
operated [. e-g_| far twenty or tarty years.
Thus this approach would likely result in
either dtfacte approval of all such- cradtta
(undermining the) reasoa for the test), or a
burden of proof so stringent that aooa would
be approved (peneHnng sources whose
shutdowns were elicited by trading). More
straightforward approaches might either baa
shutdown bubbles until a damoaslration of
attainment, or acknowledge thair uncertain
nature by applying a margin of safety—e.g. a
requirement that such bubbles produce
substantial air quality improvement—
sufficient to compensate for any uncertainties)
aad protect the integrity of current or future
SIPs. 48 PR at 38583-44 (footnotes omitted.)
EPA-then suggested seven specific
alternatives to the 1982 policy for
bubbles in these areas, including: a
prohibition on bubble credit from
shutdowns: a requirement of substantial
air quality benefit from babble*  .
proposing to use  shutdown credit or a
requirement of substantial air quality
benefit from ail bubbles, with no special
restrictions on shutdown credit Ia
partial support of this  last proposed
alternative, EPA indicated the
administrative benefits of avoiding
special definition or treatment of
"shutdowns" and "curtailments," and
stated that
  . . . Requiring substantial progress from
each bubble. . . could accelerate momentum
 toward attainment directly improve air
quality through ssah trade, and provide an
objective margin of safety agsinst
uncertainties essociatad with some
individual shutdowns, while leaving to
state the task of final SIP development It
would also maintain the incentive within the
(1982) Policy for industry to shut down high-
polluting, economically-marginal sources
.... The more each existing-source bubble
contributes directly to accelerated air  quality
progress, the stronger the justification  for use
of surplus reductions for such bubbles in the
absence of a demonstration. Moreover.
requiring all bubbles to produce a substantial
air quality improvement beyond RACT
baselines snd RACT equivalence, could
provide a margin of safety sufficient to make
special treatment of shutdowns unnecessary
... 48 FR at 38685-88 (footnotes omitted).

Thus, while the issue explicitly raised
by the August 1989 notice was use of
bubble credit from shutdowns in
primary nonattainment areas which lack
approved demonstrations, the
underlying issue was use of any type of
bubble credit in these areas. Since
emission reductions have the same
effect oa air quality whether produced
by less-polluting process changes, more
efficient operation of installed control
equipment, additional pollution controls,
or shutdowns or production
curtailments, the  fundamental question ^^
waa whether ail such reductions or nonaal
of them should be prohibited or subjecflH|
to special requirements when used for
babbles in these areas. That question
reflected-a further choice. Should EPA
defer bubble* in these areas until a
compete demonstration was finally
approved? Or should EPA authorize
continued use of bobbles, ia order to
secure interim endasioa reductions?
  Comments responding to the August
1983 notice were  essentially the same as
earlier ones. A large majority of
Industries and state pollution control
agencies commenting at that time
supported continued opportunity for
bubbles (including those using credit
from shutdowns) in nonattainment areas
with or without approved
demonstrations. Virtually all industries
and-states) commentiog with respect to
anas that Aovw approved
demonstrations supported continued use
of the 1982 policy, without change." Of
n state agencies commenting with
respect to areas that do not have
approved demonstrations, ten urged that
shutdown credits be retained for these
         eghany Coenty (PA) Health Department
 Bum* of Air PeUutlon Cootrot Air PoBuUon
 Control District at Jefferson Couaty (Uiuavtllal. KY
 Ct Dayton (OKI Raajonei Air Poflultea Control
 Agency. See also, a i_ eosMwnt* of Chevron USA.

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                                    /  Vol. Wt. N» 2»» f Ttaredarjv Dteoaber 4. J9W / Woftce*-
                                          At ule
                                                          CvAfllVTaHr* nTev OB
comments alsv suuuMfcd or
acknowledged the asjpropriatenew of a
reqniremant for a not erraaairry
benefit—in the range of »» extra
reduction* in emission* remaining
beyond a baseline reflecting RACT
eminion limits—from each bobble, so
long aa that requirement was objective
and easily administered.'*To the extent
they addressed this issue, these
comments generally opposed efforts to
test bubbles by examining the subjective
motives underlying reductions."Two
state of local agencies asked that
bubbles be prohibited in these areas
until complete demonstrations were
approved by EPA.
  Seven! commenting environmental
gimps aMcrted that EPA should not
permit any bubble* io nonattainmeat
areas lacking adequate, demonstrations.
On* argued that EPA cannot dateimiaa
that emission reduction*, are "surplus."
aid therefore creditable, in theaa ana*.
because to do so would violate the
statutory requirement to attain
standards "as expedftiousfy ae
practicable." Moreover, thia group
churned  using RACT aa a basefiae
wotdd not solve this problem because
KA^7 limits are ntfDnmnff nteesurew no?
a substitute fora STP^runttihgtnngfy
atietmient. Ton? groop* also avecrtso/
thsrt crediting sintdawns Mvulii eonuTet
wife stale*' daty te met air qmbtf
standard* "as expedftfovsty a*
practicable," becauaa. by ->emnecdiig~
emntaxDna due bava> already- ceased, H
would accosapiiss) tea* aaaaaaca.
reducBoai than is pneficabtc «atha a
given, period of Urn*. Another groap
asserted- that allowing armtdowa end**
in these Afeuwoaldatren •Sects to
progresa toward attainoient Ona>
enviranmanui group, went a step- farther
and urged that opportunity for bubble*
be restricted soieiy to atUiajaeai i
which hava already mat "qti*niit  air
quality standards.1'
  "E.J.. MaaapfaUt
Dept. of Health. Air PoUuSSB Cbocrai Dfanaioo. O.
commtmt of Ulinoie EPA.
  Mafty rnduin wl ccanaBeHan ejao aeeenvd the*
in these nonattammeiH •»••* Se» *.*. Chevm
USA; Cbaaiplin Petroleum.
  »E*. Bay Ana (CM Air Quality MaoagameM
Dltmct. Se» afov Sovthcm Calrfont* G«* Co.
  "Eg.. U»i«t>iiiim QetartiMW at
Environmemat Qoeiay Eagmeaan; South COM*
  ' ' In ant oe wntun tubniMUMa ta th»
Admimiirator made in earty 1980 while final
deciuona on today'* policy were Mill pendinv
repre»ntaur«*of ieven ttxej. and, th* SUle aad
TeirflonaH Aic Pollution Profram .•Umimatratoiw
and the Aaeociatum ot Local AirPWIuiion ConlroJ
Officer* (SrAPPAv/ALAPCOlftmilarJy urged'tfiar
bubble* no ton*tr b* ainfiorned>or ptmmj
nuaattammeiii am» onfrt a eomffUff vfTammwil
individual bubbles a» SIP revmen*
under that IMSLpBtg.? " raiaeaV oeiatfid
issne*. Sevtcai oi these proposed
bubbles wet* a)so located in pnnary
nona-ttainment area* which- required bnt
lacked approved ueniunsBratforiv* Tstt*
issue raised related to bubbles of two
types: (I J Those which relied on
reductions from shutdown* that
occurred long before- any application to
bank or trade; and (2) thoa* which retied
on extra reductions produced by routine
installation of required control
equipment long before application to
bank or trade. Beth types of bubbles
raised the larger question of whether SIP
integrity and enwonraerUat progress.
might better be assured in pnokary
nonattainment areas which requica baJ
lack approved aeBweasratkms at
attainment by allowiay no taubala credit
or allowing bubble credit onff fatr
redncttons- beyond acnul amiseioR
levels, already achieved asaft&s. tiam
aouicat oppVMta book or tekfk.
  The final policy strikes wfaeUfiPA
beUeva*to-b*ai
newiequaeuiaiHa tttnnpfcga«t tet
balance. These «*••«/« andtha
rationaiea ttipfinrtirig. tfirai are eat fbtsnc
below.

1. EFA's RaauniduuaT Kagai iDng; BaaefioaT
and Other JteqinremenJa .

require) but d*> not; a* th* taw of •
bubble appfTcanon* haw BRft*
demonstTatluua* that ambient health
standards wiD DC aXtaiaedvbttbblaaVwilL
generally be approved if they da oat zaly
on reductions which- ocoured bafersr
appiicatioai fee credit; af taayavat othor
cntenai fop oMainsaTiv aaaeaeaiT
eqanrahmee. and eonsrateney wMr
future phuiaiagaffortKandtf may
produce at least a 20% oat reductaosi iat
emissionav remaining aftea appBapfiasai
baselines have beea applied, Taaaa
objective tests both respond, to piaviaua
comments on certain mdlvidtBii bobbia
apaiicationa. and go awbataauiafly
beyond aitaraativaa riiacuaand kk EPA'a-
August 1983 uoticB, At the same ttaaa
they asaure greater pradktabiUty *•>•
                                                                      Tkk
demommtioit waa e»hautante>
petition •>•» seeMeaaty aclaaaat by •
environmental groupe. Sum thia. aaeaaaa and
related underlyiof IUUM harf been caned and-
ArtlOlratVu it IfW^TtT u^CVffliV CQVIfntirTlti\ ff far*
addrnaed aa pert of tb* Asency't Anaiaaavaaaa)
beh>«.
  " Cf.. e.g.. Union Caraid* Corp. fTexacQtyf. 47
FK 21539 (May T»  I98D: B.F- CoodKch (Avon Late).
49 FR 4798 (Febroery a. •
 amliieut oruyi nt, vrithoct- tnrpasrny
 heavy * burtfen- on vohmtary bobtrfe
 ti juisacfiuus that the envi/uiiiiimhi?
 benefits of- srreh tndtfan forgone. 1
 fB fleet tin? general principle tfiat bm
 such properfy-strucfored Gobbles
 provide continnmg incentives for
 sources to- deliberately ovennoot
 reguhtfery marks (rather than plan
 merely to meet them), bubble trade? i
 these areas can produce interim
 progress beyond current SIP
 requirements, and should be approve
  a. Specific "Progress" fte^uiremen
Applications for existing-source bubt
in primary nonattainment areas whic
require- but lack approved
demonstrations of attainment will be
deemed to produce a net air quality
 benefit and wiA be processed for
 approval if they;
  (ij Use"Iow*»t-af-sctual-SZP-
ena'eeion«> baaeflnes. Such baselines
must be eaJcdated using
  • Either the actual emission rate, rt
SIP or other federally enforceable
emission* toft or a RACT emieeion
limit whichever is toweac for eedi
source mvotod in the trade. Tats
baMatoe RHtoarshen) be- deteiiiiiiMii f.
the tima of the source's appiicaffon to
bank ar tad*, wtwhavet is earner.
  • Thatfcnwrof acfoal orailowab4*
capacrty atthltaEadan and hour* of
opetatsaai for each soarca involved m
tha trade-, Thaaa-oasetiBa factors sbsti
geaavatty be based on th* two years c
oparBtim prgcadmf the apaJicaQon tc
bank or tradtv uoJasa aaotbar two yea
period ia shown to be mow.
       itatxm otnotmai comes
operationK
  (ii>Maat tha-general omtorenf
aojakvalance testa oolhaed in today's
paiicy (saa-StcaoB IJ.1.O of the
Technicai hwuee Document) using the
baaahaea deacobad abova and. for ttv
post-bubbia casat enisKon levels thai
reflact overall tmittioaa eomvaleuce:
and
  tfii? Produce a substantial net
redoctioii at actual emissions—i e.. a
redaetteai oi at least 20% in Ihe
emisssons rtmaining after apoitcation
the stringent new baselines described
above. (A reduction of greater than 20
may ba-teauired for bubbles approver
under generic rule* in some oi these
nonattainment areas. See discussion i
Section HLA.L(dI of this Preamble.
below.)
  With issaect to source* which seek
bank ennssion-redocn'orrs after
publication of today's notice.
"application to bank."  for purpose of
ev*featiN9 credit for us« IR btrbbter
mean* the rime of fiifng of an

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                  Fedtnl Rpgiatar  /  Vol. 51.  No. 233  / Thursday  December 4. 1986  /  Notices
                                                                      4382
application to make such reductions
state-enforceable through or concurrent
with use of a formal or informal banking
mechanism. However, in order to avoid
needless disruption and inequitable
retroactivity. this definition does not
apply to reductions which sources have
previously applied to bank. See Section
l.A.l.b.(l) of the Technical Issues
Document.
  b. Additional "Progress"
Requirement: State Assurances. In
concluding that properly-structured
bubbles as defined above can produce
valuable interim progress in primary
nonattainmenl areas which require but
lack approved demonstrations. EPA also
considered whether other showings
might be necessary to assure that
individual bubbles do produce such
progress. The Agency has concluded
that few such showings, whether
bubble-related or otherwise, are
practicable or workable. It did. however.
conclude that certain representations
meant to assure each bubble's
consistency with SIP planning goals, by
requiring states to take a meaningful
look at such consistency in each bubble
approval would help assure that
progress is achieved.
   Under circumstances detailed in the
final Policy and Technical Issues
Document today's notice therefore
requires the appropriate state authority
to provide the following written
assurances to accompany each bubble
which is approved (either directly by
EPA as a case-by-case SIP revision, or
by states under an EPA-approved
generic rule) in these areas:
   1. The resulting emission limits are
 consistent with EPA requirements for
 ambient air quality progress, as
 specified in today's notice.
   2. The bubble emission limits will be
 included in any new SIP and associated
 control strategy demonstration.
   3. The bubble will not constrain the
 state or local agency's ability to obtain
 any traditional emission reductions
 needed to expeditiously attain and
 maintain ambient air quality standards.
   4. The state or local agency is making
 reasonable efforts to develop a complete
 approval SIP and intends to adhere to
 the schedule for such development
 (including dates for completion of
 emissions inventory and subsequent
 increments of progress) stated in the
 letter accompanying the bubble
 approval or in previous such  letters.
   S. The baseline used to calculate the
 bubble emission limits is consistent with
 the baseline requirements in  the
 Emissions Trading Policy Statement and
 Technical Issues Document.
    Such assurances need not be verified
  by, e.g.. detailed quantifications.
comparison with year-by-year progress
projections, or showings that ill
reductions needed for area-wide
progress or attainment have been
identified and targeted for regulation.
They are. however, expected to be
based upon meaningful review by the
state and to be consistent with the
documentation supporting the bubble.
EPA will not second-fuess such state
representations, provided they are a
suostannal test applied by the state to
each bubble and the state has explained
how the proposed bubble is consistent
with the area's projected attainment
strategy. Nor will EPA examine, or
expect states  to examine in making such
representations, any specific soyru's
subjective motivation in making claimed
reductions. The combined effect of these
requirements  will be (a) to deny bubble
credit for reductions which occurred
before application for credit in
recognition of the fact that reductions
produced before any application to bank
or trade are unlikely to have been
elicited in any way whatsoever by the
opportunity to trade: (b) to help assure
that only actual reductions in current
emissions are relied upon to satisfy
pending control requirements in these
areas:  (c) to more systematically
encourage efforts by sources to produce
and permanently maintain these
additional reductions, by granting them
predictable bubble credit when
specified baseline and other testa have
been applied and (d) to assure that
these bubbles will not interfere with
these areas' attainment effort*. Any
other approach would enmesh EPA and
state agencies in lengthy, resource-
intensive, and uncertain efforts to
determine subjective company motives
for making particular claimed
reductions—efforts which appear
unlikely to provide greater
environmental protection than the
criteria articulated here. Cf. e.g.. 46 FR at
39584 and n. 15.39585-46.

2. Basic Rationale
   EPA believes that Congress would
clearly have intended the Agency to
approve bubbles that despite the lack of
a complete attainment demonstration
for the affected areas, nevertheless
produce progress toward attainment in
those areas. Section 172(b) of the Clean
Air Act does require states to formulate
complete control strategies to attain the
standards in  these areas aa
expeditiously as practicable and in the
case of primary standards, by certain
fixed dates. It also requires these areas
 to demonstrate reasonable further
 progress toward attainment in the
 interim. However. SIPs and attainment
 demonstrations are composed of dozens.
if not hundreds, of regulations and
commitments adopted at the state i
local level following proceedings '
often arc time-consuming and 01
sequence. If EPA were to wait until
every such provision were adopted and
submitted by the state before acting on
any of them, substantial environmental
benefits th*t would otherwise accrue
from having each available requiremen
promptly incorporated in a binding
manner into the SIP and made federally
enforceable would be forgone. Such an
"all or nothing" approach would
produce less expeditious progress
toward attainment than a combination
of (a) EPA approvals of state provisions
submitted sequentially and (b)
appropriate use of sanctions authorized
by the statute to effect the adoption and
submittal of remaining necessary
provisions. Given the strong emphases
in the statute as enacted it is doubtful
that  Congress would have intended the
former, less progressive approach.23
  For these reasons. EPA has decided t<
approve in these areas bubbles which
individually produce progress, both
beyond preexisting plan requirements
and in the air itself, and which do not
interfere with these areas' efforts to
construct complete strategies that
provide for attainment as expeditiously
aa practicable.                   ^j
  Today's notice accordingly disall^J
use in bubbles of reductions made pno.
to any application to bank or trade, but
allows appropriate use of reduction!
made after such application. Where a
source voluntarily proposes to make
creditable reductions as part of and
following a banking or trading
application, the stringent lowest-of-
acrual-SIP-allowable-or-RACT-
allowabie baselines must be applied if a
bubble ia involved and that bubble
must meet appropriate ambient tests,
using emission levels that produce
overall equivalence to the emissions
baseline. The "net 20%" discount in
rtmftirMng emissions then applies to all
sources in the bubble, and provides an
additional safety margin to assure
ambient progress from bubbles in these
areas.*4 Finally, the state assurances
  '•SJM. t.f_ Ct*mn USA v. NRDC. supra n 4
  '* Thto "ntt 2M" nqotrtfflcnt n aito supported
 by twdanc* indicating that for moat txttntion drta
 SlPt •ddrtMins OMM pollution—
-------
                  FgfarsJ Renter / Vol. SI. No.  293 /  Thursday Pecambgy fc 1S88
will indfc«ewfce*«rappiOTal of the
bubbw is HlBry to mraw cuiner ffmt
enhance any unpui bMt opportunities to
cofistrocf uunpiete
strategies.
  EPA believes (ha! babble* meeting the
special progress requirements described
above will prodnce both progress
beyond preexisting plan requirements
and progress in the air. First with
respect tit preexisting plan
requirements, each bubble would
achieve a net tightening of al least 20
percent Trades that result in a
permanent 20 percent reduction beyond'
actual emission levels (wtoca are
already below what the plan allows).
would produce eve» greater progress
beyond preexisting requirements.
Moreover, stale assurances tact suist
accompany each bubble will help ensure
that aperov«l does not represent a step
backward ia the process of devdopjag a
plan providing for timely attainment
  Each such bubble would also produce
net progress in theorr. since each
increment of required control foigone as
a resuli of the trade would be more than
compensated by a greater redaction.
which was aot required, and whian may.
reasonably be presumed to have bean.
elicited by. the trading opportunity.
Neither EPA nor anyone else can prove
that aQ reductions which occur.afler
filing of an application for credit were
elicited in whofe or in  part by the
trading opportunity. Decisions in the
real world, whether corporate or
otherwise, always arise from mnftiph
motives wfu'cn are not eastrj
discntangfeti. any strand or wnrcn may
have "tipped" the balance toward or
precipitated a particular action-.
However, the Agency has concfuded1
that this presumption is reasonable.
First, it is plausible thet svefc reductions
were elicited at least in part by tfrat
opportunity, especially where, as here.
sources must affirmatively decide- to
surrender something of value and*
constrain purely  private decMionmakiitg-
(e.g..  enforceably cuumil to change-
production processeaHB>order to create
a cognizable reductthSecemi. thie
presumption is the ssatpiai afi al
alternative to the adaBMsawtiveiy
difficult and uncertain approach of
attempting to determine the intent and
motives of source owners making these
reductions.
  EPA has also concluded that bubbles
meeting these new requiceaienu wtQ oat
interfere wttfc the statutory eiaodate that
state* attain standards at expedftfoomrf
as practicable. Each such boobfc woofcf
produce progress in the air that for the
reasons jnsr described would fficely not
have been achieved absent the trading*
opportunity.1*
3. Additional Consideration* Regarding
the Benefits of Bubbtet
  Individual bubbles approved under
toda/s special progress requirements
for primary  noneltamment areas which
lack demonstrations will produce
progress in the SIP and in the air.
Moreover, the mere existence of the
opportunity to trade has independent
progressive  effects.
  As some commenter* suggested fact
of such demonstrations usually results
from one of two general causes: Either
the state does not know where or BOW to
obtain sufficient further emission
reductions* or it  has, identified sources of
such reductions  but is unabfe to
implement new regulatory requirement!
because of their cost Moreover.
regulated  ffrma may often be reluctant to
disclose information-that may be used fo.
require further retrofits against tfienu
Even where such information is      '.' .
obtained, it  may not be sufficient^
precise to allow EPA aadthatitaieta ^,
resolve n»"i»>««'«a gxnofent ncohlenis. •'
While a vigorous regulatory rupnnae   .
remains critical in these ateaa, tfial
response ia-Iikely te. be aamneteti by the
very "ifTflT*""* harriers
discouraged a damonatnnoa el
attainment in the fits! place. Sea. e4» 4ft
FR 39582 tAugust 31.1984).
  Bubbles can, help break suck
deadlocks over the feasibility of
obtaining further reductions^ bu>
providing an inrrntivs foe plan^
managezs ta find ««*yt««t~i ways ta go*-
beyond current regulatory rs^uOTamrnav
The oppoctunity to traoa may alsa
encourage sources ta> come forward ia
order to establish the quantifiable aad
enforceable emission limits on which
credit must be based.
  " TV Aatncy hat dsjtwmuied ttMt tht*»
eoacfcuBom «!M 4ppiy/ what* tr» pne*-«w>llaaiea
reducuoai oa whtca the appbcinl t (•* CMdM
h«op«n* to be a shutdown or pmfacHoft-
eurtulnrant BecauM multiph modvit (imihrty.
 ComroT (Fth. 1964lt Um*. Ucbard A-Urafl. Tha
 ConaHvatira Fannrialma, MJ Moo. LM M.TkooMV
 March 12.19V fTh« trill ealcutenoa... indiuwi !b«
 staff j attnunenu* to tiw Iimit«d caatral
 poisibilitim available, and appwr* to tuppart their
 conclusion about the contribution RACT piua 20
 perernt can mate to anammenl ').
clos* • facistfy 01 reunct its. productive*
sruiidown* the t occur after tM save* «e»ncr
for credit, no leu the* oiber typu al poat-
applicanon reductions, may be preiumed
reasonably elicited by the opportunity to> tndfc. Tnrr
is pswtiaiitriy true beaaeae- ilM saaw ujeiaU*.
whatever ite,antecedent nettwe. ene*iMk«a
deliberate decisua ta forgo aa ieun •/ miis>f»iim
velue—eithei by surrendering its operating pemut
or by accepting binding production Ifnnfi— eeteftuetrsjeMs'
difRcuU. if oot iinuusMUte. to prap* os dutnne/ UiK
opportutBiy to u*a* woe, the. dn>n>s fere* at ft
jubiecttve motne behind the shutdown, such a
prRstimpnnn is «mpiy justified
  Bu&6faa maj-acfrfav* subsTantial
reductfoOAT even wflnout special
"prugress'requirements, since sources
not otherwise subject to or not yet
meeting BACT requirements with future
effective dates ia such noaattainmcni
areas must fkst ceduce emissions ta
RACT-aflowabh levels before they can
begin to accrue credit.2* Where.modeled
showings of ambient equivalence are
required bubbles may also help identify
and correct remaining nonattauunent
problems. In addition, bubbles may help
produce (a) faster compliance with
RACT limits already defined in
partially-approved SIPs. (b) faster RACT
defmitioas f01 saurees not subject to
currently ay proved portion* of SIPs. (c)
incentives foe plant aunagers to
disclose uacotitralafd or tuunventoned
sources, and (d) incentives for such
managers ta> conttot emissions eerlter
than- required, ferhapa most important.
because of (aeirpotentiai to eiktt better
information oa sources, emissions.
coaKral patiormaace and ambient
effect*, babbies may enhance states
abatiry, to sacare htlaee reductioim. if and
when sucatreatacnona are requicsd. For
example. EPA experience has
doeuKemleal eases in which bubble or
similar tnriang applications have
miproveat1e ambient impact?, and
unrafajaled- er unfnrentoried sources XT
  "See. etg. «TFR ISOn-.arjtW 48 FR 39580 and i
1 3SSSZ enetit r.
  RACT levels are-femnlTf »> least »o« ••* man
below taLSsiliuitliJesseanoei lereti. oeoendma on
the paisBUati. Wiase psei iresle acMa* emwtiom nt
hiehier then RACT baseline leveb Uus rec^oiremeni
directly ecceterefes sirquanry progress, since no
credit can be secured fcr ttie> difference-
  *TT tell sp»rite»lmiei mhmfttd over the taut
jossai r»e> eanc imOBg edset tkuvi. aeloeo
establish and venfy ese«eau*a facMn ior
noniraeatioiial souicea. aa, well as pir-"c.> a^»»^^
emission* prafiTes of such sources  '»« eg
appBeHiew qfSWiienya Iron ana Steef Ca
spprov«at4*n»aMBIfOe«smib«T2ft l9Bllkh..«
providedcwree* eane*SMia>det»no*oiber»ise
av«ieibiei to EPA tfaeaugli UB Aococy s Naucr ^
Emissions Data System (SO FR ZS093  [une '.' .4RS
sn»tNe»»ifl»rtoe*itrt»«rsrence of sources  eae«ssD» iiassse end attainmcni
demonitnnoiB: ana hsiesrt uBprove iniorcer.en i
procedures to ortem stele programs. In aoai;.un • j
such cin>sp«a{Ii. exirnpiet. apperrunrn -o TIC?
appeefi !• reduce VresUrmret reesons ior s»-ir'e« to

inveatory aad>piaonMS *e*e. For example.
^4assachuMtta require*.firaM to prov>4e ddta :n
tn*tr two years of higfcett emissions unce the Jtima
yeer of the SIP. i» evder to eeMonsn. a a<»iv
emsssraniaa* under lea sane s VOCbubwe rule.
This requtreeiee*hsM pradaced baselme aa'* 'or
previously un<»uantifie<3 emission vears :nr ,.<~?
sounee.

-------
                  Ferf»r*r RetK**r / Vol. 51. No. 233 / Thursday. December 4. 198* f Notice*
                                                                     43023
Through all th*** m*ch**t*m*. bubble*
CM achieve substantial minion
reduction* and m quahty planning
benefits, even inillsaMl special
"progress' reqmresBsjBtB.
  Nowithstanding the** independent
progressive effects. EPA believes that it
may approve bubbles in these
nonattainment areas only if they meet
the specific progress requirements
described above and do not interfere
with the affected areas' efforts to
develop and implement complete
attainment strategies. Such babbles can
help adjust existing inadequate
regulations on a source-specific basts.
help make progress toward a full
approved demonstration, and help
improve air quality, without "franing"
inadequate SIP requirements that are
currently in place.
  Accordingly. EPA h*» decided to
approve "progress" bubbles which are
consistent with the attainment needs of
these areas, which produce a net air
quality benefit and which may therefore
secure faster interim progress toward
attainment and more rapid development
of complete attainment plans.

HL AfMHssaal Pafcy OMB*** and
Clariflcatieaa
  Today's notice makes numerous-
additional changes ia response, to
comments on and following me 19B2
policy. The most important of these
changes or clarifications are discussed
below.
A. Genmc Bubo* Rut*
  Today's notice recognizes the special
position of EPA-approved state generic
bubble rates. Such rates may provide-
clearer approval criteria and may result
 in more rapid bubble approvals wttft
reduced expenditure of EPA and state
 resources, by eliminating the need for
case-by-case Federal rutemaJring on
 each bubble  as an individual SIP
 revision.
   Today's policy affirms mar state* may
 continue to use generic rales to approve
 bubbles within the scope of such rales ia
 all areas of the coontrj;mehnflag
 primary nonattainment area* needing
 but lacking approved demonstrations of
 Attainment. It also establishes specific
 procedures to ensure opportunity for
 public comment on individual generic
 actions and for regular EPA oversight of
 state administration of all such-rates*.
 Finally, it speits out additional
 "progress" requirements that new
 genenc rules must satisfy to be
 approvable for primary nonattainment
 areas needing but lacking
 demonstrations of attainment.
   State genenc bubble rules approved
 hv EPA as SIP revisions have
independent force of law a*d farther
Congress* intent thai "ftr prevention
and control of air pollution at ft* sourc*
(remaiiul the primary responsibility of
Stales and local govemnaitsv" Cte*»
Air Act. 1101(aM3). EPA has approved
or proposed to approve 10 such rales for
9 different state*, end ar lent 12 other*
are being developed Pew approved
rules currently apply to primary
nonattainnwnt Areas which require but
lack approved demonstration*.
However, today's notice requires thai all
generic rule* meet certain addition*!
procedural requirementa in order to
assure effective EPA oversight of their
administraboe, and to identify aay
derktenciea in individual approval* or
state unpkoMntation procedure* before
substantial amber* of state-approved
bubble* may be pet at risk To tb»
extent the** requirements require
modification- of existing generic rule*
they may apply to rule* affecting aay
area, not just primary nonattainment
areas which need bat lack
demoBatretton*.
  Today's policy is meaat to i
the** rule*
both now and throuab any 1
transition: period*, without u
the conaidmU* investment
already mad* iat
th»*aoH tea* tb* pattcw if
i. end will
fee»idenfffyinf
    odrffeatfon.
                                           ^Bj
                                           9
wtit m**4 the p*bcy'a.aisba«aA(rs«
procedural ob|*ctiv**»
  Basicatfy. bobUe, IM^UJJBI/ ay
under siiKiij fTfil iifyieimfjjsa
ruin befor9tttmtffeane:dat»afltm
EPA*
due to today's cneagej.

inritpearisnt validity odmgr i by BPA a* meeting the rule
 wilial*o>**tiafy apaticabie ambient
 ecutvaJaac* teal*  (•** Technical
 Document Secnaa IKift and
  (d) Produca aaaweraU emission
 reduction at least  equal to a net 20%
 reduction in emissions remaining after
 application of tb*  above basah'rtM. or at
 least equal (in percentage terms} to the
 overall amMssaa naucoon (in
 percentage term*} needed to attain in
 the area (i.e.. at least equal to the
 source-by-sowe» wnMsron reductions
 that would be required for a full
 demonstration of attainment, taking into
 account "uncontrollable'* stationary
 (04. an*4 source* and  expecud
 einis»io« reduction* from mobile
 sources), whichever i* larger." This  last

                  i MI*quality anaiy*u
                          ba*»-yc«r
       »by <•• to altrai dM ntrm* NAAQS
          Ibl For ikt «nNct»d •IUKMMM i'*t (Man ida>-

                                   tffliMloni

-------
43824	Federal Register /  Vol. 51. No.  233 / Thursday,  December 4. 1986 / Noticea
determination must be submitted with
the rule, and must use the same type and
quality of analysis required for an EPA-
approvable SIP. In no event may the
overall emission reduction required of
generic bubbles in such areas be less
than 20% of the emissions remaining
after application of the baselines
specified above: and
  (e) provide assurances, in conjunction
with the state's submittal of the genenc
rule to EPA. that the state (i) is making
reasonable efforts to develop a complete
approvable  SIP that will achieve the
percent emission reduction from
controllable sources described in the
previous paragraph and (ii) intends to
adhere to the schedule for development
of such a SIP (including dates for
completion of emissions inventory and
subsequent increments of progress), as
stated in the letter accompanying the
submittal or in previous letters. EPA
believes that the numerical
determination and progress requirement
discussed in the previous paragraph it
the functional equivalent of the
additional assurances described earlier
in this notice (see Section Q.B.Lb above)
for bubble* needing case-by-case EPA
approval since bubbles meeting this-.
requirement will produce attainment-
level reductions. For that reason. EPA
does not believe that it must require the
state to make those additional
assurances  when it submits the generic
  Therefore tlw ndueaoiu needed from
 controllable stationary sources art
 a.«o-sjoo« J.MO tm/yr.
  And the percent tminton reduction required from
 controllable stationary source* to nun la
             HMO)

             (4200)
x 100-***
  Thui the MI ovtnll reduction required from eacn
 generic bubble would be 94% (Le_ the reductions
 produced by applicable baxeJhm (e.g» application
 of a RACT emiaaion rate) pha whatever percent
 reduction in entntiona remaining after Una RACT
 limit ia sufficient to yield the 94% Uriel).
  Slatea that wiah 10 avoid eite-be-caee SIP
 reviaiona for lourcef for wlnck RACT haw not yet
 been defined in an approved SIP proviso* may
 incorporate "presumptive RACT" viiuea (e.a>. 30%
 reduction for VOC1 m their generic rule*. Source*
 would than have the option of accepting these
 RACT veluea for genenc bubble purposes, or
 negotiating different RACT value* through the case-
 by-case SIP reviaon process. However, wnere a
 source involved in e trade is one for which EPA has
 issued a CTC. but the state has not yet adopted the
 CTC-specifled emission rate as RACT and no RACT
 has yet been specified by the jiaie for thai source.
 the presumptive or negotiated RACT values for the
 trade must be ai leasi as restrictive as the CTG-
 ipecined emission rate for mat source.
rule. However, to assure that genetic
approvals continue to complement and
do not interfere with attainment
planning. EPA will require the state to
include all of those assurances in or
with its notices of proposed and final
approval of each bubble issued under
the rule in such a nonattainment area.
Generic rules meeting these
requirements will assure that each state-
approved bubble produces reductions at
least equal to those which would be
required under an approved
demonstration of attainment Their
availability can also  encourage states
and sources to take significant further
steps towards such demonstrations.
S ice reductions sufficient for timely
a .sinment are all EPA can require for
approval of State Implementation Plans
under section 110 and Part D of the
Clean Air Act Train v. NRDC. supra.
further Agency scrutiny of individual
bubble reductions is  not required.
2. Procedural Requirements
  Today's notice includes tightened
requirements designed to assure, with
minimal burdens on states, that EPA'c-
responsibiiity to monitor the
implementation of all generic rule*
incorporated in SLPs  (see section-
110(aHZNA)(H)) is more efficiently an*
effectively carried out EPA will fulfill
this responsibility by fa) examining and-
commenting on. together with any other
public commenter under applicable state
law, the information-provided for
individual trades subject to-proposed
action under generic rules, (b)
conducting reviews of individual trades
approved under such rules; and (c)
periodically auditing implementation oi
the rule itself as part of its National Air
Audit System investigations of state air
pollution control programs, including
indepth file audits of actions under such
generic rules. These  activities will cover
state actions of disapproval  as well as
approval, and will examine whether
rules are being interpreted or applied
within the scope of their approval by
EPA.
  To be considered valid by EPA. a
trade approved under a generic rule
must (l) be one of a class of trades
authorized by the rule. (2) be approved
by the state after the rule has been
approved by EPA. and (3) meet all the
provisions of the EPA-approved rule.
State approvals which do not meet these
requirements are not considered part of
the SIP and do not replace pnor valid
SIP limits, which remain enforceable
and may make such trades the subjec
remedial action after due notice by £1
to the state and source*
  In addition to requiring that genenc
rules or other state provisions assure
meaningful notice to EPA by the first
day of the public comment penod on
proposed generic actions, and
immediately upon find generic action
today's policy also requires that state
generic rules or other state provisions
provide the general public adequate
notice and opportunity to comment.
including opportunity for judicial revt<
sufficient to make comment effective.
Existing state generic rules, statutes o
regulations will generally satisfy this
requirement. However, some
jurisdictions, for example, deny judici
review to commenters who do not
possess a direct financial stake in
individual permits. Such jurisdictions
will have to modify their genenc rule.
other provisions, to meet this
requirement.

B. Bubbles Involving Hazardous or
Toxic Air Pollutants
  EPA reaffirms and extends its 1982
determination that bubbler in any an
must not increase emissions of
hazardous or toxic air pollutants.
Bubbles cannot be used to meet or av
National Emission Standards for
Hazardous Air Pollutants (NESHAPs
that have been finally promulgated
under Section 112 of the Act.  Where
NESHAPs have been proposed but nc
promulgated for emitting sources whi
are the subject of a bubble applicatio
the proposed NESHAP will generally
serve as the baseline for determining
creditable bubble reductions, and the
trade must produce reductions at  lea:
as great as those which the proposed
NESHAP would produce, if
promulgated. Moreover, no source
emitting a pollutant subject to such a
proposed NESHAP may exceed
emissions allowed under the propose
NESHAP as a result of the  trade. Wh
a bubble involves a pollutant which
fisted under Section 112, but no
NESHAP has yet been proposed for'
relevant source category, or a pollute
for which EPA has issued a Notice-o
Intent-to-List. there must be no net
increase in actual emissions of the
noticed or listed pollutant.2* In gene
                                                                 " In some limited circumstances additional
                                                               pollutant! may be treated as iuted pollutants :
                                                               Tecnnicai Issues Document. Section I 8 1 d.

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                 FKfcref Rayjeier / Vol 51. No; 239 f Thunder. December 4. i§g*>/
                                                                                                            496
•U bubble* ieroWmg mlatiuiu of
pollutants described above moat nee
Jower-o^acruaJ^-NESHAPt-eilowaWe
•missions baselines, and must take
place within a single plant or contiguous
plants.'0
  Coounenters who addressed this issue
divided into two general groepe. One
group asserted that hazardous/ toxic
restrictions should extend beyond
pollutants currently regulated, proposed
to be regulated, or listed under Section
112. These comments generally
maintained that restrictions should also
appiy to all pollutants the Agency is
"actively considering" tor listing, A
second group asserted that neither
volatile organic compound (VOC) i
paniculate entaaiom should be traded
unless there is deer evidence that
specific substances present is such VOC
or particolat* enuasrans are "relatively
in
  EPA haa determined that for reas
of policy and administrative practicality
these suggestions, while laudable ia
latent should not be adopted. Bubble*
are alternative "«*•"• «f r-nnt^itmnr*
which should g«"«»-ny be treated no
differently than other comnCanca
strategies, provided basic SIP
requirments of consistency with ambient
needs, PSD f»m*«fi««tf
progress are met EPA'i statutory
authority to farther restrict trade* oa the
basis of hazardous substance* which
may be present in a pastfcular criteria
pollutant stream (e.g~ VOCi) and which
may be subject to a Bating, notice-of-
intent-to-U*t or proposed NESHAP. but
are not as yet regulated under f 11X Is
limited. Generalized attempts- 1»
exercise soch rataorrty based" OB mv
presence of substances on. which ma
       r baa *»l"Mi m> fiifBAt actian
    itevsr wotdd be still aora tesnsooK
Agvncyl
whetew
 Moreover, the inherent enrbfgorrjrof
 such terms as "actively considering" or
 "relatively inaocaous" aufctaJaeaaau**
 such testa. State* remain free teadoe*
 further resliicliuus oonetatenf wtth (BOB)
 laws and needs. However, with respect
 to national requiremaatt EPA haa
 concluded that dear deeMea pointa
 based on actions puneenfto tfer
 deliberative process and record
  "Tot on* etCToOon lamtrwt MMm a «Mek
torpln roducrtooa at (ho tatmtora at potintara
tablet to rifvtodon. piupupn] rtjoiiaon. IMnc, or
uoaipotiMlo for \aautm
mutton*. (&(. »(i«n t tow
Munroni botow *» bMcttno ip»uffrt ibovt. ia
cxdians* (or eomoooBdlnvtoerTCior t too* •• nicfe « (ndi
MOVJO not roMJt ui M to^nvoi in filiui octiiii or
•UowibU tmiMMM of« poihiunt tubioct to thu
•pvenl nnneMow dtoooMd tbun it «ny «oufco.
U wouM nordlffir ia M«B» of rao.anmmu hooi •
                                      evidence uiiJeif/ lng> secrjbif tit
                                      detennoitfoM arv ta be prewmeL
                                        Inhireetod parties fhouW b* awn*.
                                      however, thai ondw todafs p*U*y *•
                                      Administraaji reserve* dttqitfon te>
                                      consider on « case-by-case bute
                                      whether 1
                                      pol
                                      list
                                                     prep
                        invohw
   llutaau which, while ne4 refulated
  ted or otherwise noticed under section
112. an regulated aa toxic under other
federal health-based statute*, and te
require further analysis before
approving such proposals.
  One  coounantar expressed concern
over the 1982 policy's use of the term
"reasonably close** to indicate the
distance which may be covered by
bubbles involving pollutants listed or
proposed to be regulated under section
112. EPA agree* this term Is anbiguoua.
and with the exception of bubbles which
afEraetfveiy uteueuj» such pefclaalr
below the lower-o£act«al-or-NHSHAP»-
allowable baseline, ha* sebetir****) tfc»
more protective and
thMsacktrmdaaoccacwfthiaa
piaalarcQntifuoa*piaat*.ta
a
sdveoebjeaithar
effects, tndfey't
they rely o«ry e*>
curreei acatai ot- sectteo U&
emiecMos aa ef th*
which**** iariowec, ia
                                      noticed. liateeL at pmenaad ta be*
                                      reguialad under aacna»UL
                                        Seveceiof the*epteyiiinn*  notehTj
                                      the propoaed NSSHAPs bua
•missions cap, the- inclusion ot
poButantt subject to No0ce*-o*-aiteai>
to-Ust end tne f*Mnt Unn^ttartB-
contiguoB*> pnstv aneMDwejr*or-a)ii mars*
or-| tl2-afiowcbles baaetoes
represent subeBtaUw Qgntenteej*
the 1982 policy.
C Bankiof Emotion Rttt
/SRCf/
                i-can ecse plan*
 modmdxetfon* orexpansioni. r.e
 source siting; orrJditJhg-sonrTe
 compflaoc*. Preperff-strnctaRd ba?
 may ndnec incentive* for sources to
 delay, conceal or hoard actual cr
 potential reductions until an irvsedfa:.
 use arise*. Banks may also pro* ce
 other, interim environmentalv ^ifHtx
 since beaked ERCs remain ou: jt tht *
 (althougo they mutt be treated for 51?
 planning purposes as "to the air '• ofltiJ
 used, la addition, banks can he.? stale
 agencies manage their permit workioac
 more efficiently, because poru-nt of
. new souce or •xisting-sourca
 compttsnca ttaaaactiona may DB pre-
 permitxad oc reviewed in advaaoe.
 Banks may also help state*
 syetaamticftUy asaen that all uoused
 surplus Mductiee* an treetad a* "in th-
 eir" for SIP pianainff purpose*, svoidin;
 potential inrnneiitsnri*s which sight
           (redaction* lob* bat
            \ insltatad soeie eor.hmow
 over whethei. ht eddHlee» to- nee ting
 other ERC requirement*, reduction*
 mu*tb*aeedvfedenffrenloReao*t  lo
 be frmalfr credRed far faenkmy Tbe
 anewer ie*A*« rTOwevef, e> order* fee
            rfsetaa redaetna credit*
                       :-*pprovwWr
         xnnreD redeetion* must b*
 made*enforBnble" of on state.
 Redvetknemevtb* ontde enforceab
 by the enrv by their tfmv of deposit in
 order. **. IB better ensan the integrity
 of the safe's air eua&f} planning
 process by preventing, *onrce* ttuiu
 banking reduction* of emission*, which
 their pemuts do aai preclude them from
       ine; to ami. Tai» reqiirement wiL
     prerwnt undue reliance by pvtiei
 or potential partie* oa ffeuseioq
 reductioaie. wkica nav* not actually
 occurred.1* However, becaos* tha*e
  EPA-appeevebie *e»a*iaa.
bane* m*i> eUew- seureee te
for their ewo fiMwe o*e ot uee by
Today's aotic* reiteratee tkel stelae ace
by no maaa* required t» adopt beeJdeei
           , but note* thaH>aa\k»aM|
                                        impertant planning anolanftsmnentai
                                        benefits. Jr Banks may ancounajV-flsaev
                                        to create inexpensive extcs reddctiona
                                        at earfier. optimal time* (14*. worn
                                        replacing outworn control equfpment or
                                        deciding how to meet new reouinmental
                                        end disclose such Information te state
                                        agencies. They may help ueete a oauual
                                        pool of identifiable, readirjr-avaiixbie
                                                                                          »»tfB«ffwittm>fb« credited for
 T«ihninl IHM§ DocwnoBl). Feilawinf puon
 «ttottir'lB0«e*.**'6«d ttuo«gh
 othtr formal or infenMl baakuti mtdiiiuimi wruch
                                                                              •PP*
                                                                    * -n future
                                                                oro mod*
                                                            of u*»«nd'«ff
                                                        of *• ngatetory;
                                                            "orrrnit.
                                          1 SM t*. t7 PR 1SOS1-M (AprU7.1SBSI.

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43826
Federal Regbtef / Vok 51. No. 233  / Thursday.  December 4. 1986 / Notices
actions merely create extra reduction*
in actual or allowable emissions which
cannot by themselves produce any
adverse effects on air quality, they need
not be made federally enforceable until
used*3 Where states wish to make
banked emission reductions federally
enforceable at the time they are banked,
several mechanisms may be available
for doing so without case-by-case SIP
revisions. States with EPA-approved
PSD. NSR, visibility and preconstruction
review programs can issue permits to
credit reductions from emission units
currently subject to these
preconstruction permits.14 States with
EPA-approved generic rules may also be
able to use  those rules' procedures to
make reductions at existing sources
federally enforceable. Since only
reductions in applicable emission limits
are involved at the banking stage,
modeling should not be required.
Moreover, these reductions should
automatically meet the requirement that
changes in emission limits under generic
rules not jeopardize ambient standards
or PSD increments.
   Since some trades have special
requirements, banks do not guarantee
the validity of particular banked ERCs
for all potential uses or for all time. For
example, because only actual reductions
occurring at the same major stationary
source are eligible for netting, banked
reductions created at other stationary
sources cannot be used for netting
transactions. However, banked credits
resulting from reductions at other
stationary sources may be used as
offsets or in bubbles, so long as this
notice's other requirements for
appropriate use of credits are  observed
and applicable offset requirements are
satisfied.
   Because of differing regulatory
requirements, the amount of credit
actually derived from particular
emission reductions may also differ
from one regulatory program to another.
For example, in primary nonattainment
areas needing but lacking approved
demonstrations, the amount of credit
  Sine* ititt* may have to reviae thaw regulation*
 or permit procedural in order to implement thl* new
 siate-enforceability requirement full
 implementation will not be expected until one year
 after publication of today'* notice. However, all
 credit! not made enforceable when banked during
 this interim period, together with afl credit*
 deposited pnor to today'* notice, thould be nude
 Hate-enforceable within eighteen month* from the
 date of thli policy.
  " a. 47 FR MOTS. 15011 at coL 1
  14 Some jurisdiction* may aleo BM general state
 preconitruction review program* that neve received
 EPA approval to credit reduction* a4 axxung
 source* if men reduction! are covered undet the
 program, tince nequiremente under the** program*
 are federally enforceable.
                       available from a given reduction for
                       bubble purposes may be less than that
                       available from the same reduction for
                       netting or offset purposes, since special
                       progress requirements apply to bubbles
                       in these anas.
                         Because the use of credits will change
                       (rather than merely reduce) emission
                       levels if approved, such proposals
                       should be carefully evaluated to assure
                       they meet all of today's criteria for
                       appropriate use. For similar reasons
                       proposals to UM banked credits will
                       usually require additional approval
                       procedures (e.g.. additional modeling for
                       certain TSP or SO* trades), whether
                       such proposals are evaluated as case-
                       by-case SIP revisions, under EPA-
                       approved generic rules, or under EPA-
                       approved new source review programs.
                         One commenter asked how banked
                       ERCs would be treated if a
                       nonattainment area is being
                       redesignated to attainment
                       Redesignation will have no effect on the
                       banked ERCs. so long as state planning
                       considered those ERCs to be in the air
                       (i.e., in me inventory) at the site of their
                       creation. Because local recessions or
                       shifts in industrial patterns can
                       temporarily affect air quality without
                       regard to the adequacy of state
                       emission-control efforts, EPA guidance
                       requires that redesignatioa not be based
                       solely on monitored air quality. In
                       addition to considering factors such aa
                       the state of the particular economy and
                       its effect on emissions, EPA may
                       consider the number, type, and state
                       inventory treatment of banked credits.
                       Such procedures will help assure that
                       reliably banked reductions are not
                       reduced or otherwise adversely affected
                       by shifts in an area's designated
                       attainment status.
                         Some commenten asserted it ia overly
                       cautious to require that all banked
                       emissions be considered as "in the air."
                       One commenter asked that state
                       planning be required to include as "In
                       the air" only a portion of banked
                       emissions analogous to a "reserve
                       requirement" This comment drew
                       parallels with financial banking to
                       assume that given withdrawals and
                       deposits, a certain "float" quantity of
                       ERCs would always remain in the bank
                       and out of the air. EPA recognizes that
                       reductions placed in banks may tend to
                       keep the air cleaner through a relatively
                       constant level of deposits. However,
                       EPA cannot allow statea to consider less
                       than their full amount of banked
                       deposits as "in  the air." To do so could
jeopardize air quality planning and
attainment1*

D. OBERS Projections and Double-
Counting

  In its August 1983 notice EPA asked
for further comment on whether some
SIPs' translation of general economic
growth projections provided by OBERS
(Department of Commerce) directly into
projected emissions growth, left "no
straightforward way to disaggregate the
projections into shutdowns and new
plant openings." Whether such SIP
demonstrations were fully or only partly
approved, the notice continued, such use
of OBERS might make it impossible to
distinguish which shutdowns were
already relied on in, the demonstration.
Therefore, it might be "difficult or
impossible for states whose SIPs rest on
OBERS projections to grant credit from
shutdowns for use in existing source
bubble trades, consistent with the Clean
Air Act" 48 FR 39581.
  Most industry and several state
commenters asserted that where OBERS
data were used to project needed SIP
reductions, us* of shutdown credits in
bubbles was not a problem, since
OBERS figures substantially
overestimate the total amount of
emission reduction needed to attain. For
example, one industry commenter noted
that "emissions growth will not be
directly proportional to economic
growth because of the installation of
new environmentally efficient
technologies. Therefore. SIPs which
used "OBERS" projections already have
  " In order not to defeat banking i purpow of
encouraging the earliest poinbte disclosure and
production of potential extra emiaaion reduction!.
a** of banked credit* for bubble purpoaea m
primary acaattauuntnt ana* whicfi locJt approved
oeoKMittratuuu will continue to be allowed.
provided the** credit* meet all baaeline and other
applicable requirement* of today'* notic* for these
area*. This generally include* the lowe*t-of-«ctual-
StP-aoowabU or RACT-allowable eminion*
batata*, applied aa of the date of written
application to the itate to bank *uch reduction*
through • formal bank or informal banking
mechanise! for uae in future trade*. It alio memoes
that m net reduction requirement and net*
auuranca* «pedned above, at the tune such c.-«aits
an approved for uae in bubble*. Banked crecus
resulting boo float iAutdown or production
curtailments may be uaed for bubble* in these areas
on the tame term* a* ute of other banked cretjits.
provided their uee i* subject to stringent qualitative
review to amura legal technical and programmatic
conautancy with SIP planning goal* (e.g.. avoidance
of "shifting demand"). See today's Policy at n. 24
and Section LA.1.43) of the Technical Issues
Document. (Banked credit* resulting from certain
shutdown* or production curtailments may
however, be lubiect to special restrictions for offset
purpote*. See today'* Technical Issues Document it
n.14).
  Th* (pedal restriction* discussed above do not
apply under today'* notice '* ua* of benxed credit
for bubble purpoee* in other areas.

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                  Federal Register /  Vol. 51. No. 233 / Thursday.  December 4. 1986  / Notices
                                                                        ^3827
an inherent growth potential built into
them, and allowing ERCs for shutdowns
in these areas will not jeopardize a
state's ability to demonstrate
attainment." A local agency agreed that
"demonstrations. . . based on such
emission projections would over-
estimate attainment because some
growth will occur from [whoiiyj new
sources, new sources replacing existing
sources, or modified existing sc-.rces.
(all of] which would be subject co. .  .
New Source Review rules, rather than
the less stringent [SIP] requirements
assumed in the emission projections."
  Several state commenters also
stressed that while use of OBERS
projections ia not widespread, the
underlying question is whether the
area's SIP process incorporates
conditions sufficient to prevent double-
counting of shutdown credits. One local
agency recommended that shutdown
credits be prohibited where the source
involved is within an industrial category
projected to go through an economic
downturn, asserting that in such  cases
the SIP implicitly relies on the expected
shutdowns. An environmental group
went a step further, and urged that all
shutdown credits for bubbles in areas
using OBERS projections be completely
prohibited.
  EPA has concluded that the
requirements of the 1982 policy are
sufficient to prevent double-counting of
shutdown credits, and should be
retained without further special
restrictions. First use of OBERS  or any
other projection is relevant only  where
an area has an approved attainment
demonstration. Today's notice generally
disallows bubble credit for pre-
application reductions (including
reductions from shutdowns or
curtailments) in primary nonattainment
areas which require but lack such
demonstrations. Thus today's notice
largely moots any issue of double-
counting for past shutdowns, in the
areas for which this issue has been
raised with the greatest concern.
Second, use of OBERS projections in
areas with approved demonstrations
does not appear nearly so common as
was assumed in EPA's 1983 request for
further comment* Even where such
projections were used in approved
demonstrations, they generally
overestimate the amount of emissions
forecast to exist in the year of protected
attainment. They therefore tend to
assume substantially less overall
reductions from source turnover than
will actually occur."
  Finally, even if such projections did
not overestimate emissions, under
today's notice the state must show that
use in bubbles of any reductions created
by shutdowns is consistent with its
attainment demonstration and that
those reductions were not already
assumed in its SIP. For example, the
state must show that it did not implicitly
or explicitly rely on a "turnover rate"
from the difference in emissions
between existing sources and better-
controlled new sources for part of the
reductions required in its SIP from that
industrial category. Alternatively, it
must show that if a -turnover rate" was
assumed, the shutdown credits used in
an individual trade result from
reduction* in excess of that turnover
rate. When a state regulated the
sources in a standard industrial
classification (SIC) without explicitly
relying on turnovers, then bubble credit
for a si- udown within that SCI category
would not in general be double-
counted.*''
  These requirements should fully
protect states and sources against
adverse environmental or SIP effects.
£ Itnpnnd Modeling and dg Minimia
Rtquinonnts
  Bubble applicants must show that
their proposed trades are at least
equivalent  in ambient effect to the SIP
(or other) emission limits the bubble
would replace. For some criteria
pollutants (e.g., VOC or NOJ  this test
may generally be met by showing equal
   >• Thii ii to JMCIUM OBEKS-4a*ed SIP
 proitciiont aiiume thai uniti of production (and
 hence tmiMionil in particular SIC Code* will keep
pad with projected Mad* IB earning* and/or
employment in thoee SIC code*, without regard to
changing dlitribution* between MW and existing
•ource*. See. e.g. USD OBEX& BEA A*mm/
Protfcvons. Voluam I: MecAMfo/ogr. Cancepej and
Siot*Data. p. (xi). US. Department of Gnnerce
(July IStl).
  " Such credit* must of coon* ant ill other
requirement* of today'* nonce, including application
of appropriate buebne* and othir cnMfU defuung
eurplu* reduction*, before they may \t» mod ia •
bubble trade.
  SUM which expreuly relied on OBCRS
protection* may aUo show that no double-own ting
occurred by demonilnnag that they did aot
impHtitly rely on any turnover credit*. Tni* ahowtnf
ihould not be difficult to auk* became OBERS
auume that eirriaaiona will evenly increaae u each
plant and production line, proportionate to growth
in earning* and employment potential Cor that SIC
code. Ct a. 38 above, Thti aMumptioa neither
anticipate* nor relit* on the fact that any ihuldown
will occur.
  The one exception to theee feneral principles
could occur where a SIP relied oa OBERS
protection* for aa SIC category predicted to undergo
a quontifitd future economic downturn, wnheul
taking explicit affirmative itepe to preclude reuaace
on thet downturn, la theee cireunMtance* the itate
would either have to (how that a propoaad
thuidown credit from a aovrce within that SIC
category waa not double-counted (14. by ahowtag
that more shutdown reduction* than protected for
the SIC category had already occurred), or deny
credit.
reductions in emissions. "For otrcr
pollutants (e.g.. SO,. TSP or CO) ii
traditionally met prior to the 1982
policy, through ambient dispersion
modeling.
  The 1982 policy made available
several alternatives to the use of ruil-
scale dispersion modeling whet* »-jcn
modeling was not needed to orcisc: air
quality. These alternatives coulu.. t
appropriate, carefully-limited
circumstances, be used to demonstrate
ambient equivalence for bubbles
involving particulate matter or other
pollutants whose ambient effects were
not linearly related to emissions. They
included d» minimia levels and the use
of other screening criteria to identify
circumstances in which full-scale
modeling was unnecessary, either for
bubbles processed as SIP revisions or
those approved under generic rules.
  Today's notice both tightens some of
these screening criteria and expands  the
circumstances in which such criteria can
be used.
  Today's notice also specifies certain
conditions and types of case-by-case
SEP-revision bubbles for which EPA
Regional Offices may require additional
technical support beyond basic
modeling requirements, deemed
necessary to protect NAAQS. PSD
increments or visibility where
values used to calculate baseline
emissions an not clearly used or
reflected in an approved demonstration.
or may not reasonably be assumed
consistent with the need to protect PSD
increments or visibility. See Technical
Issues Document Section I.A.I.a.

1. De Minimis Levels
  Under the 1982 policy, trades in which
net baseline emissions did not increase
and in which the sum of emission
increases, looking only at the increasing
sources, totaled less than 100 tons per
year (TPYJ after applicable control
requirements, could be exempted  from
SIP revisions under an approved generic
rule. The rationale for this approach was
that EPA regulations implementing the
Clean Air Act already allow some
exemptions from NSR requirements for
new sources which are not defined as
"major"—Le., which do not have
potential emissions greater than 100
TPY. See e.g.. CAA section 302(j) and 40
CFR SZ21(b|(l) and 51.18(j)(l)(v).  Thus
trades which merely shift lesser
amounts of emissions, and which  are
  •• latereeted partiea thoold. however, be ewer*
 met aatbtenteaulvaleKeoBrundentron* which
 apply to SO*. IV end CO. a* deecnbed below. at*
 apply to NO, trade* involving nubility impact]
 from elevated plume*. See SectHM La I b  of toda*
 Technical Uaue* document.

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4368S
Regirter / Vol. 81. No. Z33 / Thurntay.  December 4. M6S / Notices
accompanied by compensating
decresws, should not •• subject to:
stringent requirement*. A* the 1982
notice put it "Such trad* will hive at
most a de minimis impact on local air
quality because only minor Quantities of
emissions are involved ... the Federal
resources required to evaluate these
trades could best be used to evaluate
actions that have a potential impact on
air quality." 47 FR at 15065."
  One commenter asserted that this 100
TPY limitation was unnecessary, since
the trades to which it applied  were
already required to produce no net
increase in emissions. However, four
state and environmental commenters
urged that de minimis levels for such
trades be the same as those triggering
federally-mandated review of emissions
increases in PSD areas. These comments
primarily noted that EPA had  already
defined more relevant "cutoff' levels in
its regulations for PSD, for NSR
preconstruction permits in
nonattainment areas, and La visibility
permit regulations, and that emisaioo
shifts of 100 TPY from one source te>
another might still be too large to go
unexamined for certain types  of
emissions and situanoas.
   In order to ensure prosecution of
ambient air quality, today's notice
adopts more protective de minimis
levels—derived from those for PSD; NSR
permits in nonattainment areas: and the
visibility permit regulations—of MO TPY
for CO,« TPY for SO», 25 TPY for
participate matter, and 0.6 TPY for lead.
Because of this action, state ambient
evaluation of de minima trade* wttl no
longer be required foe generic bubble
rules to be approvable by EPA.44 Trades
involving sources of substantial size
may still  be implemented as de minima
under today's provisions, as long as the
quality of ERCs traded by these sources
is below the levels specified above.

2. Modeling Requirements41

   Numerous comments were received
on the 1982 policy's ttese-tevel approach
  " The 19*2 document did. however, note that
such "(general trades are stifl siaTseil 10 sssbisnt
tests |st the slat* level andj . . . should
accordingly be evalusted by the state under the
modeling screen .  . or an equivalent approach."
47 FR1SOSS at aJ.
  •• This shoeki not be coastraed to onpty that new
sources aadawelificsaaas need not meet el
applicable requirements, including those specified
under 40 CFR 51.18 or parallel EPA-approved stale
rules.
  *' The foBowiiig Jtsueseiuii summer lias both
interlss improvements made m the 198! modeling
screen  (eee Technical Issues Document. Appendix
Cl and BPA's re»a«aees >o metar uemmenls on
moaeling issues.
              to deiMiutnung aabwat tq*ntnu*.
              The vast majority taught adtitd
              clarification, stating, for exaopk. that
              the 1962 policy did "nex adequately     Sf
              delineate the level of modeling
              necessary in each instance." Today's
              notice tightens and clarifies the
              conditions under which ambient
              equivalence may be demonstrated wtth
              less than full-scale modeling.
                a. Level I Criteria. Under the 1982
              document no modeling was generally
              required of SO*. TSP. or similar trades
              where applicable net baseline emissions
              did not increase, sources were located
              in the same immediate vicinity
              (generally within 250 meters of each
              other), and the taller suck was the one
              which increased its emissions. These
              conditions were believed sufficient to
              assure that local ambient concentrations
              of the relevant criteria pollutants would
              not increase as a result of the trade,
                EPA has added two criteria to those
              specified in 1982. in order to provide
              additional assurance that trades
              approved under Level I wHl have no
              adverse ambient effect First there most
              be no complex (e.g., monntahiona)
              terrain within 50 kilometers of the
              trading sources or within the trade's
              area of significant impact whichever is
              less. (For simplified methods of
              determining "area of significant impact"
              see today's Technical Issues Document
              Appendix E). Second, stacks with
              increasing baseline emissions must be
              sufficiently tall to avoid downwash.
                Some industry commenters objected
              to the 250-meter limitation, advocating
              use of either trade ratios for sources
              beyond that distance, or an 800-meter
              limit extrapolated from unrelated EPA
              regulations.4* EPA has retained the 290-
              meter limit as substantially more
              consistent with the modeling screen's
              original intent of simplifying modeling
              requirements for trades which eonid not
              jeopardize ambient equivalence.*"
                «• See «.». 47 FK M84. MM (Peoraary 8. ISett.
                41 Trade ratloe may already be neat ander
              general provwtoaa In vital* Malm to design other
              equivalent approaches which adequately eddrasa
              ambient concerns. See. a*. V FR at \tarr end «U.
              WOTS. However, to be approved by tff> each ratios
              would taMraUy beve to bedeAMd Uwovak era*.
              wide advance modeling of att i saris*, ao well «a
              theee likely to trade.
                Several comments also objected to the
              requirement that level I trade* not
              emiurana from the coerce wtth the lower effective
              prams height. Theee comments noted mot under
              venous conditions mailer Mack* coaM so very in
              sBsetivs prame height that iieulm wu«M
              coneutencly be "higher" or "tower." One era*
              auggeated tMa mnttartoa might eucu siege eee eftrt
              •tacks to core loco) exceedonses.
                Today') nonce retsrns this Level 1 requirement
              unchanged. That two loorocs may be virtually
              Induiingutthable in effective stack height should
              not delay approval of Lavel I trades, since the
  0. !«"»/ ff Criteria Trades of 9O».
TSP. OX Ffc and NO, {far visibility
purpose*) ane- «bo b* approved throoga
limited Level B Mdettaeg erf the ambtmt
efbcts teUy of seuresat involved in the
trade, when applicable net baseline
emissions de oot tncreaM and
designated ambient significance levels
are not exceeded.
  Today's notice confirms, clarifies, and
in certain cases extends various 1983
improvements made to increase
certainty and better assure that such
Level D trades result in ambient
equivalence. In particular, "significant
ambient impacr may no longer be
measured solely by changes at the
"receptor of m«*«minTi predicted
impact" before and after the trade.
Instead such changes must be measured
at every affected receptor for every
averaging period relevant to the
particular pollutant throughout the year.
Under this approach no Level II trades
will be approved without further
scrutiny, involving full or limited Level
ID modeling, if they result in a
significant net ambient effect at any
modeling point for any such avenging
period during a modeled year.
  Today's notice also specifies Level II
significance levels for all averaging
periods conaiatesU with all current
national aasUeat air quality standards.
not juat the) M aout averaging periods
for SO* aad PM or tike 8-hour averaging
period for CO.44 Refined models such as
MPTER and ISC must generally be used
to rasasam change* resulting from the
trade at e*eh receptor, using the most
recent foil year of meteorological
data.4*
  These Bodeling requirements assure
that bubbles which pass applkable
Level Q tests and meet all other
requirements of today's policy will
result to air quality equal to or better
                                                       Umitstton's parpi
                                                       significant tnerei
                    nttng potentially
               i m ground-level ambient
concentnttaeM dea • shafts of muuwm from
-higher" «• "lower" stacks  wiH still be satisfied.
           i such trades cannot increase net
baseline emissions, this limitation merely ensures
they wtttnot create /tew ambient violations.
Dacsisse ether SPA regnlstions address the me of
excessively tatt sSschs to ran existing ambient
violations. •• farther raeencuon 10 Uxs Level 1
requirement appeen esquired.
                  on of these significance
                                                                                                    I aseuisucs of
                                                                                                      i they provide m
                                                                                   conjunctlesi vote) today's mare sophisticated Uvei 1]
                                                                                   modeling apejcaach. see Pleckanstein. "Modeling
                                                                                   Criteria: The Key to Major Reforms For Emissions
                                                                                   Trader," AKA Paper S4-au (Sen Francisco.
                                                                                   CaiifomU.June2S.l9e4).
                                                                                    *• Under some limited conditions, conservative
                                                                                   screening modah may be substituted for these
                                                                                   refined models, and IB these cases a full year of
                                                                                   meteorologKal data nay aot be necesury See
                                                                                   Technical taaues Document. Secnon 1B i b.(3l.

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                          RigatBr / Vof.  St.  Nor. 239 / Thursday. Dtcemfaar 4.1986 / Ptotlc**
                                                                        •2829
than that produced by pre>tnde
emission limits, and may b* approved.
Because refined models have now been
approved by EPA andtheir parameters
may be specified with greater certainty
and confidence, these requirements also
provide a firmer basis for approving
state generic rules incorporating Level

  c. LmA III Cfiterta. Trades which are
not dt minimi* and do not satisfy Level
I or Level Q above must generally be
evaluated by full-scale ambient
dispersion modeling. Two air pollution
control agencies recommended fixed
trading ratios in lieu of such modeling
asserting this would reduce cost and
uncertainty while «»mim4«y to meet the
goals of the d*a» Air Act EPA
recognizes the legitimacy of the**
concerns but has concluded that trade*
which do not satisfy Level I or D raise
the kind* of sir quality issues which
appropriately require full-scare
modeling, unless such trading ratios
have been Justified by similar ana-wide
modeling conducted in advance of the
trade.
  Today's notice does, however, modify
Level ID to provide stales and sourae*-
more flexibiaUTi io this regard. Whet*, a.
tndameetaaiiothazcritariaofLesaia.
but Level D modeling has shows
significant potential increases at
particular recantoca> «"«<^faH "**^YMS
under Laval 01 may under appropriate
circumstance* be limited to a ceceptor
area smatUer than tha trade's entire are*
of impact so bog as i* incradn
emissions from all souross whick
contribute to ambient concentrations in
 that limited geographic area. Because of
 the unique nature of each situation, tlse
appropriate limited geognphic are*.
 must be detamiiMd in accord with-EPA-
 guideline* on modeling and cue-by-
 case evaluation. This "hasted Leva! IE:
 approach may conserve lapiftrsnt
 resources, while aUossing states and
  «• (nitrated parties
that becaiue ot rtpll
ipptkatioa of any suprnaa*
specific aeWiietii dispeniea:
generic ruk» may be am* difBi
sources to focus on specific geographic
anas of concern.4*
F. Enforceawit taut*
  Several commenters noted that while-
sources should as provided in the 1982
policy, be allowed to use bubbles to
come into compliance, bubble
applications might also be used to delay
compliance or enforcement without
compensating environmental benefits.
Some of these commenters alluded to
language in the 1982 notice which, while
not authorizing or intended to authorize
such results, could have been
interpreted to allow them. Such
unacceptable delay might for example.
arise where a source facing an imminent
compliance «ia««iHiM suddenly advances
a bubble application and asserts that
more time is needed to develop and
evaluate that application before
compliance with original SIP limits
should be required
  Both bubbles and generic rule* can be
important means of allowing
environmentally-sound compliance.
Generic rule* may b* more expeditious
than case-by-case- SIP revision bubbles.
They may also pieserve the very
opportunity to bubWe when the timer
needed to process a eass>by-oas* SB*
revision might extend beyond th»
source's origin*! SIP compliance  da*
implement than mil* incorporatnfOBiy-de auiumit
«nd Level I approaches for SOi. TSP. CO or Hn
Dunn) «nd after inuanca ef tne 1H2 tatans» pvtcy
EPA f taff dtaftaal aad informally oreuktaa. at (fee
request of ssate and local air agency dinctan.
modal fenene rulim which pnvidad oar* datail to
help imausud natea acceptably addrvn theea
coocama. Th« Agave? plan* to epdane. anaV-
mcuculata tboM model ruin aa quickly aa powbte
after pubbcation of today's aouca. EPA aoeourmfn
partln wish** to de»efap lenerlc rain to oat then
new models ana* wuck cloMly with ralcvim
Reftoml rtaff. to Hmt polanttal probftm mry ba
promptly idantifitd and motvtd
shovid not become a sUeU against
enforcement action* for sources which-
have failed to take neceeaaty step* to
meet required control obligation* oa>
time; Babbhw are simply atteraatir*-
meanrof complying at less cost They
should be treated neither more nor him
stringently than other, more traditional
mefhoda of compliance. DubUet offer
innovative ways tomeetendaaioir
reduction obligations. They should oat
become devices to avoid such
obligations.
   Today's notice substantially clarifies
and tightens the 1902 policy to better
implement these principles. Among
other steps, compliance extension* wiff
no longer be granted under generic miee
in any oonattainment area, and may be
  " Today't aodca alao raquirt* bubbat I
 eaftata primary Boaattamiiiaui ama i
 lackiai approwd daMMamaaM la pradMa • *«M
 air quaflty baotflt" whicn ahatt omaui at a^oaviai
 of a JB* nducnoa in tnuMtona iiiiiiuag aAar
 tppocauoa of tfaa lowarof-aCTuMg altonabU at
 RACT-ailovabla nmaaioiu banliM* to aU inairia
 involvtd in taa bnboia. Saa. *>. SaoanB. Babooa.
 Thil rtquinmaiit don aotaMait
 difftranl tha»o» IB addition la  those which do not4'

Emission* Trading Policy Statement
Tabla of ConlaoU; Policy Statement
L bMroducttOK Basic BeatanU of Emi*»u>na
    Tradia*
  A, What is Eauaaions Trading?
  & The Bubble
  C Netting
  D. Emission Offsets
  E. Emission Redaction Banking
  F. Generic Trading Rules
  C. Effect of This Policy Statement
0. Requirements for Creating. Using, or
    BaakiBf Fmiiti-rn Raducbon Credits
    A. Creating c~i*"«" Reduction Credits
    l. Surplus
    i Eniorceable
    3. Peroianeot
    4. QuantrRable
  ** Sleln and tourcaa tbouid> however be aware
that under current EPA fMdanca. inch discretion i«
moat Hkal* to be nnoaed wnare a SlP-nntran
baoWe bea on»fomaay pnposed (or upproval it
the ttate bveiaad EPA staff kava concludtd thai n
apfaanapprovabl«uadercamni EPA poiicy In
then orennwraneee imUalton o/ action to enforce
pn-trad* Hmts *al wo»W MM ba unlaced by •
v»M bueoatmxBAvanOoa wojd likeiy consume
Hmiiaa DA ea*nsan»a«M raaovren to uula
enviponmemil end.

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43830
Federal Register / Vol. 51,  No. 233 / Thursday. December 4.  1980 / NoticM
  B. Using Emiaiion Reduction Credit!
    1. EmiMiont Tradei Mu»t Involve the
    Same Criteria Pollutant
    2. All Uses of ERCs Must Satisfy
    Applicable Ambient Test*
    3. Bubbles Must Not Increase Hazardous
    Pollutants
    4. ERCs From Existing Sources Cannot
    Be Used to Meet Technology-Based
    Requirements Applicable to New
    Sources
    5. States May Approve Bubbles in
    Primary Nonattainment Areas Which
    Require But Lack Approved
    Demonstrations of Attainment
    6. Sources Need Not Be Subject to
    Binding Compliance Schedules Based on
    Current SIP Requirements
    7. States May Extend Certain
    Compliance Schedules
    a. States May Approve Bubbles Involving
    Open Dust Sources of Paniculate
    Emissions
    9. Trades Involving Lead
    10. Trades Involving ERCs From Mobile
    Source Measures
    11. Interstate Trades
    12. Bubbles Must Not Impede
    Enforcement
  C Banking Emission Reduction Credits
 III. State Generic Trading Rules
 IV. Bubbles Which Require Case-by-Case SIP
    Revision*
 V. Conclusion

 EMISSIONS TRADING POLICY
 STATEMENT

 L Introductioav Bajic Elements of
 Emissions Trading

   This statement details EPA policy on
 emissions trading. It sets out condition*
 EPA considers necessary for emissions
 trades to satisfy the  Clean Air Act It
 also clarifies and otherwise makes final
 the Interim Policy proposed on April 7,
 1982 (47 FR15076). It is accompanied by
 a Technical Issues Document which
 elaborates and provides greater detail
 on pnnciples set forth below. Finally, it
 addresses new issues, and incorporates
 certain additional safeguards a* a result
 of past trading experience, to better
 assure the environmental integrity of
 future trades.

 A. What is Emission* Trading?

   Emissions trading consist* of bubbles,
 netting, emission offsets, and emission
 reduction banking. These steps involve
 creation of surplus emission reductions
 at certain stacks, vents or similar
 sources of emissions and use of these
 emission reductions to meet or redefine
 pollution control requirements
 applicable to other emission sources.
 Such emissions trades can provide more
 flexibility to meet environmental
 requirements, and may therefore be
 used to reduce control costs and
 encourage faster compliance. Moreover.
 by developing "generic" trading  rules
                      (see Section 12 below] states1 may be
                      able to expedite bubble approval! by
                      eliminating the need for case-by-case
                      SIP revisions* and by providing more
                      predictable approval criteria.

                      8. The Bubblt
                        EPA's bubble lets ousting plant* (or
                      groups of plants) increase emissions at
                      one or more emission sources in
                      exchange for compensating extra
                      decreases in emissions at other emission
                      sources. Approved bubbles give plant
                      managers the ability to implement less
                      costly ways of meeting air quality
                      requirements. To be approvable, each
                      bubble must produce results which are
                      equivalent to or better than the baseline
                      emission levels in terms of ambient
                      impact and enforceability. Thus.
                      bubbles should jeopardize neither
                      ambient standards nor applicable PSD
                      increments and visibility requirements.
                      Under EF'  « bubble, emission
                      reductions  irom existing sources can not
                      be used to meet technology-based
                      requirements applicable to new or
                      modified stationary sources.
                        This Policy Statement replaces EPA's
                      original bubble policy (December 11.
                      1979:44 FR 71779) and* Interim Emissions
                      Trading Policy (47 JR13078K It tighten*
                      general bobble principles, a* well as>
                      requirement* for bubbles in primary
                      nonattainment areas which require but
                      lack demonstrations- of attainment, and
                      requires bubbles in these areas to-
                      prodnce progress towards attainment
                      beyond equivalence to stringent
                      emission limits. By specifying EPA1*-
                      requirements for bubbles in all areas,
                      this Policy  Statement should make the
                      development review and approval of
                      environmentally-sound bubbles more -
                      rapid and predictable.
                      C Netting
                        Netting may exempt "modifications"
                      of existing major source* from certain
                      preconstruction permit requirements
                      under New Source Review (NSR). so
                      long as there is no net emissions
                      increase within the major source or any
                      such increase falls below significance
                      levels.* By "netting out" the
                        1 ~SUtM" IndudM any enttry property dMefatod
                       authority to adnunitMr relevant pert* of • SUM
                       Implementation Plan (SIP) under the OMB A* Act
                        • "Caae-fey-caae SIP revuton" oweaa uaa by-
                       eaae approval by EPA aa a SlPrevtaJon. TWa la the
                       traditional mechanum by which babbie* aod other
                       SIP chanae* hava ba«n approved by EPA.
                        > See. a.«, 10 CFR SVUUHtMx). JIMftXm
                       3121(bH»|. Saa aiao today « Tadmical laauaa
                       Document n. 47 and acepmpanytnf taut
                        On November 7.18SS. EPA natnietund CFR Put
                       51 and renumbered many of that Part'i aacOon»(51
                       FR 40S9S). Baeaiua moat raadara wiO ba men
                       familiar with prior designation*, today'i notice
                       contain* citation* baaad on tha organization of Part
modification is not considered "major"
and is therefore not subject to
associated preconstruction permit
requirements for major modification*
under 40 CFR 51.18,51.24.5&21, 52.24.
S&27, or 5L28. The modification must
nevertheless meet applicable new
source performance standards (NSPS).
national emissions standards for
hazardous air pollutants (NESHAPs),
preconstruction applicability review
requirements under 40 CFR 51.18(a)-(h)
and (1), and SIP requirements.
  Netting's scope is determined by the
definition  of "source" for review of
major modifications. In general. PSD
areas use a single, plantwide definition.
allowing actual emission reductions
anywhere in a contiguous plant to
compensate for potential emission
increases at individual emitting units
within the plant Nonattainment areas
can choose either this single, plantwide
definition  or a dual definition, so long as
the definition selected does not interfere
with attainment and maintenance of
NAAQS and is consistent with progress
towards attainment Under the
plantwide definition, significant net
actual increases at tha plant  as a whole
will trigger new source review. Under
the dual definition, significant increases
at either the plant as a whole or
individual emitting units will trigger new
source review.
  In addition to these federal definitions
for majornew sources and
modifications, state preconstruction
permits for major or minor new sources
and modifications may be required
under 40 CFR 51.18{a), and some states
preclude netting.

D. Emission Offsets

  In nonattainment areas, major new
stationary source* and major
modifications are subject to a
praaconatructian permit requirement
that they secure-sufficient surplus
emission reductions to more  than
"offset" their emissions. This
requirement is designed to allow
industrial  growth  in nonattainment
areas without interfering with
attainment and maintenance of ambient
air quality standards. It is currently
implemented through SIP regulations
adopted by states to meet the
requirements of 40 CFR 51.18(j).
  In attainment areas, some  new
sources and modifications might not
otherwise be able to be constructed
because their emissions would result in
SI aa It exiated before thla rainctunne. Interacted
part** may uae Appendix F of today'i Technical
Mauaa Document to convert today'i Part 51 citation*
to the correipondina, new one*.

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                  Federal Register / Vol. 51. No. 233 / Thursday.  December 4.  19W /  Notices
                                                                       438:
an euceedenca of Hie apefecabie PSX>
incroMH at ambient ear qaakity
standard, would signifteanHy contribute
to a viobOoa of IB !•*•'*•* air quality
standard in a designated primary
nonattauunent area, or would
significaady contribute to viaibiiity
impairment in a Federal Clasa I area.
Torn* aourcea may iwe emissions offsets
to allow desired growth  while protecting
that increment, standard, or visibility.
£ Emission Reduction Banking
  Finns may store qualified emission
reduction credits (ERCs) in EPA-
approvable banks for later use in
bubble, offset or netting transactions.
Depending on the bank's rules, banked
ERCs may also be sold or transferred to
other firms which seek to meet certain
regulatory requirements by use of
emissions trades.
  BPA's revised Offset Ruling (40 CFR
Part SI. Appendix S] allow* states to
establish banking rules as part of their
SIPs. This Policy Statement and
accompanying Technical Issues
Document detail the necessary
components of a complete state banking
rule approrable under the Clean Air
Act WWe many areas also allow
baaJtiag of enmsten redaction* for
vejioe* pefpoeea thcougB various formal
or informal banking mechanism*, banks-
whkfe do not meet today's criteria (e.g.,
by not BMudna^ banked emission
reduction! enforceable by the state by
the ttBM the redactions are actually
banked, er by not aeeering that deeoeft*
are taken exptidtry into accoaat for SB?
ptemiiug* perpoeesf cannot o^eiify>
emtsaion reductions as ERCs. and may
offer substantially las* protection in the
event ef future SIP corrections or
change* in ambient attainment i
 F. Generic Trading Rule*
   Generic rules adopted aa part of the
 SIP can authorise states to approve
 certain types of individual tranaactione
 without the need for case-by-caaa SIP
 revisions or associated federal review
 prior to approval The first state generic
 bubble rule was approved by EPA April
 8.1981 (46 FR 20551). Far she current
 scope of permissiba* mine, see Section
 in below.

 C. Effect of Thit Policy Statement
   Emissions trading is largely voluntary:
 no source is required to trade, and no
 state is required by EPA to approve a
 particular trade or to adopt a generic
 rule. Trading merely offers slates and
 stationary sources alternative ways to
 meet regulatory requirements. For
 example, states are free to adopt generic
 rules or continue to implement trades as
 individual SIP revisions. They may
adopt rule* whicn Incorporate eft or any
combination of the above trading
approaches.*
  Thit Policy Statement is accompanied
by a Technical Issues Document for use
by states and industry in further
understanding emissions trading. The
Document offers elaboration and
important detail on requirements and
available options under the Clean Air
Act
  This notice reflect! the current Clean
Air Act and existing EPA regulations. A
policy statement cannot legally alter
such requirements. However, this notice
establishes EPA policy in areas not
governed by applicable regulations and
sets out general principles which may
help states and industry apply those
regulations in individual caeca. Federal
or state raienaking la response to. e.g~
future litigation or changes in ambient
standards, attainment status, or SIP
validity, may affect states or firms that
plan to engage or have engaged in
emissions trading activities.
  Nothing in today's notice alter* EPA
new source review requirement* or
exempts- owner* or operators of
stationery sourcee from compliance wrtfc
applicable precomtruettoa permit
reguladone- to accord with 49 CFR 51.»
51.24,51 JOT. SL21.SIM. S2JT, and
S2JSL btereeted partfee should.
however, be aware met bubble trade*
are not subject to preconstructfen
review or regulations where these trades
do not involve coejumtluu.
reconsuBUhm. or modlffcattoe? of a
source.
  EPA intends to apply changes made
by today's policy proepeettvery (e.g» not
to actions which have already been
approved a* cese by-cese SIP revisions
or tinder generic rates). IF. however.
ambient vtoietione eve diecevereti in an
aree where EPA  has approved' a trade.
or if other violations of Qeen Air Act
requirements are discovered in that
area, soercea involved In the trade
should be aware thet they are
potentially subject to requirements, for
additional emission reductions. Just aa
are all other source* in the area.
  This policy requires that substantial
additional reductions (at least 20%) is
trading tra net voluntary, for example; <
at e BINT oew KOTO* arneter •wdlflaMlM ta •
MMtta
proffeaa tewevd attejnaeoT <
emiMMna (4S<7lt n.l*ffti *wt 31. AfpeadU SI
HOWVWI** VNMP|T tnaY 4WN natal en) MlatQeBMMO
"trowtb Mrs*" el e*tra redaclfaM hi a S*» wttlea
i* currently aparevad by SPA. fee »te*t ewy provide
the offaeta tarn tfcat grow* awrfoi ratfier tfee*

the nurtiH eceordincly. SeeOeenAir Adeeettoa
173(1 MAI end (Bl
                S whi^M

                Howe^^
euilssiuiis remeaong beyond applies^
baseline* be produced by future bub
ffl primary nonattilnmeof areas whij
require but lade approved
demonstrations of attainment.
applications for bubbles in such areas
which are still pending at EPA without
formal action under the 1982 policy, or
which were previously subneitted to EF.-
Regions under the 1982 policy but not
accepted for evaluation, will be
reexamiaed and processed for approval
if they meet the requirements of the 19&2
policy and contribute to progress
towards attainment "Progre** towards
attainment" means some extra reduction
beyond equivalence to a iowest-of-
actual-SIP-ailowable-or-RACT-
ailowahle emisaion* baseline, with this
baseline applied as of the time
applicants originally sought credit
Pending bubbles in attainment areas
and nonattainBwat areas with approved
demonstrations of attainment will be
processed for approval if they meet the
requirementa of die. 1963 policy and
show that ambient standards. PSD
increments aod> visibility will not be
jeopardised.
  For further discussion on pendfeig  .
bubbles see Section l.A.l.b.(4) of the
Technical bane* Document. *-

0. RequiiesMOts for Craatug, Using, or
nanirii^i»ieaieegednctu»oCredks*

A. Creating Emission Reduction Credit
  Emia
daction credits (ERCs) are
the common currency of ail trading
activity. ERCs may be created by
redaction* from either stationary, ares.
or mobile source*. To enure that
emissions trades do not contravene
relevant requirsssenls of the Clean Air
Act only redMCtioas which arc surplus.
enfoeaobie, permanent, and
quantifiable can qualify as ERCs and be
banked or used in ae emusions trade.
  •EM aonnfaeea etaiee or aeurcei whtch
(ubeutted hfihhlea that were relumed without
rrahuttod by EPA to reenboot them under ih»«
erilene. provided they can dooiajem (ai lomiL
ttaeiy Nbmttal of ea applicauoa to EPA m iczora
w«a aomai EPA procedure* and fb) thai tne
eppJksifae wee rtormd vMtbout evaiua lion, ra ther
ttua re»ected fbrftihire to meet the terma of the
19*2 pottcy. Bubble appctcatloaa whtch wen
leeefted tar evateedoa bu« relected for {aOun to
meet *• 1SBS poHey wffl be  treated aa new
appticatfaaB onder today't notice.
  •Secaoae tola Potter Statement and
accaopeoyini Tedweal Uaue* Oocument rcilect
taaenl Cken Ak Actpnnctple*.date*, individual
aource*. or cpraneaten OB tpeciflc rulemakm;
ecttona ire free to ahow dial a eeoeral prtnc:ple
doea ne4 epply to particular  drcunuunctJ or :ouid
be aeHefleet urine, appneeha etker than iho*«
deeertbeet 3Mtee. tourcee and eoaunenten h* k t
Hue opfto* nader carrent lew. and nothing m thi«
Potlcy StatetMHt or t»» TechnieeJ taauee Doeumetx
reetrtcn Aeir opponenity to make luch showings

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43632
Ftxkral RagUUt /. VoL-Sl.-No. 233. / Thuraday. December^ 1966 / Noticsx
  1. Surplus. At mraianinvaiily emission
reductions-not required by current
regulations in the SIP. not already relied
on for SIP planning purposes, and not
used by the source to meet any other
regulatory requirement can be
considered surplus. To determine the
quantity of emission reductions that are
surplus, the state must first establish an
appropriate emissions baseline from
which surplus reductions can be
calculated. Baseline emissions for any
source are the product of three factors-
emission rate, capacity utilization, and
hours of operation.7
  In attainment areas, the lower of
actual or allowable values must
generally be used for each of these
baseline factors. However, allowable
values for one or more of these factors,
when higher than actual values, may be
used in calculating the baseline
emissions, provided those values are
shown to be used or reflected in an
approved demonstration.* The burden of
meeting this test by written evidence
rests with the state or applicant which
seeks to use an allowable value.
  When allowable values for one or
more baseline factors are not used or
reflected in an approved demonstration.
such values may still be used in
calculating baseline emissions.
However, in such cases applicants must
perform appropriate modeling to
demonstrate that allowable values
which are higher than actual values will
not delay or jeopardize attainment and
maintenance of ambient standards.*
  'For further diacusston of these Melon a* they
 rel*le lo b**eiine calculation*. IM Appendix B of
 the Technical Issues Document
  •Thit statement don not apply to netting. where
 "contetnportneout" actual emission* are alway* the
 baseline. See, t*. 40 CFR 51J446H3).
  Dubbin in araai with dcmonctranana beead eniy
 on qualitative ludgnwnta («+. the "example regtoo"
 approach or no technical support) ordinarily may
 not rely, without appropriate modeling, on
 allowable value* in calculating baaeuae emisnone.
 However, bubble* in areas with denonitratrana
 baaed on rollback or dupenion modeling may UM
 allowable values that are reflected in the
 demonstration. In certain cvcuauiancai an
 allowable baseline value specified in a
 preconstrufTtinn permit may ba deemed equivalent
 to one uicd or --fleeted in *a approved
 demonstration. S*e Technical m*M* Document a. 7.
  For further definition of 'actual" and "allowable"
 see today » Technical Issue* Document Sectua
 I.A.I.*, and Appendix B.
  • This demonstration would require a Laval II
 modeling analysis. 10 accord with the aodetiog
 screen discussed below, using actual emissions for
 the pre-bubbte case, unless, for 6uW>/es processed
 as coit-by-cose SIP revmons. the Region
 determines that additional technical support is
 needed to protect applicable standard* or
 increment*. For discussion of Level U modeling, see
 Technical Issues  Document section I.B-l.b,(3(- For
 lurther discussion of additional technical support
 which Regions may require in these circumstance*.
 see Technical Issues Document Section 1-A.l.a. For
 a discussion of parallel modeling requirement* for
                         In attainment area* where the PSD
                       baseline has been triggered, credit may
                       be granted consistent with the PSD
                       baseline concentration as specified in 40
                       CFR 5U4{b)(13} and 5i21(b){13). This
                       will generally require use of actual
                       values for each of the baseline factors.
                       However, states may use allowable
                       values if they show through appropriate
                       modeling I0 that attainment and
                       maintenance of neither the ambient
                       standards nor applicable PSD
                       increments will be jeopardized, and
                       quantify the amount of increment
                       consumed.
                         In nonattainment areas with approved
                       demonstration* of attainment, the
                       baseline must be consistent with
                       assumptions used to develop the ana's
                       demonstration. This generally means
                       that actual values must be used for each
                       baseline factor where actual values
                       were used for such demonstrations, and
                       that higher allowable values for these
                       factors may be used where allowable
                       values were used for such
                       demonstrations.11 The burden of
                       showing that an allowable value was
                       used or reflected in the approved
                       demonstration rests, with the state or
                       applicant which seeks to use an
                       allowable value. In the absence of
                       written evidence to that  effect full Level
                       HI modeling would be required to make
                       use of an allowable value in baseline
                       calculation*.11
                         hi primary nonattainatent areas
                       which need but lack approved •
                       demonstrations of attainment. stater
                       must show that bubbles  meet special
                       "progress'' requirements designed tt> -
                       produce a net air quality benefit This-
                       must be demonstrated by (1) osing the
                       lowest-of-actual-SIP-allowable-or-
                       RACT-allowable emissions baseline for
                       each source involved in the trade; "  (2)
                       meeting the ambient equivalence testa
                       outlined in sections ILB.2 of this Policy
                       and LB.l.b. of the Technical Issues
                       Document: and then (3) producing a
                       substantial net reduction in actual
                       emissions (I.e, a reduction of at least
                       use of such higher allowable values in attainment
                       area* under generic ru/e*. see Technical lamaa
                       Document. nJl.
                         '• See nJ above.
                         1 ' For netting, "contemporaneous" aetasU     •
                       tan serous are always the baseline. See. e^. 40-GFlt
                       Sl-latJMIMvl).
                         '•Foth»rtJ»dl*cu**io*io«Uve*aJmo«ieu«a>see
                       Technical Issues Document, secti
                         " For purpose* of today'* nonce, the "lowest of
                       sctual-SIP-aUowable-or-RACT-alkmabk-
                       emissions besehne means the product of (1) the
                       lowest of the actual eimsswe rate, the SIP or other
                       federally enforceable e*us*ion unit or a RACT
                       emission limit and (2) the lower of actual or
                       allowable capacity utilisation and hours of
                       operation. For further discussion of this baseline.
                       see Appendix B of today's Technical Issue*.
                       Document
20*in the emission*) remaining aft«r
application of the baseline specified
aboveVThe state muet also pnvide
assurances that the bubble is consistent
with ambient progress1 and future air
quality planning goals.14
  2. Enforceable. To assure-that Clean
Air Act requirements- are met each
transaction which revises any emission
limit upward must be approved by the
state and be federally enforceable.
Means of making emission limits
federally enforceable include SIP
revisions (see section IV below).  EPA-
approved generic bubble rules (see
Section HI below), and new source
preconstrucfion permits issued by states
under EPA-approved SIP regulations
pursuant to provisions of 40 CFR  51.18.
51.24. or 51.307, as well as construction
permits issued by EPA or delegated
states under 52£1. »• Bubbles should be
incorporated in an enforceable
compliance instrument which requires
recordkeeping based on the averaging
period over which the bubble is
operating, so it may easily be
determined over any single averaging
period that bubble limits are being met.
  3. Permanent Only permanent
reductions in emissions can qualify for
credit Permanence may generally be
assured by requiring federally
enforceable changes in source permits
or applicable, state regulations to  reflect
a reduced level of allowable emissions.
  41 Quantifiable. Emission reductions
must be quantifiable both in terms of
estimating the amount of the reduction
and cAavoctemuig that reduction for
future use. Quantification may be based
on emission factors, stack tests.
monitored values, operating rates and
averaging times, process or production
inputs, modeling, or other reasonable
measurement practices. The same
method of calculating emissions should
generally be used to quantify emission
levels both before and after the
reduction.
& Using Emission Reduction Credits

  ERCa may be used by sources in
bubble, offset or netting transactions.
The general principles below will assure
   •Thai
I may be found in the
Techneal laeuee Decumant it LA.l.b.0). EPA will
not isBoadgasss neb state ***uranc**> provided
they am(t) A tabataaaal let* applied by the stst*
lo each bubble, and (21 the state ha* explained how
the pTBPCMd bubble I* consistent with the are* s
preiected attainment strategy. This authority has
not been delegated wttb ff A. See Clean Air Act
section Wlle)tU*2 US.C T801(*)(l|.
  " EPA la alao considering generis step* which
weald make state operating permit* federally
enforceable. Prior to IBM. benJad credit* need not
be made federally enforce**-. See Section II.C.
below.

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                  Federal Regular /  Vol. 51. No. 233 / Thuraday,  December 4. 1986  / Notices
                                                                        4383'
that all uses of ERG* are-consistent with
ambient attainment and maintenance
considerations undar tha Clean Air Act
They are further articulated in the
accompanying Technical Issues
Document
  1. Emissions trades must involve the
same criteria pollutant. An emission
reduction may only be  traded against an
increase in the same criteria pollutant
For example, only reductions of SOi can
be substituted for increases of SO».
  Z. All uses ofERCs must satisfy
applicable ambient tests. The Clean Air
Act requires that all areas throughout
the country attain and  maintain national
ambient air quality standards and meet
applicable ambient requirements
relating to PSD increments and Class I
protection, including visibility. The
ambient effect of a trade depends on the
dispersion characteristics of the
pollutant involved. With the exception
of visibility for NO* dispersion
considerations will generally not affect
trades involving VOC or NO,,  whose
impacts occur across broad geographic
areas. For these pollutants "pound for
pound" trades may be  treated  as equal
in ambient effect where all sources
involved in the trade era located in the
same control strategy demonstration
area, or where the state otherwise
shows such sources to be sufficiently
close, that a "pound for pound" trade
can be justified However, dispersion
characteristics are important for bubble
and offset trades of SOi, particulates.
CO. or lead, whose ambient impact may
vary with where the emission increase*
and decreases occur. To assure ambient
equivalence, such trades of these
pollutants must satisfy ambient tests
under the modeling screen discussed in
the Technical Isiut* Document or under
a similar, equally effective approach."
   '• for simitar reasons, bobbin of the** polluunu
 mutt involve source* which ere in thesame or
 •djacrat control strategy damonatnuos) areas
 within dw MOM general air bum.
   See section O.A.I. *bov* ud Technical Ueue*
 Documtat Section LA. La regarding additional
 technical lupport required for certain trade* IB
 attainment artai.
   Whilt bubble* in primary oenattiuuMnt anca
 which need but lack approved ilaamnsiniiiini of
 attainment nuat product a MI aw quality benefit.
 thii don not entail additional ambient tests. Such
 bubble* muat first meet the general taeta under the
 modeling screen showing ambient equivaienca for
 bubbles, prior to producing the required additional
 reductions. They must then produce additional
 reductions of at level 20* beyond the applicable
 baseline emisaiona used to demonstrate ambient
 equivelence. Since these additional reductions mil
 necessarily reduce ambient concentrations below
 equivalence M some receptor*, while aonluiumf t*
 meet the tests for ambient equivalence at all others.
 a net air quality benefit should occur and no •
 additional ambient showing*, beyond those
 generally required for all bubbles, are required.
  3. Bubbles must not increase
hazardous pollutants. Bubbles may not
be used to meet applicable requirements
of National Emissions Standards for
Hazardous Air PoUutanta (NESHAPs)
promulgated under section 112 of tha
Qean Air Act to increase emissions at
any source beyond the level* applicable
NESHAPs prescribe, or to create any net
increase in baseline emissions of a
pollutant regulated under section 112.
The applicable baseline for regulated
sources is the lower of actual or
NESHAPs-allowable emissions of the
hazardous pollutant
  Where a NESHAP has been proposed
but not yet promulgated for a source
category which emits a pollutant listed
under section 112. the proposal will
serve as aa interim guideline for
evaluating the effects of any proposed
emissions trade involving a source that
would be subject to the proposed
standard. In general such trades will be
epprovable with respect to the
emissions component of the trade
subject to the proposal so long aa they
result in emission limits at each source
emitting the relevant pollutant which are
equivalent to or lower than those the
proposed NESHAP would have required
if already promulgated.'T
  Where a pollutant has been listed
under section 112 or where EPA has
published a Notice-of-mtenJ-to-Liat but
no regulations for the source category
involved in the trade have yet been
proposed or promulgated, me trad* will-
generally be acceptable with respect to
the emissions component of dw trade
subject to notice or listing, if then is no
net increase in actual emissions of that
pollutant as a result of die trade.'•
  Any trade involving source* or source
categories subject to the preceding
subparagrapha must take place within a
single  plant or contiguous plants, and
nrast credit only reductions below
current actual or NESHAPs—allowable
emissions, whichever is lower. Bat d
generally n. 8 above and today's
Technical Issues Document section
I.B.L<±
  Trades which do not meet the special
restrictions discussed in this section
may also be approved when surplus
reductions in the pollutant* addressed
  " The allowable emission rate for a source
 •ubiecf to e proposed NESHAP (s the limM
 stipulated In the proposal.
  >• Where EPA h*a issued e -Nortce-oMntenl-Ne*-
 te-Regulate" one at more source categories for a
 listed polloJant. emission* o/ that poUotant (ran the
 unregvlaied sonic*; caiefory will ismiTheeise fee
 treated the same a* etmsion* of any other listed
 pollutant Under limited circumstance*, simlar
 treatment will be given- to pollutants for which a
 "Nolice-of-lmeiH-Woi.lo.Uar ha* been pnbnsfted.
 See the Technical Issues Document section Lfl-l.d. -
above compensate for increases in r.cr.-
hazardous emissions of the same enter,.-
pollutant (e.g. benzene, a hazardous ••
VOC It reduced to create credits for JV
increase in non-hazardous VOC
emissions.) A* long as such a trade
would not result in an increase in either
actual or allowable emissions of a
pollutant subject to the preceding
paragraphs at any source, it would not
differ in nature or requirements from a
trade involving only nonhazardous VOC
emissions.
  * ERCsfnm existing sources cannot
be used to meet technology-based
requirements applicable to new sources.
Under Clean Air Act section 111 and
             ating regulations, new
EPA impli
affected fi
       I facilities must satisfy
technology-based New Source
Performance Standards (NSPS).
regardless of the attainment status of
the ana in which they an located.
Under section* 189 and 173 and EPA
implementing regulations, new or
modified major stationary sources must
also satisfy technology-based control
obligation* associated with pre-
construction permit*. These
requirements prohibit use of credits
from existing sources to meet or avoid
applicable NSPS. and bar use of such
credits to meet applicable new source
review requirements for best available
control technology (BACT) in PSD areal
or lowest achievable emission rate
control technology (LAER) in
nonattainment anas.1*
  3. States may approve bubbles in
primary nonattainment areas which
require but lack approved
demonstrations of attainment, provided
such trades meet requirements designed
to produce a net air quality benefit and
the state provides certain assurances.
See section ILA.1. above and the
Technical Issue* Document section
LAJ.b. Bubble* which meet these
objective requirements will be
processed for approval by EPA.
  A Sources need not be subject to
binding compliance schedules based on
current SIP requirements before they
can apply for a bubble which would
supersede those requirements. Sources
that an already subject to binding
dbmpiiance schedules should be aware.
however, that such schedules remain
fully enforceable until a bubble affecting
the schedule has been approved by EPA
or under a state generic rule and the
  •• But cl section* 1C and LD.etov*.
  Today's node* do*» not address whether or unaer
 what eUcanuancM todllbee subfect to NSPS.
 •ACT or LABI may svrp*** applicable permit
 limits reflecting nidi requirementa In order to create
 credits for exiaong-souree trade*.
                                      i

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                  PaefaMi Raajatar / Vol. 51. No> 233 ( Thorniay. Dacemfcer 4. itm [ Notices
schtdok ku bees oadifi«d MMMbofiy.
Some* subject to campliimc* schadaks
in adBriaiatrativ* ord*rs.or jadkiai
decree* nu*t obtaia prior aaeroval from
EPA or the relevant cowl M
appropriate, to be relieved from the
schedule contained in the order or
decree. Sources that are subject to SIP
requirements remain responsible for
meeting those requirements unless and
until a bubble has become effective
under Federal law. See section ILB.12
below.
  7. States may extend certain
compliance schedule*. States may no
longer grant compliance extensions
under new or revised generic rules in
nonattawment anai. whether or not
such areas have demonstrations.10
However, states may continue to gnat
compliance date extensions under
generic rules in attainment areas,
provided EPA has approved tie
extension provisions of the generic rule
as being adequate to comply with the
Clean Air Act including requirement*
for attainment and maintenance of
ambient air quality standards.
  States that wish to give sources in
nonattaimnnt areas, and sources ia
attainment areas far  which there ia no
applicable generic SIP provision, moea
time to implement bubble* bjr granting
compliance extensions. Bat receive
EPA approval of the extensions through
case-by-case SIP revision. Requests for
such compliance date extension*.
whether in attainment or nonattainmant
areas, may be submitted to EPA together
with bubbles, as part of a single SIP
revision package. EPA will separately
evaluate the time  extension portion of
these SIP revision package* in accord
with the Agency's normal criteria for
review of time extensions, including
consistency with the Act's requirement*
for expeditiousness. reasonable further
progress, and attainment and
maintenance. Sources should be aware
that disapproval of *ach time extension
requests may result ia disapproval of the
entire package (i.e., both pact-trade
limits and the time extension) or only
part of it, depending OB whether the.
  10 ExMtins generic ruJ« a*»oEobei to thn* eraej
 must bo revieed to comport MI* tiue enoapet
 where they contain men generic exlovton
 provision*. SPA *rtll puoliift Federal Reciter
 noeiooa loarmfytiif any-generic ntat-wMdi reqwrr
 form! modificaiiuii Fadwe ID roolve rliflnoWloi
 identified la wcfe a notice witJua the preecribod
 time period may mull in EPA retcmdmf, approve]
 of the uiiting generic rule or timing • 1101101 of 84P
 deficiency. EPA. enpocu attlts to«
 utttnok «o for M teiotbic iho( <
 txtenetona under Hiving j
 gnnled to KMreoa located IB i
 See icctMn UI below tod MCUOO ILE.4. at the
 Technical U>uei OoataeM.
state view naae C9*nanieateef'8w
prapeeed &Q> rtvifssjia* seaarafcra.
  A States WHJ opn
invotviot opan duet were** of
particuJate emmiem. baaed on
modeling demoasmbens. Open dwt
trades may be approved through
individnal SIP revisions based oa
acceptable modeling and/or monitoring
demonstrations, provided source* agree
to post-approval monitoring to
determine if predicted air quality results
have bean resumed and make an
enforceable commitment to achieve
necessary additional reductions if
predicted results do not materialize.
  A Trade involving lead. Unlike other
criteria pollutants. EPA doe* not
designate nonattainmcnt anas for lead.
However, the Regional Administrator
will review lead trade*, as all other
trade*, to assure that they do not
interfere with attainment and
maintenance of NAAQS.
  10. Trade* tnvofring ERCa from
mobile source measure*. ERCa from
mobile source measure* may b* used la
meet SIP requirement* applicable to
•Dieting stationary soorces. so long a*
such reduction* are- earpras, pemaaeat
quantifiable, and enforceable.
source measures (e.g.
                    in typeat
                    ma***™.
cai
conversion ef existing vehicle Heat* t»
cleaner fuels saca a* methanol) may
satisfy these criteria awn nadfly man
those from other tnmport-niatad
meaaan*» nowevar* doe to poeaiUa
difflcultie* in determining whether
specific anbiie-souiea redaction* Mly
meet these criteria, all saca trade* BM*t
be implemented a* case-by-case SIP
revision*.
  11. Interstate trade*. Trade* involving
source* located in neighboring state*
may be approved, provided they meat
all other requirement* of today's ootie*.
However, in order, to avoid complex StP
accounting isswe*. where stale tradfaig
requirements differ EPA will reejaira  that
such trade* meet the svostanttva
requirements of the more stringent state.
In general EPA will deem ERCs created
in one state to contribute to piugies* in
the stata when used to the extant of
that use, provided mat applicable
ambient tests (section U.BL2 above) an
met Interstate trades must be
implemented through case-bycaaa SB*
revisions.
  12. Bubbles must not impede
enforcement In general, bubble*  art a
form of SIP revision which should be
treated neither men aor lea* sttssajoatrjr
than other SIP levisiuiis. Duoole* snowd
not become a shield against
enforcement actions far SOOMM whioa
have faded to take aecasaary step* ta
tram-
  Source* saaifag trade* sfaooid icte
that Qtay remajsi SBnyect to enrs^i^cjvii!
of existing (pn-trade) SB* Hants until toe
bubble 1* approved EPA will BM ae
same ptinciptas and procedwn 1-*
deciding whether to initiate enfereeaegt
action in these cJrcnmatancas as *he
Agency applie* to any other scarce
which is subject to a proposed or final
SIP revision.
  Under established EPA policy.
regulated sources mast be subject to an
applicable, enforceable emission limit at
ail times. Accordingly, sources which
have approved bubbles with emission
limits effective at a future date, and
which an not in compliance with their
pre-trade limits prior to that effective
data, may be subject to enforcement
action, which could include penalties
baaed on a faihin to meat the pre-trade
limit*. Source* in these situations may
wish to mjMriiM the chance that capital
expenditure* may be required to meet
pre-trade limit*, either by (a) agreeing to
post-trade compliance date* which are
•abstantiaily similar to (heir pre-trade
compliaaca date*, or (bj accelerating
their compliaaca with Bost-trade-linut*.
  laaaoard with the general principle
that bubble* should be treated neither
mon nor lea* stringently than other SIP
action*, implementation of this Policy
Statement will be neatral with respect to
EPA anJofcamaat of pea-trade emission
limit*. This mean* that EPA will not
•pacifically select far enforcement
•man mmfimapJiaat sources seeking to
u*a • babel* either to come  into
compliance or ta restructure traditional
compiianoa. However, it  *l*o means that
EPA will not withhold or defer
enfftrrtmem simply because a source is
seeking alternative emission limits
through • bubble. In exercising its
enfoBcemeat discretion. EPA will apply
the same coaaideratien*  to
nnnnamplisnt sources which seek to
comply through bubbles as to those
wnten do not*
C Banking Emission Reduction Credits
  Only eaitSMa reductions that are
surpro*. permanent quantifiable, and
enforceable can qualify as ERCs and be
depoaitad in EPA-approvable banks.11
Such bank* offer source* legal
leuognUKjnjyt qualifying reductions
meet mesa ERG requirements. However.
             ** UMar lotrfi notice anMon reductions mutt
            b* BMdi OBjoBBB»Ue,«y tflo jtaar In order 10 quahry
            a*BVCo tat boJiauilteJ tai EPA^ppreveble
                             I mere dcpotit of a
                           I at enriaeton tncreaie*
                           nebena need not be made
            fedeiejr?

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                  FedereJ Retiatar / Vol. si. No. 233 / Thursday. December 4. Me* /
tht fact thM aa ERC IMS been beaked
doM not ratev* it fromlh* nMd to Mtt
ail criteria of the specific regulaJofy
program under whfch it it to bt used."
Because Mine trade* hive special
limitation* (e.$. only reductions.
occurring at the same major stationary
source can be used for netting), banks
do not guarantee the validity or specific
amount of particular banked ERCs for
all potential uses or for all time. To
provide maximun protection for the
environment and sources and to avoid
potential legal problems, state banking
rules may specify the types of sources
eligible to bank ERCs and any
additional conditions placed on
certifying, holding or using banked
ERCs.
  State banking rales may establish
ownership rights. However, any such
rights must be consistent with dean Air
Act requirements, mending the
requirement that SIPs provide for
expendittons attainment and
maintenance of ambientair quality
standards and protect PSD increments
 and visibility. To be approvable by EPA.
 such banking rules must also treat
 banked reductions as current actual
 emiseians "In the air" at the source of
 their creetfoa. in order to protect the
 integrity ox future air quality planning.
 Failure to track the ambient effects of
 such beaked redactions (04. by not
 including "***ff m a new or updated
 inventory used for SIP planning
 purposes, or by relying on thoea
 reductions to secure attainment
 redesigns Dons) would ordinarily
 preclude their ese as ERCs, due to
 double-coating. Nevertheless, states
 have coasiderabie latitude in meeting
 these requirements, and may guarantee
 banked ERCs •faint fufl orpertieJ
 reduction in quantity, so long ae that
 guarantee does not undermine
 attainment redesignetions or interfere
 with progress sod  attainment should
 ambient standards change or additional
 emission reductions be required. Tne
 Technical Issues Document* section
 LC9. outlines ways each-guarantees
 may be made effective/ ceiisistem with
 these requirements.
   In many states, banking souk) be an
 extension of oegoiiig-preconetRMtiea   •
 permit ectWtiea. The statewiss • •
 designs* could accept and evaluate
 requests to certify an ERC  maintain a
 publicly-available ERC registry or
 similar muniment describing the
     ttoraomaoj.br i
        IO aolAvOOBM tBO bOOOUM aOttl MOO>Of
 uodtta. for approval M SIP r
quantity and	
and track transfers aad wrtadnwats of
ERCs.                            .    .
  Because banked redactioas da not
increase emissions at ear saarea. they
need not  be made federally enforceable
until used. For administrative or otisar
reasons states may. however, choeee to
make them federally enforceable upon
deposit How the state makee a
reduction federally enforceebie for
banking will depend oa the type of
source at which the reduction occurs. la
some states, reductions associated with
other modifications at a source caa be
included in federally-enforceebie
preconstniction permits issued *nnfr*r
rules approved pursuant to 40 CPR 5118,
31.34 or 51J07. States with E3PA-
approved generic rales on use their
rules' procedures to make redurtionr
occurring st existing sources federally
enforceable. See Section 01 below. Since
these tnasactions involve oar?
reductions, air quality modeling is
generally not required to assure diet
new emission limits do not iiilaifaia
with attainment and maintenance of
ambient standards, protection of
applicable PSD increments, or
impairment of visibility m mandatory
federal class 1 areas. Such redactkn
wtfautoaostfcaliyaaofttaeeaaaric-
rule's test of whether a particmar limit»
withia EPA's  prsappro»ed array of
acceptable emissioa limits.**
  States without EPA-epproved L
rales caa adopt miss llmiaul In tieiiklag
transacHoiiai or eaa use tae stajedard
SIP revisioa process to maiso reoacfiBBe
federally enforceable et exstmag
sourcea. Geaerai state preoaeetracboa
permit or review prognsas that have
received EPA approval may also be
used for this purpose, since permits
issued through such programs are
federally enforceable. See 40 CPU 81.1*
S1.24: 51J07.M
BUG la lotor moaotad far ooo la o trodo. to tfco
txtont •odooovj w sonoroUjr
particular typo of
  •« to prfcoorr MwootouuMM arm ivftico
IMH fact opejiiW oaoioo»ti»lrtna. ooa I
      i of boakod anoMi proeoood by
    toraM 00*00 of
tfWtf VM tO OQwfOCt tO
                                         UM of cmissioa reduction
                                       EPA as generic far kiaotified dasael
                                       trades will net require individual SIP
                                       revisions for those trades. The Technics
                                       Issues Document explains acceptable
                                       generic procedures which suie» may
                                       adopt to reduce toe need for lacuviauai
                                       SIP revisions.
                                         Emissions trades can be approved
                                       without case-by-case SIP reviswoa if
                                       evaluated by the state under EPA-
                                       approved procedures which assure that
                                       ao trade which meets their terms will
                                       interfere with timely attainment a ad
                                       maintenance of ambient standards.
                                       protection of applicable PSD increments
                                       or visibility provisions. State generic
                                       rales are approvable only if their
                                       procedures an sufficiently replicable in
                                       operation to meet this test By approving
                                       the generic rule, EPA approves in
                                       advaaca an array of SIP-compatible
                                       emission limits, and no further case-by-
                                       case Federal review or approval is
                                       required for individual trades which
                                       meet tha terms of the rule.
                                         In cedar to ensure that generic rules
                                       an proaariy ''"f »•"•"»«< EPA intends
                                       to (a) examine, aad caauMnt oa
                                       together with eay other public
                                       comnsmter. the tetanaation which o>u»<
                                       be araeicMnxiadrvidaal trades
                                       proposed by states uader a generic
                                       (b) conduct reviews of individual
                                       bubbles approved under a generic rule,
                                       aad (e) iriritriiffVr audit the genera!
                                             Baotattoa of geaeric rukts. M part
                                        itnpla
                                       of its Nattaael Air Audit System review*
                                       of state air programa.**
                                         Any trade under a generic rule will
                                       involve emission increases at some
                                       sourcea and extra emission decreases at
                                       others. For tradea to be approvable
                                       under a generic rule, the sum of these
                                       increases and decreases (beyond
                                       bt pnrvMhd •*•*••; otkv *•! ui apBHanon to
                                       dtpMil UM«nttlU IB t farmaJ bank w««
                                       to Ik* MM* pnor to *• om* tha •Butdow
                                                      . or thai KM Mat*
                               OB*»    oooUNre*oJtiB(cneliii»o&innmo«.For
                                                         flaT CBrtaWBrlUHWI Ifl TnttVt Ol

of dOMbioeooafint or *iWmn«
             (WooobOBkod
                                        wntoai appUeadoa waa *Bbout»ol «•
                                       lor PY ISSt. Offlaa of Ao?Quality PUnn.nj? and
                                                                    •1963L
                                            _i_i	w	      | (hat do »o« mew t*
                                           I Of (10
uumauiont mtb ooo of • trrmtl
              kprtortotfto
        i uuLoiio*. POT
    ill
enruiioMOA
pufaiieoUoo of loday'i
                                                                                	                    bKhrwuinruJly
                                                                                anforeoobloc Conorte niiao finno^e be sencrinr

-------
43836
Federal Register  /  Vol. 51. No.  233 / Thursday.  December 4. 1966 / Notice*
applicable net baseline emissions} must
be zero or ItM. Sutyect to this
requirement states may adopt generic
rules which exempt from individual SIP
revisions: (1) De minimis trades when
total increases in emissions from ait
increasing sources (which must be
balanced by equal or greater emissions
decreases from other sources! are less
than 25 tons per year (TPY) of
participates. 40 TPY of SOi, 100 TPY of
CO. or 0.6 TPY of lead, after applicable
control requirements: (2) large classes of
trades involving VOC or NO,
emissions:*' (3) trades between certain
types of SOi sources, between certain
types of CO sources, between certain
types of stationary lead sources, or
between certain types of participate
sources, for which it can reasonably be
assumed that "pound for pound" trades
will produce ambient effects equivalent
to those which approved air quality
models would predict: and  (4) other SOi.
CO. Pb or paniculate trades which do
not increase baseline emissions and for
which carefully defined modeling
predicts no significant increase in
ambient concentrations.
  States and sources should, however,
be aware that because of replicability
problems inherent in modeling, generic
rules which rely on preapproved
procedures for modeled demonstrations
of ambient equivalence may be difficult
to draft or implement and many trade*
may not be approvable under such rules.
For these reasons generic rules covering
only the first three classes  of trades
above will often prove easiest to secure.
EPA encourages states to work closely
with EPA Regional Offices  to formulate
and adopt approvable rules or develop
alternative approaches that equally
assure attainment and maintenance of
ambient standards and protection  of
PSD increments and visibility. See
Section II of the Technical  Issues
Document, which details criteria under
which such generic rules may be
approved.
   To the extent general state procedures
for rulemaking or permit changes do not
assure reasonable puheJe notice of
proposed and final limftror effective
opportunity for comment on proposed
trades, states  must incorporate such
provisions in their generic rule*.
   In primary nonattainment areas
which need but lack approved
demonstrations, new generic rules must
require, and existing generic rules  must.
as requested by EPA. be revised to
                      require bubbles to use lowest-of actnai-'
                      SIP-allowable-or-RACT-allowabie
                      emissions baselines, and produce a net
                      air quality benefit (as described below.).
                      New or revised generic rules in these
                      nonattainment areas must be
                      accompanied by certain assurances of
                      consistency with air quality planning
                      goals as weU as a commitment to make
                      certain additional assurances when the
                      state approves individual bubbles under
                      the rule. Bubble* approved under
                      existing generic bubble rule* before die
                      effective date of this policy will not be
                      affected by these requirements. Because
                      EPA-approved state regulations have
                      independent legal force, future bubblea
                      submitted under existing generic rules
                      may also be approved by states in
                      accord with those rule*, until such rules
                      are modified to meet the criteria
                      below."
                        Existing generic rules in these area*
                      must be modified to assure that bubble*
                      prod'j  $ an overall emission reduction at
                      least -jual (in percentage terms) to die
                      overati emission reduction from
                      controllable sources (in percentage
                      terms) needed to attain in the are*.
                      Criteria for modifying generic rales are.
                      set forth in Section H.D. of the Techaieai
                      Issues Document including a
                      requirement for a reduction equal to the
                      greater of either the percentage?
                      reduction required for attainment, or •
                      20% reduction in emissions rem*Mof>
                      after application of appropriate
                      baseline*. New and pending
                      application* for generic bubble rule*
                      which meet these criteria will be
                      processed for approval
                        EPA will publish Federal Regie***
                      notices identifying any generic rule*
                      applicable to these areas which require
                      formal modification in order to meet die
                      progress requirements above or other
                      requirement* of EPA's current Emissions
                      Trading Policy. These notices will
                      identify specific deficiences and mean*
                      for correcting them, and will specify s>
                      schedule for submittal and review or
                      modified rules. Failure to resolve
                      deficiencies identified in these notice*
                      within the prescribed time period may
                      result in EPA rescinding its- previous  •
                      approval or issuing a notice of SIP
                      deficiency.**
         IV. BMbUee Which Require C*e*-1
                        " In the interim. EPA expecta state* la i
                       fir u feasible. Uul future bubbieo iparavi
dud*
  " Where visibility impairment due to eleveled
 NO. emissions it • concern, generic trades
 im niving NO, mu»t ordinarily be subject to imbient
 requirements similar to thoee appUceble to generic
 irades involving TSP SOi. CO or Pb.
                       euaiina; genera rule* en eonaietem with tale policy
                       is well aa the term* of their EPA-approved i
                       Sletee should be twere that without due or i
                       precaution*, continued approve! of bubbaaa i
                       emetine, generic rule* coaieimof ideatnJIad
                       deficiencies may create or accentuate plea
                       deficiencies (hat may have to be ueatumi at • later
                       data or compensated for by other meant See-
                       section I1.E.4. of the Technical leeua* Doctonent
                        *• Such notlcee may alao be laeuad (or enattif
                       generic ruiee in ettainment area* and noaatummaat
           State* and source* must use the i-a.-'-
         by-case SIP revision process to
         implement bubble* which are nor
         covered by a generic rule. Because -Jie
         case-by-case SIP revision process can
         take account of many more individual
         variation*, numerous trades which could
         not be accomplished through gener.c
         rules or similar means may still be
         approvable a* case-by-case SIP
         revisions.
           EPA will take action on generic rules
         and individual trades submitted as SIP
         revisions as quickly as circumstances
         permit after a state has adopted a SIP
         revision and submitted the action to
         EPA. EPA encourages "parallel
         processing" of such SIP revisions, with
         EPA and the state conducting
         concurrent review so that both agencies
         can propose and take final action at
         roughly the same time. EPA will also
         publish noncontroversial SIP revisions
         as immediate final actions,  converting
         them to proposals only if requests to
         submit advene comments are received
         within 30 days (see 46 FR 44477,
         September 4.19BI). hi all bubble actions
         EPA will dearly identify (or require
         state* to identify, a* appropriate) both
         pre- and poet-trade actual and allowable
         emission* tot each source involved in
         the trade, so that the. ambient effects of
         each bubble may be known.
         V. GMduatea
           This Policy Statement sets out basic
         principle* for approving individual
         trades and generic trading rules. It
         tighten* many requirements in order to
         better ensure SIP integrity and
         environmental progress, while offering
         ample opportunities for use of
         approvable. environmentally-sound
         trades. EPA encourage* states and
         sources to u*e these principles as a
         framework and refer to the
         accompanying Technical Issues
         Document for further discussion and
         examples. EPA also encourages states to
         develop other approaches which satisfy
         these principles while meeting their
         specific needs.
                                                                                     atrana. if theee
generic rulae an found to require procedural
revision la order to salca than comment with the
current Bmiaatona Tradiaf Policy. See Technical
lacuee Document section ILK,*.
  EPA recognise* the additional ttmnnj burden-
which may be Impnaart on bubble applicants m
tree* where new generic rule* cannot be or have
net been developed to new the specific air quality
benefit requirement! deecrtbed abort, and will
attempt so far aa feasible, to eneilorats that burden
In lopiaaantiBS this policy. See. e.g. n.i and section
0-8-12. above and related Preamble discussion, at
n.4S and accompanying tsaa.

-------
                  Federal Regbter / Vok 81. No. 233  /  Thursday. December 4. 1966 f Noticw
                                                                       4383:
  At-a policy etirlMMBt* this MiUu dotM
not establish coneh*Ne*y how EPA wHI
resolve IMUM to indMdMi oeaet  EPA
Will aCCCpt publlC CMBMRt OO IpeClnC
SIP change* submitted udtr it and will
review individually each generic rule
and thote emission* trade* •ubmitted at
SIP revision* to determine their
acceptability under the Clean Air Act.
Interested parties will have foil
opportunity to scrutinize application of
these prindplaa in specific case*, and to
teak subsequent judicial review of tucb
catet after EPA hat taken final action
on particular trades or generic rule*.
  Dated: November IB, MB*.
LsefeTBeaaaa,
Adminiitrotor.
   Emission* of Hasardaas or Teaae Air
Table of ContcBti
LEtemenU of BmiMtooe Trading
  A. Creating BmiMioa Reduction CrediU
    1. All Reduction* Mu*t Be Surplu*
     a. U*e of Actual or ATloweble
    Eounion* a* the BaieUar AttaimiMnt
    Area* end Noaattatanent Anaa wtn
    Appiuwu DeaMne%atidM of AetainsM&t
    (incfedtog Raral done Nonartatounem
    AIM*)

    Bubble* la Primary Nonattammant ATM*
    Which Need Bat Laok Approve*
    OeaxmMraboo* of Attainment
       (1) Objective Te*U For Ail
    Applications
       (2) Whan Thea* Special Progress
    Requirements Wlfl Apply
       (3) State Asevanee*
       (4) Treetmeat of Pending Babble
    Application*
      c No Doubie-Coenling of Redaction*
       (1) Crediting Pr*-exa»ting BOUMKM
    Redaction*
       (2) Crediting Reductions Fran
    Shutdown!
       (3) U*e of Banked Credit* from
    Shutdown* or Other Action* for Bubble
    Purpo*e*
      d. Multiple U*e of ERC*
      t. Reduction* from Uninventoried
    Source*
      2. Altem*tiv* BmiMioa Limit* Mn*t Be
    Enforceable
      3. All Reduction* Matt Be Permanent
     4. All Reduction* Meat Be Quantifiable
      *. Calculating the Reduction
      b. Detcnbirn the Reduction
   B. Using Emusion Reduction Credit*
     1. Substantive Principle* for Urine. ERC*
      *. EmiMion* Trade* Mu*t Involve the
     Sam* Pollutant
      b. All U*e* of ERC* Mu*i Senary
     Ambient Test*
        (1)0* Minimi*
        (2) Level 1
        (3) Level D.
        (4| Level ID
      c Bubble* Should Not IDOCIM
     Applicable Net B**elin* EmiMion*
     a. Bxiatiaf-Soana CrediU Canaot Be.
   Uaed to Meet Applicable Tecaaology-
   Bated Requirement* far New Source*
     f. Trade* Involving Open Dual
   EmiiBton*
     g. mtentate Trade*
     h. Trade* near PSD dan I Area*
     I. BfSaMt on TMQttC Ol DVOOTQ^Mlnl^* *
   OiMOvered dean Air Act Problem*:
   RevtaHation Comiderationa
  I Procedural Step* for U*ing ERC*
     a. Effect of Bxiating Compoance
   Schedule*
  Appeadh ft DefiaHtew ef-Aetna!.*
    "Aianveaee" end "Ba**lia
    For ftafpeeae af Amaaioae Trading
  Appoadu Q Approvabai Modeling
     c PvnoiAf EiuorcaUMnt Actions
  C* Miucfai^ Enisfftofl RraucUon Cno$ts
   t. Banking Rule* Mu»t DevigBate en
   AdaMatarinf Agency
   1 Only ERC* May be Banked
   i PoeetWe Umitatioaa oo UM of ERC*
   for New Soarce Peraitting
   4. Soarcea Should Apply to Bank Surplaa
   Reduction* A* Soon A* They Decide to
   Make Them
   S. Procedure* for Banking Sorphu
   EmiMioa Reduction* Should B* Defiaad
   ft. Banking Rule* May Ettafaiicn
   Ownership Right*
   7. Banking Rule* Mo* Eirebkefa n ERC
   Regfenry or tt* BoatvaleM
   8. PoMibk Adhtttmanla to ERCa Baaed
   on Enlbroement Conatderanona
   «. PoMibie Adfnaaawnu io
   on Ambient AUatnaaeatt Coaaid
     a. ERC* Generated Prior la the I
   or BaaaliM Year Could Be BOmtaated*
     b. ERC* Could Be Caarantaad Agktoat
   AdtaaOBent
     t Uce or Depoett of ERC* Coaid Be
   Temporarily Suspended
     d. AeroaMhe Boerd Diacoeatfag
IL Tradee Covend by StaarGeaevia R«*a*
  A. General Prtndpie* for BvaaaoBg
   Generic Rule*
  a Scope of Generic Rule*
   1. VOC or NO, Trade*
   2. Perncolate, SO.. CO or Pb Trade*
   3. Limit* oa Trade* Exempt Prom SIP
   Reviiioo* Under Generic Rule*
   4. Other Geoenc Mechanism* for
   Exempting Pertculate. SO*, CO or Pb
   Trade* From Caee-by-Ceee SIP Riviitoaa
   C Enforcing Em**eion Umft* Unrier
   Generic Rule*
  0. Generic Bubble Rule* In Primary
   Nonattalnment Area* Which Lack
   Approved Demon*tratton* of Attainment
  E. EPA Oventght of Generic Ruiea
    1. EPA Comment on Trade* Proposed
    Under Generic Rule*
    2. Review* of Individual Bubbtee
    Approved Under Gcnenc Ruler
    3. EPA Audit* of the Implemeaiathm of
    Generic Rule*
    4. Deficient Generic Trade*
    S. Deficient Generic Rule*
  P. Public Comment
  G- EPA Notification
  H. Rulenuking on Generic Rulee
 in. Trade* Not Covered by Stele Generic
    Rule*
  Appendix A: Regional EPA EmiMion*
    Trading Coordinator*
  Appendix D: Approvable Averaging Til
    for VOC Trades
  Appendix ft Radii of Significant Impact for
    Approving -Complex Terrain" PM. SO,
    aad CO Trades Under Level I Modeling
    Approaches
  Appendix P: CFR Part 51 Conversion Table

 EMISSIONS TRADING: TECHNICAL
 ISSUES DOCUMENT

  This Document offers more detail on
 technical issues for firms and pollution
 control agencies seeking to implement
 mdlviduea emisvions trade* or generic
 trading nrie* that meet the principles in
 EPA's final Emissions Trading Policy
 Statement It describes both the legal
 requirements for emissions trades under
 the Clean Air Act and a range of legal
 option* which state* ' and  sources may
 consider. States and firms may pursue
•other approach** consistent with those
 discussed bete.
  Section I of this Document explains
 general principles governing all
 Trsnismni trading. Section 11 explains
 priaeapk* goveaniog state genenc rules.
 Section m diacuaaat apeoai
 considaretioaa for emission* trades
 which anas* be implemented as case-b
 case SIP revisions.
  Becauee these sections reflect yenl
 Qeen Air Art principles, states.
 individual  source* or public commenters
 remain free to show that a general
 principle doe* not apply to particular
 circumstances or can be satisfied using
 another approach. States, sources and
 commerrters have this option under
 current law. and nothing in the Policy
 Statement  or this Document restricts
 their opportunity to make such
 showing*.
  Nothing  in today's notice alters EPA
 new source review requirements or
 exempts owners or operators of
 stationary source* from compliance with
 applicable precanatruction permit
 regulations in accordance with 40 CFR
 51.18. 51.24. S1J07. 5Z21. 52J4. S2.27.
 and 5SL28.  Interested parties should.
 however, be aware that bubble trades
 are not subject to preconstruction
 review or regulations where these trades
 do not involve construction.
 reconstruction or modification of a
 source within the meaning of those
 term* in the regulations listed above.
   1 "Stiter" tnctodH «ny tnttty property delegated
 authority to itatnffter rHtvint pani of a State
 taiRlaoMiualion Plan (SIP! under the Clean Air A

-------
43838
Federal Register / VoL 51. No. 233 / Thursday.. December 4. 1986 / Notict«
I. Elements Qt Emissions Trading.

  The basic dement* of any emissions
trade are the creation of an emission
reduction credit (ERG), its use in a trade
and its possible storage in a bank prior
to use.

A. Creating Emission Reduction Credit*
  States may grant credit only for those
emission reductions that are surplus.
enforceable,  permanent, and
quantifiable. Otherwise use of ERCs
might degrade air quality, threaten the
viability of the area's SIP. and make
more stringent control requirements
necessary.

1. All Reductions Must Be Surplus
  At minimum, only emission reductions
not required  by current regulations in
the SIP. not already relied on for SIP
planning purposes, and not used by the
source to meet any other regulatory
requirement can be considered surplus
and substituted  for required reductions
as part of an emissions trade.
  The first step in qualifying a reduction
as "surplus"  is to establish a level of
baseline emissions. This baseline
represents the level of required
emissions beyond which reductions
must occur for a source to be eligible for
credit Three baseline factors—emission
rate, capacity utilization, and hours of
operation—must be used to compute
and compare pre-tnde and post-trade
emission levels.*
  The baseline for each source must be
established both on an annual basis and
for all other averaging periods
consistent with the relevant NAAQS
and PSD increments. This approach is
necessary to protect the ambient
standards and PSD increments on a
short term as well as an annual basis.
The baseline will generally be
determined by. the attainment status of
the area.3 by the way the state
developed its SIP. and by whether the.
area is subject to PSD requirements.
  a. Use of Actual or Allowable
Emissions as the Baseline: Attainment
Areas and Nonattainment Areas With
Approved Demonstrations of
Attainment (including rural ozone
nonattainment areas), fn attainment
areas, baseline emissions must
generally be calculated using the lower
  * For furthtr discussion of these factors aa they
 relate to the calculation of baseline emissions, see
 Appendix B.
  ' Unclassified areas are treated aa attainment
 areas for permitting and emissions trading purposes.
  Unlike other criteria pollutants. EPA does not
 designate nonattainment areas for lead. However.
 the Regional Administrator will review lead trades.
 as all other trades, to assure that they do not
 interfere  with attainment and maintenance of the
 NAAQS.
                       of actual or allowable values.4 few all
                       three baseline factors. However,
                       allowable values corresponding to one
                       or more of these- factors, when higher
                       than corresponding actual values, may
                       be used in calculating baseline
                       emissions, provided those values are
                       shown to be used or reflected in an
                       approved demonstration.' The burden of
                       meeting this test rests with the state or
                       applicant Where the State or applicant
                       cannot show by written evidence ' that
                       the demonstration assumed an
                       allowable value for a  given baseline
                       factor, appropriate modeling would be
                       required in order to use an allowable
                       value for that factor in calculating
                       baseline emissions for the source.7 This
                       will require a Level II modeling analysis
                       as specified in the modeling screen
                       described below, using actual emissions
                       for the pro-trade case, unless the
                       appropriate EPA Regional Office ("the
                       Region") determines that additional
                       technical support is necessary to protect
                       the NAAQS. PSD increments or
                       visibility. Additional technical support
                       may be necessary because crediting the
                       difference between actual and
                       allowable values for even one of these
                       factors may produce a post-trade
                       increase in actual emissions sufficient to
                       jeopardize applicable standards?
                       increments or visibility.
                         Additional technical support is not
                       necessarily limited to determining the
                       impact of the increases from the trade.
                       The Region may require such additional
                         • For the definition of-ect**r tat "a
                       value*, and further discuanoo on calculation of
                       baseline eontetott. see Appendix B.
                         • This italement does not apply to setting, when
                       "contetnporanaoue" actual emissions an always
                       the baseline. See. *4-«CFRJ1.24(bX3(.
                         Bubble* in areas with <
                       solely oa qualitative judgements (*.*, the'
                       region" approach or no technical support! ordinarily
                       may not rely, without appropriate modeling, on
                       allowable value* in calculating beJtUne smissiona
                       However, bubble* in anas with demonetretloBe
                       baaed on rollbacks or dispersion modeling may use
                       allowable value* that an reflected in the
                       demonstration.
                         • For example, the demonstration calculation*
                       themselves, accompanying matenala. or affidavit*
                       from those who constructed the demonstration.
                         * In certain circumstances an allowable baseline.
                       value specified In a pnconattuctton permit will be
                       deemed equivalent to on* used or reflected in aa
                       approved demonstration. For exempts), a sotttcs) HI
                       an attainmnl area when a PSD baeeune ha* been
                       triggered may us* allowable rallies consistent with
                       its ^reconstruction permit if thai source s. •missions
                       an not reflected in the PSD ambiesu beeeiin*
                       concentration. (However, if modeling using
                       allowable, emission* predict* • PSD increment
                       violation, than additional analyses must be done t»
                       assure that the PSD increment is protected.) A
                       source in * nonattatnmtnt are* may us* aUowebt*
                       value* consistent with its pneonstnicrJoo permit I*
                       calculate it* baseline, provided thM permit poet-
                       dates the nonattainment designation. SIP eaU.
                       design year, or baeline inventory year, whichever is
                       applicable.
technics! support up to aad i
full Level HI modeling, as is aec«s»«n to
assure that applicable- NAAQS. PSi
increments and visibility requirements
will be protected. It may require the
determination of background
concentrations to which the imoacti of
possible emissions increases- that would
otherwise fall below Level II
significance values must be added.
Background concentrations should be
determined in a manner consistent with
EPA's Guidelines on Air Quality
Models.
  In attainment areas where the PSD
baseline has been triggered, the trading
baseline for a source must generally be
computed using actual values for all
three baseline factors (ie~ only
reductions below a source's actual
emissions can be considered surplus).
Because 40 CFR 51.24 and 5&21 specify
that increses in actual emissions
occurring after the PSD baseline date
consume PSD increment any trades
based on allowable emissions which
would potentially increase actual
emissions must perform at least a Level
II modeling analysis using actual
emissions for the pre-tnde case, and
provide additional technical support If
deemed necessary by the Region, to
demonstrate that they protect the
relevant increment ceiling. NAAQS, and
visibility.
  la nonattainment anas with approved
demonstrations, baseline emissions for a
source may be calculated using either
allowable values or actual values for the
three baseline factors, depending on the
assumptions used in developing the
area's demonstration^*
  Some states relied on allowable
values for certain sources in developing
their SOi and TSP attainment plans. In
these nonattainment areas, sources may
use allowable values  in calculating
baseline emissions, to the extent the
state used or assumed those allowable
values as the basis for its
demonstration. The burden of showing
that an allowable value was used or
reflected in an approved demonstration
rests with the state or applicant which
seeks to use an allowable value.9
  Other nonattainment areas either
used inventories based on actual
emissions, or relied on measured (and
therefore "actual"] ambient air quality
values, as the primary basis for
determining SIP emission limits needed
  • This statement doe* not apply to netting, where
"contemporaneous' actual emission* are always (As
baseline. See. e.g, 40CFR 31.1»|)(l)(vi). See slso
Appendix B far detailed discussion ol "actual"and
"allowable," emleemn*
  • See n. 6 and. 7 above.

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Federal  Register / Vok M. No. 233  /  Thanday.  December  4. 1966 / Notices
43839
to demonstrate attainment m some
area*. SIP demonstrations were based
merely on qualitative judgments (e.g«
"example region" approaches). Baseline
emissions for sources in all these other
areas must generally be calculated using
the lower of actual or allowable values
for each baseline factor. However.
state* may approve, on a case-by-case
basis, use of allowable values in
calculating baseline emissions, where
they explicitly demonstrate that such
use comports with reasonable further
progress and will neither create a new
ambient violation nor deley the planned
removal of an existing violation. Such
demonstrations require full Level HI
modeling and must be submitted to EPA
aa case-by-case SIP revision*.
  EPA deem* designated Rural Ozone
Nonattainment Ana* to possess
acceptable demonstrations of
attainment provided they have an
approved new source review rule and
require RACT controls for all major
VOC sources for which EPA has issued
Control Technique Guidance (CTG)
documents. (See, e.g, 43 FR 21673 (May
19,1978)). Because these areas'
nonattainment is generally caused by
emissions from sources in a nearby
urban area, control of emission* from
that area is expected to bring the ratal
area into attainment Put diSezently,
EPA doe* not require rural areas to cure
problems due to transport from
pollution-generating areas which rural
area* cannot control However, EPA
believe* that further clarification* are
required for bubbles in these areas.
   Sources involved  in such bubbles
must use RACT emission limits in
calculating baseline emissions, if subject
 to  Group I or 0 CTGs under the EPA
approved SIP for these areas. Source*
 subject to other SIP emission limits must
 use those limits in calculating baseline
 emissions. Other baseline factors muxt
 also be consistent with the applicable
 SIP requirements, and will generally be
 actual historical values. Where a source
 is  not regulated by the EPArapproved
 SIP its baseline will be acraal emission*
 in the year EPA approved the Part D
 plan for the affected rural area. In those
 approvals. EPA pniiniieil that controls
 for sources in the upwind urban areas,
 as well as RACT on GTC sources In the
 rural area, would bring about attainment
 in the rural area, and that non-CTG
 sources in the area, unless regulated by
 the SIP. could continue to emit at actual
 non-RACT levels without interfering
 with attainment in those areas. See also
 43 FR 21673 (May 19,1978).
    6. Special Progress Requirements for
 Bubbles In Primary Nonattainment
 Areas Which Need But Lack Approved
                      OejMRttreiMfl* of Attaiaamtt. EPA wiR
                      approve babbie* which areconeutem
                      with the attainment need* of these
                      areas, which produce a net atr quality
                      benefit and which therefore secure
                      interim progress towards attainment10
                        (1) Obfatin Tut* For Ail
                      Application*. Bubble application* in
                      primary nonattainment areas which
                      require bat lack approved
                      demonstration* of attainment will be
                      deemed to produce a net air quality
                      benefit and will be processed for
                      approval tf they:
                        (a) Use lowest-of-actnal-SIP-allowable
                      or RACT-allowable emissions baselines.
                      Such baselines are calculated 'i**"g
                      either
                        (i) The actual emission rate, the SIP or
                      other federally enforceable emission
                      limit or the applicable RACT emission
                      limit • * whichever is lower, to compute
                      the baseline for each source involved in
                      the trade. This baseline factor shall be
                      deter aned as of the date of the source's
                      application to bank or trade, whichever
                      is earlier.
                        (11) The lower of actual or allowable
                      capacity utilization  and hours of
                      operation to compute the baseline for
                      each source involved In the trade.
                      Aetna! value* shall  generally be baaed
                      on the two yean of operation preceding.
                      the application, to bank on trade, unices
                      another two year period is shewn to be
                      more representative of actual
                      operations. Source* which chut down
                      prior to the application to bank or trade
                      have zero emissions, and therefore no
                      credit is available.
                        For source* which banked or sought
                      to bank credit in these nonattainment
                      areas prior to publication of today's
                      notice, the "date of application to bank"
                      is the date of written application to the
                      states to bank credit through e formal
                      bank or informal
                      use in future trades. For sources which
                      seek to bank credit in these anas
                      following publication of today's notice,
                      the date of application to bank will be
                      the date of written application to the-
                      state to maJu a reduction ttate-
                      enforceabl* through or concurrent with
                      use of a formal bank or informal
                        (b) Using baseline emissions defined
                      above, meet applicable de minimi*,
                        '• Whila not til of tod»y'« a«w riiuiifiuim\t far
                      bobbin alhn« MM »n Mncttjr "binMni-
                      wtttn. ill bMic nquiraaoiu for dMM babbitt
                      tra Mtout htri for simplicity. N«w rvqiaroMnt*
                      MM apply (o gttwrlc bubble nitt a thiw am*.
                      SmSKttoBllOteknr.
                        '' When u) tniMran limit far • mtcu Involved
                      la tin nd* kM net pmrioviy DMB «pmur»J by
                      EPA •« RACT. • btMlint raflKttoi • MfMUttd
                      RACT tmiHien nif RIUM b« *tn«d upon by the
                      •cure*. *<•(• Mid EPA for ih« toon* m qoMtton.
 &OI
Level t Level 0 or Level 01 modeling
test* for ambient equivalence, as
appropriate.
  (c) Produce a substantial net redu
in actual emissions (La., a reduction
at least 20% in the emissions remaining
after application of the baselines
specified above).
  (d) Are accompanied by the
assurances of consistency with ambient
progress and air quality planning goals
specified in section LA.l.fa^3) below.
  (2) When These Special Progress
Requirement* Will Apply. The following
primary nonattainment areas need but
lack approved demonstrations, and
bubbles within them are therefore
subject to the special progress
requirement* in section LA-l.b.(l)
above:
  (a) Areas that are designated primary
non-attainment areas under section 107
for the pollutant involved in the trade
and which failed to submit a 1979 Pan D
attainment demonstration or which
submitted one that has not yet received
full EPA approval This includes primary
total suspended paniculate (TSPJ
nonattainment areas which submitted a
SIP that did not indnde an actual
demonstration of attainment but still
received EPA approval (Le~ a "RACT
plus studies" SIP).
  (b) Extension nonattainment ar
which failed to submit a 1962 SIP
demonstration, or which submitted o:
that ha* not yet received EPA approval
Also included are those ozone
nonattainment areas that are unable to
demonstrate attainment by 1987, unless
a demonstration of attainment for the
area is subsequently approved by EPA.
  (c). Areas that have received either,  (l)
A section 110(*)(2)(H} notice of
deficiency based on failure to attain or
maintain the National Ambient  Air
Quality Standards (NAAQS). in the form
of a SIP call or a new section 107 or
171(2) nonattainment designation: or (2)
a notice of failure to implement an
approved SIP.
  (d) Areas which received notice from
EPA that they heve failed to meet
condition* in their EPA-approved SIPs.
including commitments to adopt
particular regulations by specified dates.
The one exception would occur where
the only portion of the SIP (including the
attainment demonstration) lacking full
approval is the inspection/maintenance
provision for mobile sources. In these
circumstance*, stationary-source
bubble* will be treated as if the area
bed a fatty approved SIP.
  (e) Any area that does not have an
EPA-approved or EPA-promulgated
 for lead.

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43848           FaoVaral  Ragjatar /  Vol SK Nft. 333 / Thnraday. December 4>>taa»V Karioaa
  (31 State AMUTOUX*. EPA wiU not
approva a bubble in primary
nonattainmenl areas needing but lacking
approved demonstration* unless the
state provides assurances that the
proposed trade will be consistent with
its efforts to atta.n the ambient
standard. The state must make the
following representations to the EPA
Regional Office in or with the tetter
formally submitting the bubble as a
revision to the SIP:
  (a) The resulting emission limits are
consistent with EPA requirements for
ambient air quality progress, as
specified in Section LAJ-b-(l) above.
  (b) The bubble emission Units will be
included in any new SIP and associated
control strategy demonstration.
  (c) The bubble will not constrain the
state or local  agency's ability to obtain
any additional emission reductions
needed to expediiiously attain and
maintain aenbteat air quality standard*.
  (d) The state or local agency is making
reasonable efforts to, develop a complete
approvable SIP and intends to adhere to
the schedule for such development
(including dates for TromfMfffn of
emissions inventory and subsequent
increments of progress^- staled in or with
the i*1*** formally
or previous suca lettaeu
  (e) The baseline used-to qrinulafn the.
bubble emission limits is- consistent with
the baseline requirements in section
I.A.J.b.(l) above.
  These state assurances must be made
in writing by th« appropriate state or ,
local authority (e.q.. State An- Director.
Air Pollution Control Board, or
Legislative- Committee). EPA will not
second-guess such state representations.
provided: ft} They are a substantial test
applied by tile state to each bubble. and
(2) the state has explained how the*
proposed babble is consistent wHfc law
area's projected attainment strategyr
Nor wiH EPA examine, or expect state*
to examine in making suck
representation*, any specific source's
subjective motivation in making claimed
reductions.
   (4) Treatment ofPen&g Babbit
Applications. "Pendinf basMat" mean*
those which are curreauVpandiag at
EPA Regions or [fiisilipailnis  as well
as any bubble application* which wsra-
formaily submitted to EPA Beaton*
under the 1082 policy but returned
without action, because final bubUe-
criteria had not ye« been issued. la
primary nonattainment area* needing
but lacking demonstrations. uWse
bubbles sJMuid contribute to progress  -
towards attainment "Progress toward*
attainment" means s#m* extra reduction
beyond equivalence, with
actual-SIP-allowable-of-RACT-
of tha
credit. la other araas theae o«bbls*aust
show that ippiicihlt standardst
increments. and visibility requiremaoU
will not be jeopardized Pending bubblaa
which meet these tests and all other
applicable requirements of the 1882
policy will be processed tot approval.
  Pending bubbles may undergo limited
modification by the states or sources
which submitted diem in order to meet
the new requirements outlined above
(e.g* it may be necessary to recalculate
the applicable- haittline fiitTf***?* of
certain bubbles in nonattainment areas
needing but lacking demonstrations and
to reconfigure those bubbles in response
to the reduced credit which may be
allowed under the new more stringent
requirements). However, p^dfag -
bubbles- which prior to final EPA
approval are changed to the extant that
they no longer reasonably resemble tfie
original proposal quafifying for pending
bubble status (e.g, those which an
substantially expanded: tn scope or
changed (• involve primarily dlfnwsaft
souree*of ftnrtrren redaction credit),
will be considered new bubbles subject
to *H of ia*Teqairaneat» of today's • .
notice.              •      ...
  Bubble- appficaflona which weir
Mbmjtterf to EPAJUftens bf state* tat
whieh wamwtmdnwv (or r*t*rfsd|as
inadequate under the ifllg poflcy, ara.
not "pendtagi" .These
meet all requirements of-
appHcabl* to new bubble
  [c4JVb DaubltrCoiuttng
/xetAn«£nuisv At ntiiiiiHtmu to
conskleied sutpma
redaction cannot already nave bean
Claimed as part of a demons tf slim or
updated emtestoa Inventory by say state
air quality plan or haw beat used by
uMSOucce1 to meet any otner regulatory
requirement Oouble-countlng of
reductions granting credit for th» same
estisswn radnction. e.s>. onev ta tfaa
state aa part of its mnaftaaBnent SB*
demonstration or PSD baseline; and r
second tia» to a source for us» at aar
enissioo* trade, nmst be addressed m>
the followtag sttuatraaa.
  (1 ). Crediting Pre-Bxntmg flnmaAny
Rtdvcoom. In fwiwttajiiiuent OHMS-
credit generally cannot be gi en tad for
emission reductions made before.
manttoriag data is os waa ooliaotMrfor
use in current SIPptonnina. Oacaoas   '
monitored ambient revets olrtoxff reflect
these emission decreases. iurh
deoeasee-may have been  sssaassav>i
ralrdartag dw farmer redacttoaa-  •   -
neaded ta attam ambfent staadatd: ,
State* mostdeariy show mat me-
existsaca of mesa reductioas haa
 OraW to sautODedtttat teaaarajcsctiora.
 Tha eartaat accaBaahat HaeeUaa data
 would nnnaalff be dia yeas- of Mte moat
 recent esntaeians invaBtory aaed In
 planning Part QSff raviatone under th«
 Qean Air Act Amendments of 1877. '•
 Whan emissiaaa inventories or other
 data are updated for tracking RPP aad
 corractfon of Pert D SIPs. the new
 inveotorias awst treat banked emissions
 reductions, as current actual emission*
 "in the air" at the source where crested.
 so that corrected SIPs do not
 madvartaady niy on these prior
 reductkna and cause them to be lost for
 usa. If iavaalorles- da not treat these
 banked sariahsas as- "ta ma air." or if
 they an olhaiwlsa nUad upon for SIP
 pi inn ing patvoaes. soak reductions can
 no loagarba- created foe trading.1*
    tpiiuiuay noMttainmat areas
 dmwutiutAmt ofatta'aattnt. emission
          achfcnedpiiui to application
 to bank ortradafwtichcver is earite)
 wiAnot ba ciedBnf for uawin bubbfcs.
 Sea setu>iu'M.t.bLfty above. Regardless
' at whetfaar thay.maat other basetlna

 reasmaHy eOtflBd of the opportunity to
 tradrto rpndteai objective sense
              flmtng; aad cannot be
 raqoireaHBilr absent r demonstration. * «
   hi atfauaeiUaftaii nductama at
 major stationary foarcn which
 commvacadTcanstractioa after January
 1, 197»may 5V a&ot Of qualify for credit
 wuetbar sucB radiiCBoas occurred
 befon or after the PSD fiaaallne
 triggering, data. See WCPR
 SlMffypSJBR (V FX OT1»-20: August
 7, 1980). Otter emission reductions (e.&.
 at minor *ourcee) cannot qualify for
 credit when uVe PSD >«*f«»Hn« date is of
 hot beat trfggtmfutd such reductions
 occurred prior to the trigger, date, unless
 these reductions are aot assumed in the
 PSD baselines. Since baakad emission
              madbu* yuu dMu « runt
                    M»«KtMB LAX*.

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                  Federal Register / Vol. SI. No. 233 / Thursday. December 4. 1966 / Notices
                                                                       436
reduction-credit* must be considered to
be •la »e sir" for ill planning purposes,
if the baseline date is triggered before
banked credits are actually used such
banked credits will be considered as
part of the baseline and will not •
consume increment when used in an
emissions trade.
  in attainment anas when the PSD
baseline has not been triggered as of the
date EPA or the permitting authority
takes relevant final action on the trading
transaction, reductions below current
SIP or permit limits generally may be
used without special restrictions in
bubble or banking transactions,
provided they are otherwise creditable
and there is assurance that NAAOS will
not be violated due to any potential
increase in actual emissions."
  (2) Crediting Reduction* From
Shutdowns. Shutdowns are generally
treated for purposes of emissions
trading like any other type of emissions
reduction.1* For example, the same
limitations on pre-existing reductions
(section LA.1.c.(l). above) apply to
shutdowns where they apply to any
other type of emissions reduction.
However, under current federal New
Source Review requirements for major
sources, shutdowns that occur prior to
application for a new source permit can
be used as offsets only for equipment
replacing on-site productive capacity
which was shut down.11
  Shutdowns an of general concern
with respect to double-counting where a
state may have relied directly or
indirectly on shutdowns in a SIP
demonstration of attainment (Where a
primary nonattaimnent area  needs  but
lacks an approved demonstration of
attainment the progress requirements of
subsection LA-l-b. above apply to
bubbles involving shutdowns as- weH a*
to bubbles involving other types of
emission reductions. These requirements
generally bar use of reductions from
shutdowns which occurred before
application to bank or trade.)
   In general a state may credit
reductions from shutdowns if the SIP
has not already atraned credit for these
reductions in its attainment strategy. So
long as reductions from shutdowns have
not already been counted in developing
 an area's attainment strategy, they are a
 potential source of surplus reductions.
   " However, reductions «l toureee other than
 iMior tunon«ry loureo* on which coeutrucuon
 commenced Mori January 1.1«7S may not b» ueed
 lo balance uicreaeei it wch pre-tsn nupr wuret*.
   '• For uee of tanked ihaidow* crodlie.rar
 bebbiea» primary nonmieinment ereei medial
 but ledrinf approved demoni trelien*. tee McUoa
 LA.1-4J) below.
   "Seen. u»bo«e.
  Some SIPs assumed a set quantify of
reduction! from the overall difference in
emissions due to new plant openings
and existing plant shutdowns. Hies*
SIPs incorporated into their attainment
strategy a net "turnover" reduction in
emissions because new sources are
generally cleaner than those that shut
down. Double-counting would occur if a
specific source received credit for
reductions from such a shutdown, since
that reduction was already assumed in
the SIP'S demonstration of attainment
  These states have at least two options
for granting sources credit for
shutdowns without this kind of double-
counting. First they may reexamine any
"turnover" reductions relied on in their
SIP and decide not to take credit for
these reductions. This approach would
require EPA approval of a revised
demonstration of attainment or a SIP
revision showing consistency with the
existing demonstration. Such an action
can be processed by EPA concurrently
with a bubble or generic role.
Alternatively, these states may attow
credit only after the lotai quantity of
shutdown reductions relied on in the SIP
has occurred.
  In all eases where net. turnover
reductions have been quantified and
relied on aa part ofattainmeaf
demonstrations, states whica seek to
grant shutdown credit for use in trading
must be prepared to show dearly and
unequivocally on the basis of SIP
documents or tracking that the credit
has not  been double-counted or
otherwise relied on for SIP planning
purposes.
  (3) Use of Banked Credit* From
Shutdowns or Other Action* for Bubble
Purposes. '• In primacy aonattainment
areas which need but lack approved.
demonstrations. ERCs intended for
bubble purposes may generally be
banked and used with the same lowest-
of-ectueJ-OT-ailowabJe-or-RACT.,.
allowable baseline used for othe*
bubble transactions.1' This baseline
should be applied as of the time banked
credit is or was initially sought, with the
20V reduction applied to both sources in
the trade if these credits are later used
for bubbles. The lowest-of-actual-SlP-
allowable-or-RACT-allowable baseline
plus the 20* discount will also apply to
the source using that credit in • bubble.
as of the time of such subsequent bubble
application.
  Banked credits produced by
shutdowns and curtailment! may
used for babbles in these areas or
same terms as use of other banked
credits, provided their use is subject tc
stringent qualitative review to assure
technical legal and programmatic
consistency with SEP planning goals
(e.g.. avoidance of double-counting anc
"shifting demand"). This review will nc
examine any source's motivation in
shutting down a facility or curtailing
production. However, the source must
show that a written application was
submitted to make the shutdown/
curtailment state-enforceable through c
concurrent with use of a formal bank or
informal banking mechanism, pnor to
the time the shutdown/curtailment
occurred. Submittal of such an
application to make proposed reduction
from a shutdown or curtailment state-
enforceable will constitute the relevant
definition of "application  to bank" for
timing purposes related to the
evaluation of bubble credits in these
nonattainment areas (see section
LA.l.b(l) above).*0 The shutdown/
curtailment must be made federally
enforcement when it ia used in a bubble
  Use for bubble purposes of noabonkei.
credits-resulting from current shutdown:
or curtailaeata will be allowed in
areaa if the ioweet-of-actuai-SIP-
aUowable-or-RAGT-allowable bas
plus the 20% additional reduction are
applied to determine the amount of
credit
  Na special baseline or additional
reduction requirements will apply  to
these credits in other areas.
  d. Multiple Use of ERCs. Once surplus
reductions are credited states must
prohibit their multiple use. The same
pound of reduction must not be
simultaneously banked by two different
entities or used to satisfy two different
regulatory requirements at the same
time. To-present these  results, states
must adopt an ERC registry or
equivalent means of accounting for the
creation, banking, transfer,  or use  of
ERCs. See Section 1.C8 below. States
must also ensure that past reductions
used in bubble, netting or offset
transactions era not later credited in
newly-established banks.
  11 ERG* uted far nMtuif and affitt
 (tncJudim UMM derw»d from ba**a> mm* eaejpi*
 wtUt relevant NSJt end PSD reataneMnB).
  ' • For further diacuiara* reialed »the UM of
 beaked credHt in the*e noimunaent areea. we
 Mcuon I.CA below.
  *• For tource* whlefc banked or fought to b«nk
 credlti (roB almidowm or curtailment* in these
 iMHUlUUUMai we** fnor to publication of :oaay i
 notice. wntteB evtdeme ami be provided §howm«,
 either tfcel M explication to depoeif the crraiii m 4
 formal beak wu •uoentttd to the itite pnor 'o ih«
 tuM-tae faMtdewa/cwlattaaai occBrred. or thai tn*
 Mate iitiniiilirtsart befare or it the time ifie
 tlMldown/ciataUaMaf occurred, botfe the «xn
 of taal rfieldown/curteitaeat tad the source i
 intern to ue» *e reeelttne, aedtu in • future rr

-------
                                   t Vofc SC-Kev«M
                               apply
SIswRjBs. St»rce* nor i
area's SIP eansaion m«
for emisasoai rvdi
apaHcationa aiay ec
quality pianmag caoebtttfcss. Where
such source* era already subject to SIP
emission limits, those emission limits
must be used as the basis for
determining emission reduction credit
unless a more stringent baseline would
normally be required (see sections
l.A.l.a. and LA.1.O. above)."
   In atUnniatat area* state* may grant
bubble credit to sources regardless of
whether they have been included in an,
inventory, based on use of actual value*
for each of the three baseline factors, so
long as those sources an not subject to
lower allowable value* for those factors..
Allowable values,  when higher than
actual values, may alternatively be used
in calculating the baseline, provided
sources show that any resulting
potential increase in actual emissions
does not jeopardize applicable ambient
standards. PSD increments, or visibility.
(See 40 CFR 51.24 and 5Z21 for spocinc.
requirements concerning PSD
increments and visibility.)
   In nonattoinmentarsos witti oppnifstt
t/ffffNjjuCrulf0Jt* of Qitontitttftt, wnvtRvr
sources* not on die  inventory can crests?
bubbte credR wiff tnm en how rav
approved demonstration of attainment
was designed. Some slates first
monitored ambient varae* to determine
required redactions for the SIP; then
required a proportionate reduction ia
emissions £ross certain gasHrai source
categories (i*, a "roiMniek") ia order to
attain. States may  grant credit for-
reductions from onraventoned sources
in these area* ia at least two ways.
   (1) They could require the average of
percentage reductions imposed on all
inventoried sources, and grant credit
only for reduction* in excess of that
amount. In thi* case, baseline »"'ifT'*"ii
should be based on the percentage
reduction in actual emi**i«ns for the
year in which  the baseline data for the
rollback was gathered. Where such
sources are already subject to lower SIP
emisssion limits, those units must be
used to determine  credit.
   (2) They could require the source to
use n RACT emission rate and the lower
  " Where agiv«r «,urte wai not subject to
mdndpwy RACT n-gutatton dtn to the f»ct tti«« It
was nn an cizoiw extenoon aretl. a (Maehoa lefteOlne •
ne*o«ai»d RACT «niaa«m rale matt be agiuad
upon br'waen ine Morca. tne aMM and EPA  far MM
unipventorwd ao«rce in q«aaM>m.
utttiiathm and fcoot* 
catcuUtvth* boiinr. and gnat «
only far roductfono befoev mttboaoUnoi
Thut RACT bojoiiMwouid hove to>
result ia a redaction M IMS t •• graft a*
the percentage redaction aseomed hi tho
                                                                              fftt
>                                                                                       pi utetHaestTbr specifies uf a-
                                       rollback. A* discussed above. what*
                                       sources are-alreody nbjact to lower SIP
                                       emission limits, those Hints twist bo
                                       used aa tin baaia for dottraming credit
                                         Other areaa developed SIP
                                       demonstration* based on dispersioa
                                       model* ratiiar than area-wide
                                       proportionate- reductions. To the extent
                                       these SIPs demonstrated ambient •
                                       attainment through codoctions leqoiiod
                                       from specific inventoried sowcn*
                                       incorporated emission* frost
                                       uniaveatomd Murcer in ib» becfcasouoa)-
                                       or area source totals, aad projected
                                       atuimoemt by nodeting tfeerfbeaaoi
                                       those reductioa* reductions from .-
                                       sourcK ae4 on tho intonaory can ha>
                                       creditiwr «ain§.taa lower of actuaiosr
                                       allowable vnlnee tee each of too
                                       baseli
                                         In/Mzc
                                       demoMtratioa.ofottauuaml. A* •
                                       progress -requifrwieots
                                       above. anolyi l»^uobt« wfaidi-senii to-..
                                       use credit
                                       has not afraarfy been, adopted, for ajsr
be agreed upon, betveao the source. that . .
state and EPA before the baaefina can
be determined
  States which grant credit from
uniirwitoried sources not subject to
permits, offset requirements, or.
enforceable production, constraints
should address the possibility that
reductions from one such source maybe
followed by eqasi or greater increoM*
from similar nearby sources dn« to
shifting demand. These states must
clearly demonstrate that ERCs from the
uninventoried source are surplus and
permanent Interested parties should be
aware that some uninventoried sources
may not readily meet these tests, for
example, reductions resulting from
shutdown of a dry cleaner wilf generally
not be creditable, unless the stats
subjects such sources to offset
requirements or other measures
addressing this problem. However.
reductions due to  improved control at
such a dry cleaner would generaUy bo-
credits We. since shifting demand f* not
implicated
  Baselines far Open Dial Track*
Fugitive dust regulations general!?
consist of genenc work practice* and
         in Sll UBVHCftlg pefBIlt OF
                    Rts-gamiaity- «oi
possiMe IB tden«r> Ae apvruBiietB-
emission* beseter fcwn * gcoeraf st« tr-
open ^nst regwfftfon^ inerererv* ror eny
open dust trade a negotiated RACT
oassiiiw tRMef geneiwijr oe* agtvev vpevi
between the source: state and USEPA
for the open dost source in question:

2. Alternative Emission Limits Must Be
Enforceable
  Each bobble, aetttng, offset or banking
transaction owat be approved by the
state and must be federally enforceable
at dw tun* aa SRC ie used. Reviewing
authonties'may be able to use existing
procedures1 fiacMtaf praeonetraction
permits iaeaied by slates punaant to 4O
CFR SIM. 39J*. 51J«7 or 5i21) or BPA-
approved paaris.ra>ea ta masae
rutortima Jederairy enfarceabte The
former peasibsHty axista bacsase
penssse tsevee^ amaei a federaily-
approved new soaeaai'i evia w \n * *^fi % m
aniedaBUy aa£aec«abie. Htmerm.
many ptSHSBStlBCtiOB Benst DrOgjaUttS.
hairs been fiadafalhj aapsoesd sUiaitiy
fist mascBJ nbjeH te>NS&,a«d   '^
           qr aotba capabia of uaat ler
           i that ds anttngae* NS«.
            • or mat inveive sourceat
not saMsary luhjerl tBHrnoonatructioa
permits.
  Wid» respect* m* bttex possibility.
                          instnuneat
                         •AUW
                             ic rule
                                                                              scope, of aa£PA>asavo*ed
                                                                              is deaaearfedaraiir anfcro
                                                                              of the SIP.
                                                                                Enuasins
                         able aa part
                 itabushed by a trade
                                                                              must ho jDGOfpofaaSOJB • cosnpuance
                                                                              insffument wsack isaagaUy bu»din§.«jd
                                                                              poBtteabiy esaorceabis by EPA.
                                                                                Trades tevatvmf indtvtdnoi StP
                                                                                                          thi*
requisemont. For trade* ondor generic
rules a compliance inatrament cuW take
the form of an agrs assent between the
source and atsta. a praeonstruction
permit (if on* iBaopiseabia). a cornea*
decree, a state operating permit or any
otaasrcoeapiisncs mstraent judicially
enibeeoabJo by the state. To assure state
enfoiLaabihty, the generic rale should
stats thai aoanaa sobject to these
instruments aio reqwed to meet trie
emission limits contained therein. Such
instruments would then automatically
become federally enforceable via an
EPA-egpreved generic rale, provided
they are issued as, or part of. the
compliance Instrument specifically
required by the generic rule.
  Compliance instruments must ensure
that enforcement personnel do not have

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                 Federal Register / Vol 31. No. 333 f Thuraday. December 4. 1988 f
                                                                                                             43843
to (MI •tedtantotttiy evarjr tniMkm
souraa invohrad in • trade. HM
generally rtquirN io«fCB ipacific
emission limits. However, statts may
ust pre-specified combinations of
source-specific emiuion limits which
arc enforceable. States may also use an
overall limit that applies to a group of
emission sources which can be
evaluated simultaneously, where there
is a reliable and enforceable method of
determining compliance (e.g.. through
production records, input factors, or
other indirect means, or through use of a
continuous emissions monitor.) See. e*,
45 FR 80124. December 8,1900.
  The compliance instrument should
also specify applicable restrictions on
hours of operation, production rates or
input rates: enforceable test methods for
determining compliance: and necessary
racordkeeping or reporting
requirements. To be enforceable, these
limits must  state the minimum time
period orer which they will be avenged
(e.g.. Ibs/hour. Ibs/MBtu averaged over
24 hours, production rate/day).'* Unless
such enforceable restrictions are or have
been placed on capacity utitfntkra and
hours of operation, or on overall
emissions, maximum values for oapaerrjr
utilization and hours of operation outst
generally be used in "'"'ff^'ig post-
trade emission limits and in ambient
modeling of the  post-trade <
3. All Reductions Must Be Permanent
  All emission increases in a trade mutt
be ooiapeneated by eminion reductions
that are permanent fi.e- assured for the
life of the corresponding increase,
whether unlimited or liaritied in
duration).** This reeeiremeat may
generally be met by enforceable penult
limitations confirming the amount and
duration of the decrease. If reduction
with a limited life era used, the life of
the trade nraet be limited eccordingiy, so
that the trade will automatically
terminate with expiration of those
reductions. The date of termination may
be specified in th* notice of approval.
Alternatively. source(f}nay agree to
provide formal written nMacatton to
EPA and the state before such
reductions may be diseoatUMsd aad the)
trade terminated.
  Permanence may pi esent special bnt
resolvable "shifting demand" problems
for reductions from small sourcaa not
subject to permits, offset requirements.
or enfeicnbwpraduetsaa i
States wttjoft grant credit frasji theer
source catagoriea atast addraas det
possibility that redacfjoasj from eoe
source may result <• •qua! or greatar
increases from similar nearby source*."
  In order to ISM. tat a babble trad*.
emission reduction credits derived Iron
reductions in operations beyond thoee
consistent with the bsseiine (e.g., a
reduction from 3 to 2 workshifls). a
source must have its preconstruction
permit or other federally enforceable
compliance instrument altered to reflect
the curtailment in prodectkm records
reflecting such curtailment (see section
LA2 above).** Future increases In
production beyond the permit amount
may trigger new source review or
require approval of a new emiearaas
trading application which mdodea
compensating emission reductions. Aa
with other types of Donoompiiancax any
source which exceeds penaitted
production limits would be suhjairt to
potential nonrvxapliance panaitiee.
4. All Reductions Must be QoMflflabfo

  Before an emissKwifeductiaa can be
credited it must be quantified. This
generally means the state must establish
a reliable basis-far caleolaflng the
amount and rate of the reduction-end
descriOHeg Ita CBaracteristics.
  a. Caleulatiag th* Reduction. To
qoutiry the amount of t
redactMBSeiisjsbkaeBRCa.1
neat be ueJtaiasml both before and after
the prfectfon (Law «M«ateg the peat-
redoction Knits). Although many
different methods of ^ImlfH^f aie
avaiUbie (e^g« enusason feotora, Msjfik
testa, nenitored vasMe. production or
proeaaa arpwts). Ae sane ssethod aad
averaglBg time thoaW generally be used
to qmntify emisaions both balore aad
after the reductioa.**
  " Mtny etaie aenuu or
need ravi

nerd only oeour on »
individual IHO«M *M
  "Penmwor
luniifd-durition mdai am*!
limiu.
 MJXJI. O. MCtraa LA-lA ibevt.
  »• Utute EPA'» NSH rcfuUoau. prtar
 eaiutlaMM* era «ab(«ct to UM wow rwaie(iea»far
 ofliM pvpOOTt M prior ilwldownft SM & 14 cboM.
  " la yuani. itftm tuj not ipprwM VOC t
 ia COOM naauHtuutmt tnm wtan mdl trwte
                                          Utncarpa»U (
                                       dff. I him m
  6. DescribiKftke Reduction. If an ERG
 will be Med at *JM tint of cm Hon. o
charactartaKetuaeiMai'ji to evaluate
 that proposed OM need be described.
 Whew the ERC will be banked and Irs
evenfaal uee is not yet known, a more
detailed description should be provided
in order to facilitate its later evaluation
for a particular use.

B. Using Emission Reduction Credits

  This section explains the substantive
and procedural principles applicable  to
use of ERCs. primarily for existing-
sonrce bobbles. Meny of these
principles  also apply to use of ERCs in
netting or offset transactions. However.
those transactions are governed by
EPA'a New Source Review regulations
(40 CFR Parts 51 and 52) or state rules
reflecting them.

1. Substantive Priaciplet for Uting ERCs

  o. Emotions Trades Mast Involve the
Same Pollutant. The Clean Air Act
requires states to develop separate
plans to attam end maintain the
national ambient air qnallry standard
for each criteria poiratant. Thus, all
individual bubble, netting or offset
transacttont Brest involve the same
pollutant Onfy redactions of
particBfainrs can sabstitute for Increases
of parttralate*. redactions of SO> for
             ~ ,ett
  6. All UMt of ERCs Must Satisfy
Ambient few**/Because the Clean Air
Act requires nar aD areaa throughout
the country attain anal maintain ambient
standards, protect applicable PSD
increments, and protect visibility in
mandatory Federal Class I (PSD) areas.
bubbles must generally be equivalent in
ambient efforts to the baseline- imi*aion
levels which they replace. *7 In
nonattainjneat onto, use of ERC*
cannot create a new violation of an
ambient standard or delay the planned
removal of an existing violation. In
attainment areaa. use of ERCs cannot
violate an inclement or ambient
standard. Use of ERCs in either typ« or
area cannot adversely aOsct visibility in
any nsamisluiy Federal Class I area.
  The ambient effect of a trade
generally depeada on the dispersion
clkaraatertatica of the pollutant involved.
   VOC or NO, Trades. Trades involving
VOC or NO, need consider only
emJaeiona. Since the ambient impact of
these poHaSana ia areawidv rather than
localised, one sound oHncnased
emisaions wiH be balanced io ambient
                                                                                "tai
 OB t 
-------
43344
Fedewai Rv0»tar  / VoL 51. No. 233 / Thursday.  December 4. 1906 / Notion
effect by one pound of decreased
emissions within the same breed
geographic area, and the precise
location of those incrseees and
decreases ordinarily does not matter.
For VOC and NO, such "pound-for-
pound" trades may therefore be treated
as equal in ambient effect where all
sources  involved in the trade are located
in the same control strategy
demonstration area or the state
otherwise shows such source to be
sufficiently close that a "pound-for-
pound" trade can be justified.**
  Paniculate Matter. SOi, CO or Lead
Trades.  Ambient considerations are
critical for trades involving emissions of
sulfur dioxide, participates, carbon
monoxide, or lead, whose air quality
impacts may vary with where the
emission increases and decreases occur.
For example, one hundred pounds of
ERCs for such a pollutant created  at one
source may balance the  ambient impact
of a 100-pound increase  at a source
nearby,  but may only balance the  effect
of an 80-pound increase at a source
further away. In addition to distance
between sources, plume parameters.
pollutant characteristics, meteorology.
and topography will also affect the
ambient impact of such trades.2'
  This Document authorizes the use of
four alternative methods of determining
ambient equivalence, with the degree of
required modeling linked to the likely
ambient impact of the proposed trade.
The following sections describe use of
these alternatives to evaluate for
approval many bubble or offset trades
without full scale ambient dispersion-
modeling.30 Use of these alternatives
under genenc rules is discussed in
section  II below.
   (1) De Minimis. In general no
modeling is needed to determine the
ambient equivalence of  trades  in which
applicable net baseline emissions do not
increase >l and in which the sum  of the
   '* The diiiusnon in thu paragraph doe* not
 apply to NT. 'rades involving visibility impact* of
 elevated plumes.
   " The ambient equivalence aotmdentton*
 elaborated in this and foUowiaarperaaTepa* aiio
 ipply to NO, trades involving visibility impact* of
 elevated plumes. See n. 2S above.
   10 Modeling n generally not required for new
 source netting, whole purpose it to avoid expending
 resources where adverse emission or ambient
  mpacii from changes at a source an extremely
 unlikely See. e.g.. 45 FR 52877-78 (August 7.19WV
   11 Interested parties should, however, be aware
 that in some circunutancas modeling may be
 required to tusufy using certain emissions baseline*.
 pnor to the trade. Where a bubble in *
 nonaitainmfnt area seek* to employ allowable
 value* greater than corresponding actual values in
 the calculation o( baseline emiMiona. and whan
 such allowable values are not ihown to be used or
 reflected 10 an approved demonstration, a lull Level
 111 modeling analysis will be required. Where a
                        emissions increase*, looking only tt the
                        increasing sources, totals less than 25
                        tons per year (TPY) for pertculate
                        matter. 40 TPY for sulfur dioxide. 100
                        TPY for carbon monoxide. 40 TPY for
                        NO, (where visibility impacts are of
                        concern), or 0.6 TPY for lead, after
                        applicable control requirements. Such
                        trades will have at most a de minima
                        impacts on local air quality because no
                        net increase in emissions will be
                        produced and the amount of emissions
                        being shifted is less than designated
                        significance levels in associated EPA
                        regulations (see. e.g., 40 CFR
                        51.18(j)(l)(x) and 51.24(b)(23)(i))."
                          (2) Level I. In general no modeling to
                        determine ambient equivalence is
                        needed if;
                          (a) The trade does not result in an
                        increase in applicable net baseline
                        emissions:"
                          (b) The relevant sources are located in
                        the same immediate vicinity (within 250
                        meters of each other):
                          (c) No increase in baseline  emissions
                        occurs at the source with the lower
                        effective plume height as determined
                        under EPA's Guidelines on Air Quality
                        Modeling-*
                        bubble In an attainmtat area seeks to employ
                        allowable value* greater than corresponding actu,
                        value* in the calculation of baseline emissiona. and
                        where such allowable values are net show* t« b*
                        used or reflected in an approved daraonatntlosi. a
                        Level U modeling-analysis (tee below) using actual
                        emismon* (or the pre-bubble case will be required
                        unless, for bubble* processed as ca*e-by-cas*-SIP
                        revision*, the Region determine* thai additional
                        technical support n necessary to protect applicable
                        standards or increments. Where allowable valuae
                        are used to calculate baseline emissions for such a
                        ca*e-by-ca*e-SlP revision bubble in an attainment
                        area where the PSD baseline baa been triggered, the
                        Region will require the technical support necessary
                        to protect PSD increments.
                          Where allowable values higher than actual values
                        are not shown to be used or reflected m an
                        approved demonstration, stales that wish to
                        authome their use in attainment areas under
                        genenc bubbl* ru/e« must either slat*, or develop
                        repHcable procedures addressing, background
                        value* and how they will be evaluated m
                        conjunction with the actual change* in ambient
                        concentration predicted by the Level  II analyst*.
                        These step* must be sufficient to prated itandards
                        and increment* and must be approved by EPA as
                        part of a genenc rule.
                           For further discussion regarding calculation of
                        baseline emissions and related modeling,
                        requirements, see Section 1.A.L above and
                        Appendix a below.
                           "This paragraph should not be construed to
                        imply that new sources and modifications need not
                        meet all applicable requirement*, including those
                        specified under 40 CFR 51.18 or parallel EPA-
                        approved Mate rules.
                           "See n. 31 above
  (d) No complex terrain»«is wirhm Jie
area of significant iapact of the tmie "
or SO kilometer*, whichever ri less:"
  (e) Stacks with increasing baseline
emissions are sufficiently tall to avoid
possible downwash situations, as
determined by the formula described at
50 FR rS82 (July 8.1965) (to  be  codified
at 40 CFR Part SI): and
  (f) The trade does not involve open
dust sources.
  For such Level 1 trades it can
reasonably be assumed that  "pound-for-
pound" trades will produce ambient
effects equivalent to those which EPA-
approved air quality models  would
predict Therefore modeling »o
determine ambient equivalence  is not
required.
  Trades between fugitive process
sources and stack sources (i.e.. process-
for-procesa or process-for-stack) can
acceptably be evaluated and approved
under Level I as long as the maximum
distance between any emitting sources
in the trade is less than 250 meters and
all other Level I criteria are met
  (3) Level 11. Bubble trades which are
neither de minimi* nor Level 1 may
nevertheless be evaluated for approval
based on modeling to determine ambient
equivalence limited solely to the impacts
of the specific emission sources
involved in the trade, if there is  no
increase in applicable net baseline
emissions.'7 if the potential change in
emissions before and after the trade  will
not cause a significant increase in
pollutant concentrations at any receptoi
for any averaging time specified in an
applicable ambient air quality
  14 Complex terrain i* broadly defined by EPA as
terrain greater In height than the physical stack
height of a sourc*. For bubble purposes, thi*
definition i* applicable only to source* with
increaaing baseline emissions.
  " For guidance on determining 'area of
significant Impact" see Appendix E below. The
graph in Appendix i or EPA-approved alternative
approaches, auy be incorporated in genenc rules to
make this aspect of Level I analyst* replicatale and
operational. See Section U below.
  " Generally, trades involving complex terrain as
defined above may not be exempt from modeling
under a Level I analysis. However. EPA will
consider on a caaavby-case basis additional criteria
for determining whether a particular trade involving
complex terrain, but otherwise meeting the
requirements specified above, does not present a
problem of potential plume impaction and may be
approved under a Level I analysts. These additional
cnlena would include such factor* as source  height
and emisaion rates, distance between stacks and
elevated feature*, rate of topographical rise, and
other coneiderettona which may be appropriate for
the particular geographic area. Slates are
encouraged to work with EPA to determine where
and how such additional criteria can be developed
and applied to individual trades.
  "  See n. 31 above.

-------
                  F«d«r»J Rejtater /  Vd. n. No. 838 / Thumiay. December 4.  1988 /  Notteet
                                                                                                                 4384F
standard." an* tf M«h M aosjtysJ* dots
not predict my increase in ambient
concentration* in • mandatory Fcdenl
Class I arm." Tht change in
concentration from the before-trad* ca««
to the after-trade case muat in general
be modeled using refined models such
as MPTER and ISC for each appropriate
averaging time for the relevant national
ambient air quality standards for each
receptor, using the most recent full year
of meteorological data.44
  (4) Ltni 111. Full dispersion modeling
considering all sources affecting the
trade's area of impact is required to
determine ambient equivalence if
applicable net baseline emissions will
increase aa a result of the trade.4» or if
the trade cannot meet criteria for
approval under e% minimi*. Level I or
Level IL
  However, a geographically limited
Level 01 analysis may be used in some
caaaa where a Level 11 analysis predicts
0ua0fc tredoa. ttatoe Buy MI tba foUewli*
iijnolnaajna loiaaa to jdOBufy tnoea wtaea
pottntial oatmai tapec* need oat be further
evaluated beforv. approvafc
  10 m/m* fat any at-hour pcnod fbr pmrrteniate
matter
           ao? ananal period for parttoaitto
  U »•/•' tar eay M-bow panod (or SO*
  4S *«/•• far uy 1-kaw panad far 9Ot
  3 m/m' for to annual period lor SfX.
  S7S pa/a* fbf tat ovhoor period for CO.
  2MB Mfe* tar Miy 1-how parted For Ott
  ai »«/•* tar •*• naoerth period tar 1%.
  SM 4S PR seas (Aigwi r. isan Mr «>SM(
               at with BPA'i i
Review refutation* la 40 CPU 31.18 or Pkrt SI.
Appondta S. or paralM SPA-epproved aMte
reruUttom. "Sigctflcaar i»pact under « am Pan
it. ApaaadU 31» dafiaaa aa 1 »»/•* »»»»H
average far paniculate*. SOi or NOt t MS/IB* 14-
homr avenge for pemcniaie* *nd SOi: 2S M/»* *
hoar averof* for SO,: end as mf/M* ft-hoar xaieia;
«nd Z Bg/n* ana-hour average far CO.
  *• However, i bubble ordhienJy OMV MM a*
approved undtr Level II where other evidence
related la background—<••- formally voMotod
•motffit air quality momlorlni data or MU'luaa*)
atubilahod backireund TmJuaa daorly •utteato*
that tha bubble would craan • now vtaUcion of ••
afflbwrn xandard or PSD taoraoMat or «m«ld a«*ay
ib* plannad removal of OB i
  •• Other technique! may b* apprgnx) wtor*
 fouren ihow they equalrf wttt protect NAAQ8.
 appHaWt PSD incremMMe. «Ml vMbUlrjr. Par
 example, in limited i in iMnalaniaa laiiiiiiailn
 (creemnf model* may be eoeaptaMa IN Hoo of
 MPTER and ISC In »oen eaee*. oae of • fid ymr of
 meieorolovxal data ma* not be nirauary. Sort
 tereoninf model* may be acceptable onerr (a) Tha
 fcreemni modal ihowi that all the emiiatont fro*
 the *tac*(a| with tncreamf emiaaWHi mmU AM
 produce cxceedtnce* of tn»U«ol U sv^leuce
 value* daacnbul in a. IS above, orfb) the net*
 pmoMteree) the «tadi|>! with toareaoing miMtorn
 do not chanoe and the *creenfti« mood >h«wt tk*t
 the rnereaae « enttoioM at the inereaani Mec«4«l
 would not prudute emeedaneea of there
 iifBiflemoce valuoa.
  41 See ditcuuion in I.B.l.c. below
onror IMIW aamtduee* of KM Level 0
lipttAoMC* vataM. WWJetbU aulytar
will be Jtorfted «term* of geographic
scope. If BMt odMrwto* «eet KM
modeHng lequittiaena rora fWl Lerd
HI anaiysla. Indodinf consideration of
all sources affettuif the hnttad
geographkal area, in many situations
this approach may permit the receptor
area to be smaller than the trade's entire
area of impact Because cf the unique
nature of each situation, the appropriate
limited geographic area muat be
determined in accord with EPA
guidelines on •tH*llf>Bi «nd through
case-by-case evaluation.
  Bubble trade* are approvabie under
either type of Level m anaJyeia if they
do not cause a new violation of NAAQS
or PSD increments, significantly
contribute to or delay the planned
removal of an existing violation, or
adversely affect visibility in mandatory
Federal Class I areae.4*
  This three-tiered modeling approach is
both reasonable aad conservative. It
will assure that the ambient impact of
trade* is at leaat equivalent in effect to
original SIP aniseum limits, white
conserving government resource* and
shortening approval time* for many
individual trade*.
  c. Bubbbt Should Net Inane*
AfpUcabh N*t JojeZtoe  Rariuiom.
Ordinarily, bubble* may  not remit to an
increase in applicable net baseline
emission. Such a babble would require
a case-by-case SIP revision, and may
only be approved based upon a
combined Level 01 and Level II
modeling analysis (l.«, aa analysis
sufficient to show that all applicable
requirement* of a full Level 01 analysts
(as described above) are met and that
the bubble would not result m any
exceedance of significance vetoes
specified fbr a Level U analyst* at any
receptor for any avenging time
specified in an applicable ambient air
quality standard.4*
  •• Whom a Uv*l m modalhif analyn* aubauHod
 to cooper* a rotatory tradiof evpllMBue. fndteato*
 an eacaeoaaoi at •• amblax reguiremaat. PA «HU
 renew tucn *ppilc*t>oa* oa • common aanet eaee.
 by-eaa* ban*, teekinf to encouns* dladflomH of
 «ue* exeMdMOM and naM undw* dttoy o/
 daotton* on tba tfada. whOe aOeMmlo); anemia^
 pratvcttoB of pVvUc tMwtB* OH t&M^Hy of nt 39
 proeeaa (mdodtet the tuMe't pmofiBtta M
 detarmuilnf hew to remedy	eltilnmaalt. end tha
 proiitpt UM effetHw ramoBy of aire oonttWoii or
 oonattainmenL In Itt revnn*. the Aftncr wttt teJt»
 into eocowt tuea factor* a* the a*|lea of
 exceedanoa. the contnbatfoo, of UN mdUif eawva*
 and the trade Haotf to the i nje*aanoa. and the
 deeree to whteh aoch tovoM wooM be put of ay
 •olution remadylnf tha e«caad*nei
  ••Whore a |
               Whet»eoeli » babble It proposed in
                           iu tu the state must
            denonatratv dMt At trade- it consiste
            with tn*>pfogr*M denwnetmiofl under
            an approved demmuttaHuii of
            attainment. ravtM Ml BPA-eppraved
            ptuyets deflranatratioa a* part of the
            proposed SIP revision, or otherwise
            •how (e.g» by modeling and any
            necessary compensating emission
            reductions) that the proposed trade
            comports with the EPA-epproved
            emissions and ambient progress
            demonstration.
              d Bobbles Should Not Increase
            Eauaiont of Hazardous or Toxic Air
            Pollutants. Under the Clean Air Act all
            sources jnuat meet applicable section
            112 (NESHAPi) requirements for control
            of haxardons air pollutants. Sources may
            neither use a bubble to meet these
            requirements, nor increase emissions
            beyond the levei* they prescribe. Where
            a sewce wish** (o generate or use
            emission reduction credit for a criteria
            pollutant and where a NESHAPs
            pollutant i* part of the criteria pollutant
            stream, the enriaskna baseline for
            emission* of the hazardous poUutant
            from that source would be the fower-of-
            eetual-or-NMHAPs^llowable
            emissions of that pollutant, applied as of
            the ttme of application for credit. Where
            EPA haa pnpintd to regulate a source
            category far emitsrons of a pollutant
            under section ill but haa not yet  ,
            promulgated a NESHAP for that source
            category, the proposal will serve as the
            interim guideline for evaluating the
            potential effects of any proposed
            •mnaiotts trad* involving tources to
            which the proposed standard would
            apply. The emissions baseline for such a
            pollutant emitted by a  source subject to
            the proposed NESHAP would be lower*
            of-acta*J-or-propoaed-NESHAPs-
            allowabfe emissions for that pollutant.
               la genera/, such trading proposals will
            be approved so long as they (1) result in
            emission limits for eocA source emitting
            the relevant poUutant which are
            equivalent to or less than those that  the
            approved NESHAP requires or the
            propoaed NESHAP would require if
            promulgated (2) rely only on reductions
            below actual or allowable levels
            (whichever la less) of that pollutant, and
            (3) take place within a single plant or
            contiguous plants.
               When a poUutant has been listed
            under section 112 or EPA has published
            a Notiee-of-lnteot-te-List but no
            NESHAP has been promulgated or
            proposed fbr a source which emits that
•* not
 batettae ontiMMM cannot meet thia toot of amble*
 equivaJeooe. it may not be approve** a* * babble
 under the Emuiion* Trading Pottee. "
                  i BJO* *«i taomM rueh rxneed limit* for
             approval under tba general requirement* applicable
             10 SIP r i Tt HOB*.

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43846
F«4etal Itogbtor / VoL  51.  No.  233 / Thursday. December 4. ia» / Notices
pollutant state* may generetly allaw
trades consisting of equivalent increase*
and decreases of actual missions of
that pollutant within a lingce plant or
contiguous piants. Once the relevant
NESHAP is promulgated, every source.
regardless of any previously approved
trade involving emissions of that
pollutant, must meet the requirements of
that promulgation.
  Where EPA has decided that one or
more source categories which emit a
listed pollutant do not require regulation
solely because of limited  national
exposure, emissions-of that pollutant
will continue to be treated the same aa
emissions of any other pollutant listed
under section 112.
  Where EPA has issued a formal
Notice-of-Intent-Not-to-List a pollutant
under section 112. that pollutant will
ordinarily be treated as non-hazardous.
However, where the decision not to  list
or not to regulate was based on limited
national exposure, but the individual
risk was sufficiently high that EPA
committed in the announcement of its
decision to support (through some
formal mechanism such as a
Memorandum of Understanding (MOU1)
state-level efforts to develop regulations.
the pollutant will be treated a* listed for
trading purposes in order to assure that
such state efforts are not compromised.
The model for the intended scope of this
classification is EPA's acrylonitrile
decision. (SO FR 24319; June 10.1985).
  If a substance is neither listed nor
regulated as hazardous under section
112. nor meets any of the other
conditions specified above, but has been
formally listed or regulated as toxic
under any comparable health-based
federal statute, the Administrator may
consider this fact in evaluating trade*
which may increase emissions of that
substance. This authority has not been .
delegated within EPA by the
Administrator. See Clean Air Act
section 301(a)(l). 42 U.S.C. 7601(a)(l).4«
  " Tradtf involving emiiMM streams putiilly or
 wholly composed of any nUattnu tuoiect to
 special considerations andartBH section muit meet
 two separate and distinct MU-to be approved.
 First, sach tndei must beeajejrniialjls under the
 en ten* and principles which apply to all trades, t*
 discussed throughout this policy (i.t.. such trades
 mual mm baseline and other requirement* for the
 ^levant catena pollutant). Second, such trad**
 mat be appravable with respect 10 the Kasardout
 pollutant fraction of the criteria-pollutant emissrae)
 stream. Thu meant that there mutt be no net
 incrf ate in emiaaioni of the polhitarrts addressed in
 ihit section, ai a reault of such trades. Wlnre a
 NESHAP hai been promulgated or proposed, the
 baaelme for determining whether such en increase
 hat occurred is-the tower-of-actual-of-NESHAPt-
 dllowabie emissions for the hazardous component
 of the trade, for the source waish emits thai
 component. The promulgated or propoaed NESHAP
 limit not only la used to define the ailowaole
                         Exception. Trades which invoke the
                       pollutants addressed in this section, but
                       do not meet the special restrictions
                       discussed above, may also be approved •
                       where surplus reductions in those
                       pollutants compensate for increases in
                       non-hazardous emissions of the same
                       criteria pollutant For example, a source
                       emitting benzene may trade with a
                       source emitting a non-hazardous VOC
                       without meeting these special
                       restriction*, if the benzene emissions are
                       reduced as a result of the trade (i.e.,
                       "traded down"). As long as such a trade
                       would not result in an increase in either
                       actual or allowable emissions of a
                       pollutant subject to the preceding
                       paragraph! at any source, it would not
                       differ in nature or requirements from a
                       trade involving only non-hazardous
                       VOC emissions.
                         e. Existing-Soune Credits Cannot Be
                       Used to Meet Applicable Technology-
                       Based Requirements for New Soarces,
                       Under Clean Air Act section 111 and
                       EPA implementing  regulations, new
                       affected facilities must satisfy
                       technology-based New Source
                       Performance Standards (NSPSJ.
                       regardless of the attainment status of
                       the area hi which they are located
                       Under sections 165 and 173 and EPA
                       implementing regulations, new or
                       modified major sources most also satisfy
                       technology-based control requirement*
                       associated with pnconstraction permits.
                       These requirements prohibit use of
                       credits from existing sources to meet or
                       avoid applicable NSPS. and bar use of
                       such credits to meet applicable new
                       source review requirements for beat
                       available control technology (BACT) In
                       PSD areas, or lowest achievable
                       emission rate control technology (LAER)
                       in nonartainment areas.4'
                         However, modifications of existing
                       major sources in PSD and
                       nonattainment areas with an EPA-
                       approved "plantwide" definition of
                       source can use "contemporaneous"
                       reductions in actual emissions from
                       within the same source to "net out of
                       New Source  Review.4* Under such-
                       emiaaiona for thai source, but serves as.an absolute
                       ceiling on the source aa well Where a NESHA0 has
                       not yet been promulgated or proposed, the baaeiiae
                       for determining whether such so increase has
                       occurred is generally actual enuaatona for the,
                       hazardous pollutant component of lie trade. But cf.
                       today'! Policy Statement si a. &
                         *• Today t notice does not address whether or
                       under what circumstances facilities ntbtect to
                       NSPS, BACT or LAER may surpsss applicable
                       permit limits reflecting such requirements utoraW •
                       to create credits for existing-aource trade*
                         •• "Contemporaneous" mesns a reasonable
                       period for accumulating increases snd decreases in
                       emiitroru. aa specified by the tlale. See 40 OH
                       51.1ft||)(ll(vi| and SI 24(b|(3|(bl (ii|.
"netting." sourcewide increases m
potential emission* that do not exceed
designated levels of significance (see 40
CFR 51.18(j)fl)(x). 51 J4(b)(»). and
5X21(b)|23)) will not be considered
"major modifications" of the source
under 40 CFR 51.18.51.24.51.22.51.307.
52.28. or 52.27. Thus, while these source
changes must still meet applicable
NSPS. NESHAPs. preconstruction
applicability review requirements under
40 CFR 51.18 (aHh) and (1). and SIP
requirements, they are not subject to
new source review requirements for
major modification because they are not
considered "major." 4T
  /. Trades Involving  Open Dust
Emissions. Trades involving open dust
sources of participate emissions may be
approved, through case-by-case SIP
revisions based on modeled
demonstrations of ambient equivalence.
Sources proposing such trades must
commit a» part of the trade's approval.
to (i) undertake a post-approval
monitoring program to evaluate the
impact of their control efforts, and (ii)
make further enforceable reductions if
post-trade monitoring indicates initial
open dust controls do not produc* the
predicted air quality results.
  g. Interstate Trades. EPA will approve
trade* which involve sources located in
neighboring states where such trades
meet the criteria below and all other
approval criteria applicable under
today's notice.  Where state trading
requirements differ, EPA will require
that trade* with increasing and
decreasing sources indifferent states
meet the substantive requirements of the
more stringent  state. In general, in order
to avoid complex accounting problems.
EPA will deem ERCs created in another
state to contribute to progress ia the
state where used, to the extent of that
use. Such trades must be accomplished
through case-by-case  SIP revisions.
  41 Netting also applies under the narrower "dual
definition' of "source" ut certain circumstances For
exaatpia, firms aay use reductions within the pUnt
lo compensate for increases at several emitting
unit* watch, while not individually significant.
might otherwise sdd up to a significant increase
pUntwide,
  Under current EPA regulations, if a nonaitammem
area is subteet to e moratorium on new
preeonatrucuoo permits for maior tourcei or
modifications and the area does not have an
approved New Source Review program, then the
area automatically osea s planiwide definition See
40 CFR 52.24.
  EPA's general expansion of opportunities for
stales to use the plantwide source definition for
certain nonauainmem areas |49 FR 50760. October
14,10S41 wee affirmed by the U.S. Supreme Court on
fun* 23. IBS* Ctitvnn U.S.A- Inc. v Natural
/fcsovrcw OefnirCounoJ. 104 S. Cl. Z77& u ELR
209O7. ovtrrulinf Natural ttttourcrs Offtnst
Council. Inc. v. Conner,. aeS F Zd 718.12 ELR 20942
(D.C Clr. 1982).

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                   Federal Register / Vol.  SI.  No.  233 /  Thdfaday.  December 4.  1986 /  Notices
  A. Trades Near PSD Cloat I Amu.
EPA or • ttatt operating under • generic
rule must notify the Federal Land
Manager if an emissions trade will take
place within 100 kilometers of a PSD
Class I area. Notification must-occur
early enough in the review process to
allow at least 30 days for the submittal
of comments before the trade will be
approved by the reviewing authority.
  Where a bubble within SO kilometers
of a PSD Class I area is submitted to
EPA as a case-by-case SIP revision, the
Region may call for additional technical
support beyond the applicable
requirements of the modeling screen
described in section IJi.l.b. above, if
deemed necessary to protect air quality
in the Class I area.
  /. Effect on Trades of Subsequently-
Discovered dean Air Act Problems;
Revisitation Considerations. If ambient
violations are discovered in an area
where EPA has approved a trade, or if
other violations of Clean Air Act
requirements are discovered in that
area, sources in the trade should be
aware that they are potentially subject
to requirements for additional emission
reductions, just as are all other sources
in the area.4*
  «• Whii* More** involved to • trad*, like ail other
  vrcav. aay b* Mbfrct to reoumaunt* far
 tradaja approved by EPA or by Malct under BEA-
 ipproved generic rulta. nor esuauon r*d*cttoB  •
.credit* uMd •• (MR of i babbit, offtrl or netting
 ecttoo, thould b* terminated.
  Sucfc termination ooaid occur, far example, what*
 two eourc** in i erven eourc* category wort mbuct
 to pre-bnobl* BUM eminion limit* of 100 TPY each
 ind poet-bubble limit* of 90 TFT tad ISO TPY
 respectively. Aimao th* tut* impoHt • now
 category-wide regulation which would normally
 limit tboa* IODTCM to 40 TPY each. In ihia eaaa, the
 ftrat soura* ahould b* required to m**t th* now 4*)
 TPY limit (La- it ibould b* required to produo*
 additional reduction* of 10 TPY). while tb* Mcood
 Kmrc* ihould b* wbpct to • new limit of «»TPY
 (La_ • lovtl reflKfinf th* continued euateac* of th*
 X TPY tmixioo rcducnon credit). TernunatMe) of
 (h* emiaaion reduction credit would occnr *ith*r by
 requtrma, the fir*t tourc* to produo* addittonal
 *au«Hm reduction* of 80 TPY (I.*, nor* Ilkaa it*
 current Intel of emii*ioa»|. or that Hoond eowce to
 m**t th* 40 TPY limit Bihar of th**e.r***ll* wo*id
 undermine >h* purpoa* af today* notw* by
 eliminating th* pradiaabteicy Marred for.
 generation or UM of BUT*, They cootd tla*> ptMlui
 trading eourc** for taking amiinaniinlally
 beneficial meiium *oon*r than required, tow* il
 would often b* more difficult to achieve tb* nrw
 reduction* than had earlier voluntary itcpa not ban
 liken.
   For tnea* reaion*. EPA urea* »tat*i not to tafc*
 •uch credit-terminating action* unlea* th*r* i* no
 other practical way lo *au*fy the requirement* of
 th* Clean Air Act
   Today'* procedure* for depoeit and u** of banked
 credit* already addraaa addrtiOMl Mat* rmiMton
 reduction need* in the context of banking (*e*
 •action LCS. betowl. Slain thould. however.
 recount (or all prevtou* trad**  and previouity
 (ranted emtMion reduction credit* In eiiimating
 emiuton reduction* mulling from new contml
t Procedural Steps for Using ERC*
  Bubble trades may be implemented
through individual SIP revisions or state
generic-rules. This section describe*
principles applicable to either
procedure. General principles for
generic rules are addressed in Section 0
below. Special considerations for trades
which require individual SIP revisions
are addressed in Section UL
  a. Effect of Existing Compliance
Schedule*. EPA's 1979 bubble policy
required that sources be subject to
binding compliance schedules based on
original SIP emission limits before being
eligible to apply for bubbles. Because of
the time required to process babble
applications as case-by-case SIP
revisions, this requirement tended either
(a) to discourage sources faced  with
tight milestones for the installation of
conventional control equipment from
pursuing bubble applications, where-
they had agreed in good faith to SIP
compliance schedules before
discovering bubble opportunities, or (b)
to discourage sources from agreeing to
any compliance schedule until they had
fully examined bubble opportunities.
  Today's policy allows an application
to be filed though the applicant  ia not
subject to compiiaac* schedules based
on original SIP emission onto  so long
as that applicant agree* to-eanssioD: •  -
limits establishedarpaxt-of a coaapiete •
bubble application. Sources which an
already subject to binding compliance
schedules should however, be aware
that submittal or proposed approval of a
bubble application does not suspend
their obligation to comply with  such
schedules. Such schedules and  existing
SIP requirements remain applicable and
enforceable until the bubble is finally
approved and the schedule has been
modified accordingly.
  Sources seeking trades should note
that they remain subject to enforcement
of existing (pre-trade) SIP limits until the
bubble is approved. EPA will UM the
same principles snd procedures for
deciding whether to initiate
enforcements actions in these
circumstances as the Agency applies to
any other source which is subject to e>
proposed SIP revision.
  Under established EPA policy.
regulated sources must be subject to an
applicable enforceable emission limit at
all times. Accordingly, sources  which'
have approved bubbles with emission'
limits effective at future date and which
are not in compliance with their pre-
 trade limits, may be subject to
 enforcement action, which could include
penalties baaed on a failure to meet the
pre-trad« limits. Sources in such
situations may wish to minimize i
chance that capital expenditures    ^
required to meet pre-trade limits, either
by (a) agreeing to post-trade compiiancf
dates which are substantially similar to
their pretrade compliance dates, or (b!
accelerating their compliance with post-
trade limits.
  In accord with the general principle
that bubbles should be treated neither
more nor less stringently than other SIP
actions, implementation of today's
policy will be neutral with respect to
EPA enforcement of pre-trade emission
limits. This means that EPA will not
specifically target for enforcement
action non-compliant sources seeking to
use a bubble either to come into
compliance or to restructure traditional
compliance. However, it also means that
EPA will not withhold or defer
enforcement simply because a source is
seeking alternative emission limits
through a bubble. In exercising its
enforcement discretion. EPA will apply
the same considerations to
noncompliant sources which seek to
comply through bubbles as to-thoee
which do not**
  o. Extvaiora of Compliance
PMnVf'nsi States may  modify or ex
compliance schedules or deadlines
individual sources on a case-by-cas^
basis in conjunction with bubble
approvals. Such modifications or
extensions must be consistent with the
requirements of 40 CFR 51.15.
Compliance schedules  for sources in
nonattainment areas cannot be
extended beyond the statutory date for
attainment and applicable compliance
milestones must be specified and met
for each year of the revised or extended
compliance schedule. Because an
extension will usually require a revision
of the state's progress demonstration.
such approvals must ordinarily  be
submitted as SIP revisions.
 itrategiea. in order to avoid problem* do* to doMbl*-
 eounting.
  " Part** oontanplatinf bubble* involving the
trad* of anuuton reduction credit* from one firm to
anetbar ahouU b* awar* that when th*crediii
baukj provided by th* flr*t firm are the rwuii of
aramian limit* with a future compliance date, the
obiifitMO to meal prc-trade limit* remains with the
MCond Una (which may face enforcement action.
iadudtof caaii penaltiev forf*dure to comply wnn
the** prartnd* limit*) until the time jpeoliea for
th* flrat firm to achttv* th* reductions nece»ary for
compliance under (he bubble. The fird firm s iaiiure
to ackl*>* required bubble reduction* on scr.eame
nay thereafter reault In enforcement acnon
(Including ca*h pemaltin) agamit that firm
However, thii paragraph should b* rod m
cornuactioa with the general principle anic'jinird
abov* that EPA im»iam*rua«on of today 3 poncy^
will b» neutral with reaped to «nforcemrii of
pretrad* knit*.

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                                     VdL SL N*. m /. Thursday. Dacejabar 4, Itttt /  Notion
                    W*.
                       si*a»» which
wish to give ae«CJBS Bert, tineO-
implement bubbles by jjaaiiog
compliance extensions; aviat receive
EPA approval of the extension through
case-by-case SIP revisions, EPA will
evaluate the time extension portions of
these SIP revision packages in
accordance with the Agency's normal
procedures for review of time
extensions, including consistency with
the Act's requirements of
expeditiousness. reasonable further
progress, and attainment and
maintenance of ambient air quality
standards. Sources should be aware mat
disapproval of the. time extension
portion may result in disapproval of the
entire package (t.e« both post-trade
Hmits and the time extension) or only
part of it. depending on whether the
state 'view* theee component* of die.
prapoeed SIP revision ae separeoio*-
  In attainment onto, states may
CORtDlM tO £pBB COTnpfraDC& QXTC
without case-by-case SIP revision*, am
p8ft Of DttOOM SppTOWlS QDQCT ft £0RVTG'
rule. Soch generic uiaip'lam.e date
extensions- may be granted in these-
areas only if EPA baa approved (be-   •
extension pruittion of ttie generic- tits -
as adequate to comply- with, tie-dean-
Air Act
air.
  e. feitdixg BHfrrvmuei* Acttumi. A
bubble cannotbe approved Kr eft
individual e«Maie«i seasrua which ie
presently the setyeet ef a federal""
enforcement ectfen-er eutstandtag;
enfmcemem order esaaea EPA (endi   '
where neeeeeary -me eppiupriata seeH)
approves the proposal and say
rimplliiirniihiiiliiliiriiisj
"Federal eafareeaeat ecUesi
outstanding order" inchidas nottm sf>'~
violation cwti aettoe* Bied>«adee
Air Act section 113(b}, uhseual
filed under section 113(fl}, aetice*
imposing noncaeaplisnee paneMee
issued under sectieavMBL^daauBett
orders issued under aacttan 113(ajt or
citizen suits filed
whichEPAaasi
is subject to an i
judicial order.
  This requirement neiaaat)
bubble approvals under-generic rates;
provided the nde specifies an
      nri %\t occi
 recosgbae-EBArer ew
Sowcershouid.
such approvaii_cannot'QB{^aaV
                                      they remain subpct t««htuu^«
                                      limits until sach approvaL

                                      C Banking Eaianm Jttdaetion Owfrts
                                        Emission reducttona that an surplus,
                                      permanent quantifiable and enforceable
                                      can qualify as emission reduction
                                      credits (ERCs) and be deposited in EPA-
                                      appnvable banks. States may establish
                                      such banks by adopting appropriate
                                      rules to govern whether and how
                                      sources may own and hold surplus
                                      emission reduction credits for future use
                                      in bubble, offset or netting
                                      transactions.11 Such banking rules may
                                      encourage soorces to take measures to
                                      reduce emieaiaM in advance of specific
                                      need for ERCs. resulting in lower
                                      transaction costs for those seeking
                                      offsets; bubbles, or partners-for theee
                                      transactions. Stales shooid however, bo
                                      aware that because an area's air qmatiry
                                      situa4ion or the status «f its Sff n«y-
                                      chart * in the future. foMwo to aeooeal
                                      Tor bueked credits in-emieetoai
                                      inventories ased for planning pasyaeee
                                      nay festsfe in-fas* oitboao HdssMt-
                                      treated as> "in **»«<• (•«. not inebde4
                                                                             account iai trssMfais anaV wlthdraMak.
                                                                             by the suatss past o
                                      Act's
                                                                             state oy dm time they are banked.'
                                                                             However, if a source commits to  *
                                                                             produce e^pecific reduction ara
                                                                                   SfinvftlBB fornn. s state may
                                                                                                   ,
                                                                                   a obadSooBal deposit to be made.
                                                                             Prncsslaraa isrsoBh«andi
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                  Federal  Register / Vol. Si. No.  233 / Thursday.  December 4. 1966 / Notices
compromise tlw state's ability to MOU«
through further regulation any future
reduction! which may be needed.** In
all cases the reduction must be made
federally enforceable by the time the
emissions trade which relies upon it is
finally approved.

3. Possible Limitations on Use ofERCs
for New Source Permitting
  Use of banked ERCs for new source
permitting must be consistent with
applicable regulations approved by EPA
under 40 CFR Parts 51 and 92. For
example, under 40 CFR 51.18(j)(3)(ii)(c)
shutdowns that occur prior to
applications for a new source permit
may ordinarily be used only as offsets
for replacement facilities, and then only
if the permit application was filed within
one year after the shutdown occurred or
if the reduction occurred after August 7,
1«77.*«

4. Sources Should Apply to Book
Surplus Reductions As Soon As They
Decide To Make Them
  For administrative simplicity snd
accurate quantification, sources should
apply to bank reductions as soon as
possible after they decide to make them.
The administering agency should
formally note the source's intent to.
make a surplus reduction, as expressed
in the application. The state must then
verify whether and to what extent the
reduction actually occurred, and must
make the reduction enforceable by the
time it is accepted for deposit
5. Procedures for HanUng Surplus
Emission Reductions Should Be Defined
  To speed  approval of trades and
provide greater certainty for potential
ERC creators and users, state banking
rales should clearly specify which
proposed emission reductions can
qualify to be credited and banked, the
information required of sources to
substantiate their claim for credit ead
any required application forms. At
minimum, such rules must require firms
to maintain records (e^* production
records and recordrof pravtoua
  •* Sum h«»e wvoral MfltMrovUomi (a
 prwMf inch luanne*. HM» M«*for awBaio. bo*
 eondlnonoi dopotifi fnm tomiM MWffonot wtaca
 «n Mtyoa to pondlnt rofakfioa AJMmottvory.
 tlwy m«y •Ikrw unmtneiod condltMMJ 
 ihele pemcuUr tituoUon,
  " See n. 1* (bo**
emission tests) adequate to determine
the pre- and post-reduction actual and
allowable values for emission rate.
capacity utilization, and hours of
operation for the source generating the
&RC.

6. Banking Rules May Establish
Ownership Rights
  To prevent two entities from claiming
or attempting to use the same ERCs et
the same one. stete banking rules may
specify who can own ERCs. For
example, while the source creating the
ERC will generally be its owner, the
state could, as part of its rule, reserve
ownership of certain classes of ERCs to.
itself or local governments. States
considering the latter course should
carefully weigh whether such
reservations are likely to increase or
diminish future (eductions and air
quality management capabilities.

7. Banking Rules Must Establish an ERC
Registry or Its Equivalent
  An ERC registry or equivalent
instrument allows states to track
ownership, use. end transfer of ell
banked ERC*. Banking rules may
provide that no transfer of title to e
banked ERC will take effect until the
transaction is reflected in the registry- .
This rocking .system ca* nrirrimiea
potential disputes.and provide •central
list of certified ERCs which nay be -
available to potential purchasers. It can
also provide useful information for
quickly evaluating any proposed use of
a banked ERC
  Information which may help evaluate
future propoeed uses of a banked ERC
should be recorded et the time of Ha
creation and entered es part of its
banking record. This information should
include the location of the sowce
creating the ERCa; whether the
reduction is due to e shutdown or
curtailment the date the /eduction
occurred or will occur (to allow future
determination of the timing of the
reduction with respect to (he apptteotten,
for credit or its contemporaneity for nee-
in netting or. if a shutdown, aa an
offset): the source's stack parameters;
the temperature and velocity of in
promr particle size; the existence of ajsy
hazardous pollutants: daily and
seasonal emission rates: and other data
which might reasonably be deemed
necessary under the requirements
described in sections LA. and LB. above
to evaluate future use.
   To perform these tracking and
clearinghouse functions the ERC registry
must be accessible to the public Subject
to confidentiality considerations, states
should make copies of the ERC registry
svsilable at convenient locations and
                                1
                                sec
times, end mey went to publish or
otherwise issue a periodic summary
bsaJtedERC*.

8. Possible Adjustments to ERCs Base*
on Enforcement Considerations

  Banking rules should state what, if
any. changes may occur to ERC» afrer
they have been banked. Once an ERC
has been used by another sourc? to met
a permit or other regulatory
requirement any violation of th»
conditions under which thai ERC was
created should result in enforcement
against the source producing that ERC
and not the source using it If a state
attempted to enforce against the source
using purchased ERCs. a complex set  of
third-party lawsuits would likely
ensue.**

9. Possible Adjustments to ERCs Based
on Ambient Attainment Considerations

  To assure the validity of its
demonstration(s) of progress or
attainment a state with a banking rule
must assume that all banked emissions
will ultimately be used. In evaluating
their ability to attain national standards.
such states must add to their emissions
inventory or measured ambient values
all unused banked reductions at the site
at which they were created This is
especially important for areas
requesting redassification from
nonettainment to attainment. Failure t
account for banked reductions as "in the
air" for SIP planning purposes would
ordinarily eliminate their use as ERCs
following a new SIP design or inventory
year, due to double-counting.
  Additional emission reductions may
be required from sources because of
their area's failure to attain ambient
standards, because of an increment
violation, because of existing visibility
impairment, or because new RACT
requirements an being imposed under a
SIP schedule. The existence of banked
ERCa must not interfere with states
ability to obtain these additional
reductions, and a  state's rules on
treatment of banked ERCs must provide
it the necessary flexibility to meet future
requirements. However, state banking
roles may address, within this criterion.
how banked ERCs will be treated if
          '. oonflicnni pnv«t*-p*ny anempu to
     vlliowit rmoonrtbilfry for required
          ld nuko tfco purduiod ERCi
unonforenblo ond muA in rnionnon of 'he
CTMItnf toure* i on$0ul (hifh*r| cnuMion iirmu.
dw-ncUim* th*l nirphu roduccon* were produced
la roJtMic* on tovtnuMm ruto implying their
rMoonrtli nuithntlhlhry tnrl urt For these
            UmUt >Hortd ••• result of the
         «M of EBCi miui rwiuin find ino
mforetsblo •foliwlUt* cretlor of thoir ERC*. to is j
M EPA It eoncomod.

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434*1
         / VoL  St.  No. 232  /  Thieasda*. DeMober 4.
                                                 t  I
addit
uradtA
at»m ami a.a,ataii..MAAOjl paatect
PSD increment*, oc improve *ieitulkv.
Available options mciu4r -
  a. EffCa Cenentetrmbr tt> tf>e Design
or Baseline Year Coukrbe SKminated.
The use of ERCs iteneraied pn« to tht
aestgn or baseline year is unlikely to be
consistent with the state s
(iemonktraiioa, uniess the slate included
«'ich FRCs as ":n the air" for planning
purposes at thai time.
   ':. EfiCj Cuuld be Guaranteed Against
 \d:iuuaent. The state would determine
the necessary quantity of reduction*
from individual sources and source
categories aad require these  reduction*
from actively emitting, sources. Beaked
credits previously creeleday sources
would be fully preserved. Emitting
sources could then satisfy new
requirement* for redactions either by
reducing emissions directly or by using
or purchasing equivalent ERG*.
  In implementing thie option, it would
be particularly importasU. lot stales to
adjust downMacd the estimated total.
reductiona due ta these new regulatory
requirements, in order to reflect
reductions previously !f}*iqt/**k MB a
result of Ka^fctng ac&oasL. Alternatively,
state* could Bocase new coatraf
requtraraeais ia tarns of eqatvalaaaV-
reduction result! (eg* "RACT-
equivaient" cedaclioae in aon&ttaiaaant
areas) as well aa specified coaftei
techniques, or amiuion level*. Under
this approach, necessary adifioaaal.
control requirement* would fee expwsaijt
stated in terms of adcMooal redaction
responsibilities, ta be autt without:
regard to prior trades.**
  c. Use or Deposit ofERCs Could be
Temporarily Suspended. Slates may
suspend either ERG use or future ERG
deposits until the state has cotnmitted a.
its SIP to secure redaction* sufficient to
reestablish progress or cure an
increment violation. Use ol either type  .
of moratorium would be consistent with-
air qudlity objectives while allowing
sources to retain and aweatually use
their entire quantity axbanked ERCs.
However, these optioewHybe
undesirable because o£bacextainry
regarding the moratorium's start
duration, or potential interference with
user planning. This may be especially
true where a moratorium on use (rather
than deposit? is imposed after ERCs
have been hanked.
  d. Acn*»-the~8oatdDacovatu>6.
Under tin* option the state caoM
discount all ERCs in the bank by the
same factor. For example, if a 10*  .
addition*! reduction k required icam a
particular category at aaur
SiFs new denosBtniMav tba«Mt»
would diecottiil aU OURM*? aMkeat
ERCs from those type* of sources by.
10%. Although the quaotKy el EftCs held
by a firm will be reduced, the overall
supply of ERCs will decrease, while
demand will increase. Indeed, other
sources may seek to purchase banked
ERCs from cresting sources, in order to
meet the 10% redactions required of
them. Thus, the price per unit of
remaining ERCs is likely h* many case*
to increase.
  This option ia relatively
straightforward far VOC or NO,. For
SO, or parhcatete matter mow detailed.
source-specific modeling woalaV
generally be required to aUacasa the
discount necessary to demonstrate
attainment
  States may adopt any of thaav
methods of accommodating posoibia
additional reductions. They ouy atao-
adopt any equivalent method which. .
achieves the same objectives."

IL Trade* Covered by SUla
Rules
               Th»!
             develop £>Aoppiu»o»ta gaswite NB*»
             unoeV'WflfCn cttaaesFOi eMMssasia c^visifl
             may be exempt frooi ^e^gvfwtaA •"  ;»•'
             requiiuimm fus sobeoaotrt^ftP** *•••-'
                                              -> -Ji>
             A. GemeraJ£riacipJftferEvrd*ati«f, „ , .4
             Generic Rule*
             assures that emissions in
             raqisiris« cmswoy-caee 99
             under
             the Ooa» Aar Art wiltoa- evafaale* •
             under stata pioceiJajea !*•» ato*
             guarantee that amiasioa I
             under the rofe wtfl not mMfaie w4tt  -'
             timery ambieirt attmnnwRt and-
  "•' Sr« fooinolr 55 abov*.
               "The preceding cfiecuMion generally i
             the bank h> kwnd T m attainment am
             aautnioment am with en i|i»nj»a«i
             deaKN Miration, hi pnma)ry i
             which need but lack appro**:
             for bubble purposes of bcoked shutdbwnor aUni,
             crvoin wntcn ncvt RICWK rvQQficinv
             notice well senitarry be aJtoiveai Sea •
             LA.Lc.IU) rfbave. Bunbtoi in itweeiam
             be subiect t« ipecuit pic
             However, in order to accommodate poeaibaj
             additional rednctton reqummenH m other em* hi'
             a matuirr coaMeteM nllb han>» slalea as»»»
             i nlunfirilir irtnet nun m ipsjrnerh (m a»ej»jl»ei   .
             prior te the IMWUICD t»y EPA of «ay Fiicmei oeuca ai
             SIP deficiency maodating such reqiiueauMUa, Stale*
             may alto choote (t» some hove eliinrir danet hr
             specify yttift than hi Itabiaa] nejte»tar*«jMB**«.

             ddmat tbs> tola i ejnouAl of erealU tvailahar iaav
             bank, il can subitanttaUy enhance SIP ptenuif
             erferla md provide a net eir quoiny Ueiiefil trj
             reducwtj the ^ouram a/ eeueaioai  thai CBO.
                     w rciurned 'rum liM bnk te, NM aat,.
g«aara%i
two*
agivni
coaehuaoaviaroaa iriasiipaa of a generic
rule incorporating a very stsapai ferautia
that meets teats of replicabilityrsee 46
FR 2CS51 (April 8.19B1J. In relation to
generic bubble rules, this-means that
specific modeling procedures or
surrogate* are prescribed and that
states have appropriately defined their
choice of models, model inputs, and
modeling techniques in applying these
procedures to specific trades. Thus these
trades  should not create new ambient
violations of standards or increments.
delay the planned removal of existing
vfoiatfona, or degrade visibility in Class
I arees. ^r approving* such generic rules.
EPA approves in advance an array of
acceptable SIP emission limits, and no
further SJP revision ia required for
trade*-which meet the terms of the
state's approved rule.
  EPA wi]} comment on. trades proposed
under generic rales, conduct reviews of
tradea-approved under those raieav and
audit (no inglaKntatian of these ruies
as-part aftts routine audits of otiiar state
air progftuaa. See Section E below*,
                                          S)t>faa>aoBj uar a range of mechanisms
                                        to exuBgd boabie ttudcs from individual
                                        SIP leviftiaDe. WaSa sanral general
                                        mecfianismaare explained below, states
                                        may-submit other generic rules that
                                        satisfy tamaa buafa principle*. See
                                        saofloa I.O> Mow for specific
                                        requireosanta lor generic rales ia
                                        priawy' aoaaiawuaeai area* whwh
                                        need* hul lackaf pmuad- demenslrauons.

                                        1. VOC or MG,, Trade*
                                          VOC or NOiteade* approved by
                                        states uadar a generic rule that assures
                                        no-oat incfaans in applicable boaeline
                                        emissions may oacv without case-by-
                                        caaa SO* revisions.
                                          The ambtaat impacts of VOC and NO,
                                        emission* ace araaunde rather than
                                        source-specific. All such emissions
                                        within a broad, area are conquered
                                        comoacaBla. regardless  ol plume height.
                                        topography or related factors. Thus. th«
                                        ambient Impact trf trades mvohrmg
                                        emission* of VOC or NO, from different
                                        source* within aach an area wdl by
                                        definition ao eqaivaiaflt to that of the
                                        sum of applicable baseline emission
                                        limits for the sources involved in the
                                        trad*
                                          PorVOC end NO, such pound- for-
                                        pouod trades may therefore be treated
                                        under generic rules as equal in ambient
                                        effect where all sources involved in the

-------
                                     / Voi n. No. 233 / Tbroday.
                                                    , Notices
trade are-
regulation*
1980).M
approved by EPA aajeBtoi the generic
raic fot dcteinuniiifviiaeB sources
outside the demonatranam ant are
efficiently close tbit apound-for-pound
trade can be justified.**
  In general, generic VOC trading rulas
must require that surface coating
emission* be calculated on a solids-
applied basis. The rule should also
specify the maximum time period over
which emissions may be averaged in an
acceptable compliance demonstration.
For VOC that averaging time should not
exceed 24 bows anleaa the rule contains
language approved by EPA that
expressly aihma a loafer aveiagiag
period. Sea AppeiKlx D below.

2. Particuiate,SO. CO or Pb Tradaa

   Qaaaea of pattJeuiate. SOn CO asid-
lead (Pb) trade* may also be exempt
frooj SIP reriaioa* if they ace approved
under a stategaaaticniie which sseisiea
(hat valid ERCnae* canamt reaaasubiy
interfere with aRammeiit and
meinleiioncet or air qvarrty standards or*
jeopardize PSD increments or
visibility.*1
   Df Miatmu Trade*. Tradaa of
partculalaa. SO, CO«rteexMPb* ir*
which applicable! net baaafia*
emissions'* do not increase and in
which tha SOB of the emisainn  increases.
loobing only at (be increasing source*
totals leaa than 23 tons per yeaz CTPYT
for particulars. 4ftTFY to culler
dioxide. 1<»TPY forcarbon monoxide.
or 06 TRY for lead (Pb). after applicable
control requiromenta. nay proceed1
without modeling and case-by-caaa Sf?
revisions.*3 Such trades will hava> at
most a de ana out uniwci oo lacaJ ear
quality because they will prodao*4ta> Be*
increase m emtsaaon* and -the •movnTaf
emissions bemg shifted is no* sigmfieajri
 in ambient effect under associated EPA
 »ppl> lu certain NO, <'»<*+
  10 NO, trade* intnfiajtjnaiflfllr) tnpacuoa
 On'  IP elevated plumes 5e« n. BB above.
   U'.ilike other critical pnDottmi. EPA don CKX
 designate anmttammmi area* for lead. However.
 •lairs muat n»\tm le«d rr«a>ee. at all «ttwr tratfw.
 10 awort th»t they oo not interfere *>* attaytnnmt
 «me gtnacai air *a«n.   .
   "S»»» 31 above.
   " Tha de muuma kvai ta 4OT7Y fat NO. Mdm
 - hrr« viubtlirjr uaiMCUoa du* lo ticvaMd ptamM ia>
particaiate. SC%. CO or Pb emMoa*
depends on ske sparifle owton such e»
topoyaphy and plume beiglit which ar»
ordinarily evahMted by embieiM
dispersion modeling. However, if
applicable beeeJioe esoieaioBtdo not
increase, sources are located in the
saae immediate vterrnty. and aO odwr
Uvet 1 reo^iheanent»dhwiuaed In
secdoa L&1.1M2) above are met M can
reasonably be aaaomed that Mpoond4or-
pound" trades wtii preduoe atnh*en«
effects equivaient to thoer wWoh
currendy approved air quaJay-saodara
would predict. A»a eeauh.
meeting the criteria in section
above may be treated in the
manner as generic VOC and NO, trades.
and exempted from modeling, and caae-
by-caae SIP revisaona.
  EPA will nornulhjr appime genaaic
rules that ( ifine "same immediate
vicinity" as up to 250 meters betweenr
individual enussiaa soucae iavotvas> ta
a trade,
  Level II Trada*. Other patttcahitav -
90, CO ansi Pb trmdm auvaaao W —
intsmptrri frnm
reviaioa* if they
criteria in sectio
prescribed meaner. The saanr> t
trading rule moat •p^nify tbe'paxticHUeS
refined model that wilLba eaDftajcedi»fe
giveii.siruaMoo. or cri tana, lee i
limit vahabiiity in iiirnialiim.ieeiialB ilia
rule muat alao require atleaata fuUyeac:
of meteorological data. »«*••«*% the sitea
for thai data, and specify ptoca4urea.faL.
selecting input data (a*, wipri speed.
stability class, source •misiion sate}-
which are sufficiently defined ta satisfy
replicabitity concerns.*' In somallmtted
circumstances, a sufficiently
conservative screening model could be
specified as part of the generic rule. See
section I.B.l.b(3) above.
   Level 111 Trades. Because of the wide
variability in data input and use
inherent in full-scale dispersion
modeling. Level III trade* must be
  "Thia p*rajri>pli *ouJ4 tun ba couviMd la
 unplv that ntw tourcea «nd modiPc«lton» need not
 meet ill .ppheable requirementa. including ttaa*
 ipecified under 40 CFR 51.18 or parallel EPA-
 approved Hate rjlea.
  •Bvcauw today i nouce confirm ih« euibonty of
 itaieato uaa auch EPA-«vproved rafioad audai* aft
 MPTES. CRSTER or ISC M conduct tin "duly.
 temporal ipattal «oaly»u" of po«-u»d* a«h«ant
 impact* required under Laval II. l of f*Mnc
 rule* tneorporaung Level U app«uch«« limn tit br
 leti uncertain and burdenaonu ihan under Uta>
 previoul l(kU approach- See. »4- AppaodtoC
 btlo«.
Bvt«t enBtfaB* RR4 end a below.

               dBfSgvnptfm
          Un+rGtmiric Auae*
be eddmeed ta a rapBcable uaiiner. the
following may not in genera* be
exempted under generic mies from the
requirement for caae-by-ca»e SIP
re vision*;
  a. Pardcnmte. SOi CO or Pb trades
requiring Mi-scale dispersion modeling
under Level m (see section I.B.l.b.(4)
above);
  b. Paniculate. SO*. CO or Pb trades
where complex terrain **is within the
area of the source's significant impact or
50 km. whichever is leu. unless the
trade does not result in a modification of
effective stack heights and the trace
otherwise qualifies as da minimis or
Level L.The area of significant impact
can be determined aa noted in footnote
21 above and in Appendix  E; *T
  c. Open dust trades; and
  d.CevelH trades involving process
fugitive parrtdilau. SOi. CO or Pb
     f'TTn* not discharged throuBb
tucks.**
  In addirinn to tha-above, in oarief to
protect the integrity oi vanaus 3aP
procaaaea. det tallowjag typea of trades
may/ net,im geaaaai. be exempted under
generin raiea front lh»requ«Tement for
raie by fjse SIP reviatonr (l) Trades
involving GRCs from mobile source
meaaurea. (ZJ. trades uvorving emission
sources which are.me subject of an
enforcement action manifested by
issuance of a notice of violation, an
adnunistraarae. order or section 120
•ctuTtt. or tha filing.of a judicial
cosKpiaant. oniaae the rule specifies an
  •Cvvpin mr»m*»t>w«dt» drflwd trv FPA to
terrain greataviB hnjht tkan .FartaicaMiparpowe. (hit
^.R..n«» „ appiasabi* oa*> w wvcea with an
inerMM ev«r bia»»lin* enuaaioaa.
  •'Cenerafly. aiidc from the e.Trrption stHird
above. Mata* m»ol»liB| iimiple* trmir a» drry oiai lo dvvc'op ana luamit
for EPA «ppnvai »ddiaaoaj ana-specific enteric
for dXvnUaung when tradca involving u>mpie\
t(tr«ndone4aRMMpreiM««iiof pvtential nume
imoKtwa and tkarvfae* nuy be approved i.nder
tenenc ruin M de mimmm. tev«i 1 or Level U
trade* uaun • Oat terrain a»deL ThMe aooitionai
cniitrla.«rould indude luch factors uurr.» bright
and emiaeton-riM. diaiance between  fc.-n oil.
appraved tuck addilionai-cniene foe » ai««n
intttfbte aran 
maat apply the general reatrretions «'ated ,ihov
when proceKlm <^dw in («•< area under -he -•...?
   "SwApoewiiaC

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43852
                  Federal Regjalar /  Vol. 51. No.  233 / Thuraday. December 4. 1988 / Notices
                      i for notifyinf
appropriate                   .   _
EPA of the source's bubble application
prior to formal state proposal and for
securing and recording written EPA
concurrence that the bubble meets all
pertinent requirements of the generic
rule. (3) interstate trades. (4) VOC trades
with averaging times longer than 24
hours, unless a state generic rule
expressly providing for longer averaging
times has been approved by EPA. (5)
trades involving work practice and
equipment standards, unless a state
generic rule containing a provision
expressly providing for state evaluation
of such trades in a replicable manner
has been approved by EPA. and (6)
trades involving negotiated RACT
baselines. However, a state generic
trading rule could specify "presumptive
RACT* limits which acceptably define
generic trading baselines where RACT
has not otherwise been defined in the
SIP. While RACT baselines different
from this presumptive limit could still be
used for specific trades, they would
need to be approved as case-by-case SIP
revisions. Where there is no RACT m
the SIP. but EPA has issued a CTG for
sources of the type involved in the trade.
the CTG should be used as the
presumptive RACT-componenl of the
generic trading baseline.
  To the extent necessary, EPA will
issue notices requiring that existing
generic rules be revised to reflect these
restrictions. See section ILE.4. below.

4. Other Generic Mechanism* for
Exempting Paniculate. SO». CO or Pb
Trades From Case-by-Case SIP
Revisions
  EPA will approve other generic
techniques which are demonstrated to
equally protect ambient standards. PSD
increments. Class I areas, and visibility.
For example, a state could approve a
modeled formula for two or more
specific emission sources which would
satisfy ambient concerns while allowing
firms to define specific permit limits at
each covered emission source. Like
other generic provisions, such a formula
would have to be approved n part of
the SIP. EPA encourages states to work
with EPA Regional Offlen where they
seek to develop other generic
mechanisms which meet the tests of
replicability and ambient equivalence
described above.

C. Enforcing Emission Limits Under
Generic Rules

   Alternative emission limits approved
under generic rules are considered by
EPA to be federally enforceable so long
as the generic rule specifies the
compliance instrument (permit limits.
etc.) under which  the conditions of the
trade will be implemented and ail
substantive and procedural
requirements of the approved rule are
met Generic rules must specify that
such alternative limits become
applicable requirement* of the SIP under
S 110 for purposes of sections 113.120.
and 304 of the Clean Air Act and are-
enforceable in the same manner as other
SIP requirements. To assure that EPA
and citizens know what emission limits
apply, generic rules must also specify
that and in what manner. EPA will be
informed of emission limits applicable
before and after the trade. (For
additional issues related to
enforceability. see section I.A.2 above.
For requirements related to opportunity
for public comment see section ILF.
below).

D. Generic Bubble Rules in Primary
Nonattainment Anas Which Lack
Approved Demonstrations of
Attainment

  Generic rules will continue to operate
in primary nonattainment areas which
require bat lack approved
demonstrations of attainment onder the
following conditions:
  1. Bubble* approved under-existing
generic babbie- reiee prior to thr -
effective data of today's pottoy wntnot
be affected by today's requirements.
  2. Bubbles submitted to states under
existing generic rules may continue to
be approved by state* in accord with
those rale*, until such rules are finally
changed, pursuant to specific formal
EPA request to meet the criteria listed
below. Such rules must however, as
requested by EPA. be modified to meet
the criteria below.**
   X  Applications for new generic bubble
rules applicable to the** areas, and
applications for generic rules now
pending before EPA. will b*j approved
provided they meet the  criteria beta*
and  all other applicable requirements of
today's policy.
   Criteria for-Approvable Generic
Bubble Rules. New and revised generic
bubble rales applicable to primary
nonattainment areas which require but
lack approved demonstrations of
attainment must for bubbles in those
areas:
                                           •• In the interim. EPA expect* ami** to enaur*. M
                                         f*r •• featibi*. that bubble* approved under
                                         (xttitng generic rulM «rt consistent with thta policy
                                         M «*•!>» with tlM terra* of their ETA-approvad
                                         rule*. Sum should b* aware that without thit or
                                         similar precautions, continued appro**! of bubble*
                                         urnfer existing genera rule* containing identified
                                         deflcwnoM m*y create or accentual* plaa.
                                         deficiencies which may have (o b* corractid al a
                                         lattr data or compensated for by oihar meana. See
                                         faction E.4. below.
  a. U9elaw*e4-of-actuai-SIP-allowable-
or-RACT-allowabl* emissions baselines
for all source* involved in the trade:T0
  b. Using baseline emissions defined
above, meet applicable de minima
Level I or Level IT modeling tests for
ambient equivalence, as appropriate:
  c. Produce an overall emission
reduction from each bubble equal (in
percentage terms) to the larger of a 20%
reduction in emissions remaining after
applicable baselines, or to the overall
emission reduction from controllable
stationary sources (in percentage terms)
needed to attain in the area (i.e., at least
equal to the source-by-source emission
reductions that would be required for a
full demonstration of attainment, taking
into account "uncontrollable" area or
other stationary  sources and expected
emission reductions from mobil
sources).7' This  determination must be
                                                                                   '• Par detailed diacueewfi of the*e baselines. •«•>
                                                                                 sectto*) LA.lJx above and Appendix B.
                                                                                   rl Par exempt*. Mtum* air quality analyst!
                                                                                 indicate* the an* not decneae in base-year
                                                                                 tauaaiooa by *»%, I* attain the relevant NAAQS.
                                                                                 Further a**um*
                                                                                   Teal.
                                                                                   Therefor* the reduction* needed from
                                                                                 controtabia stationary source* *r* 3.4W-
                                                                                 SJOP-UMTFY
                                                                                   And the percent eayonon reduction requires from
                                                                                 cmtrolhM* stoUoaary aeurce* to attain i*
                                                                                                  x  too-***
  The* the net overall reduction required from each
fcnenc bubble would be 94* (i.e~ the reductions
produced byippUcabie b***linca (e.g. application
of • RACT eauntail rate) phi* whatever percent
rwteeflMri* *Bj|aj|ojM remntng after this RACT
Halt to sufficientto yield the 94% total).
  SIMM that wnb to avoid SIP revision* for sources
for which RACT ha* not yet been defined man
approved SIP provision nay incorporate
"presumptive RACT limits (e.g. 80* reduction for
VOC) in their generic rale*. Source* would then
have the option of accepting these RACT limits for
generic babble purpaia*. or negoualiRg different
RACT limit* through the SIP revision* process.
However, where • source Involved m a trsde is one
for which EPA ha* issued • CTG. but the state has
not yet adopted the CTG-*peafied limit as RACT
sod no RACT has yet been specified by the state for
lhal source, the presumptive or negotiated RACT
limit for the trade must  b* at least a* protective as
the CTG for that source.

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                 Federal  Register / VoL 51, No. 239 /  Thursday. December 4. Met / Notice*
submitted with the rait. and muat UM
the seme type cod qnanty of analysis ••
that required for an EPA-approvable
SIP: and
  d. Provide assurances, in conjunction
with the State's submitta! of the generic
rule to EPA. that the state (i) is making
reasonable  efforts to develop a complete
approvable SIP that will achieve the
percent emission reduction from
controllable sources described in the
previous paragraph and (ii) intends to
adhere to the schedule for development
of such a SIP (including dates for
completion  of emissions inventory and
subsequent increments of progress), as
stated.in the letter accompanying the
submittal or in previous letters. In
addition, to ensure that generic
approvals continue to complement and
do not interfere with attainment
planning. EPA will require the state to
include the  specific assurances listed at
section I.A.l.b.(3) above in or with its
notices of proposed end-final approval
of each bubble issued under the generic
rule in such a nonettainment area.'*

£ EPA OvmishtofGwricRufor
  In order to ensure proper
implementation-of EPA-epproved
generic trading rales. EPA Intends to («I
examine and comment on. together with
any other public comineiHer« the
information provided formdhrUhsai
trades proposed under a generic rale; fb)-
conduct reviews- of iadividoa4 trade*
approved under such a rale, and fc)
periodically audit the implementation of
the generic rule iteeff.

1. EPA Comment en Trades. Pro poea A
Under Generic Rules
  When processing emissions trades
under generic rules, states are required
to provide EPA and the public with
adequate notice and opportunity to
comment See sections ILF. and ILG.
below. EPA will use state procedures far
notice and  comment to oversee the
implementation of gaoencruiea without
delaying state processing of trading
applications.
  The informatio* which a state must
provide to EPA by the first day of the
comment period (see section JLG.
below) is generally sufficient for EPA ta
  'rThe*e (for raqnirvowala mat ttt inri«deda»«
contingent prornwn in all future »a«efic rvta. wrtfc
the cominpm.; ntgjiieO M apply to bubWaa to
pruna*y MMflimea* arm* w*HCh tx
loaSIPcaM<
determine (feat a trading application i* -
being proceeeed niupaily. Where this  •
information is not sufficient SPA nay  •
request the application Itfcetf. tad the
state noat provide M promptly.
  When EPA elects to provide any
comments on die proposed approval, it
will do so in writing, by the doee of the
comment period specified in dw state's
notice. EPA may also testify at any
public hearing held pursuant to die
approval of a trading application under
a generic rule. Trading applicants and
state officials are strongly advised to
address EPA's comments, and when
necessary to incorporate an appropriate
response to the** comments in the final
approval document"

2. Reriewi of Individual Bubble*
Approved Under Generic Rule*
  Reviews of Individual generic bubble
approvals, apart from the regularly
scheduled reviews associated with
activities under EPA's National An*
Audit System (see section "«-*- betow).
may be conducted at any time by EPA m
order to promptly address identified or
patterns of i
adverse effect* i
before met next bis
conducted
lEPAAedttsof Ae
                 i and to S7vuio>
  Under tha.Itetia.il Alt Andli Spteav
EPA conducts a program audit oTeacb.  ..
state agency responsible for.
implemenOBgu^SgsnndaligalaaV
federal program*.** Thee* audits are .
cunaatly caniad out on. a biaamial
baaia. As. part of the National Air Audit
System. EPA wifl conduct an in-depth
file audit of a reoreatntativ* ——r1- of
generic trading approvatt issued by. tit*.
 relevant state.
4. Deficient Generic Trade*
  As dtsoieeaOj abovov generic rasae* cam
expedite the approval precaaa lav-
certain classes of emissions tcade*.
because they anew such tradee-to be;
approved by states without undetgatoig
a subeeqtient federal rttssmeJdflg'
process. I lowever. to bo considoed -
                                         "Uch of EPA coon
                                       penad wit not bar httra-ap
                                       enfofoenwnt «r miamaHns i
                                       found lo to ineouailaaM
                                                                             valid by EPA.»trade approved unaer
                                                                               (1) Br on* of a dees of trades •
                                                                             within tfao scope of the generc nid
                                                                               (2) Be approved after the get:*-': 7
                                                                             has been approved by EPA. w.t
                                                                               (3) Meet ail the provisions ci 'he
                                                                             generic rule as approved by ET1*
                                                                               If a state-approved emiwic.".i ;T»ae
                                                                             does not meet all these .-wair-Ten's it
                                                                             cannot be considered pert of tee SI? a;
                                                                             by defin't"?"  cannot replace pnor valu
                                                                             emission limits in the SIP. See 4fiFR
                                                                             20954-55 (April ft. 1981). Should EPA
                                                                             determine, aa a result of its oversight
                                                                             activities, that a state-approved trade
                                                                             inconsistent with the above
                                                                             requirements, it will notifiy the state ai
                                                                             source in writing and specify any
                                                                             necessary remedial measures. In such
                                                                             circumstances. EPA may take
                                                                             appropriate »»-»^ut action to assure
                                                                             attainment and maintenance, including
                                                                             direct enforcement of the original SIP
                                                                             limits."
                                                                             5. Deficient Generic Rule*
                                                                               Existing generic role*  approved undt
                                                                             previous EPA policy and guidance IMJ
                                                                             require revis*oa> in order to maJei them
                                                                             consistent with today's final policy. In
                                                                             auej-llaa a-gsnerir ruJo approved by
                                                                                      rthminal polky may
                                                                             subssajtssidy be ieund to be defiar
                                                                             soms>sa*poot Becauee EPA-appro\
                                                                             generic rute* hawetindependent fo
                                                                             law. they ca« only bo amoaded
                                                                             completiooef a fomul SIP eevwon
                                                                               m afdvr nvenenre thai-generic role*
                                                                             am consistent wim tile Agency's cttrre:
                                                                             Emissi« Trading-Policy. EPA will
                                                                             publiaa noticeein me Federal Register
                                                                             whick ideBtify any generic rules
                                                                             requiring formal modiflcaaon.7* These
                                                                             notices will identify specific deficiency
                                                                             end means for correcting them, and wi:
                                                                             set forth a schedule' for submission anc
                                                                             review of revised rates. These notices
                                                                             will alert affected state* to the danger
                                                                             that continued processing of trades
9ft 01*7 have approved tiat*
ek IMM (fet taettoact ORMTM I
      iU«s w*»t«*t or not
                                                                               "fcM
                                                                                            taicvmd tar tmane
                                                   vmttdKy of cadi prevnion*.
                                                       of »»ch noilm will not
                                                                 for ca»«-t>y-
                                                               oin«f Unn
                                         f • SM. e.s-NMMMl Mr AMM CtrfiMawAr rv
                                       M. OHta of Air
                                                                                        frtmvf noaMtatooMat an» whic

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43854
Federal  Register / Vol. 51. No. 233 / Thursday. December 4. 1986  / Notice*
under these rules may create or
accentuate plan deficiencies which may
have to be corrected at a later date or
compensated by other means.  Where
states fail to remedy deficiencies
identified in the notice within  the
prescribed period. EPA may either
rescind its previous approval of the rule.
or issue a notice of SIP deficiency under
section 110(a)(2)(H) of the Act.

F. Public Comment
  For emissions trades processed under
generic rules, existing state statutes or
regulations will generally provide for
adequate public notice and opportunity
to comment, including opportunity for
judicial review sufficient, to make
comment effective. Under such statutes
or regulations, after the state has
reviewed a bubble application
submitted pursuant to an approved
generic rule, a newspaper or similar
notice is typically published providing a
comment period (usually thirty (30)
days) on the proposed decision to
approve or disapprove the application.
This notice generally informs the public
that the proposed approval document
(license,  order, permit, consent
agreement, etc.). the-appiication itself
(with the exception of any  portion-
entitled to confidentiality under state or
federal law", and the technical analysis
performed by the state- m making its
proposed determination, are available1
for review at specified times and
locations. The notice also offers the
opportunity for a public hearing.
  Under today's policy, the state must
also notify the relevant Federal Land
Manager if an emissions trade will take
place within 100 kilometers of a PSD
Class I area. Notification most occur
early enough m the review process to
allow at  least 30 days for the submittai
of comments before the trade  will be*
approved by the state.
   Where adequate procedures for public
notice and comment are not already
provided in existing state statutes or
regulations, such procedures must be
provided as part of an EPA-approved
generic rules. In all pragsMed and final
generic bubble actionstatate* must
clearly and publicly idMHf botrr the
pre- and post-trade actuaf and allowable
emissions of each source involved in the
trade, so that the ambient effects of each
bubble may be known.
   To ensure adequate public awareness
consistent with { 304 of the Clean Air
Act. state generic rules or other existing
state laws or regulations must also make
publicly  available any changes to
  11 The specific poltuuntt emitted by the source.
 ine amount of thoie polluunn. and their amoieni
 air impvct may not be deemed confidential.
                      emission limits which mult from trades
                      approved under a genetic rale..
                      C. EPA .Verification
                        In addition to the above requirements
                      for public notice and comment the
                      generic rule or other state provisions
                      must require that states, by the first day
                      of the public comment period provide
                      the appropriate EPA Regional Office
                      (see addresses in Appendix A) with a
                      copy of the public notice, the proposed
                      approval document, and the technical
                      analyses performed in evaluating the
                      trading application, together with any
                      summary of those analyses which is
                      available for public review.
                        State provisions must also require that
                      immediately upon issuance of a final
                      generic trading, approval, the state will
                      forward two copies of that document to
                      the relevant EPA Regional Office, and
                      will also submit to EPA any additional
                      documentation which is included in
                      conuner * or the post-comment record
                      and supports-that final state approval.
                        Any notices issued by EPA to correct
                      notice and comment procedures which
                      do not meet these requirements under
                      current or future generic rules will not
                      trigger special progress requirements or.
                      otherwise affect the operation of those.
                      rules. Because of the Importance  of
                      adequate public and EPA notice.
                      affected states should, however; correct
                      deficient notice procedures to the extant .
                      practicable, in the interim period before-
                      formal rule revisions are submitted and
                      approved.
                      H. Rulemaking on Generic Rultt
                        EPA will process acceptable generic
                      trading rules for approval as revisions to
                      SIPs as expeditiously as possible. In the
                      interim, states are encouraged to use
                      parallel-processing SIP revision
                      procedures (see 46 FR 44477; Sept. 4.
                      1981) wherever practical. Trades may
                      not be genetically approved by a stats
                      until EPA has published a notice  of final
                      approval of the generic trading rule in
                      the Federal Register.
                      01. Trades Not Covered by State Generic
                      Rules
                        In the absence of a  generic rule, states
                      and sources must use case-by-case SIP
                      revisions to effect bubble or external
                      offset trades. Individual trades may also
                      fall outside the scope of an approved*
                      genenc rule and still be implemented as
                      case-by-case SIP revisions. The
                      principles described in the Policy
                      Statement and this Document will be
                      used to evaluate these emission trades.
                        Because of the ability of the case-by-
                      case SIP revision process to take'
                      account of greater individual variations.
                      many trades which could not be
accomplished under a generic rule may
nevertheless fae approved- as case-by-
case SIP revisions. Through- this SIP
revision process, states and sources may
also demonstrate that a general
principle discussed in Section I above
does not apply to their particular
circumstances, or that such a principle
may be satisfied in other ways.
  EPA will make reasonable efforts to
take prompt action on SIP trading
proposals after a state has ruled on an
individual application and submitted it
to the Agency. EPA encourages "parallel
processing" of such proposals, with EPA
and state officials conducting concurrent
review so that both agencies can give
public notice of proposed action at
roughly the same time. EPA can then
take final action after the state
completes its proceedings, provided the
state does not substantially alter the
proposal after public notice. EPA will
also publish noncontroversial SIP
revisions as direct final actions.
converting thenrto proposals only if
requests to submit adverse comments
are received within 30 days (see
generally 46 FR 44477, September 4.
1981). In all bubble actions EPA will
clearly identify (or require states fa
identify, as appropriate) both pre- and
poet-bade actual and allowable
emissions for each source involved in
the trade, so that the ambient effects of
each bubble ma; be known.

Appendix A—Regions! EPA Emissions
Trading Coordinator*
Region I. David Conroy (APS-2310).
  State Air Programs Branch. U.S.
  Environmental Protection Agency.
  Region I. John F. Kennedy Federal
  Building, Boston. Massachusetts
  O2203.(817) 565-3252 FTS 835-3252
Region &• Betty Martinovich. Air Branch.
  U.S. Environmental Protection
  Agency. Region II. 28 Federal Plaza.
  New York. New York 10007. (212) 264-
  2517: FTS 284-2517
Region OL Cynthia Stahl. Air Programs
  Branch. U.S. Environmental  Protection
  Agency, Region III. 841 Chestnut
  Building. Philadelphia. Pennsylvania
  19101. (215) 597-M37: FTS 597-9337
Region IV: Melvin Russell. Air Programs
  Branca. U.S. Environmental Protection
  Agency. Region IV. 345 Courtland
  Street N.E.. Atlanta. Georgia 30308.
  (404) 257-2864: FTS 257-2864
Region V: Joe Paisie. Air Compliance
  Branch. U.S. Environmental Protection
  Agency. Region V. 230 South
  Dearborn Street. Chicago. Illinois
  80604. (312) 886-5777; FTS 886-5777
Region Vt Bill Riddle. Air Program
  Branch. U.S. Environmental
  Protections Agency, Region  VI. First

-------
                 Federal Register / Vot.  51. No. 233 / Thursday.  December 4. 1986 / Notices
  International Building. 1201 Elm
  Street Dallas, Ttx«« 75270, (214) 767-
  9670: FTS 729-9870
Region VIL Chart*1* Whitaore, Air
  Support Branch. U.S. Environmental
  Protection Agency. Region VII. 324
  East llth Street. Kansas City.
  Missouri 64108. (913) 236-2896: FTS
  757-2896
Region VIII: Dale Wells. \a Programs
  Branch. U.S. Environmental Protection
  Agency. Region VIII. 1860 Lincoln
  Street Denver. Colorado 8C36. (303)
  293-1773: FTS 564-1773
Region IX Nancy Harney, Air
  Management Division. U.S.
  Environmental Protection Agency,
  Region DC 215 Fremont Street San
  Francisco. California 94105. (415) 974-
  7658: FTS 454-7858
Region X: David  Bray. Air Programs
  Branch. ITS. Environmental Protection
  Agency. Region X. 1200 6th Avenue,
  Seattle. Washington 98101. (206) 442-
  4253: FTS 398-1253

Appendix B—Definitions of "Actual"
"Allowable" and "Baseline" Emiaaioas
for Purpose* of Pm. this
require at least a Level H model:
analysis using-actual emissions for>L
pre-trade case.* Where such an a.ia!
is submitted to justify allowable vah.
fora case-by-case SlPVevisfon bubo.
the Region may require #• u'tional
technical suppor  f deerr.»e necessar
to protect applicable Standards or
increments. See Section I.B.I.b above
  • Where, in a non-attainment area
with an approved demonstration of
attainment the demonstration does nc
assume allowable value(s) for the
baseline factorfs) in  question, but the
applicant demonstrates through a Lev
Q7 modeling analysis that the use of
such allowable value(s) will not
jeopardize attainment and maintenanc
of NAAQS or PSD increments.
  • Where, in an attainment area or a
nonattainment area with an approved
demonstration, a source has a new
source preconstruction permit issued
after the PSD baseline date or the base
year of the attainment demonstration.
such cases, the applicant may use the
valuers) of ER. CU and H upon which
the new source permit  was approved
  While the Emissions Trading Policy
does permit sources to use allowable
values for ER. CU and H in determi;
baseline emissions for bubbles unc
certain carefully prescribed conditn
the approach taken recognizes that SIP
demonstrations are frequently based o
a "hybrid" of allowable and actual
values, and that bubble baselines in
these areas must accurately reflect SIP
assumptions for all three baseline
factors, or be justified by appropriate
modeling, to maintain SIP integrity.
  In noaattainment areas needing but
lacking approved demonstrations of
attainment, sources  involved in a bubbl
must use "lowest-of-actual-SIP-
allowable-or-RACT-allowable"
emissions baselines. The ER factor for
such baselines is based on the actual
emission rate, the SIP or other federally
enforceable emission limit, or a RACT
emission limit whichever is lower, as of
the time of the source's applicable to
bank or trade, whichever is earlier. The
CU and H factors for such baselines are
based on the lower of actual or
  1 Where the PSD baseline has been rrtagt-ta arc
such emissions data is available;, the pre-buoble
situation for sources which were in existence or
commenced construction pnor to the PSO Daseime
data should be modeled-using emissions consister'
with the PSO baseline concentration as defined m
40CFH J1.2«(b|(13| and SUl(b)(13) However
tmisafona and associated parameters may be based
on more recent valuta where past emissions da
cannot readily be obtained. For related princiq
see section I .VI c.(l| above.

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4386ft
Federal RagJUsu  /  VoL 51.  No, 333 V Thurtday. D»c*mbw 4. 1W8 / Notices
allowable vaiuM4ortiMtc factors;
Actual valuts for CU ml rtmest be
determined using the source/a avenge
historical values for the two year period
preceding th« source's application to
bank or trade, unless another two year
period is shown to be more
representative of typical operations.
  For sources which banked or sought
to bank credit in these nonattainment
areas prior to publication of today's
notice, the "date of application to bank"
is the date of written application to the
state to bank credit through a formal
bank or informal banking mechanism for
use in future trades. For sources which
seek to bank credit in these areas
following publication of today's notice,
the date of application to bank will be
the date of written application to the
state to make a reduction state-
enforceable through or concurrent with
use of a formal bank or informal
banking mechanism.
Appendix C—Approrable Modeling
Approaches
UA Eavirasuaeaul Protection Agency

Office of Air. Noise; and Radiation
February 17.1883.

Memorandum
Subject Emissions Trading Policy—
    Technical Clarifications
From: Sheldon Meyers, Director. Office
    of Air Quality Planning and
    Standards (ANR-443)
To: Director. Air and Waste
    Management Division, Regions B-
    IV, VI-VnL & Director. Air
    Management Division, Regions L V,
    IX
  The proposed emission trading policy
was published on April 7,1903. is tfae
Federal Register. Duiring the initial
implementation of the proposal.
numerous emissions trading issues have
arisen including several relating to the
technical requirements of dispersion
modeling and control strategy
evaluations. To address these modeling
issues, a special workshop was held to
solicit recomendations from Regional
meteorologists/modelers as well as the
various Headquarters technical staff.
The Standing Committee on Emissions
Trading has also considered these issues
and the recommendations of the
workshop group.
  This memo is intended to outline the
results of these meetings and to provide
interim guidance. It is effective
immediately and will be incorporated
into the final Agency policy when
promulgated. The following revisions or
clarifications on modeling for TSP, CO,
and SO,, are intended to supplement the
                      criterra included in lh« April 7.
                      emissions ending policy state-bent

                      Level I Anclysu
                       • To ensure air quality equivalence
                      under Level I analysis (modeling is not
                      required), trades cannot be approves)
                      where complex terrain (terrain greater
                      than any stack with increasing
                      emissions) is within the area of
                      significant impact of the source or 50
                      kilometers, whichever is less.
                       • Stacks with increasing emissions
                      must be at least good engineering,
                      practice (GEP) to prevent downwash.
                       • Fugitive process and stack sources
                      can be traded under Level I (La, process
                      for process, process for stack, sstd stack
                      for. stack) aa long as the maximum
                      distance between any emitting points is
                      less than 250 meters. (This is trust for
                      trades under generic rules as well as for
                      trades implemented by SIP revisions.
                      The effective atack height requirement
                      hi the April poiky remains.)
                       • Since trades involving open dm*
                      sources are very difficult to ssdruss in «
                      replicabis manner, they cannot (unsiilljr
                      be approved' tadar generic Level I
                      biAbieregu*a*om(IUUeratianol April -
                      7,1982 proposed policy.)
                      Le ve/ S Afodeifa*. Amtysa
                       • In order to satisfy the basic
                      requirement of the emissinas trading
                      policy (hat trade* "must desBonstnte
                      ambient equivalence," the •"•"*•*-••  • •
                      change ma« quality impact (delta) wist
                      be determined when performing a Level
                      n anayisis. Experience has shown the*
                      this requirement is not nscsssariiy met
                      when the April 7 policy says to analyse
                      only the "impact at die receptor e(
                      tnavimiiHt predicted impact after the
                      trade." Therefore, to assura that no
                      degradation of air quality greater then
                      the significance levels would occur at
                      any site, the method of findmf the
                      maximum deltas must be determined on
                      both a spatially and temporally
                      consistent basis. This menae that you
                      look at each receptor point and
                      determine the change in concentration
                      from the before trade case to the after
                      trade case sequentially for each time
                      period within a full year of
                      meteorological data (time period means
                      the appropriate ambient standard
                      avenging time e.s> 3-hour. Ze-bour.
                      etc.). This appears the most reasonable
                      method of determining ambient
                      equivalence at this time.
                       Other techniques may be approved
                      when they can be demonstrated to be
                      equally protective of the standards and
                      PSD increments. Also, a Level III
                      analysis may be used to supplement
                      those cases where Level II analysis
                      shows • few receptors registering deltas
 greater then the siejriBtance vehm.
 TMv tinttasl Level B afiaytrti woeid
 involve only the geographical area
 containing the hMt deltas and would
 include aH eontributmg-soorces to that
 area.
   • Use of refined models (e.g.. MPTER.
 ISC) with at least one year of
 meteorological data is acceptable for a
 Level 0 analysis.
   • To ensure repllcability, only trades
 involving process fugitive emission
 sources vented through stacks can be
 approved in generic Level II rules unless
 the State rule specifically identifies
 actual facilities between which process
 fugitive trades would be permitted. In
 such-cases, the State rale most specify
 the emission points and all assotisted
 and pertinent parameters needed to
 ensure replicability of modeling results.
   • Since trades involving open dust
•sources an very difficult to address in a
 replicable manner, they cannot currently
 be approved under generic Level II
 bubble regulations. (Reiteration of April
 7, IfH proposed pottcy.)
   • Tiaeaa Invohrtegtamrplex temm
 risnmrt he eppmseri onder Level II
 generic rules; however, approval of such
 trades through indrndoet SIP reviews
 am pessshie eneer Level H> EPA's
 experience hi pniinissiiiQ bubbles for
 such eooroae nee shown that dwy are
 exceedingly difficult to- address in a
 repttcobio menner. They reouire a
 i.niSEhislils iininhBT i if jmlpisnn mil
 nenottetfons among Agency personnel
 concerning the models, data bases, and

   • Ail national amWent air quality
 standards (NAAQS) avenging periods,
 not jostle taVheer. mast be considered
 ween penansung the air quality
 equivalence analysis. This Is necessary
 to eesem trades approved under Level Q
 will not hstve any advene health and
 wetfen impacts. Therefore, sll Level II
 analyses must test the deha for each
 receptor site against the following
            levels: TSP— 10 pg/ma (24-
 hour), 5 pg/m* (annual); SOr— 13
 (24-hour). 48 u«/m» (3-hour). 3 fig/m*
 (ansraal); CO— 87»p«/m' (o-hour) 2300
 Implementation of Changes
   Implementation of these changes by
 the Regional Offices in their
 negotiations wim States and individual
 sources should begin immediately. If
 then are any on-going* bubble activities
 when the Regions or Slates and sources
 have reached firm agreements which do
 not comport with these changes, please
 alert Tom Halms (FTS a20-&62B) of my
 staff. Consideration will be given to
 situations where the worce or State has

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                 Federal Register / Vol. 51. No. 233 / Thursday. December 4. I960 /  Notices
already invested significant resources in
• good-faith analysis based on prior
methods of demonstrating ambient
equivalence. If you have specific
questions regarding implementation of
these policy changes, please call Tom
Helms.
cc: Chief. Air Branch. Regions I-X.
    Meteorologist. Regions J-X. Mike
    Levia Joe Tikvart. Oarryl Tyler

Appendix D— Approvabie Averaging
TimM for VOC Trade*
U.S. Environmental Protection Agency

Office of Air Quality Planning and
Standards.  Research Triangle Park.
North Carolina 27711
Unitary 20.1984.

Memorandum
Subject: Averaging Tunes for
    Compliance With VOC Emission
    Limits—SIP Revision Policy
From: John R. O'Connor. Acting
    Director. Office of Air Quality
    Planning and Standards (MD-10)
To: Director. Air and Waste
    Management Division. Regions U-
     IV. VT-VUL X. Director. Air
    Management Division. Regions L V,
     IX.
   The purpose of this memorandum is to
clarify the Agency's policy regarding
emission time averaging for existing
sources of volatile organic compounds
(VOCs). Numerous  State
implementation Plan (SIP)  revisions.
both broad regulations and source-
specific changes,  have been submitted
which provide for compliance
determinations by "time averaging"
emissions of VOC for periods exceeding
24 hours. These requests and the
following policy on  this subject were
discussed extensively at a recent
 meeting attended by those Regional
 Offices which have  the most pending
 actions (Regions  I. ILL IV. V]: the Office
 of Air Quality Planning and Standards:
 and the Office of General Counsel. This
 policy represents the consensus of the
 meeting attendees.
   The objective of EPA's national VOC
 emissions control program is the timely
 attainment and maintenance of the
 national ambient air quality standard
 (NAAQS) for ozone. SIP revisions and
 other regulatory actions relating to VOC
 control must maintain the integrity of
 this basic objective. There should be
 assurances that VOC emission control is
 reasonably consistent with protecting
 this short-term ozone standard. Further.
 since SIFs and associated VOC control
 programs contemplate the actual
 application of reasonably available
control technology (RACT). regulatory
actions that incorporate longer term
averages to circumvent the installation
of overall RACT level controls cannot
be allowed
  Current Agency guidance specifies the
use of a daily weighted average for VOC
regulations as the preferred alternative
where continuous compliance is not
feasible. An example might be where a
facility operate* in a batch manner with
multiple lines and various products.
Reference is made to the December 8.
1980. Federal Register (copy attached)
where can coating operators art
allowed to "bubble" several production
lines and average emissions over a 24-
hour time period.
  The preferred daily weighted average
alternative  may not be feasible in all
cases. Where the source operations an
such that daily VOC emissions cannot
be determined or where the application-
of RACT for each emission point (line.
machine, etc.) is not economically or
technically feasible on a daily basis,
longer averaging times can be permitted
under certain conditions. In determining
feasibility, consideration might be given.
for example, to the extent to which
modifications can be made to testing,
inventory, or recordkeeping practices in
order to quantify daily emissions. Also.
variability or lack of predictability in a
source's daily operation might be
considered as well as availability of
control technology or the physical
impediment or restriction to control
equipment installation. In order to allow
longer than daily averaging in SIP
regulations, the following conditions or
principles must be honored:
  1. Real reductions ut actual emissions
must  be achieved, consistent with the
RACT control levels specified in SIFs or
the control technique guideline* (CTC's).
These limits are typically expressed in
terms of VOC per unit of production (a
qualitative term such as Iba VOC/gal
coating). Where it is not feasible to
specify emission limits in such terms.
emission limits per unit of time can be
approved provided that
  a. The emission limits reflect typical
(rather than potential or allowable)
production rate and operating hour*.
These emission limits must truly reflect
emissions reductions consistent with
RACT and are not simply an artificial
constraint on potential emissions. This
must be supported in the SIP revision by
historical production and operation
data.
   b. Nonproduction or equipment
 downtime  credits are not allowed in the
 emission limit calculation unless  a
 Federally enforceable document
 specifically restricts operation during
these times. Such credit muat be b; ;*
on real historical emissions.
  2. Avenging periods must be i
as practicable and in no case lor
than 30 days.
  3. A demonstration must be made ;.-
the use of long-term averaging fgreare-
than 24-hour averaging) w»ll not
jeopardize either ambient standards
attainment or the reasonable further
progress (RFP) pun for the area. This
must oe accomplished by showing tha
the maximum daily increase in
emissions associated with long-term
averaging is consistent with the
approved ozone SIP for the area.
  4. Sources in areas lacking approved
SIFs. or in areas with approved SIP s
but showing measured violations.
cannot be considered for longer term
averages until the SIP has been revised
demonstrating ambient standards
attainment and maintenance of RFP
(reflecting the maximum daily emission
from the source with long-term
averaging).
  Meaningful short-term  (i.e.. daily)
emission caps are desirable especially
for sources subject to large fluctuations
in emissions. The use of a daily cap
(equal to or less than current average
emissions on a daily basis) that limns
short-term emissions to RACT
equivalent levels would meet the above
objective of ensuring VOC control :t
is consistent with attaining the NAj
for ozone.
  States have the primary responsible:
to show adherence to the above
principles and. to do so. must include
the following information (in detail) in
ail SIP revision requests that seek VCC
averaging times greater than 24 hours:
  1. The VOC limits specified in an
enforceable form with appropriate
compliance dates.
  2. A description of the  affected
processes and associated historical
production and operating rates.
  3. A description of the  control
techniques to be applied to the affected
processes such as low solvent and
waterbome coating technology and/or
add-on controls.
  4. The nature of the emission control
program whether a bubble, a regulation
change, a compliance schedule, or some
other form of alternative control
program.
  S.  The method of recordkeeping and
reporting to be employed to demonstrate
compliance with the new emission limit
requirement and to support the showing
that the emission limit is consistent with
RFP and the demonstration of
attainment.
  Each EPA Regional Office shall ha*-^

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43S5I
Fedafal  Register / VoL M.  No. 233  / Thursday, December 4.  196P / Nottees
the primary rteponBibiiity far          >
determining tht approvaMWy of
application requests. Hovnw, in order
to assure Regional conaisteacf;
coordination with the Office of Air
Quality Planning and Standards staff rs
encouraged during the initial
development of any single "time
average" SIP revision or regulation.
Also, all SIP revisions involving  long-
term averaging must be proposed in the
Federal Register with an explanation of
how the principles listed above have
been satisfied.
  Should there be any questions on this
policy, pledse call Tom Helms (FTS 629-
5526) or Brock Nicholson (FTS 629-
5516).

Attachment
cc:
  Barbara Bank off
  Ron Campbell
  Jack Farmer
  Mike Levin
  Ed Reich
  B.f. Steigerwald
  Darryl Tyler
  Peter Wyckoff
  Chief. Air Branch. Regions I-X
  Regional Administrator, Regions I-X.
                      Appendix B-IUt&i of Slpflksnl Impart
                      for Appnvia* -CMpta TamM' PM,
                      SOi and CO-ftate UMtarLMd I
                      Modeling Approach**
                        Appendix E indicates on its vertical
                      axis the post-trade emission rale for the
                      stack with Increasing emissions (E). and
                      on its horizontal axis the radius of
                      significant impact (R) within which level
                      I trades may be approved despite the
                      presence of complex terrain outside that
                      radius.
                        The curves in Appendix E have been
                      generated using a normally conservative
                      screening model. VALLEY, to estimate R
                      for each E. using the  24-hour and 3-hour
                      air quality impact significance level for
                      SOt and the 24-hour significance level
                      for paniculate matter (PM] which have
                      been established for level II modeling. It
                      was assumed that the short-term
                      standards would be controlling.
                        The P-stability class was assumed.
                      and wind speed was presumed to be oae
                      meter per second for estimating the
                      radius of significant impact for the
                      three-hour period, and Z5 maters per
                      second for the 24-hour case*, la.
                      developing the three-hour curve, it was
                      assumed that P-stability and a wind
                      speed of one meter per second would
                      persist for aa much aa fourteen
                      consecutive ham. la dewetaausj &• it-
hour curves, it was assumed that F-
stabiliry wttb a wind speed of 24 jneterc
per second would occur for six hours of
any 24-hour period *
  Thn Appendix provides different
estimates for SOi and PM becaase the
significance levels for these pollutants
are different For CO, the R value for E
value may be determined by multiplying
the E for SOt by twenty (30). This ia a
conservative approach towards
determining radii of significant impact
for CO. Where the effective height of the
stack with increasing emissions is not
changed (e.g., where the only change is
in the sulfur content of fuel burned), the
change in the hourly emission rate (E)
may be used in lieu of E."
  1 The eurvn in Appendix E wtr« derived uiing
tht iMunptkMU dtecnbad above «o thai they could
be uttd to dtitnuM radii of ttgnrnaat impact for
•ourcn in tny part of tht oooalry. However. It it
potaiblt thai tar torn* treat, local mtieorological
condition* will ht Mch (kal tJHraahTt. Int
conMrvativt iMttoraiagieal lanrnpiiont can be
employed la dMtmuuaf thtta radu. Watrt ittn*
can ihow thai tht u»e of nidi alternative
iiiumptlona ia appiuuMlt for t given area, rhey
dtveto» elmaatjmLmom* fam^te far
detamunmg radH •( Maai&ceait impaci tad Mbmft
tbtmftri«vit«r aodtgpavaJ by EPA. either in
oontencttoti wrtKao Individual bubble lubmiltal or
aa part of a gtntrte ruJt. Slitee tn adviitd lo work
clttalf wllk tea aBavoarlaet Rta>oiial Offict m MV
effort lo amtfap aMk arlanalivt approathte.

-------
                          / VoLSL No. m / Thursday} December 4.198» / Notices         438:
            -=.—

    FIGURE I:
     RadK of Significant Impact for PM & SO2 for Different Averaging Time^l
   400

   300



   200
    100
    90
    80
    70
7   60

-f   50

S   «°
&
g   30
J



I   2°
|
°x


    10
     9
     8
     7
     6

     5

     4
                                    Jill   	 I     III   i  I  I I
                           4   5678910         20     3040 50607080901

                              Radius of Significant Impact (Km)
     COOt «M

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43860	Federal Regular  /  Vol. 51.  No. 233 / Thursday,  December  4.  1966  / Notices
Appendix F— CFR Part 51 Conversion
Table
  On November 7. 1986 (51 FR 40656)
EPA restructured CFR Part SI and
renumbered many of that part's
sections. Because most readers will be
more familiar with prior designations.
today's notice contains citations based
on Part 51 as it existed before this
restructuring. A detailed finding list of
the old versus new citations can be
found in Table 2 of the Preamble of the
November 7 notice. Today's readers
may also use the following table to
convert today's Part 51 citations to the
corresponding new ones.
       CFR  Part 51 Coavmioa Table
  Old W CFR !1 Citation      .Vtw « CFH SI
                            Citation
31.18                  Subpart I
SI ISIll                31.1St|«|
51.1Stl)U)(vi)            3UMU|(l)(vi)
51.18!            5l.l6SUI(1Hxi|
51.18)1)11)1X11)            Sl.iaSUKlWxiil
Sl.lSli)l3||>i)(c|          S1.l«5l«M3KiWC]
Sl.lBlk)               51.18Kb)
31J2                  S1.2SJ
51.24                  51.18S
5U4(bH3)lbl(ii)         51.188«b)OI(b|(li)
51J4(b)(13)             51.1«8(b|(13)
51.24|bH13Iii)           31.18B
-------
REFERENCES FOR SECTION 8.2

-------
                                                       PN 113-37-09-23-
i
I
/
          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                          SEP 2 3 I98T
MEMORANDUM
SUBJECT:
FROM:
          Review of State Implementation Plans and Revisions
          for  Enforceability and Legal Sufficiency

          J. Craig Potter
          Assistant Administrator
            for  Air and Radiation
          Thomas L. Adams Jr.
          Assistant Administrator for Enforcement
            and Compliance Monitoring
TO:
          Francis S.  Blak<
          General Counsel
          Office of General Counsel

          Addressees
    One critical function that your offices perform  is  to
assure that regulations developed for stationary sources
by the States under the Clean Air Act are enforceable and
legally sufficient.  Our regulations require that the state
implementation plans ("SIPs") must "be adopted as rules and
regulations enforceable (emphasis added) by the State agency"
(40 C.F.R. S51.281  (1987)).  We are concerned that review  of
SIPs for enforceability has not been receiving adequate atten-
tion.  The Agency sometimes experiences difficulties in its
efforts to enforce  the current rules because they are not
sufficiently clear.  The Regional Offices are at the forefront
of the federal SIP  approval process.  The purpose of this
memorandum is to remind you of the importance of doing  the
review necessary to assure that all SIP plans and revisions
are enforceable and in conformance with the Act.  Please do not
forward for approval SIPs which fail to satisfy the  enforce-
ability criteria in this memorandum.

Backaround
     Recent information  indicates  that  the attention  being  paid
to SIP approvals  is declining, particularly  for enforceability.
The Office of General  Counsel  reviews regulations  as  to  their
adequacy under applicable  law  and  Agency'policy, but.  not  for
enforceability.   This  void  is  not  being filled by  other  offices
Often, the problems with enforcing the  regulations  are not
immediately obvious and  only become  known where a  case or  issue
focuses on the oarticular  reauiation.   Ac the October 1986

-------
                                -2-

Annapolis meeting of Air Program Directors and Regional Counsel
Air Branch Chiefs, a number of problems in recent enforcement
cases due to difficulty in interpreting and enforcing regula-
tions were discussed.  With the recent werk being done to
address the nonattainment problem, it is even more critical
that regulations be clear and enforceable.

     It is appropriate that the Regional air compliance staff
and the Regional counsel's Office have primary responsibility
for this enforceability review because they have the most direct
experience in compliance and rule interpretation.  They also
have resources allocated through their workload models specifi-
cally for SIP review.

Timing of Review

     The Regions should try to review developing State SIP
provisions prior to final approval by the State, when the
provisions are at their most malleable stage.  In line with
this, each Region should provide its States with a copy of the
implementing guidance associated with this memorandum and a
briefing which outlines the enforceability requirements for new
SIP submittals.  If we provide the States with more explicit
guidance and make earlier contacts to resolve problems, we can
avoid instances where EPA is pressured to settle for a flawed
regulation only because it is better than its predecessor.

Enforceabilitv Criteria

     Your review should ensure that the rules in question are
clearly worded and explicit in their applicability to the
regulated sources.  Vague, poorly defined rules must become a
thing of the past.  SIP- regulations that deviate from this
policy are to be disapproved pursuant to Section 110(a) of the
Clean Air Act, with appropriate references in the C.P.R.  Speci-
fically, we are concerned that the following issues be directly
addressed.  'The rule should be clear as to who must comply and
by what date.  The effect, if any, of changed con 'itions  (e.g.,
redesignation to attainment) should be set forth.  The period
over which compliance is determined and the relevant test
method to be used should be explicitly noted.  Provisions which
exempt facilities under certain sizes or emission levels  must
identify explicitly  how such size or level is determined.
Also, provisions which allow for  "alternate equivalent techniques
or  "bubbles" or any  other sort of variation of the normal mod«
of  compliance must be completely  and explicitly defined and must
make clear whether or not EPA case-by-case approval is required
to  make such a method of compliance  federally effective.

-------
                                -3-
Conclusion

     SIP revisions should be written clearly, with explicit
language to implement their intent.  The plain lancuaae of all
rules, "as well as the related Federal Register notices, should
be complete, clear and consistent with the intended purpose of
tht rules.  Specific review for enforceability will be a further
step in improving the overall SIP process and structure.

     We have attached detailed guidance to assist you in
implementing this memorandum.

Attachment

Addressees:

     Regional Administrators
     Regions I-X

     Regional Counsels
     Regions I-X

     Air Management Division Directors
     Regions I, III and IX

     Air and waste Management Division Director
     Region II

     Air, Pesticides, and Toxics Management Division
     Directors
     Regions 17 and VI

     Air and Radiation Division Director
     Region V

     Air and Toxics Division Directors
     Regions VII, VIII. and X

cc:  Deputy Regional Administrators
     Regions I-X

     Regional Counsel
     Air Contacts
     Regions I-X

     Air Compliance Branch Chiefs
     Regions II, III, IV, V, VI, IX

     Air Program Branch Chiefs
     Regions I-X

     Darryl Tyler, Director
     Control Programs Development Division

     Gerald Enuson, Director
     Office of Air Quality Planning  and Standards

-------
                               -4-
cc:  John S. Seitz, Director
     Stationary Source Compliance Division
     Office of Air Quality Planning and Standards

     Alan w. Eckert
     Associate General Counsel
     Air Division

     Michael S. Alushin
     Associate Enforcement Counsel
     Air Enforcement Division

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          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                    2 3
                                        J987
MEMORANDUM


SUBJECT



FROM:
          Review of State Implementation Plans and Revisions
          for Enforceability and Legal Sufficiency
          Michael S. Alushin
          Associate Enforcement Counsel
           for Air Enforcement
TO:
          Alan W. Eckert   __
          Associate Genera*! CoTmsel
          Air and Radiation Division

          John S. Seitz, Director
          Stationary Source Compliai
          Office of Air.Quality PlaJ

          Addressees
                                     ring and Standards
     This is to provide implementing guidance on the memorandum
issued by J. Craig Potter/ Thomas Adams and Francis Blake
on this date relating to review of SIP plans and revisions
for enforceability and legal sufficiency.  We urge you to
provide copies of these memoranda to your State Agency Directors.

Applicability

     This guidance applies to all SIP proposals which have
not completed the state or local agency legal and procedural
requirements for SIPs.  For proposals that have not yet
been submitted to the Regional office for action, the state
and local agencies have forty-five (45) days from the date
of this guidance to submit such proposals for review in order
for the proposal to be considered under previous procedures.
SIP packages currently in Headquarters will undergo the usual
review but will be returned to'the Regions if they contain
deficiencies which raise significant questions as to whether
the regulation would be enforceable.

Enforceability, Criteria

     The notion of enforceability encompasses several concepts.
At the most basic level, a regulation must be within the  statutory
authority of the promulgating'agency.  For example, some  states
have statutory restrictions or prohibitions on the promulgation
of regulations more restrictive than the federal counterpart.

-------
                                -2-

Although we should generally defer to a State's interpretation of
the scope of its authority, when there is real doubt we
should, at a minimum, consult the responsible State Attorney to
be certain the issue has been considered and resolved.  When
appropriate, an opinion letter should be obtained from the
State Attorney General.

      Please ensure that the following additional issues are
directly addressed.

     0 Applicability

    It should be clear as to whom the regulation applies.  The
SIP should include a description of the types of affected
facilities.  The rule should also state in which areas the rule
applies (entire state, specific counties, nonattainment, etc.)
and advise the reader that State administrative changes require
a formal SIP revision.  Also, some regulations might require a
certain percentage reduction from sources.  The regulation
should be clear as to how the baseline from which such a reduction
is to be accomplished is set.  In some cases it may be necessary
for enforcement purposes and independent of Clean Air Act
requirements for the SIP to include an inventory of allowable
and actual emissions from sources in the affected categories in
order to set the above baseline.

     0 Time

      The regulation should specify the recnjired date of
compliance.  Is it upon promulgation, or approval by EPA, or a
future date certain?  Future effective dates beyond the
approved or proposed attainment date should not be allowed
unless the related emissions reductions are not needed for
attainment.  Also, the regulation should specify the important
dates required of any compliance schedule which is required to
be submitted by the source to the state.

     0 Effect of Changed C-mditions

     If changed circumstances effect an emission limit or other
requirement the effect of changed conditions should be clearly
specified.  However, you should not approve state regulations
which tie the applicability of VOC control requirements to the
nonattainment status of the area and allow for automatic nullifi-
cation of the regulations if the area is  redesignated to an
attainment status.  Such regulations should continue to apply
if an area  is redesignated from nonattainment to attainment
status  unless a new maintenance demonstration supporting a chance
 in the  rule's applicability  is submitted  and approved by EPA.

-------
                                -3-

     0 standard of Conduct

     The regulation must be sufficiently specific so that a
source is fairly on notice as to the standard it must meet.
For example, "alternative equivalent technique" provisions
should not be approved without clarification concerning the
time period over which equivalency is measured as well as
whether the equivalency applies on a per source or per line
basis or is facility wide.

     0 Incorporation by Reference

      Some federal regulations are inappropriate for adoption
by reference.  For example, a state intending to enforce PSD
regulations adopted by reference must adopt 40 C.F.R. S52.21,
not 40 C.F.R. S51.166, as only the former is written in a form
imposing obligations on permit applicants.  Even then, changes
may have to be made to take into account the difference between
the State's situation and EPA's.

     * Transfer Efficiency

    Some states have attempted to provide particular VOC
sources with relaxations of compliance limits in return for
improvements in the efficiency with which the sources use the
pollutant producing material.  Any rules allowing transfer
efficiency to be used in determining compliance must be explicit
as to when and under what circumstances a source may use improved
transfer efficiency as a substitute for meeting the SIP limit.
Such provisions must state whether EPA approval is required on
a case-by-case basis.  Also, such provisions may not simply
reference the NSPS auto coating tables for the transfer
efficiency.  The improvement should be demonstrated through
testing and an appropriate test method should be set forth.
Implied improvements noted by the NSPS auto coating TE
table are not to be accepted at face value.

     • Compliance Periods

    SIP rules should describe explicitly the compliance time
frame associated with each emission limit (e.g. instantaneous,
stack test, 3 hour average or daily).  The Regions should not
assume that a lack of specificity implies instantaneous compliance
The time frame or method employed must be sufficient to protect
the standard involved.

     0 Equivalency Provisions and Discretionary Emission Limits

    Certain provisions allow sources to comply via "bubbles"
or "alternate equivalent techniaues" or through mechanisms
"as approved by the Director."  These provisions must make it

-------
                                -4-

clear as to whether EPA approval of state granted alternative
compliance techniques is reouired on a case-by-case basis in
order for the changed mode of compliance to replace the existing
federally enforceable requirement.  If EPA case-by-case approval
will not be required, then specific, objective and replicable
criteria must be set forth for determining whether the new
arrangement is truly equivalent in terms of emission rates and
ambient impact.  Such procedures oust be consistent with the
control levels specified in the overall SIP control strategy
and must meet other EPA policy requirements, including the
"Emissions Trading Policy", 51 Fed.  Reg. 43814 (1986), in
relevant instances.

     4 Recordkeeping

     The SIP must state explicitly those records which sources
are required to keep to assess compliance for the time frame
specified in the rule.  Records must be commensurate with regula-
tory requirements, and must be available for examination on
request.  The SIP must give reporting schedules and reporting
formats.  For example, these rules must require daily records
if the SIP requires daily compliance.  Additionally, the record-
keeping must be required such that failure to do so would be a
separate violation*in itself.

     9 Test Methods

     Each compliance provision must list how compliance is
to be determined and the appropriate test method to be used.
The allowable averaging times should be explicit.  Both the
test method and averaging times employed must be sufficient
to protect the ambient standard involved.

     0  Exemptions

     If sources under a certain size are exempted from control
requirements, the  regulation must  identify how the size of a
particular source  is to be determined.

     0  Malfunction and Variance Provisions

     Any malfunction or variance exemptions must be clear in
their substantive  application and  ii how they are triggered.
The  rule must specify what exceedances may be excused^ how the
standard is  to be  applied, and who makes the determination.

Conclusion

     We appreciate your attention  to this matter and hope
 that  the specific  review  for enforceability will be a farther
 step  in  improving  the overall  SI?  process and structure.
 To assist  you, we  have  attached an enforceability checklist.
 This  checklist should be  included  as part of your technical
 suooort  cackaaes  in  all  future SI? oackaaes.

-------
                                -5-

     Please contact the appropriate staff attorney in the Office
of General Counsel or the Office of Enforcement and Compliance
Monitoring should you have any questions concerning issues of
enforceability in particular instances.  Please contact Tom
Helms, OAQPS, PTS-629-5526, for other questions concerning
implementation of this guidance.

Attachment

Addressees:

     Regional Administrators
     Regions I-X

     Regional Counsels
     Regions I-X

     Air Management Division Directors
     Regions I, III and IX

     Air and waste Management Division Director
     Region II

     Air, Pesticides, and Toxics Management Division
     Directors
     Regions IV and VI

     Air and Radiation Division Director
     Region V

     Air and Toxics Division Directors
     Regions VII, VIII and X

cc:  Deputy Regional Administrators
     Regions I-X

     Regional Counsel
     Air Contacts
     Regions I-X

     Air Compliance Branch Chiefs
     Regions II, III, IV, V, VI, IX

     Air Program Branch Chiefs
     Regions I-X

     Darryl Tyler, Director
     Control Programs Development Division

     Gerald Emison, Director
     Office of Air Quality Planning
      and Standards

-------
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REFERENCES FOR SECTION 8.3

-------
J* ----- ''*„
      '         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
             _.           WASHINGTON, O.C. !804«0
                                JM 2 I
                                                          OFFICE OF
                                                     AIR. NOI« AND RAOIATICV
    MEMORANDUM
    SUBJECT:  Definition of "Continuous Compliance"
                and Enforcement of O&M Violations
    FSOMs     Kathleen M. Bennett    ;*
              Assistant Adrainistra torpor' Air, Noise and Radiation

    TOt       Directors, Air and Wastt  '•Tiagement Divisions
                Regions I-IV, VI-VIII and X

              Directors, Air Management Divisions
                Regions V and IX


        The purpose of this memo is to provide you with some  general
    programmatic guidance as to the meaning of the term "continuous
    compliance" and the role of operation and maintenance  (O&M)
    requirements in assuring that continuous compliance is maintained.
    Of course, source specific guidance on O&M measures which can
    assure continuous compliance is an essential part of this program
    and this memorandum is not intended to substitute for  such
    guidance.  As you know, DSSE has undertaken a number of
    initiatives related to the continuous compliance effort and we
    hope to discuss the progress of those efforts with you at the
    upcoming workshop at South«?£C ?lnee   DSSE will be forwarding to
    you an updated sunanify of th- .s ^.ctiviuies prior to the workshop.
    However, given the cor.-incing ai_ir,iicn being given to
    •continuous compliance," I think it would be helpful to have a
    common understanding of what that concept entails.

        In the strict legal sense, sources are required to meet,
    without interruption, all applicable  emission limitations and
    other control requirements, unless such limitations specifically
    provide otherwise.  However, of primary concern to the Agency are
    those violations that could have been prevented, through  the
    installation of proper control eq.1 ipir.ent aad the operation and
    maintenance of that equipment in accordance with proper
    procedures.  We believe the concept of continuous compliance  is
    essentially the avoidance of preventable excess emissions over
    time as a result of the proper design, operation and maintenance
    of an air pollution source.  .This includes avoidance of
    preventable instances of excess emissions, minimization  of

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                               -2-

emissions during such instances* and the expeditious termination'
of any instances which do occur.

    In determining the appropriate enforcement responsjf to a
violation/ one factor the Regions should consider is whether the
source had in place an active program designed to maintain
continuous compliance.'  Such a program would normally involve one
or more of the following elementst continuous or periodic
•elf-monitoring-of emissions; monitoring of operating parameters
such as scrubber pressure drop, incinerator combustion temperature
or flow rates; -lintenancr of a spare parts inventory; maintenance
of spare control '"-*vice modules; and procedures designed to
correct the types of violations that are most liXely to occur.
Evaluating a violator's O&M program is a necessary step in
determining the type and degree of relief that an enforcement
action could be expected to achieve.

    Documentation of avoidible departures from proper procedures
as just discussed may b« «««d not on:? is supporting evidence in
cases involving emission limit violations, but as primary evidence
in cases involve.„  illations of O&M requirements specified in
permits and regulations.  As the Agency continues to place more
emphasis on O&M requirements in the context of national standards,
and to encourage States to develop O&M requirements, the
enforcement program must be adapted to address violations of these
requirements.  A violation of specified O&M requirements, even in
the absence of documented emission limit violations, can be an
appropriate trigger for EPA enforcement response.

    In conclusion/ evaluation of a source's continuing compliance
program would be useful both in determining the appropriate Agency
response to an emission limit violation, and in assessing the
source's compliance with specified O&M requirements -

    Zf my staff can be of assistance  in evaluating  specific cases,
please feel free to call John '?j»*nic  e~ 382-2826.

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                                                PN 113-83-02-15-011
         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                     WASHINGTON. O.C. 20460
                           FE3 I 5 1983
                                                      Of HCt Of
                                                 AIM. NOISE AND RADIATION
MEMORANDUM
SUBJECT:  Policy on Excess Emissions During Startup, Shutdown,
          Maintenance/ and Malfunctions

FROM:     Kathleen M. Bennett, Assistant Administrator
            for Air/ Noise and Radiation

TO:       Regional Administrators, Regions I-X


     I have been asked to clarify my memorandum of
September 28, 1982, concerning policy on excess emissions  during
startup and shutdown.

     Specifically, I stated that "startup and shutdown  of
process equipment are part of the normal operation of a source
and should be accounted for in the design and implementation  of
the operating procedure for the process and control equipment*
Accordingly, it is reasonable to expect that careful planning
will eliminate violations of emission limitations during such
periods."  I further stated that "(i]f excess emissions occur
during routine startup and shutdown of such equipment,  they
will be considered as having resulted from a malfunction only
if the source can demonstrate that such emissions were actually
caused by a sudden and unforeseeable breakdown in the equipment.*

     A question has been posed as to whether there can be
situations in which it is unreasonable to expect that careful
planning can eliminate violations of emission limitations
during startup and shutdown.  I believe that there can  be  such
situations.  One such situation, which was already mentioned
in the policy, is a malfunction occurring during these  periods.
A malfunction during startup or shutdown is to be handled  as
any other malfunction in accordance with the policy as
presently written.

     Another situation is one in which careful and prudent planning
and design will not totally eliminate infrequent short periods
of excesses auring startup and shutdown.  An example of this
situation would be a source that starts up or shuts down once or
twice a year and during that period there are a few hours  when
the temperature of the effluent gas is too low to prevent  harmful


                                  113
                                  17-1

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formation of chemicals which would cause severe damage to
control equipment* -if the effluent were allowed to pass through
the control equipment.

     Therefore, during this latter situation, if effluent gases
are bypassed which cause an emission limitation to be exceeded
this excess need not be treated as a violation if the source
can show that the excesses could not have been prevented through
careful and prudent planning and design and that bypassing was
unavoidable to prevent loss of life, personal injury, or severe
property damage.

     I have clarified the policy concerning this issue.   A coov
is attached.                                                 **

Attachment
                                                                   i
                               17-2

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                           Attachment

      POLICT ON EXCESS EMISSIONS DURING STARTUP, SHUTDOWN,
                 MAINTENANCE, AND MALFUNCTIONS
Introduction

     Several of the existing State implementation plans (SIPs)
provide for an automatic emission limitation exemption during
periods of excess emission due to startup, shutdown, maintenance,
or malfunction.*  Generally, EPA agrees that the imposition of
a penalty for sudden and unavoidable malfunctions caused by
circumstances entirely beyond the control of the owner and/or
operator is not appropriate.  However,  any activity which can
be foreseen and avoided, or planned is  not within the definition
of a sudden and unavoidable breakdown.   Since the SIPs must
provide for attainment and maintenance  of the national ambient
air quality standards, SIP provisions on malfunctions must be
narrowly drawn.  SIPs may, of course, omit any provisions on
malfunctions.   [For more specific guidance on malfunction
provisions for RACT SIPs, see the April 1978 workshop manual
for preparing nonattainment plans].

I.   EXCESS EMISSION FROM MALFUNCTIONS

     A.  AUTOMATIC EXEMPTION APPROACH

     If a SIP contains a malfunction provision,  it cannot be
the type that provides for automatic exemption where a malfunction
is alleged by a source.  Automatic exemptions might aggravate
air quality so as not to provide for attainment of the ambient
air quality standards.  Additional grounds for disapproving a
SIP that includes the automatic exemption approach are discussed
in more detail at 42 FR 58171 (November 8, 1977) and 42 FR
21372 (April 27, 1977).  As a result, EPA cannot approve any
SIP revisions that provides automatic exemptions for malfunctions.
* The term "excess emission" means an air emission rate which
  exceeds any applicable emission limitation,  and "malfunction1
  means a sudden and unavoidable breakdown of  process or
  control equipment.
                                113
                                17-3

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     B.  ENFORCEMENT DISCRETION APPROACH—SIP EMISSION
         LIMITATION ADEQUATE TO ATTAIN AMBIENT STANDARDS

     EPA can approve SIP revisions which incorporate the
"enforcement discretion approach".  Such an approach can require
the source to demonstrate to the appropriate State agency that
the excess emissions, though constituting a violation, were due
to an unavoidable malfunction.  Any malfunction provision must
provide for the commencement of a proceeding to notify the
source of its violation and to determine whether enforcement
action should be undertaken for any period of excess emissions.
In determining whether an enforcement action is appropriate,
satisfaction of the following criteria should be considered.

     1.  To the maximum extent practicable the air pollution
control equipment, process equipment, or processes were maintained
and operated in a manner consistent with good practice for
minimizing emissions;

     2.  Repairs were made in an expeditious fashion when the
operator knew or should have known that applicable emission
limitations were being exceeded.  Off-shift labor and overtime
must have been utilized, to the extent practicable, to ensure
that such repairs were made as expeditiously as practicable;

     3.  The amount and duration of the excess emissions
(including any bypass) were minimized to the maximum extent
practicable during periods of such emissions;

     4.  All possible steps were taken to minimize the impact
of the excess emissions on ambient air quality; and

     5.  The excess emissions are not part of a recurring
pattern indicative of inadequate design, operation, or maintenance.

II.  EXCESS EMISSIONS DURING STARTUP, SHUTDOWN, AND
     MAINTENANCE

     Any activity or event which can be foreseen and avoided,
or planned, falls outside of the definition of sudden and
unavoidable breakdown of equipment.  For example, a sudden
breakdown which could have been avoided by better operation and
maintenance practice is not a malfunction.  In such cases, the
control agency must enforce for violations of the emission
limitation.  Other such common events are startup and shutdown
of equipment, and scheduled maintenance.
                               H3
                               17-4

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     Startup and shutdown of process equipment are part of the
normal operation of a source and should be accounted for in the
planning, design and implementation of operating procedures for
the process and control equipment.  Accordingly, it is reasonable
to expect that careful and prudent planning and design will
eliminate violations of emission limitations during such periods.
However, for a few sources there may exist infrequent short
periods of excess emissions during startup and shutdown which
cannot be avoided.  Excess emissions during these infrequent
short periods need not be treated as violations providing that
the source adequately shows that the excess could not have been
prevented through careful planning and design and that bypassing
of control equipment was unavoidable to prevent loss of life,
personal injury/ or severe property damage.

     If excess emissions occur during routine startup and
shutdown due to a malfunction, then those instances will be
treated as other malfunctions which are subject to the malfunction
provisions of this policy.  (Reference Part I above).

     Similarly, scheduled maintenance is a predictable event
which can be scheduled at the discretion of the operator, and
which can, therefore, be made to coincide with maintenance on
production equipment, or other source shutdowns.  Consequently,
excess emissions during periods of scheduled maintenance should
be treated as a violation unless a source can demonstrate that
such emissions could have been avoided through better scheduling
for maintenance or through better operation and maintenance
practices.
                               113
                               17-5

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,rf<*0 *'*'•>
     r>        _UNITEO STATES ENVIRONMENTAL PROTECTION AGENCY

                           WASHINGTON, O C. 20*60
                              S£P 28 193?
                                                           OFFICE OF
                                                      AIR. NOISE AND RADIATION
       :\ANDUM
   SU8J :JC'r:  Policy on Excess Emissions Dm ing Si-./sctup,  Shutdown,
             Maintenance, and Malfunctions
   FIVJM      Kathleen M. Bennett
             Assistant Administrator' 'for Air, Noise and Radiation

   TO-        Regional Administrators, Regions I-X

        This memorandum is in response to a request for a
   clarification of EPA's policy relating to excess emissions
   during startup, shutdown, maintenance, and malfunctions.

        Excess emission provisions for startup, shutdown,
   maintenance, and malfunctions were often included  as part of
   the  original SIPs approved in 1971 and 1972.  Because the
   Agency was inundated -with proposed SIPs and had limited
   experience in processing them, not enough attention was given
   to the adequacy, enforceability, and consistency of these
   provisions.  Consequently, many SIPs were approved with broad
   and  loosely-defined provisions to control excess emissions.

        In 1978, EPA adopted an excess emissions policy after .
   many, less effective attempts to rectify problems  that existed
   with these provisions.  This policy disallowed automatic
   exemptions by defining all periods of excess emissions as
   violations of the applicable standard.  States can, of course,
   consider any demonstration by the source that the  excess
   emissions were due to an unavoidable occurrence in determining
   whether any enforcement action is required.

        The rationale for establishing these emissions as
   violations, as opposed to granting automatic exemptions,  is
   that SIPs are ambient-based standards and any emissions above
   the allowable may cause or contribute to violations of the
   national ambient air quality standards.  Without clear
   definition and limitations, these automatic exemption
   provisions could effectively shield excess emissions arising
   from poor operation and maintenance or design, thus precluding
   attainment.  Additionally, by establishing an enforcement
   discretion approach and by requiring the source to demonstrate
   the existence of an unavoidable malfunction on the source,  good
   maintenance procedures are indirectly encouraged.

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                              -2 •

     Mcriached is a document stating F.PA'''. tues^'ic policy  on
excess smissions.  This document basically  reiterates  the
earliev policy, with some refinement of the policy  regard ing
exces? emissions during periods of scheduled maintsnance.

     A question has also been raised as to  *hdt  extent
operating permits can be used to address excess  emissions in
cases where the SIP is silent on this issue or where the  SIP  is
deficient.  Where the SIP is silent on excess emissions,  the
operating permit may contain excess emission provisions which
should be consistent with the attached policy.   Where  the SIP
is deficient, the SIP should be made to conform  to  the present
policy.  Approval of the operating permit as part of the  SIP
would accomplish that result.

     If you have any questions concerning this policy, please
contact Ed Reich at (382-2807).

Attachment

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                          At t.^ohir.eii t

    POLICY 0!. EXCESS LNlSSICNS  Cl:R U-"3  bTAf'T  U '• -  S'f'l'Trc'..;, ,
                             ANn  r,/. r.F'JN'C"1 TO?,1--. .
     Several of the exir, tiro  Si .--.;.«  trp' "-'''er '.*': i on  clans (ilFsi
preside for an autcratic erission  Linitfit. j or.  exemption ciurir.r
periods of excess emission due to  stfirt-ur, shutdown,
maintenance, or ralfunction. *  Generally,  EFA agrees  that the
imposition of a penalty for  sudden  and  unavoidable
malfunctions caused by circunstances  entirely beyond  the
control of the owner and/or  operator  is  not appropriate.
However, any activity which  can be  foreseen and avoided, or
planned is not within the definition  of  a  sudden and
unavoidable breakdown.  Since the  SIPs must provide for
attainment and maintenance of the  national ambient air quality
standards, SIP provisions on  malfunctions  must  be  narrowly
drawn.  SIPs may, of course,  cnit  any provision on
malfunctions.  [For more specific  guidance on malfunction
provisions for PACT SIPs, see the  April  1978  workshop  manual
for preparing nonattainnent  plans.]

I.   AUTOMATIC EXEMPTION APPROACH

     If a SIP contains a malfunction  provision,  it cannot be
the type that provides for automatic  exemption  where a
malfunction is alleged by a  source.   Automatic  exemptions
might aggravate air quality  so as  not to provide for
attainment of the ambient air quality standards.  Additional
grounds for disapproving a SIP that includes  the automatic
exemption approach are discussed in more detail at 42  FR 58171
(November 8, 1977) and 42 FR 21372 (April  27, 1977).   As a
result, EPA cannot approve any SIP revision that provides
automatic exemptions for malfunctions.

II.  ENFORCEMENT DISCRETION  APPROACH— SIP  EMISSION LIMITATION
     ADEQUATE TO ATTAIN AMBIENT STANDARDS

     EPA can approve SIP revisions which incorporate  the
"enforcement discretion approach".  Such an approach  can
require the source to demonstrate  to  the appropriate  State
agency that the excess emissions,  though constituting  a
violation, were due to an unavoidable malfunction.  Any
malfunction provision must provide for  the commencement of a
proceeding to notify the source of its  violation and  to
determine whether enforcement action  should be  undertaken for
any period of excess emissions.  In determining whether an
enforcement action is appropriate,  satisfaction of the
following criteria should be considered:
* The term  "excess emission"  means  an air emission rate which
  exceeds any applicable  emission limitation,  and
  "malfunction" means  a sudden  and  unavoidable breakdown of
  process or control equipment.

-------
     i.  To the maximum extent practicable  livo  .nic  pollution
control equipment, process equipment, or processes  were
maintained and operated .in a manner rons i. sf---»nt  vilh good
     ire for minimizing emissions:
     /.   Repairs were made in an expedition  fashion  when  Uv-
opecator knew or should have known that applicable  emission
limit- aliens were being exceeded.  Off-shift labor and overtime
must have been utilized, to the extent practicable, to ensure
that- such repairs were made as expeditiously  as practicable;

     J.  The amount and duration of the excess emissions
(including any bypass) were minimized to the  maximum  extent
practicable during periods of such emissions;'

     4.  All possible steps were taken to minimize  the impact
of the excess emissions on ambient air quality; and

     5.  The excess emissions are not part of a recurring
pattern indicative of inadequate design, operation, or
maintenance.

III. EXCESS EMISSIONS DURING START-UP, SHUTDOWN, AND
     MAINTENANCE

     Any activity or event which can be foreseen and  avoided,
or planned, falls outside of the definition of sudden and
unavoidable breakdown of equipment.  Fpr example, a sudden
breakdown which could have been avoided by better operation
and maintenance practices is not a malfunction.  In such
cases, the control agency must enforce for violations of the
emission limitation.  Other such common events are  start-up
and shutdown of equipment, and scheduled maintenance.

     Start-up and shutdown of process equipment are part of
the normal operation of a source and should be accounted for
in the design and implementation of the operating procedure
for the process and control equipment.  Accordingly,  it is
reasonable to expect that careful planning will eliminate
violations of emission limitations during such periods.

     If excess emissions occur during routine start-up and
shutdown of such equipment, they will be considered as having
resulted from a malfunction only if the source can  demonstrate
that such emissions were actually caused by a sudden  and
unforeseeable breakdown in the equipment.

     Similarly, scheduled maintenance  is a predictable event
which  can be scheduled  at the discretion of  the  operator,  and
which  can therefore be made to coincide with  maintenance on

-------
production equipment, or oth^c soui'cr  shutdowns.
Consequently, excess emissions during  periods  of:  scheduled
maintenance should be treated as a  violation  unless  a souv:^
can demonstrate that such emissions  could  not  have  been
avoided through better scheduling for  maintenance or fchcou-jh
betf-.«» operation and maintenance practices-

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       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                     WASHINGTON. O.C 2Q4«Q

                       Marcli  5,  197*
STT3J2C7:  Energy Saergency Task Force?  la^ieaentation of
          Section 110 (f) of  the Clean -Air  Act
              TION
F50X:     Assistant Adaiaistratcr  for  S-if acc

          Assistant Administrator  for  Air,  JToiae
          and Hadiitica

TOt       Ti« Adainistrator
     Suxsarisad b*low is bac.'csround  infocsation  and
         guidance on responding to an  energy  ecsrgency ur.der
Section US (£) .  7« ara alsa  initiating  devclccts-f.t  of an
esergenc? clan and iaples« station guidance- (as actrroociats)
to •aiaisiza adverse envir'.i.-.sftRtal effects  which  could
free a gasoline snortage.  *Te will forward tne gasoline
eeergency ?lm to you la the  future.
I.   CQS/2?A ?or?gir.-ir Relations-

     The Oeaartsent of Energy  (DOS} has  established  an
Snergy Saergency Center to coordinate  the  federal government
response to crisis situations resulting  froc energy  ecergezc
Although the center vas initiated under  the isnetus  of the
R£7 strike, it weuld be the coordinating agent in any energy
emergency.  S?A has also established an  ad hoc tnergy
Saergency Task ?orc« to coordinate  S?A's response to a
crisis.  E?Afs* Offices of enforceaent, Air, Noise and
Radiation, General Counsel,, and  Federal  Activities are
represented, on the task force.   S?A's  contact with CCS '3
Snergy Ssergency Center is Mrs.  Tvonns Allen, Director of
the Center (202-252-5155).  COE's contact with SSA's Ssargy
Saergency Task Force is as..I-2artha  Fcothro (alternate:
Hr. ^eldon 31aJce).-of the Division of Stationarv Source
2nf or cement (DSSS - FTS 755-2523).

-------
     Msv Allen has advised that coal supply  inforaation
(quantity, quality, and number of days of fuel  supply) wjJ|
be available from DOB: (1) weekly for utilities on*a Staff
wide basis (approximately 10-day-old data)r  (2) daily for
specific utilities that DOS has determined ta have a criti-
cally short coal supply; and  (3) weeJcly for industrial coa
burners on a State-wide- basis.  In addition, DOE can advise
EPA of State actions ta conserve and minimise- consumption c
the fuel in short supply and federal actions to provide fcr
interconnections to assure that electrical, power will be,
transferred to areas nest in need.  Although this infcraa—
tion is specific for coal, this guidance is to  be used in
any energy emergency.  Coal availability indorsation would
be useful for sources presently burning oil or  gas but wcic
have coal burning capability in the event of a  shortage of
oil or gas.

     DOC has established a formal day-to-day contact in. Jac
Watson's office during energy emergencies in. order to
expedite- the flow of information, between EPA, DOS, and the
White Souse.  008 and EPA have- also.agreed ta maintain. da.il
contact during such emergencies.
     Petitions for gnercv Eaergencv Declarations under
     Secz.iea 110 (f)  of cne. Clean Axr Ace

     Section 110(f)  provides that emergency SI? suspension*
may be- granted in accordance with the- following;

     (1) The owner or operator of fuel burning- anaticr.ary
         source applies ta the state fcr relief.

     (2) The Governor* gives no-tic* and ocuuctanitj- fcr
         public hearing on- the proposed, petition.

     (3) tt* Governor finds, thatu

         (a)   as emergency exists in the  vicinity of the  s
               involving high levels of unemployment, or
               loss- of necessary energy supplies  for resi-
               dential dwellings; and

         (b)   such unemployment or loss can  be  totally cr
               partially alleviated by an  emergency suspen-
               sion, of State Implementation Plan requirsssr.
               applicable  ta that sourcs.

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                        -3-

     (4} The Governor petitions the President to declare
         that a national or regional energy emergency exists
         of such severity that:

         (a)   a temporary suspension of any part of the
               applicable implementation plan may be neces-
               sary; and

         (b)   other meins of responding to the energy
               emergency may be inadequate.

     (5) Taa President deteraines that a national of recional
         energy emergency exists. (This authority nay not be
         redelegated.)

     (6) Tie Governor may issue aa emergency suspension ta
         tae source which stay take effect immediately,  Hot
         mere than cne such suspension say be issued to a.
         source based on the same se.t of circumstances or en
         the basis of the saae emergency.  'Suspensions are
         limited in, duration by any time limit the President
         places on his determination, and in any case"say
         not. exceed four months.

     (7) SPA Administrator may review the Governor's suspen-
         sion and disapprove it if he determines that it
         does not satisfy the criteria set'forth in (3)
         above.  Zf the SPA Administrator issues a disap-
         proval order, ha will specify therein the date en
         which the Governor's suspension shall no longer be
         effective-.
                   *
     (8) This procedure does not ap?ly ta a plan revision
         prcaulcatad by the Administrator pursuant to
         Section 110(c) (such as for'sulfur oxides in Ohio).
         da President,, however, may grant up- ta a four
         month suspension of a State Implementation Plan
         promulgated by the Administrator  if he makes  the
         findings in (3) and (4) above.

     Whenever a Governor petitions the-President for a
declaration of an energy emergency under Section 110(f)/ "«
suggest that EPA maJce the following recommendations:

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                         -4-

     Conservation measures;
         is essential* that emphasis  be placed on the  need  * __
energy conservation through means other than turning of*
pollution control*, which could  involve violations of
health-protective regulations.   CCS has determined that
there is no federal* authority to mandate conservation
measures and only a, few States have such authority.  Since
Section 110 (f) includes a provision for consideration of  the
adequacy of "other means" of responding to  the  emergency
(itea *4(b) above) r 2?A should recommend to the President
that his declaration of an energy emergency for purposes  of
Section 110 (f) be conditioned on (1) the Governor's  recoirint
that sources covered, by suspensions demonstrate they have
implemented or will implement all possible  cons err at ion
measures, and (2) where the Governor can mandate cons erva tic:
measures, that ha do so in addition to  granting relief under
Section 110 (f).  If he cannot; mandat* conservation measures
he would be? required to asJc for  voluntary conservation;
measures in the areas affected*.  tf conservation measures
•would b« adecuata- by themselves, no declaration involving
110(f) would be appropriate.

H-   Specific reference to Section  303  emergency severs r

     EPA. should, reccansend that the  President: specifically
mention the continued responsibility of the Z2A to taJce
action under Section 303 of the  dean Air Act where  air
pollution may result in an imminent: and substantial  en dan-
gers en t. to human, health-  Although  Section  303  would not  be
suspended in any event, a specific  reference will help to
ensure that: States and sources- are  on notice of £?A's
intention- to monitor the potentially severe health impacts
of any/ increases in emissions resulting from 513 suspension.
C.   Hr-fgr^ncg to possible  ease  b? ease disrcorsval  hr £?At
     This,  is. necessary to  impress upon States the need ta
make- case-  by case  findings as  repaired by Section 110(1) .
If  this is not done  at the State level, E?A should disapprove
wherever it determines that the Governor cauld not have made
the necessary  findings for the sourca-.'  (For example ,
suspensions of compliance  schedules would generally be
inappropriate  sines  they would be ...unliJcaiy to allaviata any
unemployment °c  residential energy loss.)

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                      -5-

0.   Limitations on tiae and area covered av
     declaration:

     2?A should recommend that emergency declarations be as
precise as possible, especially as to the area affected, ta
allow both an adequate response to true emergencies ar.d an
adequate opportunity to reevaluate the situation as events
develop.

XXX. EPA Hesaonse to SI3 Suspensions Issued bv Governors
     under Section 110 (c) of the Clean Air Act

A.   ?cblic hearincat
     /•« strongly urge that, whenever possible , the Seeional
Office actively participate in any public hearing hela under
HQ(c).  £2A's participation will be useful for two reasons.
First, it will help to ensure that the public health impacts
of alternative nitigative measured will be considered in the
decision marine process.  Second , it will give us the
opportunity to establish on the record early in the process
that blanket SIP suspensions throughout a State may not be
acceptable and that the findings required by-
Section 110(f ) (2) (A)- and (S)-of the Act aust be made for
each source to be coverec by the suspension.  Therefore,
Regional Offices should testify generally that EPA recognize
and will cooperate in attempting to ease the lapact of fuel
shortages but that, because the health prcbleas which could
result frcr.- suspending- air quality standards are a grave
concern, suspensions should not be granted lightly.  The
spokesperson should also advise that temporary energy
emergency suspensions should be issued on a source-specific
basis and only where the findings required by Section
110(f)(2)(A) and (3) have be-en made.
                   •
     The purpose of the public hearing required in Section
110(f) is, in part, to provide a factual record for the
Governor and EPA to use in, determining whether tem?crar?
suspension of portions of the implementation plan are
justified.  As a minimum, the public hearing should ccr-r
the following:

     (1)  the nature and extent of the energy eaergency;

     (2)  current and projected unemployment  impacts associ-
          ated with the energy emergency;

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     (3)  current and projected loss of necessary energy
          supplies for residential use associated wits the
          energy emergency;

     (4)  alternative strategies for reducing the adverse
          impacts of the energy emergency and the conse-
          quences of these strategies on unemployment
          and on residential energy supply;

     (S)  amount of energy savings expected to result frcm
          temporary suspension of portions of the implemen-
          tation plan;

     (6)  to the extent possible, pollutant emission levels
          bath before and after the proposed temporary
          suspension of portions of the. implementation plan;
          and

     (7)  te the extent possible**preliminary assessment of
          the air quality and health effect impacts of the
          proposed temporary_suspension of portions of the
          implementation plan.

     Information- provided en items (5} through (7) should,
whenever possible, include source by source data, for those
sources which, because of their location, the nature and
quantity of their emissions, the density of peculation in
the area, or other reasons, we sight reasonably anticipate
would have an unacceptably adverse impact on public health
should they be included under a temporary suspension deter-
mination.

     Secause of the emergency nature of this process, it  is
unlikely that the public will be given much notics (procaolv
less than one week) prior ta a hearing.  Accordingly, it
will be useful for those Regions likely ta be affected ta
begin ta prepare a position on SIS suspensions on a priority
basis for each State within the Region.  Sfforts should
begin immediately ta evaluate possible adverse air cuaiir*
imaacts within States expected to initiate the Section
llQ(f) process as scon as necessary.  Clearly, any air
auality analyses done as part of this effort will be cursory
and r*« only be intended ta cegin a screening process.
tlnleas recant armcspneric disnersicn modeling analyses far
particular areas or*sources has been done  for other reasons,
simple rollback (rollforward) estLnatas will have ta suffice

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                     -7-

for projecting air quality L-npacts.  Areas should be screene-
on the ,caafa °^ recent ambient monitoring data and furthe~"
on the basis of alert episode days.  Source impacts saouid
be screened on the basis of size, decree of reliance on
affected fuel, emission density, stack heights, etc.

     The general purpose of this analysis is to identify
those specific areas or particular sources where a sus^ensicr
of the SIS would be nost likely to have severe air quality
iapacts and resultant severe public health effects.  It
would be most desirable to coordinate this effort to the
maximum extent possible wirh the appropriate State agency
aiaca the Stats will sake the initial decision on the
casa-ey-cas« SI? suspensions.

B.   Regional Responsibilities Following SI? Suspension
     Decision;

     The Regional Office should maintain a current listing
of all individual sources that are granted a. suspension on a
day-tc-day basis.  Each source grantee a suspension should
be contacted by the Regional Office to determine the specific
course of action which the source intends to take in resp
to the suspension.  Such information will facilitate a
better assessment ofi the potential air quality impacts that.
can be expected.

     The Regional Offics should ensure that every effort is
mace ta process at lease daily data from all aviiable
ambient monitoring networks in and around those arsas where
SI?  suspensions have been granted... To the extent that
resource"constraints limit this effort, highest priority
should be placed on those areas that are most likely to
reach episode, levels based upon, historical ambient air
quality and the- number, concentration, and size of sources
granted SI? suspensions in the area..  The Regional Office.
should notify the Division of Stationary Source Enforcement
(DSS2) and the Office of. Air Quality Planning and Standards
(OAC?S) when air pollution concentrations in areas affected
by SI? suspensions are exceeding dangerous levels (i.e.,
episode alert levels and higher). . It is likely that tinei?
air quality conitoring data will provide the single most
important basis for supporting a determination by the
Adaisistrator ta take an emergency action under Section 303
of the Clean Air Act or to recoisaend that the President
rescind or not extend his emergency declarations for a
specific area.

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     The EPA Administrator say disapprove a suspension
issued by a Governor only Li those limited situations in
which the suspension does not meet the retirements of
Section UO(f)(2)(A) and (3) cf the Clean "Air Act (i.t
where high levels of unemployment and loss of necessary
energy supplies for residential dwellings do not exist or
the unemployment, or loss cannot be totally or partially
alleviated by the SI? suspension).  In order to assure that
suspensions apply only to sources e*peri«ncing an emergence,
EPA should ace quickly to disapprove suspensions covering *
sources for which the necessary findings cannot be cade.
The authority to disapprove suspensions should be delegated
to the Regional Administrators, with EPA headquarters
concurrtnce, in order to assure expedited action.  (A
delegation of Section 110(f}(3) authority is included Li the
attached memorandum to the Regional Administrators for your
signature.)

     Regional Offices should give* high priority to reviewing
any actual suspension issued by Governors to assure that
they are consistent with the criteria set forth in Section
110(f)(2)(A) and (B).  Reviews should focus on sources in
those areas (and, where known , major sources) for which O
has determined,, based on* available supplies and possible
interconnections, that the emergency is less critical.  D
will keep the Regional Offices informed of COS's detarrr.i-.i~
tions and will request OGE determinations as necessary ts
enable Regional Offices to sec proper priorities for reviews
of SI? suspensions.
     The memorandum attached for your signature directs
Regional Administrator to designate a contact for energy
emergency information.  DSSS's Regional Programs Section
will contact Regional Office designers each- day to obtain
information for- inclusion in a daily status chart.  BSS2
will be primarily responsible for contacting the Regional
Offices, to request specific information, for answering any
Regional questions t and for receiving and disseminating
necessary data to appropriate Regional and headquarters
Offices.

IV.  EPA Response to Inquiries frca States and Sources

     Generally, "inquiries can be expected  to fall with is she
categories listed below.  -Suggested Regional Office  raspc-sa*
are indicated.                                             gm

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A.   Source inquiries about possible suspension of
promulgated implementation
     Response:  Only the Governor can suspend such a SI?.
Source may petition Governor to petition the President far a
SllQ(f) emergency declaration.  5?A will not concur in
relaxation or environmental regulations prior to a declara-
tion under S11G(£).

B.   Source inquiries about possible suspension of federal!?
promulgated SIP:

     Response's  The President has not delegated bis aathority
to suspend such a SIP.  Sources aay direct petitions to the
President but should send copies to the Administrator and
Regional Administrator to assure quicJc response.1  Source
must present information to allov the President to determine:
(1) that an energy emergency exists in the vicinity of the
source of such severity that, a temporary suspension of any
part of the SI? aay be necessary and other means of re-
sponding may be inadequate; (2) that there exists in the
vicinity of such source a temporary energy emergency in-
volving high levels of unemployment or loss of necessary
energy supplies for residential dwellings; and (3) that such
loss, or- unemployment can be totally or partially alleviated
by a SIP suspension.  (D3SS should be notified immediately
of any expected petitions for suspension of federally
promulgated S !?'«.)

C.   Source or State inquiries about possible suspension of
ncn-SI? federal air pollution control requirements (e.g.,
Sew Source Performance Standards f interim requirements in
federal orders or consent decrees^ etc.) :

     Response:  There is no statutory authority for emergency
suspension of non-51? requirements , since SiiO(f) relates
only to SIP'S.  If, however, a determination of an emergency
has been made under SllQ(f) relative to SI?'s; SPA will
exercise enforcement discretion on a case-by-case basis in
dealing with non-Si? situations.  Where the findings neces-
sary for a 51? suspension could not have been made in a
specific case, EPA will enforce the applicable requirements
and "ill seek appropriate penalties.  Where those findings
cculd be made for a source subject to non-Si? federal
requirements, EPA will generally refrain frca enforcing or
seeking penalties based on a source's no n compliance -here

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                        -10-

all other possible a taps are being tafcen to comply and whe->
violation results from efforts to minimize the impacts of a2
emergency on high levels of unemployment or loss of aecessa-.
energy supplies to residences.  A commitment not to tnforsa""
may be made only in writing to a specific source and only"
with the concurrence of the Division of Stationary Source
Enforcement. In no event may a source be exempt £rca pcssiz'f
action under Section 303 of the Clean Air Act.  It ix
unlikely that any relaxation of incremental compliance.
schedules will be- appropriate.

D.   Source, or State inquiries about possible suspension of
federal rec^iirements for water pollution control:

     Responses  Ift based on the provisions of Section
110(f) of the Clean Air Act, a proclamation is made and
petitions for relief from NPDES requirements, are received/
the Regional Office should immediately contact the Office; of
Water Enforcement for guidance.  .The following conditions
for temporary modification of individual discharge permits
will generally apply*

     1*   On a case-by-case- basisr E2A will review written
          applications foe relief from individual eermit
          conditions ta detsraines

          a*  the specific persit conditions which the
              dischargee wishes to have amended
          b.  the specific energy savings frca. each suspen-
              sion of water treatment activity;'

          c.  additional steps- the permittee  is taJcisg  to
              reduce, total plant energy  consumption;

          d*  the anticipated environmental damage which
              will result frcm the cessation  of all or
              portions of the treatment  process;

          e.  other area wide energy conservation aeasures.

      2.   Except where- a balancing- test  would dictate a
          contrary result, written recjuests will be disap-
          proved if-they petition  for  relief frca the fol-
          lowing:

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                      -li-

          ft,  a requirement which, if suspended, would
              result in short-tera suspension of curr«_
              treataent activity and which would result"in
              long—term environmental damager

          b.  ft requirement limiting the discharge of toxic
              substances (N3DCr etc.);

          c.  the construction steps which are in their
              compliance schedules;

          d.  disinfection requirements where water is usec
              for swimming cr food processing/ etc.

     In all cases, relief may be granted using prosecutor^
discretion and the Regions will issue legally enforceable
documents, which require full compliance at the end of the
emergency period.  Tnese documents will also require  in-
creased levels- of monitoring and reporting is order to
safeguard the environment*

V.   Recommendation

     We recommend, that you; siga the attached memoranda to
the Regional Administrators which emphasises that S2A's-
respcnse to an emergency must be handled as the highest
Agency priority.
Marvin. B. Durning                 David CS. Hawkins

Attachments

cc: DO2r atts-i Ms. Tvonne Allen

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   I  UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                     WASHINGTON. C.C.


                        March 6,  1579
MSIOSAHSUH

TO:       Regional Administrators, Regions t-X

SU3JSCT:  Response ta Energy Saergency; lapleaer.tation of
          Action 110 (f) of the Clsan Air Act, as .\zended


     Tie Regional Offices should place hig-asst priority on
ess-poncing to any energy eaergancy which say arise end
Lzal-.c-nting £?.\'s rssponsibilitias under Section
                                                  U<3(f) of
the Clean Air Act.  Each Regional Administrator should  ta.-.c
action to iarlement the cuidanc« and rscoasendations  set
forth in the attached seoorandus ta ea  fros Mr. burning ard
Mr. Hawkins.

     The Clean Air Act provides that I  say disarsrove any
SI? suspension which £ determine does not csaply with
Section" 110 (f) (2) (A) and (3) of the Clean Air Act.  To
assure that disapprovals of inappropriate suspensions are
expedited,  I heceby delacate to the" Regional .\drinistracors
sy authority on car Section llG(f)(3) to disapprove suspen-
sions* issued by* Governors.  This authority say be exercisec
by the Regional Administrators only with the prior concur-
rence. of the Assistant. Adninistrator for Znforcecent  an-d
the Assistant Administrator for Air, Xoise and Radiation.
Concurrence froa the Office of Snforceaent and the Office c'
Airr Uoise  and Radiation should be requested and will be
given by telephone through the designated SPA headquarters
contact.  I have- designated Ms. Martha  Prothro  (?TS 755-252:
of the Division of Stationary Source Enforcement as the £.-\
Eeadcuartsrs- contact on all Section 110 (f) matters.
Hs. Prothro's alternate is Mr. tfeldon alake  (?TS 755-2542).
Each Regional Adainirtrator should designate a  regional
contact and alternate and the contact should call
Ms. Frothro as soon as possible.

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                           -2-

      In addition  to  tais energy emergency plan  to  ianlere--
Section llOff), we are  initiating the development  cf'an  ***
emergency 9!an to minimize adverse environnental effects
wnicn coula result from a gasoline shortace.  I will  fcrva"1
                                      guidance
                        Couglas s. Ccstle
Attacfaaent.

ce: Secartaent of Energy

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      UNITED.STATES ENVIRONMENTAL PROTECTION AGENCY
                      WASHINGTON. D.C.
                                                           TMC MMIMISTlUTOIt

                          JUL   21379
MEMORANDUM


TO:        Regional  Administrators, Regions I-X

SUBJECT:   Supplement to the Memorandum of March 6, 1979, Regarding
           Implementation of Section 110(f) of the Clean Air Act


     On March 6, 1979,* I sent to the Regional Administrators guidance on
implementing Section 110(f) of the Clean Air Act.  Since that time
headquarter1 s staff  has clarified the Informational requirements for
adequately addressing Section HO(.f) issues-and .has also developed a
policy concerning the use of price differentials between low and high
sulfur, fuel oils in  Section 110(f) proceedings.  Each Regional
Administrator should take action to implement the supplemental guidance
and recommendations  set forth in the attached memorandum to me frtm
Mr. Durning and Mr.  Hawkins.

     I have designated Mr. Paul Stolpman (phone: 426-2482) as the
headquarters contact on the analysis needed to support all 110(f)
actions.  Mr. Stolpman's alternate is Mr. George Sugiyama
(phone: 426-2432).   Action on the 110(f) applications remains as
set forth in previous guidance.
                                            Douglas M. Costic

Attachment

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       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                        WASHINGTON. O.C 20460
                           JUM 1 9 1379
                                                             TMC AOMINISTRA7C,

SUBJECT:  Supplemental  Guidance Regarding  Implementation of Section T!0(f)
          of the Clean  Air Act - ACTION MEMORANDUM

FROM   :  Assistant Administrator for Air, Noise, and Radiation

          Assistant Administrator for Enforcement

TO     :  The Administrator


     Regional guidance  on responding to an energy emergency under Section
110(f) was issued on March 6,  1979.  Since that time the President has
declared a regional energy emergency *in Florida; Connecticut and Kew York
have held hearings on low sulfur fuel oil  availability; and the President
has instructed EPA to use full authority to take price differentials into
account in making recommendations on Section 110(f) waiver requests.  Base<
on our experience subsequent to the Section 110(f) regional guidance we ncv
propose the following supplemental guidance detailing '1nforma.ri on necessary
for determining the existence  of an. energy emergency and policy guidance cr
the extent to which price differentials are to be incorporated in a waiver
recommendation.


I.  Policy on Price Differentials

    The President, in his April 5, 1979, energy address* directed the
Administrator to "consider unusually large increases in the) price
differential between complying and non-complying fuels as a basis for
recommending approval of state suspension  requests* and to 'use his
full authority to take  Into account price  differentials and to provide
the President with information on price differential increases when making
recommendations to him  on such requests."  This directive does not imply
that states must make a price  differential case when petitioning for
Section 110(f) waivers.  It does allow the Administrator to consider
price differentials whenever a state makes such a case.

     On June 7, 1979, the State of New York held hearings on a request  by a
public utility for a Section 110(f) SIP suspension of the low sulfur fuel
oil. requirement.  The issue before New York was not based on an  actual
unavailability of complying low sulfur fuel oil but was based on whether
the high price of complying fuel oil relative to non-complying fuel oil
was sufficient justification for a SIP suspension.  EPA was requested
by New York to provide  policy  guidance on  this issue.

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                                     -2-

     Price differentials between complying and non-complying fuel  oils
provide a sufficient justification  for a SIP suspension only when  such
differentials actually cause (or are  anticipated to cause)  the effects
of an energy emergency listed in Section 110(fj(2), i.e.. high levels of
unemployment or a loss of necessary energy supplies for residential
dwellings and such effects could be totally or partially alleviated  by
an emergency suspension.

     Whenever It appears that price differentials nay become part  of the
basis or the basis of a Governor's  petition to the President for t
declaration of an energy emergency. Regional Administrators should make
every effort to assure that the state develops an adequate  record  on the
Impact of price differentials.  Recoanendatfons to the President concerning
petitions for an energy emergency shall not be based on price differentials
in the absence of an adequate record  establishing the impact of  such price
differentials.  Further. In exercising the Section 110(f)(3) disapproval
authority EPA shall examine  ne price. differential Impact of t SIP
suspension to determine Its continued validity and act accordingly.
During the period of a suspension,  price differentials and  the impacts
of price differentials will be monitored by EPA to determine the continued
validity of a price differential basis for a SIP suspension.

II.  Information Mecessary to Document the Existence of An  Energy Emergen
     The following list of Information needs  Is an expansion of those ge
Items listed in  paragraph III (A) on pages  5  and 6 of the  March 6, 1979,
regional guidance.  As the record of any EPA  decision or recommendation
regarding a Section 110(f) waiver request will be primarily the state's
record, a concerted effort should be made to  assure that such record
contains the following information as well  as any available information
on the issues listed in paragraph III(A).  Although EPA should provide
assistance In developing the state's record*  the responsibility of provider
this information rests with the state and the source.

     1.  Identities of affected or potentially affected parties, including T

         (a)  parties claiming a shortage together with the basis of
         their claims,

         (b)  affected customers (ultimate  users), and

         (c)  suppliers (potential or actual) to  parties experiencing
         shortages or cutbacks.

     2.  Information concerning the amount and duration of an expected
shortage including:

         (a)  monthly demand for two calendar quarters before and after
         a SIP suspension,

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                                   -3-

         (b)  projected shortfall of conforming fuel for the period in
         Hem (a).

         (c)  any circumstances affecting a shortage, such as abnormal
         weather conditions

         (d)  unanticipated changes in supply, demand, or availability cf
         transportation.

     3.  A summary of the current inventories of the various parties
affected, including the following information:.

         (a)  by type and sulfur content

         (b)  storage capacity/blending capacity

         (c)  historical comparison of* supplies/inventory over last
         2 years

         (d)  desulfurization capacity and a historical summary
         of such capability, including any recent (3 year) changes
         in desulfurization capacity.

     4;  Information on alternative supplies of available conforming fuel
and documentation of those steps taken to locate such fuels.  An adequate
documentation will  include a list of all suppliers contacted (including
date of contact and mode of contact), the response of each supplier
contacted, copies of correspondence with the suppliers (including telephone
logs), and any other memoranda, notes, or reports evidencing the
availability or unavailability of fuel oil.

     5.  Information on the availability of other fuel supplies which
though not conforming represent a minimal increase in sulfur levels
(i.e.* IS sulfur content versus 0.32 sulfur content).

     6.  A summary of the contractual arrangements between various parties,
suppliers and users and a description of the available options in the
event of a fuel oil shortage.

     7.  What actions have been taken or considered to mitigate the
environmental, energy, and employment Impacts  of the shortage situation
or to conserve conforming fuel (mandatory or voluntary)?  Examples of
such measures may be conservation measures, voltage reductions.
thermostat reductions, wheeling and the substitution of natural gas  for
oil.  The amount of conforming fuel oil saved  by each measure -should be
detailed.

     8.  Which facilities may have  to close down as a result of the
shortages?  What is the potential  impact on employment in the area?

     9."  Which facilities can convert  to alternate fuels?   What is  the
lead time necessary for these facilities to convert?

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     10.  How will  SIP  suspensions alleviate the shortage?

          (a)  what 1s  the  present SIP limitation on fuel use              4

          (b)  what would the new requirement be If the SIP is suspended.

          (c)  how  much conforming fuel would be saved.

          (d)  can  anything within the existing SIP be done to wholly or
          partially alleviate the shortage.

          (e)  What steps will the state undertake to mitigate environ-
          mental  Impacts.

          (f)  can  a fuel user blend conforming and non-conforming fuels
          to minimize any local environmental Impact of using non-
          conforming fuels?

   11.    Which sources would violate NAAQS If the emissions limitations
are suspended? What Is the present attainment status in the affected areas?

     With regard  to a request for a 110(f) suspension based on price
differentials the following additional Information would be required:

     1.  A discussion of fuel prices, Including:

         (a)  a one year history of prices paid for conforming fuel.
         under contract or  on the spot market.

         (b)  the prices of non-conforming fuels by sulfur content.

         (c)  the prices of any available alternative fuels the use  of
         which would not require a suspension.

     2.  The impact of  price differentials of complying fuels relative to
non-complying fuels (at various sulfur levels) on unemployment (e.g.. layoffs
plant closures) and residential energy supplies, including:

         (a)  a examination of various sulfur content fuels and  alternative
         fuels.

         (b)  the mitigating  effects  of  conservation measures and the
         substitution of natural gas  for oil.

III.  Recommendation

         recommend that you sign  the attached memorandum to  the Regional
                                                          x


                                                   •-  £  u [-/u-i -
David S. Hawkins                          Marvin  B.  Ourning

-------
REFERENCES FOR SECTION 8.4

-------
                                                PN 113-88-03-31-048
     Ti        UNITED STATES ENVIRONMEN1AL PROTECTION AGENCY
     I   „.               WASHINGTON. D.C. 20460
                               3 1 MAS J9S3                    OFHCE c<
                                                         AIM AND BADlATiOM
MEMORANDUM

SUBJECT:  Transmittal of Reissued OAQPS eiMS^ilicy
FROM:     Gerald A. End son, Directc
          Office of Air Quality Jwftfirflg^a*?!^Standards

TO:       Air and Waste Management Division Director
          Region II

          Air Management Division Directors
          Region I, III and IX

          Air, Pesticides  and Toxics Management Division
          Directors
          Regions IV and VI

          Air and Toxics Division Directors
          Regions VII, VIII and X

          Air and Radiation Division Director
          Region V


     Attached is the OAQPS policy on Continuous Emission
Monitoring Systems (CEMS)  data.  This policy was originally
issued on July 28, 1987.   However, because of  the  late
transmittal date, FY 1988  implementation of the policy  was
done voluntarily.  The policy, after minor streamlining,  is
being reissued at this time to insure implementation  during
FY 1989.  It has been streamlined by removing  the  outdated
section called "Future Actions.*

     In accordance with the Operating Year Plan, FTEs and
LOE contract funds have been allocated to the  Regional  Offices
for CEMS and compliance monitoring activities.  Implementation
of this strategy should help you utilize these available  resources
more efficiently and effectively.

-------
                            - 2 -

     Furthernore, note that tracking S02 CEMS requirements is
an element of the FY 1989 Strategic Planning and Management
System (SPMS).  The FY 1989 SPMS requires determination and
reporting of the compliance status of SC>2 sources subject to
CEMS requirements.  Specifically, these sources are to be
identified, and their compliance status determined with
respect to CEMS installation, certification, report submission
and emission limits.  While SO2 sources are emphasized in
SPMS, this measure should be carried out for all sources with
CEMS requirements.

     If you wish to discuss this further, please contact me or
Louis Paley of SSCD at FTS 382-2835.

Attachment

cc:  John Calcagni,  AQMD
     Jack R. Farmer, ESD
     William Lax ton, TSD
     Don R. Clay, CAR
     Bruce Armstrong, OPAR
     Paul M. Stolpman, OPAR
     Michael S. Alushin, A ED
     Alan W. Eckert, OGC
     CEMS Technical Coordinators

-------
             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                           WASHINGTON, D.C 20460
                              8 1 MAR 1988
                                                           OFFKEOF
                                                         AIR AND (AOIATION
SUBJECT:  GEMS Policy

APPROVED: Gerald A. End son, Direct?     _  _
          Office of Air Quality Planning and Standards

DATE:
Purpose

     This states the OAQPS policy, which  is effective
immediately, on the use of Continuous Emission Monitoring
Systems (CEMS) data and provides  specific guidance as to how
that policy should be implemented.

Definition

     CEMS is one of several self-monitoring techniques  used
by regulatory agencies to monitor continuous compliance of
sources.  Sampling and analysis of sulfur in fuel to assess
SO2 compliance of sources and recordkeeping for assessment of
compliance with volatile organic  compound (VOC) emission
limitations are two other self-monitoring techniques.

Information

     As the air compliance program resolves initial compliance
problems and sources install control equipment, efforts to
assure continuous compliance become  increasingly  important.
Based on the review of State and  Regional programs that
promote the use of CEMS, OAQPS has found  that CEMS is a
valuable tool for assuring continuous compliance.
Self-monitoring techniques should be integrated  into the air
compliance program as a means of  assessing stationary source
continuous compliance with air quality  regulations.

-------
                            - 2 -

     Some of the States Which effectively use CEMS data in
compliance monitoring and in supplementing or supporting
enforcement actions are Washington (with S02 and total reduced
sulfur data) and Tennessee (with opacity monitoring data).
Ohio has a comprehensive program for requiring CEMS in
operating permits which has resulted in installation of CEMS
on a wide variety of source types.  Pennsylvania and Indiana
have highly structured .CEMS programs* including penalty
programs based on reported excess emissions.
     OAQPS is committed to promoting, encouraging and utilizing
CEMS data as a compliance assessment measure.  Our Office is
also committed to the use of CEMS in direct enforcement where
CEMS is the compliance test method and for supporting enforcement
where CEMS is not the compliance test method.  OAQPS encourages
the use of CEMS data by States in compliance monitoring and-
in supplementing or supporting enforcement actions.  If it is
technically feasible,  CEMS requirements should be incorporated
into NSR preconstruct ion reviews, operating permits and
resolutions of enforcement actions including consent decrees
and administrative orders.

     CEMS should be used to assure continuous compliance of
sources in both attainment and nonattainment areas.  Resources
should be allocated to monitor continuous compliance of .
sources in areas where the greatest environmental benefit is
likely to occur.  Therefore, priority should be given to
NESHAPS sources subject to continuous monitoring requirements
(currently 40 CFR 61, subparts F, N, O and V) and to SIP
(including major and minor NSR sources) and NSPS sources in
nonattainment areas (for the pollutant for which the area is
in nonattainment).  Next, CEMS should be used to monitor the
continuous compliance of NSPS and PSD sources in attainment
areas.  Sources with excessive emission limit excursions
identified by CEMS data should be targeted for follow-up
action (on-site inspection or $114 letter).  Where CEMS is
the compliance test method, CEMS data should be used to identify
significant violators.  These sources will then be tracked in
accordance with the "Timely and Appropriate Enforcement
Response Guidance," issued by OAR on April 11, 1986.

     There are two different types of CEMS data - direct
compliance monitoring data and excess emissions monitoring data.
Where CEMS is the compliance test method, the status of the
source is established and documented by CEMS data.  Compliance
status determined by CEMS data should be  coded  in  the Compliance

-------
                            - 3 -

Data System (CDS).  Violations identified by direct compliance
monitoring data require appropriate enforcement action
including the assessment of penalties.  There are plans to
modify the OEM Subset of CDS to allow for entry of direct
compliance monitoring data.  Use of CEMS data for direct
enforcement where CEMS is the compliance test method is
discussed in "Guidance:  Enforcement Applications of Continuous
Emission Monitoring System Data," issued by OAQPS and OECM on
April 22, 1986.

     The second type of CEMS data is where CEMS is not the
compliance method.  In these cases,  CEMS data should be used
to monitor the continuous compliance of sources and to initiate
follow-up action including on-site inspections, requesting
further information, and issuing a notice of violation. This
application is also discussed in the aforementioned guidance.

Conclusion

     CEMS is an important technique for monitoring the
continuous compliance of stationary sources. It should be an
expanding component of the air compliance program.  Evaluation
of CEMS data has been shown to be effective for identifying
sources with continuous compliance problems and has allowed
agencies to utilize their compliance monitoring resources
more effectively.

-------
REFERENCES FOR SECTION 8.5

-------
                             August 25, 1988
NOTE TO JERRY EMISON


SUBJECT:  Gibson County, Indiana, S02 Plan

THRU:     John Calcagni


     This note is a "heads up" concerning Indiana's  S02  control  plan  for
Gibson County.  The plan allows for delayed  compliance with the  SO?
limitations (one limit for attainment of the primary NAAQS and a second
limit for attainment of the secondary NAAQS  with interim milestones)  for
Public Service of Indiana's (PSI) Gibson Power Plant. The plan
also allows PSI Gibson to come in with alternate limitations.  We  concur
with the plan for the reasons  stated in the  attached analysis.

     If you have any questions, I will be happy to answer them.
                                           Bob Bauman

Attachment

-------
                       Gibson County, Indiana,  S02  SIP

Issue

     Delayed compliance schedule.

Background

     The State plan contains the following requirements:

     1.  SO? Limitations
           (Ibs/mmBtu)          Unit                 Compliance Dates

              1.2                5           All times

              5.1               1-4          Now to 12/31/91

              3.57              1-4          12/31/91 -  12/30/93  (to  attain
                                             the primary 24-hour  NAAQS)

              3.13              1-4          12/31/93 -  12/30/95

              2.57              1-4          12/31/95 (to  attain  the
                                             secondary 3-hour NAAQS)

     2.  PSI Gibson is required to submit  a compliance plan prior  to 12/31/88
specifying control measures and increments  of progress.   The plan  may  also
contain alternative individual  limitations  for  units 1-4.

     3.  The IDEM is required to present a  compliance plan  to the  Indiana
Board prior to 11/30/89 and to  submit a Board-adopted plan  to EPA  as a SIP
revision by 5/30/90.

Analysis

     The date to attain the primary NAAQS  (12/31/91)  is within the 3-year
timeframe in section 110(a)(2)(A) for EPA's final approval  of the  State's
plan.  The date to attain the secondary NAAQS (12/31/95)  is reasonable.  In
the case of attainment of the secondary NAAQS,  section 110(a)(2)(A) requires
that a plan specify a reasonable time to attain.  Although  EPA has defined
reasonable at 40 CFR 51.110(c)(2),  EPA does not have  a written policy  on
what length of time constitutes a reasonable time.   In past cases, EPA has
deferred to the State.

     PSI has not selected or been required  to select the  control method to
achieve the limitations.  The State submittal outlines three control methods
and estimates times as required by section  110(a)(2)(B) to  accomplish
compliance:  switch to low sulfur coal, install two FGD's with interim switch
to low sulfur coal, and install one FGD with some low sulfur coal.

-------
     Indiana has provided justification which is summarized as follows.

State Justification

     The compliance schedule and  cost  estimates recognize that PSI's  existing
coal  contracts limit  their ability to  rapidly substitute lower sulfur coal
for their existing supply.  The State  has  provided for:

     - Sufficient time to renegotiate  current coal contracts to the benefit
       of the utility, ratepayers, coal companies, coal miners, and
       communities.

     - Sufficient time to design  and construct one or two FGD's if necessary.

     - Time to thoroughly investigate  emerging clean coal technologies.

     - Phased-in costs.

     - Time for local coal companies to develop existing coal reserves which
       could then supply  compliance fuel.

Conclusion

     Social and economic  impacts  are substantial and good cause exists for
postponing application of control technology for more than 3 years from  plan
submission.

     The degree of emission reduction  (47  percent reduction), the social  and
economic problems involved in carrying out the control options, displacement
of over 3 million tons of IN/IL coal or the design/construction/installation
of two FGD's or combination thereof, the length of time for phase-in  of
control equipment, and the increased costs to ratepayers warrant effort  to
minimize impacts consistent with  the requirements of the Clean Air Act and
justify more than a 3-year schedule.

-------
                                                     PN 110-36-08-07-
            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                          WASHINGTON, D.C. 20460
                          AUB-TBBS
All
MEMORANDUM
SUBJECT:  Policy on SIP Revisions Requesting Compliance Oate
          Extensions for VOC Sources
FROM:     J. Craig Potter
          Assistant Administrator
            for Air and Radiation
TO:       Regional Administrators    
-------
      Policy on SIP Revisions Requestina Compliance Date
                  Extensions for VOC Sources


    In order to approve a source-specific compliance date
extension, two tests must be met.  First, a State must
demonstrate that the extension will not interfere with timely
attainment (attainment by the formally established attainment
date) and maintenance of the ozone standard and, where relevant
"reasonable further progress" (RFP) towards timely attainment.  I/
The attainment date will generally be December 31, 1982, or the ~
date established under Section 110 where the State has adequate-
ly responded to a request for SIP revisions under S110(a)(2)(H),
or December 31, 1987 in ozone extension areas.  The demonstra-
tion may be based on a comparison between the margin for
attainment predicted by the demonstration submitted with the
approved ozone SIP  2/ and the increased emissions that would
result under the prooosed compliance date extension.  3/ If
there is an adequate margin to absorb the increased emTssions
(and the extension would  ,ot interfere with RFP), then EPA
may conclude that the compliance date extension will not
interfere with the attainment and continued maintenance of
the ozone standard.
I/  The reference to a demonstration of RFP towards timely
attainment is not intended to redefine RFP but only reaffirms
that an RFP analysis is required.

 V  For areas where revisions to the Part D SIP are required
(such as 1987 extension areas or SIP call areas) and those
revisions have not been fully approved, the State would have
to submit a demonstration the eauivalent of that required
for EPA anoroval of the ozone SIP.  Without an approvable
demonstration EP\ cannot determine whether the individual
compliance date extension will interfere with timely attain-
ment and maintenance of the standard, or with RFP.  A
de minimus showing would not be acceptable, since in the
aggregate even very small sources would contribute signifi-
cantly to ozone formation.

 3/  In making such a comparison it will be necessary to
BTtermine what, if any, portion of the margin has been utilized
by new sources of VOCs that may have located in the area
since the SIP was approved, as well as by existing VOC sources
that may have already been granted compliance date extensions.

-------
                             -2-

If the State or EPA believes that there has been a substantial
chanqe in the. inventory of VOC sources or total voc emissions
since the ozone SIP was approved so- that the margin of attain-
ment has channel sionificantlv, a revised demonstration in
supoort of the source-snecific SIP revision should be submit-
ted. _4/

     Second, time extensions also must be consistent with the
requirement that nonattainment area SIPs provide for "imnlenen-
tation of all reasonably available control measures as
expeditiously as practicable"  ($172(b)(2)].  Expeditiousness
should be demonstrated by determinina when the source was
first put on notice of the applicable requirement (e.g.,
adoption of the current regulation by the State) and the tim
-------
                             -3-

revision.  Unless it can be shown that the original tiraeframe
approved in the SIP did not allow sufficient time for an
economically and technologically feasible compliance plan to
be implemented, a SIP revision for a compliance date extension
beyond the timeframes set forth above should be denied.

    In conclusion, both the demonstration of timely attainment
(including RFP where relevant) and maintenance and the
expeditiousness tests must be met before a State SIP revision
can be approved.
                                        q Potter
                                 Assistant Administrator
                                   for Air and Radiation

                                         AJ6-7B66
                                                                  i

-------
REFERENCES FOR SECTION 9.2

-------

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       "4
V  ^^^rf  *
\ ^j/V J     UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
'*-.   .C                   WASHINGTON DC 20460
  t awC1

                            FES I  5 1989

  Mr. John W.  Boston
  Vice President                                        -ft"*,. ~ >',-,.>CL
  Wisconsin Electric Power Company
  Post Offi.-e  Box 2046
  Milwaukee,  Wisconsin  52301

  Dear Mr. Boston:

       This is a revised final determination, on reconsideration,
  regarding the applicability of the Clean Air Act's New Source
  Performance  Standards (NSPS) and Prevention of Significant
  Deterioration (PSD)  provisions to the proposed life extension
  project at the Port Washington steam electric generating station,
  which is owned and operated by Wisconsin Electric Power Company
  (WEPCO).  This determination supplements the determination set
  forth in an  October 14, 1988 letter to you from Lee M. Thomas,
  which in turn incorporated my September 9, 1988 memorandum.  I
  find it necessary to reconsider EPA's original determination and
  issue this revised determination in part to address matters
  raised by,  and new information submitted by, WEPCO
  representatives since the October 14 letter.  WEPCO believes that
  these new aspects call .into question the accuracy of EPA's prior
  determination.

       For the following reasons,  EPA today reaffirms, with limited
  exceptions detailed below, its earlier findings regarding the
  Port Washington life extension project.  I hereby incorporate by
  reference the October 14 letter and the September 9 memorandum,
  and reaffirm the findings and conclusions in those two documents
  except where they are specifically superseded below.

       This action constitutes final agency action for purposes of
  judicial review under section 307(b) of the Clean Air Act, 42
  U.S.C.  S 7607(b).

       I.  CAPITAL EXPENDITURE

       SPX explained in its earlier determination that under the
  General Provisions of the NSPS regulations, a physical or
  operational  change which increases emissions at an affected
  facility is  a modification subject to NSPS.  See  40 CFR  60.14U).
  However, 40  CFR 60.14(e) provides certain exceptions  to  that
  general rule.  In particular, section 60.14(e}(2) provides  that
  an increase  in production rate at an affected facility would not,
  by itself, be considered a modification if  that increase is
  accomplished without a capital expenditure.

       As has  been discussed in recent meetings between WEPCO  and
  EPA,  the October 14, 1988 letter  from Lee M. Thomas was  based in

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                              - 2 -
part on information supplied by WEPCO in a letter dated October
11, 1988 which indicated that the increase in production rate  at
each of the five units would be accomplished with a capital
expenditure.  On October 13, 1988,  and November 22,  1988 WEPCO
submitted revised capital expenditure calculations.   EPA has
carefully reconsidered its earlier  determination based on those
two additional submissions.1  However, as explained below,  they
provide no grounds on which to alter EPA's earlier finding on
capital expenditure.

     The modification provisions are designed in part to subject
to MSPS those emissions increases caused by an increase in
production rate that is in turn attributable to a significant
investment in improvements to the capital stock.  Consistent with
this intent, capital expenditure calculations employ the total,
as opposed to annual, cost of a given project at each affected
facility.

     Thus, the December 16, 1975 preamble to the promulgated
definition of capital expenditure states that "...the total cost
of increasing the production or operating rate must be
determined.  All expenditures necessary to increasing the
facility's operating rate must be included in this total"  (40 FR
58416) (emphasis added).  The total coat of the planned work at
each facility is then compared to the product of the existing
facility's basis and the annual asset guideline repair allowance
percentage used by the Internal Revenue Service for taxation
purposes.  If the total project cost for each facility exceeds
-.he product of the basis and repair percentage for each facility,
there is a capital expenditure at that facility.  See 40 CFR
60.2.

     It is appropriate to accumulate, for capital expenditure
purposes, the cost of the renovations necessary to increase the
facility's production rate, because  the overall work necessary to
increase a facility's production rate pursuant  to a particular
renovation project is the same whether  the work  is performed  in
one calendar year or during two  (or  more) years.  The use  of
annual costs could encourage sources  to distort  normal  business
planning.by artificially stretching  out costs  over time as a
means of,-evading a finding  of  capital expenditure  and  consequent
NSPS
     1    The October 13,  1988  submission was not received in
tiae to be considered in  issuing BPA's  letter of October 14,
1988.

     2 Indeed, it  appears  that WEPCO may have extended the planned
length of the Port Washington life extension project for
precisely this  purpose  after  being informed by EPA in the Octobe^

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     Rather, the purpose of the exemption in 40 CFR 60.14(e)(2)
is to exclude from NSPS coverage increases in production rate
that are accomplished without "an expenditure for long-term
additions or improvements."  See 39 FR 36948 (preamble to
proposed NSPS regulationsi.  Where the economic realities of the
case are that increased production and,  hence,  emissions, are due
to normal fluctuations in the business cycle rather than a
considered decision to invest in substantial capital
improvements, the NSPS do not apply.

     The letter submitted on October 13 from Neil Childress of
your staff to Gary McCutchen of EPA presented updated basis
figures (determined by multiplying the original capital
investment in the facility by a coefficient representing the
inflation in construction costs between the year of the
investment and the year in which the capital expenditure
calculation is made) for each of the emissions units at Port
Washington.  These figures included costs of repair or
replacement of equipment, such as steam turbines, that is not
part of the existing affected facility for NSPS purposes.  Since
applicability determinations under the NSPS modification
provisions are based on the existing affected facility, capital
expenditure determinations likewise are limited to costs
associated with the affected facility.  For NSPS Subpart Da, the
affected facility is the steam generating unit as defined at 40
CFR 60.40a.  Therefore, EPA staff requested WEPCO to limit the
basis figures to the steam generating unit.

     The November 22, 1988 letter from Neil Childress to Walt
Stevenson of EPA presented revised cost figures on the renovation
work on steam generating units 1-4 related to the capital
expenditure calculations.  These November 22 basis figures are
understood to be limited to costs associated with the affected
facility.  The November 22 letter also presented a revised and
extended schedule for the renovation work, under which  the costs
of repairs in any one year would not exceed  the product  of the
annual asset guideline repair allowance percentage, which  is  5%
for electric utility steam generating units, and the  basis of
each unit.  Mr Childress' letter concluded  that  since 5% of  each
14, 1988 letter that there would be  a  capital  expenditure  using
the original schedule.  The unit 1 renovations have  been extended
from four years to five; unit  2 has  been extended from four  years
to six; unit 3 has been extended from  three years to six;  unit 4
has been extended from two years to  four.  (Compare  Telecopier
Transmission, Neil Childress,  WEPCO, to Gary McCutchen,  EPA,
October 11, 1988  (table attached to  Response to Question No. 4)
with Letter, Neil Childress, WEPCO,  to Walt Stevenson, EPA,
November 22, 1988, at page 2.)

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                              - 4 -
unit's updated basis is not exceeded by the cost of renovation
work in any one year, there would not be a capital expenditure  at
any of the units.  The revised figures also show that the total
costs for each unit over the entire renovation period would
exceed the 5% basis figure by 50% to 325%.

     As explained above, it is the total cost/ not the annual
cost of a renovation project that determines whether a capital
expenditure has occurred.  Accordingly, based on the calculations
and total project costs in WEPCO's November 22. 1988 letter,  the
proposed project would result in a capital expenditure at each  of
the five Port Washington units, and those units would not qualify
for the exemption in the NSPS modification provisions at 40 CFR
60.14(e) (2) .'  As to unit 5, WEPCO did not submit cost data
limited to the affected facility.  Thus, I have no reason to
alter EPA's original determination that WEPCO has not
demonstrated that the increase in production rate at unit 5 can
be accomplished without a capital expenditure.

     In addition, I have determined that it is more appropriate
to utilize the original basis of each affected facility  (as
adjusted to reflect past capital improvements) , expressed in
nominal dollars, rather than the updated basis, expressed in
current dollars, in determining NSPS applicability.  Thus, even
if WEPCO were correct that annual renovation costs, rather than
total costs, should be used in capital expenditure calculations,
in this case a comparison of annual renovation costs and the
     3    WEPCO has argued that since the definition of capital
expenditure at 40 CPR 60.2 refers to the IRS  "annual asset
guideline repair allowance percentage"  (emphasis added), EPA  is
bound by the literal language of its own regulations to use
annual rather than total project costs  in making capital
expenditure calculations.  However, the regulations do  not
dictate such a result.  Instead, on their face they call for  a
comparison- between total renovation costs and the  annual asset
guideline.  Bad SPA intended the result suggested  by WZPCO,  it
would have explicitly called for comparison of annual  costs  of
the change for projects exceeding one year  with the annual  asset
guideline.  This it did not do.  In addition, as  indicated  above,
the purpose of the capital expenditure  provision would not  be
served by annualizing project  costs for capital expenditure
purposes.

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                              - 5 -
 (adjusted) original basis of each affected facility shows that a
 capital expenditure would still occur."

     In making a more detailed inquiry into the capital
 expenditure matter in response to WEPCO's request, I have found
 that neither the NSPS General Provisions nor the preamble thereto
 contain any discussion of the matter of original versus updated
 basis, and that EPA has rarely been called upon to address this
 issue.  However, upon review of EPA's past practice in this area,
 I have found that in developing performance standards for
 particular industries, EPA has provided the regulated community
 a mechanism to calculate the original basis in making capital
 expenditure calculations.  See, e.g., "Equipment Leaks of VOC in
 Petroleum Refining Industry — Background Information for
 Promulgated Standards," EPA-450/3-81-015b, December 7, 1983.'
 This suggests that EPA intended the original basis to be utilized
 to determine whether a capital expenditure is going to be made.

     Moreover, I believe that the use of original basis is
 consistent with the overall purpose of the NSPS modification
 regulations in general, and the capital expenditure provisions  in
 particular.  The effect of using original basis is that the
 greater the age of an affected facility, the more likely it  is
 that a/given investment resulting in increased production will  be
 deemed a capital expenditure and trigger NSPS.  This is
 consistent with Congress* intent in adopting new source
 performance standards.  Older facilities are more likely to  use
 outdated equipment which does not reduce pollution to the extent
 more current technology does.  Congress included modified sources
 within the new source performance standards of section 111 to
 ensure the use of new technology on such sources.  See CAA
 §§ lll(a)(2), lll(a)(4);

          II.  AIR HEATER RENOVATIONS AT UNIT 1

     In January 1989, WEPCO asked EPA to determine whether
 replacement of the heat transfer surface elements on  the unit  1
 air heater would trigger PSD or NSPS applicability.   However,  in
 a letter dated February 3, 1989, WEPCO withdrew this  request.
     4  It is worth noting in  this  regard  that  if  EPA were  to
adhere to a literal reading of  IRS  guidelines as urged by WEPCO,
it would have no choice but to  use  original  basis  as  well as
annualized costs in making capital  expenditure  calculations for
Port Washington.  Using this formula,  WEPCO  would  exceed the
repair allowance percentage at  units  1-5 for  most years,  and
NSPS would still apply.

     9    This Background Information Document  provides an
alternative to the method prescribed  in the  General Provision
when it is difficult  to determine original costs.   The formula
uses replacement costs and an  inflation index  to  "approximate  the
original cost basis of the affected facility."

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                              - 6 -


asserting that it could not receive approval in the time
necessary, while reserving the right to renew it at a later time
as to unit 1 or any other unit at Port Washington.   Because this
issue may arise again, and because I believe it bears upon the
project as a whole, I find it appropriate to address the matter
of air heater element replacement.  Based on the information
submitted regarding this new plan, as well as the earlier
information submitted regarding air heater replacement work, I
conclude that if WEPCO were to proceed under its revised and now
withdrawn plan, it would not alter EPA's earlier finding that PSD
and NSPS would apply.  In order-to explain this finding, it is
useful to first summarize the relevant facts.

     Originally, WEPCO advised EPA that it planned to replace the
air heaters at units 1 - 4 in their entirety.  As WEPCO
explained:

          Air heaters are subject to the erosive and
     corrosive effects of the flue gas passing through them
     and require regular maintenance of the heat transfer
     surfaces.

          The plate-type air heaters on Units 1 - 4 do not
     lend themselves to replacement of the individual
     elements.  Worn sections have been patched and blocked,
     where accessible, over the years.  Now, however,
     overall corrosion and perforation h«s passed beyond the
     practical point of repair, and replacement of the air
     heaters is the economical way to maintain the air
     preheater system.

          The air heaters on Port Washington Unit 5 and  the
     other units on the Wisconsin Electric system  [other
     than Port Washington units 1-4] are of the Ljungstrom
     basket design, which allows  the heat transfer surfaces
     i_ .akets) to be replaced easily.  ***

See, e.g.. List of Port Washington Projects, p. 6  (Attachment to
April 22, 1988 letter from John W. Boston, WEPCO,  to  Gary
McCutchen. EPA).

     On January 11, 1989, WEPCO informed  the State  of Wisconsin
that it was considering replacing all  the plate elements at unit
1.  In a letter to the State of Wisconsin,  WEPCO described this
project as routine repair work, "necessary  to  halt the continuing
decrease in the capability of Unit  1," and  submitted a list of 40
generating units where significant  portions of the air heater
have been replaced.   See Letter,  with  attachment,  from Mark P.
Steinberg, WEPCO,  to  Dale Ziege,  Wisconsin  Department of Natural
Resources, January 11, 1989.

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                              - 7 -
     In a telephone conversation with EPA staff the next day,
WEPCO indicated that it desired to perform the unit 1 plate
replacement work during a current unit outage; that it intended
to replace only half, not all, of the elements, at a cost of
approximately 3500,000; that it intended to later scrap this  work
and replace the entire air heater as described in the original
scope of work, at a cost of 32,600,000; and that it was
considering performing the sane work at unit 4 also.  See Record
of Telephone Conversation between David Schulz, EPA, and Mark
Steinberg. Neil Childress, and Walter Woelfle, WEPCO, January 12,
1989.

     In a meeting on January 17, 1989, WEPCO related that if  it
replaced half of the plate elements now, it probably would
replace the remainder as part of the total renovation project at
a later date and not replace the air heater in whole.  WEPCO  also
related that complete replacement of the plate elements should
increase unit 1's capability to the original design capacity.
Finally, WEPCO stated in response to questions from EPA staff
that none of the air heaters or plate elements at units 1-4 had
ever been replaced in the past.  See Memorandum, Meeting with
WEPCO regarding the Port Washington Generating Station, from
David Schulz. EPA, to Files, January 27, 1989.

      In addition to the above information, I note  that WEPCO's
list of 40 units at which air heater element replacements have
occurred include no units containing plate elements such as those
on units 1 - 4 at Port Washington.  Instead, all of the examples
submitted are of the Ljungstrom basket type or the  tubular type.
I conclude that those examples are too dissimilar to  the plate-
type elements in use at units 1 - 4 to support WEPCO's contention
that the work in question is routine.*

     Based on all of the foregoing, I find no reason  to depart
from EPA's earlier conclusion that PSD and NSPS would apply  to
the air heater work on unit 1.  It appears that despite WEPCO's
recent recharacterization of this work as a separate  project,  it
is properly viewed as an integral part of the overall Port
Washington, life extension project.  WEPCO cannot  evade PSD and
NSPS applicability by carving out, and seeking separate  treatment
of, significant portions of an otherwise integrated renovation
program. '"Such piecemeal actions, if  allowed  to go  unchallenged,
could readily eviscerate the clear intent of  the  Clean Air Act's
     •Further, even the list of  air  heater replacement work
submitted by WEPCO did not establish this as routine repair work.
Those 40 units comprise only a small fraction of  total operating
utility units, and even at the 40  units,  air heater repair or
replacement appears to have been a one-time occurrence, not
routine repair.

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new source provisions.  Accordingly,  if seen as part of  WEPCO's
previously proposed renovation project,  the recent
recharacterization of the unit 1 air  heater work does nothing  to
alter the factors determinative of PSO and NSPS coverage.

     III.  CAPACITY TESTING FOR UNITS 1 - 4

     A.   Impact of Test Results on NSPS Applicability.

     In Lee Thomas' October 14, 1988  letter, EPA stated  that
baseline emissions for NSPS purposes  are determined by nourly
maximum capacity just prior to the renovations.  EPA relied on
actual operating data to determine that current maximum  capacity
at units 1-4 has significantly deteriorated,  such that the
restoration of original design capacity through the life
extension project would result in corresponding emissions
increases.  As to unit 5, EPA stated  that current capacity at
unit 5 is zero because it is physically inoperable.  EPA rejected
WEPCO's unsupported assertions that all five units could be
operated at high capacities, but held open the possibility of
further discussions on that point.  Subsequently, in November and
December of 1988, following discussions with EPA, WEPCO conducted
capacity tests to determine current actual capacity.

     Based on its review and analysis of the test data,  EPA finds
that the tests adequately demonstrate that units 2 and 3 can be
operated at their original design capacity on a sustained basis.
Accordingly, I hereby supersede EPA's earlier determination and
find that NSPS would not apply to units 2 and 3 by virtue of the
proposed renovations so long as the capacity of these units after
completion of the work is no higher than demonstrated in the
recent tests (694,000 and 690,000 pounds of steam per hour,
respectively).  As discussed in more detail below, this revised
NSPS determination does not affect our determination that the PSD
provisions would be applicable to the proposed work on  these  two
units.

     During the tests on units 1  and  4, WEPCO  was  able  to operate
these units at 497,000 and  586,000 pounds  of steaa per  hour,
respectively, representing  72% and 89% of  these  units'  respective
original design capacities.  These tests  are adequate to confirm
EPA's original determination  that units  1 and  4  are  not capable
of operating at their original design capacities,  and that
restoration of the lost  capacity  through the  life  extension will
trigger NSPS coverage.   EPA today also determines  that  these
tests are not adequate  to  show that  current actual capacity  for
purposes of establishing the  NSPS baseline is  as high as the
levels achieved during  the  recent tests.   Rather,  I reaffirm  that
baseline for those units is determined by the lower capacities
reflected in recent  actual  operating data as set forth  in Lee
Thomas* October  14 letter.  EPA must reject the tests for

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                              - 9 -
purposes of establishing actual NSPS baselines because during the
testing discussed above, there were significant, measured
exceedances of the applicable particulate mass emission limit,
and several measured exceedances of the applicable opacity limit
contained in the Wisconsin State Implementation Plan.  One of the
purposes of these tests was to determine the maximum actual
capacity of the Port Washington units that can be achieved in a
lawful manner.  As a consequence of the measured exceedances,
WEPCO's tests cannot be relied on to demonstrate that the company
could lawfully sustain the levels achieved during the testing.

     Regarding unit 5, I find that by declining to conduct or
schedule capacity tests, WEPCO has effectively conceded that unit
5 is at present inoperable.  Therefore, I reaffirm that its
baseline for NSPS purposes is zero.

     B.  Impact of Test Results on PSD Applicability.

     In its February 3, 1989 letter, WEPCO asserted that EPA's
October 14, 1988 determination assumed that the emission rate of
each unit would increase following the renovations.  Thus, WEPCO
claims, EPA did not address the question whether units that  are
not increasing their emission rates following renovation can be
deemed to trigger PSD.  WEPCO is incorrect on both counts.

     EPA's prior determination explained that under the PSD
program, unlike NSPS, baseline emissions are determined by
representative actual emissions prior to the physical or
operational change.  Accordingly, the results of testing
conducted by WEPCO, intended to determine current maximum hourly
capacity, have no impact on the existence of a  significant net
emissions increase for PSD purposes.  Hence, those test results
provide no reason to alter EPA's prior determination regarding
PSD applicability.

     Actual emissions are the product of the emission rate
(amount of pollution per unit of production or  throughput, e.g.,
pounds of sulfur dioxide per ton of coal combusted), the
production rate or capacity utilization  (amount of production  or
throughput P«r boor, e.g., tons of coal combusted per hour), and
the hours>-~«f operation  (e.g., hours per year).  In  its prior
determination, SPA explained that an increase in any one  of  these
three factors, if attributable to a physical or operational
change, can trigger an emissions increase  for PSD purposes,  and
rejected WBPCO's contention that only  increases in  the emission
rate were determinative.  In so doing, BPA explicitly assumed
that emissions increases at Port Washington would come not from
an increase in emission rate, but rather  from  increases  in
production rate or hours of operation.   See Memorandum from Don
R. Clay, September 9, 1988 at 8.

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                             - 10 -


     WEPCO further i.T.piies ir. its February 3.  1939 letter that   ™
the demonstration that uni's 2 and 3 can operate now at r.axi-ur  '
design capacity means that ther* will be no increase in
production rate for PSD purposes following the renovations.   This
is not the case because PSD baseline emissions are determined by
representative actual emission rate, production rate,  and hours
of operation prior to the physical change.  Representative actual
emissions are determined by examining the actual emissions
during a representative two year period,  (See 40 CFR
52.21(b)(21)(ii)) which in this case the Administrator determined
to be 1983 and 1984 (See Lee Thomas' Oct. 14 letter, at 5).   The
hourly capacity demonstration for NSPS purposes is not relevant
to the PSD analysis.

          IV.  NSPS OPERATIONAL LIMITATIONS

     In my September 9, 1988 memorandum, I pointed out that an
affected facility cannot avoid NSPS applicability by offsetting,
through the use of fuel with a lower sulfur content, an increase
in the emission rate that would otherwise occur due to a physical
or operational change.  As I explained at that time, 40 CFR
60.14(e) provides that use of an alternative fuel or raw material
— such as higher-sulfur coal — which an existing facility was
designed to accommodate before a physical or operational change
does not constitute a modification for NSPS purposes.  It follows
that the facility cannot avoid NSPS by switching to lower-sulfur
fuel to counteract a prospective increase in emission rate
because, under the regulations, the facility would always have  to
option to switch back to a higher-sulfur  fuel at a later date
without triggering NSPS.

     Subsequent t'o me issuance of EPA's  October 14, 1988 letter,
WEPCO inquired whether it might be able  to utilize lower-sulfur
coal to avoid NSPS at Port Washington, notwithstanding the
regulatory provision explained above, by  agreeing to federally
enforceable permit conditions that would  bar  the company from
switching back to higher sulfur coal  in  the future.  Restrictions
of this nature are acceptable for netting transactions under the
Act's PSD provisions.  However, the statute reflects a basic
political decision that fossil fuel-fired sources not  rely  only
on natural occurring less-polluting fuels to  comply with the
NSPS.  Instead, Congress declared that  compliance must depend  in
part upon the application of  flue gas treatment or  other
pollution control technologies.  Thus,  section 111(a)(1)(A)(ii)
defines "standard of performance" for fossil  fuel-fired  sources
as

     requiring  the achievement of  a percentage reduction in
     the emissions from such  category of sources from the
     emissions which would  have  resulted from the use of

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                             - 11 -
     fuels which are not subject to treatment prior to
     combustion ... .
Congress further clarified this point in a later paragraph of
section 111(a) by adding:

     For the purpose of subparagraph (1)(A)(ii).  any
     cleaning of the fuel or reduction in the pollution
     characteristics of the fuel after extraction and prior
     to combustion may be credited ... to a source which
     burns such fuel.

     This core policy judgment is reflected as well in the
legislative history of the 1977 Clean Air Act amendments.  For
example, the Conference Report states:

          The Senate concurs in the House provision with
     minor amendments.  The agreement requires (1) that the
     standards of performance for fossil fuel-fired boilers
     be substantially upgraded to require the use of the
     best technological system of continuous emission
     reduction and to preclude use of untreated low sulfur
     coal alone as a means of compliance;  ...  (3) that for
     fossil fuel-fired sources, the new source performance
     standards must be comprised of both a standard of
     performance for emissions and an enforceable
     requirement for a percentage reduction in pollution
     from untreated fuel.

H.R. Rep. No. 95-564, 95th Cong., 1st Sess. 130.

     Because the will of Congress is so clear  that lower-sulfur
fuels alone will not suffice to comply with NSPS, it would be
inconsistent with the legislative intent for EPA  to allow sources
to use lower-sulfur fuel to avoid coverage of  NSPS in the first
instance in the manner suggested by WEPCO.  If EPA were  to follow
such a course, numerous modifications to existing facilities
could escape coverage in a manner contrary to  the statutory
purpose. -


     V.  THE TIMING OF THE LIFE EXTENSION  PROJECT

     In discussions with EPA, WEPCO has challenged, on  grounds  of
timing, EPA's position on baseline emissions for  NSPS purposes.
In its prior determination, EPA explained  that under  the NSPS
regulations, baseline emissions are determined by hourly maximum
capacity just prior to the renovations.  Thus, the  baseline  for
unit 5 at Port Washington is zero because  the  unit  has  been  shut
down for several years due to safety  concerns.  In  response.

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                             - 12 -
WEPCO has presented the hypothetical question whether EPA would
still have found a zero baseline if unit 5 had been shut down on
a Friday due to some unexpected or catastrophic failure of a
major component previously in good working order,  and WEPCO had
sought to replace that component on the following Monday.  WEPCO
asserts that in such circumstances, EPA should have established
baseline emissions using the emissions rate just prior to the
breakdown.

     I find it unnecessary to engage in speculation by addressing
the hypothetical situation presented by WEPCO, because it is far
removed from the true circumstances surrounding the proposed Port
Washington life extension project.  In fact, unit 5 has been shut
down for over four years, not a veekend, and that is the
foundation cf EPA's analysis and determination.

     In conclusion, with limited exceptions, EPA today reaffirms
the decisions reached in the October 14 determination.  In
addition, EPA has concluded that the work on each unit
constitutes a capital expenditure and that the proposed air
heater plate replacement work on unit 1 would trigger PSD and
NSPS.  As a result of the capacity test demonstration, however,
I find that units 2 and 3 at Port Washington can be operated at
their design capacity on a sustained basis.  Therefore EPA's
earlier determination with respect to NSPS applicability  is
superseded and NSPS would not apply to units 2 and 3 by virtue of
the proposed renovations so long as the capacity of these units
after the completion of this work is no higher than demonstrated
in the recent tests.  This determination does not affect  PSD
applicability for these two units.  If you should have any
questions about the foregoing, please feel free to contact  me.
Thank you for your cooperation in this matter.
                                    Sincerely,
                                    Don R.  ClaJ
                                    Acting  Assistant Administrator
                                      for Air & Radiation

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 APPENDIX B
S02 CHECKLIST

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                     SO2  Checklist
This checklist was developed from several other
checklists and from the SC>2 Guideline itself for use in
SIP processing oversight as required by SIP processing
reform.  It should be used as a guide to identify
problems when reviewing a SIP and to prevent problems
from occuring when writing a SIP.  This checklist is an
overview and is not intended to be comprehensive.
Readers are encouraged to refer to the appropriate
chapter in the SO2 Guideline for more information.

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                                                           sdps/jvitas


                          SO; CHECKLIST          YES HQ REFERENCE
Determining Air Quality Status of Areas

     *    Modeling is used in demonstration
          (see below)

     *    Justifies exclusion of any areas as
          not ambient air

     *    Demonstration that SIP is being
          implemented

     *    Redesignation will result in a
          change in emission limits

               Redesignation allows
               emission increase

               Emission increase justified
               by SIP revision

     *    Monitoring includes eight
          quarters of data showing
          attainment

Ambient Air Quality Monitoring and Data Usage

     *    Monitoring data are included

               Data are quality assured

               Data are part of
               SLAMS network

     *    Monitors located at points
          of expected maximum ground
          level concentrations

Air Quality Modeling

     *    Specifies version of Guideline on Air
          Quality Models (Guideline) used

               If prior to current version,
               specifies reason for
               grandfathering

     *    Specifies model(s) used

     *    Specifies terrain

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Specifies the 5-year set of
meteorological data used

     If on-site data exist but were
     not used, provides rationale

Outputs include 3 and 24 hour and
annual average results
Inputs reflect maximum allowable
emissions for short-term analyses

     Justifies treatment of any
     emissions not input at
     maximum allowable

Justifies stack heights input with
respect to good engineering practice
(GEP) requirements

     Modeling does not credit above
     formula GEP stack height

Justifies any merged gas streams
input with respect to stack height
regulation

Does not include varying
emission rates with
meteorological conditions

Specifies background sources or
justifies absence

     If background sources are
     present they are explicitly
     modeled

     Justifies
     background
     concentrations
     for those sources
     not modeled

If actual stack height is below
formula GEP, downwash modeling is
provided

Justifies any deviations from
Guideline

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Stack Height Regulations

     *    Stack height negative declaration
          evaluates sources:

               with stacks > 65 meters

               with merged gas streams and
               emissions > 5000 tons/year
               grandfathered and shows date of
               documention for grandfathering

Control Strategy

     *    Specifies block (or running) averages
          used

     *    Demonstrates no * xceedance of NAAQS
          and PSD increment.

     *    Justifies rollback or multipoint
          rollback

SIP Provisions

     *    Revision contains PSD
          analysis

     *    Bubbling, trading or
          balancing is included

               Justifies use of above

               Describes before and after
               conditions of bubble, trade
               or balance

     *    Sulfur variability is not credited

     *    Documents interstate and
          international impacts

Implementation Enforcement Aspects

     *    Test method uses averaging time
          consistent with modeling
          demonstration
          Test method does not rely on 30-day
          averaging

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Does not allow administrative
revisions to the rule/permit
requirements

Specifies EPA test method

Rule/permit does not include an
expiration date

Rule/permit justifies any
ma1function, startup/shutdown,  or
maintenance provision

Rule/permit requires Continuous
Emission Monitoring

Units of compliance are
specified in the rule/permit
(e.g. Ibs/mmBtu)

Justifies any mass/time
limits

Rule/permit specifies final
compliance date

     compliance date does not exceed
     3 years

Rule/permit specifies more than one
emission limit for any emission point

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                                    TECHNICAL REPORT DATA
                            (Please read Instructions on the reverie before completing;
 . REPORT NO.
                              2.
                                                            3. RECIPIENT'S ACCESSION NO.
4 TITLE AND SUBTITLE

  S02 Guideline
5. REPORT DATE
  October 1989
6. PERFORMING ORGANIZATION CODE
                                                             I. PERFORMING ORGANIZATION REPORT NO.
                                                             10. PROGRAM ELEMENT NO.
9 PERFORMING ORGANIZATION NAME AND ADDRESS
  Radian Corporation
  Progress Center
  3200 E. Chapel  Hill  Road/Nelson  Highway, PO Box  13000
  Research Triangle Park, NC  27709
11. CONTRACT/GRANT NO.

  68-02-4392
  Work Assignment  No.  44
12 SPONSORING AGENCY NAME AND ADDRESS
                                                             13. TYPE OF REPORT AND PERIOD COVERED
                                                             14. SPONSORING AGENCY CODE
15 SUPPLEMENTARY NOTES
16. ABSTRACT
  The S02 Guideline is an integration and clarification of policy and  guidance
  information  available for S02  programs.  This Guideline is to aid  the  States and EPA
  Regional Offices, especially in  the development,  review, and enforcement of future
  S02 SIP revisions.
  Each chapter  of  the Guideline  presents a distillation of key policy and  guidance for
  various subjects  that are important to S02 programs.   Each chapter also  contains
  comprehensive  references to the  original material  upon which the chapter is based.
  These references  include relevant  statutory and  regulatory requirements  (i.e., the
  Clean Air Act  and the Code of  Federal  Regulations),  FR notices, EPA guideline
  documents, and Agency policy and guidance correspondence.
17.
                                 KEY WORDS AND DOCUMENT ANALYSIS
                   DESCRIPTORS
                                               b.lDENTIFIERS/OPEN ENDED TERMS
                                                                           c. COSATI Field/Group
  so2
  State implementation plan (SIP)
  Attainment
  Ambient Air
  Ambient Monitoring       N$PS
  Dispersion Modeling      Redesignation
  Stack Height              Enforcement
18. DISTRIBUTION STATEMEN"
                                                19. SECURITY CLASS tTins Report>
                                                                            1. NO C'
                                                20 SECURITY CLASS (Tins pagei
                                                                           22 PR'Cc
 EPA Form 2J2C-MR**. 4-77)   PR&V.OUS ep'T:CN is OBSOLETE

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