New Source Review
Prevention of Significant Deterioration
and
Nonattainment Area
Guidance Notebook
Update
Prepared by:
New Source Review Section
Noncriteria Pollutant Programs Branch
Air Quality Management Division
Office of Air Quality Planning and Standards
U.S. Environmental Protection Agency
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HOW TO USE THE
PSD/NONATTAINMENT POLICY REFERENCE GUIDE NOTEBOOK
Pflypose
This notebook is a compilation of policy memorandums, letters, and
information that have been developed to aid implementation of the prevention
of significant deterioration (PSD) and nonattainment area air pollution
control programs. The material included in this notebook primarily includes
policy statements, policy interpretations, and applicability determinations.
This notebook is an "active" file - it has been designed to accommodate
new or revised policy. Additions, deletions, replacements, and cross-
referencing information will be provided by Mr. Dennis Crumpler of OAQPS:AQMD
as it becomes available.
How to Use the Notebook
PSD-related policies are found in Chapters 1-15 of the notebook;
nonattainment-related policies are found in Chapters 21-28. The subject
headings and types of policy included under each subject heading are listed in
Tables I and II. To use the notebook properly, please follow these steps:
Step 1. See Table I or Table II to locate your subject area of interest
under the subject headings listed.
Step 2. Next, look at the index under the same subject heading to locate a
specific entry (memorandum, letter, etc.) addressing your subject.
Each index entry presents pertinent summary identification
information and it is organized as follows:
a. Each entry is numbered and the entries in each chapter are
arranged generally in chronological order. For each numbered
entry, digits to the left of the decimal indicate the chapter in
which the entry is located; digits to the right of the decimal
are assigned individually for each entry.
b. Entry index summary information:
(1) DATE: the date the memorandum or policy statement was
issued.
(2) SUBJECT: the "Subject" line on the memorandum. For letters
or other types of policy statements, a brief statement of
the policy is presented here.
(3) FROM: the originator(s) or originating office(s) for the
policy statement.
(4) TO: the recipient(s) of the policy statement, usually the
originator(s) of the request for guidance.
(5) DISCUSSION: a brief summary of issues or policies discussed
in the entry. The discussion is included to provide the
user with more information than the "Subject" line.
-------
(6) CR: cross referencing. Where an entry cannot easily be.
placed under a single subject heading, the index shows t.tte
other possible subject headings where the entry could be
placed. The terra [Hard Copy] following a cross reference
index number indicates the location of the actual
memorandum, letter, etc. Entries are cross referenced only
when the subject matter of the entry pertains to two or more
policies (i.e., the policies discussed in the entry fall
under more than one subject heading).
[NOTE: Where an entry is cross referenced, the body of the
notebook contains index information to help locate the hard
copy. For example, entry 8.4 in the body of the notebook
shows index information indicating that the hard copy can be
found under entry 10.6.]
Step 3. The final step - locate the notebook entry or entries that relate to
your need.
Updating the Notebook
Periodically, Dennis Crumpler will forward additional entries for the
notebook. For each addition, the following information will be included along
with a hard copy of the entry:
a. index number;
b. comlete entry index summary information;
c. additional CR information, as necessary; and
d. index numbers of any existing entries partially or entirely
superceded by the addition. Nemos wholly outdated or superceded
should be removed from the notebook.
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TABLE I
PSD SUBJECT HEADINGS
1. PSD: Transition/Grandfathering
Exemptions from PSD requirements entirely or from "new"
requirements based upon date construction commenced
2. PSD: Potential to Emit/Limitations on Capacity to Emit
Calculating "Potential to Emit"
Federal enforceability
Limits on operating conditions
3. PSD: Definition/Classification of Source
Definitions
Source applicability for PSD
Source reactivation
4. PSD: Modification
Allowable/actual emissions increase
Fuel conversions - "capable of accommodating," etc.; DOE
exemptions
Accumulations of emissions
de minimum levels for modification
Netting of emissions
5. PSD: Geographic/Pollutant Applicability
Ship unloading
Exempt solvents
Fugitive (secondary) emissions
de minimus levels for new sources; quantification of emission
rates
6. PSD: Baseline/Increment Consumption/Impact Analysis
Baseline data, area, emissions
Increment consumption
Air quality offsets under PSD
Air quality degradation determination
Modeling
Creditable emissions decreases
7. PSD: Ambient Monitoring
Preconstruction monitoring
Quality Assurance
Minimum data requirements for permit application
Sianificance levels for monitoring
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TABLE I
PSD SUBJECT HEADINGS
(concluded)
8. PSD: BACT
BACT decisions
Source's ability to meet BACT
BACT baseline
BACT exemptions
Unregulated pollutants
9. PSD: Class I Areas
Notification of Federal Land Manager
Inter-agency coordination
National Park Service PSD permit application review guidance
Redesignation of Class I Areas
10. PSD: Permits/Permit Processing/Public Notice
Permit administrative procedures
Permit conditions/approval
Phased permits
Contingency plans
Performance testing
Publication policy
11. PSD: Permit Changes/Extension/Expiration
Deficient permits
Extensions
Permit appeals
Permit modifications
Permit reviews
Rescissions
12. PSD: Relation to Nonattainment Program
Offsets and PSD
Nonattainment sanctions
Dirty and clean areas affected
13. PSD: Temporary Source/Portable Source/Other Exemptions
Temporary emissions
Portable sources - PSD applicability
Specific sources - requirements, exemptions
14. PSD: Allowable Construction Activities Prior to Permit Issuance
Definition of "constructed"
Definition of "commence construction"
Allowable activities
15. PSD; SIP Processing
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TABLE II
NONATTAINNENT SUBJECT HEADINGS
21. NAA: Transition/Grandfathering
Exemptions from nonattainment review based on date construction
commenced
22. NAA: Potential to Emit/Limitations on Capacity to Emit
Calculating "Potential to Emit"
Federal enforceability
Limits on operating conditions
23. NAA: Definition/Classification of Source
Definitions
Source applicability for EOP
Source reactivation
24. NAA: Geographic/Pollutant Applicability
Ship unloading
Exempt solvents
Fugitive (secondary) emissions
25. NAA: Offsets
Emissions Offset Policy
Emissions credits
26. NAA: LAER
LAER decisions
Source's ability to meet LAER
LAER baseline
LAER exemptions
27. NAA: Statewide Compliance
Enforceability
EOP Condition 2
Sanctions
28. NAA: SIP Processinq
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2. PSD: Potential to Emit/Limitations on Capacity to Emit
2.27
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 23, 1987
Opinitfn in U.S. v. Louisiana-Pacific Corporation. D. Colo.,
Interpreting Certain PSD Regulations
Thomas L. Adams, Jr.
Assistant Administrator for Enforcement and Compliance Monitoring
J. Craig Potter
Assistant Administrator for Air and Radiation (ANR-443)
This memo summarizes the October 30, 1987, opinion by Judge Arraj
of the US District Court in Colorado regarding summary judgement
and legal matters involved in the case of U.S. vs. Louisiana-
Pacific Corporation (LPC). Judge Arraj denied motions for summary
judgement, finding that a trial was needed to resolve questions of
fact. Two legal issues are discussed. First, EPA can not sue LPC
for the NOV of major modification rules, because the major source,
upon which the major modification must be based, did not exist for
more than 30 days after the NOV was issued (as required by Section
113(b)(2) of the Clean Air Act). EPA's second NOV to LPC for
construction of a major stationary source must be heard at the
trial. Second, state permit limitations can not be a defense for
a source if they were not in effect when an alleged violation
commenced. Further, restrictions on actual [annual] emissions,
alone, are not appropriate as a consideration in determining a
source's potential to emit.
3.29; 10.51; 14.9
2.28
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 29, 1988
Opinion in U.S. v. Louisiana-Pacific Corp, Civil Action No. 86-A-
1880 (D. Colorado, March 22, 1988)
Michael S. Alushin, Associate Enforcement Counsel Air Enforcement
Division
Thomas L. Adams, Jr., Assistant Administrator for Enforcement and
Compliance Monitoring
J. Craig Porter, Asst. Admin, for Air and Radiation
In this, the first enforcement case to go to trial for PSD
violations exclusively, the court found that EPA had not met its
burden of proving that the Olathe plant of Louisiana-Pacific Co.
(LPC) was subject to PSD requirements, but held that LPC had
violated PSD requirements at the Kremmling plant. Even though LPC
had not received economic benefit from its violation, the court
assessed a civil penalty of $65,000 to avoid giving "sanction to a
willful disregard of the PSD regulatory framework..." The court
decision discusses proper implementing of the 30-day notice
provisions of 42 USC §7413 and contains a thorough analysis of the
term "potential-to-emit."
3.32
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2. PSD: Potential to Emit/Limitations on Capacity to Emit (continued)
2.29 DATE: October 14, 1988
SUBJECT: Applicability of PSD and NSPS to Proposed Life Extension Project
at the Port Washington Steam Electric Generating Station
FROM: Lee M. Thomas, Administrator, EPA
TO: John W. Boston, Vice President, Wisconsin Electric Power Company,
Milwaukee, WI
DISCUSSION: This is the final applicability determination regarding the
proposed Port Washington steam electric generating station. The
renovations constitute physical changes for PSD purposes, and do
not come within the exclusions for routine maintenance, repair,
replacement; or for production rate or hours of operation. The
renovations will result in a significant net increase in emissions
of several pollutants for PSD and NSPS purposes, and are,
therefore, subject to both PSD and NSPS requirements, unless the
project is reconfigured.
CR: 4.38 [Hard Copy]
2.30 [RESERVED]
2.31 DATE: June 13, 1989
SUBJECT: Guidance on Limiting Potential to Emit in New Source Permitting
FROM: Terrell E. Hunt, Associate Enforcement Counsel, Air Enforcement
Division, Office of Enforcement and Compliance Monitoring
John S. Sietz, Director, Stationary Source Compliance Division,
Office of Air Quality Planning and Standards
TO: Addressee's (Regions I-X, Regional Counsels, Air Branch Chiefs,
Air Division Directors)
DISCUSSION: This 22-page memo contains final guidance on conditions in
construction permits that can legally limit a source's potential
to emit to minor or de minimus levels. The memo includes sections
of the Louisiana Pacific rulings. Types of limitations that are
Federally enforceable, and, therefore, legitimate restrictions on
potential to emit, are discussed, including restrictions on
production rates, operating hours, control device limitations, and
averaging periods for determining emission rates and control
efficiencies. Characteristics of "sham" permits are identified
and enforcement is discussed. The memo includes sections of the
Louisiana-Pacific rulings as a basis for policy and includes
several examples to illustrate the principles.
CR: 4.41; 22.7
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2. PSD: Potential to Emit/Limitations on Capacity to Emit (continued)
2.32 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
2.33 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
2.34 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
November 24, 1989
Court"of Appeals Decision Upholding PSD "Actual-to-Potential"
Applicability Rules, Puerto Rican Cement Co.. Inc. v. EPA. No. 89-
1070 (1st Cir.)
Gregory B. Foote, Attorney, Air and Radiation Division
Alan W. Eckert, Associate General Counsel, Air and Radiation
Division
William G. Rosenberg, Assistant Administrator for Air and
Radiation
This memo discusses the court's decision affirming EPA's position
that, when a company makes a "physical or operational change" at
an existing facility, there is a "major modification" subject to
PSD review if a comparison of actual emissions before the change
with potential emissions thereafter shows a significant net
increase. A copy of the court's ruling is attached.
4.43
January 8, 1990
Clarification of "Secondary Emissions" as defined in 40 CFR
52.21(b)(18).
John Calcagni, Director, Air Quality Management Division
Ken Waid, President, Waid and Associates, TX
(1) The definition of secondary emissions in the 1988 CFR at 40
CFR 52.21(b)(18) is incomplete; the second sentence was
inadvertently omitted by the Federal Register during
revision.
(2) Portions of the 1982 revisions to the PSD regulations have
been vacated and remanded to EPA, including the way the
Agency treats vessel emissions. Consequently, the August 7,
1980, PSD regulations, with the exception of to and from
emissions counting, shall apply to determinations on how to
treat vessel emissions. Under the 1980 regulations,
emissions from certain activities of a ship docked at a
terminal may be considered terminal emissions.
5.26 [Hard Copy]; 3.36
January 30, 1990
Comment on Permit Proposed by Indiana DEM for NIPSCO Bailly
Generating System
David Kee, Director, Air and Radiation Division, EPA Region 5
Timothy J. Method, Asst. Commissioner, Indiana DEM
The new control device and related improvements under the Clean
Coal Technology (CCT) program at the NIPSCO Bailly generating
station are not "major modifications" under NSR or "modifications"
under NSPS. The backup diesel generator is also not a major
modification if operating limits are federally enforceable. If a
source solely adds or enhances systems or devices whose primary
functions are the reduction of air pollution, and are determined
to be not less environmentally beneficial than any emission
control system or device they replace, if any, such activities
would not trigger new source requirements.
4.47 [Hard Copy]
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2. PSD: Potential to Emit/Limitations on Capacity to Emit (concluded)
2.35
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 8, 1990
EPA's Revised PSD Applicability Determination in Response to
Court's Remand Concerning the "Potential to Emit" Concept
William G. Rosenberg, Asst. Administrator for Air and Radiation,
US EPA
John Boston, President, UEPCO
This letter is EPA's revised PSD applicability determination in
response to the remand by the US Court of Appeals of one issue
advanced by EPA in the NSPS and PSD determinations for WEPCO.
Traditionally, EPA has used an "actual-to-potential" method to
calculate emissions increased for PSD purposes. The court
instructed EPA to consider past operating conditions at a plant
when addressing modifications that involve "like-kind
replacement". This instruction, in essence, causes EPA to
recognize a new subcategory of "like-kind replacements" under the
"major modification" definition of EPA's NSR provisions. In these
cases, EPA will use an "actual to actual" method, which involves
projections based on historical capacity utilization, to calculate
emission increases.
4.48 [Hard Copy]
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3. PSD: Definition/Classification of Source
3.29
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 23, 1987
Opinion in U.S. v. Louisiana-Pacific Corporation. D. Colo.,
Interpreting Certain PSD Regulations
Thomas L. Adams, Jr.
Assistant Administrator for Enforcement and Compliance Monitoring
J. Craig Potter
Assistant Administrator for Air and Radiation (ANR-443)
This memo summarizes the October 30, 1987, opinion by Judge Arraj
of the US District Court in Colorado regarding summary judgement
and legal matters involved in the case of U.S. vs. Louisiana-
Pacific Corporation (LPC). Judge Arraj denied motions for summary
judgement, finding that a trial was needed to resolve questions of
fact. Two legal issues are discussed. First, EPA can not sue LPC
for the NOV of major modification rules, because the major source,
upon which the major modification must be based, did not exist for
more than 30 days after the NOV was issued (as required by Section
113(b)(2) of the Clean Air Act). EPA's second NOV to LPC for
construction of a major stationary source must be heard at the
trial. Second, state permit limitations can not be a defense for
a source if they were not in effect when an alleged violation
commenced. Further, restrictions on actual, [annual] emissions,
alone, are not appropriate as a consideration in determining a
source's potential to emit.
2.27 [Hard Copy]; 10.51; 14.9
3.30 DATE: June 9, 1988
SUBJECT: Emissions from Rocket Firing at Test Stands; Fugitive or Point
Source Emissions
FROM: Ronald Shafer, Chief
Policy and Guidance Section
TO: John Dale
Air Programs Branch, Region VIII
DISCUSSION: Emissions from rocket nozzles are point sources.
CR: 5.23; 23.27; 24.13
3.31 DATE: August 31, 1988
SUBJECT: Whether Facilities That Use Glass Fibers Are Considered Glass
Fiber Processing Plants"
FROM: Dennis Crumpler, New Source Review Section
Noncriteria Pollutant Programs Branch
TO: Michael A. Stawarz, NY DEC Region 5
DISCUSSION: Facilities that use glass fibers to manufacture other products,
such as fiberglass-reinforced composites, were not intended to be
included in the "glass fiber processing" category. "Glass fiber
processing" was intended to include only those facilities engaged
in making glass fiber.
CR: 13.9
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3. PSD: Definition/Classification of Source (continued)
3.32
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 29, 1988
Opinion in U.S. v. Louisiana-Pacific Corp, Civil Action No. 86-A-
1880 (D. Colorado, March 22, 1988)
Michael S. Alushin, Associate Enforcement Counsel Air Enforcement
Division
Thomas L. Adams, Jr., Assistant Administrator for Enforcement and
Compliance Monitoring
J. Craig Porter, Asst. Admin, for Air and Radiation
In this, the first enforcement case to go to trial for PSD
violations exclusively, the court found that EPA had not met its
burden of proving that the Olathe plant of Louisiana-Pacific Co.
(LPC) was subject to PSD requirements, but held that LPC had
violated PSD requirements at the Kremmling plant. Even though LPC
had not received economic benefit from its violation, the court
assessed a civil penalty of $65,000 to avoid giving "sanction to a
willful disregard of the PSD regulatory framework..." The court
decision discusses proper implementing of the 30-day notice
provisions of 42 USC §7413 and contains a thorough analysis of the
term "potential-to-emit."
2.28 [Hard Copy]
3.33
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 12, 1989
Guidance on Several Issues Related to Determining Applicability
of New Major Source Regulations in Granting Construction Permits
Edward J. Lillis, Chief
Noncriteria Pollution Programs Branch
Air Quality Management Division
Michael J. Hayes, Manager
Division of Air Pollution Control, Illinois EPA
Memo provides guidance on several issues related to determining
applicability of major source regulations in granting construction
permits to modified sources.
(1) A reviewing agency must base determination of whether a
source is "major" on "major" source definitions in the
Federal Register.
(2) Whether the emissions increase related to a modification is
significant is determined before any netting calculation is
done. If it is, netting calculations are then performed to
determine whether the "net emissions increase" associated
with that modification is significant.
(3) Contemporaneous emissions increases and decreases are
discussed, as well as other factors affecting whether they
are "creditable".
(4) An example of a netting calculation is shown. Emissions
increases or decreases used in issuing a previous major
source permit cannot be creditable to a subsequent increase.
4.40; 23.30
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3. PSD: Definition/Classification of Source (continued)
3.34
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 28, 1989
Request for PSD Applicability Determination, Golden Aluminum Co.
William B. Hathaway, Director, Air, Toxics, and Pesticides
Division, EPA, Region 6
Steve Spaw, Deputy Executive Director, TACB
Golden Aluminum facility is properly considered a "secondary metal
production plant". Although little guidance towards defining
"secondary metal production plant" exists, either in the Clean Air
Act, the federal PSD regulations, or even in the legislative
history, Golden Aluminum's plant is the type of source Congress
that intended to be covered by the PSD provisions of the Act,
because the proposed plant would emit several thousand tons of
particulates without control equipment. Also, EPA interprets the
congressional intent as based upon the source's pollutant emitting
activity (e.g., smelting) rather than the source's finished
product.
None
3.35
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
August 11, 1989
Prevention of Significant Deterioration (PSD) Applicability
Determination for Multiple Owner/Operator Point Sources Within
a Single Facility
John Calcagni, Director
Air Quality Management Division (MD-15)
Irwin L. Dickstein, Director
Air and Toxics Division (8AT-AP)
An airport is a single stationary source if the pollutant-emitting
activities are under the control of the same person (or persons
under common control) at the time construction would commence on
the proposed source. This finding remains the same even if
discrete portions of the airport's pollutant-emitting facilities
are leased to other control after construction.
None
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3. PSD: Definition/Classification of Source (concluded)
3.36
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 8, 1990
Clarification of "Secondary Emissions" as defined in 40 CFR
52.21(b)(18).
John Calcagni, Director, Air Quality Management Division
Ken Waid, President, Waid and Associates, TX
(1) The definition of secondary emissions in the 1988 CFR at 40
CFR 52.21(b)(18) is incomplete; the second sentence was
inadvertently omitted by the Federal Register during
revision.
(2) Portions of the 1982 revisions to the PSD regulations have
been vacated and remanded to EPA, including the way the
Agency treats vessel emissions. Consequently, the August 7,
1980, PSD regulations, with the exception of to and from
emissions counting, shall apply to determinations on how to
treat vessel emissions. Under the 1980 regulations,
emissions from certain activities of a ship docked at a
terminal may be considered terminal emissions.
5.26 [Hard Copy]; 2.33
3.37
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 4, 1990
Definition of Postapproval Monitoring
Ed Lillis, Chief, Noncriteria Pollutant Program Branch
Marcia Spink, Chief, EPA Region III, Air Programs Branch
The term "postapproval monitoring" is used to identify the time
when ambient ozone monitoring is to be undertaken when the normal
PSD requirement for preconstruction ozone monitoring is waived.
The postapproval period may begin anytime after the source
receives its PSD permit, but should not begin later than 2 years
later after the start-up of the new source or modification.
None
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4. PSD: Modification
4.36 [RESERVED]
4.37 DATE: September 9, 1988
SUBJECT: Applicability of Prevention of Significant Deterioration (PSD)
and New Source Performance Standards (NSPS) Requirements to the
Wisconsin Electric Power Company (WEPC) Port Washington Life
Extension Project
FROM: Don R. Clay, Acting Assistant Administrator for Air and
Radiation (ANR-443)
TO: David A. Kee, Director
Air and Radiation Division, Region V
DISCUSSION: Although not an official applicability determination, this memo
provided the preliminary opinion, based on the information
collected up to the date of issue, that PSD and NSPS would apply
to a "life extension" project at Port Washington Power Plant.
Each element of PSD applicability via major modification and NSPS
applicability were discussed in the context of information
provided. This project involves restoring the physical and
operational capabilities of each unit to its original capacity and
extending the useful life of the units well beyond the planned
retirement dates that would otherwise apply. This work appears to
be non-routine, and, thus, to constitute a "physical change"; a
significant net emissions increase would occur as a result of the
work.
CR: 23.29
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4. PSD: Modification (continued)
4.38
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
October 14, 1988
Applicability of PSD and NSPS to Proposed Life Extension Project
at the Port Washington Steam Electric Generating Station
Lee M. Thomas, Administrator, EPA
John W. Boston, Vice President, Wisconsin Electric Power Company,
Milwaukee, WI
This is the final applicability determination regarding the
proposed Port Washington steam electric generating station. The
renovations constitute physical changes for PSD purposes, and do
not come within the exclusions for routine maintenance, repair,
replacement; or for production rate or hours of operation. The
renovations will result in a significant net increase in emissions
of several pollutants for PSD and NSPS purposes, and are,
therefore, subject to both PSD and NSPS requirements, unless the
project is reconfigured.
2.29
4.39
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
October 28, 1988
Review of De Minimis Emissions - Sanctions
Ronald Shafer, Chief
Policy and Guidance Section
Stationary Source Compliance Division
Ron Van Mersbergen
Air and Radiation Branch (5AR-26) Region V
De minimis net emission increases that accumulate within a
contemporaneous (5 year) time frame should not be combined and
would not trigger PSD review when significance levels are reached.
However, de minimis increases do consume PSD increment, and, in
nonattainment areas, aggregated de minimis emissions will trigger
sanctions when significance levels are reached.
5.24; 27.5
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4. PSD: Modification (continued)
4.40
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 12, 1989
Guidance on Several Issues Related to Determining Applicability
of New Major Source Regulations in Granting Construction Permits
Edward J. Lillis, Chief
Noncriteria Pollution Programs Branch
Air Quality Management Division
Michael J. Hayes, Manager
Division of Air Pollution Control, Illinois EPA
Memo provides guidance on several issues related to determining
applicability of major source regulations in granting construction
permits to modified sources.
(1) A reviewing agency must base determination of whether a
source is "major" on "major" source definitions in the
Federal Register.
(2) Whether the emissions increase related to a modification is
significant is determined before any netting calculation is
done. If it is, netting calculations are then performed to
determine whether the "net emissions increase" associated
with that modification is significant.
(3) Contemporaneous emissions increases and decreases are
discussed, as well as other factors affecting whether they
are "creditable".
(4) An example of netting calculation is shown.
3.33 [Hard Copy]; 23.30
4.41 DATE: June 13, 1989
SUBJECT: Guidance on Limiting Potential to Emit in New Source Permitting
FROM: Terrell E. Hunt, Associate Enforcement Counsel, Air Enforcement
Division, Office of Enforcement and Compliance Monitoring
John S. Sietz, Director, Stationary Source Compliance Division,
Office of Air Quality Planning and Standards
TO: Addressee's (Regions I-X, Regional Counsels, Air Branch Chiefs,
Air Division Directors)
DISCUSSION: This 22-page memo contains final guidance on conditions in
construction permits that can legally limit a source's potential
to emit to minor or de minimus levels. The memo includes sections
of the Louisiana Pacific rulings. Types of limitations that are
Federally enforceable, and, therefore, legitimate restrictions on
potential to emit, are discussed, including restrictions on
production rates, operating hours, control device limitations, and
averaging periods for determining emission rates and control
efficiencies. Characteristics of "sham" permits are identified
and enforcement is discussed. The memo includes sections of the
Louisiana-Pacific rulings as a basis for policy and includes
several examples to illustrate the principles.
CR: 2.31 [Hard Copy]; 22.7
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4. PSD: Modification (continued)
4.42
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
September 18, 1989
Request for Clarification of Policy Regarding the "Net Emission
Increase"
John Calcagni, Director
Air Quality Management Division (MD-15)
William B. Hathaway, Director
Air, Pesticides and Toxics Division (6T)
Memo provides general guidance on four questions of net emissions
increases:
(a)
(b)
(c)
(d)
CR:
None
If an emissions increase from a proposed modification is
less than significant, the Agency need not consider whether
a contemporaneous net emissions increase has occurred. The
1983 memo that discussed this, entitled "Net Emission
Increases under PSD," is still an appropriate resource (No.
4.24).
The criteria used to determine if a significant net
emissions increase has occurred from a proposed modification
at an existing major source are applied on a pollutant-by-
pollutant basis.
When determining PSD applicability, the comparison of prior
"actual" versus new "potential" emissions (or "allowable"
where appropriate) is the correct methodology to use.
Except for emissions changes considered in issuing a PSD
permit, all emissions points at the source are reviewed in
terms of actual emissions changes to determine the
contemporaneous emissions changes at a source, including
those emissions points that have not had emissions changes
incorporated into State permits.
4.43
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
November 24, 1989
Court of Appeals Decision Upholding PSD "Actual-to-Potential"
Applicability Rules Puerto Rican Cement Co.. Inc. v. EPA. No. 89-
1070 (1st Cir.)
Gregory B. Foote, Attorney, Air and Radiation Division
Alan W. Eckert, Associate General Counsel, Air and Radiation
Division
William G. Rosenberg, Assistant Administrator for Air and
Radiation
This memo discusses the court's decision affirming EPA's position
that, when a company makes a "physical or operational change" at
an existing facility, there is a "major modification" subject to
PSD review if a comparison of actual emissions before the change
with potential emissions thereafter shows a significant net
increase. A copy of the court's ruling is attached.
2.32 [Hard Copy]
-------
4. PSD: Modification (continued)
4.44
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
4.45
CR:
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
4.46
CR:
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 29, 1989
Use of Netting Credits
John Calcagni, Director, Air Quality Management Division
Bruce P. Miller, Chief, Air Programs Branch, Region IV
Emissions decreases that are not fully utilized in allowing a
source to net out of review do not result in "leftover" emissions
credits that could be used in any future netting transactions.
All contemporaneous and creditable emissions changes used to net
out of review remain fully available and must be included in
subsequent netting transactions at the source unless they occur
before the contemporaneous time period of the subsequent
modification under consideration or they are "relied upon" in
issuing a major source permit. The memo provides an example of a
netting calculus.
None
January 2, 1990
Effect of Changing Stack Heights on Prevention of Significant
Deterioration (PSD) Modeling and Monitoring
John Calcagni, Director, Air Quality Management Division
Bruce P. Miller, Chief, Air Programs Branch, Region IV
An increase in stack height can be considered as part of a
proposed modification whether or not it is physically tied to'the
emissions unit(s) being constructed or modified. The stack height
increase must be proposed in conjunction with the overall
modification. Thus, any creditable air quality improvements
resulting from the higher stack should be considered in the
preliminary modeling analysis. Note that for a height greater
than 65 meters to be fully creditable as the GEP stack height, it
must be established in a manner consistent with the stack height
rules.
6.30; 7.9
January 18, 1990
Review of Determination that Proposed Fuel Conversion at Greenwood
Unit I Power Plant is a "Major Modification"
Gerald A. Emison, Director, OAQPS
Morton Sterling, Director, Environmental Protection, Detroit
Edison Co.
EPA Region V and Headquarters agree that a proposed conversion of
an oil-fired unit to dual capacity for oil and gas firing would
subject the Detroit Edison Greenwood Unit 1 Power Plant to a PSD
review for NOX. Because the source did not own, or initiate plans
to construct equipment necessary to deliver natural gas, EPA
believes the source was not capable of accommodating natural gas
prior to January 6, 1975. Second, actual emissions after the
change to natural gas are deemed to be the sources' "potential to
emit", and under this criteria the source will experience a
"significant net emissions increase". A comparison of current
allowable to future allowable emissions is irrelevant for PSD
applicability purposes. Simple addition of gas to the boiler
would not be subject to BACT. More information is necessary to
assess the effect of other proposed changes at the plant.
None
-------
4. PSD: Modification (concluded)
4.47
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
4.48
CR:
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 30, 1990
Comment on Permit Proposed by Indiana DEM for NIPSCO Bailly
Generating System
David Kee, Director, Air and Radiation Division, EPA Region 5
Timothy J. Method, Asst. Commissioner, Indiana DEM
The new control device and related improvements under the Clean
Coal Technology (CCT) program at the NIPSCO Bailly generating
station are not "major modifications" under NSR or "modifications"
under NSPS. The backup diesel generator is also not a major
modification if operating limits are federally enforceable. If a
source solely adds or enhances systems or devices whose primary
functions are the reduction of air pollution, and are determined
to be not less environmentally beneficial than any emission
control system or device they replace, if any, such activities
would not trigger new source requirements.
2.34
June 8, 1990
EPA's Revised PSD Applicability Determination in Response to
Court's Remand Concerning the "Potential to Emit" Concept
William G. Rosenberg, Asst. Administrator for Air and Radiation,
US EPA
John Boston, President, WEPCO
This letter is EPA's revised PSD applicability determination in
response to the remand by the US Court of Appeals of one issue
advanced by EPA in the NSPS and PSD determinations for WEPCO.
Traditionally, EPA has used an "actual-to-potential" method to
calculate emissions increased for PSD purposes. The court
instructed EPA to consider past operating conditions at a plant
when addressing modifications that involve "like-kind
replacement". This instruction, in essence, causes EPA to
recognize a new subcategory of "like-kind replacements" under the
"major modification" definition of EPA's NSR provisions. In these
cases, EPA will use an "actual to actual" method, which involves
projections based on historical capacity utilization, to calculate
emission increases.
2.35
-------
5. PSD: Geographic/Pollutant Applicability
5.23 DATE: June 94 1988
SUBJECT: Emissions from Rocket Firing at Test Stands; Fugitive or Point
Source Emissions
FROM: Ronald Shafer, Chief
Policy and Guidance Section
TO: John Dale
Air Programs Branch, VIII
DISCUSSION: Emissions from rocket nozzles are point sources.
CR: 3.30 [Hard Copy]; 23.27; 24.13
5.24
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
October 28, 1988
Review of De Minimis Emissions - Sanctions
Ronald Shafer, Chief
Policy and Guidance Section
Stationary Source Compliance Division
Ron Van Mersbergen
Air and Radiation Branch (5AR-26)
Region V
Dj£ minimis net emission increases that accumulate within a
contemporaneous (5 year) time frame should not be combined and
would not trigger PSD review when significance levels are reached.
However, djg minimis increases do consume PSD increment, and, in
nonattainment areas, aggregated & minimis emissions will trigger
sanctions when significance levels are reached.
4.39 [Hard Copy]; 27.5
5.25 [RESERVED]
-------
5. PSD: Geographic/Pollutant Applicability (concluded)
5.26
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 8, 1990
Clarification of "Secondary Emissions" as defined in 40 CFR
52.21(b)(18).
John Calcagni, Director, Air Quality Management Division
Ken Uaid, President, Uaid and Associates, TX
(1) The definition of secondary emissions in the 1988 CFR at 40
CFR 52.21(b)(18) is incomplete; the second sentence was
inadvertently omitted by the Federal Register during
revision.
(2) Portions of the 1982 revisions to the PSD regulations have
been vacated and remanded to EPA, including the way the
Agency treats vessel emissions. Consequently, the August 7,
1980, PSD regulations, with the exception of to and from
emissions counting, shall apply to determinations on how to
treat vessel emissions. Under the 1980 regulations,
emissions from certain activities of a ship docked at a
terminal may be considered terminal emissions.
2.33; 3.36
-------
6. PSD: Baseline/Increment Consumption/Impact Analysis
6.22
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 5, 1988
Air Quality Analysis for Prevention of Significant Deterioration
(PSD)
Gerald E. Emison, Director
Office of Air Quality Planning Standards (MD-10)
Thomas J. Maslany, Director
Air Management Division (3AMOO)
The memo relays a policy decision on the approach to use to
interpret dispersion modeling results to determine whether a
source will cause or contribute to a violation of NAAQS or PSD
increment. Under this approach, air quality concentrations are
projected throughout the proposed source's impact area, but do not
automatically cause a source to cause or contribute to a
violation. Instead, where a modeled violation is predicted,
further analysis is done to determine whether the impact is
significant at the point and time of the modeled violation.
12.13
6.23 [RESERVED]
6.24 [RESERVED]
-------
6. PSD: Baseline/Increment Consumption/Impact Analysis (continued)
6.25 DATE: March 16, 1989
SUBJECT: Use of Allowable Emissions for National Ambient Air Quality
Standards (NAAQS) Impact Analysis Under the Requirements for
Prevention of Significant Deterioration (PSD)
FROM: John Calcagni, Director, Air Quality Management Division (MD-15)
TO: William B. Hathaway, Director
Air, Pesticides and Toxics Division, Region VI
DISCUSSION: The required PSD air quality impact analysis for new major sources
and major modifications is to be based on allowable emissions,
rather than actual emissions, from existing background sources.
However, actual annual operations at an existing source may be
considered, primarily with respect to evaluating long term NAAQS
impacts.
CR: None
6.26 DATE: June 15, 1989
SUBJECT: Timing of BACT Determination for a New Emission Source
FROM: Gary McCutchen, Chief, New Source Review Section
TO: John Daniel, Asst. Executive Director, Dept. of Air Pollution
Control, Commonwealth of Virginia
DISCUSSION: A BACT decision is not final or "locked-in" until the final permit
is issued; until that time, a permit issuing agency is free to
share a tentative preliminary BACT determination as soon as
appropriate. An applicant does not need a final BACT decision to
conduct modeling; modeling is based on the level of control
recommended by the applicant. Decisions on technology transfer
should be carefully scrutinized to ensure that "reasonable
technology transfer" is defined broadly enough to prevent
circumvention of use of certain controls by selection of some
slightly different unit.
CR: 8.38 [Hard Copy]
6.27 DATE: August 24, 1989
SUBJECT: Guidance on Implementing the Nitrogen Dioxide Prevention of
Significant Deterioration (PSD)
FROM: John Calcagni, Director
Air Quality Management Division (MD-15)
TO: William B. Hathaway, Director
Air, Pesticides and Toxics Division, Region VI
DISCUSSION: The memo discusses general and specific aspects of the NO. PSD
increment regulation. States should require N02 increment
consumption analysis as soon as possible to help to avoid a
situation where a proposed new source would violate NO. Increment
before the State's NO. increments regulations are 1n effect.
CR: 15.10
-------
6. PSD: Baseline/Increment Consumption/Impact Analysis (continued)
6.28
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
August 25, 1989
Texas Air Control Board (TACB) Inquiry Regarding Allowable
Emissions in PSD NAAQS Analysis
William B. Hathaway, Director
Air, Pesticides and Toxics Division (6T)
John Calcagni, Director
Air Quality Management Division (MD-15)
The change from actual to allowable emissions in modeling
background sources for Texas PSD permit applicants does not
represent "a significant change in the PSD rules" that would
warrant federal rulemaking procedures. This policy requires
emissions inputs that are as near as practicable to legally
allowable emissions.
None
6.29
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
October 17, 1989
Ambient Air
Robert D. Bauman, Chief
S02/Particulate Matter Programs Branch (MD-15)
Gerald Fontenot, Chief
Air Programs Branch, Region VI (6T-A)
This memo responds to the August 24, 1989, memo from Hathaway to
Calcagni [6.27].
CR:
(a)
(b)
10.45
PSD modeling by a permit applicant can discount the
contribution of a background source to the predicted
concentration as described.
Where a proposed source has a significant impact on any
increment violation, the permit should not be approved
unless the increment violation is corrected prior to
operation of the proposed source. (See also July 15, 1988,
memo from OAQPS to Region 6 [6.23]).
6.30
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 2, 1990
Effect of Changing Stack Heights on Prevention of Significant
Deterioration (PSD) Modeling and Monitoring
John Calcagni, Director, Air Quality Management Division
Bruce P. Miller, Chief, Air Programs Branch, Region IV
An increase in stack height can be considered as part of a
proposed modification whether or not it is physically tied to the
emissions unit(s) being constructed or modified. The stack height
increase must be proposed in conjunction with the overall
modification. Thus, any creditable air quality improvements
resulting from the higher stack should be considered in the
preliminary modeling analysis. Note that for a height greater
than 65 meters to be fully creditable as the GEP stack height, it
must be established in a manner consistent with the stack height
rules.
4.45 [Hard Copy]; 7.9
-------
6. PSD: Baseline/Increment Consumption/Impact Analysis (concluded)
6.31 DATE: April 25, 1990
SUBJECT: Issuance of PSD Permits in Attainment Areas where Violations Have
Been Modeled
FROM: Marcia L. Spink, Chief, Air Programs Branch
TO: John M. Daniel, Jr., Asst. Executive Director, Virginia Department
of Air Pollution Control
DISCUSSION: The attachment to this letter provides procedures for issuing PSD
permits in areas with modeled violation(s) both to sources with no
significant impacts and to sources with significant impacts. In
the latter case, procedures for processing the associated SIP
revisions are also discussed.
CR: 10.49 [Hard Copy]; 12.17; 15.11
-------
7. PSD: Ambient Monitoring
7.8 DATE: July 19, 1989
SUBJECT: Order on Petition for Review, Hibbing Taconite Co.
FROM: William K. Reilly, Administrator, EPA
TO: David Kee, Director Air and Radiation Services Division, Region V,
Gerald L. Willet, Commissioner, Minn. Pollution Control Agency,
and Others
DISCUSSION: This document remands to the Minnesota Pollution Control Agency
review of four issues raised by EPA Region V in a petition for
review of PSD permit authorizing Hibbing Taconite Company to
modify its furnaces to burn petroleum coke as a fuel. Review of
three issues raised by EPA was denied as described below.
1. Bact for SO, - discussion of fuel chosen for "base case" in
analyzing BACT for SO,, cost comparison in BACT analyses,
appropriate justification of fuel choice in defining viable
control strategy, and the need for a detailed description
and engineering analysis of the planned emissions reduction
system. (Remanded)
Unregulated pollutants (Denied)
Prescribed emission limits for entire life of the permit
(Remanded)
BACT for PM (Remanded)
Ambient Air and Public acess (Remanded)
BACT for CO (Denied)
Preconstruction monitoring (Denied)
CR:
2.
3.
4.
5.
6.
7.
8.39 [Hard Copy]; 10.43; 11.13
7.9
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 2, 1990
Effect of Changing Stack Heights on Prevention of Significant
Deterioration (PSD) Modeling and Monitoring
John Calcagni, Director, Air Quality Management Division
Bruce P. Miller, Chief, Air Programs Branch, Region IV
An increase in stack height can be considered as part of a
proposed modification whether or not it is physically tied to the
emissions unit(s) being constructed or modified. The stack height
increase must be proposed in conjunction with the overall
modification. Thus, any creditable air quality improvements
resulting from the higher stack should be considered in the
preliminary modeling analysis. Note that for a height greater
than 65 meters to be fully creditable as the GEP stack height, it
must be established in a manner consistent with the stack height
rules.
4.45 [Hard Copy]; 6.30
-------
8. PSD:
BACT
8.25
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 31, 1988
Transmittal of OAQPS Interim Control Pol icy Statement
John S. Sietz, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
Regions I-X Division Directors
The memo provides final Interim Control Policy for developing
compliance schedules that require replacement or upgrading of
existing air pollution control equipment. During the interim
period, interim controls that may be more effective in reducing
emissions may be Installed, if no delay results in installation
the final control equipment.
10.32; 11.10
of
8.26
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
April 22, 1988
Interim Policy on Stack Height Regulatory Actions
J. Craig Potter, Assistant Administrator for Air and Radiation
Air Division Directors, Regions I-X
A Court of Appeals ruling on January 22, 1988, remanded three
portions of EPA's stack height regulations. This memo discusses
the impact of these changes. Permits issued under fully approved
or delegated NSR and PSD programs prior to promulgation of revised
rules should provide notice that any permit is subject to review
and modification if the source is later found to be affected by
EPA's revised rules.
11.11; 15.5; 28.5
8.27
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 28, 1988
Supplemental Guidance on Implementing the North County Prevention
of Significant Deterioration (PSD) Remand
John Calcagni, Director
Air Quality Management Division (MD-15)
Addressees (Regional Air Division Directors)
The memo discusses 2 issues that have arisen from the
Administrators remand decision in the North County PSD permit
appeal, and that are beyond the scope of the September 22, 1987,
document providing initial guidance on the subject.
(1) Although BACT is determined case-by-case, the permitting
authority must consider the full range of pollution control
options available and choose the most effective means of
limiting emissions, unless shown compelling reasons of
economic or energy impracticality.
(2) Emission of noncriteria pollutants should be evaluated
carefully, including consultation with the sources listed.
Where a municipal waste combustor is involved, OAQPS has
provided rather detailed guidance on methods to factor air
toxics considerations into the BACT decision.
(3) In the public notice, the level of detail and identification
of specific toxic substances should be consistent with the
concern posed by the air toxics.
10.34
-------
8. PSD: BACT (continued)
8.28
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
November 10, 1988
Administrative Order Remanding to NJ DEP the PSD Permit That Was
Issued to Pennsauken Solid Waste Management Authority for
Construction of a Municipal Waste Combustor
Lee M. Thomas, Administrator, U.S. EPA
NJ DEP
Permit is remanded to New Jersey DEP for further consideration of
the BACT analysis solely as it relates to NOX emissions.
Applicants BACT analysis for NOX was inadequate and should have
considered thermal de-NOx technology as available. Permit
proceedings should be reopened for source to supply appropriate
data to document consideration of thermal de-NOx and to allow for
public notice and comment on findings.
None
8.29 DATE: November 14, 1988
SUBJECT: Request for Administrator to Initiate Review of PSD Permit for
Columbia Gulf Transmission Company, Clementsville Compressor
Station, Kentucky
FROM: Greer C. Tidwell, Regional Administrator
TO: Lee M. Thomas, Administrator
DISCUSSION: Review is requested of the permit issued by KY DER for a natural -
gas-fired turbine, because dry controls do not constitute BACT for
NOX for the source.
CR: 10.35
8.30
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
8.31
CR:
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 14, 1988
Review of Valero Hydrocarbons BACT Analysis
Allen C. Basala, Chief, EAB, ASB
Anthony Wayne, Chief, Texas, New Mexico Enforcement Section,
Region VI
The Valero hydrocarbons BACT economic analysis is unacceptable,
because the employed methodology is not supported as valid for
purposes of project budgeting and cost-effectiveness assessments.
Also, the BACT analysis fails to include other less-costly
alternate control options that are still potentially as effective
as those presented. A detailed review from EAB is attached.
None
January 4, 1989
Valero Hydrocarbons BACT Analyses
Anthony P. Wayne, Chief, TX/NM Enforcement Section
Lawrence E. Pewitt, PE, Director, Permits Division,
Texas Air Control Board
(1) Valero Hydrocarbons should reevaluate its study of feasible
BACT alternatives for its proposed natural gas processing
plant, particularly with respect to the technical, cost, and
economic issues mentioned.
(2) The memo discusses the steps Valero must take to keep their
PSD permit active, because they are coming up on the one-year
date by which EPA must make a decision.
10.37
-------
8. PSD: BACT (continued)
8.32
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 27, 1989
Discounted Cash Flow (DCF) Analysis for Craven County Project New
Source* Review
Frank L. Bunyard, Economic Analysis Section, ASB, AQMD
Allen C. Basala, Chief, Economic Analysis Section, ASB, AQMD
The EPA Economic Analysis Section reviewed a discounted cash flow
analysis describing feasibility of thermal de-NOx as BACT. This
memo states reasons EPA is not convinced on infeasibility and
recommends the PSD applicant be asked to provide more substantive
justification for key assumptions. Memos 8.33 and 8.35 are
closely related to this one.
10.36
8.33 DATE: January 27, 1989
SUBJECT: Review of Craven County Wood Energy Project
FROM: Allen C. Basala, Chief, Economic Analysis Section, ASB
TO: Bruce P. Miller, Chief, Air Programs Branch, Region IV
DISCUSSION: This memo provides notification to Region IV that a discounted
cash flow analysis provided by a PSD applicant was not found to be
convincing of the infeasibility of thermal de-NOx controls. Memos
8.32 and 8.35 are closely related.
CR: 10.37
8.34
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
February 3, 1989
BACT Determination for Davidson Exterior Trim/Textron
John S. Sietz, Director, Stationary Source Compliance Division,
Office of Air Quality Planning Standards
Winston A. Smith, Director, Air, Pesticides and Toxics
Management Division, Region IV
Davidson Exterior, an automotive fascia painting operation, failed
to make a case for rejecting add-on spray booth and/or oven
controls as BACT. Transfer of control technology from other
automotive spray painting operations might be appropriate. The
memo discusses what criteria EPA would consider valid for
rejection of controls.
None
8.35 DATE: February 13, 1989
SUBJECT: BACT Determination for Craven County Wood Energy Project
FROM: Bruce P. Miller, Chief
Air Programs Branch; Air, Pesticides and Toxics
Management Division
TO: N. Ogden Gerald, Chief Air Quality Section
NC Department of Natural Resources and Community Development
DISCUSSION: PSD permit applicant must provide additional verification as
described of economic data presented regarding thermal de-NO as
BACT for NOX emissions. The memo references economic evaluations
in Economic Analysis Section Documents 8.32 and 8.33.
CR: 10.38
-------
8. PSD: BACT (continued)
8.36
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
Nay 19, 1989
Technical Document on Control of Nitrogen Oxides From Municipal
Waste Combusters
Jack R. Farmer, Director
Emissions Standards Division, OAQPS (MD-13)
Air Division Directors, Regions I-X
Memo transmits OAQPS' technical report evaluating the technical
aspects of the control of NOX emissions from municipal waste
combustors. Selective non-catalytic reduction is discussed in
detail in the report. Copies of the report are available from
EPA, Emission Standards Division, MD-13, Research Triangle Park,
NC 27711.
None
8.37
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 9, 1989
Order Denying Review of PSD Permit for Spokane Regional Waste-to-
Energy Project
William K. Reilly, Administrator, EPA
Citizens for Clean Air and Council for Land Care and Planning
Petitioners requested review of PSD permit because BACT for NO ,
which should be thermal de-NOx, was not required, and because fuel
cleaning and separation, and recycling, were not adequately
considered as emission reduction techniques. Spokane agreed to
install thermal de-NOx before this opinion was written, so the
court dismissed that petition. The Administrator stated that
petitioners did not make an adequate case for reviewing the permit
on the other issues.
10.42
8.38 DATE: June 15, 1989
SUBJECT: Timing of BACT Determination for a New Emission Source
FROM: Gary McCutchen, Chief, New Source Review Section
TO: John Daniel, Asst. Executive Director, Dept. of Air Pollution
Control, Commonwealth of Virginia
DISCUSSION: A BACT decision is not final or "locked-in" until the final permit
is issued; until that time, a permit issuing agency is free to
share a tentative preliminary BACT determination as soon as
appropriate. An applicant does not need a final BACT decision to
conduct modeling; modeling is based on the level of control
recommended by the applicant. Decisions on technology transfer
should be carefully scrutinized to ensure that "reasonable
technology transfer" is defined broadly enough to prevent
circumvention of use of certain controls by selection of some
slightly different unit.
CR: 6.26
-------
8. PSD: BACT (continued)
8.39
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 19, 1989
Order jon Petition for Review, Hibbing Taconite Co.
William K. Reilly, Administrator, EPA
David Kee, Director Air and Radiation Services Division, Region V,
Gerald L. Willet, Commissioner, Minn. Pollution Control Agency,
and Others
This document remands to the Minnesota Pollution Control Agency
review of four issues raised by EPA Region V in a petition for
review of PSD permit authorizing Hibbing Taconite Company to
modify its furnaces to burn petroleum coke as a fuel. Review of
three issues raised by EPA was denied as described below.
1. Bact for SO, - discussion of fuel chosen for "base case" in
analyzing BACT for SO,, cost comparison in BACT analyses,
appropriate justification of fuel choice in defining viable
control strategy, and the need for a detailed description and
engineering analysis of the planned emissions reduction
system. (Remanded)
2. Unregulated pollutants (Denied)
3. Prescribed emission limits for entire life of the permit
(Remanded)
4. BACT for PM (Remanded)
5. Ambient Air and Public acess (Remanded)
6. BACT for CO (Denied)
7. Preconstruction monitoring (Denied)
7.8; 10.43; 11.3
8.40 DATE: August 2, 1989
SUBJECT: Administrative Order Denying Review of an Amended PSD Permit for a
Mass-Burn Municipal Waste Incinerator for Huntington, NY
FROM: William K. Reilly, Administrator, U.S. EPA
TO: Citizens for a Livable Environment and Recycling
DISCUSSION: The order states that the amended permit does require the facility
to use BACT, and the BACT analysis is not deficient. Petitioner
confused "de minimis" emissions limits with limitations for NOX
CR: 10.44
8.41
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
September 11, 1989
Use of Urea Injection in Place of Ammonia Inspection for the
Control of NOX from Municipal Waste Combustors
Gerald A. Emison, Director, OAQPS
Christopher J. Daggett, Commissioner, NJ DEP
Urea injection could be considered as innovative control
technology or BACT for NO control from municipal waste combustors
if the source presented EPA with material to review including
source-specific information and written justification as to how
the method fulfills the innovative technology criteria and how it
would be applied to the source.
None
-------
8. PSD: BACT (continued)
8.42
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 2, 1990
Order Denying Review of Revised Permit Determination for Spokane
Regional Waste to Energy Project
F. Henry Hubicht, Acting Administrator, EPA
Lisa J.Kilian, Joan Honican, Citizens for Clean Air, and the
Council for Land Care and Planning
This order denies the appeals filed against the revised permit for
the Spokane Regional Waste to Energy Project. The Washington
State Department of Ecology did not act inappropriately in not
holding a public hearing. Questions relating to State
requirements are beyond the purview of this proceeding. The
recycling issue is again rejected as a subject for review for the
same reasons as stated in the June 9, 1989, remand (8.38).
10.46; 11.14
8.43
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 11, 1990
BACT/LAER Determination Cut-Off Date
John Seitz, Director, Stationary Source Compliance Division, OAQPS
Regional Air Directors, Regions I-X
The BACT/LAER determination for a major new source is not set
until the final permit is issued. The source has the
responsibility to investigate all available and pending control
technologies for consideration as BACT or LAER. Establishment of
a cutoff date prior to the public comment period would limit
public participation. A cutoff date established prior to permit
issuance could allow a source to avoid more stringent controls.
26.11
8.44 DATE: February 16, 1990
SUBJECT: Typical PSD Submittal Outline
FROM: Wallace N. Davis, Executive Director, Virginia Dept. of Air
Pollution Control
TO: William C. Campbell, III, Cogentrix, Inc.
DISCUSSION: The letter provides target emission guidelines for coal-fired
facilities, and includes a typical outline for a PSD submittal
CR: 10.48 [Hard Copy]
8.45 [RESERVED]
-------
8. PSD: BACT (continued)
8.46
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 7, 1990
Designation of Issues for Review of Illinois EPA's Permit
Determinations Regarding World Color Press
William K. Reilly, Administrator, EPA
Richard J. Carlson, Director, Illinois EPA
This paper designates the issues to be briefed in the review of
World Color Press PSD permit determinations made by the Illinois
EPA. World Color Press and IEPA must reexamine their reasoning in
stating, incorrectly, that an alleged absence of significant
photochemical reactivity of the facilities' VOC emissions was an
"environmental impact" that would justify less stringent
limitations.
11.16
8.47 DATE: July 9, 1990
SUBJECT: Order on Motion for Stay on Appeal of Permits for Columbia Gulf
Transmission Company
FROM: William K. Reilly, Administrator, EPA
TO: William C. Eddins, Director, Division for Air Quality,
Commonwealth of Kentucky
Susan Midgett, Director, Air Programs Branch, USEPA, Region IV,
and others
DISCUSSION: The Administrator hereby grants a stay to the appeal by EPA Region
IV of the PSD permit granted by the State of Kentucky to Columbia
Gulf Transmission Company. The stay enables the applicant to
supplement the state administrative record with new factual
information, which the applicant believes will confirm the wisdom
of the State's original permit determination. Further, the Region
may submit additional information to ensure that the BACT
determination is fully contemporaneous. If the permit is
subsequently revised, the public will be given the right to
comment.
CR: 11.17
-------
8. PSD: BACT (concluded)
8.48 DATE: June 3, 1987
SUBJECT: Administrative Order Regarding Construction of the Lake County
Waste-to-Energy Facility
FROM: Jack E. Ravan, Regional Admin., Region IV
TO: NRG/Recovery Group, Inc.
DISCUSSION: A PSD permit given to a municipal solid waste incinerator is
invalidated due to deficiencies in requiring acid gas controls,
and in requiring more stringent emission limitations for
particulate matter and S02.
CR: None
8.49
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 24, 1987
Calculating Amortized Capital Costs
Robert D. Bauman, Chief
Standards Implementation Branch, CPDD (MD-15)
Stephen H. Rothblatt, Chief
Air and Radiation Branch, Region V (5AR-26)
The memo discusses (1) the appropriate criteria to be used in
calculating the amortized capital costs of control options in the
selection of BACT, both for process-related controls and for add-
on controls, and (2) the appropriate annual interest ("discount")
rate to use in these analyses.
None
8.50
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 31, 1987
Request for Administrator to Initiate Review of PSD Permit for
Camden County Resource Recovery Facility
Christopher J. Daggett
Regional Administrator
Lee VI. Thomas
Administrator
Region II requests review of a PSD permit issued for construction
of a resource recovery facility because no emission limit was
BACT for
on
PM
10
PM.a occurred.
was not adequately addressed, and
The NJ DEP issued the permit
included for PM1Q,
no public comment
December 7, 1987; new NAAQS for PMin were promulgated on July 1,
1987.
10.52; 11.18
10
-------
10. PSD: Permits/Permit Processing/Public Notice
10.32 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 31, 1988
Transmittal of OAQPS Interim Control Policy Statement
John S. Sietz, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
Regions I-X Division Directors
The memo provides final Interim Control Policy for developing
compliance schedules that require replacement or upgrading of
existing air pollution control equipment. During the interim
period, interim controls that may be more effective in reducing
emissions may be installed, if no delay results in installation of
the final control equipment.
8.25 [Hard Copy]; 11.10
DATE:
SUBJECT
FROM:
TO:
10.33 DATE: July 15, 1988 [2 memoranda]
Procedures for EPA to Use to Address Deficient New Source Permits
Under the Clean Air Act
Michael S. Alushin, Assoc. Enforcement Counsel for Air, OAQPS
John S. Sietz, Director, Stationary Source Compliance Division,
OAQPS
Regions I-X: Regional Counsels, Regional Council Air Branch
Chiefs, Air Division Directors, PSD Contacts, et. al.
DISCUSSION: The cover memo transmits final guidance, in the form of the
attached memo, for addressing deficient new source permits. The
cover memo discusses some of the comments made on the draft
guidance memo. The attached final guidance memo contains
procedures for 3 types of permit processes: those issued pursuant
to EPA-approved State programs, those issued by States pursuant to
EPA authority delegation, and those issued by EPA directly. Model
forms are appended. In addition, the memo contains information on
factors normally sufficient for EPA to find a permit deficient and
to consider enforcement action, timing of EPA response, and
enforcement against the source v. enforcement against the State.
CR: None
-------
10. PSD: Permits/Permit Processing/Public Notice (continued)
10.34 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 28, 1988
Supplemental Guidance on Implementing the North County Prevention
of Significant Deterioration (PSD) Remand
John Calcagni, Director
Air Quality Management Division (MD-15)
Addressees (Regional Air Division Directors)
The memo discusses 2 issues that have arisen from the
Administrators remand decision in the North County PSD permit
appeal, and that are beyond the scope of the September 22, 1987,
document providing initial guidance on the subject.
(1) Although BACT is determined case-by-case, the permitting
authority must consider the full range of pollution control
options available and choose the most effective means of
limiting emissions, unless shown compelling reasons of
economic or energy impracticality.
(2) Emission of noncriteria pollutants should be evaluated
carefully, including consultation with the sources listed.
Where a municipal waste combustor is involved, OAQPS has
provided rather detailed guidance on methods to factor air
toxics considerations into the BACT decision.
(3) In the public notice, the level of detail and identification
of specific toxic substances should be consistent with the
concern posed by the air toxics.
8.27 [Hard Copy]
10.35 DATE: November 14, 1988
SUBJECT: Request for Administrator to Initiate Review of PSD Permit for
Columbia Gulf Transmission Company, Clementsville Compressor
Station, Kentucky
FROM: Greer C. Tidwell, Regional Administrator
TO: Lee M. Thomas, Administrator
DISCUSSION: Review is requested of the permit issued by KY DER for a natural-
gas-fired turbine, because dry controls do not constitute BACT for
NO for the source.
CR: 8.29 [Hard Copy]
10.36 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 12, 1988
Order Denying Review, Col mac Energy, Inc.
Lee M. Thomas, Admin., EPA
County of Riverside, Coachella Valley Assoc, of Governments
Petitioners concerns can be grouped into 3 categories: (1) that
the State and local agencies should have jurisdiction over the
facility, (2) that unregulated pollutants, and odor and vector
control were not adequately considered, and (3) that certain
conditions are vague or inadequate and should be clarified. All
petitions are denied.
None
-------
10. PSD: Permits/Permit Processing/Public Notice (continued)
10.37 DATE:
SUBJECT
FROM:
TO:
Januar-y 4, 1989
Valero Hydrocarbons BACT Analyses
Anthony P. Wayne, Chief, TX/NM Enforcement Section
Lawrence E. Pewitt, PE, Director, Permits Division,
Texas Air Control Board
DISCUSSION: (1) Valero Hydrocarbons should reevaluate its study of feasible
BACT alternatives for its proposed natural gas processing
plant, particularly with respect to the technical, cost, and
economic issues mentioned.
(2) The memo discusses the steps Valero must take to keep their
PSD permit active, because they are coming up on the one-year
date by which EPA must make a decision.
CR: 8.31 [Hard Copy]
10.38
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 27, 1989
Discounted Cash Flow (DCF) Analysis for Craven County Project New
Source Review
Frank L. Bunyard, Economic Analysis Section, ASB, AQMD
Allen C. Basal a, Chief, Economic Analysis Section, ASB, AQMD
The EPA Economic Analysis Section reviewed a discounted cash flow
analysis describing feasibility of thermal de-NOx as BACT. This
memo states reasons EPA is not convinced on infeasibility and
recommends the PSD applicant be asked to provide more substantive
justification for key assumptions. Nemos 10.39 and 10.40 are
closely related to this one.
8.32 [Hard Copy]
10.39 DATE: January 27, 1989
SUBJECT: Review of Craven County Mood Energy Project
FROM: Allen C. Basala, Chief, Economic Analysis Section, ASB
TO: Bruce P. Miller, Chief, Air Programs Branch, Region IV
DISCUSSION: This memo provides notification to Region IV that a discounted
cash flow analysis provided by a PSD applicant was not found to be
convincing of the infeasibility of thermal de-NOx controls. Memos
10.38 and 10.40 are closely related.
CR: 8.33 [Hard Copy]
10.40 DATE:
SUBJECT
FROM:
February 13, 1989
BACT Determination for Craven County Hood Energy Project
Bruce P. Miller, Chief
Air Programs Branch; Air, Pesticides and Toxics
Management Division
TO: N. Ogden Gerald, Chief Air Quality Section
NC Department of Natural Resources and Community Development
DISCUSSION: PSD permit applicant must provide additional verification as
described of economic data presented regarding thermal de-NO as
BACT for N0x emissions. The memo references economic evaluations
1n Economic"Analysis Section Documents 10.38 and 10.39.
CR: 8.35 [Hard Copy]
-------
10. PSD: Permits/Permit Processing/Public Notice (continued)
10.41
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
February 24, 1989
Opinioj) in Frank J. Kelley, Michigan Natural Resources Commission,
Michigan Air Pollution Control Commission, and David F. Hales v.
Albar Industries, C.A. No. 88-cv-40302-FL, E.D. Michigan,
February 7, 1989
Terrell E. Hunt, Associate Enforcement Counsel,
Air Enforcement Division
Edward E. Reich, Acting Asst. Admin, for Enforcement and
Compliance Monitoring
Don R. Clay, Acting Asst. Admin, for Air and Radiation
This US District Court decision upheld the right of a State to
bring suit in Federal court as a citizen under the Clean Air Act
(CAA). Also, although the CAA does not authorize penalties under
Section 304, Michigan could collect them under the authority of
the State statute. [Copy of the Decision is included]
None
10.42
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 9, 1989
Order Denying Review of PSD Permit for Spokane Regional Waste-to-
Energy Project
William K. Reilly, Administrator, EPA
Citizens for Clean Air and Council for Land Care and Planning
Petitioners requested review of PSD permit because BACT for NO ,
which should be thermal de-NOx, was not required, and because fuel
cleaning and separation, and recycling, were not adequately
considered as emission reduction techniques. Spokane agreed to
install thermal de-NOx before this opinion was written, so the
court dismissed that petition. The Administrator stated that
petitioners did not make an adequate case for reviewing the permit
on the other issues.
8.37 [Hard Copy]
-------
10. PSD: Permits/Permit Processing/Public Notice (continued)
10.43 DATE:
SUBJECT:
FROM:
TO:
July 19, 1989
Order on Petition for Review, Nibbing Taconite Co.
William K. Reilly, Administrator, EPA
David Kee, Director Air and Radiation Services Division, Region V,
Gerald L. Willet, Commissioner, Minn. Pollution Control Agency,
and Others
DISCUSSION: This document remands to the Minnesota Pollution Control Agency
review of four issues raised by EPA Region V in a petition for
review of PSD permit authorizing Nibbing Taconite Company to
modify its furnaces to burn petroleum coke as a fuel. Review of
three issues raised by EPA was denied as described below.
1. Bact for SO. - discussion of fuel chosen for "base case" in
analyzing BACT for SO., cost comparison in BACT analyses,
appropriate justification of fuel choice in defining viable
control strategy, and the need for a detailed description and
engineering analysis of the planned emissions reduction
system. (Remanded)
2. Unregulated pollutants (Denied)
3. Prescribed emission limits for entire life of the permit
(Remanded)
4. BACT for PM (Remanded)
5. Ambient Air and Public acess (Remanded)
6. BACT for CO (Denied)
7. Preconstruction monitoring (Denied)
CR:
10.44 DATE:
SUBJECT:
FROM:
TO:
August 2, 1989
Administrative Order Denying Review of an Amended PSD Permit for a
Mass-Burn Municipal Haste Incinerator for Huntington, NY
William K. Reilly, Administrator, U.S. EPA
Citizens for a Livable Environment and Recycling
DISCUSSION: The order states that the amended permit does require the facility
to use BACT, and the BACT analysis is not deficient. Petitioner
confused "de minimis" emissions limits with limitations for N0x
CR: 8.40 [Hard Copy]
-------
10. PSD: Permits/Permit Processing/Public Notice (continued)
10.45 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
October 17, 1989
Ambient Air
Robert D. Bauman, Chief
S02/Particulate Matter Programs Branch (MD-15)
Gerald Fontenot, Chief
Air Programs Branch, Region VI (6T-A)
This memo responds to the August 24, 1989, memo from Hathaway to
Calcagni [6.27].
(a) PSD modeling by a permit applicant can discount the
contribution of a background source to the predicted
concentration as described.
(b) Where a proposed source has a significant impact on any
increment violation, the permit should not be approved unless
the increment violation is corrected prior to operation of
the proposed source. (See also July 15, 1988, memo from
OAQPS to Region 6 [6.23]).
6.29 [Hard Copy]
10.46 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 2, 1990
Order Denying Review of Revised Permit Determination for Spokane
Regional Waste to Energy Project
F. Henry Hubicht, Acting Administrator, EPA
Lisa J.Kilian, Joan Honican, Citizens for Clean Air, and the
Council for Land Care and Planning
This order denies the appeals filed against the revised permit for
the Spokane Regional Waste to Energy Project. The Washington
State Department of Ecology did not act inappropriately in not
holding a public hearing. Questions relating to State
requirements are beyond the purview of this proceeding. The
recycling issue is again rejected as a subject for review for the
same reasons as stated in the June 9, 1989, remand [8.37].
8.42 [Hard Copy]; 11.14
10.47
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 4, 1990
Remand order concerning the denial of the PSD application of Bio
Energy Corporation, West Hopkinton, NH
WilliamK. Reilly, Administrator, EPA
Timothy Williamson, Office of Regional Counsel, US EPA, Region I,
William Dell Orfano, President, Bio Energy Corporation, and others
All matters regarding the PSD Permit Denial Decision dated
November 15, 1989, concerning Bio Energy's PSD application for its
wood-fired power plant are remanded to Region I so that further
comments and technical information may be received to supplement
the administrative record.
11.15 [Hard Copy]
-------
10. PSD: Permits/PernIt Processing/Public Notice (continued)
10.48 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
10.49 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
10.50 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
February 16, 1990
Typical PSD Submittal Outline
Wallace N. Davis, Executive Director, Virginia Dept. of Air
Pollution Control
William C. Campbell, III, Cogentrix, Inc.
The letter provides target emission guidelines for coal-fired
facilities, and includes a typical outline for a PSD submittal.
8.44
April 25, 1990
Issuance of PSD Permits in Attainment Areas where Violations Have
Been Modeled
Marcia L. Spink, Chief, Air Programs Branch
John M. Daniel, Jr., Asst. Executive Director, Virginia Department
of A1r Pollution Control
The attachment to this letter provides procedures for issuing PSD
permits in areas with modeled violation(s) both to sources with no
significant impacts and to sources with significant impacts. In
the latter case, procedures for processing the associated SIP
revisions are also discussed.
6.31; 12.17; 15.11
July 30, 1990
Order denying review of PSD permit authorizing construction of a
steam electricity cogenerating facility at AltaVista, VA.
WilliamK. Reilly, Administrator
Petitioners for review of permit as listed
Petitions are denied and the response of the Virginia Department
of Air Pollution Control is upheld for two reasons: (1) in each
instance, the grounds for review alleged in the petitions did not
meet the threshold for review established by the rules, and (2) in
numerous instances, the Issues raised by two of the petitioners
had not been raised at the public hearing or during the public
comment period, and, therefore, were not eligible for
consideration on appeal.
None
-------
10. PSD: Permits/Permit Processing/Public Notice (concluded)
10.51
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 23, 1987
Opinion in U.S. v Louisiana-Pacific Corporation, D. Colo.,
Interpreting Certain PSD Regulations
Thomas L. Adams, Jr.
Assistant Administrator for Enforcement and Compliance Monitoring
J. Craig Potter for Air and Radiation (ANR-443)
This memo summarizes the October 30, 1987, opinion by Judge Arraj
of the US District Court in Colorado regarding summary judgement
and legal matters involved in the case of U.S. vs. Louisiana-
Pacific Corporation (LPC). Judge Arraj denied motions for summary
judgement, finding that a trial was needed to resolve questions of
fact. Two legal issues are discussed. First, EPA can not sue LPC
for the NOV of major modification rules, because the major source,
upon which the major modification must be based, did not exist for
more than 30 days after the NOV was issued (as required by Section
113(b)(2) of the Clean Air Act). EPA's second NOV to LPC for
construction of a major stationary source must be heard at the
trial. Second, state permit limitations can not be a defense for
a source if they were not in effect when an alleged violation
commenced. Further, restrictions on actual, [annual] emissions,
alone, are not appropriate as a consideration in determining a
source's potential to emit.
2.27 [Hard Copy]; 3.29; 14.9
10.52
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 31, 1987
Request for Administrator to Initiate Review of PSD Permit for
Camden County Resource Recovery Facility
Christopher J. Daggett
Regional Administrator
Lee M. Thomas
Administrator
Region II requests review of a PSD permit issued for construction
of a resource recovery facility because no emission limit was
included for PM Q, BACT for PM10 was not adequately addressed, and
no public comment on PMm occurred. The NJ DEP issued the permit
December 7, 1987; new NAAQS for PM10 were promulgated on July 1,
1987
8.50'[Hard Copy]; 11.18
-------
11. PSO Permit Changes/Extensions/Expiration
11.10 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 31, 1988
Transmittal of OAQPS Interim Control Pol icy Statement
John S. Sietz, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
Regions I-X Division Directors
The memo provides final Interim Control Policy for developing
compliance schedules that require replacement or upgrading of
existing air pollution control equipment. During the interim
period, interim controls that may be more effective in reducing
emissions may be installed, if no delay results in installation of
the final control equipment.
8.24 [Hard Copy]; 10.32
11.11 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
April 22, 1988
Interim Policy on Stack Height Regulatory Actions
J. Craig Potter, Assistant Administrator for Air and Radiation
Air Division Directors, Regions I-X
A Court of Appeals ruling on January 22, 1988, remanded three
portions of EPA's stack height regulations. This memo discusses
the impact of these changes. Permits issued under fully approved
or delegated NSR and PSD programs prior to promulgation of revised
rules should provide notice that any permit is subject to review
and modification if the source is later found to be affected by
EPA's revised rules.
8.26 [Hard Copy]; 15.5; 28.5
11.12 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
September 8, 1988
EPA Region IX Policy on PSD Permit Extensions
Wayne A. Blackard,Chief
New Source Section
Region IX States and Districts NSR/PSD Permitting Contacts
EPA's policy intends to grant a permit extension of the 18-month
deadline to any good faith application providing the requirements
described in this memo are met.
None
-------
11. PSD Permit Changes/Extensions/Expiration (continued)
11.13 DATE: July 19, 1989
SUBJECT: Order "on Petition for Review, Hibbing Taconite Co.
FROM: William K. Reilly, Administrator, EPA
TO: David Kee, Director Air and Radiation Services Division, Region V,
Gerald L. Millet, Commissioner, Minn. Pollution Control Agency,
and Others
DISCUSSION: This document remands to the Minnesota Pollution Control Agency
review of four issues raised by EPA Region V in a petition for
review of PSD permit authorizing Hibbing Taconite Company to
modify its furnaces to burn petroleum coke as a fuel. Review of
three issues raised by EPA was denied as described below.
1. Bact for SO. - discussion of fuel chosen for "base case" in
analyzing BACT for SO., cost comparison in BACT analyses,
appropriate justification of fuel choice in defining viable
control strategy, and the need for a detailed description and
engineering analysis of the planned emissions reduction
system. (Remanded)
2. Unregulated pollutants (Denied)
3. Prescribed emission limits for entire life of the permit
(Remanded)
4. BACT for PM (Remanded)
5. Ambient Air and Public acess (Remanded)
6. BACT for CO (Denied)
7. Preconstruction monitoring (Denied)
CR:
11.14 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 2, 1990
Order Denying Review of Revised Permit Determination for Spokane
Regional Waste to Energy Project
F. Henry Hubicht, Acting Administrator, EPA
Lisa J.Kilian, Joan Honican, Citizens for Clean Air, and the
Council for Land Care and Planning
This order denies the appeals filed against the revised permit for
the Spokane Regional Waste to Energy Project. The Washington
State Department of Ecology did not act inappropriately in not
holding a public hearing. Questions relating to State
requirements are beyond the purview of this proceeding. The
recycling issue is again rejected as a subject for review for the
same reasons as stated in the June 9, 1989, remand (8.38).
8.42 [Hard Copy]; 10.46
-------
11. PSD Permit Changes/Extensions/Expiration (continued)
11.15 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 4, 1990
Remand order concerning the denial of the PSD application of Bio
Energy Corporation, West Hopkinton, NH
William K. Reilly, Administrator, EPA
Timothy Williamson, Office of Regional Counsel, US EPA, Region I,
William Dell Orfano, President, Bio Energy Corporation, and others
All matters regarding the PSD Permit Denial Decision dated
November 15, 1989, concerning Bio Energy's PSD application for its
wood-fired power plant are remanded to Region I so that further
comments and technical information may be received to supplement
the administrative record.
10.47
11.16
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 7, 1990
Designation of Issues for Review of Illinois EPA's Permit
Determinations Regarding World Color Press
William K. Reilly, Administrator, EPA
Richard J. Carlson, Director, Illinois EPA
This paper designates the issues to be briefed in the review of
World Color Press PSD permit determinations made by the Illinois
EPA. World Color Press and IEPA must reexamine their reasoning in
stating, incorrectly, that an alleged absence of significant
photochemical reactivity of the facilities' VOC emissions was an
"environmental impact" that would justify less stringent
limitations.
8.46 [Hard Copy]
11.17 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 9, 1990
Order on Motion for Stay on Appeal of Permits for Columbia Gulf
Transmission Company
William K. Reilly, Administrator, EPA
William C. Eddins, Director, Division for Air Quality,
Commonwealth of Kentucky
Susan Midgett, Director, Air Programs Branch, USEPA, Region IV,
and others
The Administrator hereby grants a stay to the appeal by EPA Region
IV of the PSD permit granted by the State of Kentucky to Columbia
Gulf Transmission Company. The stay enables the applicant to
supplement the state administrative record with new factual
information, which the applicant believes will confirm the wisdom
of the State's original permit determination. Further, the Region
may submit additional information to ensure that the BACT
determination is fully contemporaneous. If the permit is
subsequently revised, the public will be given the right to
comment.
8.47 [Hard Copy]
-------
11. PSD Permit Changes/Extensions/Expiration (concluded)
11.18 DATE:
SUBJECT
December 31, 1987
Request for Administrator to Initiate Review of PSD Permit for
Camden County Resource Recovery Facility
FROM: Christopher J. Daggett
Regional Administrator
TO: Lee H. Thomas
Administrator
DISCUSSION: Region II requests review of a PSD permit Issued for construction
of a resource recovery facility because no emission limit was
Included for PM,ft, BACT for PM10 was not adequately addressed, and
public comment on PMin occurred. The NJ DEP issued the permit
CR:
no
December 7, 1987; new NflAQS for PM10 were promulgated on July 1,
1987.
8.50 [Hard Copy]; 10.52
-------
12. PSD Relation to Nonattainment Program
12.13 DATE: July 5., 1988
SUBJECT: Air Quality Analysis for Prevention of Significant Deterioration
(PSD)
FROM: Gerald E. Emison, Director
Office of Air Quality Planning Standards (MD-10)
TO: Thomas J. Mas!any, Director
Air Management Division (3AMOO)
DISCUSSION: The memo relays a policy decision on the approach to use to
interpret dispersion modeling results to determine whether a
source will cause or contribute to a violation of NAAQS or PSD
increment. Under this approach, air quality concentrations are
projected throughout the proposed source's impact area, but do not
automatically cause a source to cause or contribute to a
violation. Instead, where a modeled violation is predicted,
further analysis is done to determine whether the impact is
significant at the point and time of the modeled violation.
CR: 6.22 [Hard Copy]
12.14 DATE:
SUBJECT
FROM:
TO:
December 28, 1988
Emission Offset Exemptions for Resource Recovery Facilities
Gerald A. EmIson, Director, OAQPS
Conrad Simon, Director, Air and Waste Management Division, Region
DISCUSSION: States that have offset exemptions for RRF's in their SIP's should
initiate SIP revisions that would remove the exemptions. EPA will
no longer approve SIP's containing offset exemptions for RRF's
unless they contain an approved growth allowance. Appendix S is
no obstable to deletion of the exemptions, because it has been
largely superceded.
CR: 25.13 [Hard Copy]; 28.6
12.15 DATE: March 17, 1989
SUBJECT: Offset Exemption for Resource Recovery Facilities in Part 231 of
the New York SIP
FROM: Conrad Simon, Director, Air and Waste Management Division
TO: Thomas M. Allen, PE, Acting Director, Division of Air Resources,
NY DEC
DISCUSSION: New York should voluntarily revise Part 231 of its SIP to remove
the offset exemption for resource recovery facilities. When NY
NSR rules were approved in 1980, the Agency had not promulgated
any Part 51 regulations giving requirements for approval of NSR
programs, and thus, was guided by Appendix S in its approval.
Appendix S has now been largely superseded by 40 CFR 51.165(a)
establishing the current requirements for NSR programs.
CR: 25.14 [Hard Copy]; 13.10; 15.8; 25.15; 28.9
-------
12. PSD Relation to Nonattainnent Program (concluded)
12.16 DATE:
SUBJECT
March 17, 1989
Response to Petition Regarding Emissions Offset Exemption for
Resource Recovery Facilities in Part 231 of the NYSIP
FROM: Hill 1am Muszynski, Acting Regional Administrator, EPA Region 11
TO: Eric Goldstein, National Resources Defense Council, Inc., Charles
S. Warren, Berle, Kass, and Case
DISCUSSION: EPA will hold petition regarding the exemption in question in
abeyance pending further EPA action on the current SIP call. This
is, in part, because the merits of the petitions are closely
linked with EPA's outstanding call for revisions to the NY SIP to
correct the State's failure to meet ozone and CO air quality
standards
CR: 25.15 [Hard Copy]; 13.11; 15.9; 28.10
12.17 DATE: April 25, 1990
SUBJECT: Issuance of PSD Permits in Attainment Areas where Violations Have
Been Modeled
FROM: Marcia L. Spink, Chief, Air Programs Branch
TO: John M. Daniel, Jr., Asst. Executive Director, Virginia Department
of Air Pollution Control
DISCUSSION: The attachment to this letter provides procedures for issuing PSD
permits in areas with modeled violation(s) both to sources with no
significant impacts and to sources with significant impacts. In
the latter case, procedures for processing the associated SIP
revisions are also discussed.
CR: 10.49 [Hard Copy]; 6.31; 15.11
-------
13. PSD Temporary Source/Portable Source/Other Exemptions
13.9
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
August 31, 1988
Whether Facilities That Use Glass Fibers Are Considered "Glass
Fiber Processing Plants"
Dennis Grumpier, New Source Review Section
Noncriteria Pollutant Programs Branch
Michael A. Stawarz, NY DEC Region 5
Facilities that use glass fibers to manufacture other products,
such as fiberglass-reinforced composites, were not intended to be
included in the "glass fiber processing" category. "Glass fiber
processing" was intended to include only those facilities engaged
in making glass fiber.
3.31 [Hard Copy]
13.10 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 17, 1989
Offset Exemption for Resource Recovery Facilities in Part 231 of
the New York SIP
Conrad Simon, Director, Air and Haste Management Division
Thomas N. Allen, PE, Acting Director, Division of Air Resources,
NY DEC
New York should voluntarily revise Part 231 of its SIP to remove
the offset exemption for resource recovery facilities. When NY
NSR rules were approved 1n 1980, the Agency had not promulgated
any Part 51 regulations giving requirements for approval of NSR
programs, and thus, was guided by Appendix S in its approval.
Appendix S has now been largely superseded by 40 CFR 51.165(a)
establishing the current requirements for NSR programs.
25.14 [Hard Copy]; 12.15; 15.8; 25.15; 28.9
13.11 DATE: March 17, 1989
SUBJECT: Response to Petition Regarding Emissions Offset Exemption for
Resource Recovery Facilities in Part 231 of the NYSIP
FROM: William Muszynski, Acting Regional Administrator, EPA Region 11
TO: Eric Goldstein, National Resources Defense Council, Inc., Charles
S. Warren, Berle, Kass, and Case
DISCUSSION: EPA will hold petition regarding the exemption in question in
abeyance pending further EPA action on the current SIP call. This
is, 1n part, because the merits of the petitions are closely
linked with EPA's outstanding call for revisions to the NY SIP to
correct the State's failure to meet ozone and CO air quality
standards
CR: 25.15 [Hard Copy]; 12.16; 15.9; 28.10
-------
14. PSD Allowable Constructive Activities Prior to Permit Issuance
14.9
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 23, 1987
Opinion in U.S. v. Louisiana-Pacific Corporation. D. Colo.,
Interpreting Certain PSD Regulations
Thomas L. Adams, Jr.
Assistant Administrator for Enforcement and Compliance Monitoring
J. Craig Potter
Assistant Administrator for Air and Radiation (ANR-443)
This memo summarizes the October 30, 1987, opinion by Judge Arraj
of the US District Court in Colorado regarding summary judgement
and legal matters involved in the case of U.S. vs. Louisiana-
Pacific Corporation (LPC). Judge Arraj denied motions for summary
judgement, finding that a trial was needed to resolve questions of
fact. Two legal issues are discussed. First, EPA can not sue LPC
for the MOV of major modification rules, because the major source,
upon which the major modification must be based, did not exist for
more than 30 days after the NOV was issued (as required by Section
113(b)(2) of the Clean Air Act). EPA's second NOV to LPC for
construction of a major stationary source must be heard at the
trial. Second, state permit limitations can not be a defense for
a source if they were not in effect when an alleged violation
commenced. Further, restrictions on actual, [annual] emissions,
alone, are not appropriate as a consideration in determining a
source's potential to emit.
2.27 [Hard Copy]; 3.29; 10.51
-------
15. PSD SIP Processing
15.5
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
15.6
CR:
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
April .22, 1988
Interim Policy on Stack Height Regulatory Actions
J. Craig Potter, Assistant Administrator for Air and Radiation
Air Division Directors, Regions I-X
A Court of Appeals ruling on January 22, 1988, remanded three
portions of EPA's stack height regulations. This memo discusses
the Impact of these changes. Permits issued under fully approved
or delegated NSR and PSD programs prior to promulgation of revised
rules should provide notice that any permit is subject to review
and modification 1f the source is later found to be affected by
EPA's revised rules.
8.26 [Hard Copy]; 11.11; 28.5
May 17, 1988
Application of the Interim Policy for Stack Height Regulatory
Actions
John Calcagni, Director, Air Quality Management Division
Chief, Air Branch, Regions I-X
This memo provides guidance on carrying out the interim policy
described in the April 22, 1988, memo from Potter to all Regional
Air Directors (8.26). Attached to that memo example language to
be used for permits and regulatory packages to caveat permits
discussed prior to EPA's response to the court remand.
None
15.7 DATE: February 15, 1989
SUBJECT: Guidance on Early Delegation of Authority for the Nitrogen Dioxide
(N02) Increments Program
FROM: Gerald A. Emison, Director, Office of Air Quality Planning and
Standards
TO: Louis F. Gitto, Director, Air Management Division, Region I
DISCUSSION: The memo discusses: (1) how States with delegated authority
initiate the process of advancing the general effective date of
40 CFR 52.21; and (2) the appropriate EPA rulemaking procedures
for carrying out a State's request.
CR: None
15.8 DATE: March 17, 1989
SUBJECT: Offset Exemption for Resource Recovery Facilities in Part 231 of
the New York SIP
FROM: Conrad Simon, Director, Air and Waste Management Division
TO: Thomas M. Allen, PE, Acting Director, Division of Air Resources,
NY DEC
DISCUSSION: New York should voluntarily revise Part 231 of Its SIP to remove
the offset exemption for resource recovery facilities. When NY
NSR rules were approved in 1980, the Agency had not promulgated
any Part 51 regulations giving requirements for approval of NSR
programs, and thus, was guided by Appendix S in its approval.
Appendix 5 has now been largely superseded by 40 CFR 51.165(a)
establishing the current requirements for NSR programs.
CR: 25.14 [Hard Copy]; 12.15; 13.10; 28.9
-------
15. PSD SIP Processing (concluded)
15.9 DATE: March 17, 1989
SUBJECT: Response to Petition Regarding Emissions Offset Exemption for
Resource Recovery Facilities In Part 231 of the NYSIP
FROM: William Muszynski, Acting Regional Administrator, EPA Region 11
TO: Eric Goldstein, National Resources Defense Council, Inc., Charles
S. Warren, Berle, Kass, and Case
DISCUSSION: EPA will hold petition regarding the exemption in question in
abeyance pending further EPA action on the current SIP call. This
is, in part, because the merits of the petitions are closely
linked with EPA's outstanding call for revisions to the NY SIP to
correct the State's failure to meet ozone and CO air quality
standards
CR: 25.15 [Hard Copy]; 12.16; 13.11; 28.10
15.10 DATE:
SUBJECT
August 24, 1989
Guidance on Implementing the Nitrogen Dioxide (N02) Prevention of
Significant Deterioration (PSD) Increments
FROM: John Calcagni, Director, Air Quality Management Division (MD-15)
TO: William B. Hathaway, Director, Air, Pesticides and Toxics
Division, Region VI
DISCUSSION: The memo discusses general and specific aspects of the NO. PSD
increment regulation. States should require N02 increment
consumption analysis as soon as possible to help to avoid a
situation where a proposed new source would violate NO, increment
before the State's NO. increments regulations are in effect.
CR: 6.27 [Hard Copy]
15.11
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
April 25, 1990
Issuance of PSD Permits in Attainment Areas where Violations Have
Been Modeled
Marcia L. Spink, Chief, Air Programs Branch
John M. Daniel, Jr., Asst. Executive Director, Virginia Department
of Air Pollution Control
The attachment to this letter provides procedures for issuing PSD
permits in areas with modeled violation(s) both to sources with no
significant impacts and to sources with significant impacts. In
the latter case, procedures for processing the associated SIP
revisions are also discussed.
10.49 [Hard Copy]; 6.31; 12.17
-------
22. PSD Potential to Emit/Limitations on Capacity to Emit
22.7
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 13, 1989
Guidance on Limiting Potential to Emit New Source Permitting
Terrell E. Hunt
Associate Enforcement Counsel
Air Enforcement Division
Office of Enforcement and Compliance Monitoring
Addressees
This 22-page memo contains final guidance on conditions in
construction permits that can legally limit a source's potential
to emit to minor or de minimus levels. The memo includes sections
of the Louisiana Pacific rulings. Types of limitations that are
Federally enforceable, and, therefore, legitimate restrictions on
potential to emit, are discussed, including restrictions on
production rates, operating hours, control device limitations, and
averaging periods for determining emission rates and control
efficiencies. Characteristics of "sham" permits are identified
and enforcement is discussed. The memo includes sections of the
Louisiana-Pacific rulings as a basis for policy and includes
several examples to illustrate the principles.
2.31 [Hard Copy]; 4.41
-------
23. PSD Definitions/Classification of Source
23.22 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 19, 1986
Finding of Violation in Issuance of Permit to Operate to AM
Genera] Corporation, Indiana
David Kee, Director, Air Management Division, Region V
State of Indiana, St. Joseph County Health Department, AM General
Corporation
A permit to operate given to a metal part coating facility is in
violation of applicable Federal and State regulations. In
particular, applicant did not apply LAER, and increased VOC
emissions were not offset by a reduction in VOC emission by
existing facilities.
25.16; 26.13
23.23 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
October 24, 1980
Definition of "Installation" in Nonattainment Regulations
Walter C. Barber, Director, Office of Air Quality Planning and
Standards
Director, Air and Hazardous Materials Division, Regions I-X
The term installation refers to "an identifiable piece of process
equipment." If an NSPS identifies an "affected facility", the
reviewing agency should consider such an affected facility as an
installation for the purpose of new source review applicability
determinations. Where NSPS is silent or there is no NSPS to
define an affected facility, the NSPS approach should still
provide guidance to the reviewer.
None
23.24 [RESERVED]
-------
23. PSD Definitions/Classification of Source (continued)
23.25 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
October 6, 1987
Emissions from Landfills
Gerald A. Emison, Director
Office of Air Quality Planning and Standards (MD-10)
David P. Howekamp, Director
Air Management Division, Region IX
A landfill is subject to NSR if its potential to emit, excluding
fugitive emissions, exceeds the 100 tpy applicable major source
cutoff for the pollutant for which the area is nonattainment.
Landfill emissions that could reasonably be collected and vented
are not considered fugitive emissions and must be included in
calculating a sources potential to emit. Where landfill gas is
combusted or processed before release, the pollutant released
counts toward NSR applicability.
24.11
23.26 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
November 10, 1987
Air Emissions from a Landfill
Wayne A. Blackard, Chief, New Source Section
Russ Baggerly, Meiners Oaks, CA
Emissions from existing or proposed landfills without gas
collection systems are considered fugitive emissions and are not
subject to NSR. Landfill emissions that are collected would not
qualify as fugitive and could cause the landfill to be subject to
NSR.
24.12
23.27 DATE: June 9, 1988
SUBJECT: Emissions from Rocket Firing at Test Stands; Fugitive or Point
Source Emissions
FROM: Ronald Shafer, Chief
Policy and Guidance Section
TO: John Dale
Air Programs Branch, Region VIII
DISCUSSION: Emissions from rocket nozzles are point sources.
CR: 3.30 [Hard Copy]; 5.23; 24.13
-------
23. PSD Definitions/Classification of Source (continued)
23.28 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 10, 1988
Nay 25, 1988 conference call
Monica Smyth
Assistant Regional Counsel
File, CPC Argo
An increase or decrease in actual emissions is creditable in the
netting equation only if EPA has not relied on it in issuing a
major source permit under the PSD or Non-Attainment regulations.
Minor source permits and specific emission increases that might be
permitted through such minor source permits must be included in
the netting equation, as long as those increases occur during the
contemporaneous time period.
4.36 [Hard Copy]; 25.11
23.29 DATE:
SUBJECT
September 9, 1988
Applicability of Prevention of Significant Deterioration (PSD)
and New Source Performance Standards (NSPS) Requirements to the
Wisconsin Electric Power Company (VIEPC) Port Washington Life
Extension Project
FROM: Don R. Clay, Acting Assistant Administrator for Air and
Radiation (ANR-443)
TO: David A. Kee, Director
Air and Radiation Division, Region V
DISCUSSION: Although not an official applicability determination, this memo
provided the preliminary opinion, based on the information
collected up to the date of issue, that PSD and NSPS would apply
to a "life extension" project at Port Washington Power Plant.
Each element of PSD applicability via major modification and NSPS
applicability were discussed in the context of information
provided. This project involves restoring the physical and
operational capabilities of each unit to its original capacity and
extending the useful life of the units well beyond the planned
retirement dates that would otherwise apply. This work appears to
be non-routine, and, thus, to constitute a "physical change"; a
significant net emissions increase would occur as a result of the
work.
CR: 4.37'[Hard Copy]
-------
23. PSD Definitions/Classification of Source (concluded)
23.30 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 12, 1989
Guidance on Several Issues Related to Determining Applicability
of New Major Source Regulations in Granting Construction Permits
Edward J. Lillis, Chief
Noncriteria Pollution Programs Branch
Air Quality Management Division
Michael J. Hayes, Manager
Division of Air Pollution Control, Illinois EPA
Memo provides guidance on several issues related to determining
applicability of major source regulations in granting construction
permits to modified sources.
(1) A reviewing agency must base determination of whether a
source is "major" on "major" source definitions in the
Federal Register.
(2) Whether the emissions increase related to a modification is
significant is determined before any netting calculation is
done. If it is, netting calculations are then performed to
determine whether the "net emissions increase" associated
with that modification is significant.
(3) Contemporaneous emissions increases and decreases are
discussed, as well as other factors affecting whether they
are "creditable".
(4) An example of a netting calculation is shown. Emissions
increases or decreases used in issuing a previous major
source permit cannot be creditable to a subsequent increase.
3.33 [Hard Copy]; 4.40
23.31
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
February 6, 1990
Determination of Lowest Achievable Emission Rate for Coors
Container Corporation, Canline CX3
Douglas M. Skie, Chief, Air Programs Branch, Region VIII
Brad Beckham, Director, Air Pollution Control Division, CO Dept.
of Health
Because LAER is determined for each modified emissions unit, each
emissions unit at Coors Canline CXB that has an increase in
emissions due to the major modification must have an independent
LAER determination. These LAER determinations must be based on a
comparison of emissions from other similar operations on a
normalized basis.
26.12 [Hard Copy]
-------
24. PSD Geographic/Pollutant Applicability
24.9 [RESERVED]
24.10 [RESERVED]
24.11
DATE:
SUBEJCT:
FROM:
TO:
DISCUSSION:
CR:
October 6, 1987
Emissions from Landfills
Gerald A. Emison, Director
Office of Air Quality Planning and Standards (MD-10)
David P. Howekamp, Director, Air Management Division, Region IX
A landfill is subject to NSR if its potential to emit, excluding
fugitive emissions, exceeds the 100 tpy applicable major source
cutoff for the pollutant for which the area is nonattainment. L
andfill emissions that could reasonably be collected and vented
are not considered fugitive emissions and must be included in
calculating a sources potential to emit. Where landfill gas is
combusted or processed before release, the pollutant released
counts toward NSR applicability.
23.25 [Hard Copy]
24.12 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
November 10, 1987
Air Emissions from a Landfill
Wayne A. Blackard, Chief, New Source Section
Russ Baggerly, Meiners Oaks, CA
Emissions from existing or proposed landfills without gas
collection systems are considered fugitive emissions and are not
subject to NSR. Landfill emissions that are collected would not
qualify as fugitive and could cause the landfill to be subject to
NSR.
23.26 [Hard Copy]
24.13 DATE: June 9, 1988
SUBJECT: Emissions from Rocket Firing at Test Stands; Fugitive or Point
Source Emissions
FROM: Ronald Shafer, Chief
Policy and Guidance Section
TO: John Dale
Air Programs Branch, Region VIII
DISCUSSION: Emissions from rocket nozzles are point sources.
CR: 3.30 [Hard Copy]; 5.23; 23.27
-------
25. PSD Offsets
25.12 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 10,
May 25', 1988 conference call
Monica Smyth
Assistant Regional Counsel
File, CPC Argo
An increase or decrease in actual emissions is creditable in the
netting equation only if EPA has not relied on it in issuing a
major source permit under the PSD or Non-Attainment regulations.
Minor source permits 'and specific emission increases that might be
permitted through such minor source permits must be included in
the netting equation, as long as those increases occur during the
contemporaneous time period.
4.36 [Hard Copy]; 23.28
25.13 DATE: December 28, 1988
SUBJECT: Emission Offset Exemptions for Resource Recovery Facilities
FROM: Gerald A. Eraison, Director, OAQPS
TO: Conrad Simon, Director, Air and Haste Management Division, Region
II
DISCUSSION: States that have offset exemptions for RRF's in their SIP's should
initiate SIP revisions that would remove the exemptions. EPA will
no longer approve SIP's containing offset exemptions for RRF's
unless they contain an approved growth allowance. Appendix S is
no obstable to deletion of the exemptions, because it has been
largely superceded.
CR: 12.14; 28.6
25.14 DATE:
SUBJECT
March 17, 1989
Offset Exemption for Resource Recovery Facilities in Part 231 of
the New York SIP
FROM: Conrad Simon, Director, Air and Haste Management Division
TO: Thomas M. Allen, PE, Acting Director, Division of Air Resources,
NY DEC
DISCUSSION: New York should voluntarily revise Part 231 of its SIP to remove
the offset exemption for resource recovery facilities. Hhen NY
NSR rules were approved in 1980, the Agency had not promulgated
any Part 51 regulations giving requirements for approval of NSR
programs, and thus, was guided by Appendix S in its approval.
Appendix 5 has now been largely superseded by 40 CFR 51.165(a)
establishing the current requirements for NSR programs.
CR: 12.15; 13.10; 15.8; 28.9
-------
25. PSD Offsets (concluded)
25.15 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 17, 1989
Response to Petition Regarding Emissions Offset Exemption for
Resource Recovery Facilities in Part 231 of the NYSIP
William Muszynski, Acting Regional Administrator, EPA Region 11
Eric Goldstein, National Resources Defense Council, Inc., Charles
S. Warren, Berle, Kass, and Case
EPA will hold petition regarding the exemption in question in
abeyance pending further EPA action on the current SIP call. This
is, in part, because the merits of the petitions are closely
linked with EPA's outstanding call for revisions to the NY SIP to
correct the State's failure to meet ozone and CO air quality
standards
12.16; 13.11; 15.9; 28.9
25.16
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 19, 1986
Finding of Violation in Issuance of Permit to Operate to AM
General Corporation, Indiana
David Kee, Director, Air Management Division, Region V
State of Indiana, St. Joseph County Health Department, AM General
Corporation
A permit to operate given to a metal part coating facility is in
violation of applicable Federal and State regulations. In
particular, applicant did not apply LAER, and increased VOC
emissions were not offset by a reduction in VOC emission by
existing facilities.
23.22 [Hard Copy]; 26.13
-------
26. PSD LAER
26.4
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
April 25, 1988
LAER Emission Limits for Automobile and Light Duty Truck Topcoat
Operations
Jack R. Fanner, Director
Emission Standards Division (MD-13)
Regional Air Division Directors
The LAER emission unit for automobile and light-duty truck topcoat
operations should be at least as stringent as 12.26 Ibs VOC per
gallon solids deposited, with compliance on a daily basis using
actual measured transfer efficiency values. Compliance with this
LAER limit should be determined using the protocol developed by
EPA in conjunction with the motor vehicle manufacturers
association. NSR permit for Subaru/Isuzu, Lafayette, IN, was
attached to original memo.
None
26.5
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
August 29, 1988
Transfer of Technology in Determining Lowest Achievable Emission
Rate (LAER)
John Calcagni, Director
Air Quality Management Division (MD-15)
David Kee, Director
Air and Radiation Division, Region V
(a) EPA supports transfer of control technology between source
categories for the purpose of determining LAER for a source
both for gas stream controls, and for process controls and
modification.
(b) LAER is primarily an emissions unit determination; each
emissions unit must achieve the lowest possible emission
rate. "Facility-wide" LAER can be considered if some more
effective LAER exists thereby. Three hurdles to determining
"facility-wide" LAER are discussed.
(c) LAER can be considered individually for each aspect of
control of a source, although reviewers must be aware that
one decision affects the others.
None
26.6
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 1, 1988
RACT Requirements in Ozone Nonattainment Areas
Gerald A. Emison, Director
Office of Air Quality Planning and Standards (MD-10)
William A. Spratlin, Director
Air and Toxics Division, Region VII
Circumstances unique to the auto industry have created a situation
[at the time of this memo] where RACT requirements for a facility
may be more stringent than NSPS or LAER. In this case, the State
or local implementation plan should contain RACT requirements for
these facilities.
None
-------
26. PSD LAER (continued)
26.7
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
February 24, 1989
Cut-Off Date for Determining LAER in Major New Source Permitting
John Seitz, Director, SSCD, OAQPS
David Kee, Director, Air and Radiation Division, Region V
A LAER determination for an NSR permit must reflect the most
stringent LAER construction permit that has been issued anywhere
in the country in the time period up to and including the public
comment period on the permit under consideration. See also
Documents 26.10 and 26.11.
None
26.8
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
February 28, 1989
Guidance on Determining Lowest Achievable Emission Rate (LAER)
John Calcagni, Director
Air Quality Management Division (MD-15)
David Kee, Director
Air and Radiation Division, Region V
(a) Little weight is given to economics in LAER determinations.
Cost of a control could be considered not achievable only if
no new plants could be built in that industry if emission
limits were based on levels achievable only with the
contemplated control technology.
(b) LAER for coating operations may mean low (or no) VOC solvent
coatings, high transfer efficiencies, add-on control device
on the gas stream, or some combination of these.
(c) The most stringent emissions limit contained in a SIP for a
class or category of source must be considered LAER unless a
more stringent emissions limitation has been achieved in
practice, or unless the SIP limitation is demonstrated to be
unachievable by the source.
(d) Careful case-by-case investigations must be made to determine
how company-mandated product specifications (for coatings)
would be used in determining LAER, and what limit must be met
where a presumptive SIP-based LAER is not achievable.
None
26.9 DATE: March 2, 1989
SUBJECT: Reasonably Available Control Technology (RACT) for New Automobile
Assembly Plants
FROM: G. T. Helms, Chief
Ozone/Carbon Monoxide Programs Branch (MD-15)
TO: Steve Rothblatt, Chief
Air and Radiation Branch (5AR-26)
DISCUSSION: Automobile assembly plants in ozone non-attainment areas should
have VOC emission requirements that are at least as stringent as
RACT. Where NSPS and LAER requirements are not as stringent as
RACT, RACT requirements should be instituted.
CR: 28.8
-------
26. PSD LAER (continued)
26.10 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
August 9, 1989
LAER Determination for a Previously Constructed Source
John S. Seitz, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
Thomas J. Maslany, Director
Air Management Division
Region III
Final LAER determination is not made until issuance of a final
permit for a source constructed previous to permit review. The
initial LAER assessment is made at the time of the completed
application, and takes into consideration any technologies,
practices, or SIP limits in effect as of the date of the complete
permit.
None
26.11 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 11, 1990
BACT/LAER Determination Cut-Off Date
John Seitz, Director, Stationary Source Compliance Division, OAQPS
Regional Air Directors, Regions I-X
The BACT/LAER determination for a major new source is not set
until the final permit is issued. The source has the
responsibility to investigate all available and pending control
technologies for consideration as BACT or LAER. Establishment of
a cutoff date prior to the public comment period would limit
public participation. A cutoff date established prior to permit
issuance could allow a source to avoid more stringent controls.
8.43 [Hard Copy]
26.12 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
February 6, 1990
Determination of Lowest Achievable Emission Rate for Coors
Container Corporation, Canline CX3
Douglas M. Skie, Chief, Air Programs Branch, Region VIII
Brad Beckham, Director, Air Pollution Control Division, CO Dept.
of Health
Because LAER is determined for each modified emissions unit, each
emissions unit at Coors Canline CXB that has an increase in
emissions due to the major modification must have an independent
LAER determination. These LAER determinations must be based on a
comparison of emissions from other similar operations on a
normalized basis.
23.31
-------
26. PSD LAER (concluded)
26.13 DATE:
SUBJECT
June 19, 1986
Finding of Violation in Issuance of Permit to Operate to AM
General Corporation, Indiana
FROM: David Kee, Director, Air Management Division, Region V
TO: State of Indiana, St. Joseph County Health Department, AM General
Corporation
DISCUSSION: A permit to operate given to a metal part coating facility is in
violation of applicable Federal and State regulations. In
particular, applicant did not apply LAER, and increased VOC
emissions were not offset by a reduction in VOC emission by
existing facilities
CR: 23.22 [Hard Copy]; 25.16
-------
27. NAA. Statewide Compliance
27.5 DATE: October 28, 1988
SUBJECT: Review of De Minimis Emissions - Sanctions
FROM: Ronald Shafer, Chief
Policy and Guidance Section
Stationary Source Compliance Division
TO: Ron Van Mersbergen
Air and Radiation Branch (5AR-26) Region V
DISCUSSION: Qe minimis net emission increases that accumulate within a
contemporaneous (5 year) time frame should not be combined and
would not trigger PSD review when significance levels are reached.
However, de minimis increases do consume PSD increment, and, in
nonattainment areas, aggregated de minimis emissions will trigger
sanctions when significance levels are reached.
CR: 4.39 [Hard Copy]; 5.24
-------
28. NAA. SIP Processing
28.5 DATE: April 22, 1988
SUBJECT: Interim Policy on Stack Height Regulatory Actions
FROM: J. Craig Potter, Assistant Administrator for Air and Radiation
TO: Air Division Directors, Regions I-X
DISCUSSION: A Court of Appeals ruling on January 22, 1988, remanded three
portions of EPA's stack height regulations. This memo discusses
the Impact of these changes. Permits issued under fully approved
or delegated NSR and PSD programs prior to promulgation of revised
rules should provide notice that any permit is subject to review
and modification if the source is later found to be affected by
EPA's revised rules.
CR: 8.26 [Hard Copy]; 11.11; 15.5
28.6 DATE: December 28, 1988
SUBJECT: Emission Offset Exemptions for Resource Recovery Facilities
FROM: Gerald A. Emison, Director, OAQPS
TO: Conrad Simon, Director, Air and Waste Management Division, Region
DISCUSSION: States that have offset exemptions for RRF's in their SIP's should
initiate SIP revisions that would remove the exemptions. EPA will
no longer approve SIP's containing offset exemptions for RRF's
unless they contain an approved growth allowance. Appendix S is
no obstable to deletion of the exemptions, because it has been
largely superceded.
CR: 25.13 [Hard Copy], 12.14
28.7 DATE: January 31, 1989
SUBJECT: Use of the Growth Allowable Contained in Part D SIPs
FROM: Bruce P. Miller, Chief, Air Programs Branch, Air Pesticides and
Toxics Management Division, EPA Region IV
TO: Paul J. Bontrager, Director, Bureau of Pollution Control,
Nashville - Davidson County
DISCUSSION: Areas for which a growth allowance was approved, but who failed to
attain the ozone standard by the end of 1987, no longer have
growth allowance available for use in lieu of offsets for new
sources locating in nonattainment areas. Banked credits from
source shutdown can be used for offsets in NAA Areas (except for
on-site replacement facilities), only if they occur on the day the
application 1s "complete" or any subsequent day up until actual
operations begin.
CR: None
28.8 DATE: March 2, 1989
SUBJECT: Reasonably Available Control Technology (RACT) for New Automobile
Assembly Plants
FROM: G. T. Helms, Chief
Ozone/Carbon Monoxide Programs Branch (MD-15)
TO: Steve Rothblatt, Chief
Air and Radiation Branch (5AR-26)
DISCUSSION: Automobile assembly plants in ozone non-attainment areas should
have VOC emission requirements that are at least as stringent as
RACT. Where NSPS and LAER requirements are not as stringent as
RACT, RACT requirements should be Instituted.
CR: 26.9 [Hard Copy]
-------
28. NAA. SIP Processing (concluded)
28.9 DATE: March .17, 1989
SUBJECT: Offset Exemption for Resource Recovery Facilities in Part 231 of
the New York SIP
FROM: Conrad Simon, Director, Air and Haste Management Division
TO: Thomas M. Allen, PE, Acting Director, Division of Air Resources,
NY DEC
DISCUSSION: New York should voluntarily revise Part 231 of its SIP to remove
the offset exemption for resource recovery facilities. When NY
NSR rules were approved in 1980, the Agency had not promulgated
any Part 51 regulations giving requirements for approval of NSR
programs, and thus, was guided by Appendix S in Its approval.
Appendix 5 has now been largely superseded by 40 CFR 51.165(a)
establishing the current requirements for NSR programs.
CR: 25.14 [Hard Copy]; 12.15; 13.10; 15.8
28.10 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 17, 1989
Response to Petition Regarding Emissions Offset Exemption for
Resource Recovery Facilities in Part 231 of the NYSIP
Hill 1am Muszynski, Acting Regional Administrator, EPA Region 11
Eric Goldstein, National Resources Defense Council, Inc., Charles
S. Harren, Berle, Kass, and Case
EPA will hold petition regarding the exemption in question in
abeyance pending further EPA action on the current SIP call. This
is, in part, because the merits of the petitions are closely
linked with EPA's outstanding call for revisions to the NY SIP to
correct the State's failure to meet ozone and CO air quality
standards.
25.15 [Hard Copy]; 12.16; 13.11; 15.9
-------
1. PSD
Transition/Grandfathering
-------
2. PSD
Potential to Emit/Limitations on Capacity to Emit
-------
i as
UNITED STATED
JAN -4 1333
2.27
ONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
1
ENFORCCMFNTAND
COMPllfcNC.t BOMTO-I.NC
SUBJECT: Opinion in U.S. v. Louisiana-Pacific Corporation,
D. Colo., Interpreting Certain PSD Regulations
V \C>
FROM: Thomas L. Adams, Jr. <=>~-^— _X^«—
Assistant Administrator for Enforcement
and Compliance Monitoring
TO: J. Craig Potter
Assistant Administrator
for Air and Radiation (ANR-443)
On October 30, 1987, Judge Arraj of the U.S. District Court
for the District of Colorado issued an opinion on cross motions
for summary judgment in this case. The United States has sued
Louisiana-Pacific (LPC) for construction of two major stationary
sources without first obtaining prevention of significant
deterioration (PSD) permits as required by the Clean Air Act and
applicable regulations. LPC has alleged that the sources in
question, waferboard production facilities located at Kremmling
and Olathe, Colorado, were not major sources and so the requirement
to obtain PSD permits did not apply to the facilities. Judge
Arraj denied both motions for summary judgment, finding that
questions of fact existed which need to be resolved in a trial.
Trial is new set to commence January 19, 1988. However, Judge
Arraj's opinion covers several legal matters which are important
issues of first impression and may significantly affect enforcement
under the Clean Air Act in the future.
I. The Jurisdictional Requirement for a 30 Day
Continuing Violation After the Issuance of a NOV
In its complaint, the government had pleaded its first claim
in the alternative, alleging that the LPC Kremmling waferboard
facility was either a "major modification" or a "major stationary
source", as defined by the PSD regulations. The Court granted
LPC's motion for summary judgment on the government claim that
the Kremmling facility was a major modification. The Court's
reasoning was based on the Jurisdictional requirements of the
-------
-2-
Clean Air Act. LPC operated a saw mill which contained a teepee
burner on the Kremmling site prior to commencing construction of
the waferboard plant in 1983. The ieepee burner was undisputedly
a major stationary source (it had emitted over 250 tons per year
of a regulated pollutant). A major modification is defined in
the PSD regulations as a physical or operational change which
produces significant net emissions increases. "Significant" is
further defined as 40 tons per year of volatile organic compound,
or 25 tons per year of particulates. There is no question that
the waferboard plant increased emissions at Kremmling by those
amounts.
EPA issued an NOV to LPC for construction of a major
modification without a PSD permit on June 5, 1987. However, by
the end of June, LPC had dismantled and permanently removed the
teepee burner (the major stationary source). Judge Arraj held
that EPA could not maintain its action on the major modification
theory because the major source, upon which the major modification
must be based, did not exist for more than 30 days after the NOV
was issued. Section 113(b)(2) of the Clean Air Act allows the
Administrator to bring suit in federal district court when a
source violates the Act "more than 30 days after having been
notified by the Administrator under section (a)(l) of this section
of a finding that such person is violating such requirement."
EPA had also issued a second NOV to LPC for the construction
of the waferboard plant at Kremmling, however. This NOV, issued
February 3, 1987, alleged construction of a major stationary
source without a PSD permit. To prove this allegation, EPA must
show that•the Kremmling waferboard plant itself has the potential
to emit 250 tons per day. The Judge allowed this claim (the
plaintiff's first claim in the alternative) to stand and be heard
at trial.
II. The Meaning of "Federally Enforceable Restrictions"
as Limiting "Potential to Emit" Under PSD Regulations
LPC argued that the Kremmling and Olathe plants could not
be considered major stationary sources because conditions
in their state permits limited their emissions to less than 250
tons' per year of each regulated pollutant. Since these state
permits were issued under an EPA-approved program, the permits
are considered "federally enforceable". Therefore, LPC argued,
conditions in these permits which limit emissions should be
considered federally enforceable limits for purposes of determining
potential to emit.
-------
2.27
-3-
The Court disagreed. Judge Arraj first pointed out that the
violation begins when construction commenced and that the state
permits for Kremmling and Olathe were not issued until several
months after construction commenced. Thus, the state permit
limitations could not be a defense in the case be^aus_e they riiri
not ejtist when the alleged vio_l_a.tJj3Ji_c.ojiiaen.cfiji.
After making this determination, Judge Arraj held
that "even if the state permits had been in existence when the
alleged violation occurred . . . defendant's motion would still
have to fail because I cannot accept defendant's overly broad
construction of the term 'potential to emit."1 pp. 17-18. The
Judge rejected the notion that restrictions on actual emissions
are properly consider^ in ripj-pT-m-ir.ir.rj a C-^.V&«MVI^ pA^nt-i^i +-.->
emit_. He analyzed the opinion in Alabama Power v. Cos tie, 636
F.2d 322 (D.C. Cir. 1979), the seminal opinion regarding
the meaning and requirements of the PSD program. He looked, as
well, to the preamble of the 1930 PSD regulations, those regulations
promulgated-by EPA in response to the Alabama Power decision.
From these sources and the language of the regulations themselves,
the Judge concluded "that a variety of factors (in addition to
maximum design capacity) are properly included in the calculation
of a source's potential to emit. These factors clearly include
the effect of pollution control equipment. Additionally, they
include federally enforceable permit conditions which restrict
hours of operation or amounts of material combusted or produced
. . . (T)hese factors do not include permit restrictions which
limit specific types and amounts of actual emissions." In
reaching his conclusion, the Judge found that the definition of
"potential to emit" should be given a narrow construction. The
opinion held that "not all federally enforceable restrictions are
properly considered in the calculation of a source's potential to
emit. While restrictions on hours of operation and on the amount
of material combusted or produced are properly included, blanket
restrictions on actual emissions are not." p. 23.
A copy of the opinion is attached. If you have any questions,
please call Judy Katz at 382-2843.
Attachment
-------
-4-
cc: Regional Counsels
Regions I-X
Air and Waste Management Division Director
Region II
Air Management Division Directors
Regions I, III, and IX
Air and Radiation Division Director
Region V
Air, Pesticides, and Toxics Management Division Directors
Regions IV and VI
Air and Toxics Division Directors
Regions VII, VIII, and X
Jonathan Z. Cannon
Deputy Assistant Administrator for Civil Enforcement
John S. Seitz, Director
Stationary Source Compliance Division
Alan EcXert
Associate General Counsel
Air and Radiation
-------
2.28
*
3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
•AR 291988
MEMORANDUM
Offirt OF
ENFORfcMFNT AND
COMPLIANT MONITOMIOiC
SUBJECT: Opinion in U.S. v. Louisiana-Pacific Corporation, Civil
Action No. 86-A-1880 (D. Colorado, March 22, 1988)
FROM: Michael S. Alushin £M 0
Associate Enforcement Counsel
Air Enforcement Division
TO: Thomas L. Adams, Jr.
Assistant Administrator for Enforcement
and Compliance Monitoring
J. Craig Potter
Assistant Administrator
for Air and Radiation (ANR-443)
On March 22, Judge Alfred A. Arraj of the District of Colorado
issued his opinion in this case which was tried in Denver between
January 19-26, 1988. EPA had brought an enforcement action
against Louisiana-Pacific Corporation (LPC) for violations of the
prevention of significant deterioration (PSD) regulations under
the Clean Air Act. The violations occurred when LPC constructed
two waferboard plants in Kremmling and Olathe, Colorado without
first obtaining PSD permits. Judge Arraj found that EPA had not
met its burden of proving that the Olathe plant was subject to
PSD requirements, but held that LPC had violated PSD regulations
at the Kremmling plant. Judge Arraj did not find that LPC had
received an economic benefit from its violation, however, and
assessed a civil penalty of $65,000. This is the first enforcement
case for PSD violations exclusively to go to trial.
Discussion
Although the amount of the civil penalty awarded by Judge
Arraj is modest, his opinion contains good law for EPA. The
adverse holdings were based on narrow issues of fact and cannot
act as precedent for future litigation. The important legal
issues discussed include the proper implementation of the thirty
day notice provision of 42 U.S.C. §7413 and a thorough analysis
of the term "potential to emit."
-------
-3-
In arriving at an appropriate penalty, Judge Arraj found
that there was no economic benefit from delayed compliance. His
conclusion was based on the reasoning that, by the first date of
LPC's violation, LPC had already installed and was operating the
control equipment that probably would have been required as best
available control technology (BACT) if LPC had applied for a PSD
permit. The first date of violation was found to be November
1986, when LPC first exceeded the production limits in its state-
permit.
However, the court ruled that:
Were this court to assess a nominal penalty only in
this case, it would give sanction to a willful disregard
of the PSD regulatory framework/ and encourage other
sources in the future to disregard other lawful
restrictions on operations whenever convenient to do
so .... (T)he burden of guessing correctly (what
emissions will be) remains with the source, and ....
a mistake in this process can indeed result in a
penalty. Otherwise, future sources that are unsure of
whether they will qualify as a major source will have
no incentive to apply for PSD permits, which,
undisputedly, is a burden. Slip opinion at 49-50.
Judge Arraj did not explan how he arrived at the figure of §65,000.
Conclusion
The amount of the penalty awarded by the Court is significantly
less than the government sought at trial. However, the opinion
contains language that will be helpful precedent for cases in the
future. The reasons for the court's relatively small penalty
turn on narrow issues of fact peculiar to this specific case and
cannot be used generally by other sources in future litigation.
While the government has not made a definite decision about
whether to appeal, it seems likely that we will accept Judge
Arraj's decision. A copy of the opinion is attached.
Attachment
cc: Gerald Eaison, Director
Office of Air Quality Planning and Standards
Jonathan Z. Cannon
Deputy Assistant Administrator
for Civil Enforcement
Alan W. Eckert
Associate General Counsel
Air and Radiation Division
-------
IK THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO »" I L E D
L-|i;£3 ITATIJ DilTPiCT C3UR3
Civil Action No. 86-A-1880
UNITED STATES OF AMERICA, MAR 22.1988
plaintiff« JA:.!I3 rt. MANSPSAKE
vyi J CLE°K
v. KVV
LOUISIANA-PACIFIC CORPORATION,
a Delaware corporation.
Defendant.
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
ARRAJ, District Judge
This is a civil enforcement action brought by the United States
of America, as plaintiff, on behalf of the U.S. Environmental Protection
Agency CEPA") for violations of the Clean Air Act, 42 D.S.C. § 7401,
et. seq., and the regulations promulgated thereunder concerning the
prevention of significant deterioration ("PSD") of air quality by
the defendant, Louisiana-Pacific Corporation ("LPC"). Plaintiff
seeks to enjoin defendant from further alleged violations of the
PSD regulations, which are set forth at 40 C.F.R. $52.21. Additionally,
plaintiff seeks the assessment of civil penalties against LPC for
alleged riolations of these regulations.
1. The PSD Program, added to the Clean Air Act by Congress in 1977,
is designed to protect areas where the air is relatively clean.
It requires that a special permit be obtained before a "major stationary
source" of air pollution, or a "major modification" of a major stationary
source, may be constructed in such an area.
-------
The case was tried to the court on January 19 through 22, and
January 25 and 26, 1988. Written closing arguments were submitted
by the parties, and oral closing argument was heard on February 17,
1988. Having heard the testimony and arguments, and having reviewed
the voluminous transcripts and exhibits, I find that the matter is
ripe for disposition. The following shall constitute the court's
findings of fact and conclusions of law in conformance with Ped.R.
Civ.P. 52(a).
I. BACKGROUND! THE PSD PROGRAM
The Clean Air Act establishes minimum air quality standards
to be achieved in all regions of the country. In 1977, Congress
amended the Act to establish a program for the "prevention of signi-
ficant deterioration ("PSD") of air quality. The PSD statutes and
regulations are designed to protect areas of the country where the
air is relatively clean. The goal of the program is to prevent the
air quality in areas where it exceeds the statutory minimum from
degenerating to that level.
To achieve this result, areas of the country where the air is
cleaner than required by the National Ambient Air Quality Standards
are id«tifi«d by the states and designated as "attainment areas."
42 U.S.C. $5 7407, 7471 (1983). The attainment areas are further
divided into three classes: Class I for areas that have very clean
air (such as national parks) where little or no deterioration is per-
mitted; Class II for areas where moderate deterioration of air quality
may occur; and Class III for areas where more economic growth and
resulting air quality deterioration is allowed. Id. SS 7472, 7474.
- 2 -
-------
The thrust of the ?SO orogran 13 that new "najor e-nmring facilities"
may not be constructed within these areas before certain permits
have been obtained. Id. § 7475.. The permits, in turn, allow the
new facility to contribute to air pollution only up to specified
incremental amounts. Id. $ 7473(b). Of central importance to this
case is the fact that LPC's Kremmling and Olathe facilities are located
within attainment areas.
The Clean Air Act provides that "tn]o major emitting facility...
may be constructed in any [attainment area] unless a permit has been
issued for such proposed facility in accordance with this part setting
forth emission limitations for such facility " 42 O.S.C. 5 7475(a)(1)
(emphasis added). The Act further provides that the term "major
emitting facility" includes any source with the potential to emit
250 tons per year (TPY) or more of any air pollutant. Id. S 7479(1).
The PSD regulations go into more detail and establish the rule
that no "major stationary source" or "major modification" of a major
stationary source "shall begin actual construction without a permit"
which states that the source or modification will meet the emission
requirements set forth in the regulations. 40 C.P.R. 5 52.21(i)
(1983). The term "major stationary source" is defined to include
any facility which emits, or has the potential to emit, 250 TPY of
any air pollutant. .Id. S 52.2Kb) (1) (i) (b). A 'major modification-
is defined as any physical change or change in operation that would
result in a significant increase in the emission of any one of several
pollutants. Id. 55 52.21(b)(2)(i), 52.21 (b)(23). With regard to
the pollutants that are relevant in the present case, a net emissions
increase of 100 TPY of carbon monoxide (CO) or 40 TPY of volatile
organic compounds (VOCs) would be significant, and thereby constitute
a major modification. Id.
- 3 -
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Permits nay be issued only to sources that satisfy two principal
requirements. First, the source must demonstrate that emissions
from the construction or operation of the facility will not violate
any applicable emission standard of the act. 42 U.S.C. § 747S(a)(3).
Second, the proposed source must be subject to the best available
pollution control technology. Id. § 747S(a)(4). To facilitate its
review, the EPA requires that new sources submit air monitoring information
necessary to determine the impact on air quality of the proposed
source. 40 C.F.R. S 52.21(m). Generally, such monitoring must be
gathered one year in advance of submission of the PSD application.
The EPA then has up to one year to review and grant or deny the application.
42 U.S.C. S 7475(c). As a result, it may take up to two years before
the source is allowed to commence actual construction of the new
facility.
Where the EPA determines that the provisions of the Clean Air
Act and its implementing regulations have not been complied with,
it may issue a notice of violation ("NOV") to the alleged offender.
42 U.S.C. § 7413(a)(ll. If the alleged violation continues for more
than 30 days after the issuance of the NOV, the EPA is then empowered
to bring a civil enforcement action. Id. S 7413(b)(2). If a violation
is established, the Act authorizes the court to issue a temporary
or permanent injunction, or to assess a civil penalty of up to $25,000
per day of violation, or both. Id.
- 4 -
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II. FINDINGS OF FACT
Defendant LPC came to Colorado in 1983, with the encouragement
of the state government, to establish the industry of waferwood manu-
facturing.2 Since that time, LPC has built two waferwood plants
in Colorado, the first in Kremmling, and the other near the town
of Olathe. The air pollution emissions from these two plants, and
the failure by LPC to obtain PSD permits from the EPA, form the basis
of the present litigation.
A. "Waferwood"
In order to fully appreciate the issues before the court in
this case, it is necessary to have some familiarity with the process
by which LPC's Kremnling and Olathe facilities turn aspen and pine
logs into "waferboard." First, when the logs are ready to be processed,
they are cut by a saw into lengths of about eight feet. Once cut,
the logs are moved into pools of heated water, called "hot ponds,"
to condition the bark for removal. From the hot ponds, the logs
go to the "debarker" which, not surprisingly, is a machine that removes
the bark. After the bark is removed, the logs move on to the "slasher,"
which cuts the logs into three-foot pieces, and then to the "waferizer,"
which chops these pieces into one-and-a-half to three-inch chips,
or "wafers." The wafers then go to storage bins.
2. Waferwood is a plywood substitute product made of resinated wood
chips, or "wafers," which are compressed into boards.
3. Additionally, the hot ponds perform the function of thawing out
any logs which may, ir. the wintertime, be frozen.
- 5 -
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From the storage bins, the wafers go to the "wafer dryer," which
is a machine that combusts wood and sawdust to produce a heated "exhaust
gas." The hot exhaust gas is brought into direct contact with the
wood chips and thereby dries them. The chips are blown by the exhaust
gas into a cyclone which, using principles of centrifugal force,
separates the dried wood chips from the exhaust gas. The dried wafers
then* move on to a "screening" process where they are separated into
two different sizes and stored.
Once the chips have been screened, they move from the storage
bins to a "blender," where they are mixed with adhesives and waxes
for the forming process. The chips are then laid on a mat. with
larger chips on the top and bottom and smaller chips in between.
The material on the mat is split by a "cross-cut saw" into sections
measuring eight feet by sixteen feet. These sections are then loaded
into the "press," which heats and compresses the material into "wafer-
board." From the press, the sections of waferboard are trimmed and
cut into sheets measuring four feet by eight feet by the "trim saw."
These four-by-eight sheets of waferboard are the final product.
The process just described creates air emissions in a number
of ways. First, wet bark and sawdust from the slasher and debarker
are combusted in a device known as a "Bonus" thermal oil heater to
generate men of the heat required by the plant. The main purpose
of the Konus is to provide heat to the presses by means of a hot
oil system, which is similar to a boiler system. The heat from the
Konus is used to heat oil which, in turn, transfers that heat to
the presses. A secondary purpose of the Konus is to supply heat
to the hot ponds. Finally, heat from the Konus is also -used to heat
- 6 -
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the building itself in the wintertime. The emissions generated by
the Konu« Include carbon monoxide {"CO") and volatile organic compounds
("VOC3"), as well as particulates, from the complete and incomplete
combustion of the wet bark and wood that is used as fuel for the
device.
Particulate emissions from the Konus combustion process are
removed from the exhaust gas in two ways. First, the gas is blown
into a 'cyclone," which is a cylindrical device that causes the exhaust
to rotate around in it. As a result of the rotation, solid material
in the gas stream is thrown to the side of the device and is collected.
Second, the gas exiting the cyclone is blown into a "baghouse."
A baghouse is a pollution control device that operates in much the
sane way as a household vacuum cleaner. It consists of several fabric
bags through which the exhaust is blown. The fabric catches particulate
matter as the gas passes through.
In addition to the Konus, the wafer dryer process creates a
second source of air emissions. As with the Konus, the combustion
process again creates CO, VOCs, and partieulate emissions. Additionally.
when the wood chips are heated and dried in this fashion, natural
resins are released from the wood.
As noted above, exhaust gas from the combustion of wood and
sawdust is blown, along with the wood wafers being dried, to a primary
cyclone where the wafers are separated from the gas. The exhaust
gas continues on from the primary cyclone to a number of smaller
cyclones operating at a higher velocity which remove more particulate
matter from the gas stream. Under the original design, the gas exiting
the smaller cyclones was vented directly to a stack. Subsequently,
- 7 -
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nowever, LPC added an additional pollution control device, known
as an "electrified filter bed" ("EFB"), to remove more particulates
from the exhaust.
The presses give rise to a third source of emissions. VOCs
result at this point as the heat and pressure from this process release
more of the natural resins from the wood. These emissions are exhausted
through the "press vents." Finally, the various saws make up a fourth
source of emissions, since they generate sawdust which must be controlled.
B. The State Permits
LPC applied to the Colorado Air Pollution Control Division (APCD)
in June of 1983 to obtain air emission permits for the Kremmling
plant. The application requested permits for four emission sources:
the Konus hot oil heater, the wafer dryer, the crosscut saw, and
the trim saw. in October of 1983, LPC submitted a similar application
for the Olathe plant. LPC then commenced on-site construction at
Krennnling and Olathe in July and November of 1983, respectively.
In January of 1984, the Colorado APCD issued four air emission
permits for the four emission sources at Kremmling referenced in
LPC's application. These permits contained restrictions on the amount
of fuel that could be combusted and on the amount of waferboard that
could be produced by each source. The wafer dryer permit restricted
that aoure* to 20,000 tons per year of wood fuel and 93,000 tons
per year of production. The permit for the Konus limited the annual
fuel input for that device to 19,000 tons of bark and wood. Finally,
the two permits for the saws limited production to 49,950 four-by-eight
foot sheets of waferboard per year.
In February of 1984, the APCD received comments from the Colorado
State Council of Carpenters to the effect that the public notices
issued for the Kremmling and Olathe facilities failed to contain
- 8 -
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any information concerning formaldehyde emissions. As a result,
the APCD requested information from LPC concerning the possibility
that formaldehyde was being emitted from the press verts. LPC responded
to this request on March 8, 1984, by supplying the APCD with the
data from one of four previous press vent tests it had conducted
at its waferboard plant in Rayward, Wisconsin. These four tests
were conducted in September of 1981, May of 1983, July of 1983, and
the early part of 1984. LPC sent the APCD the preliminary results
of the 1984 test as soon as they were available. While these test
results were the most recent and current, they also showed the lowest
emission rates.
In addition to supplying this test data, LPC invited the APCD
officer who had made the inquiry, Mr. Abe Vasquez, to observe another
test of formaldehyde emissions from the press vents at the Eayvard,
Wisconsin plant. Vasquez accepted, and the test was conducted in
May of 1984. LPC subsequently applied for a permit for the Kremmling
press vents in October of 1984, and such a permit was issued by the
APCD in April of 1985. This permit limited waferboard production
to a maximum of 49,950 tons per year and 160 tons per day.
In September of 1984, the APCD issued five air emission permits
for th« Olathe plant. Pour of these five permits were for the four
emission points referenced in LPC's application, and the fifth was
issued for the Olathe press vents. These permits contained combustion
and production limitations similar to those issued for the Kremmling
plant. Specifically, the wafer dryer was restricted to 20,000 tons
per year of wood fuel and 80,127 tons per year of production, the
T. The 1984 tests showed formaldehyde emissions from the press vents
of 9.14 Ibs/hour. In contrast, the tests from May and June of 1983
indicate emissions of 19.05 and 31.92 Ibs/hour, respectively.
-.9 -
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Konus was restricted to 19,000 tons per year of bark and wood fuel,
and the crosscut and trim saws, as well as the press vents, were
United to 49,950 tons of production annually and 160 tons of produc-
tion daily. Revised permits fat the aiathe Konus and the Olathe
dryer were issued in Hay of 1985.
The APCD informed LPC by letter in June of 1985 of its intention
to revoke the wafer dryer permits for both Kremmling and Olathe on
the ground that LPC had violated certain conditions of the permits
relating to opacity. A hearing on this matter was held before the
Air Quality Control Commission on September 5, 1985, and by written
order (dated September 23, 1985, nunc pro tune September 5, 1985)
the Commission ruled that the Kremmling dryer permit would be revoked
effective October 15, 1985, and that the Olathe dryer permit would
be revoked effective November 15, 1985. The order further provided,
however, that LPC could continue to operate the plants if it obtained
new dryer permits by these dates. The purpose of the order was to
give LPC some additional time to install electronic filter beds ("EFBs")
to further control emissions from the dryers. LPC did install EFBs
in the fall of 1985, and opacity tests were subsequently performed
which indicated compliance. As a result, replacement permits for
the dryers were issued in October and November of 1985. These permits
contained various restrictions on emissions and output, the amounts
of which trare determined "based on" 8000 hours per year of operation.
The APCD again in early 1986 informed LPC of its intention to
revoke the same wafer dryer permits, as well as the permit for the
Konus heater at Olathe. As with the 1985 revocations, however, LPC
appealed this action to the Air Quality Control Commission, and the
revocation decisions were stayed pending a hearing before the Commission.
- 10 -
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Subsequently, LPC and the Commission entered into a settlement
agreement to resolve the problem. The settlement set forth a number
of improvements and modifications for the air pollution control system,
and provided that the decision to revoke would be withdrawn if LPC
made all of the specified improvements and modifications. After
a hearing was held on December 13, 1986, the Commission issued its
order, dated January 6, 1987, finding that LPC had "complied in all
respects with the terns and conditions of the Settlement Agreement,"
and ordering that the "suspended decisions' revoking the permits
in question were vacated in all respects.
The most restrictive limitation contained in the state emission
permits issued for Kremmling and Olathe limited annual production
6
at both facilities to 49,950 tons of waferboard per year. Talcing
into account the weight of a sheet of waferboard that measures
three-eighths of an inch in thickness, undisputed expert testimony
established that the mathematical equivalent of 49,950 tons is roughly
90 million square feet on a three-eighths inch basis. While LPC
5. The concept and term "most restrictive permit limitation" recognizes
the fact that a permit limitation, while it may be issued in reference
to a particular piece of equipment in the process flow, is effectively
a limit on the whole facility. For example, in a waferboard plant
possessing a single waferirer and a single press, if the wafenzer
was limited to 200,000 tons of production per year, and further down
the line tha press was limited to 100,000 tons per year, the latter
limitation would obviously be the more restrictive of the two. Moreover,
it would effectively limit production for the entire facility (including
the wafertier) to 100,000 tons per year.
6. This permit limitation was contained in the wafer dryer permits
for both Kremmling and Olathe, as well as the permits for the Olathe
cross-cut and trim saws. I oust admit some confusion over the fact
that the permits for the Kremmling cross-cut and trim saws limit
production to 49,950 four-by-eight foot sheets of waferboard annually.
Assuming that one four-by-eight foot sheet of waferboard weighs less
than a ton, this later restriction on sheets of production would
clearly seem to be more restrictive than the former limit on tons
of production. However, since neither plaintiff nor defendant argued
that this latter limitation was the most restrictive, I will ignore
this discrepancy as well.
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kept production within this amount in 1985 and prior years, production
exceeded this permit limitation in 1986 and 1987. Specifically,
production in square feet at Olathe and Kremmling amounted to 105
million and 10S million in 1986, and 124 million and 94 million (through
November) in 1987, respectively.
Desiring to increase production at Kremmling and Olathe beyond
the limits on production contained in the original permits, LFC applied
to the APCD for new permits allowing increased production. Revised
permits limiting production to 78,216 tons per year were issued for
all five of the emission sources at Kremmling in July of 1987. Revised
permits for the Olathe plant had not been issued as of the time of
trial.
C. The PSD Permits
It is undisputed that the LPC had not submitted PSD permit applications
for either of its Colorado waferboard plants to the EPA prior to
initiating construction and operation of these facilities. At the
tine of trial, LPC had submitted PSD permit applications, but actual
PSD permits for Kremmling and Olathe had not been issued.
In September of 1983, Mr. Steven Frey of the United States EPA
was driving to an inspection when he stopped to visit the Kremmling
construction site. Frey stopped because he noticed a large amount
of smoke being emitted from a "wigwam burner" at the site. Frey
visited the Kremmling operation a second time in December of 1984
because he was aware that the APCD had been conducting frequent in-
spections of the facility. Frey informed LPC at or around the time
of this second visit that the wigwam burner probably constituted a
"major stationary source" of air emissions as that term is defined in
the PSD regulations. As a result, the new waferboard plant could be
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considered a "major modification" of the wigwam burner, and could
therefore be in violation of the PSD program.
A 'wigwam burner" is a tepee-shaped incinerator used to burn
wood waste from a sawmill. Such a wigwam burner and a sawmill were
already in existence at the Kremmling plant site when the property
was purchased by LFC in 1982. A permit which allowed emissions of
500 TPY. of CO from the wigwam burner was transferred to LPC in August
of 1983. As a result of Prey's warning, LPC quickly closed operation
of the wigwan burner and, by June 4, 198S, it had completely dismantled
and removed that facility.
In December of 1984, Robert Jorgenson of the Colorado APCD sent
a letter to LPC requesting that air emission tests (or "stack tests")
be performed at the Kremmling and 01athe plants. The division required
test data for a number of pollutants, including CO and VOCs. LPC
accepted bids from a number of companies specializing in this kind
of testing and recommended by the APCD. After reviewing the bids,
LPC selected Interpoll, Inc. to conduct the tests, and scheduled
them for March of 1985.
Alex Slivinsky was hired by LPC in January of 1985 and given
direct responsibility for the stack testing to be done in March of
1985. Interestingly, he had no previous experience in air emissions
testing. Similarly, Jorgenson, who had a background in wildlife
biology end public administration when he was hired by the APCD in
1984, had never observed an emissions test for CO prior to the March,
1985 tests at Kremmling and Olathe. Slivinsky and Jorgenson worked
together to prepare the protocol for the March, 1985 emissions test.
7. A "protocol" is a written plan or program which specifies how
the emissions testing is to be conducted.
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Jorgenson and Slivinsfcy ran into some confusion in preparing
the protocol for the Konus heater test. Although Jorgenson had no
previous experience with the design of the Konus and did not review
the specifications for the device, he did learn from an informational
brochure that the Konus could generate a maximum heat output of 28
million BTO. As a result, in preparing the protocol, and in adnini-
g
stering the test at 01athe, Jorgenson insisted that the Konus be
operated to provide this maximum heat output.
An undisputed fact of critical importance, established by the
testimony of numerous expert and lay witnesses, is that the Konus
is designed to match heat output with heat demand. As noted above,
the sources which demand heat from the Konus include the press (hot
oil system), the hot ponds, and the building itself. A thermostat
within the Konus works to operate an automatic fuel feed system.
When heat demand exceeds heat output, fuel will automatically be
added, when heat output and demand are approximately equal, or output
exceeds demand, the system will automatically stop supplying fuel.
Additionally, if the fire gets too hot, a second system will automatically
turn off the fans which supply the air for the combustion, and the
fire will smolder. The purpose behind these automatic systems is
to achieve maximum combustion and heat output with the smallest amount
of fuel.
The eaissions test for the Konus heater at Olathe was performed
9
on March 12, 198S. Although he tried, Slivinsky was never able
to generate the maximum heat output called for in the protocol for
8. As a representative of the APCD, Jorgenson was present to observe
the testing at Kremmling and Olathe.
9. Various emissions tests were performed at Olathe on March 12,
13, and 14, 1985.
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a number of reasons. First, the fuel was fed not automatically,
but rather at a pre-calculated rate. By estimating the amount of
3TUs that a fixed amount of fuel would generate, Jorgenson and
Slivinaky had hoped to be able to create 28 million BTUs by pouring
in a pre-calculated amount of fuel. Unfortunately, the fuel created
a greater amount of heat than had been estimated. Second, even though
the hot ponds, the press, and the building had been allowed to cool
the night before the test, and even though the building heat was
turned up to maximum and hot ponds were heated to a temperature forty
percent higher than normal operations, these sources did not generate
a large enough heat demand. These two facts, combined with the fact
that the Konus will not generate more heat than required, worked
together to create a cycle of problems.
As too much fuel was fed in, and because the heat demand was
too low, the system would overheat and the fans would shut down.
With the air supply cut off, the fire would "smolder" rather than
"burn." Once the smoldering caused the unit to cool down, more
fuel would be added to what was already too much, smothering what
little fire there was. When the fire got to burning again, the
10. Roughly translated from layman's terms into more precise terms,
"burning" would correspond to "complete combustion," and "smoldering"
would correspond to what the experts referred to as "incomplete combustion.
11. Thia »«thod of operation was so unusual that at one point the
Konus fir* actually went out completely for IS to 20 minutes because
the large amount of fuel added (consisting of wet bark and sawdust)
smothered it. One expert compared operation of the Konus to burning
a snail pile of wet leaves in the backyard. Operating the Konus
as it is designed would be like adding wet leaves to the fire a few
at a time. In contrast, the operation at the March. 1985 test at
Olathe would be akin to putting out the fire by throwing a full bushel
of wet leaves onto the pile all at once.
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the cycle would repeat itself. The ultimate result of this operation
was that fuel was fed into the Konus in "lumps," rather than continuously,
and that the fuel primarily "smoldered," rather than "burned."
The Konus heater at the Kremmling facility was tested the following
weefc on March 19, 1985. As a result of the problems experienced
at Olathe, Slivinslcy arranged with Jorgenson to operate the Konus
differently. Specifically, although Slivinsky still pre-calculated
the amount of fuel to be burned, he calculated a lower fuel-feed
setting. The result was that the amount of heat created more closely
matched the heat demand, and the Konus therefore operated continuously,
and at a relatively stable rate, throughout the test. Using significantly
less fuel, the device actually generated more heat than at Olathe,
and the plant as a whole was able to operate (that is, produce waferboard)
for a greater percentage of the testing time. It is important to
note that the representatives of the EPA and the APCD who testified
at trial did not consider any of the Kremmling test results to be
incorrect or misleading.
The test results processed by Interpoll and returned to LPC
indicated that CO emissions were three times greater at Olathe than
they were at Kremmling. This discrepancy is due to the fact that
CO is a product of incomplete combustion. Since there was so much
more incomplete combustion associated with the Olathe test, it naturally
follows that the CO emissions there would be greater.
Steven Frey of the EPA reviewed the March, 1985 stack test results
and used them to calculate the potential to emit various pollutants
from the two plants. Using this data, he concluded that the Olathe
facility had the potential to emit more than 250 TPY of CO, and therefore
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constituted a "major stationary source" of air emissions (as that
term is dafined in the PSD regulations). Similarly, Frey calculated
that the Kremmling facility had the potential to emit more than 100
TPY of VOCs, and therefore qualified as a "major modification" of
the wigwam burner. Accordingly, the EPA issued two Notices of Viola-
tion ("NOVs") to this effect on June 5, 1985.
Prey's original calculations did not take into account any of
the restrictions on operation contained in the state permits. Rather,
his original figures are based on the assumption that the Kremmling
and 01athe plants could operate at an unrestricted 8760 hours per
year. Accordingly, he combined this figure and the March emission
data from 01athe to calculate that the Olathe plant had the potential
to emit 437.9 TPY of CO. Similarly, he used the March data from
Kremmling and EPA Method 25 to conclude that the Kremmling plant
had the potential to emit 265.0 TPY of VOCs. These calculations
formed the basis for the issuance of the June, 1985 NOVs.
After comparing the results of the March stack tests at Kremmling
and Olathe. and considering Slivinsfcy's report on the different methods
of operation at each facility, LPC concluded that the test data for
the Olathe Konus was inaccurate because the unit was not operated
as designed. LPC contacted the CPA and the APCD to explain this
conclusion. It informed both agencies of its decision to retest
the Olathe Konus in June, and invited both agencies to attend. Jorgenson
accepted the invitation and attended for the APCD. Frey responded
that the maximum capacity of the Konus could not be tested in the
relatively warm month of June. As a result, he stated that the June
test -results would have no effect on his conclusion and that he would
not be in attendance.
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LPC did retest emissions from the Konus at Olathe in June of
1985. The fuel feed was operated in the automatic mode, and, as
with the teat at Kremmling, heat output was matched with heat demand.
Predictably, the emission rate for CO was drastically lower than
the March test at Olathe and similar to the emission rate measured
at Kremmling.
On July 10, 1985, representatives of LPC and the EPA held a
conference to discuss the NOVs that were issued the previous month.
At this conference, Frey explained the reasoning behind the EPA's
position that the plants were in violation of the PSD regulatory
scheme. In response, Slivinsky explained why LPC felt that no violation
had occurred, with respect to Olathe, Slivinsky explained that the
March stack tests were unreliable because the plant would never actually
be operated so badly that the Konus fire would go out. Addressing
the EPA's concern that maximum heat demand could not be tested in
June, Slivinsky offered to retest the Konus the following winter.
With respect to Kremmling, Slivinsky informed the EPA that the wigwam
burner, the alleged major stationary source, had been dismantled.
At this conference, Frey was informed by LPC that the restrictions
in the state permits effectively limited the plants to 8000 hours
of operation per year. Applying this limitation to the data from
12. Interestingly, none of the many permits issued for the Kremraling
and Olathe facilities, by their terms, expressly limit operations
to 8000 hours per year. This figure does not even appear at all
in 15 of the 19 permits that were ultimately issued, including the
original ten permits and the five permits issued for Kremmling in
1987. Four of the permits ~ the Olathe Konus and dryer permits
dated May 28, 1985, the Olathe dryer permit dated October 21, 1985,
and the Kremmling dryer permit dated November 20, 1985 — do contain
a reference to 8000 hours of operation. However, these actually
state only that various other specific restrictions on emissions
that are expressly contained in those permits were determined "based
on" 8000 hours of operation per year.
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the March stack tests at Olathe, he calculated that the Olathe plant
had the potential to emit 399 TPY of CO. Similarly, the Kremmling
data, when applied to this limitation, indicated that the Kremmling
facility had the potential to emit 242.1 TPY of VOCs measured in
accordance with EPA Method 25.
Upon learning that the wigwam burner had been dismantled before
the NOVs were ever issued, the position of the EPA gradually became
that the Kremmling facility constituted a major source in its own
right. At this point, unconvinced that Method 25 was the appropriate
method for measuring VOCs in the PSD context. Prey recalculated
the potential to emit VOCs at Kremmling using a new and unpublished
methodology that he conceived and that he felt was preferable. The
basic difference between the two methods is that under Method 25,
VOCs are expressed as carbon, but under Frey's method, VOCs are expressed
as formaldehyde. Since the molecular weight of formaldehyde is greater
than the atomic weight of carbon, Frey's method results in a greater
VOC emission rate than Method 25. Using his new method, Frey calculated
the potential to emit VOCs at Kremmling to be 293.5 TPY for 8760
hours of operation and 265.3 TPY for 8000 hours of operation.
13. Method 25 is a method for VOC emission testing and analysis
promulgated by the EPA and published at 40 C.F.R. § 60 App. A. It
was originally developed in the context of new source performance
standards, but the regulations state that all of the methods contained
in Appendix A have potential applicability in other contexts. The
government's position is that a methodology arising in the context
of new source performance standards "is not necessarily applicable
to sources subject to the prevention of significant deterioration
requirements." In enacting the PSD program in 1976, Congress ordered
the EPA to promulgate regulations giving specific guidance for a
number of pollutants, including VOCs. 42 U.S.C. 5 7476(a) & (c).
The government does not dispute the fact that the EPA has never complied
with this directive, and that the deadline set by Congress passed
several years ago.
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Aienough nothing transpired at the July conference to change
LPC's position that its Krenroling and Olathe facilities were not
subject to the PSD program, it decided after this meeting to apply
for PSD permits anyway. This decision represented both an attempt
to satisfy the EPA and a realization that a significant expansion
of these operations in the future might really trigger the PSD program.
Before any such applications were ever submitted, the EPA issued
an administrative order to LPC on September 27, 1985. The order
directed LPC to submit a PSD permit application for its Olathe wafer-
board facility within 60 days of the effective date of the order.
The order stated that it would become effective IS days after its
issuance. However, in a display of the efficiency for which the
public sector is so famous, the order was neither signed nor dated
when it was issued.
One of the components of a complete PSD application is air "moni-
14
toring" data. Since this requirement can be waived by the admini-
strator, LPC requested such a waiver from the EPA on November 7,
1985. Although only the Olathe plant was subject to the administrative
order, LPC asked the EPA to consider a waiver for both Kremmling and
Olathe because the plants were so similar and because it was preparing
to submit applications for both plants. EPA responded to LPC's request
in the n«g«tive on December 3, 1985, but the response only addressed
the Olath* plant. As a result, SlivinsJcy continued to wait for a
response which addressed the Kremmling plant. When it appeared
14. The PSD regulations generally require that the air quality of
the area in which the new emission source is to be located is to
be monitored over a period of at least one year. See 40 C.F.R.
52.21(m).
15. See 40 C.F.R. 52.21(i)<8).
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that such a response would not be forthcoming, he submitted PSD appli-
cations for both facilities on January IS, 1986.
At th« time these applications were submitted, a state iropleraenta-
16
tion plan ("SIP") for Colorado had not yet been approved by the EPA.
Accordingly, the EPA was responsible for the administration of the
PSD program in Colorado, and any application for a FSD permit submitted
during this period should have been submitted to the EPA. Nonetheless,
under the terns of an "interim agreement" between the EPA and the
Colorado APCD, the substantive review of the application was performed
by the APCD. Thus, when a PSD permit wa's submitted to the EPA, it
was shortly forwarded to the APCD for review.
Aware of this procedure, Slivinsky submitted the PSD permit
applications, contrary to the directions in the administrative order,
directly to Jim Geier of the APCD. Slivinsky left~"a message with
the APCD that Geier should contact him if the latter had any questions
or if there were any problems with what was submitted. Shortly after
receiving the application, Geier conferred with Frey over the fact
that the PSD applications had been submitted. Neither Frey nor Geier
made any attempt, either by cover letter or phone call, to inform
LPC that the applications had been submitted to the wrong agency.
LPC was informed of the problem by way of a letter from EPA's regional
counsel, on March 25, 1986.
LPC hired Mr. Charles Bray in February of 1986 as a consultant
to assist LPC in the PSD permitting process for the Kremmling and
Olathe facilities. Bray reviewed the data from the stack tests that
had been conducted in March and June of 1985 and used these test
16~Colorado's SIP for its PSD program was approved by EPA in
September of 1986.
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results to calculate the Kremmling and Olathe plants' potential to
emit various pollutants. In contrast to Prey's conclusions, however.
Bray's calculations indicated that the Olathe facility did not have
the potential to emit 250 TPY of CO, and that the Krenunling facility
did not have the potential to emit 250 TPY of VOCs. In short. Bray's
calculations indicated that neither of LPC's Colorado facilities was a
ma}or stationary source of air emissions subject to the PSD program.
The different conclusions reached by Frey and Bray can be explained
by the fact that Bray's calculations differ from Prey's in a couple
of important respects. First, with regard to Olathe, Bray used the
CO emission data from the June, 1985 test rather than the March,
1985 test. Bray believed it would be inappropriate to use the March
results because the Konus heater was operated at that test in a manner
contrary to its design. Second, with regard to both facilities,
Bray concluded that the most restrictive permit limitation was the
annual limit on production of 49,950 TPY which is contained in the
original saw aftd drier permits. Frey (it will be recalled) used a
limit of 8000 hours per year of operation. Third, Bray used Method 25
(rather than Prey's new method) to calculate VOC emissions.
Applying the permit limitation on annual tons of production,
Bray concluded that the potential of the Kremmling plant to emit
VOCs was 193.7 TPY under Method 25. Although he believed that Method
25 was to* proper methodology to employ in calculating the weight
of VOC emissions, he also calculated the potential to emit VOCs at
Kremmling to be 216 TPY using Prey's new and unpublished methodology.
Using the test results of the June, 1985 stack test, and applying
the permit limitation on tons of production, Bray calculated that
the potential to emit CO at the Olathe plant was 196 TPY. He noted
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that if he had used the results of the March stack test at Kremmling
(instead of the data from the June test at Olathe) that the potential
of the Olathe plant to emit CO would have been lower still (by about
ten percent).
After reviewing LPC's original PSD permit applications, the
EPA noted a number of deficiencies. In response to the agency's
complaint that the applications did not contain a "complete" moni-
toring plan, Bray submitted revised monitoring plans for both plants
in June of 1986. In an effort to address the other deficiencies,
LPC submitted revised PSD applications to the EPA in July and August
of 1986 for the Olathe and Kremmling facilities, respectively. In
September of 1986, EPA informed LPC that the revised monitoring plan
was also deficient, and, in October of 1986, EPA informed LPC of
a number of problems with the second set of PSD permit applications.
Yet another monitoring plan was submitted by LPC in April of 1987,
and a third set of PSD applications (which EPA has since found to
be complete) were received by EPA in July of 1987. PSD permits for
the two facilities had not been issued as of the time of trial.
D. Procedural Posture of the Case
The United States filed its complaint in this case on September 12,
1986. The complaint contained two claims for relief. The first
claim alleged that the Kremmling facility constituted a "ma]or modi-
fication* of the pre-existing wigwam burner, and the second alleged
that the Olathe plant itself was a "major stationary source." These
claims charged that the plants were in violation of the PSD program
because they were constructed and were being operated in the absence
of PSD permits.
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On February 3, 1987, the EPA issued yet another NOV to LPC alleging
this time that the Kremmling plant constituted a "major stationary
source" in its own right. The United States then moved to amend
its complaint to add a first claim for relief in the alternative
based on the violation alleged in the 1987 HOV. The government also
sought to add a third claim for relief based on LPC'a failure to
comply with the administrative order issued in September of 1985.
This motion to amend was granted. The first claim for relief was dis-
missed by Memorandum Opinion and Order of this court dated October 30,
1987, and the third claim for relief was dismissed on defendant's
motion at trial made at the close of plaintiff's case-in-chief.
As a result of these rulings, only the first claim for relief
in the alternative and the second claim for relief remain for resolution,
The narrow questions they present are whether the Olathe plant had
the potential to emit 250 TPY of CO, and whether the Kremmling plant
had the potential to emit 250 TPY of VOCs. While these issues might
at first appear to present questions of fact, their resolution actually
turns on the legal construction of the term "potential to emit."
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III. CONCLUSIONS OF LAW
A. The Thirty Day Notice Provision of 42 O.S.C. § 7413
42 U.S.C. § 7413(a)(l) provides as follows:
Whenever, on the basis of any information available
to him, the Administrator finds that any person is in
violation of any requirement of an applicable state
implementation plan, the Administrator shall notify
the person in violation of the plan... of such find-
ing. If such violation extends beyond the 30th day
after the date of the Administrator's notification,
the Administrator... may bring a civil action in
accordance with subsection (b) of this section.
42 U.S.C. § 7413(a)(l) (1983) (emphasis 'added). Subsection (b),
in turn, empowers the EPA to bring a civil enforcement action for
an injunction, or civil penalty, or both, whenever the owner of a
major stationary source 'violates any requirement of an applicable
implementation plan... more than 30 days after having been notified
by the Administrator under 3Ubsection(a)(1) of this section of a
finding that such person is violating such requirement." id. § 7413(b)(2)
(emphasis added).
These provisions make it clear that, in enacting the PSD program,
Congress envisioned a system where, before the EPA has jurisdiction
to bring a civil enforcement action, (1) the source which is allegedly
in violation must be notified by the EPA of the violation, and (2)
the source must disregard the warning and persist in the alleged
violation for 30 days. The EPA is empowered to bring such a civil
suit only on the basis of the specific violation alleged in the NOV
and only where that specific violation has continued for 30 days.
United States v. Louisiana-Pacific Corp., No. 86-A-1880, slip op.
at 11 (D.Colo. Oct. 30, 1987) (hereinafter Memorandum Opinion). As a
result, not every violation of the PSD provisions is actionable, but
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only chose where the alleged offender is notified of the violation
and persiit* in the violation for 30 days thereafter. Id. at 13.
A primary legal question raised in this case and which must
necessarily be resolved at the outset is the proper construction
of the 30 day period referred to in 42 U.S.C. S 7413. Defendant
contends that this provision should be given the narrowest possible
construction. It argues that in considering whether the 30 day require-
ment is met, the court must look only to the 30 day period immediately
following the issuance of the NOV. Zt urges that any other events
transpiring after this period are irrelevant. Thus, if the facilities
in question became major stationary sources (the specific violation
alleged in the NOVs at issue) 31 days after the NOVs issued, and
this violation continued thereafter, LPC would contend that such
a violation is not actionable because it began more than 30 days
after the notice was issued. If the EPA wished to bring an action
on this violation, the argument goes, then it would have to issue
a second MOV alleging the same violation and wait another 30 days.
Applied to the facts of the present case, LPC urges that because
the NOV for the Olathe plant (which alleged that the facility had
the potential to emit 250 TPY of CO and was therefore a major stationary
source) was issued on June 5, 1985, this court should only consider
whether this facility had the potential to emit 250 TPY of CO between
June 5, 1985, and July 5, 1985. Similarly, since the NOV for the
Kremmling facility (which alleged that the facility was a major stationary
source because it had the potential to emit 250 TPY of VOCs) issued
on February 3, 1985, LPC would have the court narrow its inquiry
to whether the Kremmling plant had the potential to emit 250 TPY
of VOCs between February 3, 1985, and March 5, 1985.
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Plaintiff argues for a broader construction of the 30 day require-
ment. It asserts that this junsdictional prerequisite exists solely
for the purpose of giving the source fair warning of the problem
and a reasonable period of time to clean up its act. Thus, in contrast
to the position taken by LPC, the government urges that this junsdictional
requirement has been met if the source commits the specific violation
alleged in the NOV anytime after the 30 day grace period has run.
I conclude, again, that the latter construction now being
urged by the government is indeed the correct one. The Clean Air
Act taken as a whole, and a plain reading of its provisions, both
clearly indicate that, in enacting the notice requirement at issue,
Congress' intention was to give an alleged source a brief period
of time within which to evaluate its options before the substantial
18
penalties available under the act could become a possibility. It
did not intend to create a jurisdictional technicality that could
be abused to prevent even the most reckless and chronic polluter
from being brought to trial.
Where a source is truly in violation, the PSD program is designed
to allow and encourage the source to correct the problem. To further
this goal, the provision being considered should be construed in such
a way as to create an incentive for the source to permanently correct
the problem, not merely to correct it for 30 days. To achieve this
permanent correction, the EPA's power to enforce the violation alleged
in the NOV must be ongoing rather than extending merely for 30 days.
17. See Memorandum Opinion at 17 (wherein the approach now being
urged by the government was applied by this court without comment
at a time before the issue had specifically been raised).
18. The specific language chosen by Congress expressly contemplates
the effect of an NOV extending beyond the 30 days immediately following
its issuance. Ej- 42 U.S.C. § 7413(a)(l) ("If such violation extends
beyond the 30th day..."): 42 U.S.C. 5 7413(b)(2)(EPA has jurisdiction
to sue whenever the owner of a source commits a violation "more than
30 days after having been notified...").
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Were this court to accept the construction being urged by LPC,
it would create a loophole in the enforcement scheme large enough
to swallow the entire PSD program. Under such a construction, an
irresponsible source could chronically and even intentionally avoid
the PSD program by temporarily correcting the violation alleged near
the end of the 30 day period. After that period had passed, the
source could return to business as usual and continue to operate
in violation until the next MOV was issued. In light of the fact
that one HOV is sufficient to put a source on notice, I fail to see
what possible purpose could be served by forcing the EPA to continually
issue identical NOVs to the same offender.
in sun, the ^urisditional requirement of 42 U.S.C. § 7413 has
been met if the source commits the specific violation alleged in
the NOV anytime after the 30 day grace period has run. Therefore,
in the case at hand, if the EPA can show that the Olathe facility
had the potential to emit 250 TPY of CO anytime after July 5, 1985,
it has shown a violation of the PSD program actionable under 42 U.S.C.
§ "7413. Similarly, if it can prove that the Kremraling plant had
the potential to eait 250 TPY of VOCs anytime after March 5, 1987,
it has made out an actionable violation. This ruling does nothing
to increase the exposure to liability of a source that, upon receiving
notice of a violation, does what is necessary to meet its responsibili-
ties to-society by pursuing a policy of permanently complying with
the law. Rather, the practical effect of this holding extends only
to sources who would take advantage of a perceived technicality in
the law and whose long term strategy and policy is to continue to
violate the Clean Air Act even after having been warned.
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19
B. "Potential to Emit"
The PSD regulations define the term "potential to emit" as
follows:
"Potential to emit" means the maximum capacity of
a stationary source to emit a pollutant under its
physical and operational design. Any physical or
operational limitation on the capacity of the source
to emit a pollutant, including air pollution control
equipment and restrictions on hours of operation or
on the type or amount of material combusted, stored,
or processed, shall be treated as part of its design
if the limitation or the effect it would have on
emissions is federally enforceable."
40 C.F.R. S 52.2Kb) (4). In order to resolve the seemingly narrow
issues of the potential to emit VOCs and CO at Krenroling and Olathe,
20
it is necessary to grapple with some perplexing (and as yet unanswered)
legal questions raised by this definition and the unique facts of
this case. First, what is meant by the "maximum capacity" of a source
to emit a pollutant under its "physical and operational design"?
Second, are the operational limitations contained in the state permits
"federally enforceable"? Third, if they are, which of the several
permit restrictions should be used in the calculation? Fourth, should
such operational limitations be included in the calculation of a
source's potential to emit even where such restrictions are routinely
and knowingly violated? The court will now address each of these
issues ia turn.
19. A thorough analysis of the term "potential to emit", including
a history of its definition and construction, is set forth in the
Memorandum Opinion at 17-24.
20. There is precious little prior authority dealing, even in a
general way, with the proper construction of the term "potential
to emit." Moreover, with regard to the narrow and unique issues
enumerated and discussed in this litigation, the parties have been
unable to supply any helpful citation in their briefs, and the court
has similarly been unable to locate any caselaw bearing directly
on these points. Thus, since the issues raised in this case appear
to present novel questions of law, the court must address them without
the benefit of any precedent with which to guide the analysis.
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1. 'Maximum Design Capacity'
LPC argues that the results obtained from the March. 1985 test
of the Konus heater should not be used in the calculation of potential
to emit. LPC urges the court that it would be inappropriate to use
such data because the concept of potential to emit clearly contemplates
the unit being operated as designed, and that the Olathe Konus was
operated contrary to its design at the test in March of 1985. The
government responds that the March, 1985 Olathe data is acceptable
because the term "potential to emit" really means the maximum emissions
that a source can possibly generate, regardless of whether it is
being operated as designed. The government argues that, even though
the operation of the Konus at this test may have been incorrect,
it was still possible to operate the unit in this way, and that this
data is therefore useful for determining the maximum emissions the
source can generate. For the several reasons that follow, I find
the government's position on this issue untenable, and hold that
the concept of potential to emit refers to the maximum emissions
a source can generate when being operated within the constraints
of its design.
The PSD regulations themselves define the potential to emit
as the maximum capacity of a source to emit pollutants under its
physical and operational design. 40 C.F.R. S 52.21(bH4). The plain
reading of this language indicates that test data must meet two require-
ments before it may properly be used in the calculation of a source's
potential to emit. First, the unit being tested must be operated
during the test in the manner in which it is designed to be operated.
Second, within that constraint, the unit must be operated at maximum
capacity, or "full throttle," throughout the test.
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Any analysis of the definition of "potential to emit" must include
a reference to the case of Alabama Power Co. v. Costle, 636 F.2d
323 (D.C.Cir. 1979) because the current definition above was promulgated
in response to the D.C. Circuit's holding in that case. The reasoning
in the Alabama Power opinion indicates that the government's construction
should not be accepted. At the time this case was before the 0:C.
Circuit, the EPA by regulation defined potential to emit as referring
to the projected emissions of a source when operating at full capacity,
with the projection increased by hypothesizing the absence of air
pollution control equipment designed into the source. Id. at 363.
The court rejected such an interpretation, and remanded the regulations
to the EPA with instructions to the agency to include the effect
of in-place control equipment in defining potential to emit. .Id_.
at 355. Holding that potential to emit refers to a facility's "design
capacity," the court reasoned that since air pollution control equipment
was part of the overall design of the source, it must be considered
in the calculation of potential to emit. Id. at 353.
The broad holding of Alabama Power is that potential to emit
does not refer to the maximum emissions that can be generated by
a source hypothesizing the worst conceivable operation. Rather,
the concept contemplates the maximum emissions that can be generated
while optrating the source as it is intended to be operated and as
it is normally operated. Of course, it is possible that a source
could be operated without the control equipment designed into it
or that a Konus heater could be operated so badly that the fire would
go out. Yet, Alabama Power stands for the proposition that hypothe-
sizing the worst possible emissions from the worst possible operation
is the wrong way to calculate potential to emit.
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Additionally, it serves no legitimate purpose to test the emissions
from a source when that source is being operated in a way it would
never ba operated in actual practice. Such data is valueless unless
EPA's purpose is to require every source in attainment areas to be
subject to the PSD program. It is clear, however, that this was
not Congress1 intention, since it expressly exempted small sources.
The government makes much of the fact that it is theoretically
possible to operate the Konus in the manner that was done at the
March, 1985 test at Olathe, and that it was even possible to operate
the plant (produce waferboard) when the Konus was being misused in
this way. while this statement may be correct, this argument fails
to meet the court's concern that any emission data gathered during
such operation would be valueless. For example, it makes as much
sense to add so much fuel to the Konus that the fire goes out as
it does to fuel the unit (which is designed to accept wet bar* and
sawdust) with coal. Certainly it might be possible to do both, and
the unit might even generate sufficient heat to produce waferboard.
Yet, either course of action would be contrary to the unit's design,
and neither would yield any useful emissions data.
In the present case, there can be no doubt that the Konus at
Olathe was operated during the March, 1985 emissions test in a manner
contrary to its design. First, it is uncontroverted that the Konus
is designed to match heat output with heat demand, whether the unit
is operated in the automatic or semi-automatic mode, and that this
was not done at the test. Second, the Konus is designed to generate
heat by way of complete combustion, but the fire primarily smoldered,
rather than burned, during the test in question.
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Moreover, the manner in which the Konus was operated during
the March. 1985 test at Olathe would never occur during normal operations.
First, the function of the Konus is to generate heat. The testimony
was uncontroverted (and common sense would also indicate) that, in
light of this purpose, the Konus would never be operated so badly
that the fire would actually be smothered. Second, the Konus is
designed to be fuel efficient, generating the greatest amount of
heat or power from the least amount of fuel. Since resorting to
outside sources for fuel would be an expense to the business, the
realities of a competitive marketplace suggest that LPC would act
to conserve its internal fuel supply by operating the unit fuel-efficiently
as it is designed. Third, and perhaps most important, the fuel-feed
setting was pre-calculated to provide an amount of fuel that would
generate 28 million BTO. Although the unit was often run on semi-
automatic . this kind of fuel feed setting would never occur in actual
practice because (even allowing the plant to cool for a full winter
night, and heating the hot ponds to temperatures forty percent above
normal) the Olathe facility will simply never generate that great
a heat demand.
In sum, the results of the March. 1985 test of the Konus heater
at Olathe cannot be used to properly calculate the potential of that
source to «nit CO because during that test the device was operated
in a manner contrary to its design and in a manner that would never
occur in normal operations. The government's only evidence that
the potential to emit CO at Olathe exceeded 250 TPY consisted of
Prey's calculations, all of which were based on data from the March,
1985 test at Olathe. Since (for the reasons expressed above) this
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evidence is unreliable, and in light of the fact that the CO results
from the Kremaling test were unchallenged by the government and were
so radically different from the Olathe CO data, Z find the government's
evidence on this matter unpersuasive. Accordingly, since plaintiff
has failed to carry its burden of proof, the second claim for relief
will be dismissed.
2. "Federally Enforceable* Restrictions
A crucial aspect of LPC's defense in the present case is its
assertion that the operational limitations contained in the state
emission permits must be considered in calculating the potential
of the Kremmling plant to emit vocs. with regard to such restrictions,
the PSD regulations provide that any operational limitation to which
a source is subject, including 'restrictions on hours of operation
or on the type or amount of material combusted, stored, or processed,"
should be taken into account in determining the source's potential
to emit, but only if the limitation or the effect it would have on
emissions is "federally enforceable." 40 C.F.R. 5 52.21(b)(4).
In the present case, since the permit limitation upon which L?C chiefly
relies (an annual limitation on the amount of waferboard which may
be produced) is clearly a restriction on the amount of material processed,
it should indeed be included in the calculation of potential to emit
if it is -federally enforceable."
Th« PSD regulations provide that the tern "federally enforceable'
refers to all limitations and conditions which are enforceable by
the EPA. 40 C.F.R. S 52.2Kb) (17). The term is broadly defined to
21. Additionally, I note that there is no evidence in the record
(presented by either side) to indicate that the CO results from either
of the other two tests (March, 198S at Kremmling or June, 1985 at
Olathe) would yield a potential to emit CO at Olathe of 250 TPYJ.
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include any requirement or limitation contained in or created pursuant
to any SIP. whether it be a SIP to enforce the national ambient standards
or a SIP to enforce the PSD program. Additionally, the term embraces
any requirements or limitations imposed to enforce new source performance
standards or created pursuant to a new source review process. Id.
Caselaw confirms the proposition that restrictions on emissions
imposed by a state in or pursuant to its SIP are federally enforceable.
In the leading case of Onion Electric Co. v. EPA, 515 F.2d 206, 211
(8th Cir. 1975). aff'd. 427 U.S. 246 (1976), reh'q denied, 429 U.S.
873 (1976), the court held that the requirements of an EPA-approved
SIP "have the force and effect of federal law and may be enforced
by the (EPA] in federal courts." Accord Friends of the Earth v.
Carey, 535 F.2d 165, 171 n. 6 (2d Cir. 1976), cert, denied, 434 U.S.
902 (1977). Even state-adopted emission limitations which are more
stringent than necessary to meet the federal ambient air standards
are federally enforceable. Friends of the Earth v. Potomac Electric
Power Co., 419 F.Supp. 528, 533 (D.D.C. 1976).
The state permits at issue in this case were issued under the
terms of Colorado's air quality regulation No. 3, 5 C.C.R. § 1001-5.
This regulation was part of Colorado's approved SIP for the enforcement
of the National Ambient Standards. Thus, since the restrictions
in question were established pursuant to a SIP, they are federally
enforceable by definition.
3. Which Restrictions to Apply
Restrictions contained in state permits which limit specific
types and amounts of actual emissions ("blanket" restrictions on
emissions) are not properly considered in the determination of a
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source's potential to emit. Memorandum Opinion at 20. However,
federally enforceable permit conditions which restrict hours of operation
or amounts of material combusted or produced are properly included
in the calculation. Id. Within the latter category, however, where
the permits at issue contain a number of different restrictions,
a question arises as to the proper restriction to use in the calculation.
The expert testimony on this issue was uncontroverted that the "most
restrictive" of the several permit limitations is the one that should
be employed in determining the potential to emit. I find that
I agree with that proposition, and so hold.
In this particular case, however, such a ruling does not dispose
of the issue, since the experts in this case were in disagreement
over which permit limitation should be considered the most restrictive.
Prey's calculations, it will be recalled, were based on an annual
limit on operations of 8000 hours. In contrast. Bray employed the
annual limit on production, contained in the original saw and press
permits, of 49,950 tons.
To state the issue a bit more precisely, there was never any
question about which limitation was the more restrictive of the two.
All other factors and variables being equal (that is, if the parties
had otherwise used the same methodology and test data), the limitation
on annual tons of production would always yield a lower figure for
potential to emit than the limitation on annual hours of operation.
Thus, in that sense at least, the restriction utilized by 3ray was
clearly the more restrictive. Rather, the controversy on this issue
22. For an explanation of the concept behind the term "most restrictive
permit limitation," see supra note 5.
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stemmed from the government's contention that the restriction on
tons of production was not an "effective" limit on operations and
should not have been used at all.
Essentially, the government's position was that this restriction
did not really limit production to 49,950 TFY because it applied
only to finished production. Since some of the waferboard produced
is removed during the trimming process, the government argued that
more than 49,950 tons could actually be produced under this limitation.
For example, if the LPC produced 49,950 tons of finished product, and
in the process removed 1000 tons of waferboard as trim, the government
would contend that 50,950 tons had actually been produced.
LPC's response to this concern was that Bray took the trimming
process into account in making his calculations. In computing the
"emission factor" upon which his results were based, Bray took the
amount of total emissions generated during the test and divided by
the total weight of finished product to come up with a figure of
emissions per ton of finished production. Of central importance
is the fact that the emission factor was based on production after
the trimming process. Bray then multiplied the emission factor by
the annual limit of 49,950 tons to determine the annual potential
to emit.
After a thorough examination of the calculations submitted by
the experts in this case, I find that the annual limitation on tons
of production, properly employed, is indeed as effective a restriction
on operations as any of the others contained in the permits. I further
find that this restriction was properly utilized by Bray. Since
the emission factor he computed stated the emissions generated per
ton of finished product, the emissions generated in producing the
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waferboard chat was ultimately trimmed were included in the potential
to emit figure. Moreover, if it is valid to assume that the emissions
generated during a four-hour test are representative of and can be
used to compute the emissions generated throughout the /ear, it is
just as valid to assume that the amount of trim removed during such
a test is representative of the trim removed throughout the year.
Accordingly, since the annual limitation of tons of production is
the most restrictive permit limitation, and since it is as effective
a limitation on operations as any of the other restrictions contained
in the permits, I find that it was the proper limitation to employ
for purposes of determining potential to emit in the present case.
4. The Proper Effect of Permit Limitations That Are
Willfully and Regularly Violated
Federally enforceable restrictions on operations that are contained
in state permits are properly considered in determining potential
to emit. 40 C.F.R. S 52.21(b)(4). Where a number of such restrictions
exist, the "most restrictive" of the several provisions is the one
that should be employed. In the case at hand, the annual limitation
on tons of production is both federally enforceable and the most
restrictive. Nonetheless, the government argues that this limitation
should not be considered in this case.
The government argues generally that a source which knowingly
and routiavly violates the conditions of a permit should not get
the benefit of those conditions in the computation of the source's
potential to emit. Thus, since LPC regularly and knowingly violated
the restriction on annual tons of production, the government urges
that this restriction should not be considered in the present case.
For the reasons which follow, I agree with the government on this
point, and rule that conditions contained within state emission permits
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are not to be considered in the determination of a source's potential
to emit, notwithstanding 40 C.F.R. S 52.2Kb) (4), where such conditions
are knowingly and regularly violated.
First, as already noted, the definition of potential to emit
at issue here was promulgated in response to the D.C. Circuit's holding
in Alabama Power, 636 F.2d at 323. In that case, it will be recalled,
the court ruled that the effect of pollution control equipment designed
into a source must be considered in calculating the source's potential
to emit. Id. at 355. While that rule of law is a good one, it is
clear from the opinion that this holding-is based upon the assumption
that the control equipment in question will be used. Id. at 353-55.
See also (prior opinion in same case) Alabama Power Co. v. Costle,
606 F.2d 1068, 1076 (D.C.Cir. 1979)("The 'potential to emit1 of any
stationary source must be calculated on the assumption that air pollution
control equipment incorporated into the design of the facility will
function to control emissions in the manner reasonably anticipated
when the calculation is made."). As a result, I am unconvinced that
the D.C. Circuit would extend this protection to a source where the
control equipment was never used, inoperable, or disconnected.
The EPA went beyond the narrow holding of the Alabama Power case
when it drafted the new definition of potential to emit to encompass
not only "air pollution control equipment," but also federally enforce-
able "restrictions on hours of operation or on the type or amount
of material combusted, stored, or processed." 40 C.F.R. $ 52.2Kb) (4).
In the same way that the court's holding in Alabama Power assumes
that the control equipment will be used, however, I believe that
the latter part of this definition contemplates that emission limita-
tions appearing within state permits will be complied with. Thus,
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as I am unconvinced that the Alabama Power court would extend the
protections offered by its opinion to sources which fail to utilize
their pollution control equipment. I am similarly unwilling to extend
the rule that federally enforceable permit limitations are a component
of potential to emit to a case where such limitations are repeatedly
ignored or violated.
Second, to hold that permit limitations which are repeatedly
violated should nonetheless be considered in determining potential
to emit would give better treatment to sources which knowingly violate
such conditions than the treatment currently afforded sources which
comply with the law. For example, consider a source which has a
potential to emit pollutants of less than 250 TFY solely by virtue
"of operational limitations contained within state permits issued
to it. When faced with the need to expand operations, such a source
can choose to either 1) apply for new permits with less restrictive
limitations and comply with the old permits until the new ones are
issued, or 2) violate the conditions contained within its current
permits. Should it choose to obey the law and follow the former
course of action, and should the relaxation of its permit limitations
cause its potential to emit to exceed 250 TPY. it will become subject
to the PSD program as soon as the new permits are issued. This is
because the regulations currently provide that when a particlar source
becomes a major source solely by virtue of the relaxation of a federally
enforceable limitation on operations, the source shall at that time
become subject to the permit requirements of the PSD program. See
40 C.F.R. S 52.21(r)(4).
In the present case, it is established that LPC knowingly violated
the annual restriction on tons of production contained in the state
air emission permits at both Kreramling and Olathe. As a result, this
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limitation (upon which Bray's calculations were based) may not be
employed in determining potential to emit in this case, Therefore.
my conclusion as to the potential to emit VOCs at Kremmling is based
upon unrestricted operations.
In addition to the calculations based upon unrestricted opera-
tions, Prey also calculated the potential to emit VOCs at Kremmling
employing an annual limitation on operations of 8000 hours per year.
I have not considered these calculations in reaching my conclusion
for a number of reasons. First, it does not appear that any_ of the
Kremmling permits really do limit operations to 8000 hours per year.
The only permit issued for Kreramling even containing a reference
to 8000 hours of operation is the drier permit dated November 20,
1985, but the terms of that permit merely state that some of the
specific restrictions that are set out in that permit were determined
"based on" 8000 hours of operation per year. Second, even if this
permit did limit operations to 8000 hours of operation per year,
such that it were necessary for me to decide the question, I would
hold, for the reasons expressed above, that a regular and willful
violation of one permit limitation (such as the annual restriction
on tons of production) should eliminate consideration of any other
permit limitations (such as the annual restriction on hours of opera-
tion) which would otherwise apply to the source.
Third, even if the rulings above are found to be too harsh,
the ultimate conclusion regarding the potential to emit at Kremmling
should still be based upon unrestricted operations, since both the
permit containing the 49.950 ton limitation and the permit containing
the 8000 hour reference were superceded in July of 1987. The new
permits issued for Kremmling do not contain the 8000 hour reference,
23. See supra note 12.
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and raise the restriction on annual production to 78,216 tons, of
course, if a violation were to be based upon this fact rather than
upon the legal rulings in this opinion, the date of the violation
would be July 20, 1987, rather than the end of November, 1986.
Without considering any restrictions on operations, Frey calculated
the potential of the Kremmling plant to emit VOCs to be 265 TPY under
EPA Method 25 and 293.5 TPY using his own unpublished methodology.
Under either approach, the Kremmling plant obviously qualifies as
a major stationary source. Under the reasoning X have employed,
the'plant would have become a major source around November of 1986,
which is when LPC first violated the limitation on production upon
which it had been relying. Accordingly, I conclude that the violation
alleged in the February 3, 1987 NOV (that the Kremmling plant was
a major stationary source without a PSD permit) not only existed
on that date, but persisted for more than 30 days thereafter. Therefore,
I find in favor of the plaintiff on its First Claim for Relief in
the Alternative.
C. Penalty
Where the EPA files a civil enforcement action and successfully
establishes that a violation of the PSD regulatory scheme existed for
more than 30 days following the issuance of an appropriate MOV, the
court ii ••powered to assess a civil penalty of up to 525,000 per
day of violation. 42 U.S.C. 5 7413(b)(2). Generally, "[dletermina-
tion of the amount of [a civil penalty] is committed to the informed
discretion of the district judge." United States v. Ancoro Nat'l
Services. Inc.. 516 F.2d 198, 202 (2d Cir. "l975). However, the penalty
provision at issue expressly provides that
IT!Accordingly, I need not reach the issue of whether Method 25
or Frey's methodology is the proper approach for calculating the
potential to emit VOCs.
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In determining the amount of any civil penalty to
be assessed under this subsection, the courts shall
take into consideration (in addition to other factors)
the size of the business, the economic impact of the
penalty on the business, and the seriousness of the
violation.
42 U.S.C. S 7413(b).
All three of the factors enumerated in 42 U.S.C. § 7413 are
important and should be considered. United States v. Chevron U.S.A.,
Inc., 639 F.Supp. 770, 779 (W.D.Tex. 1985). Centra United States v.
General Motors Corp., 403 F.Supp. 1151. 1164 (D.Conn. 1975). However,
there is nothing to indicate that all three factors are equally important
or deserve equal weight. As a result, a nominal fine nay be imposed
upon even the largest enterprise in the appropriate circumstances.
General Motors, 403 F.Supp. at 1164. For purposes of computing the
appropriate fine, the penalty period begins when the source first
commits the violation, and not later when the NOV is issued. United
States v. SCM Corp., 667 F.Supp. 1110 (D.Md. 1987). Delay on the
part of the government in bringing the enforcement action should
neither increase nor decrease the penalty amount. Id. at 1128.
There is little precedent providing guidance on how to assess
the "seriousness" of the violations at issue. One recorded case
25. Since LPC is one of the largest businesses in the United States,
it urges this court to rule that the first two factors enumerated
in 42 U.S.C. $ 7413 should not be considered, and in support thereof
cites the case of United States v. General Motors, 403 F.Supp. at
1151. While I agree with the district judge in General Motors that
the seriousness of the violation may well be the most important factor
of the three, I am not prepared to say that the other two factors
are irrelevant. First, the General Motors court was interpreting
a different provision than the one at issue in this case and, while
similar, it is not identical. Second, to ignore two of the three
factors expressly listed in the statute would be contrary to both
common sense and the clear instructions of the Congress. Third,
I believe that the General Motors court was not inclined to consider
the first two factors because the defendant was an enormous enterprise
and the court had concluded that a nominal fine was appropriate under
the unique circumstances of that case.
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in which a fine was imposed for a violation of the PSD program is
United States v. Chevron. 639 F.Supp. at 770. In that case, the
oil company knowingly allowed treatment of hydrogen sulfide to cease
for a period of 17 months at its El Paso refinery. This action greatly
increased emissions of sulphur dioxide, a harmful chemical and principal
cause of "acid rain." Id., at 772. The PSD rules were violated
because'the cessation of treatment constituted a "major modification"
for which the company had failed to obtain a PSD permit. Due to
the fact that Chevron had numerous opportunities to treat and control
these emissions and "chose not to do so-for purely economic reasons,"
the company was fined 31000 per day for 522 days of violation. I&_.
at 779.
In contrast, the General Motors case dealt with a violation
of the Clean Water Act. United States v. General Motors. 403 F.Supp.
at 1151. In that case, vandals had entered an abandoned manufacturing
facility that General Motors was trying to sell. Once inside, they
opened the valves on the plant's oil storage tanks, causing oil to
spill onto the ground and drain into a nearby creek which fed into
the Pequabuck River. When General Motors acquired knowledge of the
spill, it promptly notified the appropriate state and federal authorities,
and directed a thorough clean-up operation which prevented all but
about 25 of the S-BOOQ gallons spilled from reaching the river.
Id_. at 1153. in light of these efforts, and the fact that the spill
had been caused by third parties, a violation was found, but the
court assessed a fine of only one dollar. .Id,, at 1165.
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1. Mitigating Factors
In the present case, a number of factors going to the "serious-
ness" of the violation mitigate against the imposition of a heavy
penalty. First, in LPC's defense, it should be noted that the PSD
provisions create a most unusual and perplexing regulatory framework.
These provisions prohibit the construction of a major stationary
source until after a PSD permit is not only applied for, but actually
received. Yet, one of the very propositions illustrated by this
case is that it is impossible to know with certainty whether a source
will qualify as a "major" source 'until after it is constructed and
emission tests are performed.
As a result, the PSD framework makes no provision for a' source
which constructs in the good faith belief that it is not subject
to the program, only to find out after operations are commenced that
it is a major source. Zn such a situation, the most a source can
do (other than cease operations) is apply for PSD permits, and this
was promptly done by LPC upon receipt of the NOVs.
Second, the only purpose to be served in requiring a new source
to submit a PSD permit application — the only real purpose of the
PSD permitting program — is to ensure that the new source contains
the best available control technology ("BACT"). I am aware that
the determination of what controls constitute BACT for a particular
source is aa agency detrmination to be made by the EPA, and not by
26. Where the owner of a proposed source does not believe that the
PSD program is applicable, there is every incentive not to submit
a PSD application, since the permitting program may legally take
two to three years and, in practice, can take an infinitely long time.
27. In response to the government's contention that these applica-
tions did not contain "complete" monitoring information, it defies
logic to criticize a source in this context (already constructed,
and application required immediately) for failure to include a year's
worth of pre-construction monitoring information in its PSD application.
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this court. However, the testimony of numerous experts at trial did
establish the fact that the pollution control equipment "pioneered"
by LPC28, and which was installed at Kremmling and Olathe at con-
siderable expense, was the most effective control equipment for the
particular application at issue that technology could provide. While
this court cannot and does not hold that this equipment was BACT,
I can and do hold that, in light of the ultimate purpose of the PSD
program, these actions taken by LPC mitigate against the imposition
of a heavy penalty.
Third, there is no evidence that the emissions from Krennling
and Olathe caused environmental damage in the sense that air quality
standards were violated. In addition to the installation of BACT,
the other requirement of the PSD permitting process is for the owner
to demonstrate that operation of the source will not cause emissions
in the area to exceed the National Ambient Air Quality Standards
("NAAQS") or any "increments" established for particular pollutants.
The government -conceded that no "increments" have been set for the
pollutants at issue in this case, and that therefore a source need
only stay within the NAAQS. Additionally, the evidence was undisputed
that the existing ambient air quality, with the plants in operation,
is far better than the NAAQS require for the pollutants at issue.
Fourth, I am unconvinced that LPC reaped any economic benefit
from iti delayed compliance with the PSD program. The benefits of
delayed compliance are properly computed by attempting to quantify
28. Use of EPBs to control emissions at Kremmling and Olathe repre-
sented the first successful commercial application of that technology
in the waferwood industry.
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the savings a source obtains by installing the control equipment
required by the PSO program not when it is legally required, but
rather at some later point in time. The benefit consists of both
the deferral of capital investment in the equipment and the complete
avoidance of the expenses of operation and maintenance which would
have been incurred if the equipment were in place. The economists
proffered by both sides agreed that the benefit should be computed
by determining the cost of the equipment as of the data of noncompliance,
and then bringing that value forward to the date of compliance using
an appropriate discount rate. The maintenance and operational expenses
also create savings, and this cash flow must be discounted as well.
The date of noncompliance is the date that the control equipment
that would have been required by the BACT analysis should have been
paid for and installed. This, of course, must be a date when the
source is in violation of the PSD program and when the equipment
was technically available. The date of compliance is the date when
29
the equipment is paid for, installed, and operational. The econo-
mists that testified reached different conclusions because they employed
different discount rates and were given different dates (by the parties)
as the date of noncompliance. All of then used the date that the
EFBs were installed and operational as the date of compliance.
In the present case, there was no economic benefit from delayed
compliance for two reasons. First, the Kremmling and Olathe plants
were the first plants of their kind in the country to install EFBs
to control emissions. Since the control equipment required by the
29. This is the date of "compliance" — regardless of whether PSD
permits have been issued — because the expenditure is tied to this
date, and it is the avoidance of this expenditure that is being studied.
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PSD program was installed as soon as it became commercially available,
it cannot be said that LPC delayed in installing this equipment.
Second, and perhaps more important, is the fact that the EFBs were
installed, and the required modifications were complete, by the end
of 1986. As established in Part III B above, however, the violation
at Kremmling did not occur until about the end of November, 1986,
since it was at this time that the permit restriction on annual tons
of production was first violated. Thus, since compliance (in economic
terms) occurred at the same time the PSD program was first implicated,
there cannot be said to have been any delayed compliance or resulting
economic benefit.
I note for the record that the government proposed an alternative
methodology for computing the proper penalty in a case such as this.
The approach is to assess as a fine a percentage of the profits generated
by the source for the period that it was in violation. This approach
is rejected because it seems to this court to be so arbitrary and
simplistic as to not really qualify as a "methodology" at all. If
this method were used, two companies of exactly the same size could
commit exactly the same violation, yet two drastically different
fines would be imposed if one company were profitable and the other
were not. Moreover, if the percentage is based solely on the magnitude
of the violation as suggested, this approach leaves no room to consider
30. In stating that EFBs are the control equipment that would be
required by the PSD permitting process, I do not mean to make any
ruling that such equipment is BACT. As already noted, BACT is an
agency determination. Nonetheless, the evidence at trial was overwhelming
that the state-of-the-art equipment installed at Kremmling and Olathe
would constitute BACT when that determination is ultimately made.
Moreover, I note that the government's own economist used the date
the EFBs were installed as the date of compliance in making her cal-
culations. Thus, while I do not rule that the EFBs constitute BACT,
I have, for purposes of computing the penalty in this case, no reason
to believe that they do not.
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the culpability of the offender. Thus, where a large emission or
spill occurs, the method leaves no room to assess a nominal fine
against a profitable defendant, as was properly done in the General
Motors case.
2. Aggravating Factors
Notwithstanding the several factors above which mitigate against
the imposition of a heavy penalty, I conclude that some penalty must
be assessed nonetheless on the unique facts of this case. Initially,
I note that LPC did knowingly violate the restriction on annual produc-
tion contained within its state emission .permits. Moreover, it was
this willful act that caused the defendant to be in violation of
the PSD program. In this sense, therefore, the violation in this
case (however serious) was the result of a deliberate and willful
act, and cannot be characterized as an accidental or inadvertent
31
transgression.
In determining whether a source is subject to the PSD program,
the EPA, in good faith, takes into account state-imposed restrictions
on operations. However, the definition of the term "potential to
emit" — and therefore the PSD program as a whole — is based on
the assumption that a source subject to such restrictions will make
a good faith effort to comply. Were this court to assess a nominal
penalty only in this case, it would give sanction to a willful disregard
of the PSD regulatory framework, and encourage other sources in the
future to disregard other lawful restrictions on operations whenever
convenient to do so.
ITIHowever, I do not wish to characterize LPC's actions as a knowing
or willful violation of the PSD program. Prior to the issuance of
this opinion, at least, a knowing violation of the conditions contained
within a state-issued air emission permit was not necessarily the
equivalent of a knowing violation of the PSD program.
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As I have already noted, the regulatory framework at issue nay
be unusually difficult to comply with because it requires a source
to gueis what its emissions will be prior to construction and the
commencement of operations. Nonetheless, there must be no question
that the burden of guessing correctly remains with the source, and
that a mistake in this process can indeed result in a penalty. Other-
wise, future sources that are unsure of whether they will qualify
as a major source will have no incentive to apply for PSD permits
which, undisputably, is a burden. Rather, they will build first
and wait for the issuance of an NOV before initiating the permit
application process.
Finally, failure to assess a penalty might wrongly give some
indication that the PSD provisions were somehow complied with in
this case. LPC urges that by submitting PSD applications and in-
stalling state-of-the-art pollution control equipment, it complied
"in substance" with the PSD program all along. Whatever effect these
actions may have on the "seriousness" of the violation, they do not,
in and of themselves, constitute compliance with the PSD regulatory
framework. Although a source which has done these things has probably
done all that the PSD program requires it to do, to hold that this
constitutes compliance would be to entirely obliterate the EPA's
role in the process. Rather, the requirements of the program have
been met only upon receipt of PSD permits (not submittal of applications)
after agency review and determination of 8ACT. As a result, the
PSD framework still remains to be complied with in this case.
The violation at the Kremmling plant began around November of
1986 and continues to the present time. Since more than 30 days
have passed since the NOV alleging this violation was issued on
February 3, 1987, this court may impose a fine of up to S25.000 per
day of violation. On the basis of the several considerations discussed
- 50 -
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above, I find that a fine of $65,000.00 is the proper penalty to
impose in this case.
D. Injunction
The purpose of an injunction is to prevent future violations.
United States v. SCM Corp., 667 F.Supp. at 1128; United States v.
w.T. Grant Co., 345 U.S. 629. 633 (1953). As a result, before an
injunction may properly issue, the court must find that there exists
some cognizable danger of recurrent violation. The moving party
bears the burden of satisfying the court that such danger exists
and that injunctive relief is necessary. Id.
Rule 65 of the. Federal Rules of Civil Procedure requires that
"(ejvery order granting an injunction... shall be specific in terms
[and] shall describe in reasonable detail... the act or acts sought
to be restrained...". Fed.R.Civ.P. 65(d). One purpose of these
requirements is to avoid the possible founding of contempt citations
on an order that is too broad or vague. Schmidt v. Lesard, 414 U.S.
473 (1974): Calvin Klein Cosmetics Corp. v. Parfums de Couer, Ltd.,
824 F.2d 665, 669 (8th Cir. 1987). Thus, broad language in an injuction
that essentially requires a party to obey the law in the future is
improper because it is basic to the intent of Rule 65(d) that those
against whom an injunction is issued should receive fair and precisely
drawn notice of what the injunction actually prohibits. Schmidt v.
Lesard,. 414 U.S. at 476: Calvin Klein, 824 F.2d at 669.
In the present case, LPC has submitted PSD permit applications
that the EPA has found to be complete, and all indications are that
the control equipment already installed will be found to constitute
BACT. As a result, the government has failed to establish that there
presently exists some danger of recurrent violation. Moreover, the
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type of injunction requested by the government — that this court
enjoin LPC from further violations of the Clean Air Act and the Colorado
SIP — wonld merely require LPC to "obey the law." As such, it would
fail to meet the specificity requirements of Fed.R.Civ.P. 65fd).
Accordingly, the government's prayer for an injunction will be denied.
CONCLUSION
Based upon the above and foregoing,.
IT IS HEREBY ORDERED. ADJUDGED, AND DECREED that Plaintiff United
States of America's Second Claim for Relief is DISMISSED with prejudice:
IT IS FURTHER ORDERED, ADJUDGED. AND DECREED that the DISMISSAL
with prejudice previously entered in this case of Plaintiff United
States of America's First Claim for Relief is hereby CONFIRMED;
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the DISMISSAL
with prejudice previously entered in this ease of Plaintiff United
States of America's Third Claim for Relief is hereby CONFIRMED;
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the court
finds in favor of Plaintiff United States of America and against
Defendant Louisiana-Pacific Corporation on Plaintiff's First Claim
for Relief in the Alternative; therefore
IT IS FURTHER ORDERED that a civil penalty is hereby assessed
against Defendant Louisiana-Pacific Corporation in the amount of
365,000.00. The Cleric is ordered to enter final judgment in this
amount in favor of the plaintiff and against the defendant;
IT IS FURTHER ORDERED that Plaintiff United States of America's
prayer for injunctive relief be, and the same hereby is, DENIED.
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Costa shall be assessed to the defendant upon plaintiff's filing
of a bill of costs as provided by law.
^
DATED at Denver, Colorado thisj?*?"*""' day of March, 1988.
BY THE COTOT:
ALFRED/A ARRAJ, Judge
United States District Court
ENTERED
ON FHE DOCKET
MAR 2 ? 1988
JAMES R. MAflSP£AKER
- 53* -
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2.29
2.29
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
October 14, 1988
Applicability of PSD and NSPS to Proposed Life Extension Project
at the Port Washington Steam Electric Generating Station
Lee M. Thomas, Administrator, EPA
John W. Boston, Vice President, Wisconsin Electric Power Company,
Milwaukee, WI
This is the final applicability determination regarding the
proposed Port Washington steam electric generating station. The
renovations constitute physical changes for PSD purposes, and do
not come within the exclusions for routine maintenance, repair,
replacement; or for production rate or hours of operation. The
renovations will result in a significant net increase in emissions
of several pollutants for PSD and NSPS purposes, and are,
therefore, subject to both PSD and NSPS requirements, unless the
project is reconfigured.
4.38 [Hard Copy]
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2.30
Reserved
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2.31
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
JUN 13089
MEMORANDUM
SUBJECT: Guidance on Limit ing Potential to Emit in Ne>r Source
Permitting
Emit in New
FROM: T**T?1 i v HMnt —*^-^fc*g^^
Associate Enforcement Counsel
Air Enforcement Division
Office of Enforcement and Compliance Monitoring
John S. Seitz, Director
Stationary Source Compliafi^e"Division"
Office of Air Quality Planning and Standards
TO: Addressees
This memorandum transmits the final guidance on conditions
in construction permits which can legally limit a source's
potential to emit to minor or de minimis levels. We received
many helpful comments on the January 24, 1989 draft of this
guidance, and have incorporated the comments into the final
document wherever possible. A summary of the major changes which
have been made to the guidance in response to these comments is
provided below.
Several commenters noted that the draft guidance used the
term "federally enforceable" to mean both federally enforceable
as defined in the new source regulations (40 C.F.R. §§
52.21(b)(17), 51.165(a)(1)(xiv), 51.166(b)(17)), and enforceable
as a practical matter. We have tried to distinguish the places
where each term should be used, explained the relationship
between the two terms, and indicated that in order to properly
restrict potential to emit, limitations must be both federally
enforceable as defined in the regulations and practically
enforceable.
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-2-
SOIM commenters requested that the section on averaging
times for production limits be more specific as to when it is
appropriate to use limitations which exceed a one month time
basis. We have tried to explain why it is not possible to
develop generic criteria for making this distinction, and to
indicate situations where exceptions to the policy that
production and operation limitations not exceed one month may be
warranted.
There were some requests for a section on enforcement. We
have included a new Section VI which addresses this topic. We
also received many good suggestions on the example permit
limitations. The section on examples has been substantially
reworked to reflect your comments.
Finally, we learned through the comments that in two
specific circumstances, short term emission limits are the most
useful and reasonable way to restrict and verify limits on
potential to emit. These circumstances are: 1) when control
equipment is installed but control equipment operating parameters
are difficult to measure during enforcement inspections; and 2)
in surface coating operations with numerous and unpredictable use
of coatings containing varying VOC content, where add-on control
equipment is not employed. Therefore, we have made a narrow
exception to the flat prohibition on use of emission limits to
restrict potential to emit for these specific circumstances, and
only when certain additional conditions have been met.
Again, we appreciate the thoughtful comments we have
received on this guidance. Please insert this document into your
Clean Air Act Compliance/Enforcement Policy Compendium as Item
Number H.3. If you have any questions, please contact Judith
Katz in the Air Enforcement Division at FTS 382-2843, or Sally
Farrell in the Stationary Source Compliance Division at FTS 382-
2875.
Addressees:
Regional Counsels
Regions I-X
Regional Counsel Air Branch Chiefs
Regions I-X
Air Management Division Directors
Regions I, III, and IX
Air and Waste Management Division Director
Region II
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2.31
-3-
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
Air compliance Branch Chiefs
Regions I-X
New Source Review Contacts
Regions I-X
Alan Eckert
Associate General Counsel
Greg Foote, OGC
Gary Mccutchen, NSRS, AQMD
David Solomon, NSRS, AQMD
Sally Farrell, SSCD
Judy Katz, AED
David Buente, Chief
Environmental Enforcement Section
DOJ
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2.31
LIMITING POTENTIAL TO EMIT IN NEW SOURCE PERMITTING
JUNE 13, 1989
AIR ENFORCEMENT DIVISION
OFFICE OF ENFORCEMENT AND COMPLIANCE MONITORING
STATIONARY SOURCE COMPLIANCE DIVISION
OFFICE OF AIR QUALITY PLANNING AND STANDARDS
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Limiting Potential to Emit in New Source Permitting
I. Introduction
II. The Louisiana-Pacific Case
III. Types of Limitations that will Limit Potential to Emit
IV. Time Periods for Limiting Production and Operation
V. Sham Operational Limits
A. Permits with conditions that do not reflect a source's
planned mode of operation are void ab initio and cannot
act to shield the source from the requirement to
undergo preconstruction review.
1. Sham permits are not allowed by 40 CFR 52.21(r)(4)
2. Sham permits are not allowed by the definition of
potential to emit: 40 CFR 52.21(b)(4),
51.165(a)(1)(iii), 51.166(b)(4)
3. Sham permits are not allowed by the Clean Air Act
B. Guidelines for determining when minor source
construction permits are shams.
1. Filing a PSD or nonattainment NSR application
2. Applications for funding
3. Reports on consumer demand and projected
productions levels
4. Statements of authorized representatives of the
source regarding plans for operation
VI. Enforcement Procedures
VII. Examples
VIII. Conclusion
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2.31
Limiting Potential to Emit in New Source Permitting
I. Introduction
Whether a new source or modification is major and subject to
new source review under Parts C and D of the Clean Air Act is
dependent on whether that source or modification has or will have
the potential to emit major or significant amounts of a regulated
pollutant. Therefore, the definition of "potential to emit"
under the new source regulations is extremely important in
determining the applicability of new source review to a
particular source. The federal regulations define "potential to
emit" as:
the maximum capacity of a stationary source to emit a
pollutant under its physical and operational design. Any
physical or operational limitation on the capacity of the
source to emit a pollutant, including air pollution control
equipment and restrictions on hours of operation or on the
type or amount of fuel combusted, stored or processed, shall
be treated as part of its design if the limitation or the
effect it would have on emissions is federally enforceable.
40 C.F.R.§§ 52.21(b)(4), 51.165(a)(1)(iii), 51.166(b)(4).
Permit limitations are very significant in determining
whether a source is subject to major new source review. This is
because they are the easiest and most common way for a source to
obtain restrictions on its potential to emit. A permit does not
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2
have to be a major source permit to legally restrict potential
emissions. A minor source construction permit issued pursuant to
a state program approved by EPA as meeting the requirements of 40
C.F.R. § 51.160 is federally enforceable. In fact, any permit
limitation can legally restrict potential to emit if it meets two
criteria: 1) it is federally enforceable as defined by 40 C.F.R.
§§ 52.21(b)(17), 51.165(a)(1)(xiv), 51.166(b)(17), i.e..
contained in a permit issued pursuant to an EPA-approved
permitting program or a permit directly issued by EPA, or has
been submitted to EPA as a revision to a State Implementation
Plan and approved as such by EPA; and 2) it is enforceable as a
practical matter. The second criterion is an implied requirement
of the first criterion. A permit requirement may purport to be
federally enforceable, but, in reality cannot be federally
enforceable if it cannot be enforced as a practical matter.
Non-permit limitations can also legally restrict potential
to emit. These limitations include New Source Performance
Standards codified at 40 C.F.R. Part 60 and National Emission
Standards for Hazardous Air Pollutants codified at 40 C.F.R.
Part 61.
The appropriate means of restricting potential to emit
through permit conditions has been an issue in recent enforcement
cases. Through these cases and through guidance issued by EPA,
the Agency has addressed three questions: what types of permit
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2.31
3
limitation* can legally limit potential to emit; whether long
averaging times for production limitations are enforceable as a
practical matter; and whether sources may limit potential to emit
to minor source levels as a means of circumventing the
preconstruction review requirements of major source review.
II. The Louisiana-Pacific Case
In United States v. Louisiana-Pacific Corporation. 682 F.
Supp. 1122 (D. Colo. Oct. 30, 1987) and 682 F. Supp. 1141 (D.
Colo. March 22, 1988), Judge Alfred Arraj discussed the type of
permit restrictions which can be used to limit a source's
potent! to emit. The Judge concluded that:
...not all federally enforceable restrictions are properly
considered in the calculation of a source's potential to
emit. While restrictions on hours of operation and on the
amount of materials combusted or produced are properly
included, blanket restrictions on actual emissions are not.
682 F. Supp. at 1133.
The Court held that Louisiana-Pacific's permit conditions
which limited carbon monoxide emissions to 78 tons per year and
volatile organic compounds to 101.5 tons per year should not be
considered in determining "potential to emit" because these
blanket emission limits did not reflect the type of permit
conditions which restricted operations or production such as
limits on hours of operation, fuel consumption, or final product,
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4
The Louisiana-Pacific court was guided in its reasoning by
the D.C. Circuit's holding in Alabama Power v. Costle. 636 F. 2d
323 (D.C. Circuit 1979). Before Alabama Power. EPA regulations
required potential to emit to be calculated according to a
source's maximum uncontrolled emissions. In Alabama Power, the
D. C. Circuit remanded those regulations to EPA with instructions
that the Agency include the effect of in-place control equipment
in defining potential to emit. EPA went beyond the minimum
dictates of the D.C. circuit in promulgating revised regulations
in 1980 to include, in addition to control equipment, any
federally enforceable physical or operational limitation. The
Louisiana-Pacific court found that blanket limits on emissions
did not fit within the concept of proper restrictions on
potential to emit as set forth by Alabama Power.
Moreover, Judge Arraj found that:
...a fundamental distinction can be drawn between the
federally enforceable limitations which are expressly
included in the definition of potential to emit and
...(emission) limitations Restrictions on hours of
operation or on the amount of material which may be
combusted or produced ... are, relatively speaking, much
easier to "federally enforce." Compliance with such
conditions could be easily verified through the testimony of
officers, all manner of internal correspondence and
accounting, purchasing, and production records. In
contrast, compliance with blanket restrictions on actual
emissions would be virtually impossible to verify or
enforce.
Id. Thus, Judge Arraj found that blanket emission limits were
not enforceable as a practical matter.
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2.31
5
Finally, the Court reasoned that allowing blanket emission
limitations to restrict potential to emit would violate the
intent of Congress in establishing the Prevention of Significant
Deterioration (PSD) program.
III. Types of Limitations that will Restrict Potential to Emit
As an initial matter in this discussion, a few important
terms should be defined. Emission limits are restrictions over a
given period of time on the amount of a pollutant which may be
emitted from a source into the outside air. Production limits
are restrictions on the amount of final product which can be
manufactured or otherwise produced at a source. Operational
limits are all other restrictions on the manner in which a source
is run, including hours of operation, amount of raw material
consumed, fuel combusted, or conditions which specify that the
source must install and maintain add-on controls that operate at
a specified emission rate or efficiency. All production and
operational limits except for hours of operation are limits on a
source's capacity utilization. Potential emissions are defined
as the product of a source's emission rate at maximum operating
capacity, capacity utilization, and hours of operation.
To appropriately limit potential to emit consistent with the
opinion in Louisiana-Pacific, all permits issued pursuant to 40
C.F.R. §§51.160, 51.166, 52.21 and 51.165 must contain a
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6
production or operational limitation in addition to the emission
limitation in cases where the emission limitation does not
reflect the maximum emissions of the source operating at full
design capacity without pollution control equipment.
Restrictions on production or operation that will limit potential
to emit include limitations on quantities of raw materials
consumed, fuel combusted, hours of operation, or conditions which
specify that the source must install and maintain controls that
reduce emissions to a specified emission rate or to a specified
efficiency level. Production and operational limits must be
stated as conditions that can be enforced independently of one
another. For example, restrictions on fuel which relates to
both type and amount of fuel combusted should state each as an
independent condition in the permit. This is necessary for
purposes of practical enforcement so that, if one of the
conditions is found to be difficult to monitor for any reason,
the other may still be enforced.
When permits contain production or operational limits, they
should also have recordfceeping requirements that allow a
permitting agency to verify a source's compliance with its
limits. For example, permits with limits on hours of operation
or amount of final product should require an operating log to be
kept in which the hours of operation and the amount of final
product produced are recorded. These logs should be available
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2.31
7
for inspection should staff of a permitting agency wish to check
a source's compliance with the terms of its permit.
When permits require add-on controls operated at a specified
efficiency level, permit writers should include, so that the
operating efficiency condition is enforceable as a practical
matter, those operating parameters and assumptions which the
permitting agency depended upon to determine that the control
equipment would have a given efficiency.
An emission limitation alone would limit potential to emit
only when it reflects the absolute maximum that the source could
emit without controls or other operational restrictions. When a
permit contains no limits on capacity utilization or hours of
operation, the potential to emit calculation should assume
operation at maximum design or achievable capacity (whichever is
higher) and continuous operation (8760 hours per year).
The particular circumstances of some individual sources make
it difficult to state operating parameters for control equipment
limits in a manner that is easily enforceable as a practical
matter. Therefore, there are two exceptions to the absolute
prohibition on using blanket emission limits to restrict
potential to emit. If the permitting agency determines that
setting operating parameters for control equipment is infeasible
in a particular situation, a federally enforceable permit
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8
containing short term emission limits (e.g. Ibs per hour) would
be sufficient to limit potential to emit, provided that such
limits reflect the operation of the control equipment, and the
permit includes requirements to install, maintain, and operate a
continuous emission monitoring (CEM) system and to retain CEM
data, and specifies that CEM data may be used to determine
compliance with the emission limit.
Likewise, for volatile organic compound (VOC) surface
coating operations where no add-on control is employed but
emissions are restricted through limiting VQC contents and
quantities of coatings used, emission limits may be used to
restrict potential to emit under the following limited
circumstances. If the permitting agency determines for a
particular surface coating operation that operating and
production parameters (e.g.. gallons of coating, quantities
produced) are not readily limited due to the wide variety of
coatings and products and due to the unpredictable nature of the
operation, emission limits coupled with a requirement to
calculate daily emissions may be used to restrict potential to
emit. The source must be required to keep the records necessary
for this calculation, including daily quantities and the VOC
content of each coating used. Emission limits may be used in
this limited circumstance to restrict potential to emit since, in
this case, emission limits are more easily enforceable than
operating or production limits.
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2.31
IV. Tine Periods For Limiting Production and Operation
As discussed above, a limitation specifically recognized by
the regulations as reducing potential to emit is a limitation on
production or operation. However, for these limitations to be
enforceable as a practical matter, the time over which they
extend should be as short term as possible and should generally
not exceed one month. This policy was explained in a March 13,
1987 memorandum from John Seitz to Bruce Miller, Region IV. The
requirement for a monthly limit prevents the enforcing agency
from having to wait for long periods of time to establish a
continuing violation before initiating an enforcement action.
EPA recognizes that in some rare situations, it is not
reasonable to hold a source to a one month limit. In these
cases, a limit spanning a longer time is appropriate if it is a
rolling limit. However, the limit should not exceed an annual
limit rolled on a monthly basis. EPA cannot now set out all-
inclusive categories of sources where a production limit longer
than a month will be acceptable because every situation that may
arise in the future cannot now be anticipated. However, permits
where longer rolling limits are used to restrict production
should be issued only to sources with substantial and
unpredictable annual variation in production, such as emergency
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10
boilers. Rolling limits could be used as well for sources which
shut down or curtail operation during part of a year on a regular
seasonal cycle, but the permitting authority should first explore
the possibility of imposing a month-by-month limit. For example,
if a pulp drier is periodically shut down from December to April,
the permit could contain a zero hours of operation limit for each
of those months, and then the appropriate hourly operation limit
for each of the remaining months. Under no circumstances would a
production or operation limit expressed on a calendar year annual
basis be considered capable of legally restricting potential to
emit.
V. Sham Operational Limits
In the past year, several sources have obtained purportedly
federally enforceable permits with operating restrictions
limiting their potential to emit to minor or de minimis levels
for the purpose of allowing them to commence construction prior
to receipt of a major source permit. In such cases where EPA can
demonstrate an intent to operate the source at major source
levels, EPA considers the minor source construction permit void
ab initio and will take appropriate enforcement action to prevent
the source from constructing or operating without a major source
permit.
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2.31
11
The following example illustrates the kind of situation
addressed in this section: An existing major stationary source
proposes to add a 12.5 megawatt electric utility steam generating
unit, and applies for a federally enforceable minor source permit
which restricts operation at the unit to 240 hours per year.
Because the project is designed as a baseload facility, EPA does
not believe that the source intends to operate the facility for
only 240 hours a year. Further investigation would probably
uncover documentation of the source's intent to operate at higher
levels than those for which it is permitted.
This situation raises the question of whether a source can
lawfully bypass the preconstruction or premodification review
requirements of Prevention of Significant Deterioration (PSD) and
nonattainment New "Source Review by committing to permit
conditions which restrict production to a level at which the
source does not intend to operate for any extensive time.
If, after constructing and commencing operation, the source
obtains a relaxation of its original permit conditions prior to
exceeding them, does this constitute a violation of the
preconstruction review requirements? This section discusses why
it is improper to construct a source with a minor source permit
when there is intent to operate as a major source, and provides
guidelines for identifying these "sham" permits.
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12
A. Permits with conditions that do not reflect a source's
planned mode of operation are void ab initio and cannot act to
shield the source from the requirement to undergo preconstruction
review.
1. Sham permits are not allowed by 40 CFR §52.21(r)(4)
Section 52.21(r)(4) states:
At such time that a particular source or modification
becomes a major stationary source or major modification
solely by virtue of a relaxation in any enforceable
limitation which was established after August 7, 1980 on the
capacity of the source or modification otherwise to emit a
pollutant, such as a restriction on hours of operation, then
(PSD) shall apply to the source or modification as though
construction had not yet commenced on the source or
modification.
When a source that is minor because of operating
restrictions in a construction permit later applies for a
relaxation of that construction permit which would make the
source major, Section 52.21(r)(4) prescribes the methodology for
determining best available control technology (BACT). However,
it does not foreclose EPA's ability, in addition to the
retroactive application of BACT and other requirements of the PSD
program, to pursue enforcement where the Agency believes that the
initial minor source permit was a sham. EPA will limit its
activity to requiring application of 40 CFR 52.21(r)(4) only for
the cases where a source legitimately changes a project after
finding that the operating restrictions which were taken in good
faith cannot be complied with. Whether a source has acted in
good faith is a factual question which is answered by available
evidence in the particular case.
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2.31
13
2. Sham permits are not allowed by the definition of
potential to emit: 40 C.F.R. §§52.21(b)(4),
51.165(a)(1)(iii), 51.166(b)(4).
The definition of potential to emit enables sources to
obtain federally enforceable permits with operational
restrictions as a means of limiting emissions to minor source
levels. However, implicit in the application of these
limitations is the understanding that they comport with the true
design and intended operation of the project.
3. Sham permits are not allowed by the Clean Air Act
Parts C and D of the Clean Air Act exhibit Congress's clear
intent that new major sources of air pollution be subject to
preconstruction review. The purposes for these programs cannot
be served without this essential element. Therefore, attempts to
expedite construction by securing minor source status through the
receipt of operational restrictions from which the source intends
to free itself shortly after operation are to be treated as
circumvention of the preconstruction review requirements.
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14
B. Guidelines for determining when minor source construction
permits are shams.
EPA's determination that a purportedly federally enforceable
construction permit is a sham is made based on an evaluation of
specific facts and evidence in each individual case. The
following are criteria which should be scrutinized when making
such a determination:
1. Filing a PSD or nonattainment NSR permit application
If a major source or major modification permit application
is filed simultaneously with or at approximately the same time as
the minor source construction permit, this is strong evidence of
an intent to circumvent the requirements of preconstruction
review. Even a major source application filed after the minor
source application, but either before operation has commenced or
after less than a year of operation should be looked at closely.
2. Applications for funding
Applications for commercial loans or, for public utilities,
bond issues, should be scrutinized to see if the source has
guaranteed a certain level of operation which is higher than that
in its construction permit. If the project would not be funded
or if it would not be economically viable if operated on an
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2.31
15
extended basis (at least a year) at the permitted level of
production, this should be considered as evidence of
circumvention.
3. Reports on consumer demand and projected production
levels.
Stockholder reports, reports to the Securities and Exchange
Commission, utility board reports, or business permit
applications should be reviewed for projected operation or
production levels. If reported levels are necessary to meet
projected consumer demand but are higher than permitted levels,
this is additional evidence of circumvention.
4. Statements of authorized representatives of the source
regarding plans for operation.
Statements by representatives of the source to EPA or to
state or local permitting agencies about the source's plans for
operation can be evidence to show intent to circumvent
preconstruction review requirements.
Mote that if a determination is made that a permit is a
"sham11 for one pollutant and, therefore, the source is a major
source or major modification, the permit may possibly still
contain valid limits on potential to emit for other pollutants.
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16
In such cases, the entire source must still go through new source
review, during which, for PSD review, all pollutants for which
there is a net significant increase must be analyzed for BACT.
In nonattainment new source review, new sources must have LAER
determinations only for pollutants for which they are major.
Major modifications, however, must have LAER determinations for
all nonattainment pollutants emitted in significant amounts. If
the valid limits in a partially void minor source construction
permit keep certain pollutants below significance levels, then
those pollutants would not have to be analyzed for BACT or LAER.
However, if a source or modification is determined to be major
for PSD or NSR because part of its minor permit is deemed void,
it would have to undergo BACT or LAER analysis for all
significant pollutants.
VI. Enforcement Procedures
This guidance has discussed permit conditions which will
legally restrict potential to emit, shielding a source from the
requirement to comply with major new source permitting
regulations. Failure by a permitting agency to adhere to these
guidelines may result in a permit that does not legally restrict
potential to emit, thereby subjecting a source to major new
source review. If that source has not gone through
preconstruction review, it is a significant violator of the Clear
Air Act and is subject to enforcement for constructing or
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2.31
17
modifying without a major new source permit.
The enforcement options available to EPA in these situations
include administrative action under §§167 or 113(a)(5) of the Act
or federal judicial action under §§ 113(b)(2), 113(b)(5), 113(c),
or 167. Which enforcement option is selected depends on the
facts of the particular situation. (See July 15, 1988 guidance
on EPA Procedures for Addressing Deficient New Source Permits.)
VII. Examples
The following examples are provided to illustrate the type
of permit restrictions which would and would not legally limit
potential to emit to less than major source thresholds. These
examples are provided for purposes of clarifying the potential to
emit and averaging time guidance only. They are not intended to
reflect all the permit conditions necessary for a valid permit.
Specific test methods, compliance monitoring and recordkeeping
and reporting requirements are necessary to make permit
limitation* enforceable as a practical matter. The use of
examples where averaging times are the longest times allowed
under EPA policies is not intended to necessarily condone the
selection of the longest averaging times; averaging times should
in practice be as short as possible.
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18
1. The minor source construction permit for a boiler
contains the following restrictions: 250,000 gal fuel/month;
0.8% S fuel; 8000 hours/year.
These conditions are federally enforceable production and
operation limits, but do not limit potential to emit because one
of them does not meet EPA policies on enforceability as a
practical matter. The averaging time for hours of operation, one
of the operational limits necessary to restrict emissions to less
than 250 tpy, exceeds a monthly or rolling yearly limit. If,
instead of 8000 hours/year, the hourly restriction were stated as
666 hours/month, the permit would serve to keep the source a
minor source, assuming the permit contains appropriate
recordkeeping provisions.
2. A waferboard plant which has the physical capacity to
emit over 300 tpy of carbon monoxide in the absence of using
specific combustion techniques has the following permit
restriction as the sole emission limitation: 249 tpy.
This does not limit potential to emit since an operational
or production restriction is necessary for the source to be
restricted to 249 tpy. The permit must contain a restriction on
hours of operation or capacity utilization which, when multiplied
by the maximum emission rate for the CO sources at the plant,
results in emissions of 249 tpy. Additionally, while the
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2.31
19
emission fimit alone cannot restrict potential to emit, the
emission limit is unenforceable as a practical matter since it is
limited on an annual basis. The permit should contain a short
term emission limit (in addition to the annual emission limit),
consistent with the compliance period or parameter in the
applicable test method for determining compliance.
3. A small scale rock crushing plant that cannot emit more
than 240 tpy under maximum operation without controls (including
plant-wide particulate emissions from transfer and storage
operations) has the following permit restriction as the sole
emission limitation: 240 tpy particulate matter.
Since no operational limitations are necessary for the
source to emit below 250 tpy, no operational restrictions need be
in the permit to limit potential to emit. However, although this
is not a major source, the state agency should express the
emission limit in this permit as a Ib/hour measure or gr/dscf so
that it will be enforceable as a practical matter.
4. A plant consisting solely of a small rock crusher has
the following permit restrictions: 0.05 Ib gr PM/dscf; fabric
filter must be employed and maintained at 99% efficiency.
Assuming that maintaining the fabric filter at 99%
efficiency will result in emissions of less than 250 tpy, this
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20
permit would limit potential to emit if it also contained either
1) parameters that allowed the permitting agency to verify the
fabric filter's operating efficiency or 2) a requirement to
install and operate continuous opacity monitors (COMs) and a
specification that COM data may be used to verify compliance with
emission limits. Note that if this second alternative were
adopted, it would not be necessary to require that the fabric
filter be maintained at 99% efficiency.
To determine potential to emit, the efficiency rate of the
fabric filter would be multiplied by the maximum uncontrolled
emission rate, the maximum number of operating hours and maximum
throughput capacity since there are no other operating or
production limits. However, the efficiency rate of the fabric
filter would not be enforceable as a practical matter unless
there were an enforceable means to monitor ESP performance on a
short term basis. The two alternatives mentioned above would
satisfy this requirement.
5. A surface coating operation has the capability of
utilizing 15,000 gal coating/month, with the following permit
restrictions: 3.0 Ib VOC/gal coating minus water? 20.5 tons
VOC/month; monthly VOC emissions to be determined from records
of the daily volumes of coatings used times the manufacturers
specified VOC content.
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2.31
21
This does not limit potential to emit since the source has
the physical capacity to exceed 250 tpy of VOC, and the permit
does not contain a production or an operational limitation. A
monthly limit on gallons of coating used which when multiplied by
3.0 Ib/gal equates to less than the 250 tpy threshold (e.g.
13,500 gallons/month), with appropriate recordkeeping, would
generally be necessary to limit potential to emit. If, however,
the permitting agency determines, due to the wide variety of
coatings employed and products produced, that restrictions on
operation or production are not practically enforceable, then the
above emission limits could restrict potential to emit if there
are requirements that the source calculate emissions daily, and
keep the appropriate records.
If the source.-was alternatively to meet the 20.5 ton/month
limit by employing add-on controls, the permit would need to
contain an operational limit, such as the requirement to install
and operate an incinerator at 99% efficiency. A requirement to
monitor incinerator efficiency (either directly or indirectly via
temperature monitoring for example), and appropriate
recordkeeping requirements to verify compliance with each of the
permit conditions would also be necessary to make the permit
conditions enforceable as a practical matter. Note, however,
that in the case where add-on controls are employed, the source
may be able to meet a shorter term emission limit than the ton
per month figure.
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22
vizi. Conclusion
We hope this guidance will help EPA Regions identify sources
which have the potential to emit major amounts of an air
pollutant which will subject those sources to the requirements of
preconstruction new source review. Every source which is
subject to these requirements but has not obtained a major new
source permit should be seriously considered for enforcement
action.
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2.32
itP SI,.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON DC 20460
NOY24I989
OFFICE OF
CO'JNSEL"
MEMORANDUM
SUBJECT
FROM:
THRU:
TO:
Court of Appeals Decision Upholding PSD
"Actual-to-Potential" Applicability Rules
Puerto Rican Cement Co. , Inc.._ v. EPA,
No. 89-1070 (1st Cir.)
Gregory B. Foote, Attorney
Air and Radiation. Division
Alan W. Eckert
Associate General Counsel
Air and Radiation Division (LE-132A)
William G. Rosenberg
Assistant Administrator
for Air and Radiation
The First Circuit Court of Appeals has issued a decision
which, in resounding terms, upholds the rules governing
applicability of PSD ro major modifications under the Clean Air
Act. In Puerto Rican Cement Co., Inc. v. EPA. No. 89-1070 (slip
op. Oct. 31. ~ 1989")" (copy attached), the court affirmed EPA's
position that when a company makes a "physical or operational
change" at an- existing facility, there is a "major modification"
subject to PSD review if a comparison of actual emissions before
the change with potential emissions thereafter shows a
"significant net increase." Essentially, the court embraced our
view that alterations at- a plant provide an economic incentive to
increase production, and must undergo PSD review unless the
company agrees to limit its actual emissions to current levels.
The facts of the case and the court's holdings are summarized
below.
Puerto Rican Cement planned to convert cement kilns 'from a
"wet" process to a "dry" process. Overall production capacity
would have increased, but because the new process was inherently
less polluting, both total potential emissions and emissions per
unit of production would have decreased. Nevertheless, because
the plant had operated at 60% capacity in recent years, a
comparison of actual emissions before the conversion with
potential emissions thereafter showed a significant increase.
The PSD regulations provide that a physical or operational change
is subject to review as a major modification if there will be a
significant net increase in actual emissions. However, because
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actual emissions cannot be predicted before the modification
occurs, the rules also provide that where a source has not begun
"normal operations," its actual emissions are assumed to be its
potential to emit. See, e.g., 40 C.F.R. § 52.2Kb) (2) (i) ,
(b)<3),
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2.32
- 3 -
Third, the court ruled that the provision in the.PSD
regulations that excludes emissions increases due to increased
production rates or hours of operations (see, e.g., 40 C.F.R. §
52.2Kb) (2) (iii) (f)) does not apply where those increases are
linked to a physical or operational change. The company had
argued that under this provision, it could increase production at
its old kilns to 100 percent of capacity, and saould also be
allowed to do so with the more efficient kilns. The court
rejected this claim, pointi-ig to tne statute's focus on
"construction" of facilities (see section 169(2)(C)), and to "a
prediction that, as a c-T^ral rule, new Building will more likely
lead to increased emiss .ons levels." Consequently, the court
found no contradiction Wtwet/i allowing increased output at
existing facilities to avoid review while subjecting increased
output of new capacity :.o PSD coverage. Slip op. at 18-19.2
The issues addressed in Puerto Rican Cement are among those
still pending before tr.~ Seventh Circuit in Wisconsin Electric
Power Co. v. Reilly. .\'os. 88-3264 and 89-1339 ("WEPCO") . We have
advised that court of -?.. First Circuit decision, which should
have a favorable impact for us.
The Pue.rt.q Ri.c_an '.'.r-ner.- decision is a ringing endorsement of
an important facet of ^:jA's recent activist posture on PSD
issues. It can be reao as a green light for the Agency to
proceed to rigorously ^'ply new source requirements to a broad
range of physical or .oorational changes at existing facilities
where the changes prov.d-? an economic incentive that might
result in increased emissions. However, there are many potential
2 In addition, the .-«urt found that an isolated prior
inconsistent interpretation of EPA's applicability rules did not
invalidate the Agency's -.it?'ermination as to Puerto Rican Cement.
Slip op. at 19-22. Also, the court upheld EPA's interpretation
that the time period for calculating "contemporaneous" emissions
increases and decreases runs backward from the commencement of
construction on the particular change, not from the time the
company sought a nonapplicability determination from EPA. Slip
op. at 24-26. Finally, the court rejected Puerto Rican Cement's
attempt to gain judicial review of the lawfulness of the PSD
regulations themselves. The First Circuit noted that under
section 307(b)(l), challenges to nationally applicable
regulations may be lodged only in the District of Columbia
Circuit, and that such a challenge is still pending in Chemical
Mfrs. Ass'n v. EP.A, No. 79-1112.
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- 4 -
pitfalls to the Agency's approach. This case and the upcoming
ruling in the WEPCO case thus underscore the need for EPA to
address in a comprehensive manner the various PSD applicability
issues that have arisen in the last year or so. They also
increase the likelihood that industry petitioners will attempt to
revive Exhibit B of the settlement agreement in Chemical
Manufacturers Association v. EPA, No. 79-1112 (D.C. Cir.). Under
that long-dormant agreement, EPA pledged to propose and take
final action on revisions to the new source review regulations
that would replace the actual-to-potential calculus with an
applicability system based on changes in potential emissions. We
are preparing a memorandum for Mike Shapiro on all of these
issues, and hope to brief nim on them in the near future.
Attachment
cc: Don Elliott
Gerald Yamada
Michael Shapiro
Lydia Wegman
Gerald Emison
John Calcagni
John Seitz
Rob Brenner
Air Division Directors, I-X
Regional Counsels. I-X
Gerald Yamada
C. Marshall Cain
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2.32
United States Court of Appeals
For the First Circuit
No. 89-1070
PUERTO RICAN CEMENT COMPANY, INC.,
Petitioner,
v.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,
Respondent.
ON PETITION FOR REVIEW OF AN ORDER OF
THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Before
Bownes, Circuit Judge.
Fairchild,* Senior Circuit Judge.
and Breyer, Circuit Judge.
Grant S. Lewis, with whom Daniel R. Dominguez. Dominouez & Totti.
G.S. Peter Beraen. Ronald J. Gizzi and LeBoeuf. Lamb. Leiby & MacRae
were on brief for petitioner.
Michael A. McCord. Attorney, Department of Justice, Land and Natural
Resources Division, with whom Donald A. Carr. Acting Assistant Attorney
General, Land and Natural Resources Division, Michael S. Winer. Jeffrey
B. Renton. Attorneys, Office of General Counsel, and Joseph A. sieoel.
Office of Regional Counsel, U.S.E.P.A., were on brief for respondent.
OCTOBER 31, 1989
*0f the United States Court of Appeals for the Seventh Circuit,
sitting by designation.
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BREYER, Circuit Judge. The Puerto Rican Cement Co.
(the "Company") wishes to build a new cement kiln, replacing
older kilns that it now operates at about 60 percent of their
capacity. If operated to achieve about the same level of
production, the new kiln will pollute far less than the older
kilns; but, if the Company operates the new kiln at
significantly higher production levels, it will emit more
pollutants than did the older kilns. The Environmental
Protection Agency, noting that it is possible that the new
kiln will produce more pollution, has held that the Company
cannot build it without obtaining a special kind of EPA
approval, required when one wishes to "construct" a "major
emitting facility" in a place where the air is particularly
clean. (The facility must meet "prevention of significant
deterioration" ("PSD") requirements. Sge. 42 U.S.C. § 7475.)
The Company appeals. We find that EPA's determination is
lawful.
I.
Background
1. Factual; The Company's cement plant contains six
kilns, which produce a fine powder called "clinker." In 1987
the Company decided to convert Kiln No. 6 from a "wet," t- a
"dry," cement-making process, and to combine that kiln with
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2.32
Kiln No. 3. At that time, Kilns 3 and 6 were operating at
about 60 percent of their combined capacity, producing about
424,000 tons of clinker per year. The converted kiln would
have a total capacity of 961,000 tons of clinker per year, or
about 35 percent more than the 705,000 ton capacity of Kilns
3 and 6. At any given level of production, the new kiln would
emit less air polluting substance than the two older kilns
combined, and would use less fuel to boot. However, if the
company decided to operate the new kiln close to its capacity,
it might produce both more clinker and more pollution than the
old kilns produced when operated at 60 percent of their
capacity. In particular, information submitted by the Company
suggests the following:
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Pounds of Emissions per Ton of Clinker Produced
NOX S02 PM
Old (Wet) Process 4.9 6.32 O.234
New (Dry) Process 2.6 4.01 0.133
Fig. 1: Comparative Emissions Rates
Tons of Emissions Per Year
NO, SO2 PM
Old (Wet) Process
/Actual (operated at 1100 1340 49.€
about 60% of capacity)
/Potential 1745 2230 82.6
New (Dry) Process
/Actual 578 850 28.2
/Potential (operated 1250 1927 64.0
at full capacity)
Fig. 2: Comparative Emissions Amounts
These charts show the rate and amount of emissions of three
pollutants: nitrogen oxides, sulfur dioxide, and particulate
matter. The "Actual" rate of production is the average rate
for Kilns 3 and 6 for the years 1985-86, or 424,000 tons; the
"Potential" rate equals 705,000 tons of clinker per year for
the old v«t process and 911,000 tons of clinker per year for
the new dry process. The emboldened numbers are those used
by EPA in comparing actual emissions of the old kilns with
potential emissions of the proposed new kiln. The charts make
clear that emissions will increase only if the company
operates the new kiln at significantly higher production
levels.
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2.32
3» Legal; Since the cement plant is located near
Ponce, Puerto Rico, where the air quality is better than
national ambient air quality standards, new construction is
subject to PSD provisions contained in Part C of Title I of
the Clean Air Act. Sfifl 42 U.S.C. §§ 7470-7479. That part of
the Act says that "[njo major emitting facility . . . BaX_bfi
constructed in any [such] area" without various specified
studies, reviews, demonstrations of compliance with certain
substantive standards, and the issuance of a permit. Sfift *2
U.S.C. § 7475 (emphasis added). The Act defines "major
emitting facility" as a "stationary source[) of air
pollutants," including Portland Cement plants that "emit, or
have the potential to emit, one hundred tons per year or more
of any air pollutant" (such as the facilities at issue here).
42 U.S.C. § 7479(1). It defines "construction" to include
"modification," which it says
means any physical change in, or change
in the method of operation of, a
stationary source which increases the
amount of any air pollutant emitted by
such source or which results in the
•mission of any air pollutant not
previously emitted.
42 U.S.C. Si 7411(a)(4), 7479(2)(C). The Act also provides
that EPA itself must review the construction proposal and
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provide p* necessary approvals where, as here, no EPA-
^•~
approved" 'state implementation plan" is in effect. Sea 42
U.S.C. § 7478; 40 C.F.R. 52.21(a).
Because the permitting process is costly and time-
consuming, EPA has developed an informal system for
determining whether or not a particular construction proposal
does, or does not, fill within the scope of the PSD permit
law. If EPA decides that PSD review is unnecessary, it issues
a "non-applicability determination" (known as a "NAD").
3. Proceedings! On July 9, 1987, the Company asked
EPA for a NAD. It submitted information to EPA over an eight-
month period. On August 30, 1988, EPA denied the Company the
NAD. The Company has appealed EPA's determination to this
court, subsequent to the docketing of this appeal the Company
and EPA agreed that, if the Company loses this-appeal, it will
operate its new facility at a sufficiently low capacity to
prevent any actual increase in emissions levels. EPA will then
issue a NAD, fifie/40 C.P.R. 52.21(b)(4) (federally enforceable
limitations on emissions will be taken into consideration in
determining- "potential to emit"), but the Company will lose
w
its rigMf^to ask for a PSD permit, thereby giving up the
possibility of obtaining EPA's approval for an increase of
emissions.
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2.32
II.
Jurisdiction
The Company can appeal the EPA's decision denying
a NAD only if that decision is a "final action of the
administrator.11 42-.U.S.C. § 7607(b)(l); ££. 5 U.S.C. § 704
(specifying actions reviewable under the Administrative
Procedure Act). As other courts have recognized, sgs. Hawaiian
Elec. Co. V. EPA. 723 F.2d 1440, 1442-44 (9th Cir. 1984), one
might question the "finality" of such a decision either 1)
because the agency must take further action to obtain an
enforceable order (a problem of "ripeness"), or 2) because the
Company can take further administrative steps (jte., it can
invoke the PSD review process) and thereby perhaps obtain the
permission to build that it seeks (a problem of "exhaustion
of administrative remedies").
The first of these problems — that of "ripeness" -
- is not particularly serious here. Even though the NAD
denial does not, by itself, order the Company to refrain from
building (EPA would have to bring an enforcement action to
stop the Company from building, §s& 42 U.S.C. § 7477), it is
well established that "ripeness" turns not upon such formal
considerations, but rather upon such functional considerations
as "the fitness of the issues for judicial decision and the
•-7-
-------
hardship to the parties of withholding court consideration."
Abbott Laboratories v. Gardner. 387 U.S. 136, 149 (1967).
(But compare Justice Brandeis* now-outdated description of
finality in United States v. Los Anaeles & Salt Lake R.R. Co..
273 U.S. 299, 309r310 (1927)). Here, the EPA's position on
the legal question (of PSD applicability) is final and
authoritative; court review will not "deprive the agency of
the opportuity to refine, revise or clarify the . . . natter
at issue." Roosevelt Cainpobello Int'l Park C9W'n v. EPA. 684
F.2d 1034, 1040 (1st Cir. J.982). Moreover, the fact-based
record makes the legal issue "sufficiently concrete" to permit
a court's focused attention. Id. At the same time, to
withhold review would work considerable hardship on the
Company, forcing it either to abandon its building plans, to
compromise them by agreeing to emissions limitations, or to
engage in a long, costly PSD review process. Under these
circumstances, we consider the issue sufficiently "ripe." See
Abbott Laboratories.. 387 U.S. at 148-49; Hawaiian Elec. Co..
723 P.jtd at 1443. Cf. Roosevelt. 684 F.2d at 1040 (issue not
"rip«» v£ere agency may well take legal action that would moot
the controversy).
The second problem is more serious. The Company,
in a sense, may not yet have "exhausted" its agency remedies;
-8-
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2.32
in prinajgp* it could, by following the PSD review procedures,
possibly obtain from EPA permission to build the new kiln and
to operate it at whatever levels it wishes. Of course, it is
most unlikely that EPA, in the process, will reverse its
determination that PSD review applies to the kiln. But, that
•
fact does not end the matter, both because the Company may
obtain a form of building permission and because the Supreme
Court has held that an "interlocutory" agency decision may not
be sufficiently "final" to warrant review. The Court held
that a roughly analogous type of agency decision -- a Federal
Trade commission decision to initiate an expensive, time
consuming agency proceeding against a company — was
"interlocutory" and not "final" for review purposes despite
the "substantial burden" that forced participation in to*
administrative proceeding would impose upon the company. £XC
v. Standard Oil Co.. 449 U.S. 232, 244 (1986). And, in SO
holding, the Court noted that "'the expense and annoyance of
litigation is "part of the social burden of living under
government."1" standard Oil. 449 U.S. at 244 (quoting
Petrola^^KPloration. Inc. v. Public Service Com'n. 304 U.S.
209, 222'(1938) (quoting Bradley Lumber Co. v. EI£fi, 84 F.2d
97, 100 (5th Cir. 1936))).
-9-
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While we recognize the possible analogy to Standard
Oil, we also recognize that legal doctrines concerning
"finality,1* particularly those related (closely or distantly)
to "exhaustion of remedies,11 are riddled with exceptions.
See, e.g.. 4 K. Davis, Administrative Lav Treatise § 26:1, at
414 (1983) (The doctrine that administrative remedies must be
exhausted is "false almost as often as [it is] true."). We
believe this is a case to apply the exception, not the rule.
First, the legal question at issue — the
applicability of PSD review — is plainly separable from, and.
therefore collateral to, all the matters that the agency would
consider in a PSD review itself. The collateral nature of the
issue diminishes the likelihood that further agency
proceedings will make it unnecessary for a court to decide the
issue (as does the fact that PSD review cannot give the
Company precisely what it wants without a few conditions, such
as a use of "best available" anti-pollution technology, that
it may not want). See. efa.. citv of New York v. Heckler. 742
P.2d 729, 736-37 (2d Cir. 1984) (court nay waive statutory
exhaustion requirement when factors such as collaterally,
futility, and irreparable harm indicate waiver would be
appropriate), aff'd. 476 U.S. 467 (1986); &ifih£fi£ v.
Schweiker. 717 F.2d 813, 822-25 (3d Cir. 1983) (Becker, J.,
-10-
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2.32
concurring!) (judicial waiver of statutory exhaustion
requirement appropriate when unexhausted claim substantially
collateral, agency has taken final position on claim, and
requiring exhaustion would cause substantial hardship),
vacated. 469 U.S. 977 (1984) (remanding case for
reconsideration in light of new statute).
Second, the agency itself can waive "exhaustion"
requirements. See Mathevs v. Diaz. 426 U.S. 67, 76-77 (1976);
Mathews v. Eldridoe. 424 U.S. 319, 328 (1976); Duaan v.
Ramsav. 727 F.2d 192, 194 (1st Cir. 1984). The EPA here has
created an administratively separate agency decision making
process for granting or denying NADs. The EPA has agreed with
the Company to grant a NAD if and only if the Company not only
promises not to increase emissions but also promises not to
seek permission, through the PSD process, to increase
emissions levels. And, the EPA has not raised any objection
to our reviewing this case. We therefore find a waiver of
whatever exhaustion requirements might otherwise apply.
Together these considerations mean that, whether one
views th« statutory "finality" problem through the lens of
"ripeness," of "exhaustion of remedies," or of "interlocutory
decision," the EPA determination before us is sufficiently
"final" to warrant review under 42 U.S.C. § 7607(b)(l).
-11-
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* Elee. Co.. 723 P.2d at 1442-44 (holding that the
determination that a proposed change is a "major modification"
requiring PSD review is a "final action" under § 7607{b)(l».
III.
The Merits
A.
Interpreting EPA's Regulations
The statute applies its PSD requirements to the
Company's proposed modification of its kilns only if the
modification will "increase[J the amount of any air pollutant
emitted." 42 U.S.C. §§ 7411(a)(4), 7479(2)(C). In deciding
whether or not the kiln conversion would result in such an
increase, EPA calculated the actual historical amount of
pollutants that Kilns 3 and 6 emitted in the past (which,
under the regulations, equals the average emissions over the
past two years, see 40 C.F.R. § 52.21(b) (21) (ii)) and compared
that with the amount of pollutants that the converted kiln
would be capable of emitting in the future. Since the Company
operated the kilna at only 60 percent of their capacity in
1985-86, the new kiln, though cleaner and more efficient, is
obviously capable of emitting significantly more pollutants.
The Company argues that the EPA's application of
this "actual/potential" method of measurement to its proposed
-12-
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2.32
kiln modification represents an improper, arbitrary, and
contradictory interpretation of EPA's own regulations. After
reading the regulations themselves, we disagree.
First, the language and expressed intent of the
regulations both support EPA's interpretation. The
regulations provide that a "major modification," subject to
PSD review, includes "any physical change in or change in the
method of operation of a major stationary source that would
result in a significant net emissions increase of any
pollutant . . . .« 40 C.F.R. § 52.21(b) (2) (i) (emphasis
added) . They go on to define "net emissions increase" as the
amount by which the "sum of ... any increase in actual
emissions" (plus or minus other "contemporaneous" changes in
emissions) "exceeds zero." 40 C.F.R. § 52.21(b>(3) (emphasis
added) . And, most importantly for present purposes, they
define the words "actual emissions" in a special way.
They state that
M[a]ctual emissions" means the actual rate
of emissions of a pollutant from an
emissions unit, as determined in
ccordance with paragraphs . . . fii)
7ivl rbelowl 7
40 C.F.R. £ 52.21(b)(21)(i) (emphasis added) . Paragraph (ii)
says that
[i]n general, actual emissions as of a
particular date shall equal the average
-13-
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rate, in tons per year, at which the unit
actually emitted the pollutant during [the
preceding] two-year period.
40 C.F.R. § 52.21(b)(21)(ii). But, paragraph (iv) adds that
ff|or anv emissions unit which has not
beoun normal operations on the particular
date, actual emissions shall equal the
potential to emit of the unit on that
date.
40 C.F.R. § 52.21(b)(21)(iv) (emphasis added). The
regulations also define "emissions unit" to include "any part
of a stationary source which . . . would have the potential
to emit any pollutant." 40 C.F.R. § 52.21(b)(7) (emphasis
added).
The Company's proposed modified kiln is "part of a
stationary source" and it has the "potential to emit" a
pollutant. 40 C.F.R. § 52.21(b)(7). EPA considered it to be
an "emissions unit which has not begun normal operations."
40 C.F.R. § 52.21(b)(21)(iv). It therefore counted as its
"actual emissions," the modified kiln's "potential to emit"
pollution, id., namely, in the case of S02, 1927 tons per
year. See p. 4, supra. It counted the "actual emissions" of
the existing Jcilns as "the average rate ... at which" they
"actually emitted the pollutant during the [preceding] two
year period," 40 C.F.R. § 52.21(b)(21)(ii), namely, in the
case of SO2, 1340 tons per year. Sfifi p. 4, supja. It
-14-
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2.32
therefore ttund an increase in what the regulations call
"actual emissions11 (1927 minus 1340 equals 587 tons per year).
And, after setting off allowable contemporaneous changes, it
found that the net increase was significantly greater than
zero. Seg 40 C.F.R. i§ 52.21(b)(2)(i), 52.21(b)(3)(i).
EPA's application of its regulation to the facts of
this case complies with the expressed intent of the
regulation's writers as well. In a preamble to the
regulation, EPA says that, when calculating whether a physical
change will bring about a significant net increase in
emissions, "the source owner must [first] quantify the amount
of the proposed emissions increase. This amount will
generally be the potential to emit of the new or modified
unit." 45 Fed. Reg. 52,677 (emphasis added).
In considering the lawfulness of an agency's
interpretation of its own regulations, courts often give that
interpretation "'controlling weight unless it is plainly
erroneous or inconsistent with the regulation.111 Udftil v.
Tallman. 380 U.S. 1, 16-17 (1965) (quoting Bowles v. Seminole
Rock ft Sand Co.. 325 U.S. 410, 414 (1945)); ycoord Donovan v.
A. Anorello * Sons. Inc.. 761 F.2d 61, 63 (1st Cir. 1985).
In this case, EPA needs little help from this principle; for
-15-
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both language and expressed purpose indicate that EPA applied
the regulations properly.
Second, the Company argues that EPA's interpretation
of the regulation is arbitrary — that the interpretation
makes little sense-.because it would significantly discourage
the Company, and _others like it, from installing more
efficient machinery that, at any production level, emits
significantly less pollution. But we cannot agree. EPA has
simply taken account of, and given controlling weight to, a
different consideration: the fact that a firm's decision tat.
introduce new, more efficient machinery may lead the firm to$
decide to increase the level of production, with the result
that, despite the new machinery, overall emissions will
increase. Indeed, EPA points out that a firm introducing such
machinery can escape PSD review simply by promising that it
will ensure its actual emissions do not in fact increase (that
is, by promising that it will not run the machinery at such
a rate as to create an actual increase in emissions levels.)
see 40 C.P.R. 52.21(b)(4) (federally enforceable physical or
operational limitations which effect emissions will be taken
into consideration in determining "potential to emit*).
One can imagine circumstances that might test the
reasonableness of EPA's regulation. An electricity company,
-16-
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2.32
for exampOTy Bight wish to replace a peak load generator —
one that operates only a few days per year — with a new peak
load generator that the firm could, but almost certainly will
not, operate every day. And, uncertainties about the precise
shape of future electricity peak demand might make the firm
hesitate to promise EPA it will never increase actual
emissions (particularly since EPA insists, as a condition of
accepting the promise and issuing the NAD, that the firm also
promise not to apply for permission for an actual increase
under the PSD review process). Whatever the arguments about
the. "irrationality" of EPA's interpretation in such
circumstances, however, those circumstances are not present
here. The Company is not interested in peak load capacity;
it operated its old kilns at low levels in the past; its new,
more efficient kiln might give it the economic ability to
increase production; consequently, EPA could plausibly fear
an increase in actual emissions were it to provide the NAD.
Thus, this seems the very type of case for which the
regulations quoted above were written. We can find nothing
arbitrary or irrational about EPA applying those regulations
to the Company's proposal.
-17-
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Finally, the Company points to another regulation
with which, it argues, EPA's interpretation conflicts. That
regulation says that
a physical change or change in the method
of operation shall not include ... an
increase in the hours of operation or in
the production rate.
40 C.F.R. S 52.21(b)(2)(iii)(f). The Company notes that,
given this regulation, it could increase production at its old
kilns to 100 percent of capacity, thereby vastly increasing
actual emissions; why, it argues, should it not be permitted
to do the same by building a more efficient kiln and then
increasing output?
The answer to this question likely lies in the
statute itself, for the statute refers to the "construction"
of facilities, not to increased use of existing facilities.
See 42 U.S.C. § 7479(2)(C). It may also lie in a prediction
that, as a general rule, new building will more likely lead
to increased emissions levels. Regardless, there is no
logical contradiction in rules that, on the one hand, permit
firms using existing capacity simply to increase their output
and, on the other, use the potential output of new capacity
as a basis for calculating an increase in emissions levels.
And, we can find no policy conflict sufficiently serious for
-18-
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2.32
a court tAvrerride the policynaking authority that Congress
^*
has entrusted to the agency.
B.
Ineons istencv
The Company argues that EPA has interpreted its
regulations inconsistently; it says that sometimes EPA has
interpreted the words "emissions unit which has not begun
normal operations" to include only new units, while here it
has interpreted those words to include modified units as well.
The company points to the well-established legal doctrine that
an agency "'must either follow its own precedents or explain
why it departs from them.'" Shaw's Supermarkets. Inc. v.
NLRB. 884 F.2d 34, 36 (1st Cir. 1989) (quoting 2 K. Davis,
Administrative Law Treatise § 8:9 at 198 (1979)). And, it
argues that EPA has provided no explanation for any such
departure here.
We have examined the relevant agency materials that
the parties have submitted, however, and we cannot find any
significant conflict.. First, the more official EPA documents
— the escalations and the written materials explaining them
— make •lear that EPA does mean to include "modified units"
in the category of units that have "not begun normal
operations." The preamble to which we earlier referred, for
-19-
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•ample, says that the "amount of the proposed emissions
increase" will "generally be the potential to emit of the new
or modified unit." 45 Fed. Reg. 52,677 (emphasis added).
Second, a number of EPA internal memoranda concerning specific
projects clearly follow this interpretation. Third, two or
three internal memoranda and NAD letters are ambiguous about
whether modified units are, or are not, included. Fourth, as
EPA concedes, one NAD letter clearly contains a contrary
interpretation.
In our view, these materials do not show a
significant, legally recognizable "conflict" within the agency
for two reasons. First, the "deviant" interpretation occurs
but once. EPA materials written both before, and after, the
deviant letter are consistent with its present interpretation.
As the Fifth Circuit stated in NLRB v. Sunnvland Packing Co..
557 F.2d 1157 (5th Cir. 1977):
[O]ne swallow doesn't make a summer, and
one inconsistent precedent does not
entitle an agency litigant to demand that
the [agency] ignore prior and subsenquent
holdings which have followed a uniform
approach. . . . [Plaintiff] must do more
than point to a single potentially deviant
precedent before the reviewing court can
find such inconsistency in agency action
as to constitute arbitrary treatment of
litigants.
-20-
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:.32
sunnvland. "§87 P.2d at 1160-61. Second, the NAD letters and
internal memoranda were written by different regional
administrators and division directors on different occasions.
No large agency can guarantee that all its administrators will
react similarly, or interpret regulations identically,
throughout the United States. The purpose of the
"consistency" doctrine in administrative law is not so much
to assure that lower level officials will properly interpret
an agency's well-established pre-existing policies as to
prevent the agency itself from significantly changing those
policies without conscious awareness of, and consideration of
the need for, change. See, e.g.. Atchison. Toneka ft Santa
Fe Rv. Co. v. Wichita Bd. of Trade. 412 U.S. 800, 808 (1973)
(plurality opinion) (ground for departure from prior norms
must be clearly set forth so that the reviewing court may
understand the basis of the agency's action and judge the
consistency of that action with the agency's mandate); ShawJ-S.
supermarkets. 884 P.2d at 41 ("Unless an agency either follows
or consciously changes the rules developed in its precedent,
those subject to the agency's authority cannot use its
precedent as a guide for their conduct; nor will that
precedent check arbitrary agency action."); ChiflhQll v.
Logistics Aaencv. 656 F.2d 42, 47 (3d Cir. 1981)
-21-
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(obligation to explain departures from precedent is an aspect
of requirement that agency not act arbitrarily or
capriciously); Miner v. £££, 663 F.2d 152, 157 (D.C. Cir.
1980) (agencies must explain departures from prior precedent
because "'the Rule of Law requires that agencies apply the
same basic standard, of conduct to all parties appearing before
them1") (quoting Teamsters Local Union 769 v. NLRB. 532 F.2d
1385, 1392 (D.C. Cir 1976)). The material we have described
shows no such change in EPA policy.
C.
Lawfulness of the Regulations
The Company argues that EPA's regulations, insofar
as they apply the "actual/potential" method to plant
modifications, fall outside the scope of the statute's
regulation-writing authority. However, judicial review under
these circumstances is governed by 42 U.S.C. § 7607(b), which
provides that "[a]ny petition for review [of the lawfulness
of a regulation] shall be filed within 60 days from the date
notice of [the regulation's] promulgation . . . appears in
the Federal Register." 42 U.S.C. § 7607(b)(l). EPA
promulgated the regulations in question in 1980, sfifi 45 Fed.
Reg. 52,735 (1980); other parties have challenged their
lawfulness in a suit filed in the Court of Appeals for the
-22-
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2.32
District of^tolumbia, SS& Chemical Mfra. Aaa'n v. EPA. Mo. 79*-
1112 (D.C. Cir.). The Company has not tried to intervene in
that suit (which is still pending). It seems obviously too
late for the Company to mount an independent legal challenge
here. See Hawaiian Elec. Co.. 723 F.2d at 1441 (holding that
a challenge to another provision of 40 C.P.R. § 52.21 was
untimely under 42 U.S.cT § 7607(b)(l)).
Regardless, the regulations in question apply to
any State implementation plan which has
been disapproved with respect to
prevention of significant deterioration
of air quality in any portion of any State
where the existing air quality is better
than the national ambient air quality
standards.
40 C.F.R. § 52.21(a) (emphasis added); see 42 U.S.C. § 7478.
The list of states changes as implementation plans are
approved and disapproved; as of July 1, 1988, for example,
provisions of § 52.21 were applicable to numerous states other
than Puerto Rico. See, e.g.. 40 C.F.R. §S 52.144 (Arizona);
52.270 (California); 52.382 (Connecticut); 52.499 (District
of Columbia); 52.632 (Hawaii); 52.738 (Illinois); 52.793
(Indiana) i-52.931 (Kentucky); 52.1116 (Maryland); 52.1165
(Massachusetts); 52.1180 (Michigan); 52.1234 (Minnesota);
52.1280 (Mississippi); 52.1529 (New Hampshire); 52.1603 (New
Jersey); 52.1689 (New York); 52.1884 (Ohio); 52.2178 (South
-23-
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Dakota> 52.2303 (Texas); 52.2451 (Virginia); 52.2497
(Washington); 52.2581 (Wisconsin); 52.2676 (Guam); 52.2779
(Virgin Islands); 52.2827 (American Samoa). These facts, in
our view, mean that the regulations are "nationally
applicable" and also "based on a determination of nationwide
scope or effect." 42 U.S.C. § 7607(b)(l). Hence, the statute
requires the Company to challenge their lawfulness in the
Court of Appeals for the District of Columbia; it cannot
proceed in this court. IsL (challenges to nationally
applicable regulations must be brought in -the District of
Columbia Circuit; challenges to regulations of only local or
regional applicability may be brought in any appropriate
circuit.)
IV.
Credit for "Contemporaneous" Decreases in Emissions
The regulations, as we have previously mentioned,
measure any increase in emissions by, first, calculating the
"actual" increase in emissions, and second, offsetting any
"contemporaneous" decrease in emissions, due, say, to other
changes the firm has made at the plant. Sfifi PP- 13-15, SJJEia-
The Company undertook a coal conversion project in 1982-1983,
which led to a significant decrease in emissions. The EPA
refused to credit the Company with this decrease because, it
-24-
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2.32
found, themjpierease was not "contemporaneous" with the present
proposed project. The Company now argues that the EPA is
wrong.
The EPA's regulations, however, sake clear that the
coal project was not "contemporaneous." They say that a
decrease is "contemporaneous" if it occurs between
the date five years before construction
on the particular change commences[,] and
. . . the date that the increase from the
particular change occurs.
40 C.F.R. § 52.21(b)(3)(iii). Since construction on the kiln
modification has not yet "commence[d]", and since more than
five years has passed since the coal conversion, the Company
cannot bring itself within this "contemporaneous" window. The
Company says that it filed its NAD application within five
years of the time it converted to coal, but that fact is
irrelevant; the regulation speaks of "construction on the
[kiln] . . . change," not of an application to make the
change. 40 C.F.R. § 52.21(b)(3)(iii). And, the history of
the regulation, referring to an alternative, shorter (three
year) window measured with respect to "the date an application
was complete,• makes clear that reference to a construction
date (along with the longer five year window) was intended.
see 45 Fed. Reg. 6803 (1980) (soliciting comments on proposed
-25-
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regulatilflKs defining "contemporaneous" for purposes of
offsetting emissions).
Since the regulation is clear, since it does not
count the 1982-83 coal conversion project as
"contemporaneous,11 since the Company made no request of the
agency to waive the rule, and since it cannot challenge the
lawfulness of this "nationally applicable" regulation in this
court, see pp. 22-24, supra; 42 U.S.C. 7607(b)(l), we must
reject its claim.
For these reasons, the petition for review is denied
and the order of the United States Environmental Protection
Aaencv is affirmed.
Adm. Office, U.S. Courts — Blaodurd Press, Inc., Boston, Mast.
-26-
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2.33
2.33
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 8, 1990
Clarification of "Secondary Emissions" as defined in 40 CFR
52.21(b)(18).
John Calcagni, Director, Air Quality Management Division
Ken Waid, President, Waid and Associates, TX
(1) The definition of secondary emissions in the 1988 CFR at 40
CFR 52.21(b)(18) is incomplete; the second sentence was
inadvertently omitted by the Federal Register during
revision.
(2) Portions of the 1982 revisions to the PSD regulations have
been vacated and remanded to EPA, including the way the
Agency treats vessel emissions. Consequently, the August 7,
1980, PSD regulations, with the exception of to and from
emissions counting, shall apply to determinations on how to
treat vessel emissions. Under the 1980 regulations,
emissions from certain activities of a ship docked at a
terminal may be considered terminal emissions.
5 [Hard Copy]; 3.36
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2.34
2.34
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 30, 1990
Comment on Permit Proposed by Indiana DEM for NIPSCO Bailly
Generating System
David Kee, Director, Air and Radiation Division, EPA Region 5
Timothy J. Method, Asst. Commissioner, Indiana DEM
The new control device and related improvements under the Clean
Coal Technology (CCT) program at the NIPSCO Bailly generating
station are not "major modifications" under NSR or "modifications"
under NSPS. The backup diesel generator is also not a major
modification if operating limits are federally enforceable. If a
source solely adds or enhances systems or devices whose primary
functions are the reduction of air pollution, and are determined
to be not less environmentally beneficial than any emission
control system or device they replace, if any, such activities
would not trigger new source requirements.
4.47 [Hard Copy]
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2.35
2.35
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 8, 1990
EPA's Revised PSD Applicability Determination In Response to
Court's Remand Concerning the "Potential to Emit" Concept
William 6. Rosenberg, Asst. Administrator for Air and Radiation,
US EPA
John Boston, President, WEPCO
This letter is EPA's revised PSD applicability determination in
response to the remand by the US Court of Appeals of one issue
advanced by EPA in the NSPS and PSD determinations for WEPCO.
Traditionally, EPA has used an "actual-to-potential" method to
calculate emissions increased for PSD purposes. The court
instructed EPA to consider past operating conditions at a plant
when addressing modifications that involve "like-kind
replacement". This instruction, in essence, causes EPA to
recognize a new subcategory of "like-kind replacements" under the
"major modification" definition of EPA's NSR provisions. In these
cases, EPA will use an "actual to actual" method, which involves
projections based on historical capacity utilization, to calculate
emission increases.
4.48 [Hard Copy]
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3. PSD
Definition/Classification of Source
-------
3.29
3.29
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 23, 1987
Opinion in U.S. v. Louisiana-Pacific Corporation. D. Colo.,
Interpreting Certain PSD Regulations
Thomas L. Adams, Jr.
Assistant Administrator for Enforcement and Compliance Monitoring
J. Craig Potter
Assistant Administrator for Air and Radiation (ANR-443)
This memo summarizes the October 30, 1987, opinion by Judge Arraj
of the US District Court in Colorado regarding summary judgement
and legal matters involved in the case of U.S. vs. Louisiana-
Pacific Corporation (LPC). Judge Arraj denied motions for summary
judgement, finding that a trial was needed to resolve questions of
fact. Two legal issues are discussed. First, EPA can not sue LPC
for the NOV of major modification rules, because the major source,
upon which the major modification must be based, did not exist for
more than 30 days after the NOV was issued (as required by Section
113(b}(2) of the Clean Air Act). EPA's second NOV to LPC for
construction of a major stationary source must be heard at the
trial. Second, state permit limitations can not be a defense for
a source if they were not in effect when an alleged violation
commenced. Further, restrictions on actual, [annual] emissions,
alone, are not appropriate as a consideration in determining a
source's potential to emit.
2.27 [Hard Copy]; 10.51; 14.9
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3.30
r.MTEl) STVTES EM IRONMENTAL PROTECTION
WASHINGTON. D.C. 20460
JUN 9 ipr-
OH-1CE OF
AIR AND RADIATION
SUBJiiCT: Emissions tPsns Rocket Firing at Test Stands; Fugitive
or Point Source Emissions
FROM: Ronald ShaVE^r, Chief
Policy and Guidance Section
TO: John Dale
Air Programs Branch, Region VIII
This is in response to your May 9, 1988 memorandum to
Sally Farrell which requested assistance in determining whether
to regard emissions from rocket nozzles as fugitive or point
sources. We "have consulted with the New Source Review Section
in the Air Quality Management Division, and both sections agree
that emissions from rocket nozzles are point sources. Fugitive
emissions are defined as "...those emissions which could not
reasonably pass through a stack, chimney, vent, or other
functionally equivalent opening." The nozzle of the rocket
would be considered a vent or functionally equivalent opening.
Therefore, emissions from rocket firing should not be considered
fugitive emissions.
If YOU have any questions, please contact Sally Farrell at
FTS-382-2875.
cc: David Solomon
John Dale
-------
3.31
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park. North Carolina 27711
AU6311388
Michael A. Stawarz, P.E.
New York Department of
Environmental Conservation
Region 5 - Environmental Quality
Hudson Street
Warrensburg, New York 12885
Dear Mr. Stawarz:
This is in response to your August 16, 1988 letter to Gary McCutchen
requesting some clarification of the term "glass fiber processing plant."
You specifically asked if this term was "intended to include facilities
that use glass fibers (such as a manufacturer of fiberglass storage tanks)."
In a subsequent telephone conversation with Mr. John Conover of your staff,
Mr. McCutchen said he would investigate the matter and respond in writing.
Facilities that use glass fibers to manufacture other products, such
as fiberglass-reinforced composites, were not intended to be included in
the "glass fiber processing" category. After investigating the origin of
the source category listing and subsequent rulemakings by the Environmental
Protection Agency, we have concluded "glass fiber processing" was intended
to include only those facilities engaged in making glass fiber. While the
plants that produce glass fiber and filament sometimes integrate the manu-
facture of insulating wools and 100 percent glass fiber fabrics, the
manufacture of fiberglass-reinforced composites is a substantially different
process, which is more similar to a surface coating process. The typical
pollutant from the production of glass fiber would be paniculate; whereas,
the pollutant from manufacturing fiberglass-reinforced storage tanks, for
example, would be primarily volatile organic compounds.
Please call me at (919) 541-0871 if you have further questions regarding
the definition of "glass fiber processing."
Sincerely,
Dennis VI. Grumpier
New Source Review Section
Noncriteria Pollutant Programs Branch
cc: G. McCutchen
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3.32
Reserved
-------
3.33
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
January 12, 1989
Mr. Michael J. Hayes, Manager
Division of Air Pollution Control
Illinois Environmental Protection Agency
Post Office Box 19276
Springfield, Illinois 62794-9276
Dear Mr. Hayes:
This is in response to your letters of August 17, 1988 and
September 9, 1988, requesting guidance on several issues related
to determining applicability of new major source regulations in
the granting of construction permits to sources of air emissions.
These issues arose as a result of CPC International's "Argo II
Rebuild Project Phase II" in Bedford Park, Illinois.
The questions you asked concern the following issues:
1. What definitions should be used to determine whether the
CPC Phase II Rebuild Project is a major modification?
2. If the Phase II project in and of itself does not
represent an increase in emissions, much less a significant
increase, should contemporaneous and creditable emission
increases and decreases determine whether a major modification
has occurred?
3. How would netting provisions in the regulations apply to
the CPC situation?
These questions were discussed in a telephone conversation
on August 17, 1988, in which Gary McCutchen of my office
concurred with the positions previously taken by the
Environmental Protection Agency (EPA), Region V, but stated that
he would consider the matter further upon receipt of a written
request for guidance. The Office of Air Quality Planning and
Standards (OAQPS) had a chance to review your letters. As a
result, this office reiterates the positions we have taken
before.
-------
Background Information
Before responding to your specific questions, it may be
helpful to summarize key modifications at CPC that resulted in
changes in particulate matter emissions. In 1981, CPC reportedly
decreased its particulate emissions by 262 tons per year (tpy).
In 1985, it constructed the "Phase I Rebuild Project" which
increased particulate emissions by 49.5 tpy. This increase was
netted against the prior 262 tpy decrease achieved in 1981, so
that the Phase I project was not subject to major new source
permitting requirements (i.e., the net emissions increase was
less than the de minimis emission rate of 25 tpy).
Construction of the Phase II project began in 1986, but the
company did not get a construction permit until June 1988. The
permit that was issued was a minor source permit. Prior to the
Phase II project, CPC emitted approximately 600 tpy of
particulate matter. It was, therefore, a major stationary
source. In Phase II, certain pieces of obsolete equipment were
shut down, reportedly reducing emissions by about 600 tpy, but
new equipment was added at the same time. The new equipment
resulted in an increase in emissions of approximately 600 tpy.
Question 1:
What definitions should be used to determine whether the CPC
Phase II Rebuild Project is a "major modification"?
As a preliminary matter, when making a major source
applicability determination, a permitting agency must base the
determination on "major" source definitions, not on "minor"
source definitions. The specific definitions to use in making an
applicability determination are found in the specific new source
review (NSR) regulations under which the proposed new
construction or modification is reviewed. The area of Bedford
Park, Illinois, is nonattainment for total suspended particulate
(TSP), and Illinois does not have approved Part D NSR
requirements in its State implementation plan. For this reason,
40 CFR Part 51, Appendix S, Emission Offset Interpretative
Ruling, applies to new major stationary sources and major
modifications to existing sources of TSP in that area.
The CPC also emits PM10. Since Bedford Park is attainment
for PM10, prevention of significant deterioration (PSD)
requirements found at 40 CFR Part 52.21 also apply. Therefore,
CPS is subject to the definitions contained in Appendix S (for
TSP purposes) and in Part 52.21 (for PM10 purposes).
Question 2:
If the Phase II project in and of itself does not represent
an increase in emissions, much less a significant increase,
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3.33
should contemporaneous and creditable emissions increases and
decreases determine whether a major modification has occurred?
Because the Phase II Rebuild Project was to result in an
increase in emissions of approximately 600 tpy of particulate
matter, the change is "significant" (i.e., greater than 25 tpy)
and should be scrutinized for applicability to new source
requirements using the definitions of "major modification" in
40 CFR Part 51, Appendix S and Part 52.21. Whether a change is
"significant" is determined before any netting calculation is
done.
A determination as to whether a significant change is a
"major modification," as defined at 40 CFR Part 51, Appendix S,
II.A.10, requires a decision as to whether the change has
resulted in a "significant" net emissions increase (i.e., greater
than or equal to 25 tpy for particulate matter). The definition
of "net emissions increase" in Appendix S mandates a calculation
of all creditable increases and decreases which occurred during
the contemporaneous time period and specifies that time period.
It begins 5 years before the date construction "commenced" on the
project and ends on the date the emissions increase from the
particular modification occurs (if after the commencement date).
A necessary condition for establishing the commencement date is
that the owner or operator has all necessary preconstruction
approvals or permits. The Phase II Project was permitted in June
1988; consequently, the contemporaneous time period began in June
1983. How each of the increases and decreases in emissions is
taken into account to determine if the change will result in a
major modification is discussed in the response to your third
question.
Question 3:
How would netting provisions in the regulations apply to the
CPC situation?
The mechanics of performing the netting calculation, once
the contemporaneous time period has been established, can be
found in the definition of "net emissions increase" at 40 CFR
Parts 5l.l65(a)(l)(vi); 51.166(B)(3); Appendix S, section II.A.6;
and 52.21(b)(3). The definitions specifically state:
... an increase or decrease in actual
emissions is creditable only if the
Administrator has not relied on it in issuing
a permit for the source under this section,
which permit is in effect when the increase
in actual emissions from the particular
change occurs.
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The preamble to the 1980 PSD regulations at 45 FR 52701
explains that the:
. . . prior increase or decrease is
creditable only if the relevant reviewing
authority has not relied upon it in issuing a
permit under the relevant NSR program . . .
As such, EPA's policy is that any prior increase or decrease
that has been used in issuing a previous major source permit has
been "relied" upon, and therefore cannot be creditable to a
subsequent increase. However, emissions increases or decreases
that have been used by a source only to net out of review (versus
those used in NSR review) have not been "relied" upon and are,
therefore, still subject to further consideration. In other
words, if a source is able to net out of review, the increase in
emissions that triggered the netting action will not have been
subject to NSR. Its effect on increments and ambient air quality
would not have been determined, and it would only be determined
if it happens to fall in a contemporaneous time period of a
subsequent project that is determined to be a major new source or
major modification. Once included in a major NSR action, the
increase that originally netted out of review, but was later
subjected to it, will not be subject to review again (i.e., the
slate is wiped clean). Similarly, if no major modifications are
made for 5 years after the source that netted out of review
received its permit, then the slate is wiped clean.
For the reasons stated above, we reaffirm the guidance that
Region V and OAQPS conveyed in previous discussions with you.
Each netting transaction involves a "snapshot" of the creditable
emissions increases and decreases within the applicable
contemporaneous time period. Emissions reductions that have
occurred prior to the current contemporaneous time period are not
creditable, even though they may have been used to allow one or
more individual increases which are still inside the current
contemporaneous time period to net out of review. To consider
netting transactions that involve emission increases and
decreases which occur outside of the current contemporaneous time
period would effectively lengthen the contemporaneous time period
to greater than 5 years. This is contrary to the existing NSR
regulations. Any increases that occur inside the current
contemporaneous time period are not double counted as you have
alluded, because they will never be subjected to NSR more than
once.
The netting calculation for the Phase II project starts with
the 600 tpy increase from the new equipment. It is not clear
that the 600 tpy decrease that occurred simultaneously with the
600 tpy increase is creditable because of issues concerning the
requirement that the decrease be federally enforceable at the
time actual construction commenced, but if we assume that the 600
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3.33
tpy decrease was creditable, the 600 tpy increase and 600 tpy
decrease essentially cancel each other out. However, these are
not the only emissions changes within the 5-year contemporaneous
time period, and the NSR regulations require that all such
changes be totaled, not just certain ones. Therefore, the 49.5
tpy increase from Phase I must be added, because it occurred
within the 5-year contemporaneous period. The 262 tpy decrease in
particulate matter emissions in 1981, which had been used to net
out of review the 49.5 tpy increase in 1985, cannot be used
because it occurred outside of the five-year contemporaneous time
period.
It would appear then that CPC has two options for resolving
the permitting requirements for the Phase II project. The first
option would be for CPC to determine if its emissions were
reduced by at least 25 tpy due to other changes within the
contemporaneous time period (in addition to the 600 tpy
reductions associated with the Phase II Project) to net against
the 49.5 tpy and enable the source to obtain a minor source
permit. Of course, a second option would be for the source to go
through NSR, (i.e., install LAER, obtain offsets greater than
1:1, etc.), and thereby "wipe the slate clean."
Please contact me at (919) 541-5586 or Gary McCutchen at
(919) 541-5592 if you have additional questions regarding the
matters discussed in this letter.
Sincerely,
//Edward ,2f./Lillis, Chief
Nonoriteria Pollutant Programs Branch
Quality Management Division
cc: Richard Wagner, Region V
David Kee, Region V
Judy Katz, OECH
Sally Farrell, SSCD
Gary McCutchen, AQMD
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30* 3'34
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
•* llf-.l JJh
l*4"> IK I^Jl A.I NOI 'ill 'I V»»J
DALLAS TEXAS 'SirO.'
July 28, 1989
Mr. Steve SpjwV P.E.
Deputy Executive Director
Texas Air Control Board
6330 Hwy. 290 East
Austin, Texas 78723
RE: Request for PSD Applicability Determination
Golden Aluminum Company, San Antonio, Texas
Dear Mr. Spaw:
1 am writing in response to your July 25, 1989, request for a
Prevention of Significant Deterioration (PSD) applicability
determination for the above-referenced source. While I agree
that Golden Aluminum's facility, as proposed, is properly
considered a "secondary metal production plant", I would like
to take this opportunity to explain the basis for this deter-
mination. Enclosed please find a copy of our PSD applicability
determination, which goes Into considerable detail 1r, explaining
the regulatory background and EPA's interpretation of the appli-
cable PSD regulations.
Should you have any further questions concerning this matter,
please do not hesitate to call me.
Sincerely yours,
William 8. Hathaway,_£)rector
Air, Toxics and Pestvcides Division
Enclosure
cc: Elizabeth A. Hurst. Jenkens & Gil Christ
Joseph 5. Lamb. Golden Aluminum
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3.34
PSD Applicability Determination
for Golden Aluminum Company
San Antonio, Texas
BACKGROUND
Golden Aluminum Company, a subsidiary of Adolph Coors Company,
1s proposing to construct a new facility 1n San Antonio, Texas.
The proposed source will Include four melting furnaces and a
rolling mill. The feedstock for the plant will consist of used
aluminum beverage cans, scrap aluminum and small amounts of
primary (refined) aluminum. The melting and rolling will .be a
continuous, Integrated process, and the plant will not have the
capability to produce aluminum Ingots from the furnaces. Although
the predicted emissions have not been clearly established, 1t
appears that the partlculate emissions will exceed 100 tons per
year. Golden Aluminum and EPA Region 6 agree that 1f the proposed
plant 1s determined to be a "secondary metal production plant,
then PSD review would be required If the potential to emit any
pollutant regulated by the Clean A1r Act exceeds 100 tons per
year. However, Golden Aluminum believes Its plant will not be a
"secondary metal production plant" because the primary end product
or service will be flat rolled aluminum, the melting operation 1s
merely a support for the primary activity (i.e. the production
of rolled aluminum), and no ingots or other products will be made
as Intermediates from the molten aluminum.
ISSUE
The issue presented by the facts described above is whether or
not Golden Aluminum's proposed plant is a "secondary metal
production plant" within that term's meaning in Section 169(1) of
the Clean Air Act and 40 C.F.R. § 52 .21(b) (i)(a).
ANALYSIS
If a proposed "stationary source" will have the "potential to emit-
more than 100 tons per year of any pollutant regulated "nderV ™e. .
Clean A1r Act (Act), then H will be subject to PSD review provided
the source falls within one of the 28 listed source categories
found 1n 40 C.F.R. § 52.21 (b){l) (1 )(a). "Secondary 1>etal produc-
tion plants" are among the 28 listed source categories; however,
neither the Clean A1r Act nor the federal PSD regulations ™«™
at 40 C.F.R. § 52.21) define that term. Review of the legislative
history provides little guidance on the meaning of secondary
metal production plants"; however, 1t 1s obvious that Congress
compiled the list of 28 source categories based upon information
that such sources contributed significantly to ambient air concen-
trations of air pollutants. Thus, Congress saw the need to list
such sSurces specifically as being subject to PSD 1f the source's
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-2-
potentlal to emit would exceed 100 tons per year. In fact, the
Senate suggested that additional sources be examined to see
whether they should be added to the 11st of 28 source categories
through additional legislation [See Senate Report 127, 95th Cong.
1st Session, 96-97 (1977)]. "Secondary metal production plants"
typically emit large amounts of particulates, as evidenced by
Golden Aluminum's own estimates that the proposed plant would
emit several thousand tons of partlculates without control
equipment. Thus, it is clear that Golden Aluminum's plant 1s the
type of source 'Congress intended to be covered by the PSD
provisions of the Act if it has the potential to emit more than
100 tons per year of any regulated pollutant.
Another source of information relevant to the proper categorization
of the proposed plant is the Standard Industrial Classification
(SIC) Manual. Although the term "secondary metal production plant"
does not appear In the SIC Manual, it Is closely reflected by
SIC Code 3341 - "Secondary Smelting and Refining of Nonferrous
Metals." A source is classified under SIC Code 3341 if 1t Is
primarily engaged in recovering nonferrous metals and alloys from
new and used scrap and dross or in producing alloys from purchased
refined metals. Thus, a plant that is primarily engaged In
recovering aluminum from new or used scrap would tie considered a
secondary aluminum smelter. It is interesting to note that the
form the smelted aluminum takes is not determinative of whether
or not the plant 1s a secondary smelter; rather, a secondary
smelter is defined by the principal activity or process and not
the final product resulting from that process. Since the smelting
process, not the rolling process, causes the majority of the
particulate emissions from the source, It is only logical that
Congress intended EPA to focus on those activities which could
cause significant emmisions of pollutants and hence, significant
deterioration of air quality. Thus, EPA interprets the
Congressional intent in determining whether or not a source 1s
within one of the 28 listed source categories, as based upon the
source's pollutant emitting activity (e.g. smelting) rather than
the source's finished product.
Golden Aluminum argues that its proposed plant Is primarily
engaged in rolling aluminum. This would be true if the plant was
merely taking primary aluminum (e.g. aluminum ingots) and heating
it up to make 1t malleable and then rolling H into sheets or
coils. Such a process would not be considered a "secondary metal
production plant" but rather an aluminum rolling mill (See SIC
Code 3353). However, Golden Aluminum is proposing to slicit the
plant's feedstock, over 90% of which is in the form of used
beverage containers and scrap aluminum, in four melting furnaces.
Based upon these facts, EPA finds that the smelting operation
(I.e. secondary metal production) Is the primary pollutant-
generating activity of the plant, and the rolling mill 1s merely
the process by which the owner has chosen to form the recovered
aluminum into an end product.
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3.34
-3-
Golden Aluminum also points to the language 1n the preamble to the
current PSD regulations that describes how the agency should
classify a source (See 45 Fed. Reg. 5289$, August 7, 1980). Golden
Aluminum claims that EPA should look to the principal product of
the plant (I.e. rolled aluminum) 1n categorizing.the source.
However, as discussed below, this argument must.fall for two
reasons.
First, the preamble language referred to concerns the scope o.f
the categorization of a source under the SIC Code. This section
of the preamble addressed how EPA would group pollutant-emitting
activities at a site. EPA chose to group together as one "source"
all pollutant-emitting activities falling under the same two-digit
(Major Group) SIC Code. However, in order to address those
situations involving plants with several support operations or
several totally unrelated final products EPA stated that support
activities and nonprlmary products should be grouped with the
two-digit SIC Code of the plant's principal activity or product
for puposes of defining the scope of the "stationary source"
under 40 C.F.R. § 52.21(b) (5), (6). In this case, both "Secondary
Smelting and Refining of Nonferrous Metals"(SIC Code 3341) and
"Aluminum Sheet, Plate, and Foil" (SIC Code 3353) are within the
same two digit SIC Major Group - "Primary Metal Industries"
T^aJor Group 33). Thus, the preamble language referred to by
Golden Aluminum cannot assist in a determination whether a proposed
source is within one of the 28 listed source categories; rather,
the language simply concerns which pollutant emitting activities
at a plant should be grouped together to determine whether the
proposed plant will be considered a single major "stationary
source."
Second, Golden Aluminum's argument also falls because it would be
Illogical for a source clearly within one of the 28 listed categories
to fall outside the listed category by merely altering the form
of Us end product or by the addition of certain processes that
do not significantly alter the pollutant-emitting characteristics
of the source. For example, under Golden Aluminum's logic, a
primary copper smelter (one of the 28 listed categories) could
Integrate a copper wire facility Into the smelter and thus the
plant becomes a copper wire plant (not one of the 28 listed
category sources). Likewise, Golden Aluminum would lead us to
believe that if Its plant made ingots from the aluminum scrap and
sold such Ingots, then 1t would be a "secondary metal production
plant," but if It added a continuous caster to its process later,
then it would no longer be characterized as a secondary metal
production plant but rather an aluminum rolling mill. Clearly,
Congress could not have intended the PSD program to be interpreted
1n this manner and EPA cannot allow for such an interpretation
either; to do so would permit circumvention of the PSD program.
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fit: ' I
i ..... , ,:;
913 jo
Finally, Golden Aluminum contends that EPA has classified other
plants which smelt used aluminum cans and form aluminum colls
as "aluminum rolling mills" not "secondary metal production plants."
However, EPA Region 5 has confirmed that all such plants, with
the exception of the Alumax facility in Texarkana, Texas, referred
to by Golden Aluminum have the potential to emit less than 100
tons per year for each pollutant regulated under-the Clean Air
Act and thus proper categorization of the source was not relevant
to the permittlns decisions since in PSD did not apply in any
event. With respect to the Alumax facility 1n Region 5, EPA
determined that the primary activity of the plant was rolling
aluminum since more than 50% of the feedstock would consist of
aluminum Ingots which would not be fed into * melting furnace but
rather were merely preheated to make them malleable enough to
roll Into coils. Unlike Alumax, Golden Aluminum intends to smelt
all of its feedstock, which will consist of over 90? aluminum
scrap and used beverage containers. EPA finds that t1s is a
reasonable basis upon which to distinguish between the applica-
bility determination and this case.
Golden Aluminum also contends that other agencies and other
programs administered by EPA (e.g. the Clean Water Act) have
classified similar facilities as aluminum rollings mills.
However, it must be understood that other statutes have different
goals and criteria for the classification of sources consistent
with their respective statutory purposes. Accordingly, those
criteria are not determinative under the Clean Air Act. In other
words, one agency or program may call the proposed source a
rolling mill while another may consider 1t secondary metal production
plant; both may be correct for their specific program.
CONCLUSION
Golden Aluminum's proposed plant 1s properly categorized as a
"secondary metal production plant" and thus subject to PSD
review if the plant will have the potential to emit more than
100 tons per year for any pollutant regulated under the Clean
Air Act.
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3.35
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
1 1 AUQ
MEMORANDUM
SUBJECT: Prevention of Significant Deterioration (PSD) Applicability
Determinatiop^fqj^MuJtiple Owner/Operator Point Sources Within
a SinqJ
FROM: . JoH&<5TcagnT,~tf
Air Quality Management Division (MD-15)
TO: Irwin L. Dickstein,
Air and Toxics Division (8AT-AP)
This is in response to your June 15, 1989 request for clarification of
the Environmental Protection Agency's (EPA's) policy concerning how
nonfugitive emissions should be considered in determining applicability for
major new sources or modifications with multiple owners or operators. This
issue must be addressed in order to determine PSD applicability and permitting
requirements for a new airport being planned by the City and County of Denver,
Colorado (Denver). In short, you need to know whether the entire airport
should be considered a single stationary source or whether the activities
under the control of each airline (or other independent entity operating at
the airport) should each be considered a separate source.
I understand that, at this point, Denver has submitted neither
information concerning the type and size of airport facilities (including
emission sources) it plans to build, nor data indicating the type and amount
of air emissions anticipated from operations at the new airport. Also, Denver
has not provided either the Colorado Department of Health (the permitting
authority) or Region VIII with any information on the proposed airport's
ownership, leasing agreements, or operation that would assist in judging
control of the construction and eventual operation of the airport (for the
purpose of determining "stationary source"). With virtually no specific
information upon which to base a well-informed decision, my staff has
evaluated the situation in general terms and discussed the project with
several EPA new source review experts for their interpretation.
The PSD regulations define a "building, structure, facility, or
installation," for source definition and emissions accounting purposes, as
follows:
". . . all of the pollutant-emitting activities which belong
to the same industrial grouping, are located on one or more
contiguous or adjacent properties, and are under the control
-------
of the same person (or persons under common control) . . .
Pollutant-emitting activities shall be considered as part of
the same industrial grouping if they belong to the same "Major
Group" (which have the same two-digit code) as described in
the Standard Industrial Classification Manual ..."
The Standard Industrial Classification (SIC) Manual classifies virtually all
activity at an airport under Major Group 45, so that if the SIC Manual
grouping was the only criterion to consider, then the airport and all
pollutant-emitting activities therein would be considered a single source.
However, the definition requires that, for applicability purposes, emissions
be aggregated not just on the basis of the SIC code but also based on a
determination of "control" of the pollutant-emitting activities at a
stationary source. Thus, the question of control appears to be the key
criterion in determining what constitutes a "stationary source" at the
proposed Denver airport.
The PSD applicability determination for a new stationary source must be
made before construction commences so that, if the source is major, the source
may obtain the necessary preconstruction PSD permit. When PSD applicability
involves a determination of "control," the determination should be based on
control at the time construction would commence on the proposed source.
Control at this stage of a project would most often rest with the source
owner. In cases where an airport authority (or an equivalent managing entity)
acquires property, develops plans, and establishes a contract for the
construction of a new airport, the airport authority (or equivalent) would be
considered to be in "control" of the airport buildings or facilities for which
it establishes a construction contract. Therefore, we believe, in the absence
of information to the contrary, that the City and County of Denver is the
owner (and as such is in "control") of the proposed airport and that the
airport, as defined by SIC Major Group 45, is a single stationary source for
the purpose of determining PSD applicability. This finding remains the same
even if Denver intends after construction to lease discrete portions of the
airport's pollutant-emitting facilities to an airline or other independent
entity such that the lessee would have "control" over certain pollutant-
emitting activities.
As a result of the finding that the airport is a single stationary
source, all potential emissions of each pollutant must be aggregated to
determine whether the airport is subject to PSD. If the airport emits more
than 250 tons per year (tpy) of any pollutant regulated by the Clean Air Act,
the source would be required to obtain a PSD permit. If it emits less than
250 tpy, no PSD permit is required. However, other State air quality
permitting requirements may apply (i.e., minor source permit).
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3.35
I hope that this will be helpful to you in future discussions with the
Colorado Department of Health and Denver. If you have questions about this
determination or wish to discuss this when you obtain additional information
from Denver, please call Gary McCutchen of my staff at FTS 629-5592.
cc: NSR Contacts, Regions I-X
G. Foote
J. Dale
E. Lillis
G. McCutchen
R. Shafer
D. Skie
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3.36
3.36
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 8, 1990
Clarification of "Secondary Emissions" as defined in 40 CFR
52.21(b)(18).
John Calcagni, Director, Air Quality Management Division
Ken Waid, President, Waid and Associates, TX
(1) The definition of secondary emissions in the 1988 CFR at 40
CFR 52.21(b)(18) is incomplete; the second sentence was
inadvertently omitted by the Federal Register during
revision.
(2) Portions of the 1982 revisions to the PSD regulations have
been vacated and remanded to EPA, including the way the
Agency treats vessel emissions. Consequently, the August 7,
1980, PSD regulations, with the exception of to and from
emissions counting, shall apply to determinations on how to
treat vessel emissions. Under the 1980 regulations,
emissions from certain activities of a ship docked at a
terminal may be considered terminal emissions.
5.26 [Hard Copy]; 2.33
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3.37 -
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park. North Carolina 27711
June 4, 1990
MEMORANDUM
SUBJECT: Definition of Posttap#r
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4. PSD
Modification
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4.36
Reserved
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4.37
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
MEMORANDUM
SEP 9
OFTOZ OF
A1RANDIADIAT10N
SUBJECT: Applicability of Prevention of Significant Deterioration (PSD)
and New Source Performance Standards (NSPS) Requirements to
the Wisconsin Electric Power Company (WEPCO) Port Washington
Life Extension Project
FROM: Don R. Clay, Acting Assistant Administrator
for Air and Radiation (ANR-443)
TO: David A. Kee, Director
Air and Radiation Division, Region V
This is in further response to your March 25, 1988 memorandum requesting
guidance on PSD applicability regarding the proposed renovation of the Port
Washington Power Plant by the WEPCO. I have also addressed the question
whether the renovations proposed for this facility would subject the individual
units to Subpart Da of the NSPS.
Based on the information presented in your memorandum, subsequent written
information received from WEPCO, information provided by the State of Wisconsin,
and other information contained in the Environmental Protection Agency's (EPA's)
files on this matter, I have concluded that, as proposed, this renovation
project would not come within the PSD and NSPS exclusions for routine mainte-
nance, repair, and replacement, nor the exclusions for increases in production
rate or hours of operation. It also appears that the project would increase
emissions within the meaning of these two programs. Thus, the renovation
project likely would be subject to PSD review as a major modification of an
existing stationary source and that the renovations proposed for units 1-5 at
this facility probably would subject the individual units to Subpart Da of the
NSPS as a modification. However, WEPCO has not yet requested EPA to make an
applicability determination. In any case, it would not be possible to make
final applicability determinations at this point, for three basic reasons.
First, EPA must be supplied sufficient data regarding the various
pollutants emitted by the Port Washington facilities to determine, on a
pollutant-specific basis, how the proposed renovations would affect emissions
levels. Second, WEPCO might avoid both PSD and NSPS applicability by adding
or enhancing pollution control equipment, or in the case of PSD, restricting
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operations below maximum potential such that the emissions increases necessary
to trigger applicability would not occur. The WEPCO should discuss its plans
in this regard with EPA. Third, regarding NSPS applicability to unit 1,
additional information is necessary to determine whether a physical or
operational change would occur.
Thus, although this memorandum will serve to answer many of the questions
necessary to reaching final determinations, you should advise WEPCO that
ultimately applicability depends upon changes in emissions after the renova-
tions and whether the company decides to take the steps which would enable it
to lawfully avoid coverage. Also, NSPS coverage of unit 1 can only be deter-
mined after an evaluation of the additional information regarding the work to
be performed. In addition, as to NSPS, WEPCO should be advised to submit a
formal request pursuant to 40 CFR 60.5 if it desires a final applicability
determination.
As the need for further factual development here suggests, determinations
of PSD and NSPS applicability are fact-specific, and must be made on a case-by-
case basis. This memorandum provides a framework for analyzing the proposed
changes at Port Washington and gives EPA's views on relevant issues of legal
interpretation. It should also be useful in assessing other so-called "life
extension" projects in the future. However, any such project would need to be
reviewed in light of all the facts and circumstances particular to it. Thus,
a final decision regarding PSD and NSPS applicability here would not
necessarily be determinative of coverage as to other life extension projects.
If you have any further questions regarding the discussion or conclusions
in this memorandum, please have your staff contact David Solomon of the New
Source Review Section at FTS 629-5375.
I. Background
As mentioned in your March 25 request, the five coal-fired units at Port
Washington began operation in 1935, 1943, 1948, 1949, and 1950, respectively.
Each unit was initially rated at 80 megawatts electrical output capacity. In
recent years, however, the performance of the units began to deteriorate due to
age-related degradation of the physical plant. In particular, inspections
performed by a WEPCO consultant in 1984 revealed extensive cracks originating
from the internal surfaces of the rear steam drums and boiler bank boreholes in
units 2, 3, 4, and 5, creating significant safety concerns. Because of these
safety concerns and other age-related problems, in 1985 the operating levels
of units 2, 3, and 4 were reduced, and unit 5 was removed from service. As a
result of the plant's deteriorating condition, the maximum rated physical
capacities of units 1, 2, 3, and 4 at this time are 45, 65, 75, and 5b
megawatts, respectively.
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-3- 4.37
The life extension project includes extensive capital improvements to
the common facilities and each of the individual units, including replacement
of the rear steam drum in units 2, 3, 4, and 5. The renovation work will
restore the physical and operational capability of each unit to its onyinal
80 megawatt nameplate capacity, and extend the useful life of the units well
beyond the planned retirement dates that would otherwise apply. Upon comple-
tion of the project, WEPCO intends to substantially increase the actual
operations at the Port Washington plant.
II. PSD Applicability
The life extension project at Port Washington is subject to ^reconstruction
review and permitting under the Act's PSD provisions if it is a "major modifica-
tion" within the meaning of the Act and EPA's regulations. The PSD regulations
at 40 CFR 52.21 govern this determination because Wisconsin has been delegated
PSD permitting authority under the provisions of 52.21(u). The definition of
"major modification" in 52.21(b)(2)(i) requires an analysis of several factors.
These factors may be grouped under two general questions. Will tne work
entail a "physical change in or change in the method of operation ot a major
stationary source"? If so, will the change "result in a significant net
emissions increase of any pollutant subject to regulation under the Act" [see
52.21(b)(2)(i)]? The Port Washington facility is an existing major stationary
source because it emits well in excess of the PSD threshold amount for several
pollutants.
A. Physical Change or Change in the Method of Operation
This requirement of a major modification is satisfied if either a physical
or operational change would occur.
1. Physical Change
The renovation work called for under the proposed life extension project
at Port Washington would constitute a "physical change" at a major stationary
source. The clear intent of the PSD regulations is to construe the term
"physical change" very broadly, to cover virtually any significant alteration
to an existing plant. This wide reach is demonstrated by the very narrow
exclusion provided in the regulations: other than certain uses of alternate
fuels not relevant here, only "routine maintenance, repair and replacement"
is excluded from the definition of physical change [see 52.21(b)(2)(in)(a)].
In determining whether proposed work at an existing facility is "routine,"
EPA makes a case-by-case determination by weighing the nature, extent, purpose,
frequency, and cost of the work, as well as other relevant factors, to arrive
at a common-sense finding. In this case, all of these factors suggest that the
work required under WEPCO's life extension project appears not to be "routine."
The available information indicates that the work proposed at Port Washington
is far from being a regular, customary, or standard undertaking for the purpose
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-4-
of maintaining the plant in its present condition. Rather, this is a
highly unusual, if not unprecedented, and costly project. Its purpose is to
completely rehabilitate aging power generating units whose capacity has
significantly deteriorated over a period of years, thereby restoring their
original capacity and substantially extending the period of their utilization
as an alternative to retiring them as they approach the end of their useful
physical and economic life. The most important factors that would support
these conclusions are outlined below.
a. The project would involve the replacement of numerous major components.
The information submitted by WEPCO shows that the company intends to replace
several components that are essential to the operation of the Port Washington
plant. In particular, as noted above, WEPCO would replace the rear steam
drums on the boilers at units 2, 3, 4, and 5. According to WEPCO, these steam
drums are a type of "header" for the collection and distribution of steam
and/or water within the boilers. They measure 60 feet long, 50.5 inches in
diameter, and 5.25 inches thick, and their replacement is necessary to continue
operation of the units in a safe condition. In addition, at each of the
emissions units, WEPCO plans to repair or replace several other integral
components, including replacement of the air heaters at units 1, 2, 3, and 4.
The WEPCO also plans to renovate major mechanical and electrical auxiliary
systems and common plant support facilities. The WEPCO intends to perform
the work over a 4-year period, utilizing successive 9-month outages at each
unit.
In its July 8, 1987 application for authority to renovate to the Public
Service Commission of Wisconsin (PSC), WEPCO described the life extension
project and explained its purpose and necessity. The WEPCO took care to
distinguish the proposed renovation work from routine maintenance that did
not require PSC approval, explaining that:
. . . [work items] falling into the category of repetitive
maintenance that are normally performed during scheduled
equipment outages do not require specific commission approval
and, accordingly, are not included in this application.
Thus, WEPCO1s own earlier characterization of this project supports a
finding that the planned renovations are not routine.
b. The purpose of the project is to significantly enhance the present
efficiency and capacity of the plant and substantially extend its useful
economic life. In its application to the PSC, WEPCO pointed out that due to
age-related deterioration, total plant capability had declined by 40 percent.
The company noted that the currently planned retirement dates for the Port
Washington units, as set forth in its Advance Plan filed with the State,
ranged from 1992 to 1999. However, WEPCO asserted that "extensive renovation
of the five units and the plant common facilities is needed if operation of
the plant is to be continued." In any event, WEPCO stated that the renovation
work would allow the Port Washington plant to generate power at its designed
capacity until the year 2010, and thus "represents a life extension of the
units."
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-5- 4.37
In contrast, in Its July 29, 1988 letter to EPA headquarters (pages 9-13),
WEPCO characterized the renovation work as the timely, routine correction or
equipment problems— principally, the steam drum cracks. However, the informa-
tion presented leads to the conclusion that this is not the case. While
replacement of the steam drums is necessary to restore lost generating
capacity, that is not the only work proposed to be done. Based upon maximum
capacity figures for past years, it appears that the units had experienced
deterioration in physical generating capacity even prior to the discovery of
the steam drum cracks in 1984. Thus, WEPCO proposes a wide-ranging project
encompassing a broad array of tasks that would not only correct the steam
drum problem, but correct other aye-related deterioration that is essentially
independent of the steam drums. Such other work (e.g., replacement or air
handlers) apparently is also necessary as a practical matter to restore
original nameplate capacity. Thus, it appears that even if WEPCO had under-
taken this renovation work immediately following discovery of the steam drum
cracks, it would have been proper to characterize the proposed work as a
nonroutine life extension project.1
c. The work called for under the project is rarely, if ever, performed.
The WEPCO1 s application to the PSC asserted that the work to be performed
under the life extension project was not frequently done:
Generally, the renovation work items included in this
application are those that would normally occur only
once or twice during a unit's expected life cycle.
The EPA asked WEPCO to submit information regarding the frequency of
replacement of steam drums, the largest category of work item called for
under the project. WEPCO reported that to date, no steam drums have ever
been replaced at any of its coal-fired electrical generating facilities.
WEPCO did point out that it had replaced other "headers" comparable in design
pressure and function. However, the largest of these was 16 inches in
is important to note in this regard that not all renovation,
repair, or "life extension" projects would properly be characterized as
modifications potentially subject to PSD and NSPS. For example, nonroutine
repairs to correct unexpected equipment outages, even of major components
such as steam drums, would not be subject to NSPS if they did not increase
the maximum capacity of the affected facility as it existed prior to the
outage. Conversely, undertaking a program of repair and maintenance
properly characterized as routine would not subject a facility to the Act's
requirements.
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-6-
diameter, and EPA does not believe that they are comparable in diameter, wall
thickness, function, or importance to the rear steam drums at Port Washington.2
d. The work called for under the project is costly, both in relative
and absolute terms. The latest information supplied by WEPCO is that the
renovation work at Port Washington will cost $87.5 million, of which at least
$45.6 million is designated as capital costs.3 The WEPCO reports that, in
terms of annualized costs, the renovation project will cost $7.8 million, as
compared to $51.6 million for a new 400 megawatt plant. Thus, renovation
costs represent approximately 15 percent ot replacements costs.
2. Change in the Method of Operation
The renovation work at Port Washington would not constitute a "change
in the method of operation" within the meaning of the PSD regulations.
However, it is clear that the "physical change" and "operational change"
components of the "major modification" definition are discrete and independent.
Thus, as explained below, PSD still applies if there is a physical change that
will significantly increase net emissions.
In addition, the regulations exclude from the definition of physical or
operational change "an increase in the hours of operation or in the production
rate" [see 4U CFR 52.21(b)(2)(iii)(f)]. The preamble to the rule [45 FR b2676,
52704 (August 7, 1980)], makes it clear that this exclusion is intended to
allow a company to lawfully increase emissions through a simple change in
hours or rate of operation up to its potential to emit (unless already subject
2The WEPCO's July 29, 1988 letter to EPA stated (on page 13) that after
further investigation, the company "learned of several examples" of steam drum
failure and replacement. However, WEPCO provides no further details, other
than noting that in one instance, the drum failed during initial testing and
was replaced. Replacement of a failed component at a new facility presumably
would not increase emissions from the facility, and probably would be viewed
as routine if the alternative was to forego operation of that new facility.
Under such circumstances, it is unlikely that the replacement would trigger
the Act's requirements.
3The WEPCO's July 8, 1987 application to the PSC included a project
cost estimate of $83.9 million, of which $45.6 million was designated as
capital costs. A more recent cost estimate provided to EPA by WEPCO indicates
that several work items are now deemed unnecessary, such that the cost of the
original project is now estimated at $70.5 million. However, all but $89,000
of these reductions are designated as "maintenance" items. The recent submis-
sion also relates that the scope of the original project has now been expanded
to include flue gas conditioning equipment and associated air heater work
costing approximately $17 million. Although WEPCO has not broken down these
additional costs into capital and maintenance (or "expense") expenditures, it
would appear that most, if not all, of this additional work would be classified
as capital costs. Thus, it is highly likely that actual capital costs would
be significantly hiyher than $45.6 million.
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to any federally enforceable limit) without having to obtain a PSD permit.
Thus, emissions increases at Port Washington associated with increased opera-
tions would not, standing alone, subject WEPCO to PSD requirements. However,
as discussed In greater detail below, the exclusion for increases in hours of
operation or production rate does not take the project beyond the reach of
PSD coverage if those increases do not stand alone but rather are associated
with non-excluded physical or operational changes.
In its March 17, 1988 letter to Region V and its July 29, 1988 letter
to EPA Headquarters, WEPCO asserted that the exclusion for increases in
operational hours or production rate also would serve to render PSD review
not applicable to the renovation work proposed at Port Washington because the
project's purpose was to restore the original design capacity of 80 megawatts
per unit, but not to exceed that level. However, a plant's original design
capacity is irrelevant to a determination of PSD applicability.
B. Significant Net Emissions Increase
Under the PSD regulations, whether the life extension project at Port
Washington would result in a "significant net emissions increase" depends on
a comparison between the "actual emissions" before and after the physical
changes resulting from the renovation work. Where, as here, the source has
not yet begun operations following the renovation, "actual emissions"
following the renovation are deemed to be the source's "potential to emit"
[see 40 CFR 52.21(b)(21)(iv)]. Apparently, there would be a "significant net
emissions increase" within the meaning of the PSD regulations as a result of
the proposed renovations as currently planned, because potential emissions
after the project—reflecting the restoration of 80 megawatt capacity at each
unit—would greatly exceed representative actual emissions prior to the
physical changes. (The fact that the project is intended to restore the
plant's original design capacity is irrelevant to that calculation.}4 If
this is so, the project would be a "major modification" subject to PSD review.
However, PSD applies on a pollutant-specific basis, and EPA has not been
furnished with adequate data regarding the impact of the proposed renovations
on the various pollutants to determine whether a significant net emissions
increase would indeed occur for any pollutant. Such data must be provided
before EPA can make a final determination of PSD applicability.
4The WEPCO also contends (July 29, 1988 letter, page 35} that EPA
should instead compare representative actual emissions prior to the change
with "projected" actual emissions after the renovations. The PSD regulations
provide no support for this view. Where, as here, a source is not currently
subject to a PSD permit containing operational limitations, EPA must presume
that the source will operate at its maximum capacity and, hence, its maximum
potential to emit. However, as discussed below, a source is entitled to
reduce its potential to emit by embodying its "projections" of future emis-
sions in federally enforceable restrictions on its operations that may serve
to lawfully avoid PSD review.
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-8-
It is important to note in this reyard that WEPCO, at its option, could
"net out" of PSD review by accepting federally enforceable restrictions on
its potential to emit after the renovation. This could occur throuyh
enhancement of existing pollution control equipment, addition of new equip-
ment, acceptance of federally enforceable operational restrictions, or some
combination of these measures, limiting potential emissions to a level not
significantly greater than representative actual emissions prior to the
renovations. Theoretically, WEPCO could minimize the needed restrictions on
its potential to emit following the renovations if it could show that some
period other than the most recent two years is "more representative of normal
source operation" [see 52.21(b)(21)(ii)]. (Obviously, such a showing would
be most important with respect to unit 5, because it has been shut down and
has had zero emissions since 1985.) Since these matters are within WEPCO's
control, you should advise the company to enter discussions with Region V and
Wisconsin, as appropriate, if WEPCO desires to "net out" of PSD review.
The WEPCO also argued in its July 29, 1988 letter, at payes 33-41, that
even if EPA is correct that the Port Washington life extension project would
involve physical changes within the meaning of the PSD regulations, any
emissions increases would be due to increased production rates or hours of
operation rather than higher emissions per unit ot production. Therefore,
WEPCO contends that these increases should be excluded from consideration in
determining whether a net significant emissions increase and, hence, a major
modification, would occur. The WEPCO is incorrect in this reyard.
As noted above, the exclusions cited by WEPCO are intended to apply
where a source increases emissions by simply combusting a laryer amount of
fuel, or processing a larger amount of raw materials during a yiven time
period, or by expanding its hours of operation "to take advantage of favorable
market conditions" (see 45 FR 52704). In this instance, however, it is
obvious that WEPCO's plans to increase production rate or hours of operation
are inextricably intertwined with the physical changes planned under the life
extension project. Absent the extensive renovations proposed at Port
Washington, WEPCO would have little market incentive to, and in part would be
physically unable to, increase operations at these aged and deteriorated
facilities which, absent the renovations, would likely be retired from service
in the near future. Thus, WEPCO's plans call for precisely the type of
"change in hours or rate or operation that would disturb a prior assessment
of a source's environmental impact [and] should have to undergo [PSD review]
scrutiny" (see 45 FR 52704). Conversely, accepting WEPCO's interpretation of
the major modification regulations would serve to exclude from consideration
all physical or operational changes except those which cause increased emis-
sions per unit of production. Clearly, EPA never intended this result. It
would allow, through substantial capital investment, significant expansion of
the pollution-emitting capacity and longevity of major industrial facilities
without PSD review of the impacts on air quality and opportunities for future
economic growth.
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~9~ 4.37
C. Baseline Date
The November 9, 1987 letter from the Wisconsin Department of Natural
Resources to Region V asked whether a complete March 28, 1986 PSD permit
application for certain work at Port Washington triggered the PSD baseline
date, despite the fact that the permit was never issued. The answer to this
question is yes. Baseline dates are triggered by the first complete applica-
tion and remain in effect regardless of whether the application is revised or
withdrawn, or whether the permit is finally issued and the source constructed
or modified.
III. NSPS Applicability
The Port Washington renovations are subject to the Act's NSPS if they
constitute "modifications" within the meaning of section 111 and 40 CFR Part 60.
Under 60.1, the NSPS applies to modifications at an "affected facility." Each
unit at Port Washington is properly characterized as an "affected facility"
subject to the NSPS at 40 CFR Part 60, Subpart Da, which applies to electric
utility steam generating units [see 60.40(a)]. Pursuant to 60.14(a), a modifi-
cation for NSPS purposes is defined as "any physical or operational change to
an existing facility which results in an increase in the emission rate to the
atmosphere of any pollutant to which a standard applies." Increase in emission
rate is in turn defined as an increase in kilograms per hour (kg/hr) [see
60.14(b)J.
Pursuant to longstanding EPA interpretations, the emission rate before
and after a physical or operational change is evaluated at each unit by
comparing the hourly potential emissions under current maximum capacity to
emissions at maximum capacity after the change. In addition, under the Act's
NSPS provisions, only physical limitations on maximum capacity are considered
in determining potential emissions at power plants. Thus, any prospective
changes in fuel or raw materials accompanying the physical or operational
change are not considered in determining maximum capacity. Consequently,
60.14(b)(2) requires that, in conducting emissions tests before and after a
change to determine whether an increase in emission rate has occurred,
"operational parameters" which may affect emissions must be held constant.
Fuel and raw materials are "operational parameters" for this purpose.
Similarly, 60.14(e)(4) provides that use of an alternative fuel or raw
material which the existing facility was designed to accommodate before the
change would not be considered a modification. Thus, for example, a physical
change which increases the maximum capacity of the facility would have a
corresponding increase in the sulfur dioxide emissions if the facility used
fuel with the same sulfur content before and after the change. Such a prospec-
tive increase cannot be offset by instead using fuel with a lower sulfur
content after the change, because, under the regulations, the facility would
always have the option of changing back to the higher sulfur-content fuel at
a later date without triggering a modification for NSPS purposes. However,
any offsetting reductions in emission rate caused by the concurrent addition
of pollution control equipment would be considered in determining whether a
physical or operational change results in an increase in emission rate.
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The WEPCO contends (July 29, 1988 letter, at pages 20-27) that baseline
capacity for the purpose of determininy whether an increase in emission rate
occurs for purposes of an NSPS modification is the original design capacity
of the facility. This is incorrect. The thrust of the NSPS modification
provisions is to compare actual maximum capacity before and after tne change
in question. Thus, original design capacity is irrelevant. The provision in
40 CFR 60.H(b)(2) for manual emission tests to determine whether an increase
has occurred clearly contemplates that tests will be done just prior to and
after the physical or operational change. The original desiyn capacity of a
unit, to the extent it differs from actual maximum capacity at the time of
the test due to physical deterioration—and, hence, derating—of the facility,
is immaterial to this calculation.
A. Physical or Operational Change
As with the Act's PSD provisions, a modification occurs for NSPS purposes,
if there is either a physical or operational change [see 40 CFR 60.14(a)].
1. Physical Change
As is the case under the PSD provisions, the proposed renovations at
Port Washington would constitute a physical change for NSPS purposes, at
least at units 2, 3, 4, and 5. The WEPCO would need to supply more informa-
tion, if EPA is to make a definitive determination as to unit 1.
The rear steam drums are part of the steam generating unit which
constitutes the "affected facility" within the meaning of 40 CFR 60.41(a),
and the drum replacements at units 2, 3, 4, and 5 are integral to the planned
increase in maximum capacity, which is the purpose of the life extension
project. With respect to unit 1, other physical changes would increase
maximum capacity from 45 to 80 megawatts. However, there is some question
whether those changes, in significant part, would occur at the steam generating
unit or will be limited to the turbine/generator set, which is not part of
the affected facility. We suggest that you pursue this matter with WEPCO to
the extent necessary to determine NSPS applicability regarding unit 1.
As with PSD, the NSPS regulations exclude routine maintenance, repair,
and replacement [see 60.14(e)(2)]. However, the renovations at the Port
Washington steam generating units are not routine for NSPS purposes for the
same reasons—detailed above—that they are not routine for PSD purposes.
2. Operational Change
Operational changes include both increases in hours of operation and
increases in production rate. Section 60.14(e)(3) provides that an increase
in hours of operation is not, by itself, a modification. However, an increase
in production rate at an existing facility constitutes a modification, unless
it can be accomplished without a capital expenditure on that facility [see
60.14(e)(2)].
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-11- 4.37
It Is highly likely that the life extension project at Port Washington
constitutes an operational change under this standard, for two reasons.
First, restoring nameplate capacity at units 1, 2, 3, and 4 presumably
entails, among other things, changes that will allow the units to combust a
laryer amount of fuel at maximum capacity through operation at higher working
pressures than the units have been able to accommodate In recent years. In
the case of unit 5, the renovations presumably involve an increase over zero
fuel and pressure. These changes constitute an increase in production rate
within the meaning of the regulations. Second, as noted above in the
discussion of PSD applicability, this increase in production rate entails
substantial investments to improve the capital stock at each affected
facility. It appears that these investments are large enough to qualify as
"capital expenditures" under the formula specified in 60.2, although WEPCO
should be asked to supply actual calculations should this become necessary
to determine NSPS applicability.
B. Increase in Emission Rate
It seems clear that, absent some creditable offsetting changes, the
increases in maximum generating capacity proposed for each of the Port
Washington units would represent an increase in the hourly potential emission
rate for each pollutant to which a standard applies over the emission rate
prior to the renovation. As noted above, burning cleaner fuels would not be
creditable. Similarly, voluntarily restricting the production rate following
the renovations also would not be creditable tor NSPS purposes, because WEPCO
could, at a later date, increase production without triggering NSPS [see
40 CFR 60.14(e)(2)]. Accordingly, to avoid triggering NSPS, WEPCO would need
to install additional air pollution control equipment, or upgrade existing
equipment, to offset the potential emissions increases, such that no increase
would occur at maximum capacity. The information submitted indicates tnat
WEPCO may plan some enhancement of the current control equipment, but it is
unclear whether this would be adequate to prevent an increase in emission
rates. As with PSD applicability, such steps can lawfully avoid NSPS require-
ments. Accordingly, you should advise the company that it should address
these contingencies if it desires EPA to rule on whether WEPCO can avoid NSPS
requirements in this fashion.
C. Reconstruction
Based upon data provided by WEPCO, it seems that the Port Washington
renovations would not qualify as a "reconstruction" for NSPS purposes under
40 CFR 60.15, because the capital cost for the upgrades to each of the five
units, while substantial, apparently is less than 50 percent of the fixed
capital cost of constructing a comparable, entirely new steam generating unit
[see 60.15(b)(1)]. However, the modification and reconstruction provisions
of NSPS are independent. The former provisions are intended to apply in
circumstances where physical or operational changes which increase emissions
make NSPS coverage appropriate at levels well below 50 percent of the capital
cost of a replacement unit. Conversely, the reconstruction provisions are
aimed at changes to an existing unit irrespective of associated emissions
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-12-
increases, but trigger NSPS requirements only if the higher 5U percent level
is reached. Thus, the suggestion made by WEPCO in its July 29, 1988 letter
(at pages 14-15) that EPA must undertake rulemaking to amend the reconstruction
regulations before NSPS could be applied to the Port Washington project is
not well taken.
IV. Conclusion
In adopting the PSD and NSPS programs, Congress sought to focus air
pollution control efforts at an efficient and logical point: the making of
long-term decisions regarding the creation or renewal of major stationary
sources. The Port Washington life extension project, as it has been
presented to EPA, would involve a substantial financial investment at
pollution-emitting facilities that may significantly increase potential
emissions ot air pollutants over a period well beyond the current life
expectancy of those facilities. If the additional factual information called
for in this memorandum shows that emissions increases would indeed result
from this project, the project would be subject to PSD and NSPS requirements.
Such a result would be in harmony with the broad policy objectives that
Congress intended to achieve through these programs.
cc: Gerald Emison, OAQPS
Alan Eckert, OGC
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4.38
\
* UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D C 20460
OCT U 1968
TWC ADMINISTRATOR
Mr. John W. Boston
Vice President
Wisconsin Electric Power Company
Poet Office Box 2046
Milwaukee, Wisconsin 52301
Dear Mr. Boston:
As you requested in our meeting on September IS, 1988, I
have made final determinations regarding the applicability of the
Clean Air Act's New Source Performance Standards (NSPS) and
Prevention of Significant Deterioration (PSD) requirements 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) . For the reasons
discussed below, Z have determined that, as proposed, the
renovations at Port Washington are subject to both PSD and NSPS
requirements. However, EPA remains willing to work with you
regarding methods of compliance. As we have -discussed, one
alternative would be to reconfigure the project such that no
emissions increases would occur. My staff is ready to meet with
you to discuss these matters at any time*
Z. BACKGROUND
On September 19, 1988, David Kee, Director, Air and
Radiation Division , BPA Region V, wrote you regarding PSD and
NSPS coverage of the Port Washington renovations. Enclosed with
that letter was a memorandum dated September 9, 1988 from Don R.
Clay, Acting Assistant Administrator, addressing the background
of the Pert Washington project, and analyzing at some length the
relevant interpretative issues. For purposes of brevity, Z will
not repeat that material here, but rather incorporate it by
reference.
The September documents concluded that the life extension
project, as proposed, likely would be subject to PSD and NSPS
requirements. However, EPA also stated that final applicability
determinations could not be provided at that time in the absence
of certain factual information. In our subsequent meeting you
requested that SPA furnish final determinations, and agreed to
provide the necessary additional information. You also asked BPA
to reconsider certain of the conclusions in Don Clay's
memorandum. These matters are discussed below.
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II. FINXL DETERMINATIONS
Your staff has responded to our requests for additional
information, and I want to thank you for WEPCO's continued
cooperation in doing so. Based on this, and the other
information in SPA'a files, I now make the following final
determinations:
(1) The life extension project, as proposed, will render
WEPCO's Port Washington plant subject to the PSD requirements of
Part C of the Clean Air Act as a major modification within the
meaning of the Act and the EPA regulations at 40 C.F.R. I 52.21.
(2) The proposed life extension project will render each of
the five steam generating units at the Port Washington plant
subject to the NSPS requirements of section 111 of the Clean Air
Act as a modification within the meaning of the Act and the SPA
regulations at 40 C.F.R. Part 60.
In reconsidering the memorandum and letter of September 9
and 12, I have taken a careful look at the issues you raised in
our meeting: whether the renovations are routine; whether EPA
has treated similar projects in a different fashion; and whether
there would be an emissions increase due to a physical or
operational change. However, I find no reason to depart from the
reasoning of the September documents. Accordingly, I conclude
that WEPCO's life extension project, if carried out as proposed,
will involve a substantial and non-routine renewal of the Port
Washington facilities that will significantly increase both
hourly maximum and annual emissions of air pollutants.
Specifically, regarding the nature of the proposed work at
Port Washington, Z find that these renovations constitute
physical changes for PSD purposes within the meaning of 40 C.F.R.
I 52.2Kb) (2) (i), and physical and operational changes for NSPS
purposes within the meaning of 40 C.F.R. I 60.14(«). I find
further that these changes do not come within the PSD and NSPS
exclusions for routine maintenance, repair, and replacement, nor
the exclusions for increases in production rate or hours of
operation. (See 40 C.F.R. 81 52.21 (b) (2) (iii) and 60.14{e».
Regarding the emissions changes from the life extension
project, baaed upon the emissions data and certain factual
assertions submitted by WBPCO, I find that the Port Washington
renovations will result in a significant net increase in
emissions of several pollutants for PSD purposes within the
meaning of 40 C.F.R. § 52.21(b)(2)(i), (b)(3), and (b)(21). I
find further that the renovations will result in an increase in
the emission rate of several pollutants at each of units 1-5 for
NSPS purposes within the meaning of 40 C.F.R. 8 60.14U) and (b) .
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OCT 17 -83 03=05 EIP^ ?.* 4.38
- 3 -
Enclosures A and B detail the emissions changes underlying
these findings for PSD and NSPS purposes. At indicated above,
EPA1s calculations and determinations are based on data supplied
by tfSPCO. He will use the data in Enclosures A and B in the
event you would like to work with us to establish an acceptable
arrangement for satisfying PSD and NSPS requirements through the
addition or enhancement of pollution control equipment, physical
capacity restrictions, or, in the case of PSD, federally
enforceable limitations on potential emissions.
111. DISCUSSION
As you requested, I have reconsidered the question
of whether the physical and operational changes at Port
Washington are routine, whether applying PSD and NSPS here would
be inequitable in light of EPA's past treatment of renovation
projects, and whether the renovations will result in emission*
increases. These matters are addressed below, as is EPA'a
reasoning with respect to the baselines for calculating the F8D
and NSPS emissions increases reflected in Enclosures A and B.
Regarding the question of routineness, the renovations
involve the replacement of steam drums, air heaters, and other
major components that are integral to the continued operation of
the source. The work will not simply maintain the facilities in
their current state, but rather will significantly enhance their
present efficiency and capacity, and substantially extend their
useful economic life. In addition, the work called for here is
rarely, if ever, performed. Moreover, this work in costly, both
in relative and absolute terms. Based on these and other
factors, I reaffirm Don Clay's findings on the non-routine
character of the Port Washington changes. The September 9
memorandum contains a complete discussion of EPA's reasoning on
this issue.
On the related equity question, 2 find no inconsistency here
with SPA'a prior determinations regarding .routine and non-routine
changes. I note initially that PSD and NSPS applicability
determinations are made on a case-by-ease basis. Thus, it is
very difficult to analogize to other projects, which almost
inevitably present significant factual differences.
Nevertheless, my staff has reviewed the additional material you
submitted on September 19, and September 27. 1988 regarding
certain other renovation projects, and has informally surveyed
EPA Regional Offices and state agencies.
I have concluded that none of the four steam drum
replacements identified in your September 19 submission are
sufficiently similar to the Port Washington project to support
determinations of nonapplicability in this matter. The Carolina
-------
OCT 17 '33 E3:27 EP3 ?.5
- 4 -
Power and Light case involved a faulty steam drum replaced prior
to the initial start-up of a new unit, and would not have
increased emissions for PSD or NSPS purposes. The Great Western
Sugar example did not involve a utility boiler, and was too small
to be affected by NSPS. The Ashland Oil facility was not at a
utility, involved a waste heat boiler that was not fossil-fuel
fired, and hence, was not an emissions unit subject to PSD or
NSPS. The Algoma Steel Co. facility was not a utility boiler,
and not located in the United states.
In addition, the informal survey conducted by the Office of
Air and Radiation disclosed no closely analogous cases that were
ever reviewed by EPA headquarters for purposes of PSD or NSPS
applicability. In particular, BPA found no examples of steam
drum replacement at aged electric generating facilities.
Moreover, BPA could find no examples in which the Agency had
analyzed and issued an applicability determination for a "life
extension project" for any category of major source. Regarding
the four utility projects identified in your September 27
submission, I note that they do not involve steam drum
replacement. In addition, permit applications were not submitted
to the ftate agencies for the Duke Power and Texas Utilities
projects you cite. Consequently, they were not reviewed by any
air pollution control agency. The Cincinnati Gas and Electric
project was reviewed by the state, but not BPA. The state
determined, and EPA Region II concurred, that the Hydraco
Enterprises project was not subject to PSD bated on a net
decrease in emissions of all pollutants. Our informal survey and
review of the projects you identified reveal that major
construction activities undertaken by utilities that may be
subject to Clean Air Act requirements have not been brought to
the attention of BPA. The Agency is considering what steps may
be necessary to address this situation.
BPA has discovered only two state agency determinations
addressing life extension questions in a manner possibly
inconsistent with BPA's analysis of the Port Washington project.
These instances, which apparently were not brought to BPA's
attention prior to the states' determination, do not create an
inequity that would justify a different conclusion by BPA in this
case.
As to the question of emissions increases at Port
Washington, I believe that EPA has properly interpreted the PSD
and NSPS regulations as applying to increases in emissions due to
increases in hours of operation or production rate, where, as
here, such operational or production increases are closely
related to physical or operational changes. A contrary
interpretation would allow even jnaaaive emissions increases
stemming from significant new capital investment — as
distinguished from routine fluctuations in the business cycle —
-------
4.38
P A
OCT 17 '33 03=33 E:3n
- 5 -
to escape scrutiny under the Clean Air Act simply because the new
investment did not involve an inherently more polluting
production process. I do not believe that Congress intended such
a result.
I would like to point out that the figures on emissions
increases in Enclosures A and B reflect my conclusions regarding
the proper points in tine from which to calculate emissions
changes. For PSD, I have determined under 40 C.F.R. I
52.2Kb) (21) (ii) that the two-year period of 1983 and 1984 --
prior to the source curtailments due to discovery of cracks in
the rear steam drums — art more representative of normal source
operations than the moat recent two-year period. This conclusion
is appropriate in light of WEPCO's historical operations.
As to NSPS, there is no "representative emissions" concept
under that program. Rather, under the circumstances presented by
this case, the baseline emission rates for units 1-5 are
determined by hourly maximum capacity just prior to the
renovations. At this time, EPA is relying on the actual
operating data you submitted to determine current maximum
capacity. Although EPA is certainly open to further discussion
on this point, the information contained in your September 27 and
October 11, 1988 submissions is inadequate to support WEPCO's
assertions that higher-than-actual capacities could be achieved
on an economically sustainable basis. For example, you indicate
that operation at higher levels at units 1-4 "could increase
equipment deterioration thus causing further damage." Regarding
Unit 5, you state that "safety concerns" dictated the decision to
shut down that unit. Based on this information, we are unable to
rely on VBPCO's statements as to maximum "achievable" capacity in
determining the emissions changes at each of these units. Thus,
for example, in the case of unit 5, the current capacity must be
regarded as xero.
IV. CONCLUSION
In adopting the PSD and NSPS programs. Congress intended to
address the type of long-term capital investments in pollution-
emitting facilities at issue in the Port Washington life
extension project. Thus, as proposed, these renovations would be
subject to the requirements of both programs. However, as
indicated above, my staff remains ready to work closely with
WEPCO to discuss specific pollution control equipment and
permitting measures that would minimize the cost to WEPCO of
complying with the requirements of the Clean Air Act. I have
asked Don Clay to work with you in seeking a final resolution of
the compliance issues by December 1.
-------
OCT 17 '33 03=10 EIPA
P.7
- 6 -
Again, thank you for your cooperation in this natter.
Sincerely,
Lee M. Thomas
Enclosures
cc: Senator Robert V. Kasten, Jr.
Representative F. James Sensenbrenner. Jr.
Don Clay, SPA (ANR-445)
David Kee, Air & Radiation Oiv., Region V
-------
Enclosure A
PSD Applicability
Port Washington Power Plant Renovation Project
(all amisaions calculations are in tons per year)
4.38
Pollutant
Actual
Emissions
Baseline (1}
Total suspended
particulate
Sulfur dioxide
Nitrogen oxides
Carbon monoxide
Hydrocarbon
Beryllium
Fluorides
170
24,236
2,991
144
17
0.0016
38
Potential
Emission* (2)
283 (3)
52,621 (3)
8,201
397
47
0.005
98
Nat
Emissions
increase
• 108
28,385
5,210
253
30
0.0034
60
PSD
Level
25
Subje
te.PS
NOTE: P6D applicability far the other PSD regulated pollutants listed
at 40 CFR Section 52.21 (b) (23) (i) and (ii) has not been
determined at this tine.
1) Average emissions for two-year period defined by calendar years 1983
and 1984.
2} As calculated by WEPCO based on 1992 coal type, actual emissions
after ESP, and an annual capacity utilization factor of 90%.
3) An EPA estimate of potential emissions, based on existing federally
enforceable limits (i.e., applicable SIP), may be higher. The
indicated PSD applicability determination would, however, not
change.
yes
40
40
100
40
0.0004
3
yes
yes
yes
no
y«
yes
-------
OCT 17 '65 03=11 E
Enclosure B
NSPS Applicability
Port Washington Power Plant Renovation Project
FULL LOAD EMISSIONS AT CURRENT CAPACITY
(BEFORE RENOVATION)
302 (LBS/HR)
PM (LBS/HR)
NOx (LBS/HR)
UNIT-1 UNIT-2 UNIT-3 UNIT-4 UNIT-5
1417
15
480
1828
16
352
2043
12
28S
1560
12
221
-0-
-0-
-0-
302 (LBS/HR)
PM (LBS/HR)
NOX (LBS/HR)
FULL LOAD EMISSIONS AT FUTURE CAPACITY"
(AFTER RENOVATION)
UNIT-1 UNIT-2 • UNIT-3 UNIT-4 UNIT-5
2046
16
696
2037
16
392
2088
12
297
2269
17
316
2695
IS
369
SUBJECT TO NSPS (AFTER RENOVATION)
UNIT-1 UNIT-2 UNIT-3 UNIT-4 UNIT-5
S02 (LBS/HR) YES(a) YES(a) YES(a) Y£S(a) YES
PM (LBS/HR) YES(b) NO NO YES(b) YES
NOX (LBS/HR) YES(C) YES(O YES(c) YES(C) YES(C)
Notes:
(a) With lass add-on control than NSPS requirement, emissions
(Ib/hr) would not increase and NSPS would not apply.
(b) Because of planned ESP upgrade, PM emissions (Ib/MM Btu)
after renovation are expected to be less than NSPS requirement.
However, NSPS would retire CEMS for opacity.
(c) Because arch-fired boilers are used at Port Washington,
current NOx emissions (lb/MM Btu) are expected to be less than
NSPS requirements. However, NSPS would require a CEMS for NOx.
-------
4.39
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
? 8 !??? OFFICE OF
AIR AMO RADIATION
MEMORANDUM
SUBJECT: Review of De^'Min'ifflis Emissions - Sanctions
FROM: Ronald Shafer/~$iTef
Policy and Guidance Section
Stationary Source Compliance Division
TO: Ron Van Hersbergen
Air and Radiation Branch (5AR-26)
Region V
The purpose of this memorandum is to comment on your
draft reply to the State of Illinois explaining SSCD's
January 5, 1983 applicability determination. The 1983
memorandum addressed the question of whether nonsignificant
(de minintis) net emission increases that accumulate over time
will trigger PSD reviews when the total net emissions exceed
significance levels.
The 1983 memorandum stated that even though the preamble
to the PSD regulations addressed the question of accumulation of
emissions, the PSD regulations themselves did not. SSCD
decided that those changes which occur over time (within a
contemporaneous time frame, that is, five years) and whose
emissions when reviewed as distinct entities are not signifi-
cant, should not be combined and would not trigger PSD review
(PSD permit issuance and imposition of BACT controls) when
significance levels are reached. This was a policy decision
based on concerns about the reasonableness of requiring permit-
ting and imposition of controls for the most recent small
increase in emissions. These policy considerations apply
only to the permitting requirements for PSD and NSR and do
not apply to the rules governing sanctions (S52.24).
-------
- 2 -
It is very important to note that the 1983 memorandum
affirmed that even though individual de-minimis increases do
not accumulate to trigger a PSD review, they do consume PSD
increment and ambient air quality must be protected. Likewise,
in nonattainment areas, de minimis net emission increases
must be aggregated and considered in evaluating air quality
impacts so the NAAQS will be attained. Under the nonattainment
rules, aggregated de minimis emissions will trigger sanctions
when significance levels are reached. Emissions are aggregated
as follows: any emissions increase as a result of a physical
change or change in the method of operation must be evaluated
to see if the cumulative net emissions increase over the past
five years is significant.
We are now reconsidering the January 5, 1983 applicability
determination arid intend to write to you later about this.
If you have^any comments or further questions, please call me
or Myra Cypser on my staff (382-2872).
cc: Judy Katz, OECM
Greg Foote, OGC
Dennis Grumpier, AQMD
NSR contacts, Regions I-X
-------
4.40
4.40 DATE: January 12, 1989
SUBJECT: Guidance on Several Issues Related to Determining Applicability
of New Major Source Regulations In Granting Construction Permits
FROM: Edward J. 11111s, Chief
Noncriterla Pollution Programs Branch
Air Quality Management Division
TO: Michael J. Hayes, Manager
Division of Air Pollution Control, Illinois EPA
DISCUSSION: Memo provides guidance on several issues related to determining
applicability of major source regulations in granting construction
permits to modified sources.
(1) A reviewing agency must base determination of whether a
source Is "major" on "major" source definitions in the
Federal Register.
(2) Whether the emissions increase related to a modification is
significant is determined before any netting calculation is
done. If it is, netting calculations are then performed to
determine whether the "net emissions Increase" associated
with that modification is significant.
(3) Contemporaneous emissions increases and decreases are
discussed, as well as other factors affecting whether they
are "creditable".
(4) An example of netting calculation is shown.
CR: 3.33 [Hard Copy]; 23.30
-------
4.41
4.41
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 13, 1989
Guidance on Limiting Potential to Emit in New Source Permitting
Terrell E. Hunt, Associate Enforcement Counsel, Air Enforcement
Division, Office of Enforcement and Compliance Monitoring
John S. Sietz, Director, Stationary Source Compliance Division,
Office of Air Quality Planning and Standards
Addressee's (Regions I-X, Regional Counsels, Air Branch Chiefs,
Air Division Directors)
This 22-page memo contains final guidance on conditions in
construction permits that can legally limit a source's potential
to emit to minor or de minimus levels. The memo includes sections
of the Louisiana Pacific rulings. Types of limitations that are
Federally enforceable, and, therefore, legitimate restrictions on
potential to emit, are discussed, including restrictions on
production rates, operating hours, control device limitations, and
averaging periods for determining emission rates and control
efficiencies. Characteristics of "sham" permits are identified
and enforcement is discussed. The memo includes sections of the
Louisiana-Pacific rulings as a basis for policy and includes
several examples to illustrate the principles.
2.31 [Hard Copy]; 22.7
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_<^ — ^ 4.42
\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
8 Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
1 8 SE? 1083
MEMORANDUM
SUBJECT: Request for Clarification of Policy Regarding
the "Net Emissions Increase"
"ion 4ffifi?r:/*7
FROM: John Calcagni, Director
Air Qual ity ManagemenJ^Tivision . -si
TO: William B. Hathaway, Birector x^/
Air, Pesticides, and Toxics Division (6T)
This is in response to your August 10, 1989 memorandum regarding guidance
on several issues related to the calculation of "net emissions increase" (as
defined in 40 CFR 52.21(b)(3)(i)) for prevention of significant deterioration
(PSD) applicability purposes. These issues arose from a PSD pre-application
package submitted to Region VI by Conoco Inc. of Westlake, Louisiana.
As was discussed in an August 17, 1989 conference call between Region VI
staff and members of the New Source Review Section, our response provides
general guidance on the four basic netting questions raised in your
memorandum, as opposed to a more detailed response specific to the Conoco
application.
Question 1:
Which of the following approaches is correct for determining if a
contemporaneous net emissions increase has occurred at an existing major
source?
A. Not including contemporaneous emissions unless the project emissions
exceed PSD significance levels for a pollutant.
B. Using a literal interpretation of the definition of "net emissions
increase" as contained in 40 CFR 52.21(b)(3)(i) which suggests that,
even if the project's emissions do not exceed the PSD significance
levels, a series of less than significant changes would still be
accumulated.
Response:
Although the definition of "net emissions increase" could be interpreted
differently, the Environmental Protection Agency's (EPA's) historic policy has
been not to consider accumulated emissions from a series of small (i.e., less
than significant) emissions increases if the emissions increase from the
proposed modification to the source is, standing alone without regard to any
-------
decreases, less than significant. In other words, the netting calculus (the
summation of contemporaneous emissions increases and decreases) is not
triggered unless there will be a significant emissions increase associated
C. jtith the proposed modification. This policy was discussed in detail in a 1983
*• EPA~m¥moTaTraunP(copy attached) titled "Net Emission Increases Under PSD." In
October 1988 the Policy and Guidance Section of the Stationary Source,, ;r.-~T)
Compliance Division (SSCD) sent a memorandum (copy attachedKto Region V
restating the policy and indicating that it applied only to applicability
determinations made under PSD and did not apply to nonattainment rules. The
memorandum also indicated that SSCD was reconsidering the policy as it applies
to PSD. We have, however, discussed this matter with SSCD and understand that
there are no plans to revise the policy.
This office has reviewed the considerations (as discussed in the 1983
memorandum) which led to the policy and continue to find them to be reasonable
and appropriate. For example, it would not be sensible to subject a small
increase (e.g., 2 tons per year [tpy]) to a full PSD review because of an
unrelated 39 tons per year increase 3 years earlier. The PSD reviews of such
small emissions could place a significant resource burden on both applicants
and review agencies and would likely result in minimal, if any, emissions
reductions or air quality benefits from the application of BACT. Conse-
quently, I reaffirm that EPA's current policy is not to aggregate less than
significant increases at a major source when the emissions increase from a
proposed modification is less than significant. Of course, attempts by
applicants to avoid PSD review by splitting a modification into two or more
minor modifications constitutes circumvention of the PSD requirements. Two or
more related minor changes over a short period of time should be studied for
possible circumvention.
Question 2:
Once PSD review is triggered for one pollutant, does the triggering
mechanism (i.e., as described in question 1) remain the same for other
pollutants or is the net contemporaneous emissions increase for these other
pollutants compared to the PSD significance levels? In other words, if PSD
review is triggered for one pollutant, is the source then required to consider
all contemporaneous emissions changes for the other pollutants when
determining applicability, even if new emissions from the proposed project
will be less than significant?
Response;
No. The criteria used to determine if a significant net emissions
increase has occurred from a proposed modification at an existing major source
are applied on a pollutant-by-pollutant basis.
For example, a major source experienced insignificant increases of NOX
(30 tpy) and S02 (15 tpy) 2 years ago, and a decrease of SO? (50 tpy) 3 years
ago. The source now proposes to add a new process unit with" an associated
emissions increase of 35 tpy N0y and 80 tpy S02. For S02, the proposed 80 tpy
increase from the modification by itself (before any netting) is significant,
-------
4.42
so we then determine the contemporaneous net emissions change, the algebraic
sum of (-50)+(15)+(80), which equals +45 tpy. Therefore, the proposed
modification is major and a PSD review for SOg is required. However, the NOX
increase from the proposed modification is by itself less than significant.
Consequently, netting is not performed for NOX even though the modification
is major for SC^.
Question 3:
Is the approach of comparing new, allowable emissions to old, actual
emissions still appropriate for determining PSD applicability?
Response:
Under the PSD regulations, whether a physical change or change in the
method of operation at a source will result in a "net emissions increase"
requires a comparison of the "actual emissions" of the source before and after
the change. For an existing emissions unit at a source, "actual emissions"
before the change equal the average rate in tons per year at which the unit
actual1v emitted the pollutant during the 2-year period (or more representa-
tive period) which precedes the change [see 40 CFR 52.2I(b)(21)(ii)]. Where
the change will affect the normal operations of an existing emissions unit (as
in the case of a change which could result in increased use of the unit),
"actual emissions" after the change must be assumed to be equal to "potential
to emit.' The PSD regulations are quite clear regarding such circumstances
[40 CFR 52.21(b)(21)(iv)]:
For any emissions unit that has not yet begun normal operations
on the particular date, actual emissions shall equal the potential
to emit of the unit on that date. (Emphasis added.)
Where "allowable emissions" are the sane as or less than the "potential to
emit" for an emissions unit, "allowable emissions" may be used to define the
•actual emissions' of that unit after the change. Consequently, for
determining PSO applicability, the comparison of prior "actual" versus new
"potential" emissions (or "allowable" where appropriate) is the correct
methodology to use.
The comparison of prior "actual" to future "potential" emissions is made
on a unit-by-unit basis for all emissions units at the source that will be
affected by the change. It is done for the emissions unit(s) undergoing the
physical change or change in the method of operation and also for any other
units at which normal operations could be affected by the change at the
source. This, for example, includes a review for possible emissions increases
at process-related emissions units due to a physical change which removed a
bottleneck at only one of the units.
Question 4:
When determining contemporaneous increases and decreases, are all
emissions points at the source reviewed, or only those emissions points that
-------
have had emissions changes Incorporated Into State permits, in terms of actual
emissions changes.at the beginning and end of the contemporaneous period to
determine the contemporaneous emissions changes?
Response:
Generally all emissions points at the source (including fugitive
emissions where applicable) are reviewed for emissions changes, including
those points with emissions changes that have not been incorporated into
permits. The PSD regulations at 40 CFR 52.21(b)(3)(i)(6) require that "any
other increases and decreases in actual emissions at the source that are
contemporaneous with the particular change and are otherwise creditable" be
included in the calculation of "net emissions increase." (Emphasis added.)
In regard to emissions changes incorporated into permits, the regulations
at 40 CFR 52.21(b)(3)(iii) provide that a contemporaneous increase or decrease
(to the extent the decrease is federally enforceable) is creditable only if
the relevant reviewing authority has not relied on it in issuing a PSO permit
for the source, and the permit is still in effect when the increase in actual
emissions from the particular change occurs. A reviewing authority relies on
an increase or decrease when, after taking the increase or decrease into
account, it concludes that the proposed project would not cause or contribute
to a violation of an increment or ambient standard. In other words, an
emissions change at an emissions point which was considered in the issuance of
a PSD permit for the source is not available to be used in subsequent netting
calculations. For example, an emission change incorporated in a source's PSD
permit (State or Federal) would not be available to be used as a
contemporaneous increase or decrease in a subsequent netting calculation.
On the other hand, where an emissions change was not relied upon in
issuing a PSD permit for the source, the regulations make no distinction
between an emissions point with an emissions change incorporated into a State
permit and any other emissions point at the source when defining an otherwise
creditable contemporaneous change. Consequently, except for emissions changes
considered in issuing a PSD permit, all emissions points at the source are
reviewed in terms of actual emissions changes to determine the contemporaneous
emissions changes at a source, including those emissions points that have not
had emissions changes incorporated into State permits. Although emissions
changes incorporated into State permits do not affect which emissions points
must be considered, conditions in State permits (if federally enforceable) may
be used to define an emissions unit's "allowable emissions."
If you have any questions in regard to this matter, please contact
David Solomon of the New Source Review Section at FTS 629-5375.
Attachments
cc: NSR Contacts
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
4.42
MEMORANDUM
SUBJECT: Nee Emission Increase Under PSD
FROM: Sheldon Meyera, Director
Office of Air Quality Planning and Standards
TO: David P. Howekamp, Director
Air Management Division - Region IX
This is in response to your memo dated May 3, 1983 to
Kathleen M. Bennett concerning net emission increases under PSD.
I have looked into the question of inconsistency in interpretation
of the de minimus provisions of the PSD regulations as raised in
your memorandum, and have concluded that the interpretation made
by the Stationary Source Compliance Division is the most practical.
The issue, as I understand it, is whether sources and control
agencies need to aggregate small changes (i.e., those below de
minimus levels) which occur over time so that once the cumulative
effect of the changes exceeds de minimus levels, PSD is triggered.
The preamble to the PSD regulations implied that this aggregation
would be required. However, the Agency has maintained since 1981
that no such aggregation is required. This interpretation was
first articulated in a memo from SSCD (then DSSE) to Region VII
daced January 22, 1981,. and has been reiterated in memoranda
to Region IX and X since then. The SSCD interpretation was
concurred in by the Office of General Counsel (Peter Wyckoff) as
legally supportable since the regulations themselves are not clear.
The policy considerations leading to this interpretation were:
(a) aggregation could impose a significant resource
burden on sources which might never become subject
to PSD.
(b) aggregation would only require installation of BACT
level controls on the last piece of equipment which
triggered the review, with a minimum air quality
benefit, and
(c) air quality would be protected since these changes
would consume increment in any event.
COMCURMEMCES
)
SU*NAMt)
—XV
6L
CP< •«. 132M (12-TO
OFFICIAL FILE COPY
-------
-2-
In conclusion. I feel that the irccrrrc-cscion cade
bv SSCD to be the moat reasonable, Kovever, I recopr.ize
that a clarifying amendment tc the Pf£ reflation is advisable
and will include it as part of the next set of prooosec changes
to the PSD regulations. If you would like to discuss this
further, please contact me.
cc: Darryl Tyler
Ed Reich .
Peter Uyckoff
En-341:R.Biondi:kw:Draft 5-31-83 382-2831 Rm. 3202 Final 6-2-83
Disk RAS #3 Rich
-------
4.42
USE
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
OCT? 8 i??c- OFFICE OF
AIR AND RADIATION
MEMORANDUM
SUBJECT: Review of Der'Mia'imis Emissions - Sanctions
FROM: Ronald Shafer r~$u£f
Policy and Guidance Section
Stationary Source Compliance Division
TO: Ron van Mersbergen
Air and Radiation Branch (5AR-26)
Region V
The purpose of this memorandum is to comment on your
draft reply to the State of Illinois explaining SSCD's
January 5, 1983 applicability determination. The 1983
memorandum addressed the question of whether nonsignificant
(de minimis) net emission increases that accumulate over time
will trigger PSD reviews when the total net emissions exceed
significance levels.
The 1983 memorandum stated that even though the preamble
to the PSD regulations addressed the question of accumulation of
emissions, the PSD regulations themselves did not. SSCD
decided that those changes which occur over time (within a
contemporaneous time frame, that is, five years) and whose
emissions when reviewed as distinct entities are not signifi-
cant, should not be combined and would not trigger PSD review
(PSD permit issuance and imposition of BACT controls) when
significance levels are reached. This was a policy decision
based on concerns about the reasonableness of requiring permit-
ting and imposition of controls for the most recent small
increase in emissions. These policy considerations apply
only to the permitting requirements for PSD and NSR and do
not apply to the rules governing sanctions (S52.24).
-------
- 2 -
It is very important to note that the 1983 memorandum
affirmed that even though individual de minimis increases do
not accumulate to trigger a PSD review, they do consume PSD
increment and ambient air quality must be protected. Likewise,
in nonattainment areas, d_e minimis net emission increases
must be aggregated and considered in evaluating air quality
impacts so the NAAQS will be attained, under the nonattainment
rules, aggregated de minimis emissions will trigger sanctions
when significance levels are reached. Emissions are aggregated
as follows: any emissions increase as a result of a physical
change or change in the method of operation must be evaluated
to see if the cumulative net emissions increase over the past
five years is significant.
We are now reconsidering the January 5, 1983 applicability
determination and intend to write to you later about this.
If you have any comments or further questions, please call me
or Hyra Cypser on my staff (382-2872).
cc: Judy Katz, OECM
Greg Foote, OGC
Dennis Grumpier, AQMD
NSR contacts, Regions I-X
-------
4.43
4.43
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
November 24, 1989
Court of Appeals Decision Upholding PSD "Actual-to-Potential"
Applicability Rules Puerto Rican Cement Co.. Inc. v. EPA. No. 89-
1070 (1st Cir.)
Gregory B. Foote, Attorney, Air and Radiation Division
Alan H. Eckert, Associate General Counsel, Air and Radiation
Division
William G. Rosenberg, Assistant Administrator for Air and
Radiation
This memo discusses the court's decision affirming EPA's position
that, when a company makes a "physical or operational change" at
an existing facility, there is a "major modification" subject to
PSD review if a comparison of actual emissions before the change
with potential emissions thereafter shows a significant net
increase. A copy of the court's ruling is attached.
2.32 [Hard Copy]
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4.44
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
DEC 2 9
MEMORANDUM
SUBJECT: Use of Netting Credits
FROM:/ John Calcagni, Director
CP^ Air Quality Management Division (MD-15)
TO: Bruce P. Miller, Chief
Air Programs Branch, Region IV
This memorandum is in response to your October 27, 1989 memorandum which
asked several questions concerning the Environmental Protection Agency's
(EPA's) position on netting. Specifically, you asked the following questions:
1. Can "leftover" contemporaneous emissions reductions be used in
future netting transactions?
2. If so, can these emissions credits be sold or otherwise be used by a
separate facility with a different, major, standard industrial classification
(SIC] number under any circumstances?
3. If a source is allowed to use the leftover emissions credits in the
future, is the 5-year netting time frame opened for all pollutants, even
though a modification may be major for only a limited number of pollutants?
The following response is based on our reading of the Federal
regulations. However, States with federally approved prevention of
significant deterioration (PSD) State implementation plans are free to follow
a more stringent interpretation of their regulations.
Your first question asked whether a source could use "leftover" emissions
reduction credits from a netting transaction in future netting transactions.
We assume by "leftover" emissions reductions you mean some portion of an
emissions decrease that does not appear to be fully utilized in allowing a
source to net out of review. As explained below [and in the January 12, 198
letter (see attached) from Ed Lillis to Michael Hayes], the procedure we
recommend for considering emissions increases and decreases in a netting
calculation does not result in "leftover" emissions credits, since emissions
increases and decreases are considered in their entirety.
The pertinent PSD criteria for emissions increases and decreases to be
creditable for netting transactions is CFR 40 Part 52.21(b)(3)(iii) or
Part 51.166(b)(3)(iii), which states that the emissions increases and
decreases are creditable:
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b)..."1f the reviewing authority has not relied on it
(e.g., an emissions decrease) in issuing a permit for the
source under regulations approved pursuant to this
section, which permit is in effect when the increase in
actual emissions from the particular change occurs."
[NOTE: EPA's policy is to interpret the permit to be a
PSD permit.]
There are situations, such as when a source nets out of review, when the
permitting authority does not rely on creditable emissions increases or
decreases "in issuing a PSD permit." For example, when a source nets out of
review, no PSD permit is issued. As such, the reviewing authority has not
relied on any creditable emissions increases or decreases in issuing a permit,
so the emissions increases and decreases are still available for future
applications.
For example, a major source proposes to replace a boiler that emits
30 tons per year (tpy) of sulfur dioxide (S02) with a new unit that has a
potential to emit 50 tpy S02- Also, the source shut down a 40 tpy S02 unit 3
years prior to the proposed modification. As such, the netting equation for
the example is:
+50 tpy (proposed increase) minus 30 tpy (current shutdown)
minus 40 tpy (previous shutdown) - -20 tpy S02
Note that these shutdowns, as all other decreases, must be federally
enforceable in order to be creditable. Consequently, the source nets out of
review, and no PSD permit is issued.
We do not view the -20 tpy S02 that results from the netting calculation
as "leftover" credit. Rather, we view each of the contemporaneous and
otherwise creditable emissions increases and decreases considered by the
source in netting out of review as still being fully available, and must
therefore be included in the next netting transaction at the source. To
further illustrate, suppose the source in the example plans to add another new
boiler in 3 years, which will increase S02 emissions by 50 tpy without
replacing any existing units. A new net emissions increase must be
calculated. The 40 tpy reduction that was creditable in the previous netting
transaction will have passed out of the contemporaneous window, so it is no
longer available. The new net emissions increase is calculated as follows:
+50 tpy (proposed increase) plus 50 tpy (previous increase)
minus 30 tpy (previous shutdown) = 70 tpy S02
In this case, the source does not net out of review and must get a PSD permit.
Where a source is not able to net out of review, any emissions increase
or decrease used in the netting equation to determine source applicability
must also be used in its entirety in the subsequent air quality impact
analysis. In this manner, a reviewing authority relies on the full emissions
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4.44
increase or decrease in determining whether the proposed project would or
would not cause, or*contribute to, a violation of an increment or ambient
standard. At this point, these increases and decreases are no longer
creditable.
Your second question asked if "leftover" credits existed, could those
credits be sold or otherwise used by a separate facility (with a different
major SIC number) under any circumstances. As a hypothetical example, you
asked if a new major source, with a different SIC number and under separate
ownership, located on the property of another source, could it use the
"leftover" netting credits under any circumstances. The answer to this
situation is ng_, since netting is source-specific. Emissions reduction
credits cannot be sold to, or used by, separate sources for PSD netting
purposes, even if they are collocated at the same site.
The answer to your third question is aft. It was addressed in my
September 18, 1989 memorandum to William B. Hathaway, Director of the Air,
Pesticides, and Toxics Division, EPA Region VI, a copy of which is attached.
Please refer to the response to question 2 in that memorandum.
If you have any questions, please contact Gary McCutchen or
Dennis Grumpier of my staff at FTS 629-5592 or FTS 629-0871, respectively.
2 Attachments
cc: G. Foote, OGC
Air Branch Chief, Regions I-III, V-X
New Source Review Contacts
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4 15
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 2771 1
JAN 0 I
MEMORANDUM
SUBJECT:
FROM:
TO:
Effect of Changing Stack Heights on Prevention of
Significant Deterioration (PSp>-M6jd^Mflg^and Monitoring
John Calcagni, Director-^^-^cr^-iS*-:—*' J~"
Air Quality Management, Division (MD 15}
Bruce P. Miller, Chief/ _
Air Programs Branch, Region IV
This is in response to your October 20, 1989 memorandum concerning
whether and when the beneficial air quality impacts that result from raising
an existing stack height at a source can be considered as part of a proposed
PSD modification. You asked for our comments on your draft response to
Mr. Richard Grusnick's (Alabama Department of Environmental Management)
September 11, 1989 letter on this issue. I have reviewed your draft response
concerning the following specific examples provided by Mr. Grusnick.
Example 1. A baseline (non-increment consuming) unit raising its stack
(from 100 feet to 250 feet) at the time of a mill expansion. The reason for
raising the stack is:
(a) to produce enough air quality credit to reduce the
ambient impact caused by the expansion; and
(b) to prevent a nuisance to workers in a new 200-foot
building.
Example 2. An existing PSD increment-consuming unit raising its stack
(from 100 feet to 250 feet) in conjunction with a mill expansion to avoid
worker exposure inside a new 200-foot building.
Example 3. An existing PSD increment-consuming unit (with a wet scrubber
and a 100-foot stack) whose emissions would be merged with new emissions from
a proposed new adjacent unit (with an ESP) with a 300-foot stack.
I agree with your position that the reason why a source raises a stack is
not relevant in deciding whether the air quality benefit to be derived from the
stack increase can be considered in the PSD analysis. However, the maximum
height creditable as the good engineering practice (GEP) stack height without
providing a demonstration is 65 meters (approximately 213 feet). For a height
greater than 65 meters to be fully creditable as the GEP stack height, it must
be established in a manner consistent with the stack height rules.
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In response to the question of when the Increase in a stack height can be
considered as oart of a proposed modification, I believe that the increase must
be proposed in conjunction with the overall modification, but need not be
directly related to other physical changes or changes in the method of operation
being proposed by the source. That is, the stack being raised need not be
physically tied to the emissions unit(s) being constructed or modified. Thus,
when a stack height increase is proposed in a PSD (modification) application,
any creditable air quality improvements resulting from the higher stack (whether
or not any increase in emissions resulting from the proposed modification are
to be released through such stack) should be considered in the preliminary
modeling analysis to determine whether further modeling or preconstruction
monitoring would be required.
In each of the examples provided by Mr. Grusnick, I would consider the
proposed stack height increase to be part of the proposed modification, and
such increase, in general, should therefore be used in the determination of
whether PSD modeling or preconstruction monitoring would be required. However,
before any new stack exceeding 65 meters (approximately 213 feet) could be fully
creditable, it would have to be verified as the GEP height in accordance with
approved stack height rules. There are additional requirements with regard to
the merging of exhaust gas streams that should be carefully evaluated to
determine the creditable stack parameters in the third example.
If you have any questions concerning this response, please contact
Dan deRoeck at 629-5593.
cc: J. Calcagni
E. Lillis
G. McCutchen
E. Ginsberg
Air Branch Chief, Regions I-III, V-X
NSR Contacts
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4.46
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park. North Carolina 27711
JAN 1 8 1990
Mr. Morton Sterling, Director
Environmental Protection
Detroit Edison Company
200 Second Avenue, 482 WCB
Detroit, Michigan 48226
Dear Mr. Sterling:
This is a followup to the October 19, 1989 meeting during which Detroit
Edison further discussed its position that the addition of natural gas firing
capacity to the Greenwood Unit I Power Plant should not be subject to a
prevention of significant deterioration (PSD) review. At the meeting, you
requested that Environmental Protection Agency (EPA) Headquarters review
Region V's previous determination that the proposed fuel conversion was a
"major modification" for PSD purposes.
As you are aware, in a letter dated December 20, 1988, EPA Region V
concluded that the proposed conversion of the oil-fired Greenwood Unit to dual
capacity for oil and gas firing would subject the plant to a PSD review for
nitrogen oxides (NOX). The Region's conclusion was based on a determination
that 1) the source was not capable of firing natural gas prior to January 6,
1975 (and therefore was not covered by the PSD exemption for modifications
under 40 CFR 52.21(b)(2)(iii)(e)(l)); and 2) there would be a significant net
increase of NOX resulting from the change. As you have requested, we have
reevaluated this finding in light of the additional information submitted by
Detroit Edison during the October 19 meeting.
The information presented by Detroit Edison indicates that the emissions
unit at the source was initially designed and permitted to fire both oil and
gas. However, there is no evidence to demonstrate that the source as a whole
had, or at any time initiated construction on, the equipment necessary to
deliver natural gas to the combustion unit. Without such equipment, it would
not be possible for the source to utilize natural gas as an alternate fuel.
Consequently, it is our view that the source was not capable of accommodating
natural gas prior to January 6, 1975. Therefore, the changes necessary to
accommodate the firing of natural gas at the Greenwood Plant would, for PSD
purposes, be considered a "physical change" to the source.
As requested, we have also evaluated the net emissions change at the
source that would result from the modification. It is Detroit Edison's
position that the large decreases in "allowable" emissions of sulfur dioxide,
particulate matter, and NOX when burning natural gas rather than oil as a
result of the modification, warrants special consideration. Specifically,
Detroit Edison feels that the use of a cleaner fuel at the Greenwood Plant
warrants a finding that there is no increase in actual emissions and
accordingly no "major modification."
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Under the PSD regulation, a "major modification" occurs when the
physical or operational change at the source (in this case the installation of
natural gas handling facilities and the firing of natural gas) would result in
a significant net emissions increase for any regulated pollutant at the
source. Whether the proposed use of natural gas at the Greenwood Plant would
result in a "significant net emissions increase" depends on a comparison
between the "actual emissions" before and after the physical or operational
change. Where, as here, the source has not yet begun operations firing
natural gas, "actual emissions" after the change to natural gas firing are
deemed to be the source's "potential to emit" for that fuel [see 40 CFR
52.21(b)(21)(iv)]. Potential annual NOX emissions when firing natural gas at
the Greenwood Plant greatly exceed its current actual emissions. Therefore,
as a result of the ability to fire natural gas after the change, the emissions
of NOX at the source would experience a "significant net emissions increase,"
within the meaning of the PSD regulations. The fact that current annual
"allowable emissions" for the Greenwood Plant when firing oil may greatly
exceed future allowable (or potential) emissions when firing natural gas is
not relevant for PSD applicability purposes. See Puerto Rican Cement Co..
v. £M No. 89-1070 (First Circuit) (slip op. October 31, 1989).
In summary, our review indicates that Region V correctly applied the PSD
applicability criteria.
The PSD requirements include an air quality and additional impact
analysis and the application of best available control technology (BACT). The
BACT requirement applies to "each proposed emissions unit at which a net
emissions increase would occur as a result of a physical change or change in
the method of operation in the unit" [see 52.21(j)(3)]. Consequently,
although the addition of gas firing would subject the source as a whole to a
PSD review, the requirement to apply BACT is applicable only to those
emissions units at the source which undergo both a physical or operational
change and a significant net emissions increase. It appears that the only
emissions unit at the Greenwood Plant affected by the proposal to fire gas
would be the existing boiler. Historically, it has been EPA's policy that
where the individual boiler being converted is capable of accommodating the
alternate fuel, BACT would not apply.
In this case, in addition to the physical changes at the source
necessary to deliver natural gas to the existing boiler, a number of canes
capable of burning natural gas would be installed in the existing burner
assemblies. Modifications to the unit's overfired air duct are also planned.
We also understand that there will be no changes in the present oil burning
system, which will be retained.
Our review indicates that, bv itself, the addition of gas canes to the
burners is not a physical change or change in the method of operation in the
unit and, consequently, would not subject the boiler to a BACT review.
Therefore, if the sole change to the boiler is the addition of the canes,
then, in this case, the only requirements necessary for a PSD permit are an
air quality anal'ysis, additional impacts analyses, and (if applicable) a
Class I impact analysis—the application of BACT is not required. However,
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4.46
the information submitted by Detroit Edison indicates that changes to the
boiler's overfired" air duct are also planned. At this time, without
additional information on the nature and scope of the work to be done on the
overfired air duct, we cannot determine whether these are physical or
operational changes to the boiler that are necessary to make the boiler
capable of accommodating natural gas. If the ducting work is necessary for
this purpose, then a BACT analysis would likely be required.
In addition, it is unclear from the information submitted whether
Detroit Edison plans to undertake further modifications to the boiler which
would allow 100 percent load when firing natural gas. Currently, the unit as
presently configured has the potential of achieving only 75 percent load when
firing natural gas. To achieve a higher load, substantial modifications to
the unit apparently would be required. These types of physical changes to the
boiler likely would require a full PSD review, including a BACT analysis for
the boiler. The BACT analysis would require that the source evaluate the use
of all available additional air pollution controls for reducing NOX emissions.
The analysis would consider retrofit costs for add-on controls and the fact
that gas is a relatively clean-burning fuel. Consequently, in this case, it
is possible that the currently planned use of a low-NOx burner design may be
BACT for gas firing. However, such a conclusion would have to be demonstrated
through the requisite BACT analysis. I have asked Region V to work with you
should you need assistance in preparing the analysis.
Sincerely,
•raid A. Emison
Director
Office of Air Quality Planning
and Standards
cc: J. Calcagni, EPA/AQMD
D. Kee, EPA/Region V
G. Foote, EPA/06C
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01/31 1390 10:38
10802118 P. 02
4.47
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
2tt SOUTH DEARBORN ST.
CHICAGO. ILLINOIS MM4
MM.T TO THE AITBmON Of
Mr. Timothy J. Method
Assistant Qcnnissicner
Office of Air Management
Indiana Department of Bivircnrontal Man
105 South Meridian Street
P.O. Box 6015
Indianapolis, Indiana 46206-6015
Dear Mr. Method:
The purpose of this letter is to comment on the permit proposed by the
Indiana Department of Environmental Management (IEDQ for Northern Indiana
Public Service Company's (NTPSOD) Bailly generating station. The permit
provides for the construction of an air pollution control device and directly
related improvements under the Clean Coal Technology (OCT) program. The
EwiroTOsntal Protection Agency (EPA) agrees with the determination by IDEM
that the State and EPA rules for prevention of significant deterioration
(PSD) and new source performance standards (NSPS) are not intended to apply
to the OCT project at Bailly. In other words, the project should not be
considered a "major modification11 under new source review (NSR) or a
'•modification11 as set forth under NSPS provided certain requirements are net.
In a separate but related issue, EPA also agrees with the determination by
IDEM that the addition of a diesel generator as a backup power supply to the
scrubber to be installed at Bailly is not a major modification if the limits
on operating the generator agreed to by NTPSOO are federally enforceable.
Introduction
For NSPS purposes, a modification is defined as any physical change in, or
change in the method of operation of, a stationary source which increases
(in terms of hourly emissions capacity) the amount of any air pollutant
regulated under the Clean Air Act (Act) which is emitted by such source, or
which results in the emission of any air pollutant not previously emitted.
For NSR purposes, a major modification is a modification which results in a
significant net emissions increase (in terms of actual annual emissions).
The EPA han become aware that these definitions can be interpreted in such a
manner as to wbjsct to NSR or NSPS, or both, certain environmentally^
desirable activities at existing stationary sources which neither Congress
nor EPA intended to ba covered by the Act's new source requirements.
Moreover, NSR or NSPS coverage would, in some instances, have the effect of
discouraging such activities. The EPA believes that such activities,
including OCT demonstration projects, are not physical changes or changes in
the method of operation, so long as they meet certain criteria discussed
herein and EPA issues an applicability exclusion. Hence, such activities are
not "modifications" for NSPS purposes, or "major modifications" for NSR
purposes.
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31/31/19'=0 10:39 10802118 P.03
-2-
Over the past several months, EPA has held numerous internal meetings to
discuss the dean Air Act regulatory issues raised by the OCT program. AS a
result of these discussions, the EEA has decided to issue an interpretative
ruling as soon as possible to provide guidance on the definition of a
physical or operational change, as it applies to new source requirements. In
a letter dated January 5, 1990, EPA advised NIPSCO of this intention.
Essentially, this ruling would clarify that if a source solely
adds or enhances systems or devices whose primary functions are the
reduction of **** pollution, and that are determined to be not less
environmentally beneficial (as determined by the Administrator) than any
emission control system or device it replaces, if any, such activities would
not constitute a physical or operational change triggering new source
requirements. Consequently, NSPS and PSD and nonattainmant new source review
would not apply to these types of activities. This interpretative ruling
would include permanent, as well as temporary projects under the CCT program.
However, it would not extend to projects that primarily are intended to
extend the life of a plant or increase capacity, m addition, any changes,
nent or temporary, which are expected to significantly increase
emissions to the atmosphere, such as changes which increase a source's hourly
operating capacity (e.g., eliminating a bottleneck), hourly emissions rate
(e.g., one pollutant decreases but another increases), or utilization rate
(e.g., an anticipated increase in hours per year of operation resulting from
the installation of controls) would still be subject to NSR and NSPS.
Based on our review of the draft permit, we believe that the Bailly project
is consistent with the provisions EPA is developing for its interpretative
ruling. On this basis, we have reached the conclusion that this project in
particular is not subject to NSPS or major NSR requirements, so long as it
continues to meet the criteria dl BO retort herein.
The balance of our coonents outlines the grounds for EPA's conclusion and
contains a discussion of the anticipated terms of EPA's upcoming
interpretative rule. The EPA is still deliberating the specific terms and
provisions of its interpretative ruling. While today's comments reflect
EPA's current expectations cf what will be contained in that document, the
actual tens of the ruling nay differ frcn those discussed herein.
Background
A. The HSR and NSPS provisions of the Clean Air Act
The NSR and NSPS provisions of the Act apply to wholly new facilities, and to
modifications at existing facilities, when certain conditions are met. The
rules governing the applicability of NSR and NSPS to modifications at
existing facilities are '*•«*•'»•<*** in detail in the EPA regulations (see 40
CER 51.165 and Appendix S, 52.21, 60.14 and 60.15). In general, the
modif ications that would trigger these new source requirements are those
involving physical or operational changes which increase emissions over
baseline levels. (In addition, for NSPS purposes under EEA regulations, a
reconstruction occurs and a source is considered "new" if the physical or
operational change costs more than 50 percent of the replacement cost of the
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01/31'1950 10=33 10802118 P.04 4.47
-3-
iffectod facility, regardless of whether an emissions increase occurs). The
t«nn "physical or operafinrwl rhwrw11 is omstnwrt brrwHly »ndl wny iivl'yl**
the installation, -UM, or dismantling of pollution control equipment.
1. Bectacpround of the NSPS and NSR Modification Provisions.
The 1970 Amendments to the Act required EPA to promulgate technology-based
new source performance standards applicable to the construction or
modification of stationary sources that cause or contribute significantly to
air pollution tftiich nay reasonably be anticipated to endanger public health
or welfare. 42 U.S.C. 7411 (b) (l) (A). Congress decreed that, in addition to
wholly new sources, NSPS would apply to the modification of an existing
source, defined broadly as: any physical change in, or change in the method
of operation of, a stationary source which increases the amount of any air
pollutant emitted by such source or which results in the emission of any air
pollutant not previously emitted. Clean Air Act section ill (a) (4), 42 u.s.c.
7411(a)(4).
The NSP8 provisions were "designed to prevent new [air] pollution problems"
by regulating both newly constructed sources of pollution and existing
sources that increase their emissions. Mationaj, Agphalt Payment Assoc. v.
Train. 539 F.2d 775, 733 (D.C. Cir. 1976) rsea also K.R. Rep. No. 1146, 91st
Gang., 2d Sees. 3, reprinted in 1970 U.S. Code Gong. & Admin. News 5356,
5358]. The effect of including modified sources as well as newly-constructed
under the provisions of section 111 was to establish a current level
of emissions above which an existing source may not pollute without becoming
subject to the NSPS. In August 1977, Congress adopted further extensive
••Ranges to the Act (Pub. L. 95-95). These included review-and-permitting
progidius for new and modified sources combining the technology-based approach
of NSPS with specific measures to insure that ambient air quality goals under
the Act are met. Congress intended NSR to apply "where industrial changes
might increase pollution in an area." Alabama Power Co. v. Oostle. 636 F.2d
323, 400 (D.C. Cir. 1979). Part D applies to areas which have not net
national ambient air quality standards (NAAQ6) under section 109. To receive
a permit in "yh areas, major new and modified sources must (among other
things) obtain emissions offsets that assure reasonable progress toward
attainment of the NAAQS and must comply with the "lowest achievable emission
rate," which can be no less stringent than an applicable NSPS (see sections
171-173). The 1977 amendments also added a new Part C to the Act including,
in sections 160 - 169, an NSR program for the prevention of significant
deterioration of air quality (the "PSD" piujiam) in areas which have attained
the KAAQS. To receive a PSD permit, a prospective major new or modified
source trust (among other things) show that it will not exceed the available
air quality "increment" (designed to prevent pollutant concentrations from
deteriorating beyond certain levels), and will use the "best available
control technology", which must be at least as stringent as any applicable
NSPS. Both the Part D NSR program applicable to nonattaiment areas and the
Part C HSR program applicable to attainment areas adapted the NSPS definition
of "modification," but not all the exclusions to that definition [see
sections 171(4) and 169(2)(C)].
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01-'31'1990 10:d0 10802118 P. 05
It is evident from the structure of the NSR and NSPS piujraiia that Congress
sought to focus air pollution ocntrol efforts at an efficient and logical
point: the Baking of substantial. capital investaancs in, or other long-term
decisions regarding', pollution-generating facilities. In adopting NSR
measures in r^*^<^ii*r congress edbght to y^vwv»^+ the legislative goal of
envircnuntal protection with a concurrent desire for continued fmnmnin
growth [aee secticne 160(1)-(4)]. Consequently, a key theme of the NSR
pruuram is the careful evaluation of, and public participation in, "any
decision to permit increased air pollution" [see section 160(5)]. As
rtlsrnMert below, the current regulations implementing NSFS and NSR were
designed to apply these yiuyidw in a manner consistent with their respective
statutory purposes. Today's acansnts represent our Interpretation of these
existing regulations under the facts presented by the Bailly project. The
EPA expects that its upcoming interpretative ruling will further focus EPA's
position on the basic legislative intent of these important programs.
2. The Two-step Test for Modifications.
The modification provisions of the NSPS and NSR programs grow from a single
statutory trunk, the very broad definition of "modification" in section
in (a) (4). Under both respective program, EPA developed a two-step test for
determining whether activities at an existing facility constitute a
modification subject to new source requirements. In the first step, which is .
largely the same for KSPS and NSR, EPA determines whether a physical or
operational change has occurred. If so, EPA proceeds in the second step to
determine whether the physical or operational change will result in an
emissions increase over baseline levels. In this second step, the applicable
rules branch apart, reflecting the fundamental distinctions between the
technology-based purposes of NSFS and the technology and air quality concerns
of NSR. Briefly, the NSPS program is concerned with hourly emissions rates,
expressed in kilograms or pounds per hour. [An hourly emissions rate is the
product of the instantaneous emissions rate, i.e., the amount of pollution
emitted by a source, after control, par unit of fuel, combusted or material
processed, (such as pounds of sulfur dioxide emitted per ton of coal burned)
times the production rate (such as tons of coal burned per hour) ]. Emissions
increases for NSFS purposes are determined by changes in the hourly
emissions rates at pnxtpun capacity. The NSR is concerned with total annual
emissions to the atmosphere, expressed in tens per year. (Annual emissions
are the product of the hourly emissions rate, which is the sole concern of
NSPS, tines the utilization rate, expressed as hours of operation per year).
Emissions increases under NSR are determined by changes in flpm"rt fmisaiona
tO the aliiww^iifet^fa.
3. Physical or operational Change.
The very broad definition of physical or operational change in section
lll(a) (4) mi\A, standing alone, encompass the most mundane activities at an
industrial facility — even the repair or replacement of a single leaky pipe
or a change in the way that pipe is utilized, ftie definition certainly is
broad enough to encompass the addition or enhancement of pollution control
equipment. However, EPA has always recognized that Congress obviously did not
intend to require every activity to be potentially subject to new source
requirenents, and that it would be administratively impracticable to do so.
Accordingly, EPA has substantially narrowed this term in its NSPS and NSR
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01^31.1990 10=41 1080211B P.06 4.47
regulatory definitions through the adoption of common-sense exclusions. For
example, both sets of regulations contain similar exclusions for routine
maintenance, repair, and replacement; for certain increases in the hours of
operation or in the production rates' and for certain types of fuel switches
[see 40 CFR 60.14(e); see also, e.g., 40 CFR 52.21 (b) (2) (iii)]. In
addition, with respect to pollution control equipment, the NSPS regulations
contain an exclusion fort
The addition or use of any system or device whose primary function
is the reduction of air pollutants, except when an emission
control system is removed or is replaced by a system which the
Administrator dertemdnes to be less environmentally beneficial [40
CFR 60.14(e)(5)].
The EPA has held that this exclusion does not apply to a source which, upon
original construction, enployed wet scrubbers, but later (upon relaxation of
a State plan under section lll(d)) desired to remove the control equipment,
which would have resulted in much higher levels of pollution than the plant
had ever emitted fltotier|a^ Scufchtfire Aluminum Co. v. EPA. 838 F.2d 835 (6th
Cir.), mrti flftnlfflr 109 S.Ct. 390(1988), herein after National Southvirel.
In the past, EPA has taken various views as to whether the exclusion in
section 60.14(e) (5) should apply for NSR purposes. As noted earlier, the NSR
statutory definitions of modification siaply adopt the NSPS definition-in
section 111 (a) (4). In addition, the legislative history reflects that, as a
general matter, Congress intended to conform the meaning of "modification"
for PSD purposes to usage under NSPS [see 123 Cong. Rec. H11957 (Nov. 1,
1977) ]. For this reason, EPA initially ruled that the NSPS exclusion for
addition of control devices applied automatically to PSD (Memorandum from
Edward E. Reich, CAQPS, and William F. Pedersen, CGC, to EPA Region VI, April
21, 1983). The EPA reversed course in a 1986 applicability determination
issued for both PSD and nonattainment NSR purposes, noting that the NSPS
exclusion was highly qualitative, and failed to give due account to either
the air quality management component or the largely quantitative orientation
of the NSR applicability regulations. (Memorandum from Gerald A. Emison,
Director, QftQPS, to Regional Air Division Directors, July 7, 1986).
Comments on NSPB Applicability
An NSPS modification is any "physical or operational change to an existing
facility which results in an increase in the emission rate to the attnosphere
of any pollutant to which a standard applies11 (40 CFR 60.2). Under NSPS,
emissions Increases, for applicability purposes, are calculated by comparing
the hourly emission rate immediately before and after the physical or
operational change. All operating parameters which may affect emissions must
be the *""•» to the ••»<«• «* feasible degree for the before and after testing,
and tests must be conducted under representative conditions. Absent the
exclusions from modifications specified at 40 CFR 60.l4(e), any increase in
emissions to the atmosphere over the previous emissions rate will subject the
modification to NSPS [see section 60.U(a) and (b)]. In addition,
modifications which would cost 50 percent or more of the cost of a comparable
new facility are classified as reconstruction (see 40 CFR 60.15) and are
subject to NSPS as a new source even if there is no emissions increase.
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01-31 1390 10:42 10802118 P.07
Thus, unless the reconstruction provisions cone into play, it is clear that
under the existing-regulations NSPS would not apply to the installation or
improvement of emission control equipment which reduces hourly emissions
rates. If the reconstruction provisions do apply, then such changes would
trigger NSPS.
Based on NIPSCO's permit application and representations made by NIPSOO's
September 14, 1989 and December 4, 1989 information submittals to EPA, NSPS
would not apply to tha Bailly Station if the new Hffmhb»r is not removed
(i.e., if it is a permanent demonstration) because hourly emission rates will
not increase as a result of the addition of these CCT controls. As a
permanent CCT demonstration project, it would satisfy the requirements of the
exemption contained in 40 CFR 60.14 (a) (5) for the addition or use of any
control system or device whose primary function is the reduction of air
pollution. (The definition of "modification" for NSFS is found at 40 CFR
60.14). in addition, the Bailly piujeui would not qualify as a
reconstruction under 40 CFR 60.15.
However, the NSPS provisions could also apply to major facilities with
temporary CCT demonstration projects at the end of the demonstration when the
control equipment is removed and emissions rise back to the level that
existed before the demonstration. Thus, while the placement of CCT controls
at Bailly will reduce the hourly sulfur dioxide (502) emissions rate, if
NTPSCO later dismantles the CCT controls, this would result in an increase in
hourly S02 emissions up to pre-demonstration levels and the source could be
considered subject to NSPS.
Today's comments reflect EPA's position that the Bailly plant would not be
subject to NSPS at the conclusion of the project, if NIPSCO decides to make
it only temporary, as the result of an increase in emissions rates back up to
the levels which existed before the changes were made to accommodate the
temporary demonstration project. The EPA expects that its forthcoming
interpretative rule will take this position with respect to all temporary CCT
and similar demonstration projects which reduce emission rates. Unlike the
situation presented in National Southwire. it is clear that the addition of
pollution control In a temporary CCT demonstration was never intended to
result in permanent emissions reductions. In addition, removal of temporary
controls will not result in a level of emissions higher than that experienced
in the past. (Baconstniction provisions, however, could subject both
temporary and permanent CCT demonstration projects, and certain other
emission control system installations or improvements, to NSPS. Still, as
indicated by the Bailly project, the reconstruction provisions of the Act
should rarely, if ever, apply to the type of activity which would be
considered for exclusion from the definition of a physical change or a change
in the method of operation. Thus, the triggering of the reconstruction
provisions is an indication that tha proposed activities are more extensive
than just the addition, or replacement, of an emission control system or
device, and so are not appropriate for exclusion.)
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10802118
-7-
acnwnts on NSR Applicability
Modified sources are subject to HSR if the mortification ia "major." Major
mortifications must consist of a physical change or change in the rwathcd of
operation of a major stationary source [40 CFR 52.2l(b) (1)] which results in
a net emissions increase of any pollutant subject to regulation under the
Act that is significant. Significance levels are expressed in tons per year
and differ for each pollutant [40 OR 52.21(b) (23) ]. Net emissions increases
are determined [40 CFR 52.2l(b) (3)] by summing all contemporaneous creditable
actual emissions increases and decreases. The definition of "actual
emissions'* is such that generally the ~~f*r*»«* i* between actual emissions
before the physical or operational change in question and the potential to
emit of the facility afterwards [40 CFR 52.21(b) (21)]. If the source has
not been operating near full capacity, even the addition of a control device
could be considered a significant net emissions increase when comparing
historic actual emissions with a new potential to emit, even though there may
be a substantial reduction from historic actual emissions.
Specifically, actual emissions before the change at a facility are generally
determined by averaging the emissions for the 2 years prior to subnittal of
the permit application (or sane other period if the last 2 years are not
representative of normal unit operation) [see, e.g., section
52.21(b) (2) (ii)]. Since the emissions rate after a physical or operational
change cannot be predicted in advance, EPA regulations assume that a source's
actual emissions will equal its ™»v<»«™ "potential to emit", which is based
on constant full load operation for an entire year (unless restricted by
federally enforceable limitations) [see, e.g.,'sections 52.2l(b) (21) (iv);
52.21(b) (4)]. Thus, a physical or operational change will trigger NSR if the
annual potential to emit of the source is significantly greater after the
change than its representative actual annual emissions before the change,
unless the company agrees to federally enforceable operational restrictions
which limit its potential to emit to levels not significantly greater than
its actual emissions before the change. This actual-to-potential methodology
applies to physical or operational changes at new or "modified" (i.e.,
altered or changed) emissions units [see 45 TR 52676, 52677, 52718 (1980)].
As explained below, EPA believes that this methodology generally serves the
purposes of NSR because it subjects to review projects that might lead to an
increase in actual pollution. However, the NSR provisions in the existing
regulations could be interpreted to apply to major facilities simply
installing or improving control equipment, including QCT demonstration
projects, under circumstances where a permanent increase in pollution is
highly unlikely.
Under EPA»s prospective interpretative ruling, existing sources which would
otherwise become subject to NSR only because they decide to install or
improve emission controls, or participate in the CCT program or similar
demonstration projects approved by EPA, would instead be excluded from NSR
coverage, so long as certain criteria intended to ensure that permanent
increases in actual emissions do not occur are met.
With respect to the Bailly project in particular, it appears that the plant
has been operated at a rather high level of approximately 60 percent of
capacity, reflecting baireload utilization of the plant. There is no
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01/31/1590 10:44 10802118 P.09
-8-
indication that NH600 intends to increase this level of usage at any
following install at Ion of the OCT controls. In addition, it appears that the
Bailly project win asst the criteria ERA expects to sec forth in it*
interpretative ruling for both temporary and peraanent projects.
The EPA now believes it is appropriate to devise and apply such criteria
both for the Bailly yixjject and for the upcoming interpretative ruling. The
ERA has iHumM uteri the position taken in its 1986 memorandum, A*•**•****
earlier, regarding use of the NSPS exclusion in 40 OR 60.l4(e) (5). While
EPA continues to believe that this exclusion does not apply automatically for
NSR purposes, the criteria rtlsniimeri herein provide due consideration of air
quality management concerns and the need for quantitative analyses.
Conditions for Permanent Controls or Devices to be Considered Not
Lsss Environmentally Beneficial
As noted above, EPA is preparing an interpretative ruling which will clarify
that if a source solely adds or enhances systems or devices whose primary
functions are the reduction of air pollution, and which are determined to be
not less environmentally beneficial, such activities would not constitute a
physical or operational change triggering new source requirements. At this
time, EPA anticipates that its ruling will provide that such pollution
controls will be considered not less environmentally beneficial, with
respect to permanent controls, if they meet at least the following criteria:
(1) Tfr* source will ocnf ir"** to meet ail rmiBBit requirements and
standards applicable to existing sources under the Act. This
includes meeting applicable NAAQS, PSD increments, permit conditions,
and State inqplenantaticn plan (SZP) limitations.
(2) There is no environmental harm resulting from the proposed
activities. This includes conditions that the proposed activities
would not cause the source to;
(a) increase the maximum hourly actual emissions rate of any
pollutant regulated under the Act;
(b) increase the annual emissions of any pollutant regulated
under the Act as a result of an increase in capacity
utilization rate/
(c) adversely upset an air quality related value (e.g.,
visibility) in any Class I area; or
(d) allow an increase in emissions of toxic pollutants not
regulated by the Act which would cause an adverse health
or welfare upset.
Based on the information provided by NHSCD, it appears at this time that the
Bailly project, if it is made permanent, will meet the above criteria.
Accordingly, as to the Bailly project in particular, EPA believes that ma^or
NSR requirements clearly will not apply if the project is made permanent, so
long as these criteria are in fact met.
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01/31/1990 10=44
108021IS P.10
4.47
Tesporary OCX Cungeo
In its upcoming interpretative ruling, EPA expects to fallow criteria for
"temporary41 OCT projects which are aonwhat different frcm those for
permanent piujecLs. The EPA likely will consider a ucoject to be temporary
if it lasts less than 5 years from tha date the project cconences
construction. However, the ruling probably will provide that the
Administeator would consider an additional period of time, up to 5 additional
years, in certain cases. At the end of a temporary project, the facility
would be returned to pre-demonstration conditions and hourly emission rates
(or loMsr). It is not clear if the proposed Bailly station permit is for a
t*™«n«it c* temporary OCT project. It is our understanding that NIPSCO
considers the first 3 years of the Gd demonstration project to be
"temporary* and will view the changes as ••permanent" for the following 17
years if they are continued after the 3 year period.
expects that its interpretative ruling will provide that for
temporary demonstration projects, the conditions relating to actual emissions
increases and hours of operation criteria under 2a, b and d above would not
apply to minor, temporary variations ten nominal operating conditions.
Tnporary increases may occur due to testing procedures or seme failure in
unique but unproven equipment, but should not willfully contribute to adverse
health or welfare impacts. The EPA believes that the benefits inherent in
OCT and other similar technology demonstration projects counterbalance the
limited, temporary impacts that may occur during these temporary projects.
Under the ruling, temporary demonstration project applications likely would
have to meet all of the other criteria applicable to the permanent projects
discussed above. This interpretation would provide the flexibility to
encourage temporary demonstration projects which are considered to be
environmentally beneficial overall, despite unpredictable, temporary
increases in emissions of seme pollutants or in the hours of operation that
may occur during the course of a demonstration.
The EPA expects the ruling to state that temporary changes would become
permanent at any time during or at the end of a demonstration period if the
owner/operator seeks a revised applicability determination addressing all
criteria applicable to permanent air pollution control system improvements.
In submitting these comments, EPA is applying the above criteria in its
review of the Bailly project. If NH5QO ultimately decides that the Bailly
OCF project if to became a permanent OCT demonstration, the project should
meet all the criteria dlsnmimd earlier for permanent projects at the time
the project is to be converted to pennanent status (i.e., after 3 years).
Procedures for Environmentally Beneficial Seclusions frcm Applicability
The EPA expects that under its forthcoming interpretative rule, an owner or
operator proposing to make an environmentally beneficial change in an air
pollution control system will be called upon to request an applicability
determination frcm the appropriate NSR/NSPS permit authority. The request
should include a general description of the facility and the proposed
activity, information on the current and projected use of the facility, and
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01/31/1990 10=45 10802118 P.11
-In-
sufficient information to justify a nonapplicability determination. For any
air pollution control system improvement, the request should include a
latictol* for why th& uuiaaicin caitrol syfltan or device Jjoulu Le uuibidex«xi
equal to or more efficient than exiiiting control technology at the sours?.
Ins EPA also anticipates that its inbirpretative ruling will stats that in
providing information to the reviewing authority, an owner or operator
should submit sufficient modeling to demonstrate that any now or increased
emissions of unregulated toxic pollutants Lesnitljij from the change in
control equipment will not cause or contribute to adverse health or welfare
impacts. I** owner or operator should also denonstrate that the source will
not operate at greater hourly emissions rates, or for note hours, than it has
been during the aost recent 2 years (or sons other period, if the last 2
years are not representative of ™*~i»i operation). In assessing whether
arrnnl emission increases of any pollutant are lUcaly to occur, the reviewing
agency should consider the economic incentives to increase production rates
or hours of operation associated with the change. Any change which could
reasonably result in increased emissions due to possible increased
utilization of the facility as a result of the changes should not be
considered environmentally beneficial. The authority reviewing the proposed
change should explicitly determine, based on consideration of these and other
relevant criteria, that the net effect will not be one of environmental
harm.
Operating Limits on New Diesel Generator
Ihe EPA considers the addition of a backup diesel generator at Bailly not to
be an integral part of the OCT demonstration, in that the generator could
serve multiple functions once installed. In general, EPA views changes to be
subject to HSR and NSFS if such changes are not strictly related to the
addition of the improved air pollution control system and the changes have
any possible additional application. However, EPA agrees with IDEM that the
addition of a new diesel generator does not constitute a "major modification"
if the State's limits on the generator's hours of operation, preventing
concomitant increases in emissions from exceeding significance levels, are
federally enforceable.
In closing, EPA ngrmn with the State that NSPS and NSR do not apply if the
conditions outlined in this letter are net. If you have any further
questions, please contact Mr. Ron Van Marsbergen at, (312) 886-6056 or
Mr. Don Abella at, (312) 886-6543.
sincerely yours,
David A**r Director
Air and Radiation Division
-------
ai/31'1990 10:46 10802119 P.12 4.47
-11-
Btandaxtt boa's: official fila oopy v/attadanant
originator copy v/o attachment (s)
originating organization raading file v/o attachment (s)
other bce'a: 0. Bni*cn, QAQPS (MD-10)
D. KM
R. Van Mteatttpn, RD V (5MQ6)
D. ttMlla, HO V
J. Don, IDBM
D. ZOU, HIM
J. Calcagni, PQB (MD-15)
J. Fame, BSD, (M>13)
J. SaitS, SSCD (EN-341)
J. Runic, SSCD (EM - 341)
B» TlUBHIKHf NWB
G. Foota, OK (IZ - 132A)
M. Miller, SSCD
S. OBOMe, SSCD (Bf-341)
E. Kctol*, NPPB
B. Mtttln, AETOL (MD-60)
L. Wagman, CAR (ANR-443)
K. Shapiro, OBCM (LE-134A)
J. DaModoar, OFKR (ANR-443)
B. Pogely, CHB (Rf-220)
J. Sdiakenbach, CAZAP (ANR-445)
E. Glen, RD 3 (3MQ1)
M. Arnantrout, HO 4
K. Nioewander, RD 6 (ffT-EA)
J. Dale, RD 8 (8AT-AP)
D. Bray, RD 10 OVS-532)
R. Cttqpbell, CAQFS (MD-10)
D. Devoe, QfiCPS-DC (ANR-443)
X. Batxy, N*D (MD-15)
B. Ajax, SDB (MD-13)
E. Llllia, HPre (MD-15)
G. MCCUtchen, NPPB (MD-15)
E. Giraburg, S02/PMB (MD-15)
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4'48
I MTHI ?TM» KN\ IKHNMI-.N \' \\. I'UOTM.TluN \U.\U
» \HI LM i fu\, 1 1.< ..
8 1990
Of FICE ill
Mr. John Boston
President
Wisconsin Electric Power Company
Post Office Box 2046
Milwaukee, Wisconsin 52301
Dear Mr. Boston:
On January 19, 1990, the United States Court of Appeals for
the Seventh Circuit in Wisconsin Electric Power Co. v. Reillv.
Kos. 88-3264 and 89-1339, issued its decision regarding a
challenge by Wisconsin Electric Power Company (WEPCO) to two
final determinations issued by the Environmental Protection
Agency (EPA). Zn these determinations, EPA concluded that
WEPCO 's proposed renovations to its Port Washington power plant
would be subject to new source performance standards (NSPS) and
prevention of significant deterioration (PSD) requirements.
In its decision, the court upheld all* but one of the
positions advanced by EPA in the NSPS and PSD applicability
determinations. However, the court rejected EPA's position on
the issue of whether the "actual-to-potential" method — referred
to by the court as the "potential to emit concept"— should be
used to calculate emissions increases for PSD purposes in this
case. Consequently, the Seventh Circuit vacated and remanded the
PSD determination to EPA for further action consistent with the
court's decision.
As you know, EPA -decided to acquiesce in the court's holding
rather than seek rehearing. This letter constitutes EPA's
revised PSD applicability determination in response to the
court's remand order.
The Agency believes that the court's principal instruction —
that EPA consider past operating conditions at the plant when
addressing modifications that involve "like-kind replacements"—
can be reasonably accommodated within the present regulatory
framework without further litigation in this case. The net
result of the court's ruling is the recognition of a subcategory
of "like-kind replacements" under the "major modification"
definition of EPA's new source review provisions.
As explained below, EPA will employ an "actual-to-actual"
method to calculate emissions increases for WEPCO 's proposed ;
renovations to its Port Washington power plant. The outcome in
this case is that WEPCO will not be subject to PSD review for
-------
sulfur dioxide (SO,)/ particulate natter (PM), carbon monoxide,
or hydrocarbons. However, there will be a significant net
increase in actual emissions of nitrogen oxides (NOX), and WEPCO
must obtain a PSD permit for that pollutant.
I. BACKGROUND
A. Factual Background.
The WEPCO owns and operates five coal-fired, steam-
generating units at its Port Washington facility near Milwaukee.
All units had an original design capacity of 80 megawatts when
they were placed in service between 1935 and 1950. However, due
to age-related deterioration and loss of efficiency, both the
physical capability and actual utilization of the plant have
declined over time. Unit 5 was shut down completely due to a
cracked rear steam drum. Consequently, by 1987, WEPCO was faced
with removing the units from service as they reached their
planned retirement dates beginning in the early 1990's, unless it
undertook a costly "life extension11 program to restore the
physical and economic viability of the units and extend their
useful life for approximately 20 years. The WEPCO proposed such
a life extension to include replacement of the steam drums, air
heaters, and other major capital improvements totaling over $80
million. It should be noted that this program is not a pollution
control project (i.e., it is not intended to add on or improve
pollution control systems even though modest improvements to the
particulate matter control devices are a part of the program).
In a series of applicability determinations in 1988 and
1989, EPA ruled that the renovations planned under WZPCO's life
extension program would constitute a "modification11 for purposes
of the NSPS provisions of the Clean Air Act (Act), and a "major
modification" under the PSD provisions of the Act. Thus, WEPCO
would have had to install some level of control equipment or
physical capacity restriction to avoid NSPS coverage for three of
the five units proposed to be renovated. As to PSD, the company
would have had to accept operational restrictions or lower
emissions rates to "net out" of review. Regarding SO,, for
example, WEPCO could have almost doubled its projected level of
future operations without triggering PSD review. However, WEPCO
did not want to be constrained by new source requirements, and so
sought review in the Seventh Circuit Court of Appeals.
B. The Court's Decision.
1. Physical Change.
The court unequivocally agreed with EPA that the replacement
of steam drums, air heaters, and other major components was a
nonroutine "physical change," and thus met the first of two tests
for a modification under NSPS and PSD. The Agency found that the
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4.48-
renovations proposed by WEPCO ware exactly the type of industrial
changes that were meant -.o be addressed by the NSPS and PSD
programs. Za upholding EPA's finding that a physical change
would occur, the court strongly endorsed EPA's reading of the
basic congressional intent in adopting the modification
provisions of the NSPS and PSD programs, because to rule
otherwise "would open vistas of indefinite immunity from the
provisions of NSPS and PSD" (slip op. at 11). The court also
relied on the reasonableness of EPA's consideration of the
magnitude, purpose, frequency, and cost of the work in upholding
EPA's finding that the renovations are not "routine" (slip op. at
14-18). In addition, the court rejected WEPCO's argument that
the renovations could not be deemed a modification for NSPS
purposes because they did not constitute a "reconstruction" under
40 CFR 60.15 (Slip op. at 18-20).
2. NSPS Emissions Increase.
The court upheld EPA's decision that there would be an
increase in hourly emissions at three of the units, and thus for
those three units, WEPCO met the second test for NSPS
applicability. The Agency had argued that the regulations
require NSPS emissions increases to be determined by comparing
the current (pre-change) hourly emissions capacity of each
affected facility with the post-renovation hourly emissions
capacity of each unit. The Seventh Circuit agreed, and rejected
WEPCO's argument that original design capacity or past
"representative" capacity no longer achievable at the plant
should be used for the baseline emissions rate (slip op. at
20-25).
3. PSD Emissions Increase.
The regulatory preamble to the PSD regulations provides that
the set of emissions units that have "not begun normal
operations" includes both "new or modified" units (45 FR 52676,
52677, 52718) (1980). Consequently, EPA used the "actual-to-
potential" calculus in evaluating WEPCO'S life extension project.
The court rejected this methodology in the case of WEPCO's "like-
kind replacement," asserting that EPA's reasoning was circular
(slip op. at 28). [In addition, the court held (slip op. at 27
n. 11) that the exemption in 40 CFR 52.21(b) (2) (iii) (f) for
emissions increases due to expanded operations did not apply,
because WEPCO's increased operations were directly tied to the
life extension project.] Instead, the court ruled that EPA
should recalculate post-change emissions considering past
operating conditions where it is possible to make a more
realistic assessment of future emissions (slip op. at 29-31).
Alternatively, the court stated that EPA could conduct new
rulemaking to explicitly apply the "actual-to-potential" calculus
to "like-kind replacements" (slip op. at 30).
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II. THE WEPCO DECISION IN THE CONTEXT OF THE PSD PROVISIONS
The Seventh Circuit held that EPA could not wholly disregard
past operating history and automatically apply the actual-to-
potential methodology for determining PSD applicability to
WEPCO'a "like-kind replacements." In describing the WZPCO
changes as "like-kind replacements" and limiting its decision to
such changes, the court did not dispute the correctness of EPA's
application of the actual-to-potential test to the full spectrum
of new and modified sources not covered by this subcategory of
change. The recent decision in Puerto Riean Cement Co. v. EPA.
889 F.2d 292 (1st Cir. 1989), explicitly upheld EPA's position
that the actual-to-potential concept should be applied to
"modified" emissions units. The First Circuit case involved the
modernization and reconfiguration of existing emissions units
[see 889 F.2d at 293 (company planned to "convert kiln No. 6 from
a 'wet' to a 'dry1 cement-making process, and to combine that
with Kiln No. 3")]. A key issue was whether EPA properly.held
that the "modified" units had "not begun normal operation" and
therefore the actual-to-potential concept applied in calculating
emissions increases. The First Circuit affirmed EPA's position
that the actual-to-potential concept should be applied to the
company's "modified" units. Puerto Riean Cement. 889 F.2d at
297. consequently, the court found that both the language and
expressed purpose of the regulations indicate that EPA applied
the regulations properly in using the actual-to-potential test
for a proposed modification. The Seventh Circuit in WEPCO did
not dispute the correctness of EPA's application of the actual-
to-potential test to the full spectrum of changes not covered by
the subcategory of changes (like-kind replacements) created by
the court.1 Therefore, in the case of nonroutine physical or
1 EPA will leave to future case by case applicability
determinations what is a "like-kind replacement." But
for guidance of the parties, EPA presently considers that only
for projects that are genuine "like-kind replacements" can future
emissions projections be calculated using "estimated future
actual emissions" in lieu of potential to emit. EPA does not
consider "like-kind replacements" to mean the entire replacement
(or reconstruction) of an existing emissions unit with an
identical new one or one similar in design or function. Rather,
EPA considers "like-kind replacements" to encompass the
replacement of components at an emissions unit with the same (or
functionally similar) components. Under this interpretation of
the term, new components that perform essentially the same
function as old ones will be viewed as "like-kind replacements."
In addition, even if the design or purpose of a new component is
identical to that of an old one, if the new component is part of
a project that will fundamentally change the production process
at an existing stationary source, this would be beyond the scope
of a "like-kind replacement." Under either of those
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4.4B
operational changes at an existing major source which are not
specifically "like-kind replacements" in nature, EPA will
continue to apply the actual-to-potential test for PSD
applicability purposes.
III. THE AGENCY'S RESPONSE TO THE COURT'S REMAND ORDER
A. The PSD Baseline Emissions.
Determining the "baseline" level of actual emissions before a
physical or operational change is a necessary first step to
determine if emissions increase as a result of the physical
change. The Agency's regulations define the baseline for PSD
purposes, as follows:
In general, actual emissions as of a particular date shall
equal the average rate, in tons-per-year (tpy), at which the
unit actually emitted the pollutant during a 2-year period
which precedes the particular date and which is
representative of normal source operation. The
Administrator shall allow the use of a different time period
upon a determination that it is more representative of
normal source operation. Actual emissions shall be
calculated using the unit's actual operating hours,
production rates, and types of materials processed, stored,
or combusted during the selected time period [see 40 CFR
52.21(b)(21)(ii)].
The purpose of the definition is to establish a baseline
that is "representative" of "normal" source operations prior to
the change. The Agency historically has followed a presumption
circumstances, it would be unreasonable to rely on pre-
modification usage patterns to estimate future levels of capacity
utilization. Instead, in such cases, EPA believes that it is
reasonable to assume that in the absence of federally-enforceable
limits on hours of operation or production rates, the new
components may result in a substantial increase over historical
levels of utilization of the emissions unit following
modification [see Puerto Riean cement, supra. 889 F.2d at 297 ("a
firm's decision to introduce new, more efficient machinery may
lead the firm to decide to increase the level of production")]
and will compare pre-modification actual emissions to post-
modification potential emissions. In addition to this
circumstance, there are cases in which sources that undergo
changes that qualify as add-on control systems would, under
certain circumstances, be exempt from new source review. g
Letter to Timothy J. Method, Assistant Commissioner, Indiana
Department of Environmental Management, from David Xee, EPA
Region V, January 30, 1990.
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that the most recent 2 years should be used, but has allowed
another period vhere the source demonstrates that recent
operations are abnormal [see 40 CFR 52.21(b)(21)(ii); see also
45 FR 52676, 52718 (1980)]. The WEPCO baseline period is an
example of this. In this instance, plant utilization was
disrupted by physical problems that led to nonroutine physical
changes to remedy those problems. Consequently, EPA determined
that a period prior to the onset of such problems was
representative of normal operations, and as required by its
regulations, used this period to establish the baseline. The
period used was also within the contemporaneous period specified
in 40 CFR 52.21(b)(3)(ii). It should be emphasized that, in the
WEPCO case, the parties and the court agreed that 1983-84 (prior
to discovery of steam drum craclcs) should be the baseline years
(slip op. at 26); these years had an average 29 percent
utilization rate. We continue to believe this is the appropriate
baseline period for the Port Washington renovation.
B. calculating Post-Change Emissions Under PSD.
The court concluded that "EPA's reliance on an assumed
continuous operation as a basis for finding an emissions increase
is not properly supported" (slip op. at 30). Although the court
held that EPA cannot, in this case, wholly disregard past
operating conditions at the plant, it also held that EPA could
not reasonably rely on the company's own unenforceable projection
of operating conditions (slip op at 29). The court remanded the
question of PSD applicability to EPA for further proceedings not
inconsistent with its decision.
Before the court remanded EPA's determination, it attempted
to ascertain whether, in fact, the proposed project would be a
major modification even using the assumptions least likely to
result in an emissions increase. The court felt (and we agree)
that such a "best" cas.e. scenario for WEPCO would assume that the
"present hours and conditions" would not change at all following
the renovations (despite, of course, WEPCO's own estimates of at
least tripling of utilization over current levels) (slip op. at
31, n. 14). The court, however, lacked the data to make this
calculation, so it could not determine whether a major
modification would result using a set of assumptions most
favorable to WEPCO. Therefore, the court remanded the
determination to EPA for further consideration.
A conceivable interpretation of the court's opinion is that
EPA must calculate WEPCO's post-modification emissions increases
based on "present hours and conditions." However, for the
reasons discussed below, EPA believes that this interpretation is
incorrect. Under such an interpretation, EPA would determine
WEPCO's post-renovation annual emissions in tons per year (tpy).
by simply projecting into the future the hours of operation and'
conditions (i.e., hourly emissions rate) that existed just before
-------
4.48
the renovationi. This is the interpretation urged by WEPCO in a
February 9, 1990 latter to EPA. Such a calculus will always
result in exactly the sane level of emissions before and after
the physical change, and thus would always exempt "like-kind
replacements" from PSD review. In addition, calculating
emissions increases using this assumption would flatly contradict
the record in this case. The WEPCO has stated that it will
greatly increase capacity utilization over both current levels
and the baseline levels used in the previous determinations.
Capacity utilization in terms of heat input to the plant (based
on nameplata capacity) during 1978-1979 was about 40 percent
(Record item 7.4, WEPCO Submission, April 19, 1988 meeting with
EPA). During the 1983-1984 baseline period, it was approximately
27 percent. Id. it has since declined to less than 10 percent
(1988-1989 data). Id. The WEPCO has advised the State of
Wisconsin that it intends to return to a forecasted 42 percent
utilization level in the years following renovation, with an
upper maximum forecast of 50 percent [Letter from Walter Woelfle,
WEPCO, to Dale Zeige, Wisconsin Department of Natural Resources,
March 29, 1990, Table 7 (enclosed)]. It would be wrong to assume
that unit 5 would not be operated at all in the future when an
explicit purpose of the renovation is to bring the unit back on
line at its original design capacity; moreover, unit 5 is
presently inoperative. Most importantly, this methodology is not
fairly discernible from any reading of the current regulations.
In addition, using "present hours and conditions" would disregard
planned changes at WEPCO that will affect the post-renovation
hourly emissions rate [e.g., increased capacity, lowering of
sulfur content, and enhancement of the electrostatic
precipitators (ESP)].
The court upheld EPA's position that increased utilization
in the future that is linked to construction or modification
activity should not be excluded in determining post-renovation
emissions. Nevertheless, the court told EPA not to automatically
assume 100 percent utilization in the future when historical data
are available. The WEPCO has definite plans to return the plant
to historical levels of utilization that are well above baseline
levels of utilization, and which could not be physically or
economically attained but for the renovation project.
Accordingly, EPA believes it is consistent with the court
decision for EPA to base its remand decision on these facts and
not rely on the present hours and conditions as conclusive of
post-renovation emissions. After a thorough review of the
possibilities, EPA has concluded that the court intended that
estimates of future emissions for WEPCO's "like-kind
replacements" should consider historic pre-renovation operating
hours and production rates, as well as other relevant factors, in
estimating future utilization levels, and should also consider
the increased capacity, switching to lower-sulfur fuel, and other
changes affecting the hourly emissions rate for PSD purposes.
Consequently, for WEPCO's "like-kind replacements," EPA will
-------
compare representative actual emissions for the baseline period
to estimated future actual eaiaaiona based on all the available
facts in the record. Specifically, in calculating post-
renovation actual emissions, this approach takes into account 1)
physical changes and operational restrictions that vould affect
the hourly emissions rate following the renovation, 2) WEPCO'S
pre-renovation capacity utilization, and 3) factors affecting
WEPCO's likely post-renovation capacity utilization.
To quantify HEPCO's estimated future actual emissions after
the proposed changes EPA relied heavily on projected and
historical operational data (e.g., fuel consumption, KHBTU
consumed) representative of the source, specifically, the Agency
considered available information regarding (1) projected post-
change capacity utilization filed with public utility
commissions; (2) Federal and State regulatory filings; (3) the
source's own representations; and (4) the source's historical
operating data. As described below, EPA determined an
appropriate utilization factor for future operations and combined
this with post-change emissions factors (to the extent they are
or will be made federally enforceable) to estimate a future level
of annual emissions for the purpose of determining whether the
proposed physical and operational changes would be considered a
major modification for PSD purposes. Where a significant
emissions increase is projected to occur, WEPCO could voluntarily
agree to federally-enforceable limits on any aspect of its future
operation (including physical capacity and hours of operation) to
ensure that no significant emissions increase will occur.
IV. THE AGENCY'S REVISED PSD APPLICABILITY DETERMINATION
A. Estimated Future Actual Emissions.
The Agency has revised its October 14, 1989 PSD
applicability determination for WEPCO1a proposed Port Washington
renovation based on a "representative actual" to "estimated
future actual emissions" comparison (as outlined above). As
previously discussed, estimated future actual emissions
projections take into account the likelihood that the plant will
operate in the future as it has in the past.
The stated purpose of WEPCO's renovations is to refurbish
the power plant units to an "as-new" condition in terms of their
capacity, efficiency, and availability. Consequently, EPA has
used actual, historical, operational data representative of tha
plantfs past operations, approximating an "as-new" configuration,
to calculate "estimated future actual emissions." The Agency has
verified these data by comparison to WEPCO's own projections of
post-renovation capacity utilization and industry averages.
As to the emissions factors used to calculate future
emissions, EPA has used WEPCO's own emissions factors for future
-------
4.48
hourly emissions rates. These emissions factors are based on
WEPCO's own assumptions regarding future sulfur in fuel and
control technology performance levels. However, since these
assuaptions go "beyond current State implementation plan (SIP)
requirements, they must be made federally enforceable for EPA to
continue to consider them for PSD applicability purposes.
Operational data (i.e., heat input) from the years 1978-1979
show a capacity utilization factor of 42 percent. These data
points represent the closest projection of WEPCO's operational
characteristics, approximating an "as-new" state, as currently
available to EPA. The data currently available to us regarding
WEPCO's past operational levels are limited to a 10-year period.
The Agency believes that these historical levels of operation are
representative of the plant's past operations in an "as-new"
condition. In addition, the 1978-79 data points appear
consistent with WEPCO's own projection of future operations for
the year 2010 (as submitted to the Wisconsin Department of
Natural Resources on March 29, 1990) and common capacity levels
for the utility industry, in general, for new units. However, by
this letter, EPA is requesting that WEFCO submit operational data
from previous years (i.e., pre-1978), if such data show heat
input levels notably higher than the 1978-1979 levels.
As previously mentioned, to calculate- future emissions
levels for each pollutant, EPA assumed that the amount of future
coal consumed in terms of heat input to the plant would be
comparable to WEPCO's annual average 1978-1979 coal-consumption
figure. On March 29, 1990, WEFCO submitted to the Wisconsin
Department of Natural Resources information which contained
estimates of future emissions for different levels of coal and
heat input to the plant. The Agency used these estimates to
establish future emissions based on 1978-1979 heat-input values.
Again, it is important to note that EPA's calculation of
"estimated future actual emissions" is based on WEPCO's
projection of control technology performance levels and/or fuel
sulfur content for post-renovation operations. Consequently,
EPA's PSD applicability determination is valid only to the extent
that the emissions factors (based on control technology
performance levels and sulfur in fuel) used to calculate future
emissions are made federally enforceable. Otherwise, the
calculation of estimated future actual emissions for each
pollutant vill need to be revised by EPA based on existing
federally-enforceable limits (i.e., applicable SIP, NSPS). The
use of current, federally-enforceable emissions in the current
SZP would result in higher projected future emissions than
assumed in EPA's calculations and, consequently, could affect the
indicated PSD applicability finding.
-------
10
B. Revised Finding
In SUB, EPA has considered past operations at WEPCO's Port
Washington plant in estimating future actual emissions.
Specifically, EPA has relied on the 42 percent utilization level
(in terms of heat input) during 1978-1979. The Agency believes
this is a reliable indicator of future utilization because it is
consistent both with WEPCO's own projections of post-renovation
operations and typical industry usage. The Agency has also
considered post-renovation emissions rates on the assumption that
they will be made federally enforceable. Compared to the 1983-
1984 baseline period, those hourly rates are lower for S02 and
PM, and unchanged for NOX. The 42 percent estimated post-
renovation capacity utilization is substantially higher than the
29 percent utilization level during the baseline period.
However, in calculating total annual actual emissions, that
increased usage is offset for S02 and PM by the decreased hourly
emissions rates resulting from improvements to control systems
and the use of low sulfur coal. Consequently, WEPCO is not
subject to PSD review for those pollutants.
In the case of NOX, there will be a direct correlation
between increased utilization resulting from the renovations and
increased actual emissions. Hence, WEPCO is subject to review
for that pollutant and must obtain a PSD permit. The company
should contact the Wisconsin Department of Natural Resources
regarding the processing of a permit application for KOX. Due to
insufficient source-specific information regarding emissions
factors, PSD applicability for PM-10, lead, and noncriteria
pollutants listed at 40 CFR 52.21 (b)(23)(i) and (ii) cannot be
determined at this time. The PSD applicability for these
pollutants should also be based on the "actual-to-actual"
emissions test described herein.
This PSD applicability determination applies to WEPCO's
currently planned renovations to units 1-5 (see Enclosure A), or,
if WEFCO no longer wishes to proceed with renovating unit 5, only
the renovation of units 1-4 (see Enclosure B). However, a
decision to cancel the currently planned renovations to unit 5
could result in a PSD review for that unit should WEPCO
reconsider renovating it some time in the future.
It is our understanding that WEPCO proposes to avoid
triggering NSPS for SO, and PM at units 1 and 4 by using dry
sorbent injection and Improving the existing ESP's to offset the
potential emissions increases of these pollutants. To the extent
that the controls are federally enforceable, and no increase in
hourly emissions would occur at maximum capacity, WEPCO can use
these options to avoid triggering NSPS for PM and SO, at units 1
and 4. However, the two units are still subject to the NSPS ;
requirements for NOX. Unit 5 cannot, however, avoid triggering
-------
4.48
11
NSPS for any pollutant and, tharafora, ia BUDjact to the NSPS
raquiraaantc for KOxf SO2, and PH.
Sincaraly,
Aaaiatant Adniniftrator
for Air and Radiktion
3 Enclosuraa
-------
Table 7
03/29/90
PORT UASHINGTON POWER PLANT
HAY 1989 FORECAST
Units 1 - 5
PORT UASHINGTON POUER PLANT
UPPER MAXIMUM FORECAST
Unit* 1 - 5
YEAR
1995
1996
1997
199B
1999
2000
2001
200Z
2003
2004
2005
2006
2007
2008
2009
MEGAUATT
HOURS
GENERATED
825*288
941,779
1*081,002
1*114,313
1,247,29*
1*349 • 329
1*391,882
1.481,464
1.420,120
1.432,122
1*431,412
1,460,471
1,488*124
1.481*423
1.463,981
FU
CAPACITY CO
FACTOR
0.24
0.27
0.31
0.32
0.36
0.38
0.40
0.42
0.41
0.41
0.41
0.42
0.42
0.42
0.42
EL CONSUMPTION
AL < 13200 Btu/lb)
BURNED TONS
365,548
415.332
475,624
490, B68
546*546
589,569
608,621
646,417
620,153
625,174
624,904
637,519
649,133
646,909
638,750
YEAR
MEGAUATT FUEL CONSUMPTION
HOURS CAPACITY COAL (13200 Btu/lb)
GENERATED FACTOR BURNED TONS
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
,074,957
,202,460
,341*074
,390,470
,501*584
,600,500
.6S1.930
•748*046
,690,000
,690*000
,690,000
,710*000
.720,000
,720*000
.695*000
0.31
0.34
0.38
0.40
0.43
0.46
0.47
0.50
0.48
0.48
0.48
0.49
0.49
0.49
0.4B
473*981
528*838
587*412
609.237
654,718
696,483
718,252
760,000
735,000
734,000
734,000
741,000
748,000
747,000
737.000
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Enclosure A
Revised PSO Applicability Determination
Port Washington Power Plant Renovation of Units 1-5
(all emissions calculations are In tons per year)
4.48
Pollutant
Part1culate
matter (4) (5)
Estimated
Actual Future
Emissions Actual
Baseline Ml Emissions
Net
PSO
Subject
Emissions Significance to PSO
Change Level Review
Sulfur dioxide (4)
Nitrogen oxides (5)
Carbon monoxide
Hydrocarbon
328
24,235
2,592
144
17
323
15,919
3,405
217
25
-5
•8,317
813
73
9
25
40
40
100
40
no
no
yes
no
no
Other Regulated Pollutants: Due to insufficient source-specific information
regarding emission factors, PSO applicability for PM-10, lead and noncriterla
pollutants listed at 40.CFR Section 52.21 (b)(23)(1) and (11) cannot be determined
at this time.
1) Average actual Mtaalona far 2-yaar period defined by calendar yaara 1911 and 1964.
2) Calculated by EPA baaad ox tha following tafcreation aubatttad by IfaKfe
a. Jnx average historic firing rate (appraxlMtaly 17*19 HHa par year) far the 2-yaar period defined
by calendar yaara 1979 and 1979.
b. Tha Missions estiMtas for the renovated unite based M future coal character tat tea (e.g.. sulfur
and haat content) and actual Missions after pollution controls far partIculate.
ta comply with ISPS
tIvaly. to awlude
illlty aitenaia historic
c. Sulfur dioxide eantrala applied to unit S at 75 percent wlfur dioxide r
Subpert Oa. Sulfur dioxide rcxovat of 22 and U percent at unite 1 and 4.
thaaa laitta fro» ISPS requirementa for greater control of aulfwr dioxide.
3) If MB data Indicate that annual. Matortc-flrtng rataa at tha Part Washington fa
197« and 1979 lavela. tha indicated applicability datarvtaatian could change.
4) Tha calculation of eattaitad. future, actual eBtaatona for thta pallutant la baaad an MEPCO'a projection of
control technology parforawna lavtls and/or fuel sulfur content for poet-renovation operation. Canaequently.
VK't no applicability determination it valid only ta tha extant that the specific part leu late and sulfur
dioxide emissions factor* weed far units 1-5 to calculate future Missions (baaad on particulate and SO,control
tochnalogy perforaanet lavals and fuel sulfur and haat content) are aada federally enforceable. Otherwise, tha
calculation of eattatod. future, actual emissions far this pollutant will be ravtaad by EPA. baaad an existing
federally-enfercaabl* Halts (I.e.. applicable SIP. RSPS). Tha uaa af currant, fodarally-anfarceabla •taalona
factera wld raaalt ta htgher. projected, future oalssions and. canaaauantly. could affect tha Indicated rSO
applicability find tog.
S) Baaaltne emUilona (actual ealsstons for 2-yaar period defined by calendar yaara 196S and 1984) have boon
revised baaed on additional Inforaatton autaattted by vtPCO.
-------
Enclosure B
Revised PSD Applicability Determination
Port Washington Power Plant Renovation of Units 1-4
(all emissions calculations are In tons per year)
Pollutant
PartIculate
matter (4) (5)
Actual
Emissions
Baseline
Estimated
Future Net PSD Subject
Actual Emissions Significance to PSD
FnH**1on< f?l Chanoe Level Review
328
339
11
25
Sulfur dioxide (4)
Nitrogen oxides (S)
Carbon monoxide
Kydroctrbon
24,236
2,592
144
18,505
3,396
217
•5,731
804
73
40
40
100
17
25
40
no
no
yt$
no
no
Other Regulated Pollutants: Due to insufficient source specific information
regarding emission factors, PSD applicability for PM-10, lead and noncrlterlt
pollutants listed at 40 CFR Section 52.21 (b)(23)(1) and (11) cannot be determined
at this time.
1) Average actual eBleatona for t-yeer period defined by calender yeare IMS and 19M.
t) Calculated by CM baaed en the follce-lng Information subBttted 'fey eUCO:
e. The ereragc. hlatorlc-fIrlng rete (epproKleetely 11*1.9 *t» per year) for the 2-year period defined
by calendar yaera 1971 and 1971.
b. The ewlaalene eatleetea for tha renovated unite beeed en future coel character lit lea (e.|.. eulfur
and teat content) and actual eetaalone after pollution controla for partlculate.
al of U and U percent at unite I end 4. respectively, to
for greater central of eulfur dioxide.
3) If MU date indicate that annual, nlatorlc-ftrlng retee et the Port teuhlngtee facility eneedad hlaterle
1971 and 1979 level a. the indicated applicability determination could change:
4) 1Yio calculation of ttttatUd. futur*. actual OBlMlona for thla pollutant la baMd on VOCO a fnjoctlan of
e. Unit S inoportttvt. Sulfur dloxldi
owludi UIOM unlU fn» ISPS roquii
calculation of eetoBtad. future, actual •Helena for thle pollutant will be revtaed
federelly-wforceeblc liatte (!.«.. applicable SIP. «SPS). The ue* of current, feder tmMfMm >«
fectore vould reeult ta higher, projected, future enlealene end. ceneequently. could affect the Indicated PSD
applicability finding.
S) laooline •oieotom (actoal enteelene for f-year period defined by calendar yean UB end ISM) have been
revtaed baaed en eddltienel Information eubeltted by tCPCO.
-------
5. PSD
Geographic/Pollutant Applicability
8
-------
5.23
5.23 DATE: June 9, 1988
SUBJECT: Emissions from Rocket Firing at Test Stands; Fugitive or Point
Source Emissions
FROM: Ronald Shafer, Chief
Policy and Guidance Section
TO: John Dale
Air Programs Branch, VIII
DISCUSSION: Emissions from rocket nozzles are point sources.
CR: 3 [Hard Copy]; 23.27; 24.13
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5.24
5.24
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
October 28, 1988
Review of De Minimis Emissions - Sanctions
Ronald* Shafer, Chief
Policy and Guidance Section
Stationary Source Compliance Division
Ron Van Mersbergen
Air and Radiation Branch (5AR-26)
Region V
De mlnimis net emission increases that accumulate within a
contemporaneous (5 year) time frame should not be combined and
would not trigger PSD review when significance levels are reached.
However, de minimis increases do consume PSD increment, and, in
nonattainment areas, aggregated de mlnimis emissions will trigger
sanctions when significance levels are reached.
4.39 [Hard Copy]; 27.5
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5.25
Reserved
-------
SOS*..
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
OS3
Mr. Ken Waid, President
Waid and Associates
8000 Centre Park Drive, Suite 270
Austin, Texas 78754
Dear Mr. Waid:
This is in response to your November 22, 1989 letter to Gerald
Em i son in which you asked for clarification on two questions concerning
"secondary emissions" as defined in the Code of Federal Regulations (CFR) at
40 CFR 52.21{b){18). First, you asked whether the definition found
in the 1988 edition of the CFR was the correct definition. Second, you asked
whether any emissions from a vessel are considered secondary emissions.
You are correct in your conclusion that the secondary emissions
definition in the 1988 CFR at 40 CFR 52.21(b)(18) is incomplete. The second
sentence of the definition in the 1981 CFR apparently was inadvertently
omitted when the CFR was revised by the Federal Register of June 25, 1982
(47 FR 27554), which promulgated an amendment to the definition.
Concerning whether any vessel emissions are secondary emissions, the
June 25, 1982 revisions to the prevention of significant deterioration (PSD)
regulations exempted all vessel emissions from consideration in PSD review of
new or modified marine terminals on the basis that vessels are mobile sources
and mobile source emissions are excluded by the Clean Air Act from attribution
to a stationary source. However, on January 17, 1984 the Court of Appeals for
the D.C. Circuit vacated and remanded to the Environmental Protection Agency
(EPA) portions of the June 25, 1982 promulgation, including the way in which
the Agency treated vessel emissions (Natural Resources Defense Council v.
U.S. EPA. 725 F.2d 761). The Court stated that EPA was correct to interpret
the term "mobile sources" to include vessels, but that the Agency acted "far
too precipitously" in concluding that it therefore had no authority to
attribute any vessel emissions to marine terminals. The EPA, the Court went
on to say, should have examined the nature of the interactions between a
vessel and a terminal to determine specifically which categories of emissions,
if any, should be attributed to the terminal.
The Court affirmed the portion of the 1982 promulgation that excluded
"to and fro"- vessel emissions from attribution to the terminal as secondary
emissions, but vacated EPA's 1982 blanket repeal of the dockside vessel
emissions component from PSD emissions counting as either primary or secondary
emissions. In so doing, the Court acknowledged that, with the exception of to
and fro emissions, it implicitly reinstated the PSD regulations promulgated on
August 7, 1980 (45 FR 52676). In essence, the Court removed from the CFR the
total exclusion of vessel emissions counting which now appears in 40 CPR
52.21(b)(6) as the phrase "...except the activities of any vessel," and in
-------
2
40 CFR 52.21(b)(18) as the phrase "...or from a vessel." Consequently, the
August 7, 1980 PSD regulations {with the exception of to and fro emissions
counting) shall apply to determinations on how to treat vessel emissions.
The preamble to the 1980 regulations explains that emissions from certain
activities of a ship docked at a terminal (i.e., when the vessel is
stationary) may be considered emissions of the terminal if the activities
would "directly serve the purposes of the terminal and be under the control of
its owner or operator to a substantial extent" (45 FR 52696). Vessel
emissions which are opl to be taken into account in determining whether a
marine terminal is subject to PSD review (i.e., they are not primary
emissions) are those which result from activities which do not directly serve
the purposes of the terminal and are not under the control of the terminal
owner or operator. The Court ordered EPA to perform the analyses necessary to
distinguish which dockside emissions, if any, should be assigned to the
terminal and which should be assigned to the vessel. However, EPA has not yet
completed the analyses necessary to define which dockside vessel emissions,
and under what conditions, should be assigned to the terminal and whether
these would be considered primary or secondary emissions. States with
Federally- approved PSD implementation plans are free to develop regulations
more stringent than the Federal regulations, and some may have done so already
with regard to the treatment of vessel emissions. Thus, I recommend that you
check with individual States to learn whether any dockside vessel emissions
are considered secondary (or primary) emissions in that particular State.
Finally, as you have noted in your letter, a correction of the Federal
PSD regulations is in order. I prefer that any changes to the CFR with
respect to vessel emissions not only correct the error of omission cited in
your letter, but also carry out the Court's instruction to resolve the issue
of dockside emissions attribution for PSD purposes. We hope that our
resources will allow us to initiate work on such rulemaking in the near
future.
I hope that this has answered your questions. Should you wish to discuss
further EPA's policies concerning secondary or vessel emissions, please call
Gary McCutchen of my staff at (919) 541-5592.
Sincerely,
John Calcagni '
Director
Quality Management Division
cc: G. Emison
R. Bartley, Region VI
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6. PSD
Baseline/Increment Consumption/Impact Analysis
-------
6.22
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
JUL 5 1988
MEMORANDUM
Subject: A1r Quality Analysis for Prevention of
Si gnifi cant Deteri orati on (PSD1
From: Gerald A. Emlson, Direct
Office of Air Quality PTanhTng 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 If the source's estimated air quality Impact 1s Insignificant (I.e.,
at or below defined de minimis levels). In recent years, two approaches have
been used to determine If a source would "significantly" (40 CFR 51.165(b)
defines significant) cause or contribute to a violation. The first Is 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 1s 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
impact was not significant at the predicted sit. »>f the violation during the
violation period. You have indicated that this is the approach you currently
use.
-------
-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 is carried one step further in
the event that a modeled violation is 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 PSD permit. This approach 1s currently being
used by Region V and several other Regional Offices, and is the approach that
you recommend as the standard approach for completing the PSD air quality
analysis.
In discussing this matter with members of my staff from the Source
Receptor Analysis Branch (SRAB) and the Noncriteria Pollutant Programs Branch
(NPPB), it appears that different guidance has been provided, resulting in the
two separate approaches just summarized. We have examined the history and
precedents which have been set concerning this issue. I also understand that
this issue was discussed extensively at the May 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
is the second approach which considers the significant impact of the source in
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
PSD increment will occur in the impact area of the proposed source. In this
case, a permit may be issued and no further action is required.
(b) Second, a modeled violation of a NAAQS or PSD increment may be
predicted within the impact area, but, upon further analysis, it is determined
that the proposed source will not have a significant impact (i.e., will not be
above de mini mis 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 in 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
is 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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6.22
-3-
violation, offsets sufficient to compensate for the source's significant
impact must be 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 1s 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 KSR 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 Tlkvart/Ed LIlUs, 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: A1r Division Directors, Regions I-X
Air Branch Chiefs, Regions I-X
D. Clay
J. Calcagni
J. Tikvart
E. Llllis
G. McCutchen
D. deRoeck
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Attachmen; 6>22
— RETYPE OF ORIGINAL SIGNED MEMORANDUM —
/ f\ 4,0 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
? ~—-- Zj Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
Date: December 16, 1980 12.12
Subject: Interpretation of "Significant Contribution" PN-165-80-12-16-007
From: Richard G Rhoads, Director
Control Programs Development Division (MD-15)
To: Alexandra Smith, Director
Air & Hazardous Materials Division, Region X
We have received your memo of October 27, 1980 regarding the
applicability of PSD and the Emission Offset Interpretative Ruling
when the proposed sources (such as Northern Tier) would be locating
in a PSD area and would cause or contribute to a new or existing
violation of the National Ambient Air Quality Standards (NAAQS). You
asked for clarification of existing policy in two areas. This memo
is intended to finalize the draft transmittals we have exchanged
since receiving your request.
Your first question asked whether EPA is using the concept of
siginifleant contribution within the PSD regulations when assessing
whether a proposed source, locating in a PSD area, would "contribute
to air pollution in violation of the NAAQS." As discussed in the
PSD workshops and the PSD workshop manual, EPA continues to apply the
significant Impact concept using the values defined in the 1978
preamble, 43 FR 26398, and in 40 CFR Part 51 Appendix S. If the
proposed source or modification has no significant contribution to
the nonattainment problem, then the proposed project does not
contribute to this violation. Provided that it would not cause any
new NAAQS violations, such a source is not subject to the require-
ments of 40 CFR 51.18U) or 40 CFR Part 51 Appendix S; the proposed
project must, however, still demonstrate that It will not cause or
contribute to air pollution in violation of the PSD increments. See
40 CFR 52.21(k)(2).
Your second question asked about the need for a significant
impact by the proposed source to occur simultaneously with the actual
violation at a particular nonattainment site. In general, a PSD
source with significant new emissions of the applicable pollutant
which constructs in an area adjacent to a nonattainment area should -
be presumed to contribute to the violation if it would have a
significant impact at any point in the nonattainment area. However,
if the proposed PSD source can demonstrate that its new emissions
would not have a significant impact at the point of the violation
when that violation is actually occurring, then the proposed source
would meet the requirements of 40 CFR 52.211kMl) provided that it
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6.22
-2-
would not cause any new violations of the NAAQS. This answer would
apply whether the nonattainment area was newly discovered or was
formally designated nonattainment.under §107. I should like to add
that, while such a demonstration is allowed, it will be extremely
difficult to prove an insignificant contribution, especially in the
short term.
Several examples will clarify this response. For instance, a
proposed new major stationary source may locate near a designated
nonattainment area for $03. Suppose that the source owner has shown
in his PSD application that his S02 impacts are significant only on
the edge of the §107 area which is demonstrated to actually be in
attainment of standards. The source owner also demonstrated that his
impacts are not significant in the area of actual violation of the
S02 standards. A second scenario is the case where the owner demon-
strates that on the days when the 24-hour $03 standard violation is
actually occurring, the proposed source's 24-hour averaged impacts are
not significant. The owner has also shown that on other days when
the air quality meets the 24-hour S(>2 standard, his impacts are
significant but do not cause the air quality to exceed the 24-hour
standard. The third example is where the area was only nonattainment
for the SQ.2 annual standard. The source owner shows his impacts on
the nonattainment area are significant for the 24-hour averaging time
and insignificant on an annual basis. For all three scenarios, the
source owner has demonstrated that he will not contribute to air
pollution in violation of the NAAQS and has met the PSD review
requirements of 40 CFR 52.21(U(1) for S02, providing that he will
not cause any new violations. This source would also not be subject
to nonattainment NSR requirements under 40 CFR 51.18U).
If you have further questions, please contact Mike Trutna
(FTS 629-5291) for more information.
cc: 0. Hawkins
W. Barber
Director, Air & Hazardous Materials Division, Regions I - X
Director, Enforcement Division, Regions I - X
NSR, PSD Regional Contact, Regions I - X
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6.23
Reserved
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6.24
Reserved
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/"!>,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
1 6 MAR 1S8S
6.25
MEMORANDUM
SUBJECT:
FROM:
TO:
Use of Allowable Emissions for National Ambient Air
Quality Standards (NAAQS) Impact Analyses Under the
Requirjsments'%pjr prevention of Significant
Det«
iiii
Technic
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 51.166(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.
-------
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 I960) 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 typically emit at ra£es 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 rater 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,
Emission rates for model input consist of three components:
1) the emission limit, e.g., #/mmBtu; 2) the operating level,
e.g., mmBtu/hour; and 3) the operating factor, e.g., hours/day,
hours/year.
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6.25
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)..." 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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6.26
6.26 DATE: June 15, 1989
SUBJECT: Timing of BACT Determination for a New Emission Source
FROM: Gary McCutchen, Chief, New Source Review Section
TO: John Daniel, Asst. Executive Director, Dept. of Air Pollution
Control, Commonwealth of Virginia
DISCUSSION: A BACT decision is not final or "locked-in" until the final permit
is issued; until that time, a permit issuing agency is free to
share a tentative preliminary BACT determination as soon as
appropriate. An applicant does not need a final BACT decision to
conduct modeling; modeling is based on the level of control
recommended by the applicant. Decisions on technology transfer
should be carefully scrutinized to ensure that "reasonable
technology transfer" is defined broadly enough to prevent
circumvention of use of certain controls by selection of some
slightly different unit.
CR: 8.38 [Hard Copy]
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y1*01*^
— T. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
3 Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
AU6 24 1989
MEMORANDUM
SUBJECT: Guidance on Implementing the Nitrogen Dioxide (N02)
Prevention of Significant Deterioration (PSD)
Increments
FROM: John CalcajmlT Director
Air Quality/Management Division)(MD-15)
TO: WilliamB. Hathaway, Director
Air, Pesticides, and Toxics Division, Region VI
This memorandum is in response to your request for guidance on meeting
the requirements of the N02 PSD increments regulation. General points are
discussed below, while the specific questions you posed in your memorandum are
listed in the attachment, followed by our responses.
We believe that promulgation of the N02 increments regulation creates
some new, but manageable, aspects of the PSD program. Studies show that
excessive N02 increment consumption on an area-wide basis, particularly for
Class II areas, should not be a problem for many years. Thus, there should
be time available for most States to develop the programs needed to address
NO? increments before potential problems arise: While considerable guidance
exists to implement the NOo increments, the additional guidance needed to
prepare State implementation plan (SIP) and delegation agreement revisions is
under development and scheduled for completion within the next few months.
More specifically, guidance is now being developed which outlines the
necessary revisions to SIP's (and delegation agreements) that States need to
make to have approvable SIP's. This guidance will be distributed in
memorandum form to Regional Offices and incorporated into the New Source
Review (NSR) Guidance Manual (which is currently being updated). A technical
procedures document is also being developed which will provide a step-by-step
description of how to develop an emissions inventory and gather the
information needed to model mobile source and area emissions. It will also
contain examples of N02 increment consumption analyses.
One aspect of the N02 increment program that does need some attention is
the fact that N02 increment consumption began with the date of the proposal of
the N02 increments (February 8, 1988). Since State programs to implement the
N02 increments are not required to be in place until November 17, 1990, there
is a possibility that some major N02 sources that would violate the N02
increments would submit a permit application before the State N02 increments
regulations are in effect. While we do not believe that many such situations
will occur, especially in Class II areas,'the situation has already occurred
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In Region II and nay arise elsewhere. We pointed this potential situation out
in the preamble of the regulations and suggested that States require N02
increment consumption analysis as soon as possible. Since major sources of
NOo are already required to perform a NAAQS analysis, this nay provide much of
the data base which will be needed to determine how much increment has already
been consumed.
Various actions should be considered by the State or by EPA if it is
determined that a proposed new source will violate an N02 increment before the
State's N0? increments regulations are in effect. There is no need for the
permitting agency to be blind to a future violation. Therefore, if a source
will be in violation of an NO? increment once the revised SIP or delegation
agreement is approved, the Regions should call upon the State to indicate how
the violation will be cured. A notice in the permit to the effect that the
source may later be required to reduce its NOX emissions might also be
prudent. An individual source which could cause or contribute to N02
increment exceedances should at the very least be forewarned that further
emissions reductions may be required (once the NOg increment rules are
effective) to avoid such exceedances.
To minimize any potential impact of the time lag, the promulgated N02
regulations allow States to obtain SIP approval as early as October 1989. A
similar procedure is also available for States with delegated authority to do
likewise. This procedure was outlined in a memorandum entitled "Guidance on
Early Delegation of Authority for the N02 Increments Program," dated
February 15, 1989. You are encouraged to explore early delegation or SIP
submittals with your States. In fact, the first early delegation we are aware
of occurred on August 11 when Region I delegated the N02 increment program to
New Hampshire (see the attached Federal Register). Lynne Hamjian, the
Region I contact, has details on the procedure they used to go direct final on
this action.
If there are any questions, please call me at FTS 629-5621 or Gary
McCutchen at FTS 629-5592.
Attachments
cc: Regional Division Director, Regions I-X
Chief, State Air Programs Branch, Region I
Chief, Air Programs Branch, Regions II, III, IV, VI,
VIII, IX, and X
Chief, Air and Radiation Branch, Region V
Chief, Air Branch, Region VII
Chief, Air Compliance Branch, Region II
Chief, Air Enforcement Branch, Regions III, VI
Chief, Air Operations Branch, Region IX
NSR Contacts
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6.27
ATTACHMENT
Responses to Questions:
1. Recognizing the lack of regulatory authority at present and [the
delayed] effective implementation date, what is the EPA policy and recommended
actions for planning and implementation of the N02 increment standards between
now and November 17, 1990?
Regions are encouraged to begin working with their States to obtain early
delegation agreements or approvable SIP's prior to the submittal deadline of
July 17, 1990. Later this year we will be providing documents that will give
more detailed guidance on a number of specific topics, such as modeling and
emissions inventories, but Regions can begin at any time to start working with
the States on general agreements.
There is one issue that is likely to arise early in your negotiations.
In the preamble to the N02 increments regulations, EPA recommends that States
require all major sources to provide N02 increment consumption analyses even
before their N02 increment programs are in place. This is because N02
increment consumption in an area can begin as early as February 8, 1988, and
thus may begin before the State's N02 increment rules are in effect. Most of
the data needed to determine increment consumption should already be
available. For example, N02 emissions modeling for NAAQS compliance (which is
already required for major new sources and major modifications) should provide
much of the data needed to determine N02 increment consumption. This is
because a PSD source must model its new emissions (or emissions increase) to
determine the boundaries of its impact area [the area(s) where the impact of
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emissions from the proposed source is 1 0g/m N02 (annual average) or more].
A source may also need to model to determine whether preconstructlon
monitoring is required [preconstruction monitoring is not required if ambient
air quality impacts are below 14 jig/m3 N02 (annual average)]. Either of these
modeling exercises can provide the amount of N02 increment the new source or
modification will consume. States should ask that these modeling analyses,
including the maximum air quality impact, be provided to them in the
application. The only data not provided from this modeling would be the
increment consumption from other nearby increment-consuming sources. We
believe it would be highly unusual for many situations to occur in the first
2-3 years of this program (February 1988 to November 1990) where two or more
major N02 increment-consuming sources locate close to each other so as to have
overlapping impacts. If this does occur, the proposed source will likely have
to model emissions from those nearby increment-consuming sources to ascertain
compliance with the N02 NAAQS (which has always been required in the PSD
analysis). This information can be provided with the permit application, at
little or no extra cost or effort, to determine increment consumption. States
could also request increment consumption data on a voluntary basis or-through
a section 114 letter. Having sources generate these data now will be less
expensive and time-consuming for all concerned than to try to make this
determination after the fact.
2. Is the Regional Office responsible for emission inventory and
increment analysis for stationary and mobile sources to identify the areas
where the increments for N02 were exceeded on or before February 8, 1988
(determining the baseline areas)?
First, there was no N02 increment consumption before February 8, 1988,
the major source baseline date. Second, States, rather than Regional Offices,
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6.27
are directly responsible, after their revised SIP or delegation agreements are
approved, for ensuring that emission inventories are developed and maintained,
and for requiring permit applicants to perform NOg increment consumption
analyses. In the interim, the Regional Offices should encourage their States
to obtain increment consumption data or analyses from all major sources. Also,
when necessary, they can use Clean Air Act section 114 authority to require
major sources to conduct N02 increment analyses. They can also delegate this
authority to the States.
3. Is it necessary at this time to add a caveat to each PSD permit,
issued between February 8, 1988 and November 17, 1990, that would enable the
permitting agency in the future to revisit and adjust the NOg emission
limitations if the N02 increments are found to be exceeded in that area
(similar to stack height regulations/PSD permits)?
Certainly, adding a caveat to a permit before it is issued, that
expressly constitutes a conditional approval, could be very useful in
circumstances where the source would cause an increment exceedance. If that
were done, the permit itself could be amended, or even rescinded, after the
effective date of the increment regulations, if it is determined that the
source is located in an area which in fact exceeds the N02 increment
allowance. A lesser measure would be a caveat advising the source that, while
the permit will remain unchanged, the source may be required to reduce
emissions at a later date. Such caveats should help get the point across to
the applicant that it is prudent to perform a N02 increment consumption
analysis and inadvisable to build a facility which would cause or contribute
to N02 increment exceedances. Of course, States will have to cure any N02
increment violations within their borders once their revised SIP or delegation
agreements are approved, regardless of the terms of a permit. Accordingly, a
State can take whatever steps are necessary, even after a permit has been
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issued, and even if there are no caveats in the permit, to effect a change in
emissions limitations, source configuration, or other requirements applicable
to the source in order to cure the increment violation. Issuance of a permit
does not free an applicant of the need to meet other requirements and
regulations [see section 52.21(r)(3), Approval to Construct]. (In States
where the NSR permits program is run by the EPA Region, the Region has the
same rights and privileges as a State would have if it were running the
program and should consider conditions in the permit, or some other measure,
to avoid or correct N02 increment violations).
4. Will all affected sources which received PSD permits after February
8, 1988 be subject to re-analysis to determine if any of these sources
exceeded the NO* increment when the increment standards become effective on
November 17, 1990 (SIP approval)?
As explained in the response to question 1, most,if not all of the data
needed to determine whether a source will cause or contribute to a violation
of an increment should already be available as a result of other required
analyses. As such, we do not anticipate .that "re-analysis" will be needed in
many cases. However, sources could be subject to re-analysis, depending on
how the State elects to determine and track N02 increment consumption and cure
increment violations. Each State must explain in its revised SIP or
delegation agreement how it will determine the amount of N02 increment already
consumed. The State must also describe the process by which any exceedance of
the N02 increment will be corrected. We do not anticipate many situations,
especially in Class II areas, where the N02 increments will be exceeded prior
to States developing their N02 increments programs.
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6.27
5. Several questions arise which an example may clarify. A PSD permit
for NCL was issued to a source after February 8, 1988. Later, the permitting
agency found that the N02 increments were exceeded on or before February 8,
1988. The questions are: a) will the source have a valid permit after
November 17, 1990, and b) will this source be required to do an N02 increment
analysis and potentially be required to reduce its NOX emissions to an
acceptable level?
As discussed in question 2, N02 increment violations could not have
occurred prior to February 8, 1988. In response to question (a), sources that
are issued permits before the State N02 increments requirements are in place
will have valid permits, even in those situations where they may cause or
contribute to an N02 increment violation. However, States are required to
take action to remedy increment exceedances, once their revised SIP or
delegation agreements are approved. Accordingly, even though a State may not
have the authority to revoke or directly revise a permit, it can override or
supercede the permit conditions (e.g., a SIP revision), since issuance of a
permit does not free an applicant of the need to meet other requirements and
regulations [see sect. 52.21(r)(3), Approval to Construct]. Action to correct
an increment violation could focus on one large source, on all new sources, or
on all sources of that pollutant in that area. The choice of strategy is up
to the State, so it could involve revocation of permits (in States with that
authority), additional analyses by sources, new control requirements to
control emissions, or other measures.
With respect to question (b), the Part 52 N02 increments regulations
contain a provision that grandfathers permit applications which are already
complete on the effective date of the regulation, including those projects
with approved permits, from being required by EPA to perform N02 increment
consumption analyses. It is therefore possible that some sources may be
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grandfathered from being required to do the N02 increments analysis. Some
delegated States have statues which prohibit rules more stringent than EPA's
and may have to accept the EPA grandfathering provision. However, States are
not required to include these grandfathering provisions in their SIP
regulations, and EPA encouraged them in the preamble of the N02 increments
regulations not to do so.
6. Can (or should) an agency (between now and November 17, 1990) issue
a permit to a source if, in fact, the permitting agency is aware that the NO*
increments have already been exceeded in the area under consideration?
A permit should not be rejected by either EPA or a State agency solely
because the available NOg increment has been (or will be) exceeded, until such
time as either: 1) the State's revised N02 increment SIP or delegation
agreement is in effect, or 2) the EPA has taken over responsibility for this
facet of the permitting program. However, there is no need for a permitting
agency to be blind to a future violation. A State has broad authority to deny
or condition a permit, as long as it has some rational basis for doing so, and
States with approved PSD programs are free to factor N02 increment consumption
into the permitting decision. Also, EPA can insist that the State show, as
part of the permit review package, how excessive increment consumption or an
exceedance will be cured once the increment regulations are effective. In the
absence of an explanation of how an exceedance will be cured at a later time,
EPA can insist that the State include appropriate conditions in the permit for
the new or modified source that could be relied on by the State to alleviate
or prevent possible future increment exceedances. As noted in the response to
question 3, EPA has the same rights as the States, when it runs the NSR
-------
6.27
program, to require a source to show how excessive increment consumption wi
be cured.
Assume, for example, that modeling shows that a proposed new source
would cause an N02 increment exceedance when the increment becomes effective,
and the only way to prevent such an exceedance is to reduce emissions from
that source. If such future reductions would entail significant retrofit
costs, this would be an adequate basis for requiring a more stringent BACT
determination or other permit conditions to reduce the source impact prior to
construction. Such conditions represent a valid exercise of the permitting
agency authority to manage clean air resources in a manner consistent with the
goals and purposes of the PSD program.
7. Can (or should) an agency (between now and 11/17/90) issue a PSD
permit to a source if this source (by itself) "causes or contributes" to N02
increment exceedances?
See responses to questions 3 and 6.
8. Hill the sources that received PSD permits before February 8, 1988
but increased production rate and emissions for NOX after February 8, 1988
(but before November 17, 1990) be grandfathered from the NOg increments
[consumption]? Our concern stems from the fact that there is no mechanism to
track consumption from increased production of the industries that had been in
an economic downturn until recently. These types of sources can increase
their actual emissions up to allowable levels without applying for a permit.
In general, increased emissions from such sources would not be
grandfathered. Increases in emissions resulting from increased hours or
capacity utilization at sources contributing to baseline concentrations
consume increment, since actual emissions are used in increment consumption
analyses. However, if a source can demonstrate that its operation after the
baseline date is more representative of normal source operation than its
operation preceding the baseline date, the more representative period may be
-------
used to calculate the source's actual emission contribution to the baseline
concentration.
Emission increases of less than 40 tons per year associated with a
modification at a major source after February 8, 1988 consume N02 increment
even if the minor source baseline date has not been triggered, but would not
trigger the minor source baseline date (only major new sources or major
modifications do that). Increment consumption analyses are not required
under PSD for any non-major modifications, but must be taken into account
when the next major source conducts an increment consumption analysis.
9. The NOX emissions from area sources in several parishes of Louisiana
exceed the NOX emissions from point sources. How will increment [consumption]
from area sources be quantified as of February 8, 1988?
With the exception noted in the previous response, increment consumption
by minor sources (which includes area and mobile sources) will not begin until
the minor source baseline date is triggered. This does not occur in an area
until receipt (after February 8, 1988) of the first complete major source
permit application with significant NOX emissions. This applicant must
determine the baseline ambient air quality for N02 from a combination of
monitoring and modeling data as of the date of the submittal of the permit
application; this level becomes the baseline concentration. Each subsequent
major source applicant must calculate the ambient air quality impact of all
N0¥ emission changes from major, minor, mobile and area sources since the
A
previous major source permit application. Guidance for States to consider in
developing procedures for developing and maintaining inventories of NOX
emissions from major, minor, mobile and area sources are currently under
development.
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6.27
10. The following questions concern source shutdowns:
a. If a source Is shut down before the baseline date, will it be
subject to the NO? increment analysis if it restarts between February 8, 1988
and November 17, 1990?
b. If a source shuts down before the baseline date and then
restarts after November 17, 1990, will it be subject to the N02 increment
analysis?
c. If a source shuts down after the baseline date, but before
November 17, 1990 (and restarts after November 17, 1990), will it be subject
to the N02 increment analysis?
For all of the above cases, a new permit would be needed if the shut down
is considered to be permanent under EPA policy (expired or rescinded permit,
no longer in inventory, or torn down). In that eventuality, the source
"restart" would be considered a new source and an N02 increment consumption
analysis would be required. If, however, for cases "a" and "b", the
"shutdown" was considered temporary (e.g., it remained on the State's emission
inventory), EPA would not require the source to do an N02 increment
consumption analysis, since it is not a new or modified source.
When an existing major source shuts down (e.g., no valid operating
permit) after the baseline date (February 8, 1988), as in case "c", it expands
available increment. When that source is restarted it consumes increment and,
at least in those States which have an approved SIP or a delegated program in
place, an N02 increments analysis would be required.
11. If a source submitted an application before November 17, 1990, and
the application was considered complete before that date (assuming the permit
will be issued after that date), is this source subject to the N02 increment
analysis?
Since States can adopt and implement the program prior to November 17,
1990, the answer will vary depending on Federal and State requirements and
-------
when they went into effect. For example, if a State's requirements went into
effect on January 1, 1990 and the source submitted its complete permit
application on March 1, 1990, it would be subject to the NOg increment rules.
Sources are required by EPA to submit N02 increment consumption analyses for
permit applications which are completed after November 17, 1990 or the date
the State SIP (or delegation agreement) is approved, whichever is earlier.
States may require N02 increment consumption analyses prior to approval of
their SIP's or delegation agreements, and they are encouraged to do so.
10
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 6
1445 ROSS AVENUE. SUITE 1200
DALLAS. TEXAS 75202
August 25, 1989
REPLY TO: 6T-AN
MEMORANDUM
SUBJECT: Texas Air Control Board (TACB) Inqttf^.Regarding Allowable
Emissions in PSD NAAQS Analyses
B. Hathawayt
Director -
Air, Pesticides & Toxics Division (6T)
TO: John Calcagni
Di rector
'Air Quality. Management Division (MD-15)
I have attached for your information a recent letter-.from TACB that
discusses the .implications-of.your March 16, 1989,, memorandum that
clarified the.use of-Guideline on Air Quality Models (Revised) Table
tnclt
to TACB.
9-1 emissions in PSD.NAAQS analyses. I have also tncjuded try reply
No. specific'.response-to-.this memo-is expected, .but I;do. encourage
your .attention to'paint three in TACB's letter, *hich discusses the
implications of .the March 16 nemo on inventorying .baseline sources.
I believe that .this calculation of "potential to eait" may be re-
quired in many states.
Should you have questions or consents, please call me or have your
staff call' Jfa;Yartjrough. Thank you.
Attachments
cc: ui man Laxton (MDrl4)
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2 5 1989
••:i'Lv r.
"p. Si-Vi-
T«. x.« Air Control gnarc
.'-330 '-ig^ey ??c rest
•\ustin, Trxai 7C-723
P.:?: vour '.unust 3, 1935, Latter About Allowable- Emissions in Prevention of
Si-jr.u leant Oeteri oration (PSD) Mo-jflinc for .National Ambient Air
Quality Star.dards (MAAOS)
r-'.-ir :'r. Spaw:
Thsnk you for your August 3, 193?. letter providing the TAGS' s viewpoints on
John Calcagni's recent decision about tn* use of allowable emissions in
NAAQS analyses. I would like to respond to the points you raised 1r. your
l.'tu-r ii the order you presfntfd then».
First, you a>eed for this change prior
to ray f!ay ?. l-'.£9. Better, t»»o rationale provided in John Calcagni's March
15, 10;.", n.jr.,y (previously for./arricd to TAC2), anil tns provisions of ny
, I!?",?, Utter, I believe that this c'rcision -Iocs not constitut«? a
t ir. t^i- ?S"» proprem of tiit typ^ necossary to warrant f«.-d*>ral rulmnatcing
-------
6.28
',,'.. -./i^ l-.ii. »i \* -I-1. I
r.j.-ii.'j. -ij-..u ^ui. ;..
]••.., .f C.-.S. i A ;>.<„* _..ii~.'- Ui^ LS,. C> nlwci:. ..r>i SSiOl-S
.'-I Pi'J iuu'v^i .,rt.(vC!i.j '.S r..-iU "iLt- J •«->' L.:'.^ niducUt HlA.-.r J-. tisiju. Ii:
tj in*, ii. jL'-IiiolVu (5 lltctl._ ''Till. SuiM Oi Lfi- LaSv.l 1 n>.
ifici .I-^M. ^.;ou.c ^»^jci L;;-> \'dli!'. cP.tic 'is v.oi:ip£r«.ij to H:L f«\r*Q5.'' I.
n;:^ I :),_]-,. v. t..is ii urn. s^urct. of coi-fusion in Liiis ccraplicattd
in PS'J r^c.'^-.iiiiv, t,n_ Mr.^3 shcu'u s*. cuinparud againsi ctic. tctdl air
T;>U zciai iir qjolity is tfi^ ij.ni 01 cunctfttrations out ic current
h 01 rit suiirc.s (iriciuoiiii, LJIOS-. -xplicitly cicaolco using emissions as dvfiticu
in Tables -i jf tiu. Guide-] inL «ro t!ioSw not r,iotf«lcd).' conct-ntracions tlut to
b tir^a anc, mou-ilV sources wonc-nt rat ions out. to natural- SOUPCLS and
cii'iCucJ concunirations rvsuitiriy froti th-i af/pllcant's prcpo&co' n«w
j.js;si-;cii&r.. -JSL'eC6i;4c; , to,bal^eir ..qual itx^siRd
MlVsicnAriri'K-u£s* l'(T ii;J MOO«.I iny 1ntlu*.ncc uhc toial air quality.
Jun« CalctfjiTi's i;arcn iu iiti i«u:iO rcCOynirtd th^ correctness of a
jlri^ 7c.de -j-i (*..'3.. alluuiiuUj -_rnissions ov->r actual omissions "in
lcliii^ LOiai air qudjiij>. I uclicvo It is uuSeo upon sinilor lo^ic to
jcr;i:iu thL Tvxas policy icr air qufelity stanaarJs --
e uaissicos as
T:,irri vuu UaJc tix poin'u m«t 'kf:is action fcoulJ incrcasa^orlcload r-.t]uirc-
>:«.i;is tor rc.Cjulatory aycncius. Tnc Ki.-t;icrt ti - TACB discussions arc p
co i.r:-> oost yf'Ticiait way 10 c-Suiijatv.- 'Vottntial to cult," for baseline sources
:iiiu bO i:\corpGriiL-.- th^si. numbers into TAC3's Point -Source Data Ucsc SysttU
lPSuC>. Ti-.is is a r:v.cissary step to realize full application of
Jui:n Calca^ni's Karen 16 r-k.ut>. However. I do not believe this Is-a decisive -
•issue irrhaltir.g use" of allwcatU- ufiissions for all affected (i.t.. "incluuinsj
r.tir.-i/ds«;iint.i sources. Pltasi. T.OLC that I ruisain inturcstec in IduntirVin-..
a iSULuaUy egr^La^K way ic cocpiK sucr< o "pcL^ntial to cent" cats bas*..
uiio I di,>-r-_ciatL ^-our
«.:•_
r.K.neioriwC ii'.at cms Decision will novo d. Significant iaipact on
el c&nB^nity. As our staffs have discussc-a several tints, ii is .
riot our intention to unfairly restrict further ^rowth in industrialized
urxcs yi Texas. hcwi\i.r. in » FSD iaodcllnj analysis it is n^c^ssory to
u'^^ c. cctal «ir quality concentration that is a r*.asonaLl-_ reflection cf
-..V-iicJiiy iT.oo.liO Uack'3rou»u sources can l.-j,ally efint. John Cdko^m's
;• .1. .:tV .-.lu-ij r.!£wu& it,e».. sp-jcifics. because nani1 T^xas PSD sources
noySuriol n<.e ar-.
-------
i :..... ti'.n* '.."ij .IJiK-.^ iX'.J i t. • OPs i lf.\0f...,^i^.: r_j,cr-.:iij v.'.i. I\t9K-:i y
.Oiic..- i:i wf,'i^ ii-i \.ci*»."i M.r 'i Ji;i. r-i .iiliiK-ns in P5u 't/Vv^5 r.ioc'^s ir:-j.
-iL-uiL.;*;: ^Jit-Ji-j.iofij ..'i:- u. ^r±\..Z ~j our Averts ir. jn ..;^'on io '.'
tr-ii Kv*. iwV a'- ;>i.oi/'.!."y ^/iJ ..Jivruiy cJi ,:o5ili;l.. _t>'!wubi '.!o J.CL i^i'it
«\ir PiSiiciiJ-.s £ Toxics ui vision (dT;
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6.28
T
I 6
EXAS AIR CONTROL BOAR
6330 HWY. 290 EAST, AUSTIN, TEXAS 78723, 512/451-5711
D
DICK WHITTINCTON, f'.E
CHAIRMAN
BOB G. BAILEY
VICE CHAIRMAN
ALLEN ELI BELL
EXECUTIVE DIRECTOR
August 3, 1989
JOHN L BLAIR
MARCUS M. KEY, M.D.
OTTOR.KUNZE.Ph.D.,P.E.
HUBERT OXFORD, III
WILLIAM H. QUORTRUP
C H. RIVERS
MARY ANNE WYATT
Mr. William B. Hathaway
Director
Air, Pesticides and Toxics Division (6T)
U. S. ENVIRONMENTAL PROTECTION AGENCY
Region 6
1445 Ross Avenue, Suits 1200
Dallas, Texas 75202
Re:
Dear Mr. Hathaway:
Clarification of Use of
Allowable Emissions
This .is in response to your letter of May 9, 1989 regarding the use of
allowable emissions in Prevention of Significant Deterioration (PSD)
National Ambient Air Quality Standards (NAAQS) analyses.
The Texas Air Control Board (TACB) staff has conducted a preliminary
review of the March 16, 1989 memo from Mr. John Calcagni on Use of
Allowable Emissions for NAAQS Impact Analyses Under the Requirements for
PSD. We believe it would be appropriate for the Environmental Protec-
tion Agency (EPA) to go through proper federal rulemaking'procedures
before moving from the use of actual emissions to the use of allowable
emissions for the NAAQS analysis performed in PSD permit review. There
are four primary reasons we believe this would be appropriate:
(1) The use of allowable emissions represents a significant change in
the PSD rules.
The PSD regulations at 40 CFR 52.21(x) state that, "All estimates
of ambient concentrations required under this paragraph shall be
based on the applicable air quality models, data bases, and other
requirements specified in the "Guideline on Air Quality Models
(Revised)" (1986), which is incorporated by reference." Page 1-1
of the "Guideline on Air Quality Models (Revised)" (GAQM) states,
"Tnis guideline recommends air quality modeling techniques that
should be applied to State Implementation Plan (SIP)1 revisions for
axisting sources and to new source reviews?, including PS03.'^
erence 3 is the "Prevention of Significant Deterioration Wj
Manual, 1930" (Manual). Page I-C-20 of the Manual states
sioos inventories for the last two categories are for t'i
of demonstrating compliance ditn the applicable NAAQS
gathered and co-opilsd in a siuilar 'iianner to the inert
-------
f«1r. William B. Hathaway -2- August 3, 1989
sions inventory. For existing sources, this inventory should be
based on actual emissions if data are available." The "last two
categories" of emission inventories refers to inventories of (1)
existing emission sources, and (2) permitted sources which are not
yet operating. This is a clear statement that actual emissions
should be used for the NAAQS analysis. To change to the use of
allowable emissions for the NAAQS analysis, the Manual should be
changed and since it is referenced in the GAQM which is incorpo-
rated in the PSD regulations by reference, the only proper process
for making this change is to follow the appropriate federal rule-
making procedures.
(2) The use of allowable emissions represents a significant departure
from the PSD program's reliance on actual emissions consistent with
the Alabama Power court case.
We believe that the general import of the PSD rules as established
consistent with the Alabama Power court case clearly indicates that
the NAAQS analysis should be performed with actual emissions. The
comments in the Federal Register (FR) of August 7, 1980 state that
the baseline and PSD increment should be determined with actual
emissions. Furthermore, the baseline should be established with
monitoring data, which reflects actual emissions. Specifically on
page 52718 of the August 7, 1980 FR, "Increment consumption or
expansion is directly related to baseline concentration. Any
emissions not included in the baseline are counted against-the
increment. The complementary relationship-between the "baseline"
and "increment" concepts supports using the same approach for
calculating emissions contributions to each. Since the Alabama
Power decision and the statute both provide that actual"air quality
be used to determine baseline concentrations', but provide no guid-
ance on increment consumption calculations, EPA has concluded that
the most reasonable approach, consistent with the statute, is to
use actual source emissions, to the extent possible, to calculate
increment consumption or expansion." The sum of the baseline and
PSD increment should equal the value that is compared to the NAAQS.
If both parts of the sum are to be determined with actual emis-
sions, the only logical conclusion is that the sum should be
determined with actual emissions. Thus, it is inconsistent and
contrary to the intent of the August 7, 1980 FR and the Alabama
Power court case to use allowable emissions to calculate the con-
centrations to be compared to the NAAQS while performing the air
quality review for PSD permits.
(3) The use of allowable emissions would impose a significant increased
workload on state (or federal) regulatory agencies.
The Point Source Data Base (PSOB) maintained by the TACB contains
permit allowable emissions and actual emissions. For sources that
are not permitted, it does not contain the value for the "potential
to emit" which is the only interpretation for allowables for these
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6.28
Mr. William 8. Hathaway -3- August 3, 1989
sources. "Potential to emit" would be the lower of: (1) the
highest emission rate the source could emit without undertaking a
modification requiring a state or federal permit, or (2) the
emission rate limitation established consistent with state or
federal rules applicable to the source. To collect this data for
the PSDB, the TACB would have to conduct an extensive inventory of
all non-permitted sources in Texas. This would be an expensive and
time-consuming effort that would need to be addressed through grant
negotiations. Furthermore, this would increase the resources
required in evaluating each PSD permit application which should
also be addressed through grant negotiations. Federal rulemaking
procedures would allow all affected parties the chance to comment
on the resource impacts of this requirement and for those impacts
to be considered in establishing the final rules. As discussed at
our meeting on June 7, 1989, we are preparing resource estimates to
assist both agencies in examining this issue.
(4) The use of allowable emissions may have a significant impact on the
regulated community which should be considered through the rule-
making process.
The result of moving to allowable emissions will be that it may not
be possible to issue PSD permits involving increases in sulfur
dioxide emissions in large areas of Harris, Galveston, Jefferson,
Orange and Nueces counties. This is based upon a study performed
by Radian Corporation for the TACB in 1978 which showed .large areas
exceeding the NAAQS in these counties if. the sources were modeled
at permit allowable emissions. This result is in direct conflict
with the quote on page 52718 of the August 7, 1980 FR, "EPA
believes it is unwise to restrict source growth based only on
emissions a source is permitted to emit but which in many instances
have not been and are not likely to ever be emitted." Federal
rulemaking procedures would allow all interested parties the chance
to comment on the impact of these proposed changes.
We look forward to resolving this matter as part of our current dialogue
regarding PSD permitting matters.
Sincerely,
"
.
Steve Spaw, P.£. /
Deputy Executive Director
cc: Mr. Robert E. Layton, Jr., Regional Administrator, U.S.
Environmental Protection Agency, Region 6, Dallas
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X"*1*
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
OGT 171989
MEMORANDUM
SUBJECT: Ambient Air
FROM: Robert D. Bauman, Chief
SOj/Particulate Matter Programs Branch (MD-15)
TO: Gerald Fontenot, Chief
Air Programs Branch, Region VI (6T-A)
My staff and I have discussed the ambient air case outlined in the August
24, 1989 memorandum from Jim Yarbrough of your staff to Doug Grano of my
staff. Specifically, Region VI and the Texas Air Control Board propose that
prevention of significant deterioration (PSD) modeling for Mitsubishi
Industries can discount the contribution of a background source to the
predicted concentration as follows:
1. Assume Mitsubishi and background plants B and C.
2. Mitsubishi and plants B and C are modeled and total concentrations
are estimated.
3. Where a receptor is located on plant B's nonambient air property,
the contribution from plant B (only) may be subtracted from the
total concentration.
This situation is similar to a case raised to OAQPS's attention in 1987
by Region V. Guidance on this case was provided by OAQPS to Region V in a
memorandum dated April 30, 1987 (attached). That guidance is consistent with
your proposed approach and, therefore, we agree with your position.
However, the State should be advised that, when modeling Mitsubishi, all
receptors off Mitsubishi property are in ambient air and that the ambient air
policy does not allow sources to excessively pollute their neighbors. Note
that a background source could, in the future, change their operation and make
portions of their property accessible to the public. Care should be taken to
avoid situations that could result in undue exposure to excessive
concentrations and which could result in adverse public health impacts.
In response to your position on issuance of the permit where Mitsubishi
makes a significant contribution to predicted violations of either the
national ambient air quality standards (NAAQS) or PSD increments, policy
contained in the July 5, 1988 memorandum from OAQPS to Region 3 should be
-------
applied (attached). For a new or existing NAAQS violation, the permit may be
granted under specific conditions. However, for any increment violation 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.
If you have any questions regarding this memorandum, please call Doug
Grano at FTS-629-5255.
Attachments
cc: Air Branch Chief, Regions I-V, VII-X
SOZ Contacts
bcc: John Calcagni
Dan deRoeck
JSa'ry McCutchen
Joe Tikvart
Dean Wilson
Jim Yarbrough
Regional Modeling Contact, Regions I-X
-------
6.30
6.30
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 2, 1990
Effect of Changing Stack Heights on Prevention of Significant
Deterioration (PSD) Modeling and Monitoring
John Calcagni, Director, Air Quality Management Division
Bruce P. Miller, Chief, Air Programs Branch, Region IV
An increase in stack height can be considered as part of a
proposed modification whether or not it is physically tied to the
emissions unit(s) being constructed or modified. The stack height
increase must be proposed in conjunction with the overall
modification. Thus, any creditable air quality improvements
resulting from the higher stack should be considered in the
preliminary modeling analysis. Note that for a height greater
than 65 meters to be fully creditable as the GEP stack height, it
must be established in a manner consistent with the stack height
rules.
4.46 [Hard Copy]; 7.9
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6.31
6.31 DATE: April 25, 1990
SUBJECT: Issuance of PSD Permits in Attainment Areas where Violations Have
Been Modeled
FROM: Marcia L. Spink, Chief, Air Programs Branch
TO: John M. Daniel, Jr., Asst. Executive Director, Virginia Department
of Air Pollution Control
DISCUSSION: The attachment to this letter provides procedures for issuing PSD
permits in areas with modeled violation(s) both to sources with no
significant impacts and to sources with significant impacts. In
the latter case, procedures for processing the associated SIP
revisions are also discussed.
CR: 10.49 [Hard Copy]; 12.17; 15.11
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7. PSD
Ambient Monitoring/Analysis
-------
7.8
7.8
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 19, 1989
Order on Petition for Review, Hibbing Taconite Co.
William K. Reilly, Administrator, EPA
David Kee, Director Air and Radiation Services Division, Region V,
Gerald L. Millet, Commissioner, Minn. Pollution Control Agency,
and Others
This document remands to the Minnesota Pollution Control Agency
review of four issues raised by EPA Region V in a petition for
review of PSD permit authorizing'Hibbing Taconite Company to
modify its furnaces to bum petroleum coke as a fuel. Review of
three issues raised by EPA was denied as described below.
1. Bact for SO, - discussion of fuel chosen for "base case" in
analyzing BACT for SO,, cost comparison in BACT analyses,
appropriate justification of fuel choice in defining viable
control strategy, and the need for a detailed description
and engineering analysis of the planned emissions reduction
system. (Remanded)
2. Unregulated pollutants (Denied)
3. Prescribed emission limits for entire life of the permit
(Remanded)
4. BACT for PM (Remanded)
5. Ambient Air and Public acess (Remanded)
6. BACT for CO (Denied)
7. Preconstruction monitoring (Denied)
8.39 [Hard Copy]; 10.43; 11.13
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7.9
7.9
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 2, 1990
Effect of Changing Stack Heights on Prevention of Significant
Deterioration (PSD) Modeling and Monitoring
John Calcagni, Director, Air Quality Management Division
Bruce P. Miller, Chief, Air Programs Branch, Region IV
An increase in stack height can be considered as part of a
proposed modification whether or not it is physically tied to the
emissions unit(s) being constructed or modified. The stack height
increase must be proposed in conjunction with the overall
modification. Thus, any creditable air quality improvements
resulting from the higher stack should be considered in the
preliminary modeling analysis. Note that for a height greater
than 65 meters to be fully creditable as the GEP stack height, it
must be established in a manner consistent with the stack height
rules.
4.45 [Hard Copy]; 6.30
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8. PSD
BACT
00
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8.25
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
MAR 31 1988
0"iCE OP
AIR AND RADIATION
MEMORANDUM
SUBJECT: Transmittal of OAQPS Interim Control Policy Statement
FROM: John S. Seitz, Director
Stationary Source CompliAjTcer DivisiT
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 Toxics Division Directors
Regions VII, VIII and X
Air and Radiation Division Director
Region V
Attached is the final Interim Control Policy for
developing compliance schedules that require replacement or
upgrading of existing air pollution control equipment.
Comments solicited from the Air Compliance and Air Programs
Branch Chiefs, OECM, and SSCD by a memorandum of January 20,
1988, have been addressed, resulting in a few minor language
clarifications and one change to the policy.
The change resulted from a comment on the requirement
to maintain existing controls in the interim. In lieu of
maintaining the operation of the existing control equipment
during the interim period, allowance has been made for
installing interim controls Which may be more effective in
reducing emissions. The usage of interim controls may not
result in a delay of the installation of the final control
s-. intent.
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- 2 -
Also, clarification has been made concerning the
installation of redundant equipment on new control systems.
Design requirements mentioned in this policy apply to those
sources which require continuous operation of the process
equipment. Temporary shutdown during maintenance periods is
always a possible compliance alternative to adding redundant
control equipment. The policy now states this specifically.
One notable recommended change has not been included.
The comment was made that performance bonds should not be
applied to activities which may be beyond the control of the
source, such as the delivery of materials. Installation of
control equipment frequently involves the activities of
several contractors and requires careful scheduling to avoid
delays. Late delivery of equipment can have a serious adverse
effect on the ability of a source to meet a tight installation
schedule. A source must take the necessary steps to select
the most reliable, rather than the lowest cost vendor, to
ensure that schedules are met.
Thank you for your assistance with the development of
this policy statement. If you have questions concerning it,
please contact Pam Saunders of my staff at FTS 382-2889,
EMail EPA6264.
Attachment
-------
8.25
INTERIM CONTROL POLICY
PURPOSE
The purpose of this policy is to provide uniform criteria
for developing final compliance requirements, schedules, and
interim requirements for sources in situations where failing,
deteriorating or inadequate air pollution control equipment
must be replaced or upgraded.
APPLICABILITY
This policy applies to situations where a determination to
rebuild or replace existing control equipment has been made.
Situations mentioned in this policy may also be subject to
applicable civil penalties as stated' in the Civil Penalty
Policy.
OBJECTIVES
The objectives of this policy are to require subject
sources to:
1. Minimize and continuously monitor emissions during
the interim period;
2. Attain final and continuing compliance as quickly
as feasible using all available means;
3. Maintain continuous compliance in the future by
appropriate design of the final control system,
including the continuous monitoring of excess
emissions.
POLICY
INTERIM MEASURES
Interim measures combined with continued operation and
maintenance of existing controls must be required wherever
existing controls are inadequate. During the interim period
until the new or upgraded control equipment is operational
and the source is in compliance, emissions from the source
must not be allowed to increase. The existing though
inadequate control equipment must remain operational to the
maximum extent possible, including being maintained and
-------
- 2 -
repaired, until such time that construction or tie-in of new
equipment requires its shutdown or removal. In lieu of
maintaining the existing though inadequate control equipment,
interim controls which offer a higher degree of emission
reduction and are readily and reasonably available may be
installed. The use of such interim controls shall not unduly
delay the installation of final control equipment.
When existing control equipment must be taken off line
to tie-in or complete construction of new or upgraded
equipment, additional interim controls or other interim
measures are required to ensure no increase in excess emissions
occurs during the tie-in period. Such measures may include
installation of additional temporary control equipment or
operational controls, e.g., curtailment of production rates,
relocation of production to complying process lines or
facilities, purchase of power or product elsewhere as needed,
or temporary shutdown.
The source should be required to implement an interim
continuous emissions monitoring program, to enable the agency
to monitor the emissions performance of the source during the
interim period.
COMPLIANCE REQUIREMENTS
All compliance schedules must contain specific milestones
for design, construction, installation and operation of new
or rebuilt control equipment.' The milestones should reflect
the shortest feasible schedule for achieving compliance and
should include, but not be limited to, the following:
1. Submittal of a control plan, including necessary
permit applications, to agency;
2. Award of major contract(s) to vendors;
3. Delivery of materials or control equipment;
4. Initiation of off-sitie fabrication or on-site
construction or installation of the control
equipment;
5. Completion of installation or rebuilding of control
equipment;
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8.25
- 3 -
6. Testing and demonstration of final compliance by
the source.
Performance bonds or stipulated penalties must be
associated with every milestone specified in the schedule.
To promote an expeditious schedule, the use of prefabricated
equipment or the use of double or triple shifts for the
construction or installation of equipment should be considered.
CONTINUOUS COMPLIANCE AND MONITORING REQUIREMENTS
A fundamental principle of this policy is that the source
must make every possible effort to maintain continuous
compliance after the new or rebuilt equipment becomes
operational. To assure continuous compliance during future
maintenance periods, all new or upgraded equipment must
normally include spare compartments (or units) and parts (or
equipment) that can maintain emissions at a compliance level
while the remainder of the equipment is being replaced,
repaired, or maintained. In lieu of this, those sources that
do not require continuous availability of the process equipment
may shut down during such periods.
To assure the ability of the agency to monitor continuous
compliance in the future, the source must periodically report
excess emissions to the appropriate air pollution control
agency. This may be accomplished by requiring the installation,
operation and reporting of data from continuous emissions
monitoring equipment. These 'requirements are to be set out
specifically in the compliance agreement.
-------
^ Attachment A 8.26
I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C 20460
APR 22 038
EOF
AB.AKDKAMA.HON
MEMORANDUM
SUBJECT: Interim Policy on Stack Height Regulatory Actions
FROM:
Assistant
for Air and Radiation (MR-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 aqd 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 rehearins^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)];
2..Dispersion credit for sources originally designed and constructed
with merged or multiflue stacks [40 CFR 51.100(hh)(2)(ii)(A)3; and
3. Grandfathering of pre-1979 use of the refined H + 1.5L formula
[40 CFR 51.100(ii)(2)3.
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 redesignations 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 proyvded 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 is due to the issue of
whether EPA.fets authority to unilaterally change attainment designations.
During this interim period, the Regional Office staff should review with
their States all regulatory actions involving dispersion credit: 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
-------
8.26
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. Cir. 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. Grandfathering pre-October 11, 1983 within-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 51.100(hh)(2)(ii)(A)]; and
3. Grandfathering pre-1979 use of-the refined H + 1.5L formula
[40 CFR 51.100(10(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 NRDCTemand modifies the
July 8, 1985 regulations, the EPA will notify the State of [_J that its
rules must-fee 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 in 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. Cir 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."
-------
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 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 tieight 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 it^
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 v. Thomas, 838 F.2d
1224 (D.C. Cir. 1988). Consequently, this permit may be subject ta
modification if and when EPA revises the regulation in response to
the court decision. -This may result >in re vised'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] progcam."
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
-------
8.26
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 [ ]. Th;s commitment is b.eing
Incorporated Into the Code of Federal Regulations for the State of [ ] 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 1n any permits issued until EPA has completed Us reconsideration
of the stack height regulations and has promulgated any necessary revisions*.
-------
Attachment C
State
AZ/CA/NV
AZ/CA/NV
SC
MS
NJ/NY/YI
WA
NO
AR
OH
TX
LA
DE
OH
SO
CO
AQMD t
3059
3210
3243
3330
3418
3480
3543
3548
3570
3572
3592
3600
3334
3618
3623
Description
Promulgation of Stack Height Regs.
App. and Disapp. 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 Stacjc. Height Rules
Stack Height Regulations
Redes ignati on of Galia County to
Attainment
Administrative Rules
Negative Declaration
Disposition
HQ
RO
RO
RO
RO
HQ
RO
HQ
HQ
HQ
HQ
HQ
Hold
RO
RO
-------
. 8 27
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
1 Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 2771 1
JUL 2 8 1983
MEMORANDUM
SUBJECT: Supplemental Guidance on Implementing the North County
Prevention of Significant Deterioration (PSD) Remand
FROM: II John Calcagni, Director /U*JT/-3^.
Ls\ Air Quality Management Division (MD-15)
TO: ' Addressees
On September 22, 1987, Gerald Emison issued guidance on implementation
of the Administrator's remand decision in the North County PSD permit appeal,
PSD Appeal No. 85-2. That document sets forth, in general terms, the essence
of the remand—that all pollutants, including those not directly regulated by
the Clean Air Act are to be considered in making the best available control
technology (BACT) determination for a PSD applicant. Now that the guidance
is out, various issues beyond the scope of the September 22, 1987 document
have arisen. I am addressing two of them. The first deals with the flexibilit
that the permitting authority has with respect to pollutants considered and
controls selected, while the second involves the level of detail needed in
the PSD public notice.
Consideration of Air Toxics in the BACT Determination
The BACT requirement is implemented through case-by-case decisionmaking.
While this necessarily involves significant use of judgment by the permitting
authority, certain policy presumptions apply: that it consider the full range
of pollution control options available and choose the most effective means of
limiting emissions, subject only to a showing of compelling reasons of economic
or energy impracticality. Those are the important lessons underscored by the
North County and H-Power remands. The presumption of employing a top-down
BACT analysis was further emphasized in Craig Potter's memorandum of December
1, 1987, entitled "Improving New Source Review (NSR) Implementation," to the
Regional Administrators. Other policy presumptions were articulated in the
September 22, 1987 guidance requiring that the BACT determination for regulated
pollutants be sensitized to the control of unregulated air pollutants (including
air toxics).
The September 22, 1987 policy does not identify which toxic substances,
require consideration in the BACT analysis, and at what levels. Among the
reasons for this is that the information with respect to the type and magnitude
of emissions of noncriteria pollutants for many source categories is limited.
-------
-2-
For example, a combustion source emits hundreds of substances, but knowledge
of the magnitude of some of these emissions or the hazard they produce is
sparse. While the Environmental Protection Agency (EPA) is pursuing a variety
of projects that will help permitting authorities to determine pollutants of
concern, EPA believes it is appropriate for agencies to proceed on a
case-by-case basis using the best information available. Thus, the determina-
tion of whether the pollutants would be emitted in amounts sufficient to be
of concern is one that the permitting authority has considerable discretion in
making. Reasonable efforts should be made to address these issues. The EPA
expects these efforts to include consultation with the Regional Office and with
the Control Technology Center (CTC), National Air Toxics Information Clearing-
house, and Air Risk Information Support Center in the Office of Air Quality
Planning and Standards (OAQPS) and review of the literature, such as
EPA-prepared compilations of emission factors. Source-specific information
supplied by the permit applicant is often the best source of information, and
it is important that the company be made aware of its responsibility to provide
for a reasonable accounting of air toxics emissions.
Similarly, once the pollutants of concern are identified, the permitting
authority has flexibility in determining the methods by which it factors air
toxics considerations into the BACT determination, subject to the obligation
to make reasonable efforts to consider air toxics. Consultation by the
review authority with EPA's implementation centers, particularly the CTC, is
again advised. One exception to this approach is where a municipal waste
combustor is involved. Here, the OAQPS has provided rather detailed guidance
regarding pollutants of concern and their control. (See memorandum of June
22, 1987, from Gerald Emison to EPA Regional Air Division Directors.) Similar
guidance on other source categories will be developed as appropriate.
It is important to note that several acceptable methods, including risk
assessment, exist to incorporate air toxics concerns into the BACT decision.
Whatever the methods selected, these serve only to affect the selection of
the control strategy. The overall approvability of a project once it applies
BACT depends on other criteria, as well, and is outside the scope of the
North County remand and this guidance.
Level of Detail in Public Notice
The September 22, 1987 guidance strongly emphasizes public participation.
The purpose of the PSD public notice is to provide sufficient information as
to the type of source involved, and its projected emissions and proposed
controls, such that potentially interested citizens will be apprised of the
main issues. Individuals wishing to investigate those issues in depth can
turn to the technical support document. Our intent regarding air toxics is
to provide the public with adequate notice of potential issues. The identi-
fication of specific toxic substances and the degree of detail in the notice
should be consistent with the concern posed by air toxics.
For example, if there are no air toxics projected to be emitted in
amounts sufficient to be of concern to the permitting authority, the notice
-------
-3- 8.27
can be handled very simply. One way, but by no means the only way, of doing
this would be to note that "the [permitting authority] also considered the
impact of available control alternatives on emissions of other pollutants,
Including those not regulated by the Clean Air Act, in making the BACT
determination, but found that no such pollutants would be emitted in amounts
sufficient to cause concern."
When any toxic pollutants of concern have been identified, it is
appropriate that the public be informed of them more directly. A variety of
approaches is acceptable. Public notice requirements would be met if all these
pollutants are mentioned individually, by name, or addressed by referring to
them by groups (e.g., "toxic metals"). It might be reasonable to note the main
representative pollutants (e.g., "the State has examined other pollutants of
potential concern, including compounds A, B and C"). In short, the permitting
authority can provide adequate notice in several ways, including the names of
the pollutants at issue and an indication that the compounds are toxic. The
notice can be quite brief on this subject (1-2 sentences), deferring any
detailed analyses and discussion to the technical support document.
EPA Oversight
The EPA Regional Offices are now supporting State and local implementation
of PSD review in virtually all cases and are charged with taking enforcement
action, as necessary, to ensure proper implementation of the September 22,
1987 policy. Action is contemplated only where-basic procedural steps are
missed, such as appropriate public notice, or inclusion of discussion of
relevant control alternatives in the technical support document, or where the
substantive technical analysis is clearly inconsistent with general practice,
Priority should be given to those cases in which there is a practical impact
to any followup—for example, more effective and affordable controls were not
considered.
The OAQPS is taking steps to facilitate continuing effective implementation
of this policy. One step toward this goal is the recent addition of this policy
in reviews of PSD permits under the National Air Audit System.
Thank you for your progress in carrying out this significant regulatory
requirement. If you need further assistance, please contact Michael Trutna at
FTS 629-5345 or Kirt Cox at FTS 629-5399.
Addressees:
Director, Air Management Division, Regions I, III, and IX
Director, Air and Waste Management Division, Region II
Director, Air, Pesticides, and Toxics Management Division, Region IV
Director, Air and Radiation Division, Region V
Director, Air, Pesticides, and Toxics Division, Region VI
Director, Air and Toxics Division, Regions VII, VIII, and X
cc: Air Branch Chiefs
New Source Review Contacts
Air Toxics Coordinators
OAQPS Divison Directors
G. Emison
0. O'Connor
E. Lillis
G. McCutchen
M. Trutna
K. Cox
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11X16/1983 13:57 EPfl IJftSH DC 1SEND ONLY 202 3S2 7871 P.02 8.28
BE70RB THE XDMIKI8TRATOR
C.S. EMVIROHM2MTAL PROTECTION AGENCY
WASHINGTON, D.C.
In the Matter of: )
)
Pennsauken County, New Jersey ) PSD Appeal No. 88-8
Resource Recovery Facility )
REMAND ORPfi
In separate petitions filed pursuant to 40 CFR §124.19
(1987), -' the Township of Cinnaminson g£ al. ^ and Robert
Filipczak requested review of a Prevention of Significant Deteri-
oration (PSD) permit issued to the Pennsauken Solid Waste Manage-
ment Authority for construction of a municipal waste combustor.
The permit determination was made by the New Jersey Department of
Environmental Protection (NJDEP) pursuant to a delegation of
authority from EPA Region II, New York, New York. Because of the
delegation, NJDEP 's permit determination is subject to the review
provisions of 40 CFR §124.19, and any permit it issues will be an
EPA-issued permit for purposes of federal law. 40 CFR §124.41;
45 Fed. Reg. 33,413 (May 19, 1980).
^ All references to the Code of Federal Regulations are to the
1987 edition.
27 The Township of Cinnaminson is joined in the petition by the
Borough of Palmyra and the Borough of Riverton, which are munici-
palities located in Burlington County, New Jersey, and by Allied
Citizens Opposing Pollution (ACOP), a civic association.
-------
11'' 1S'19S3 13=58 EPR UPSH DC 1SEND ONLY 202 382 7B71 P. 03
2
Under the rules governing this proceeding, there is no
appeal as of right from the permit decision. Ordinarily, a
petition for review of a PSD permit determination is not granted
unless it is based on a clearly erroneous finding of fact or
conclusion of law, or involves an important matter of policy or
exercise of discretion that warrants review. The preamble to the
regulations states that "this power of review should be only
sparingly exercised," and that "most permit conditions should be
finally determined at the Region level * * *." 45 Fed. Reg.
33,412 (May 19, 1980). The burden of demonstrating that the
permit conditions should be reviewed is therefore on the
petitioners.
Discussion.
Cinnaminson g£ al. object to issuance of the permit because
they believe NJDEP's determination of best available control
technology (BACT) is deficient. J/ According to these petition-
ers, NJDEP did not give adequate consideration to thermal de-NO,
V To obtain a PSD permit, the applicant must demonstrate that
the proposed facility will employ BACT for each regulated pol-
lutant. Section 169 of the Clean Air Act defines BACT as an
"emission limitation reflecting the maximum degree of reduction"
that the "permitting authority,H on a "case-by-case basis, taking
into account energy, environmental, and economic impacts and
other costs" determines is "achievable." 42 U.S.C. §7479(3).
Because BACT is determined on a case-by-case basis and takes into
account energy, environmental, and economic impacts and other
costs, which may vary from location to location, a BACT deter-
mination for a municipal waste combustor at one site may differ
from one reached at another site, even though the technology
employed may be identical. In other words, the emission limita-
tions for the sites can differ.
3
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11/16/1968 13:59 EPfi UIPSH DC I5END OI-LY 202 382 7671 P.04 8.28
3
technology in performing the BACT analysis. Petitioners argue
that MJDEP'8 determination not to set an emission limitation
based on thermal de-NOK technology was based on an inadequate
record, resulting in part from NJDEP having made its BACT deter-
mination prior to the time of permit issuance. Petitioners also
argue that the BACT analysis submitted by the permit applicant
did not adequately justify use of combustion controls (the means
chosen by the applicant for controlling NOX emissions from the
proposed facility) instead of thermal de-NOR technology. NJDEP
responded to these contentions by arguing that the record actual-
ly discloses that the BACT determination was made at the tine of
permit issuance; that the permit applicants1 BACT evaluation
fully evaluates alternative control technologies, including
thermal de-NOx technology; and that thermal de-NOx technology is
not yet "available** within the meaning of the statutory defini-
tion of BACT. Regarding the last point, NJDEP stated that there
was just one facility in the United States (the Commerce facility
in Whittier, California) employing thermal de-NOK technology, and
that it had been in operation only one year; that there is just
one facility currently under construction (in Modesto,
California); and that a third (in Long Beach, California) began
operations after the Pennsauken permit was issued and therefore
could not have been considered at the time of permit issuance.
With respect to these facilities, NJDEP says they were reviewed
4
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il/l6''l?68 14:00 EPft WASH DC 15END ONLY 232 362 7871 P. 05
4
under legal standards ^ and NO,, control strategies ^ not perti-
nent to the Pennsauken facility.
An examination of the materials identified by NJDEP as
representing the NOX BACT analysis ^ generally bears out peti-
tioners' contention that the BACT analysis on which NJDEP relied
is inadequate. Specifically, the record fails to disclose that
the applicant met its burden of showing that an emission limita-
tion based on combustion controls alone represents BACT. The
basic attributes of that burden are set out in Honolulu Resource
Recovery Facility f"H-Power"). PSD Appeal No. 86-8 (June 22,
1987), where I interpreted the statutory definition of BACT as
placing the burden on the applicant of "demonstrating that signi-
47 NJDEP points out that the South Coast Air Quality Management
District in California (SCAQHD) treats NOX as a non-attainment
pollutant requiring lowest achievable emission rate (LAER). In
point of fact, however, one of the three facilities (Modesto) is
located in an area that is attainment for NOX, and EPA issued a
PSD permit for it with a BACT limitation based on thermal de-NOx.
EPA Region IX issued the permit on August 11 19B6. Telephone
conversations between Ronald L. McCallum, EPA Chief Judicial
Officer, and Bob Baker, EPA Region IX (October 5 and November 11,
1988).
^ According to NJDEP, the Commerce facility was permitted under
California rules as innovative technology, and all of the
facilities are in locations where NO emissions fall under the
South Coast Mr Quality Management District's (BCAQMD's) control
strategy for ozone. Conversely, New Jersey focuses on volatile
organic compounds (VOC's) for its ozone control strategy.
67 See Final Environmental and Health Impact statement
("FEHIS"), Volume I, at 5-36 through 5-56 (Jan. 1987); FEHIS
Response to Comments, Volume I at 211-213 (June 1987); Hearing
Officer's Report at 226 (June 30, 1988).
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o oft
11-'1S/1938 14:01 EPfl UlflSH DC 1SEND ONLY 202 3B2 7871 P.06 °'to
fleant technical defects, or substantial local economic, energy,
or environmental factors or other costs warrant a control tech-
nology less efficient than [the most stringent available techno-
logy]." JcJ. at 7, 6 n.9. This interpretation was disseminated
in operational guidance for municipal waste combustors on June
26, 1987, ^ and was further refined in general guidance issued
by EPA's Assistant Administrator for Air and Radiation on
December 1, 1967. The latter guidance refers to the applicant's
burden as the "top-down" approach to BACT analysis:
The first step in this approach is to determine, for the
emission source in question, the most stringent control
available for a similar or identical source or source
category. If it can be shown that this level of control is
technically or economically infeasible for the source' in
question, then the next most stringent level of control is
determined and similarly evaluated. This process continues
until the BACT level under consideration cannot be eliminat-
ed by any substantial or unique technical, environmental or
economic objections. Thus, the "top-down" approach shifts
the burden of proof to the applicant to justify why the
proposed source is unable to apply the best technology
available. It also differs from other 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 required for munici-
pal waste combustors pursuant to the June 22, 1987,
Administrator's remand to Region IX of the H-Power BACT
decision and the OAQPS June 26, 1987, "Operational Guidance
on Control Technology for New and Modified Municipal Waste
Combustors (MWC's)." It is also currently being successful-
ly implemented by many permitting agencies and some of the
^ Memorandum from Gerald Emison, Director, EPA Office of Air
Quality Planning and Standards (OAQPS) to EPA Regional Air office
Directors, enclosing "Operational Guidance on Control Technology
for New and Modified Municipal Waste Combustors."
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11/16/1988 1^:62 EPfl UIPSH DC 1SEND ONLY 202 3S2 7871 P. 07
Regional Offices for all sources. I have therefore
determined it should be adopted across the board. *
The H-Pover decision, the operational guidance for municipal
waste combustors, ^ and the "top-down" guidance are all ap-
plicable to the Pennsauken permit determination. H-Power vas my
direct administrative interpretation of the statutory BACT
requirement; the subsequent operational guidance and "top-down"
guidance implement H-Power through statements of Agency policy.
All three documents antedate issuance of the permit. ^ These
& Memorandum from J. Craig Potter, Assistant Administrator, to
Regional Administrators (Regions I-X) at 4 (Dec. 1, 1987) (the
Potter Memorandum).
27 The Operational Guidance expressly states that it applies to
all PSD permits issued through State and local agencies pursuant
to delegation agreements made under 40 CFR §52.21(u), except
where a final permit was issued and administrative appeals under
40 CFR Part 124 were exhausted prior to June 26, 1987.
Operational Guidance at 7; see also 52 Fed. Reg. 25399, 25406
(July 7, 1987); 52 Fed. Reg. 47826 (December 16, 1987). The
"top-down" guidance contains statements to the same effect.
Potter Memorandum 4.
& The chronology of the Pennsauken permit is as follows: the
permit application was filed in January 1987; it was supplemented
with a BACT analysis for NO, in June 1987 (including an
evaluation of thermal de-NOx technology)? NJDEP completed its
BACT assessment in December 1987; hearings were held and public
comment was solicited in January-February 1988, in which
commenters questioned the absence of an NO, emission limitation
based on application of thermal de-NOK technology; and lastly,
the permit was issued in July 1988, specifically rejecting
thermal de-NO, as representing BACT for this facility.
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11/1S/1983 14=03 EPfl UflSH DC i^EMD ONLY 2G2 382 7S71 P.05 g
7
interpretations and policy statements were therefore available to
the applicant and NJDEP for the Pennsauken permit. ^
The permit applicant's burden of showing that a more strin-
gent technology is not BACT obviously does not come into exis-
tence unless the so-called "more stringent" technology is
available. If the technology is not available/ the permit ap-
plicant is under no duty to consider it in the BACT analysis.
Here, NJDEP contends that thermal de-NOx technology is not avail-
able; however, there is nothing of substance in the applicant's
BACT analysis to bear out this contention. If anything, it is
^ As a practical matter, BACT determinations will ordinarily be
made at some time prior to actual issuance of the permit, for
there is always a lag between closure of the administrative
record (usually the close of the public comment period) and the
time when the permit determination is announced. As noted in
Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519 (1978),
quoting ICC v. Jersey city, 332 U.S. 503 (1944):
Administrative consideration of evidence * * * always
creates a gap between the time the record is closed and
the time the administrative decision is promulgated
[and, we might add, the time the decision is judicially
reviewed] * * *. If upon the coming down of the order
litigants might demand rehearings as a matter of law
because some new circumstance has arisen, some new
trend has been observed, or some new fact discovered,
there would be little hope that the administrative
process could ever be consummated in an order that
would not be subject to reopening.
435 U.S. at 554-55; see Nance v. EPA, 645 F.2d 701 (9th Cir.
1981) (quoting Vermont Yankee supra).
Absent unusual delay between the close of the public comment
period and the date of permit issuance, or the presence of other
extraordinary circumstances, the close of the public comment
period can be used as the reference by which the adequacy of the
administrative record is judged.
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11X16/1988 14=04 EPfl UflSH DC iSEND ONLY 202 382 7B71 P.09
8
refuted by reference to the Commerce facility, which was in
existence and operating during NJDEP's review of the permit
application, and by reference to the evident willingness of the
Modesto and Long Beach applicants to commence construction of
their municipal waste combustors during the same period of
consideration. The fact that these projects were undertaken to
comply with allegedly different legal requirements (LAER or
California rules) and different control strategies is not
especially material to the issue of availability. ^ The
question of availability for purposes of BACT is a practical,
factual determination, using conventional notions of whether the
technology can be put into use. ^ The record here raises a
strong presumption in favor of concluding that thermal de-NOx
technology is available in the sense just described. The opera-
tional guidance, issued June 26, 1987, also treats thermal de-uo^
technology as an available technology that "should be considered
by permitting authorities in making BACT determinations." Opera-
tional Guidance at 6. In short, the applicant's BACT analysis
must evaluate thermal de-NOx as an available technology.
The applicant's BACT analysis, however, does not contain the
level of detail and analysis necessary to satisfy the applicant's
W See notes 4 and 5 supra.
u/ The dictionary defines the word "available" as that which can
be "used," or is "usable," or can be "got, had, or reached; * * *
accessible." Webster's New World Dictionary of the American
Language 96 (2d College ed. 1972).
Q
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11/16''19B8 14:05 EPPI UlftSH DC 15END ONLY 2023827871 P. 10
9
burden, aa previously described, of showing that thermal de-NO
technology is technically or economically unachievable for this
source. The applicant's assertions that the technology has not
yet been demonstrated to be efficient, ^ reliable, and cost
effective in controlling NOX are merely conclusory. ^/ Moreover,
they were made in a January 1987 submission and are undoubtedly
out-of-date in view of the rapid developments in the application
of this technology. Although the BACT analysis shows control
costs in the range of $1300-1500 per ton of NOX removed, w there
is no serious discussion of cost effectiveness. For example, the
applicant estimated annual costs of removing NOX at $200,000 to
$250,000 using thermal de-NOx technology. FEHIS (Response to
Comments) at 212 (Table 16.1-1). However, there is no discussion
that even purports to show that these costs are unusually high.
Greater efforts must be made by the applicant to show that
thermal de-KOx is economically infeasible or otherwise not
achievable in this case. This might be done, for example, by
^ The applicant's own submissions refute this contention.
According to the applicant, NO, emissions for the proposed fa-
cility would be 88.9 Ib/hr using combustion controls compared
with 35.6 to 62.2 Ib/hr using thermal de-NO,, technology. FEHIS
Response to comments 211-212 (Table 16.1-1 (June 1987). Pol-
lutant reductions of this magnitude are clearly significant.
^ See FEHIS at 5-48.
^ When operated at the peak fuel feed rate of 500 tons per day,
for 365 days per year, the total annual emissions of NOK at the
proposed facility are estimated at 389.3 tons. FEHIS at 5-37
(Table 5.3-3).
1L
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11'-16--1338 14 = 0o EPfl UflSH DC ISEND ONLY 202 382 7S?1 P. 11
10
obtaining and analyzing operating data and other information from
the Commerce facility — and perhaps also from the Long Beach
facility, which recently commenced operations. H-Pover and EPA's
guidance implementing that decision contemplate a much more
thorough explanation, based on consideration of objective techni-
cal and economic data, to substantiate the contention that
thermal de-No, is an experimental, unproven technology. In sum,
the BACT analysis does not contain sufficient justification,
specific to the proposed facility, to justify the level of
control proposed in the permit. More detail and analysis is
required.
Petitioner Robert Filipczak's fundamental objections to the
Pennsauken permit are not with the control technology, but
rather, with the municipal waste combustor itself. He urges
rejection of the combustor in favor of co-firing a mixture of 20%
refuse derived fuel and 80% coal at existing power plants. These
objections are beyond the scope of this proceeding and therefore
are not reviewable under 40 CFR §124.19, which restricts review
to "conditions" in the permit. Permit conditions are imposed for
the purpose of ensuring that the proposed source of pollutant
emissions — here/ a municipal waste combustor — uses emission
control systems that represent BACT, thereby reducing the
emissions to the maximum degree possible. These control systems,
as stated in the definition of BACT, may require application of
"production processes and available methods, systems, and
techniques, including fuel cleaning as treatment or innovative
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11/16/1963 14:e? EPA UW5-1 DC 15EHD ONLY 202 382 7871 P. 12 8.28
11
fuel combustion techniques" to control the emissions. 42
U.S.C.A. §7479(3). The permit conditions that define these
systems are imposed on the source as the applicant has defined
it. Although imposition of the conditions may, among other
things, have a profound effect on the viability of the proposed
facility as conceived by the applicant, the conditions themselves
are not intended to redefine the source, as petitioner Filipczak
would have them do. In other words, the source itself is not a
condition of the permit. Therefore, petitioner's objections to
the permit are not within the scope of this proceeding. Other
matters raised by petitioner that are arguably within the scope
of the proceeding, for example, the adequacy of the BACT analysis
as it relates to mercury emissions and removal of metals as a
fuel cleaning procedure, have not been presented in a manner to
convince me that NJDEP committed clear error or that an important
issue warranting review has been raised at this time. Therefore,
the petition is denied.
Conclusion
The deficiencies in the BACT analysis leave two courses of
action open at this juncture of the proceedings, one is to grant
review of the permit and enter into the briefing phase
contemplated by 40 CFR §124.19(c). However, the deficiencies in
the record can not be rectified through the submission of briefs,
and any ensuing decision would likely conclude that the permit
should be denied (because of the deficiencies) or that it should
be remanded to the permit-issuing authority to allow the ap-
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11/16/198S 14:08 EPP UfiSH DC 1SEND ONLY 202 382 7871 P. 13
12
plicant to supplement the BACT analysis. Considerations of time
favor remanding the permit in the first instance. Therefore,
rather than receiving additional briefs on appeal, I an remanding
the case to NJDEP for further consideration of the BACT analysis,
solely as it relates to NO, emissions. This remand should not be
viewed as prejudging the issue. NJDEP is simply directed to
reopen the permit proceeding for the limited purpose of allowing
the applicant to supplement its original BACT analysis in accor-
dance with the guidance described in this decision. If/ after a
full review of the data NJDEP determines that NOX emission levels
obtained from combustion controls alone represent BACT, it may
reissue the permit as written. It may, of course, revise the
limitations and other conditions of the permit as appropriate.
After making the determination, NJDEP should reopen the
public comment period to receive any supplemental comments from
petitioners Cinnaminson et aJL. on the issue of the NOK limita-
tions in the permit. NJDEP's determination on remand will be
subject to review under 40 CFR §124.19, and appeal of its
decision on remand will be required to exhaust administrative
remedies under section 124.19(f)(1)(iii).
So ordered.
Dated: m-'viv - i — •
/ Lee M. Thomas
Administrator
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11/1S/1988 14:09 EPR UflSH DC ISEND ONLY 202 382 7871 P.14 8.28
CERTIVICATB 01 8HRVICE
I hereby certify that copies of the foregoing Order on
Petitions for Review in the matter of Pennsauken County, New
Jersey, Resource Recovery Facility, PSD Appeal no. 88-8, was mail
to the following by first class nail, postage prepaid.
Michael 8. Caro
Deputy Attorney General
Department of Law & Public Safety
Division of Law, CN 112
Environmental Protection Section
Richard J. Hughes Justice Complex
Trenton, NJ 08625
William J. Muszynski
Acting Regional Administrator
U.S. EPA, Region II
26 Federal Plaza
New York, NY 10278
Thomas J. Genuine
19 Market Street
Morristown, NJ 07960
Robert Filipczak
402 Dahlia Street
Northfield, NJ 08225
Robert P. Bedell
Myarson, Kuhn and Sterrett
1330 Connecticut .Avenue, NW
Washington, DC 20036
Dated:
H. Selden, Secretary
to the Chief Judicial Officer
14
TRTQI P
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.£./ 8.29
Ti
. | UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
0 REGION IV
343 COURTLAND STREET
MEMORANDUM ATLANTA. GEORGIA soies
NOV i* 1383
SUBJECT: Request for Administrator to Initiate Review of PSD Permit for
Columbia Gulf Transmission Company, Clementsville Compressor
Station, Kentucky
FROM: Greer C. Tidwell OL^ fl 1 juu u^nP—•
Regional Administrator
TO: Lee M. Thomas
Administrator
I am requesting that, pursuant to 40 C.F.R. §124.19, you review the Prevention
of Significant Air Quality Deterioration (PSD) portion of the air pollution
permit issued by the Commonwealth of Kentucky to Columbia Gulf Transmission
Company (Columbia Gulf) for the construction of a stationary natural gas-fired
turbine at Clementsville, Kentucky. The failure of the Kentucky Division
for Air Quality (Division) to properly require best available control
technology (BACT) for the nitrogen oxides (NOX) emissions is the basis for
reviewing the Division's actions in issuing the permit and for staying the
effectiveness of the permit until all PSD requirements have been met. As
explained below, if you agree that review of this permit pursuant to
Section 124.19(b) is appropriate, you will have to notify the permittee by
Navember 15, 1988, that you are initiating review of the PSD portion of the
permit. Conversely, if you determine that it is more appropriate to initiate
review under Section 124.19(a), it will, likewise, be necessary to serve
copies of the appeal on the appropriate parties as identified below.
This permit was issued on October 13, 1988, by the Division under various
authorities including EPA's PSD permitting authority, 40 C.F.R. §52.21,
which has been delegated to the Division. The area in which the construction
is contemplated is classified as attainment for all pollutants. My staff
has concluded that the permit does not adequately control NOg emissions
under the applicable PSD regulations. The analysis of the NO^ control
technology undertaken by the Division fails to demonstrate that the system
selected would provide the best degree of emission control currently available.
The Delegation of PSD Authority to the Kentucky Division for Air Quality
EPA Region IV delegated PSD review authority to the Kentucky Division for
Air Quality pursuant to 40 C.F.R. §52.21 on January 25, 1978, at 43 Federal
Register 3361, as amended at 45 Federal Register 52741, August 7, 1980 (see
40 C.F.R. §52.931). (See Enclosure 6.)
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-2-
Applicability of NOy Requirements to Columbia Gulf
Columbia Gulf's consultant, Entrix Inc., filed a permit application with
the Division on or about May 26, 1988, requesting approval for the construction
and installation of one 11,864 horsepower (8.9 MW) gas turbine at the
Clementsville Compressor Station in Clements vi lie, Kentucky. Supplemental
information was filed on June 13 and August 22, 1988. The existing facility
consists of two turbine compressor sets, three emergency generator sets,
two boilers, and seven gas compressors. The facility has the potential to
emit NOjj from these sources in the amount of 1583.22 tons per year (TPY).
The primary uncontrolled pollutants emitted by the new unit would be 282.5
TPY of NOx, 7.4 TPY of unhalogenated hydrocarbons (UHC), and 2.9 TPY of CO.
Therefore, the proposed construction constitutes a major modification for
NOy emissions to an existing major source. See 40 C.F.R. §52. 2Kb).
Clementsville is located in a county designated as attainment for all
pollutants. See 4G C.F.R. §81.318. Therefore, the emissions of N^ are
subject to review under the PSD regulations contained in 40 C.F.R. §52.21,
authority for the implementation of which has been delegated to the Division
by EPA, as set forth above.
BACT Emission Limit for NCy
The permit establishes an emission limit of 178 parts per million volume
(ppmv) NOx when burning natural gas. This limitation is below the 196 ppmv
NO, limit specified in the New Source Performance Standards (NSPS) Subpart
GG limitations for turbines less than 30 MW; however, this limit is substantially
less stringent than BACT limitations imposed in pending and existing PSD
permits for other stationary turbines of approximately the same size, and
that use the same type fuel. My staff has determined that BACT for this
facility consists of water injection for NOX control to reduce emissions
to about 0.2 Ib NC^ per mmBtu when burning natural gas. Such a reduction is
normally achiever at a cost of about $3,000-$6,500 per ton of NOX removed.
The State BACT Analysis"
The preliminary determination dated June 20, 1988, submitted by the Division
to EPA during the public comment period states that the following alternatives
for NOx control were analyzed by Columbia Gulf:
1. Selective Catalytic Reduction (SCR)
2. Water Injection
3. Dry Controls
The Division rejected SCR because of temperature constraints and water
injection because of increased CO emission, operating costs, and fuel
consumption. The Division determined that dry controls represents BACT.
"Dry controls," which Columbia Gulf proposed to use, merely means that the
Solar turbines were designed in such a way to meet the minimum requirements
of Subpart GG (which was promulgated almost 10 years ago). Since its
promulgation, more efficient turbine designs, such as the Solar Mars turbine,
have been developed, resulting in better combustion and lower NC^ formation.
Based on the degree of NC^ reduction- however, "dry controls" should not be
considered a "top" control option, but merely a more efficiently designed turbine.
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8.29
-3-
Public Comment Period
By letter dated June 20, 1988, the Division notified EPA that a public
notice announcing the commencement of the public coirenent period had been
sent to the newspaper on June 13, 1988. Attached was a copy of the
preliminary determination, modeling analysis, and a copy of the proposed
permit (see Enclosure 1). The preliminary determination stated that BACT
for the proposed turbine was the use of dry controls. EPA Region IV
reviewed this material and provided comments to the Division on July 21,
1988 (see Enclosure 2). Region IV's primary concern was that BACT for the
NOjj emissions had not properly been determined. Region IV stated that, in
the absence of an acceptable technical or economic justification to the
contrary, a valid BACT determination regarding NQg emissions from this
source would be water injection, resulting in a NOX limit of about 0.2 Ib
per mmBtu.
By letter dated October 13, 1988, the same date as the permit issuance, the
Division notified Region IV of their final determination. The final determi-
nation did not adequately address all of Region IV's comments regarding
BACT, and concluded that BACT for the proposed turbine was dry controls.
The NOX emission limit in the final permit was below the NSPS emission
level but above a level determined by Region IV to be BACT in this case.
The following is a brief summary of EPA's responses made during the comment
period regarding the Division's BACT determination.
Division Position; The proposed turbine will operate approximately 6000
hours per year and the incremental reduction cost associated with the use of
water injection would be $2,121 per ton of NC^ removed. This cost is
unreasonable? therefore, water injection should not be considered as BACT.
Region IV's Response; Historically, water injection has been used to
control NOjj emissions from gas turbines without adverse effects. Because
it is a "top" technology, we feel that water injection should be considered
as BACT. Additionally, incremental reduction cost of $2,121 per ton of
is not unreasonable.
Division Position; The addition of water injection controls would increase
fuel consumption by^2.2 percent. This 2.2 percent increase represents a 7
percent decrease in fuel "efficiency gain.
Region IV's Response; The 2.2 percent increase is insignificant and
therefore would not be considered a unique and convincing argument against
the use of water injection in this case.
Division Position; Previously permitted Solar turbines did not require water
injection as BACT.
Region IV's Response; Because BACT determinations are made on a case-by-
case basis- the fact that other permitted Solar turbines were not required
to install water injection controls is irrelevant. According to the
BACT/IAER Clearinghouse, the use of water injection for gas turbines is
technically feasible. Unless unique and convincing arguments are presented
showing that the use of water injection controls will pose a financial
hardship on the company, we feel that water injection is economically feasible.
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-4-
Additionally, there is at least one permitted Solar Mars turbine that is
using water injection as a result of a NSR determination and two other
permits pending that will require water injection.
In addition to the above written comments, the following comments were made
after the public comment period during a telephone conversation on
October 26, 1988, between William Eddins of the Kentucky Division for Air
Quality and Bruce P. Miller of EPA, Region IV:
Division Position; Although the use of water injection would reduce
emissions, CO emissions would increase threefold.
Region IV1 s Response; It is true that CO emissions could increase from
2 TPY to 6 TPY with the use of water injection; however, NO^ emissions will
be reduced from 193 TPY to 79 TPY, a 114 TPY reduction. The large reduction
in NOX emissions compared to the small increase in CO emissions justifies
using NOX controls.
Division Position; An annualized cost of $243,000 to reduce the maximum
annual average impact by 0.02 ug/m-* is unreasonable when the NAAQS is 100
uc 'm3 .
Region IV s Response; The predicted impact of this source is independent
of the requirement to apply aACT. Although Columbia Gulf has indicated its
intent to operate this facility only 6000 hours per year, there are no_
operating restrictions in the permit. Therefore, at full operation, with
no controls, this source could emit approximately 282 TPY of
Division Position; EPA's comparison of Columbia Gulf's a^CT analysis with
other projects subject to IAER or other local restrictions is inappropriate
since the analyses have different requirements.
Region IV s Response; Regardless of what pollution controls other projects
were required to install, the modification of this source triggered a PSD
review, which in turn requires a "top-down" BACT analysis. The "top-down"
BACT analysis requires that the most stringent controls be evaluated first,
the second most stringent controls evaluated second, and so on. Only after
convincing arguments are presented showing that a control is either technically
infeasible or is unreasonable based upon energy, environmental or economic
concerns, can this control be rejected as BACT.
Region IV has determined that regardless of what other similar sources were
required to do, the facility has not made unique and convincing arguments to
obviate water injection as BACT.
Division Position; Pollution controls installed on turbines used for
co-generation should not be compared to turbines used at gas transmission
compressor stations because the facilities are different.
Region IV' s Response; It is true that co-generation facilities should not
routinely be compared to facilities without heat recovery when selective
catalytic reduction controls are being evaluated. The use of water injection
on gas turbines, however, is not affected by heat recovery systems or lack
thereof .
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8.29
-5-
The turbines at these two facilities can be compared to each other because
each turbine used in the comparison use the same fuel (natural gas), have
the sane energy rating (8.9 MW), and are the same model (Mars, manufactured
by Solar). Regardless of what type of facilities the turbines are installed
at, each will create NOj, in the combustion chamber while producing electricity.
Since water injection is considered technically feasible for reducing NOjj
emissions for the chosen turbines located at co-generation facilities,
water injection appears to be feasible as BACT for the turbine to be installed
at Columbia Gulf's facility.
Reoonmendation
I am asking that you initiate review of the Columbia Gulf permit with
respect to compliance with the PSD review procedures applicable to BACT
determinations. Specifically, the review should address the adequacy
of the review and determination of BACT for NOx emissions.
Procedures and Time Limitations
If you desire to evaluate these inportant issues as they relate to this
permit, review procedures must be initiated within the time period allowed
by the regulations, 40 C.F.R. Part 124. Under Section 124.19(a), if this
is construed as a petition for review, the petition must be filed within 30
days of service of the notice by the Division of its final permit decision,
and the Administrator must issue an order granting the review within a
reasonable time following the filing of the petition. Section 124.19(c).
If for any reason you determine that Section 124.19(a) is not the proper
procedure, we would request you to initiate review on your own initiative
under Section 124.19(b), which likewise requires you to act within the
initial 30 days.
Based on the permit issuance date of October 13, 1988, we calculate that
the 30 day period from the issuance of the permit will end on November 12,
1988. Pursuant to Section 124.20(a), the time began to run on the day
after permit issuance. Since service of the Division notice was by mail,
we have added three days to the prescribed tine in accordance with Section
124.20(d). The thirty-third day after October 13, 1988, is November 15, 1988.
If this is construed as a review on your own initiative pursuant to Section
124.19(b), notice must be given by this date. If this is construed as a
petition for review, it must be served as specified in 40 C.F.R. §124.10.
I have enclosed, for your review, a draft Notice of Decision to Review
Permit (Enclosure 7).
The regional office filed connents on the draft permit within the Division
coiment period. We construe the definition of person in Section 124.41, as
well as that in the Act, 42 U.S.C. §7602, to include an EPA regional office
and/or an EPA Regional Administrator. Therefore, the Region, and/or the
Regional Administrator, as a person on whose behalf conments were filed, is
a proper party to file a petition for review under Section 124.19(a).
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-6-
Section 124.19{a) requires a statement that the issues being raised for
review were raised during the cement period to the extent required by Part
124. All facts or issues raised herein except as noted above were raised
during the public conment period.
Notice of the initiation of the review procedures or service of this document
as a petition for review should be sent to:
1. Mr. William Eddins, Director
Division for Mr Quality
Kentucky Departnent for Environmental
Protection
Frankfort Office Park
18 Reilly toad
Frankfort, Kentucky 40601
2. Mr. Richard D. Bayley
Manager of Design Engineering
Columbia Gulf Transmission Conpany
P. 0. Box 683
Houston, Texas 770Q1
3. Mr. Daniel Ransbottom
Senior Consultant
Entrix, Inc.
P. 0. Box 56288
Houston, Texas 77256-6283
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8.29
-7-
Enclosed are copies of the following documents upon which this request is based:
1. Letter dated June 13, 1988, from William Eddins, Kentucky Division for
Air Quality to Winston Smith, EPA, transmitting the Division's pre-
construction review and preliminary determination for Columbia Gulf Trans-
mission Company's construction of a Solar Mars Turbine at their Clementsville
Compressor Station located in Clementsville, Kentucky.
2. Letter dated July 21, 1988, from Bruce P. Miller, EPA, to William Eddins,
Kentucky Division for Air Quality, acknowledging receipt of the preliminary
determination for Columbia Gulf Transmission Company and providing comments
on their determination.
3. Letter dated August 22, 1988, from William Eddins, Kentucky Division for
Air Quality to Winston Smith, EPA, transmitting Columbia Gulf Transmission
Company's rebuttal to EPA's July 21, 1988, comments on the preliminary
determination.
4. Letter dated September 23, 1988, from Bruce P. Miller, EPA, to William
Eddins, Kentucky Division for Air Quality responding to Columbia Gulf
Transmission Company's rebuttal to EPA's comments on the preliminary
determination.
5. Final determination and permit dated October 13, 1988, issued by the
Kentucky Department for Environmental Protection to Columbia Gulf
Transmission Company to construct a Solar Mars Gas Turbine at the
Clementsville Compressor Station located in Clementsville, Kentucky.
6. Letter dated May 19, 1980, from Rebecca W. Hanmer, EPA, to Jackie Swigart
delegating authority for all portions of the Federal PSD program, as
described in 40 CFR 52.21, to the Commonwealth of Kentucky. (See 45
Federal Register 52741, August 7, 1980).
7. Draft Notice of Decision to Review Permit.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
December 14, 1988
MEMORANDUM
SUBJECT: Review of Valero Hydrocarbons BACT Analysis
FROM: Allen c. Basala, Chief
Economic Analysis Section, ASB (MD-12)
TO: Anthony Wayne, Chief
Texas, New Mexico Enforcement Section (6T-ET)
Region VI
This memo is in response to your request of November 8. In
our judgment, the Valero hydrocarbons BACT economic analysis is
unacceptable. The employed methodology is not supported as valid
for purposes of project budgeting and cost-effectiveness
assessments. To remedy this deficiency, Valero should redo their
analyses using more conventional techniques. Also, the BACT
analysis fails to include other alternate control options which
are potentially as effective as, and less costly than, those
control techniques presented.
Frank Bunyard's detailed review is attached.
cc: G. McCutchen
F. Bunyard
E. Noble
D. Solomon
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8 30
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
December 8, 1988
MEMORANDUM
SUBJECT: Review of Valero Hydrocarbons BACT) Analysis
FROM: Frank L. Bunyard
Economic Analysis Section, ASd* (MD-12)
TO: Allen C. Basala, Chief
Economic Analysis Section, ASB (MD-12)
Per your request of November 8, I have reviewed the subject
document and prepared the following comments regarding my
concerns on the economic issues of the BACT proposals offered by
Valero. I have also coordinated our reviews with Eric Noble of
the Noncriteria Pollutants Programs Branch for his technical
insights in preparing these comments. In addition, I have
discussed these thoughts at some length with Stanley Spruiell and
Rick Bartley of EPA Region VI staff by phone earlier in this
week.
My major concerns with the technical, cost and economic
issues are summarized as follows:
(1) Inconsistent annualization methods to estimate cost-
effectiveness
(2) Omission of analyses of alternatives, such as combined
cycle steam generation for gas turbines and
retrofitting dry controls on internal combustion
engines (ICE)
(3) Questionable incorporation of downtime in the
operating costs and unreasonable concerns regarding
catalyst regeneration and/or disposal, brine disposal
and water purification costs.
The following discussion will explore each of these points
in detail. First, my chief concern is the annualization method
used in the derivation of the cost-effectiveness figures that are
the focus of the arguments presented by Valero.
The method, as discussed in Section 3, page 20, of the
Valero BACT analysis, uses the sinking fund, or future value
method, to determine cost-effectiveness. Standard cost
estimating methodologies used by the Agency program offices are
based on present value methods. All the criteria for EPA
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rulemaking, such as NSPS, and NAAQS/PSD program implementation,
such as RACT determinations and BACT determinations, employ this
present value method. This philosophy is in agreement with both
academicians and practitioners familiar with modern financial
theory in capital budgeting and asset allocation activities.
The estimate of $14,724 per ton, which is-derived from the
future 10-year value of $53,947,000, is equivalent to a $5676 per
ton NO, removed for Selective Catalytic Reduction (SCR)
technology presented in Table 3, page 25. Similarly, the $5,865
for water injection in Table 2 is equivalent to $1545 per ton NOX
removed; and, the $9,292 in Table 3 for SCR for the ICE engines
is equivalent to $ $3,582 per ton. In short, the choice of a
present value versus future value metric is a time preference
issue that should not be an argument introduced into the test of
reasonableness of BACT determinations. To repeat, Agency
standardized procedures use the present value method.
I concur with Valero's concept for normalizing annualized
costs for projects with nonuniform cash outlays, such as
replacing catalyst. I also concur conceptually with most of the
remaining line-by-line items, with the exception of specific
items, such as those discussed below (e.g., lost production).
On the second point, Valero excludes discussion on
alternative technical options, which would include: (1) operating
some gas turbines in the combined cycle mode, (2) retrofitting
existing ICE with new heads to meet the 2 gram NO, per
horsepower-hour emission limit or,(3) purchase or rental of new
simple cycle gas turbines capable of meeting the NOX limit with
little or no water or steam injection.
Regarding the discussion on page 32 of the Valero analysis,
Valero could have included a discussion on the viability of
installing one or more combined cycle gas turbines rather than
utilizing all simple cycle units. The addition of heat recovery
steam generators and steam turbines would increase plant
efficiency and, as a side benefit, make steam available for
injection into the gas turbines. Steam improves the heat rate of
the gas turbines and reduces the maintenance impacts associated
with water injection. I understand that Solar Turbines was
promoting this concept a few years ago.
Concerning the technical discussion of ICE's on page 47,
Valero did not address retrofitting the ICE's with the new heads
that would would achieve the desired emission limit of 2 gram NO,
per hp-hr without further control. This would be cheaper and more
reliable than SCR technology on existing ICE's in achieving the
same environmental objective. Alternatively, newer model engines
with new NO, control technology could possibly be rented.
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8.30
On the third issue regarding inclusion of specific operating
cost elements, we should not concur with the philosophy
underlying the assumptions for downtime and associated lost
production, brine disposal, and water purification problems. We
believe the case for maintenance problems and including lost
production as an out-of-pocket expense is overstated. We believe
that expensing a full-time technician to monitor these turbines
and engines should diminish potential downtime problems.
Accordingly, adding an expense for lost production is a redundant
item. Furthermore, enough experience should now be available on
both wet controls and SCR to prevent, or at least be prepared
for, potential maintenance problems. If not, then the source
should consult with equipment manufacturers, users, and states
for documentation of maintenance experience regarding SCR. As a
minimum, EPA should request more analyses of dry controls in the
Valero permit application.
As for brine disposal, this requirement is not unique to
Corpus Christi. This is a problem common to all facilities
producing steam, as well as gas turbines with water injection.
Therefore, this is not an argument for unreasonableness.
Likewise, catalyst regeneration is a routine recycling operation
carried out by the catalyst manufacturer. Regarding the
discussion on page 28, the concerns with handling the handling
and disposition (recycling) of vanadium pentoxide as a hazardous
waste is a legitimate issue; however, proper care of this
material is a normal cost of doing business and should not be
considered as an economic argument, without additional
documentation.
The loss in efficiency attributed to water injection also
seems to be excessive. The permit presumes (to meet a 42 ppm NO,
limit) a fuel penalty of at least 2.2% for a 0.62:1 water-to-fuel
ratio. This is about 3 1/2 times the impact reported in the
background document for the gas turbine NSPS. Incidently, both
the Solar and Allison gas turbines may be able to meet the 25 ppm
limit with water injection at a water-to-fuel ratio less than
1.0.
In summary, Valero has not presented sufficient information
to render the emission limits of 25 or 42 ppm for gas turbines
and 2 grams per hp-hr for ICE inappropriate.
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JAN 04
Mr. Lawrence E. Pewitt, P.E.
Director, Permits Division
Texas Air Control Board
6330 Highway 290 East
Austin, Texas 78726
Re: Valero Hydrocarbons BACT Analysis, PSD-TX-746
^_— -^ lAfAVt\fP
• ••"'•'itJhL SU3HED 3V TOW WAT we
Dear Mr. Pewitt: •-.:V'i'w*-
We have evaluated the information provided by Valero Hydrocarbons
on August 19, 1988, concerning the feasibility of best available
control technology (BACT) alternatives for its proposed natural gas
processing plant near Corpus Christi, Nueces County, Texas. Our
evaluation was coordinated with the Economic Analysis Section in
Research Triangle Park, North Carolina, whose review is enclosed.
Major concerns with the technical, cost, and economic issues are
as follows:
Inconsistent annualization methods to estimate cost-
effectiveness.
Omission of analyses of alternatives, such as combined
cycle steam generation for gas turbines and retrofitting
dry controls on internal combustion engines.
Questionable incorporation of downtime in the operating
costs and unreasonable concerns regarding catalyst
regeneration and/or disposal, brine disposal, and water
purification.
These items are discussed in detail in the Enclosure.
We recommend that Valero re-evaluate its economic analyses using
more conventional techniques. We further recommend that Valero
include in its BACT analysis a review of the alternate control
options which are described in the Enclosure, which are potentially
as effective as, and less costly than, those control techniques
presented.
6T-ET:SPRUIELL:tl:12/28/88:X7229 PEW746.PSD
JVC
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It is, furthermore, important that you be aware that the Clean Air
Act requires us to take final action to either grant or deny a
Prevention of Significant Deterioration (PSD) permit within one
year after the date of filing a completed permit application. See
42 U.S.C. 7475(c). Although Valero's original application was
dated" January 22, 1988, significant changes to the BACT analysis
were made subsequent to the public comment period. Presently, EPA
is considering denial of the permit because of the numerous and
significant deficiencies in the permit application as described
herein and in the Enclosure. However, if Valero submits a written
request that EPA delay its final permit decision beyond the January
22, 1989 date, then EPA will allow Valero to respond to the
concerns detailed by this letter. The written request should also
include a schedule mutually agreed upon by the Texas Air Control
Board, the Environmental Protection Agency, and Valero to complete
action on this permit within a reasonable time. Such schedule must
be agreed upon before January 22, 1989; otherwise EPA may proceed
to disapprove Valero's request for a PSD permit. Finally, this
letter, Valero's comments, and any additional information supplied
to the Texas Air Control Board since the previous public comment
period must again be submitted for public comment.
If you have any questions concerning this letter, please
Mr. Stanley M. Spruiell of my staff at (214) 655-7229.
Anthony P. Wayne
Chief
TX/NM Enforcement section (6T-ET)
Enclosure
cc: Mr. Allen Eli Bell w/Enclosure
Executive Director
Texas Air Control Board
Mr. Tom Palmer w/Enclosure
Region 5 Director
Texas Air Control Board
Mr. John W. Ehlers w/Enclosure
Senior Vice President
Valero Hydrocarbons Company
Ms. Nina Sisley, M.D. w/Enclosure
Director
Corpus Christi-Nueces County Department of Public Health
-------
8.31
Mr. William J. Moltz, Esquire w/Enclosure
Brown, Marony, Rose, Barber, and Dye
bcc: Wayne (6T-ET) w/Enclosure
Basala (MD-12) w/Enclosure
Bartley (6C-T) w/Enclosure
Lindsey (6T-ET) w/o Enclosure
PEA-7 w/o Enclosure
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8.32
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park. North Carolina 27711
January 27, 1989
MEMORANDUM
SUBJECT: Discounted Cash Flow (DCF) Analysis for Craven County
Project New Source Review r
FROM: Frank L. Bunyard fT™^ L*~~*^lj
Economic Analysis Section, ASB, AQMD (MD-12)
TO: Allen C. Basala, Chief
Economic Analysis Section, ASB, AQMD (MD-12)
Per your request, I have reviewed the DCF submitted with the
permit application for New Source Review under the Prevention of
Significant Deterioration regulations.
I have conducted a partial sensitivity analysis to test
assumptions on selected key variables. One of the important
results was that allowing for constant revenues over 15 years
does make the project with thermal deNO, feasible for both target
rate of return and debt service coverage.
The most important factors subject to scrutiny are concerned
with the following:
• The revenue stream over the project life, particularly
the assumed rates for the years 2001 through 2005.
• The escalation rate for wood waste prices (i.e*, 1990
price of $11 per ton for wood wastes rises to $21 per
ton in 2005).
• The depreciation schedule assumed for the analysis
(i.e., write-off of equipment in 5 years.)
• The inconsistent cost of capital for base plant (7.5%)
and thermal deNO, (11.5%).
To re-iterate our teleconference discussion, there are two
points recording the analysis that seem to be counter intuitive
with reality. I do not believe that a project to be viable which
shows declining revenues with rising fuel costs over time, the
thermal diNO, controls notwithstanding. Secondly, we do not
-------
believe that prices for waste wood would escalate at the rate as
assumed. Given that wood wastes represent an undesirable
commodity, namely the worst part of the tree, we would think that
prices for residual wood (chips and saw dust) would continue to
be relatively flat in the Southeast U.S., as they have been
historically.
I would recommend the following contacts for providing
accurate answers to interject a more realistic scenario in the
analysis:
(a) North Carolina Utilities Commission, Electric Division
for renegotiation of utility rates on rate schedules
(e.g., CSP-6C). Phone (919) 733-2267
(b) Phillip Badger (TVA), Southeast Biomass Program, Mussel
Shoals, Alabama for information on costs and
availability for wood wastes. Phone (205) 386-3086.
Also, Robert Brooks (TVA), Norris, Tennessee. Project
manager for a computer model of availability and costs
for forest resources for the Southeast. Phone
(615) 632-1513.
Also, Fred Allen, Georgia Forestry Commission, Macon,
Georgia. Phone (912) 744-3357.
(c) Refer to the 1986 IRS (or later years) Tax Code for
depreciation schedules.
I have followed up on some of these contacts listed herein
and have found that the Craven Project assumptions on revenues
and fuel costs are very pessimistic or conservative.
Consequently, it would appear that the scenario portrayed in the
Craven County project shows that the thermal deNOr represents the
knife-edge for project feasibility.
In conclusion, I would recommend that the documentation for
the Craven County Project provide more substantive justification
for the assumptions concerning the key variables discussed in
this analysis. As the analysis stands, the findings are not
convincing as a test of infeasibility.
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8.33
f MT» \ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
s ^"— § Office of Air Quality Planning and Standards •"); p. -
/ Research Triangle Park, North Carolina 27711 //. fr>> *•"-
January 27, 1989 £*e "'
MEMORANDUM
SUBJECT: Review of Craven County Wood Energy Project
FROM: Allen C. Basala, Chief
Economic Analysis Section, ASB (MD-12)
TO: Bruce P. Miller, Chief
Air Programs Branch, Region IV
We reviewed the documentation on the subject project
regarding its economic viability with non-catalytic ammonia
reduction of NO, controls. We find the arguments, from an
economic perspective, neither unique nor convincing.
In reaching this conclusion, we had no quarrel with the
analytical framework. The discounted cash flow methodology is in
our judgement appropriate. However, sensitivity analysis on the
revenue and fuel cost assumptions together with interest rate and
leverage factors (e.g., debt/equity mix and depreciation
schedules) resulted in findings counter to those in the
applicant's analysis. In particular, the project could under
certain yet undramatic conditions be economically viable with the
NO, controls. Resolution of course requires verification/
validation of the plausibility of applicant's assumptions
regarding the aforementioned variables.
To not burden the applicant nor the state permitting
authority, we provided a list of contacts who could provide
unbiased evidence regarding those variables.
Frank Bunyard of my staff performed our analysis and helped
develop the list of contacts. His attached memo provides further
details of the analysis and the list of contacts.
Attachment
cc: -W .--"Aron ;ori •>'
J. Calcigni
B. Jord an
G. McCutchen
P. Wilms (NCDNR-Archdale Building)
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8.34
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
FEB 3
OFFICE OF
AIR AND RADIATION
MEMORANDUM
SUBJECT: BACT Determination for Davidson Exterior Trim/Textron
FROM:
TO:
John S. Seitz, Director
Stationary Source Compl
Office of Air Quality P
> ion
fnning and Standards
Wins ton A. Smith, Director
Air, Pesticides and Toxics Management Division
Region IV
On October 14, 1988 you forwarded to this division a request
regarding the BACT determination for the Davidson Exterior
Trim/Textron facility in Georgia. We have coordinated a response
to your request with the New Source Review Section in AQtyD,
the Chemical Application Section in BSD, and the Air Enforcement
Division in OECM. The following responses to your questions
are provided:
1. Does Davidson Exterior present "unique and convincing"
arguments which would justify elimination of add-on spray
booth and/or over controls as BACT?
While Davidson has supplied data on the control cost,
cost effectiveness, and percent increase in the cost per
unit of product, they have not presented an argument as to
why the control cost is unreasonable. It also appears that
there are control alternatives available which Davidson has
not explored (see response to question 2 & 3 below).
Therefore, we agree that Davidson Exterior has failed to
make a case for rejecting as BACT the add-on controls in
question.
2. Are there other fascia plants which have been required to
install both spray booth and oven controls?
We know of no other fascia plants which have been required
to install both spray booth and oven controls. The General
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- 2 -
Motors parts plant in Oshawa, Ontario, Canada has recently
installed an exhaust air recirculation and VOC control
(incineration) system on the clear coat portion of the
fascia spray booths.
3. Has EPA established spray booth and/or oven controls as BACT
at fascia painting operations?
Bake oven exhaust controls have been required in several
BACT/IAER permits for fascia painting (Subaru-Isuzu, DuPont,
Saturn, etc.)* Spray booth exhaust controls have not been
required in BACT/IAER permits for fascia painting. The
number of controlled spray booths is-growing (e.g.* automobiles,.
aerospace, metal'parts), and the cost of control is becoming
lower with experience and the development and demonstration of
new technologies (e.g., recirculation, control equipment for
low VOC concentration exhaust streams). Spray booth exhaust
controls, therefore, must receive serious consideration in
current and future permitting of fascia painting operations.
4. Were the oven controls installed on the fascia operations at
the Subaru/1suzu facility, located in Lafayette, Indiana, the
result of a BACT evaluation or necessitated for some other
r eason?
The bake oven exhaust controls at Subaru-Isuzu were part of
the BACT demonstration.
5. If the arguments presented by Davidson Exterior do not
constitute a "unique and convincing" basis for rejection of
controls, what would EPA consider to be valid criteria for
rejection of the controls?
Three criteria which should be asked when reviewing permits
in which more stringent levels of control have been rejected
as BACT are discussed below:
i) If another similar source has adopted certain emission
controls, why can't this applicant? Where similiar units
have adopted a particular level of emission control or
control technology, the applicant should justify on technical,
environmental, or economic ground why they cannot also adopt
that particular control system or otherwise raeet that level
of control. This analysis should focus on the differences
(if any) between the two sources (e.g., differences in raw
material costs or control costs).
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8.34
- 3 -
ii) Why is the economic impact of a level of control
unreasonable? Where a permit applicant claims that emission
control costs are unreasonable, the burden of showing why
the cost are unreasonable is on the applicant. Some
possible parameters for judging the reasonableness of a
control level could be the percent of the total cost of a
construction or modification project, cost effectiveness
($ per ton), or percent cost increase per unit of product.
Again, other similar sources that have adopted a particular
level of control may provide a useful benchmark against which
to compare the claimed economic impact of emission controls*
However, control cost data and cost effectiveness calculations
likely'dp not, standing alone, provide a convincing argument
against adapting a potential BACT level. For example, simply
stating that it is infeasible to meet a particular cost
per ton of pollutant controlled is not adequate; the
reason must be explicity explained to EPA, the permitting
agency, and the public. The applicant should lock at this
cost in terms of typical control cost for other sources of
this pollutant. The costs of control for similar sources
is addressed in fi above.
iii) Based on the reviewer's experience in reviewing control
cost estimates and cost effectiveness calculations for a
particular pollutant and source category, do the cost data
provided by the applicant seem credible? In other words,
are the cost estimates within the range of costs you would
expect to see for that particular type of source or pollutant?
If a cost or cost effectiveness estimate strikes you as being
too high, you should ask the applicant to explain why their
emission control costs would be higher than those documented
for a similar source.
6. Would Headquarter's support a §167 order, issued by Region
IV, if it is determined that Davidson Exterior has not
installed or proposed to install BACT?
Consistent with the July 15, 1988 guidance on procedures to
follow when EPA finds a Deficient New Source Permit, a deficient
BACT analysis is cause for expeditious (within 30 days of
permit receipt) issuance of a §167 order in SIP-approved programs.
However, the ultimate decision whether to proceed with enforcement
action in this or any other case depends, in large part, upon
all the specifics of the particular cases. These include, among
others:
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- 4 -
1) The tine and manner in which EPA has informed the
applicant and the permitting authority of alleged
defects in the permit, and of the consequences of a
failure to correct those defects.
2) The amount of time between permit issuance and the
commencement of enforcement action.
3) Whether the applicant has entered into construction
contracts, begun actual construction, or otherwise
acted in reliance on the State-issued permit.
4) Plus, for-SIP approved States,. the content of -the
State regulations and relevant Federal Register
notices.
I apologize for the delay in providing this response. If
you have any questions, please contact Gary McCutchen in AQMD
(FTS-629-5592) regarding responses #1 & 5, Dave Salman in ESD
(FTS-629-5417) regarding responses #2-4, and Sally Farrell of
my staff (FTS-382-2875) regarding response #6.
cc: Wayne Aronson, Region IV
Mark Armentrcut, Region IV
Gary McCutchen, AQMD
Sam Duletsky, AQMD
Jim Berry, ESD
Dave Salman, ESD
Judy Katz, OECM
NSR Contacts, Region I-X
Greg Foote, OGC
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
949 COUMTLANO STREET
4APT-APB ATLANTA. GEORGIA 30369
FEB 13
Mr. N. Ogden Gerald, Chief
Air Quality Section
Division of Environmental Management
North Carolina Department of Natural
Resources and Conmunity Development
Post Office Box 27687
Raleigh, North Carolina 27611
Re: Craven County Wood-Energy Project (PSD-NC-121)
Dear Mr. Gerald:
We have reviewed your January 27, 1989, letter containing the final
determination and final permit for the construction of the Craven County
Wood-Energy project. Although our concerns were adequately addressed
regarding the inclusion of specific test methods in the permit, we are
presently unable to concur with the best available control technology
(BACT) determination for nitrogen oxides (NO ) emissions until
verification of the economic data is presented regarding the add-on N0x
controls, as outlined below.
Subsequent to our January 11, 1989, meeting with yourself and
representatives from Craven County's consulting firm, we have been in
contact with EPA Headquarters concerning the economic feasibility of the
Craven County project, if thermal deNO were employed; specifically the
discounted cash flow portion of the economic analysis presented by the
applicant at the meeting. According to EPA Headquarters, the cash flow
methodology and analytical framework used in the economic analysis was
appropriate; however, a sensitivity analysis on the revenue and fuel cost
assumptions together with interest rate and leverage factors resulted in
findings counter to those in the applicant's analysis (see enclosure 1).
Craven County contends that the proposed project would be viable even
though the applicant's economic analysis shows: (1) declining revenues
with rising .fuel-costs over time, notwithstanding thermal deNO^ controls
and (2) escalating wcodwaste costs, even though prices for residual wood
in the Southwest U.S. have been relatively stable in the past.
We request that the applicant provide additional justification for the
following assumptions concerning the key variables which either make or
break the project:
a. The revenue stream over t-he project life, particularly the assumed
rates for the years 20C ihrough 2005.
b. The escalation rate for voodwaste prices (i.e., 1990 price of $11.00
per ton for woodwaste rises to $21.00 per ton in 2005).
c. The depreciation schedule assumed for the analysis (i.e., write-off of
equipment in five years).
d. The inconsistent cost of capital for base plant (7.5%) and thermal
(11.5%).
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-2-
The applicant may wish to contact the following entities for obtaining the
necessary information:
a. North Carolina Utilities Commission, Electric Division for renegotiation of
utility rates schedules (e.g., CSP-6c). Phone (919) 733-2267.
b. Phillip Badger (TVA), Southeast Biomass Program, Mussel Shoals, Alabama for
information on costs and availability for woodwastes. Phone (205)
386-3086.
c. Robert Brooks (TVA) , Norris, Tennessee. Project manager for a computer
model of availability and costs for forest resources for the Southeast.
Phone (615) 632-1513.
d. Fred Allen, Georgia Forestry Commission, Macon, Georgia. Phone (912)
744-3357.
e. The 1986 IRS (or later years) Tax Code for depreciation schedules.
In conclusion, we anticipate that once this additional information is presented
we will be in a position to concur on the final permit and determination.
Please respond to the issues set forth in this letter by February 28, 1989.
If you have any questions concerning this letter, please call me or
Wayne Aronson of my staff at (404) 347-2864.
Sincerely yours,
Bruce P. Miller, Chief
Air Programs Branch
Air, Pesticides, and Toxics
Management Division
Enclosure
cc: Mr. Frank L. Bunyard
ASB, AQMD, MD-12
RIP, NC 27711
Mr. Allen C. Basala, Chief
Economic Analysis Section
ASB, AQMD, MD-12
RTP, NC 27711
Mr. Bruce C. Bley, President
Craven Wood-Energy Project
Power Projects, Inc.
1000 Prospect Hill Road
Winsor, Connecticut 06095
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
19 MAY 1989
8.36
MEMORANDUM
Technical Document on
Municipal Waste Combu
en Oxides From
SUBJECT:
FROM: Jack R. Farmer, Dir
Emission Standards
TO: Air Management Division Directors
Regions I, III, V, and IX
Air and Waste Management Division Director
Region II
Air, Pesticides, and Toxics Management Division
Directors, Regions IV and VI
Air and Toxics Division Directors
Regions VII, VIII, and X
As you know, OAQPS is currently developing air emissions
standards for municipal waste combustors (MWC's) under
Section 111 of the Clean Air Act (CAA). As part of this effort,
the technical aspects of the control of nitrogen oxides (NO.)
emissions from MWC's are being evaluated. The purpose of this
memorandum is to transmit OAQPS's evaluation, contained in the
attached technical report, for use by the Regions in considering
NO, requirements for the permitting of new MWC's.
Selective non-catalytic reduction (SNCR) is currently being
applied at three facilities in California in the form of the
Exxon Thermal De-NO, process. As you are aware, the
Administrator remanded on November 10, 1988, a Prevention of
Significant Deterioration (PSD) permit issued by the New Jersey
Department of Environmental Protection (NJDEP) for the Pennsauken
County, New Jersey, Resource Recovery Facility. The remand was
based on a determination that the best available control'
technology (BACT) analysis for the control of NO, emissions under
the "top-down" approach was inadequate. The NJDEP reconsidered
its previous determination and reissued the permit with a more
stringent emission limitation for NO. based on the use of the
Thermal De-NO, process. Furthermore, several States, including
the NESCAUM States and California, consider SNCR to be BACT for
MWC's.
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The attached technical report documents the currently
available knowledge on NO, emissions and control of these
emissions for MWC's. It presents the available data on
uncontrolled NO, emissions from MWC's, and information on
alternative techniques that have been applied (both within and
outside the United States) or could potentially be applied to
MWC's to achieve NO, control. Detailed information is presented
for the Exxon Thermal De-NO, system, including emission control
performance data, procedures for calculating capital and
annualized costs, potential operating problems such as ammonia
emissions and the generation of a visible detached plume, and the
possible interference of this process with the control of mercury
emissions as achieved by spray dryer/particulate matter control
systems. Also, the estimated costs of applying Thermal De-NO. to
several model MWC facilities representative of new MWC's are
presented.
The transmittal of this report should not be considered as
issuance of operational guidance on control requirements for NO,
emissions from MWC's under PSD provisions of the Act. As
additional information becomes available on SNCR, and the Exxon
Thermal De-NO, process in particular, we will evaluate it to gain
a better understanding of any site-specific factors that may
affect the cost and effectiveness of NO, controls for MWC's.
If you have any questions concerning the technical report,
please call Al Vervaert at FTS 629-5602 or (919) 541-5602.
Attachment
cc: R. Brenner (ANR-443)
J. Calcagni (MD-15)
D. Clay (ANR-443)
A. Eckert (LE-132A)
G. Emison (MD-10)
W. Laxton (MD-14)
S. Lowrance (WH-562)
S. Meiburg (MD-11)
R. Morgenstern (PM-221)
J. O'Connor (MD-10)
F. Princiotta (MD-60)
W. Rosenberg (ANR-443)
J. Seitz (EN-341)
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8.36
bcc: R. Ajax (MD-13)
R. Campbell (MD-10)
J. Chamberlain (PM-220)
A. Cristofaro (PM-221)
J. Crowder (MD-13)
J. DeMocker (ANR-443)
K. Durkee (MD-13)
G. FQOte (LE-132A)
C. Gregg (WH-556)
M. Johnston (MD-13)
R. Kellam (MD-13)
J. Kilgroe (MD-65)
E. Lillis (MD-15)
G. McCutchen (MD-15)
D. Porter (MD-13)
A. Vervaert (MD-13)
B. Meddle (WH-563)
J. Weigold (MD-13)
J. Wiltse (ANR-443)
C. Winer (LE-132W)
OAQPS:BSD:ISB:MGJOHNSTON:mhinson:FTS:629-5604:
DISC:JOHNSTON:B:5/18/89
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8.37
BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
In the Matter of: )
)
Spokane Regional Waste-to-Energy ) PSD Appeal No. 88-12
Applicant )
ORDER DENYING REVIEW
In a joint petition filed pursuant to 40 CFR §124.19 (1988), -'
Citizens for Clean Air and Council for Land Care and Planning
("Petitioners") requested review of a Prevention of Significant
Deterioration (PSD) permit issued to the Spokane Regional Waste
To Energy Project ("Spokane") for construction of an 800-ton-per-
day municipal waste incinerator at an existing landfill west of
the City of Spokane. The permit determination was made by the
Washington State Department of Ecology ("Ecology") pursuant to a
delegation of authority from EPA Region X, Seattle, Washington.
Because of the delegation/ Ecology's permit determination is
subject to the review provisions of 40 CFR §124.19, and any
permit it issues will be an EPA- issued permit for purposes of
federal lav. 40 CFR §124.41; 45 Fed. Reg. 33,413 (May 19, 1980).
Petitioners object to the issuance of the permit because
they believe it is deficient in several respects. In particular,
they claim the permit does not meet "best available control
27 All references to the Code of Federal Regulations (CFR) are
to the 1988 edition.
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2
technology" (BACT) requirements for emissions of nitrogen oxides
(NOJ and for emissions of "trace [sic] metals and toxic pol-
lutants such as dioxins and furans." ^ Petition at 2. In
making a BACT determination for NOX, Petitioners claim that
"thermal de-NOx," not combustion controls, is BACT. For the
other pollutants, Petitioners allege that Ecology did not give
adequate consideration to "fuel cleaning and separation" and did
not consider economic, environmental, and other costs associated
with the incineration of "recyclable materials." Jfl. at 2-3.
Ecology responds by arguing that the NOX issue is now moot
because the City has subsequently agreed to modify the facility
to incorporate NOX controls employing thermal de-NOx or an equiv-
alent technology, with respect to fuel cleaning and separation,
Ecology argues that these practices need more study — to gather
information about costs and impacts — before Ecology would be
able to determine whether they represent a better emissions
^ It is not clear what Petitioners mean by trace metals;
however, I assume they are referring to small quantities of
"heavy metals" such as lead and mercury. Cf. notes 8 and 28.
Petitioners assert three other grounds for review: (1)
emission levels for PM.0 should be set in accordance with a LAER
standard, not BACT; (2) the assessment of the impact of CO
emissions on nearby areas is inadequate; and (3) Ecology erred in
not setting emission levels for dioxins, furans, and chloroform.
There is no merit to these allegations. As noted by Region X in
its response to the Petition, BACT, not LAER, is the correct
standard to be applied to PH.0; Ecology correctly followed EPA
guidance and concluded that there would be no adverse effect on
nearby CO non-attainment areas; and EPA has no authority under
the Clean Air Act to prescribe emission limitations for unregu-
lated pollutants fcf. note 8, >nfral such as dioxins, furans, and
chloroform. See EPA Response at 8.
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3
control method than the controls currently proposed for the
facility. " Spokane likewise argues that fuel cleaning and
separation are not BACT, and it points out that these and other
similar practices have undergone thorough evaluation in connec-
tion with Spokane's overall waste management strategy, which
calls for recycling, waste reduction, the proposed "waste-to-
energy facility," and one or more new regional landfills desig-
nated for non-recyclable and residual wastes only.
Under the rules governing this proceeding, there is no
appeal as of right from the permit decision. Ordinarily, a
petition for review of a PSD permit determination is not granted
unless it is based on a clearly erroneous finding of fact or
conclusion of law, or involves an important matter of policy or
exercise of discretion that warrants review. The preamble to the
regulation states, "this power of review should be only sparingly
exercised," and "most permit conditions should be finally deter-
mined at the Regional [State] level * * * ." 45 Fed. Reg. 33,412
(May 19, 1980). The burden of demonstrating that the permit
conditions should be reviewed is therefore on Petitioners. In
this case I have determined that Petitioners have net their
burden with respect to the NO, issue but not with respect to
heavy metals and toxic pollutants.
Ecology Fact Sheet at 3 (December 7, 1988).
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Discussion
Before addressing the issues presented by the appeal, I
believe it would be worthwhile to state first what the case is
not about. It is not about the desirability of recycling for
municipalities planning to build solid waste incinerators. I
consider recycling in its various manifestations, including off-
site (curbside) separation of newspapers, bottles, and aluminum
containers, and on-site mechanical separation processes, as an
essential part of intelligent planning for the solid waste
disposal predicament that more and more of our Nation's cities
are facing. y Nor is this case about the desirability of recyc-
ling for Spokane in particular. The Spokane waste-to-energy
project ^ calls for extensive recycling, including a central-
ized, curbside recycling program to be implemented by January 30,
1991. The city's plans also include three drop-off centers in
different locations in the Spokane area. The centers will
contain facilities for citizens to leave recyclable materials,
which are designated initially as newspaper, high grade paper.
y See generally U.S. Environmental Protection Agency, Office
of Solid Waste, "The Solid Waste Dilemma: An Agenda for Action"
at 1 (February 1989) (Final Report of the Municipal Solid Waste
Task Force) ("[H]ore than one third of the nation's landfills
will be full within the next few years and many cities are unable
to find enough acceptable sites for new landfills or new combus-
tors").
57 According to the Final [State] Environmental Impact state-
ment (FEIS) for the project, steam generated in the boilers will
be used by a condensing turbine to generate electricity. The
power output of the turbine will be approximately 22,000 kilo-
watts. FEIS at 14.
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8.37
5
corrugated paper, aluminum, three colors of sorted glass, scrap
metals, and tin cans. & In addition, a "reusables" area for
miscellaneous items — small appliances, baby furniture, books,
toys, etc. — is also planned. According to EPA Region X,
Spokane expects to obtain a recycling level of 31% by the year
2008. EPA Response at 6.
Recycling is indeed an issue in this case, but in a signif-
icantly narrower context than just described. The focus here is
on whether Ecology erred in its BACT determination by not giving
in-depth consideration to "fuel cleaning and separation" in
combination with the conventional, state-of-the-art pollution
control equipment already required by the Spokane permit, for
control of heavy metal and toxic pollutant emissions. ^ In
other words, if fuel cleaning and separation in this particular
technological configuration would allow Ecology to set emission
& Spokane's Response to Petition for Review, Attachment 5
(Grant Amendment No. 1 — Amended Project Description, Conditions
B, C, and 0).
^ Traditionally, EPA has not required a PSD applicant to
change the fundamental scope of its project. See Pennsauken
Resource Recovery Facility, PSD Appeal No. 8B-8 at 11 (EPA
November 10, 1988) (Order Denying Review) (BACT permit conditions
"are not intended to redefine the source"). Therefore, to give
Petitioners the benefit of the doubt, I will not construe their
petition as advocating a redefinition of the Spokane project by
proposing fuel cleaning and separation as a substitute for
conventional, state-of-the-art pollution control technology.
Rather, I will assume Petitioners are advocating the addition of
fuel cleaning and separation to the controls already proposed for
the facility.
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levels for regulated air pollutants ^ that are demonstrably
lover than the levels achievable using the proposed control
equipment, then Ecology would have erred in its BACT determina-
tion by not analyzing fuel cleaning and separation sufficiently. -'
The second major issue presented by the appeal, unrelated to the
" Petitioners do not identify the specific regulated air
pollutants that supposedly do not meet BACT requirements. This
omission contributes to the serious lack of specificity in the
petition, discussed elsewhere in the text of this decision, for
not all pollutants are regulated pollutants, whereas only regu-
lated pollutants are subject to BACT. Similarly, not all heavy
metals and toxic pollutants — i.e., the ones of specific concern
to Petitioners — are regulated pollutants, and thus not all of
them are subject to BACT. The list of regulated pollutants
include some heavy metals but not toxic pollutants such as
dioxins and furans. The regulated pollutants include: arsenic,
asbestos, benzene, beryllium, carbon monoxide, fluorides, hydro-
carbons, hydrogen sulfide, lead, mercury, nitrogen oxides, ozone,
particulate matter, radionuclides, radon-222, reduced sulfur
compounds, sulfur dioxide, sulfuric acid mist, total reduced
sulfur, vinyl chloride and volatile organic compounds. See 40
CFR §52.21(b)(23) (prevention of significant deterioration of air
quality); 40 CFR Part 61 (National Emission Standards for Hazar-
dous Air Pollutants).
^ The focus of a BACT determination is not always on regulated
pollutants. In some circumstances, an alternative technology for
controlling a regulated pollutant may be deemed BACT in prefer-
ence to another technology, even though application of the former
does not result in lower emission levels than the latter. This
circumstance occurs, for example, whenever an analysis of the
overall environmental impacts of the two technologies demon-
strates that one will have lower adverse impacts than the other.
We are not confronted with this issue in this case because, as
explained in the text, Petitioners have not established, as a
threshold natter, that fuel cleaning and separation, when used in
combination with conventional, state-of-the-art pollution control
equipment, are "available" control technologies for control of
regulated pollutants. Unless this advocated additional control
technology is available for the primary purpose of controlling
emissions of regulated pollutants, the permit issuer is not re-
quired to include that control technology in the BACT analysis or
consider, as a secondary matter, the effect of that technology on
unregulated pollutants or its other collateral environmental
impacts.
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8.37
7
recycling issue, is whether Ecology also erred in its BACT
determination by not requiring thermal de-NOx for control of MOX
emissions. Resolution of these issues necessarily begins with an
examination of the process of making the BACT selection from
among competing technologies.
The statutory phrase "best available control technology" or
BACT, as it is customarily abbreviated, refers to a technological
standard that applies to facilities subject to PSD requirements.
It is defined in section 169(3) of the Clean Air Act -' as an
"emission limitation" ^ reflecting the "maximum degree of
The complete text of the BACT definition states:
The term "best available control technology" means an
emission limitation based on the maximum degree of reduction
of each pollutant subject to regulation under this chapter
emitted from or which results from any major emitting
facility, which the permitting authority, on a case-by-case
basis, talcing into account energy, environmental, and
economic impacts and other costs, determines is achievable
for such facility through application of production proces-
ses and available methods, systems, and techniques, includ-
ing fuel cleaning or treatment or innovative fuel combustion
techniques for control of each such pollutant. In no event
shall application of "best available control technology"
result in emissions of any pollutants which will exceed the
emissions allowed by any applicable standard established
pursuant to section 7411 [new source standards] or 7412
[hazardous pollutant standards] of this title.
137 The ten "emission limitation" is defined in section 302 (k)
of the Clean Air Act as follows:
Sec. 302. When used in this Act —
* * *
(k) The terms "emission limitation" and "emission
standard" mean a requirement established by the State or the
Administrator which limits the quantity, rate, or concentra-
tion of emissions of air pollutants on a continuous basis,
including any requirement relating to the operation or
(continued...)
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8
reduction" of "each pollutant subject to regulation under the
Act," which the permitting authority determines is achievable
after "taking into account energy, environmental, and economic
impacts and other costs." 42 USCA §7479(3). Achievement of an
emission limitation may be secured "through application of
production processes and available methods, systems, and techni-
ques, including fuel cleaning or treatment or innovative fuel
combustion techniques for control of each such pollutant." I£.
Recent EPA guidance describes the process of selecting BACT
for individual facilities. The process is based on a recognition
that the statutory definition of BACT imposes a responsibility on
the permit applicant to identify the particular "available"
technology that will produce the maximum degree of reduction of
each regulated pollutant to be emitted from the proposed facil-
ity. If the applicant wishes to use some less effective control
technology, the applicant must "demonstrat[e] that significant
technical defects, or substantial local economic, energy, or
environmental factors or other costs warrant a control technology
less efficient than [the most stringent available technology].11
^(...continued)
maintenance of a source to assure continuous emission reduc-
tion.
42 U.S.C. §7602(k). The regulatory definition of BACT provides
that, to the extent technological or economic limitations in
measurement methodologies would render an emissions standard
infeasible, the Administrator may instead prescribe a design,
equipment, work practice, operational standard, or combination
thereof. fige, e.g.. 40 CFR §52.21(b)(12).
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8.37
Honolulu Resource Recovery Facility. PSD Appeal No. 86-8, at 7
(EPA June 22, 1987) (remand of decision respecting S02 controls
for a municipal waste incinerator). In guidance issued by EPA's
Assistant Administrator for Air and Radiation on December 1,
1987, & the process of selecting BACT ~ known as the "top-down"
approach to BACT analysis — is described as follows:
The first step in this approach is to determine, for the
emission source in question, the most stringent control
available for a similar or identical source or source
category. If it can be shown that this level of control is
technically or economically infeasible for the source in
question, then the next most stringent level of control is
determined and similarly evaluated. This process continues
until the BACT level under consideration cannot be eliminat-
ed by any substantial or unique technical, environmental or
economic objections. Thus, the "top-down" approach shifts
the burden of proof to the applicant to justify why the
proposed source is unable to apply the best technology
available. It also differs from other 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.
127 Memorandum from Craig Potter, Assistant Administrator, to
Regional Administrators (Regions I-X) (Dec. 1, 1987). See also
Memorandum from Gerald Emison, Director, EPA Office of Air
Quality Planning and Standards (OAQPS) to EPA Regional Air Office
Directors (June 26, 1987), enclosing "Operational Guidance on
Control Technology for New and Modified Municipal Waste Combus-
tors."
^ Memorandum from Craig Potter, Assistant Administrator, to
Regional Administrators (Regions I-X), at 4 (Dec. 1, 1987). The
"baseline case" and its relationship to the BACT selection
process appears in an EPA guidance manual issued in October 1980.
See EPA (Office of Air Quality, Planning, and Standards), Preven-
tion of Significant Deterioration Workshop Manual, at II-B-1 et
seq., EPA-450/2-80-081 (October 1980). The selection process as
outlined in the guidance manual was not inconsistent with the
dictates of the statute; however, in practice, the process
developed into what could be described as the "bottom up"
approach, in which the permit applicant could select virtually
(continued...)
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Applying the top-down approach to Spokane, the issue is
whether the alternative controls advocated by the Petitioners —
thermal de-NOx for NOX emissions, and fuel cleaning and separa-
tion for heavy metal and toxic pollutant emissions — represent
the most effective or "top" technologies for control of regulated
pollutants, or whether they represent some lesser level of
control. If they represent the former, the BACT analysis per-
formed by Spokane and approved by Ecology should have contained
(but did not) an in-depth discussion of each alternative control
technology to justify rejecting it as BACT. If, on the other
hand, Petitioners' alternatives do not represent the top tech-
nologies, no detailed discussion of them is required in the BACT
analysis, unless there is evidence to show that the alternatives
are available for the primary purpose of controlling regulated
pollutants and, despite not being the top technology, they are
nevertheless BACT after giving appropriate weight to their
collateral environmental (or energy) impacts. ^ Absent such
^(...continued)
whatever technology it deemed desirable from a business or
utilitarian perspective — the so-called "baseline case" — and
then, in a formidable challenge to the applicant's powers of
objectivity, the applicant was expected to present a full and
fair analysis of alternative technologies, including potentially
more effective technologies. This approach presented too many
opportunities for abuse, since it provided little or no incentive
for the applicant to select the most effective technology, par-
ticularly when the most effective technology — as is often the
case — was also the most expensive technology.
^ See, e.g.. note 9. If the applicant and the permitting
authority agree that the top technology for control of regulated
pollutants should be selected as BACT, economic impacts that in
(continued...)
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11
evidence, no detailed discussion of the alternatives is required
since the analysis would only satisfy academic concerns and would
have no effect on the outcome of the permit determination. Any
failure on the part of the permit issuer to consider such a
technology would amount to harmless error, at most.
Did Ecology miscategorize either of the two types of tech-
nology when it rejected them and concluded that neither required
additional analysis? This question is now moot for the thermal
de-NOR issue; Spokane's subsequent decision to install an approp-
riate NOX emission control system employing either thermal de-NOx
or an equivalent technology effectively decides the issue. All
that remains to be done now is for Ecology to set numerical
emission limitations for the NOX emissions using the agreed-to
technology, and to prescribe monitoring requirements and operat-
ing restrictions as deemed necessary or appropriate. ^
The question is not as easily answered in the case of fuel
cleaning and separation. To answer it, we first need to ascer-
tain the permit issuer's responsibilities whenever deficiencies
in a proposed permit determination are alleged. For instance, do
the rules require the permit issuer to conduct a full-scale BACT
^(...continued)
theory could justify selection of less effective technologies are
presumably not at issue.
157 Ecology and Spokane will want to consider the optimization
provisions discussed in the recent permit decision for the
Pennsauken waste-to-energy facility in New Jersey. See
Pennsauken Resource Recovery Facility, PSD Permit No. 88-8 (EPA
April 20, 1989) (Order Denying Review).
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analysis of each alternative proposed by a commenter, regardless
of the proposal's merit, or is it permissible for the permit
issuer to tailor its response in proportion to the substantive
merits of the proposal? In other words, if the comment is
clearly without merit or is vague and lacks sufficient support,
can the permit issuer dismiss the comment summarily or must it
prove the comment's lack of substance by, for example, requiring
the permit applicant to submit studies, tests, and comparisons
demonstrating that the commenter's proposed alternative tech-
nology is unworkable or otherwise unsuitable?
The applicable rules and case law fortunately adopt a rule
of reason in answer to these questions, and thus do not require
the permit issuer to respond in detail to all comments irrespec-
tive of their merit. Specifically, the permit issuer need only
"describe and respond to all significant comments on the draft
permit." 40 CFR §124.17(a)(2) (emphasis added). The permit
issuer's response can be in proportion to the substantive merit
of the comments.
[T]he "dialogue" between administrative agencies and the
public "is a two-way street." Home Box Office. 567 F.2d at
35. Just as "the opportunity to comment is meaningless
unless the agency responds to significant points raised by
the public," IS. at 35-36 (footnote omitted), so too is the
agency's opportunity to respond to those comments meaning-
less unless the interested party clearly states its posi-
tion. See Wisconsin Electric Power Co. v. Costle. 715 F.2d
323, 326 (7th Cir. 1983) ("the rules of administrative law
apply across the board, to agencies and interested parties
alike").
Northside Sanitary Landfill. Inc. v. Lee M. Thomas. 849 F.2d
1516, 1520 (D.C. Cir. 1988) (interpreting the phrase "significant
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13
comments" in the rulemaking provisions of the Administrative
Procedure Act). The Supreme Court has also held that a permit
issuer nay adopt a threshold test for determining how it responds
to a comment or proposal. Vermont Yankee Nuclear Power Corp. v.
NRDC. 435 U.S. 519, 551-555, 55 L.Ed. 2d 460, 98 S.Ct. 1197,
1215-1217 (1978). The petitioners in Vermont Yankee had accused
the Atomic Energy Commission of not giving adequate consideration
to "energy conservation" as an alternative to licensing the
construction of a nuclear power plant. The Commission held that
it would only consider energy alternatives that were reasonably
available, would curtail demand to the point where the power
plant would not be necessary, and were susceptible of a reason-
able degree of proof. The Commission concluded that petitioners
had not met this threshold test because, inter alia, they had
failed to "take into account that energy conservation is a novel
and evolving concept." Vermont Yankee 98 S.Ct. at 1207. The
Commission added that in view of "this emergent stage of energy
conservation principles," it is incumbent on the petitioners to
state "clear and reasonably specific energy conservation conten-
tions." Id. The Court of Appeals held that the Commission's
threshold test was arbitrary and capricious, but the Supreme
Court overturned the appellate court, holding that the Commis-
sion's decision had to be judged in light of the information then
available to it. Significantly, the Supreme Court noted that the
petitioners' responsibility to present its position and conten-
tions effectively was especially heavy when the Commission is
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14
being asked to "embark upon an exploration of uncharted ter-
ritory, as was the question of energy conservation in the late
1960's and early 1970's." Id. 98 S.Ct. at 1216.
In the case of the instant petition, as in Vermont Yankee.
historical perspective is an essential ingredient of any thres-
hold test, for fuel cleaning and separation are also new and
evolving concepts insofar as air pollution control at municipal
waste incinerators is concerned. Although arguably much is known
about recycling in terms of how and what to recycle to achieve
waste reduction, no hard data are presently available to judge
whether supplementing conventional, state-of-the-art pollution
control equipment such as baghouses and scrubbers with fuel
cleaning and separation would cause reductions or increases of
regulated pollutant emissions. According to an EPA Municipal
Waste Task Force Report just released in February 1989, informa-
tion on reducing emissions from municipal waste incinerators
through elimination of specific materials from the combustor —
for example, through separation and recycling — is not well
known: n[D]ata are currently inadequate to determine precisely
the effect on air emissions and ash of eliminating specific
materials from the waste stream prior to combustion." ^
This current paucity of knowledge is illustrated by the
petition for review. Petitioners are unable to point to a single
study or instance in which the addition of fuel cleaning and
-' "The Solid Waste Dilemma: An Agenda for Action,11 supra note
4, at 63.
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15
separation results in anv emissions reductions over those obtain-
ed by the use of the highly effective conventional equipment and
operating practices already required by the Spokane permit.
Petitioners cite a study done by National Recovery Technologies,
Inc. (NRT) for the proposition that removal of aluminum, steel,
glass, and dirt from municipal waste will result in "a 30 to 75
percent reduction of air emissions"; ^ however, an examination
of this study fails to support Petitioners' statement, at least
not in the manner intended by Petitioners. The study actually
shows that these reductions represent comparisons of emissions
from the separate burning of treated (cleaned) and untreated
wastes, respectively, "prior to emissions control equipment and
are not direct air releases." NRT Study at 4 (emphasis added).
In other words, the study does not show that there would be a
reduction in pollutant emissions had conventional pollution
control devices been in operation. This omission is significant,
because it is impossible to conclude from the study whether
emissions would have increased, decreased, or stayed the same if
conventional equipment had been in operation, w for it is well
& Petition at 3.
& I disagree with Region X, which takes the position, Response
at 6 (undated), that the results of the study "imply" that recyc-
ling, in combination with the current combustion and post-combus-
tion controls proposed, would constitute the most effective
method of reducing heavy metal emissions. Any such implication
at this time is premature and speculative; the data warrant, at
most, further investigation in the form of additional studies.
Hence, it was not clear error for Ecology to not accept this
implication. For much the same reasons, I attach no special
weight to Ecology's "assumption," pointed out by Petitioners,
(continued...)
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known that the conventional, state-of-the-art equipment required
by the Spokane permit is highly effective in reducing emissions
of heavy metals and most other pollutants, as well as reducing
the specific pollutants for which the equipment is designed to
control — principally S02 and particulate matter. ^
Petitioners also make reference to a BACT analysis performed
by EPA Region IX, San Francisco, California, for a municipal
waste incinerator to be built in San Marcos, California. This
BACT analysis included source separation as a control option. —'
Region IX concluded, however, that BACT for the incinerator was a
lime slurry spray dryer system (dry scrubber) with a baghouse for
the control of sulfur dioxide (S02), acid gas, and particulate
emissions. Region IX specifically found that source separation
provides poor control of heavy metals and fair control of dioxins
^(...continued)
that removing heavy metals from the fuel before combustion would
reduce their emissions.
^ See, e.g. . Memorandum, dated June 27, 1987, from Gerald
Emison, Director, EPA Office of Air Quality Planning and Stan-
dards (OAQPS) to EPA Regional Air Office Directors, enclosing
"Operational Guidance on Control Technology for New and Modified
Municipal Haste Combust or s" ("EPA today also draws upon the
technical data referenced below, and its experience in issuing,
reviewing, and enforcing PSD permits for [municipal waste combus-
tors] MWCs. Recent emission test data have demonstrated that
particulate matter (PM) , S02, and other air pollutants (including
[toxic] organics, heavy metals, and acid gases) can be controlled
effectively by acid gas scrubbing devices (dry scrubbers)
equipped with efficient particulate collectors" — page 4).
227 Letter from Jean M. Mischel, attorney for Petitioners, to
Jay Willenberg, Air Program, Washington Department of Ecology,
dated November 2, 1988 (commenting on Ecology's preliminary
approval of the permit) .
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17
and furans. According to the Region, the line slurry spray
dryer, in contrast, provides excellent control of both heavy
metals and dioxins and furans. ^ In short, Region IX's con-
sideration and rejection of source separation in this one in-
stance obviously furnishes no basis for saying Ecology erred by
not including it in the Spokane BACT analysis.
The absence of studies or actual operating results is
especially fatal under the Clean Air Act, for the statutory
definition of BACT requires a technology to be "available" for it
to be considered as BACT. &
The permit applicant's burden of showing that a more
stringent technology is not BACT obviously does not come
into existence unless the so-called "more stringent" tech-
nology is available. If the technology is not available,
the permit applicant is under no duty to consider it in the
BACT analysis.
Pennsauken Resource Recovery Facility. PSD Appeal No. 88-8, at 7
(EPA November 10, 1988) (Remand Order). A technology is obvious-
ly not available in any meaningful sense if knowledge about its
effect on emissions, in the particular configuration in which it
would be employed, is so incomplete as to be unusable. Moreover,
given the Clean Air Act's emphasis on granting or denying com-
& Ifl. (enclosure).
w As with the HRT study, the Region IX BACT analysis does not
explore what levels of emission reductions might be achieved by
using source separation and conventional pollution control
equipment in combination with each other. The reason it was not
done, I suspect, can be attributed to the same lack of essential
data that is also apparent in this case.
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pleted PSD permit applications within one year of filing, ^ it
would be unreasonable to read the tern "available" as imposing a
duty on the permit applicant to conduct time-consuming original
research by generating new data for the purpose of discovering
whether a potential, but unproven, technology might possibly
prove successful. ^ Perhaps more importantly, without the
requisite knowledge about the technology's effects on emissions,
the technology also cannot be regarded as the "best" technology.
Therefore, I conclude that Petitioners have not shown that fuel
cleaning and separation, in combination with conventional, state-
of-the-art pollution control equipment, constitute available
technologies for purposes of the BACT determination.
227 The one year limitation appears in section 165 (c) of the
Clean Air Act:
Any completed permit application under section 7410 of
this title for a major emitting facility in any area to
which this part applies shall be granted or denied not later
than one year after the date of filing of such completed
application.
42 USCA §7475(c). The limitation is "directive in nature" not
jurisdictional. Hancock County v. EPA, No. 83-3108, slip op.
(6th Cir. Aug. 14, 1984), 22 Env't. Rep. Cas. 1714, 1719 (SNA).
& This does not imply that a technology need have a proven
application for the source category under consideration before it
can be deemed "available." Technology transfer from one source
category to another is appropriate for BACT purposes. Thus, a
technology that is in actual use for controlling a regulated
pollutant in one source category — and thus is clearly available
— may be required for control of that same pollutant in another
source category, provided sufficient data can be readily gener-
ated to establish transferability. However, that issue is not
presented in this case. Here, there are no known facilities
using the advocated technology (fuel cleaning and separation in
combination with conventional, state-of-the-art pollution equip-
ment) for control of regulated pollutants.
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19
Apart from the absence of studies or operating results to
support the petition, the petition is also flawed in at least one
other serious respect. Specifically, given the embryonic state
of our knowledge about recycling in the present context, Petitio-
ners also have a responsibility to satisfy a reasonable threshold
of clarity and precision in their demands of the permit issuer.
They have not done so in this case. For example. Petitioners
never state exactly what they mean by fuel cleaning and separa-
tion. The omission is problematic because there is no uniform
definition of fuel cleaning and separation, and Petitioners have
not sought to clarify their intentions by supplying their own
definition. Both terms in the context of the petition can be
interpreted as referring simply to removal (separation) of
objects such as car batteries, tires, glass bottles, and large
metal appliances, so-called white goods, from the waste fuel
before incineration. In fact, Petitioners identify "removal of
aluminum, steel, glass, and dirt" as examples of separation
possibilities. Petition at 3. However, Petitioners later expand
their concept of separation to encompass use of refuse-derived
fuel (RDF), which they refer to as an example of "mechanical"
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20
separation. & Petitioners also use the term "source separation"
in apparent reference to curbside separation of waste by home-
owners, but without specifying how the waste should be separated. —'
Because of the uncertainty and confusion in their terminology, it
is difficult to determine precisely what Petitioners are alleging
Ecology failed to consider in its BACT analysis. & The possib-
ilities appear limitless. Under these circumstances, it is
unreasonable to expect the permit issuer or the permit applicant
to sort through all the possibilities in the hope of identifying
some feasible practice that might satisfy Petitioners' expecta-
227 Significantly, however, RDF facilities are usually as-
sociated with a different combustor design and feed mechanism
than the designs employed in mass-burn incinerators such as the
one proposed for Spokane. As noted previously, EPA has not
required PSD applicants to redefine the fundamental scope of
their projects. See note 7, supra. For example, an applicant
proposing to build a coal-fired boiler has not been ordered to
build a gas-fired turbine although the latter is inherently less
polluting.
267 Although the Clean Air Act easily contemplates object
removal bv the permittee as a potential control technology ("fuel
cleaning and treatment"), it is not at all clear that the permit
issuer can require curbside separation by homeowners as a condi-
tion of a HO permit, and that issue is not decided here.
Moreover, even where the requested condition is phrased as a
limitation on the kinds of waste to be accepted by the permittee,
if the requested limitations are extensive the proposal might
border on an improper request to redefine the source, i.e., to
alter the fundamental scope of the project. See note 25, supra.
*& I note that Spokane, Ecology, and EPA Region X, in their
responses to the petition, cope with the imprecision by glossing
over it and providing, in effect, their own definitions of what
they think Petitioners meant. No such powers of clairvoyancy
should be necessary to respond appropriately to a petition.
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8.37
21
tions. I therefore conclude that the ill-defined scope of the
petition alone is grounds for its dismissal. ^
Conclusion
Petitioners have not made an adequate case for reviewing the
permit on the "fuel cleaning and separation" issue. As dis-
cussed, the petition fails to demonstrate that Ecology committed
clear error in not requiring the permit applicant to develop more
information on these practices. I say this because Petitioners
are requesting Ecology to venture into territory that is not well
charted, where the possible recycling and separation strategies
that Spokane could adopt are virtually limitless and the results
are unknown and not presently predictable. Therefore, it is not
enough for Petitioners to say that benefits can be derived from
these practices when our knowledge about them in the specific
context of air pollutant emissions from municipal waste incinera-
tion is in the formative stages. To have warranted in-depth
227 See also note 8 supra. The vagueness resulting from lack
of definition cannot be dismissed as harmless error. For ex-
ample, EPA's failure to define "recycling" in Clean Water Act
regulations that established separate requirements for discharges
of wastewater from crushed stone mining operations, depending
upon whether the operator recycled the mine's wastewaters,
prompted a reviewing court to express doubts about the validity
of the regulations:
The fact that the regulations do not define recycling
may well make them void for vagueness under our decision in
duPont. at p. 1033, where we set aside an EPA regulation
because we were "not sure what it means in the context in
which it is used."
National Crushed Stone Ass'n v. E.P.A., 601 F.2d ill, 120 (4th
Cir. 1979) (remanding the regulations on other grounds).
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22
consideration in the BACT analysis, Petitioners should have
established as a threshold matter that these practices are
"available" to the applicant, e.g., that there are sufficient
data indicating (but not necessarily proving) that their addi-
tional control technologies, in conjunction with the conven-
tional, state-of-the-art controls considered in the Spokane BACT
analysis, will lead to a demonstrable reduction in emissions of
regulated pollutants or will otherwise represent BACT. ^ They
have not done so in this instance. Petitioners have not pointed
to a single facility anywhere (or even a study) that satisfies
these threshold requirements. Therefore, this aspect of the
petition is dismissed.
It is clear that more and more communities will be using
recycling in conjunction with incineration to address their
municipal waste problems. As more information becomes available
from these communities, it may overcome the deficiencies in the
petition presented in this case, and if so, it may determine the
potential of recycling practices for controlling regulated
pollutant emissions under the PSD provisions of the Clean Air
Act. The Agency expects future permit applicants to consider
this information as it becomes available and to assess its
potential for inclusion in their analyses of BACT. The rate at
which this information becomes available is also likely to
increase rapidly in the near future. In late January 1989, EPA
^ ££. note 9, supra.
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8.37
23
established a new Office of Pollution Prevention, which will
include the study and development of environmentally sound
recycling practices as part of its mission. 54 ffifl. ££3- 3845
(January 26, 1989). In addition, the Agency's February 1989
Municipal Waste Task Force Report describes the many recent
efforts to develop information and to effect positive changes in
the way we deal with the problems of increasing waste generation
and decreasing waste management capacity. Currently, however,
not enough technical data are available to determine the air
quality benefits of requiring fuel cleaning and source separation
in combination with state-of-the-art air pollution equipment.
As a final matter, I am also dismissing as moot the petition
insofar as it concerns the NO, emission limitation and thermal
de-NOx technology. I am doing this not because the petition
lacks merit but because Spokane has agreed to install the re-
quisite technology and to have the permit revised to reflect this
change in the facility. Accordingly, I am remanding the permit
to Ecology to revise the permit along these lines. Following
reissuance of the revised permit. Petitioners shall be given the
opportunity, in accordance with 40 CFR §124.19, to appeal any
determination Ecology makes with respect to the revised NOX
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24
limitation. Any such appeal shall be strictly limited to the
scope of the revisions in the NOK limitation.
So ordered. ^
Dated: JIN 9 BBS
William K. Reil
Administrator
^ All pending requests to submit further comments or responses
are denied.
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8.37
25
CERTIFICATE OF SERVICE
I hereby certify that copies of the foregoing Order Denying
Review, PSD appeal No. 88-12, were nailed to the following by
First class mail, postage prepaid.
Laurie Sillers Halvorson
Assistant Attorney General
Ecology Division — M/S PV-11
7th Floor
Highways Licenses Building
olynpia, WA 98504-8711
Stu Clark
Wash. State Dep't. of Ecology
Mail Stop PV-11
Olynpia, WA 98504-8711
David M. Bricklin
Jean Mischel
Bricklin & Gendler
Fourth & Pike Building
1424 Fourth Avenue, Suite 1015
Seattle, WA 98101
Gary O'Neal
Air and Toxics Division
U.S. EPA, Region X
1200 Sixth Avenue
Seattle, WA 98101
Jay Willenberg
Wash. State Dep't. of Ecology
Mail Stop PV-11
Olynpia, WA 98504-8711
Craig Trueblood
Preston, Thorgrimson, Ellis &
Holnan
Suite 1400
W. 601 Riverside Avenue
Spokane, WA 99201
David Birks
Spokane Regional Waste-to-
Energy Project
West 808 Spokane Falls Blvd.
Spokane, WA 99201
Deborah Hilsnan
Office of Regional Counsel
U.S. EPA, Region X
1200 Sixth Avenue
Seattle, WA 98101
Dated: JUN -9
Brenda H. Selden, Secretary
to the Chief Judicial Officer
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8.38
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
JUN 15 1989
Mr. John Daniel
Assistant Executive Director
Department of Air Pollution Control
Commonwealth of Virginia
P.O. Box 10089
Richmond, Virginia 23240
Dear John:
This is in response to your letter of May 12, 1989, in which you
asked at what time the State of Virginia could finalize a best available
control technology (6ACT) determination for a new emission source that will
be collecting site-specific meteorological data until April 1990 for the air
quality modeling analysis required under 40 CFR 51.21(m). You stated that the
air quality modeling analysis must be performed before the permit application
can be considered complete, and specifically asked whether the.State may "lock
in" BACT for the source (a) now, approximately 10 months before the
meteorological data are available for the modeling analysis, (b) in December
for modeling purposes, or (c) at some other time. You added that your
preliminary determination of BACT for this source is the same as for three
other virtually identical emission sources for which you already have issued
permits to the applicant.
Based on the situation you have described, there are two interpretations
of the question you have asked. The first is that the applicant wants a BACT
decision that is somehow "locked in" (i.e., unchangeable) at some point during
(or before) the permit review process. Such a procedure would be unlawful.
In the BACT selection process, the applicant analyzes BACT alternatives and
recommends one of the alternatives in the application. The reviewing agency
then makes a preliminary BACT determination and presents this and other
preliminary determinations to the public for comment. The reviewing agency,
based on public comment and any new information regarding either the
alternatives evaluated in the PSD application or recent developments in
control techniques that were not addressed in the application, then selects
BACT as it prepares the final permit. Even then, as you know, the BACT
decision is not "locked in." If the source requests a permit extension under
40 CFR 52.21(r)(2), EPA's current policy is to re-evaluate the BACT decision
based on the technologies that are available at the time of the extension
request.
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The above summary of the review process for BACT is intended to emphasize
the open nature of the BACT determination, even with a complete application.
In light of the Clean Air Act's emphasis on careful evaluation and informed
public participation, a permitting authority can not lawfully agree on BACT
with an applicant before the application is complete.
The second interpretation of this situation is that the applicant simply
would like to know your tentative preliminary determination of BACT as soon as
possible. There is nothing wrong with sharing this information at any time
you feel is appropriate. It is obviously useful for an applicant to know the
minimum level of control you would seriously consider to be BACT based on your
experience and expertise, so long as you make the applicant understand that
you are not held to that level as a "locked in" decision. Of course, a good
preliminary BACT determination made for the source is more likely to remain as
the permitted BACT.
The lack of a "locked in" BACT should not affect the applicant's ability
to conduct a modeling analysis. Modeling should be done by the applicant
based on the level of control recommended by the applicant. If a more
stringent level of control is selected as BACT, the applicant's modeling
results can nearly always be adjusted by applying the ratio of selected vs.
modeled emissions. Therefore, a "locked in" BACT isn't needed for modeling.
I am also somewhat concerned about BACT determinations you indicate have
already been made. You did not specify what BACT was, but with different fuel
mixes, I would have anticipated the probability of different limits on the
units. Also, did the BACT review consider whether a spreader stoker was the
best way (from an air pollution prevention point of view) to fire coal for co-
generation and whether some other type of coal-fired unit would be better?
Another point worth mentioning is the area of technology transfer. We
have heard that some applicants are attempting to define gas streams and
source types far more narrowly than common sense would dictate in an effort to
avoid certain controls. For example, an applicant might say that NOX controls
have been applied to a 30 and 70 MW coal boiler, but not to a 45 MW coal
boiler; that the control technology has been applied to pulverized and
fluidized bed units, but not to spreader stokers; or that the technology has
never been applied to the particular mix of, say, wood and coal planned for
that unit. Such arguments should be closely scrutinized and the applicant
should explain fully not only what is different about the gas stream (if the
control technology being analyzed is an add-on control), but also why. that
difference precludes transfer of that control technology to the proposed
source. The burden of proof should be relatively high in order to prevent
circumvention of reasonable technology transfer by the selection of some
slightly different unit.
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8.38
1 hope that this response has been helpful in answering your question.
Please contact Sam Duletsky [(919) 541-0873] or me [(919) 541-5592] if you
wish to discuss this further.
Sincerely,
Gary'HcCutchen, Chief
New Source Review Section
cc: Bernie lurlinski, Region III
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8.39
BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
In the Matter of )
)
Hibbing Taconite Company, )
) PSD APPEAL NO. 87-3
Petitioner )
ORDER ON PETITION FOR REVIEW
In a petition dated July 30, 1987, U.S. EPA Region V seeks
review of a Prevention of Significant Deterioration (PSD) permit
determination that authorizes the Hibbing Taconite Company
(Hibbing) to modify its furnaces to burn petroleum coke as a
fuel. A final decision to issue the permit was made on July 2,
1987, by the Minnesota Pollution Control Agency (MPCA) , pursuant
to a delegation of authority from Region V. ix MPCA's action in
issuing the permit is subject to the review provisions of 40 CFR
§124.19 because the permit is deemed to be an EPA-issued permit
under EPA rules. 40 CFR §124.41; 45 Fed. Reg. 33,413 (May 19,
1980) .
In its petition for review, Region V raises seven issues:
(1) whether Ribbing's analysis of Best Available Control Tech-
nology (BACT) for sulfur dioxide (S02) is erroneous; (2) whether
17 The PSD program was delegated to the State of Minnesota on
October 15, 1980, under the authority of 40 CFR §52.21(u). See
Letter from John McGuire, Regional Administrator, EPA Region V,
to Terry Hoffman, Executive Director, MPCA (October 15, 1980).
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2
Hibbing failed to perform a collateral impacts analysis on
unregulated pollutants as required by North County Resource
Recovery Associates. PSD Appeal No. 85-2 (June 3, 1986); (3)
whether the permit violates section 165 of the Clean Air Act (CAA
or Act) by allowing Hibbing to modify its facility and operate
for nine months without a prescribed emission limit for S02; (4)
whether the permit limit of 0.024 grains per dry standard cubic
foot (gr/dscf) represents BACT for particulate matter (PM); (5)
whether Hibbing improperly excluded its property from the ambient
air quality modeling; (6) whether analysis of alternative control
technologies is required for carbon monoxide (CO) emissions and
whether the permit must contain operating requirements for
combustion of CO; and (7) whether Hibbing improperly relied on
existing data from distant monitors to meet the preconstruction
monitoring requirements under 40 CFR §52.21(m)(1). J
For the reasons set forth below and pursuant to 40 CFR
§124.19, review of issues (2), (6), and (7) is denied. Issues
(1), (3), (4), and (5) are remanded to MPCA to conduct additional
BACT analyses and to determine the portion of the Hibbing pro-
-' Both Hibbing and MPCA have filed responses to the Region's
Petition for Review. See Comments of Hibbing Taconite Company on
the EPA Region V Petition for Review of Minnesota Permit No. 541-
87-OT-l (PSD Appeal No. 87-3)(December 30,1987); Minnesota
Pollution Control Agency, Division of Air Quality, Response to
U.S. EPA Region V's Petition for Review of Permit No. 541-87-OT-l
Issued to Hibbing Taconite Co. (September 28, 1987). Ribbing's
attorney sent a letter dated January 5, 1988, concerning a
curtailment of natural gas to the Hibbing plant. For purposes of
deciding the issues on appeal, there is no need to consider the
matters raised in that letter.
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3
perty (if any) that should be excluded from the ambient air
determination, consistent with this opinion.
Background
Hibbing's plant crushes taconite ore, concentrates the iron
in the resulting powder, and forms it into pellets for shipment
to a primary steel plant. The taconite plant equipment includes
ore crushers, concentrating process lines, and pelletizing
furnaces. The plant currently uses venturi rod scrubbers as a
pollution control technology. Until recently the furnaces burned
only natural gas and fuel oil. Now Hibbing plans to switch to
petroleum coke as a fuel, thus requiring a physical modification
of the plant. The modification will bring Hibbing under the
purview of the CAA's PSD requirements for the first time. -x
Hibbing has submitted a PSD applicability analysis that
shows the proposed modification is subject to PSD requirements
for emissions of S02, CO, and PM. v
-' The Hibbing facility was constructed between 1973 and 1977.
The PSD requirements of the CAA apply only to facilities on which
construction was commenced after August 7, 1977. 42 U.S.C.
§7475.
-' Before an existing major emitting facility located in an area
that is meeting the National Ambient Air Quality Standards
(NAAQS) can undertake a major modification, i.e., one which would
result in a significant net emissions increase of a regulated
pollutant, the owner must obtain a PSD permit. 40 CFR
§52.21(b)(2)(i). Hibbing is located in an area designated as
being in attainment of the NAAQS for S02, CO, and TSP ~ all
regulated pollutants. 40 CFR §81.324. Hibbing's analysis shows
that there would be a significant net emissions increase for each
of these pollutants.
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4
Discussion
Administrative review of PSD permit decisions is not usually
granted unless the permit decision is clearly erroneous or
involves an exercise of discretion or policy that is important
and therefore should be reviewed by the Administrator as a
discretionary matter. 40 CFR §124.19. "This power of review
should be only sparingly exercised * * *." 45 Fed. Reg. 33,412
(May 19, 1980). The regulations envision that disputed permit
conditions will be resolved for the most part at the regional
level. Id. The burden of demonstrating that review should be
granted is therefore on the petitioner.
Issue fl): BACT for SO.
The CAA makes permit issuance contingent on a showing that
the proposed facility will employ the Best Available Control
Technology (BACT) for each regulated pollutant emitted from it in
significant amounts. 42 U.S.C. §7475. Section 169(3) of the CAA
defines BACT as an "emission limitation" reflecting the "maximum
degree of reduction" that is "achievable" on a "case-by-case
basis, taking into account energy, environmental, and economic
impacts and other costs." 42 U.S.C. §7479(3). This case-by-case
approach provides a mechanism for determining and applying the
appropriate technology in each situation.
The Region argues that the BACT analysis for SO2 is erron-
eous because Hibbing failed to use the burning of natural gas as
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8.39
5
its "base" case; ^ it did not factor in the cost savings from
the fuel switch; it did not justify rejecting the burning of
natural gas as a viable control strategy; and it did not present
an engineering analysis demonstrating how the proposed 1.2
Ibs/MMBTU limitation for S02 emissions would be achieved or
explaining why this limitation represents BACT. ^ According to
the Region, the first two arguments present the following ques-
tion: "When economic problems face a facility, to what degree
must that facility use cost savings to minimize environmental
degradation if the facility switches to a more polluting fuel
that reduces operating costs?" 7J Because PSD guidance for BACT
does not directly address this issue, the Region asserts that it
is appropriate for review by the Administrator.
Neither the PSD regulations nor the PSD guidance differ-
entiate between BACT analyses for plant modifications and BACT
analyses for the construction of new plants. Nevertheless, the
Region contends that, because Hibbing has been able to continue
J Use of the base case in performing a BACT analysis is des-
cribed in the EPA Prevention of Significant Deterioration Work-
shop Manual at I-B-7 (October 1980). For a definition of the
base case, see text infra at 6-7. Cf. note 10 infra.
-' The Region also argues that Hibbing failed to consider other
technologies commonly used to control S02 gas streams. Although
this argument may have been true with regard to the original BACT
analysis, Hibbing remedied this deficiency with its supplemental
BACT analysis and its 9/24/87 BACT support study, conducted by
Black and Veatch. See Letter from Charles B. Hoffman to David
Beil, MPCA Staff Engineer (June 17, 1987); MPCA Response at 9-11
and Attachment 1.
-' See Response of U.S. EPA, Region V, to Comments of Hibbing
Taconite Company at 4 (March 14, 1988).
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6
to operate burning natural gas, it must use natural gas as the
base case. I disagree. Hibbing's use of the coke burning plant
with existing pollution controls as the base case clearly com-
plied with the criteria for choosing a base case in EPA's guid-
ance document. EPA's Prevention of Significant Deterioration
Workshop Manual (October 1980) defines the base case as:
[T]he control strategy that, in the absence of BACT
decisionmaking, would normally have been applied.
The choice of the base case may be dictated by other
existing regulations and/or by company practice stand-
ards or choices, if they provide a greater degree of
emission reduction than that required by existing regu-
lations (such as new source performance standards,
national emission standards for hazardous air pol-
lutants, etc.).
Id. at p. I-B-7. The base case chosen here meets the require-
ments of Minnesota's state permitting regulations, -y and thus is
consistent with this definition. Moreover, Hibbing's choice of
the base case is consistent with the practices of other taconite
plants in Minnesota. -' Nothing in the definition requires the
-' Minnesota taconite plants operate under permits specifying
the SO. emission limits based on Minnesota Rules part 7005.2770.
These limits are 2.0 Ibs/MMBTU when burning a liquid fuel and 4.0
Ibs/MMBTU when burning a solid fuel. See HPCA Response at 7.
The limit in the base case chosen by Ribbing is 4.0 Ibs/MMBTU
when burning petroleum coke. But see note 15 infra.
27 Of the three taconite plants in Minnesota that are equipped
and permitted to burn a combination of solid fuel, fuel oil and
natural gas in the pellet production process, two plants produce
a substantial portion of their production using a solid fuel.
See MPCA Response at 6. Hibbing is the first taconite plant in
the United States to become subject to PSD review either for
original construction or for modification. Id. at 7.
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8.39
7
base case to be the unmodified plant. ^ The Region has not
shown any compelling reason why a permit applicant seeking to
modify an existing plant should be subject to a different set of
criteria for choosing a base case than a new permit applicant.
Furthermore, I disagree with the Region's argument that
Hibbing failed to take into account the cost savings from the
fuel switch. An important purpose of any BACT analysis is to
provide a comparison of the costs associated with each alter-
native control technology. This comparison necessarily takes
into account the cost-savings associated with less expensive
control technologies, as well as the increased costs associated
with the more expensive alternatives. Once a proper base case is
chosen and alternatives are compared, no additional cost savings
analysis is necessary. The Region has not met its burden of
showing that the BACT analysis was clearly erroneous or otherwise
warrants review with respect to the first two issues. Thus,
review is denied on this aspect of the S02 BACT issue.
The Region's third argument is that Hibbing failed to just-
ify its rejection of burning natural gas as a viable control
—; Recognizing the need for a more consistent BACT process, EPA
recently began developing specific guidelines on the use of the
"top-down" approach, which requires an applicant to justify why
it cannot use the most effective pollutant control available.
Se= Memorandum from J. Craig Potter, Assistant Administrator for
Air and Radiation, to EPA Regional Administrator's (December 1,
1987). The top-down approach, however, was not applicable here
because the permit determination was made prior to the issuance
of this memorandum. See In the Matter of Pennsauken County, New
Jersey Resource Recovery Facility, PSD Appeal No. 88-8 at 6-7
(November 10, 1988).
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8
strategy. I agree. Hibbing contends that although natural gas
was once a financially viable alternative, due to the depressed
economic situation in the steel industry, natural gas is now too
costly. Nevertheless, Hibbing has been able to continue to
operate using natural gas. In my view, Ribbing's ability to
continue to operate using natural gas creates a presumption that
natural gas is a financially achievable alternative. Of course
this presumption can be rebutted, but to do so, Hibbing must
provide a detailed consideration of objective economic data.
Mere generalizations about the economic woes of the steel in-
dustry are not enough. Hibbing's BACT analysis does not contain
the level of detail and analysis necessary to overcome the pre-
sumption that the natural gas alternative is economically achiev-
able. The BACT analysis shows the cost of burning natural gas is
$1310/ton of SO2 removed, however, there is no serious discussion
of cost effectiveness. Greater efforts must be made by the
applicant to show that the natural gas alternative is not econom-
ically feasible. This might be done, for example, by comparing
the costs of burning natural gas with the costs associated with
S02 controls used in other similar types of facilities that have
gone through PSD review. ^ Thus, on remand, MPCA must ensure
that the BACT analysis contains a more detailed economic just-
ification for rejecting the natural gas alternative.
-^ In its petition, the Region states that a control cost of
$1300 per ton is within the cost range found for BACT deter-
minations, and therefore, is reasonable.
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8.39
9
Although the parties have not raised it, one argument that
could be made is that the Region, by requiring the burning of
natural gas to be an alternative to be considered in the BACT
analysis, is seeking to "redefine the source." Traditionally,
EPA has not required a PSD applicant to redefine the fundamental
scope of its project. & However, this argument has not been
made, and in any event, the argument has no merit in this case.
EPA regulations define major stationary sources by their
product or purpose (e.g., "steel mill," "municipal incinerator,"
"taconite ore processing plant," etc.), not by fuel choice. ^
Here, Hibbing will continue to manufacture the same product
(i.e., taconite pellets) regardless of whether it burns natural
gas or petroleum coke. Likewise, the PSD guidelines state that
in choosing alternatives to be considered in a BACT analysis, the
^' See In the Matter of Pennsauken County, New Jersey Resource
Recovery Facility, PSD Appeal No. 88-8 at 11 (November 10,
1988)(BACT permit conditions "are not intended to redefine the
source"). Several important distinctions, however, can be drawn
between Pennsauken and the facts here. In Pennsauken. the
petitioner was urging EPA to reject the proposed source (a
municipal waste combustor) in favor of using existing power
plants to co-fire a mixture of 20% refuse derived fuel and 80%
coal. In other words, the petitioner was seeking to substitute
power plants (having as a fundamental purpose the generation of
electricity) for a municipal waste combustor (having as a
fundamental purpose the disposal of municipal waste). Moreover,
the petitioner was not merely seeking to "condition" the permit;
instead, it was urging EPA, in effect, to deny the permit for
construction of the proposed source in favor of using existing
power plants. The Hibbing situation, however, is quite distinct.
Here, the petitioner (the Region) is merely urging the continued
burning of natural gas at the same source — an alternative that
will not require any fundamental change to Hibbing's product,
purpose, or equipment.
& See 40 CFR 52.21(b)(l).
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10
applicant must look to what types of pollution controls other
facilities in the industry are using. The record here indicates
that there are other taconite plants that burn natural gas, or a
combination of natural gas and other fuels. Thus, it is reason-
able for Hibbing to consider natural gas as an alternative in its
BACT analysis. Moreover, because Hibbing is already equipped to
burn natural gas, this alternative would not require a funda-
mental change to the facility.
The Region's last argument with respect to the BACT analysis
for SO2 is that Hibbing failed to present an engineering analysis
demonstrating how the 1.2 Ibs/MMBTU limitation for SO2 emissions
would be achieved or explaining why this level represents BACT.
I agree. Although BACT is defined as an "emission limitation,"
it is also, as its name implies, keyed to a specific control
technology. In a previous PSD permit decision involving the
issue of whether EPA has the authority to prescribe technological
process and production requirements, the Administrator stated:
PSD permits and BACT determinations are tailor-
made for each pollutant emitting facility. Conse-
quently, the "case-by-case" evaluation of economic
costs and energy and environmental impacts that has to
be performed as part of a BACT determination is inex-
tricably tied to a specific set of assumptions regard-
ing the type of pollution control technology that will
be in place at each facility. Any change in the con-
trol technology would require a reevaluation of those
impacts and costs, which, in turn, might necessitate a
change in the emission level (lower or higher than the
previous one). Therefore, unless the type of control
technology that will be used to achieve a particular
emission limitation is identified and adhered to by the
Applicant, the BACT determination is meaningless. Ac-
cordingly, an emission limitation in a PSD permit
cannot be established without also relating it to the
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8.39
11
specific type of control technology that will be used
to achieve the limitation. ^
Moreover, EPA regulations require PSD permit applicants to submit
"a detailed description as to what system of continuous emission
reduction is planned . . . , emission estimates, and any other
information necessary to determine that best available control
technology would be applied.11 40 CFR §52.21(n) (1) (iii) (emphasis
added}.
Here, the record before me fails to clearly identify the
control technology that represents BACT and to explain how HPCA
arrived at the 1.2 Ibs/MMBTU ^ figure or whether Hibbing will be
& In the Matter of CertainTeed Corp., PSD Appeal No. 81-2 at 5-
6 (December 21, 1982)(footnote omitted).
—' The entire process by which the emission limitation of 1.2
Ibs/MMBTU was chosen is confusing. In its initial BACT analysis,
Hibbing proposed burning petroleum coke as BACT, using its
existing control technology (venturi rod scrubbers). See Letter
from Charles B. Hoffman to David Beil, MPCA Staff Engineer (May
20, 1987). In a technical document based on Ribbing's BACT
analysis, MPCA concurred with Hibbing. See Request for Author-
ization to Issue Air Emission Facility Permit No. 54i-87-OT-l for
a Taconite Ore Processing Plant and Air Pollution Control Equip-
ment to Hibbing Taconite Company, MPCA, Division of Air Quality,
Regulatory Compliance Section at 4-5 (June 23, 1987). However,
MPCA did not specify an emission limitation for S02 in that
document. In the draft permit subject to public notice, MPCA set
the BACT emission limit for S02 at 2.0 Ibs/MMBTU. Subsequently,
in response to EPA comments on the permit, MPCA issued the permit
with an emission limitation of 1.2 Ibs/MMBTU for S02. In its
brief, MPCA summarily stated that the 1.2 Ibs/MMBTU limit "is
economically justified." The Black & Veatch support study, which
was completed after MPCA issued the permit with the 1.2 limit,
also found the existing technology and petroleum coke to be BACT.
Based on this study MPCA determined that 1.8 Ibs/MMBTU was BACT.
The Black & Veatch study indicates that the only control tech-
nology that would lower emissions to 1.2 Ibs/MMBTU is the ad-
dition of a wet limestone scrubber. However, MPCA never deter-
mined that wet limestone scrubbers represent BACT.
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12
able to meet the limit using the existing control, technology. —'
MPCA's failure to require Hibbing to provide a detailed descrip-
tion of the control technology that represents BACT, including
data quantifying its removal efficiency, is clear legal error.
Accordingly, on remand, MPCA must ensure that the record iden-
tifies the control technology that represents BACT and MPCA must
propose an emission limit based on the BACT analysis. If MPCA
determines that 1.2 Ibs/MMBTU is BACT, the record must specify
the control technology upon which the limitation is based and
show that such technology will enable Hibbing to meet the 1.2
Ibs/MMBTU limit.
Issue (2): Unregulated Pollutants
Region V argues that MPCA's permit review is deficient
because there was no consideration of unregulated pollutants as
required by North County Resource Recovery Associates. PSD Appeal
No. 85-2 (June 3, 1986). In response, MPCA incorrectly argues
that North County only applies to PSD permit proceedings for
municipal waste combustors. North County interprets an express
statutory requirement applicable to all PSD permits, and thus
requires the permitting authority to take into account the con-
trol technology's impact on unregulated pollutants in every
permit proceeding. However, MPCA also responds that it did
require Hibbing to analyze petroleum coke for unregulated trace
w Hibbing contends that it "cannot meet the 1.2 Ib. limit in
any financially viable way." See Ribbing's Comments (December
30, 1987).
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8.39
13
elements of concern. ^ In its response, Region V did not dis-
pute the adequacy of the trace element analysis. Thus, the
Region has not met its burden of showing that Hibbing's analysis
of unregulated pollutants is clearly erroneous or otherwise
warrants review.
Issue (3)i CAA's requirement for prescribed emission limits
Region V argues that MPCA erred in issuing a PSD permit that
does not prescribe an emission limitation for S02 for the first
nine months of operation under the permit. The permit must set
forth emission limitations for each regulated pollutant that the
facility will emit in significant amounts. Section I65(a)(l), 42
U.S.C. §7475(a)(l). Although Hibbing's permit establishes a 1.2
Ibs/MMBTU emission limitation for S02, Part V.D. of the permit
allows Hibbing to operate its facility for nine months after
modification while it designs a plan to achieve and comply with
this limit. If after nine months Hibbing cannot achieve the 1.2
Ibs/MMBTU limit, it must submit an application for a revised
emission limit. As a result, the permit has no emission limit
prescribed for S02 for at least the first nine months.
Last year in another PSD permit decision (involving the
threshold question of whether the Administrator should review the
permit), the Administrator stated:
[T]he permit contains a provision allowing a reopening
of the BACT determination after construction of the
—/ Hibbing analyzed a large number of trace elements in its
Applicability Analysis. See MPCA Response at 18-19 and Attach-
ment 6 (September 28, 1987).
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14
facility has commenced. This provision appears to
contravene §165(a)(1) of the Clean Air Act (CAA), which
forbids construction of a facility before the emission
limitations in the permit have been established. (CAA
§169(3) defines BACT as an "emission limitation.") —
Similarly, in the instant case, Part V.D. of the permit con-
travenes section 165(a)(1) of the CAA. Thus, Region V has made a
showing of clear error and, on remand, MPCA must ensure that the
permit contains an emission limitation for S02, based on BACT,
for the entire life of the permit.
Issue (41: BACT for (PW
Region V contends that MPCA erred in setting 0.024 gr/dscf
as BACT for PM because the technical document supporting the
permit states that the existing scrubbers used by Hibbing "have
consistently shown an outlet dust loading of 0.01 gr/dscf when
tested by EPA Methods 1-5." ^ Nowhere in this document is the
0.024 gr/dscf limit mentioned.
MPCA's response to the Region is that many BACT and Lowest
Achievable Emission Rate (LAER) determinations have been made in
the range of 0.02 to 0.05 gr/dscf. Since 0.024 is at the low end
of this range, MPCA considered it acceptable. MPCA's argument is
unresponsive to the information contained in the technical doc-
197 In the Matter of Virginia Power (Chesterfield Generating
Station), PSD Appeal No. 88-2 at 2-3 (February 1, 1988)(footnote
omitted).
^ See Request for Authorization to Issue Air Emission Facility
Permit No. 541-87-OT-l for a Taconite Ore Processing Plant and
Air Pollution Control Equipment to Hibbing Taconite Company,
Minnesota Pollution Control Agency, Division of Air Quality,
Regulatory Compliance Section at 5 (June 23, 1987).
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8.39
15
ument and it ignores the site-specific nature of BACT determin-
ations. The argument that many BACT and LAER determinations have
been made in the range of 0.02 to 0.05 gr/dscf should not, by
itself, be used to justify a less stringent PM limit than is
otherwise achievable, taking into account the necessary energy,
economic, and environmental impacts. ^ Therefore, on remand,
MPCA must provide a detailed justification for not adopting the
0.01 gr/dscf limitation if another less stringent limitation is
chosen.
Issue 4; Ambient Air
The Region argues that Hibbing improperly excluded approx-
imately 14,000 acres of its property from ambient air quality
monitoring. An EPA screening analysis conducted with receptors
located inside the excluded area indicates that the PM and SO2
PSD increments and the SO2 NAAQS will be exceeded. ^ To obtain
^ As MPCA pointed out in its response, EPA guidelines on BACT
state that the analysis of alternative strategies is not required
in a BACT analysis if the applicant demonstrates that the chosen
base case provides the highest degree of emission reduction
available. Thus, MPCA may use the 0.01 gr/dscf limit in the
permit without considering alternatives if it can show, as it
represented in its technical document, that 0.01 gr/dscf repre-
sents the highest degree of emission reduction available. See id.
MPCA also cites EPA's BACT guidelines, which state that the
analysis should only be as extensive as the quantity of pol-
lutants emitted and the ambient air impact. MPCA is correct
that, under this guideline, it need not necessarily expand the
scope of control technology alternatives beyond those previously
considered. Nevertheless, MPCA must still explain its reasons
for rejecting the 0.01 gr/dscf limit.
& Furthermore, the analys;. suggests PM concentrations in this
area may exceed the de minirr.is level of 10 ng/m , thus triggering
the requirement for pre-construction monitoring data for TSP.
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16
a PSD permit, an applicant must demonstrate that emission in-
creases from the proposed source or modification will not exceed
primary or secondary NAAQS or PSD increments. ^
In ambient air quality monitoring, mathematical models are
used to predict pollutant concentrations at specific locations.
To obtain a permit, the models need show only that the NAAQS and
PSD increments will not be exceeded in the "ambient air.11 ^ The
rules define ambient air as "that portion of the atmosphere,
external to buildings, to which the general public has access."
40 CFR §50.1(e). Thus, emissions that exceed the NAAQS or PSD
increments on company property to which the public does not have
access are not an impediment to permit issuance. EPA policy has
allowed exclusion if public access is barred by fence or other
physical barrier. —' A Memorandum of Law issued by the EPA
Office of General Counsel interprets the definition of "ambient"
in section 50.1(e) as follows:
That definition, in our view, limits the standards'
applicability to the atmosphere outside the fence line,
since "access" is the ability to enter. In other
words, areas of private property to which the owner or
^ See 40 CFR §52.2l(c)(increases in pollutant concentrations
over baseline limited to specific PSD increments); id.
§52.21(d)(no pollutant concentration shall exceed the primary or
secondary NAAQS); see also 40 CFR §52.21(k)(2) (the applicant
must demonstrate the proposed source or modification will not
cause or contribute to air pollution in violation of any PSD
increment or NAAQS).
-' Both the PSD increments and the NAAQS only apply in areas
meeting the definition of ambient air. See 42 U.S.C. §§7409 &
7470-7473.
—' see, e.g.. Letter from Douglas M. Costle, EPA Administrator,
to Senator Jennings Randolph (December 19, 1980).
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8.39
17
lessee has not restricted access by physical means such
as a fence, wall, or other barrier can be trespassed
upon by members of the community at large. Such per-
sons, whether they are knowing or innocent trespassers,
will be exposed to and breathe the air above the pro-
perty. &
MPCA argues that it inspected the area and found that effec-
tive physical barriers preclude public access. ^ In support of
this argument, MPCA has submitted photographs that show access
roads blocked by gates and other physical barriers. Hibbing
correctly argues that the test for ambient air exclusion does not
require a continuous fence around the perimeter of the property.
Other types of physical barriers can effectively preclude access.
However, based on photographs submitted by EPA, there appears to
be at least three, w possibly four, & locations where physical
—' Memorandum from Michael A. James, EPA Air Quality and
Radiation Division, to Jack R. Farmer, EPA Plans Management
Branch (September 28, 1972)(citation omitted)(emphasis added).
-' MPCA cites a Federal Register notice in which EPA found the
operator of the Kennecott smelter in Magma, Utah had effectively
precluded public access from its property by a series of no
trespassing signs, rugged terrain, and security patrols. See 50
Fed. Reg. 7057 (February 20, 1985). As Region V points out in
its response, however, the two situations are not analogous. The
Kennecott property was extremely rugged and mountainous. Thus,
the physical terrain itself helped to create an effective bar-
rier. Id. Hibbing1s property, as described by Hibbing itself,
consists of "flat lowland with occasional rolling hills." See
Hibbing's Comments at 16. Furthermore, Kennecott apparently did
not involve the same type of rights of way as does the Hibbing
property.
—' The three locations not having any apparent physical barriers
are the main plant entrance, the rail line into the plant, and
the power line into the plant.
—' It is difficult to ascertain whether the berm around the
tailings pond is an effective physical barrier from the photo-
graphs submitted.
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18
barriers, natural or otherwise, do not exist along the perimeter
of the 14,000 acres. I am remanding this issue to MPCA to recon-
sider whether public access is effectively precluded at the four
locations in question. If MPCA does not find effective barriers
to public access at the four identified (or any other) locations,
MPCA must impose requirements in the permit that would force
Hibbing to erect appropriate barriers or to take other measures
that would effectively preclude public access. Alternatively,
MPCA may identify a different portion (presumably smaller) of
Hibbing's property, from which access is effectively barred. ^
The factual issue of the exact area to which public access is
precluded may be ripe for a negotiated settlement.
Issue 6: BACT for CO
Region V argues that the BACT analysis for CO is erroneous
because it did not contain an analysis of alternative controls
and did not include any operational requirements for combustion
of CO. I disagree. The Region acknowledges that alternative
controls for CO are limited to combustion with excess air and
temperature control. Nevertheless, the Region argues that the
BACT analysis must include consideration of alternative combin-
ations of these two variables. Both Hibbing and MPCA have pro-
w Region V has indicated that there may be a smaller area that
would properly be excluded from the ambient air.
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8.39
19
vided reasons why the chosen combination of temperature and
excess air was the only acceptable one. ^
The Region also asserts, without citation, that once the
combination of temperature and excess air that represents BACT is
established, it should be specified in the permit. Neither the
CAA nor EPA regulations absolutely require the permit to specify
operational requirements in addition to a numerical emission
limitation. ^ Both the CAA and EPA regulations define BACT as
an "emission limitation." ^ Hibbing's permit contains this
required emission limitation and therefore omission of operation-
al requirements was not clear error. ^/ Nevertheless, Hibbing
must adhere to the control technology identified as representing
BACT in its BACT analysis. ^ Review is denied on this issue.
—' To produce a high strength abrasion resistant taconite
pellet, the pellets must be heated to, and maintained at, a
temperature of 2450° F. The amount of excess air that can be
used is limited by the need to achieve a high enough temperature
in the combustion gases to raise the temperature of the pellet to
the required level. Although increasing the temperature would
result in a reduction of CO emissions, it would also result in
pellets of unacceptable quality. Thus, the chosen combination of
temperature and excess air appears to be the only acceptable
combination. The Region has not shown that Ribbing's justifi-
cation of this combination is clearly erroneous.
—( Furthermore, MPCA represents that combustion control is
automatic and not dependent on operator attention.
-' 42 U.S.C. §7479(3); 40 CFR §52.21(b)(12).
^ Moreover, there is nothing in the record to indicate that
specifying the combination of temperature and excess air is
essential to monitor compliance with the emission limitation.
^ See In the Matter of CertainTeed Corp., PSD Appeal No. 81-2
at 5 (December 21, 1982).
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20
Issue 7; Preconstruction Monitoring
Region V argues that the data used by Hibbing do not meet
the preconstruction monitoring requirements of 40 CFR §52.21(m)
and EPA's Guidelines on Ambient Monitoring. ^ Section
52.21(m)(1)(iii) of the rules requires applicants to submit
continuous air quality monitoring data to determine if emissions
of a pollutant would cause or contribute to a violation of a
NAAQS or an increment. The data must be gathered over a period
of at least a year and must represent at least the year preceding
receipt of the application. EPA allows substitution of existing
representative air quality data in lieu of having the source
generate its own preconstruction monitoring data, provided these
data meet the criteria in the "Ambient Monitoring Guidelines for
Prevention of Significant Deterioration" (July, 1980). ^
The guidelines require existing monitoring data to be rep-
resentative of areas of (l) maximum existing pollutant
concentrations, (2) maximum concentration increases from the
proposed source or modification, and (3) maximum combined impact
from existing and proposed sources. If there are no existing
monitors in such areas the guidelines allow monitors located
elsewhere to be used on a case-bv-case basis. The guidelines
provide examples of cases in which it would be appropriate to use
—* Based on Ribbing's modeling results, preconstruction monitor-
ing data is required only for SO2. However, in light of the
remand on the ambient air issue, preconstruction monitoring may
also be required for PM. See supra note 17 & accompanying text.
See 45 Fed. Reg. 52676 (August 7, 1980).
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8.39
21
existing monitors that are located outside the three areas listed
above. Id. at 6-8. In one example, the proposed source is in an
area that is generally free from the impact of other point sour-
ces. Id. at 6. The guideline states that representative data
may be obtained from a "regional11 site, a site that is charac-
teristic of air quality across a broad region. Id. The use of
regional sites should be limited to relatively remote areas and
should not be used in areas of multisource emissions or areas of
complex terrain. Id.
Hibbing maintains that it properly used representative data
from a monitoring site that fits the description in this example.
Both Hibbing and the monitoring site are located in an area that
is generally flat, sparsely populated, and contains one plant
(the Clay Boswell plant) that accounts for 70% to 81% of the
total SO2 emissions. Hibbing contends that because this moni-
toring site is closer to the Clay Bosvell plant than is the
Hibbing property, it probably has higher pollutant concentrations
than the Hibbing property. Nevertheless, the Region asserts that
it is "not convinced that Hibbing qualifies for the use of reg-
ional monitoring data." The Region maintains that there are
eleven SO sources within 65 kilometers of Hibbing, and thus it is
a "multisource" area. The Region also contends that because the
Clay Boswell plant has two very tall stacks, it is not expected
to cause high ground-level concentrations, and thus the moni-
toring data may not reflect pollutant levels as high as those in
the area closer to the Hibbing plant.
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22
In my view, the Region has not met its burden of showing
that MPCA committed clear legal error in interpreting or applying
example number one of the guidelines. The guidelines are very
broad and leave much to the discretion of the permitting auth-
ority. Moreover, the examples provided in the guidelines are not
intended to be an exhaustive listing of every conceivable situ-
ation in which the use of representative data is appropriate. ^
The Region is not able to point to any specific misinterpretation
or misapplication of the guidelines. The mere existence of some
other sources in the area and the Clay Boswell plant's tall
stacks, without more, is not sufficient to show that MPCA's
characterization of the area as non-multisource was clearly
erroneous.
Moreover, the Region has not shown that MPCA committed a
factual error in evaluating the conditions in the vicinity of the
^ The guidelines state "some examples are included to demonstr-
ate overall intent." Ambient Monitoring Guidelines for Preven-
tion of Significant Deterioration at 6 (July, 1980). The Region
also argues that the guidelines require existing representative
data to be collected in the three year period preceding the
permit application. Hibbing used data from 1980-1983, which
clearly was not within three years of the 1987 permit appli-
cation. The guidelines merely state, however, that "generally"
preconstruction data must have been collected within three years
prior to the date of permit application. Here, it appears that
it would be impossible to do this because MPCA had already
permitted Hibbing to do a test burn of petroleum coke during 1985
and 1986. See Citizens Against the Refinery's Effects, Inc. v.
United State Environmental Protection Agency, 643 F.2d 178, 181
(4th cir. 1981) (PSD permit applicant may properly use one year of
weather data in its air dispersion model instead of the five
years recommended by EPA guidelines because the guidelines were
only recommendations and only one year of data was locally
obtainable and compatible with the model used).
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8.39
23
Hibbing site and monitoring site. Region V has not contested
Bibbing*s factual assertions that the Clay Boswell plant accounts
for the majority of S02 emissions in the area or that the other
plants in the area account for very small percentages (no source
accounting for more than 3.6%) of overall emissions. In sum, far
from demonstrating that MPCA committed clear error by allowing
Hibbing to use the regional data, Region V has shown nothing more
than it is "not convinced" that Ribbing's use of the regional
monitoring data was appropriate. ^ Review is denied on this
issue.
Conclusion
The deficiencies in the BACT analysis leave two courses of
action open at this juncture of the proceedings. One is to grant
review of the permit and enter into the briefing phase con-
templated by 40 CFR §124.19(c). However, the deficiencies in the
record cannot be rectified through the submission of briefs, and
any ensuing decision would likely conclude that the permit should
be denied (because of the deficiencies) or that it should be
remanded to the permit-issuing authority to allow the applicant
to supplement the BACT analysis. Considerations of time favor
remanding the permit in the first instance. Therefore, rather
than receiving additional briefs on appeal, I am remanding the
case to MPCA to: include in the permit an emission limitation for
^ Moreover, MPCA has included in the permit a requirement that
Hibbing design, install, and operate an ambient air monitoring
system for S02.
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24
SO2 based on BACT, for the life of the permit; to provide a
detailed economic analysis sufficient to justify rejection of the
natural gas alternative; to identify the control technology that
the S02 limitation is based on and demonstrate that such tech-
nology will enable Hibbing to meet the prescribed permit limit-
ation; and to either set the BACT limitation for PM at 0.01
gr/dscf or explain why it rejected this limitation. On remand,
MPCA must also determine whether public access is effectively
precluded from the four locations identified in this order, and
if not, MPCA must either impose conditions in the permit that
would require Hibbing to erect appropriate barriers at these
locations or identify a smaller area of its property from which
public access is effectively precluded.
MPCA's determination on remand will be subject to review
under 40 CFR §124.19, ^ and appeal of its decision on remand
27 The Region maintains that MPCA should be required to obtain
the Region's concurrence on the permit before issuing the permit.
I find no basis for this argument. Regarding the procedures for
issuance of PSD permits, the delegation agreement between EPA and
MPCA requires MPCA only to forward preliminary determinations to
grant or deny a PSD permit to EPA for comment and to send copies
of its final action on PSD permits to EPA. In contrast, In the
Matter of Honolulu Resource Recovery Facility, PSD Appeal No. 86-
8 (June 22, 1987), the delegation agreement required EPA Region
IX and the Hawaii Department of Health (HDOH) concurrence on BACT
determinations on the first five permits issued by HDOH.
Nevertheless, MPCA and the Region should communicate during
the course of PSD permit proceedings and attempt to reach a
consensus on matters of disagreement. Moreover, as previously
noted, MPCA's action in issuing the permit is subject to review
provisions of 40 CFR §124.19 because the permit is deemed to be
an EPA-issued permit under EPA rules. 40 CFR §124.41; 45 Fed.
Reg. 33,413 (May 19, 1980).
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8.39
25
will be required to exhaust administrative remedies under section
124.19(f)(l)(iii).
So Ordered.
Dated:
JUL
William K.
Administrator
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CERTIFICATE OF SERVICE
I hereby certify that copies of the foregoing Order on
Petition for Review in the natter of Hibbing Taconite Company,
PSD Appeal No. 87-3, were sent by First Class Mail to the fol-
lowing persons:
David Kee
Director, Air & Radiation
Services Division
U.S. EPA, Region V
230 South Dearborn Street
Chicago, IL 60604
Sebastian Patti
U.S. EPA, Region V
230 South Dearborn Street
Chicago, IL 60604
Gerald L. Willet, Commissioner
Minnesota Pollution Control Agency
520 Lafayette Road
St. Paul, MN 55155
Thomas J. Kalitowski, Executive Director
Minnesota Pollution Control Agency
520 Lafayette Road.
St. Paul, MN 55155
Charles B. Hoffman, Esq.
Pickands Mather & Co.
200 W. Superior St. - Suite 811
Duluth, MN 55803
William Pedersen, Jr., Esq.
Perkins Coie
1110 Vermont Ave, NW
Washington, DC 20005
Dated: 11 20
I30S Brenda H. Selden, Secretary
to the Chief Judicial Officer
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8.40
BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
In the Matter of: )
)
Huntington Mass-Burn Incinerator ) PSD Appeal No. 89-2
)
Applicant )
ORDER DENYING REVIEW
By letter dated July 9, 1989, Citizens for a Livable
Environment and Recycling, Inc. requested review of an amended
Prevention of Significant Deterioration (PSD) permit that author-
izes construction of a mass-burn municipal waste incinerator for
the Town of Huntington, New York. The New York State Department
of Environmental Conservation (DEC) issued the amended permit on
June 9, 1989, pursuant to a delegation of authority from EPA
Region II, New York, New York. Because of the delegation, DEC'S
permit determination is subject to the review provisions of 40
CFR §124.19, and any permit it issues will be an EPA-issued
permit for purposes of federal law. 40 CFR §124.41; 45 Fed. Reg.
33,413 (May 19, 1980).
Petitioner objects to the issuance of the permit because it
believes the permit is deficient in several respects. Petitioner
claims, inter alia, that the permit will allow the facility to
emit excessive quantities of NOX; that it fails to require the
facility to use the best available control technology (BACT) for
control of NOX emissions; and that the BACT analysis is deficient
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2
because it does not contain a comparative analysis of recycling
and mass-burn incineration.
Under the rules governing this proceeding, there is no
appeal as of right from the permit determination. Ordinarily, a
petition for review of a PSD permit determination is not granted
unless it is based on a clearly erroneous finding of fact or
conclusion of law, or involves an important matter of policy or
exercise of discretion that warrants review. The preamble to the
regulations states that "this power of review should be only
sparingly exercised," and that "most permit conditions should be
finally determined at the Regional [state] level * * *." 45 Fed.
Reg. 33,412 (May 19, 1980). The burden of demonstrating that the
permit conditions should be reviewed is therefore on the peti-
tioner. Petitioner has not met its burden.
Petitioner's claims with respect to NOX emissions are
groundless and are based on a misunderstanding of the applicable
legal requirements. In claiming that predicted emissions of NOX
(565 tons per year, according to petitioner) will exceed federal
requirements, petitioner has confused the actual requirements
(for which there are no specific tonnage limitations) with a "de
minimis" emissions rate — 40 tons per year ~ which determines
whether a facility's NOX emissions are "significant" and there-
fore subject to BACT and other PSD requirements. See 40 CFR
§§52.21(b)(23)(i) and 52.21(j)(2). Because the facility's
predicted NOK emissions will exceed that threshold rate, a BACT
analysis was performed for the proposed facility, with DEC
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8.40
3
determining BACT to be "selective noncatalytic reduction." DEC's
BACT determination is reflected in the permit, and petitioner has
not shown it to be erroneous in any respect. With respect to
recycling, Petitioner's assertions that the BACT analysis is
deficient are unconvincing because petitioner has not shown, as
it must, that recycling is an "available" technology, which ~ in
combination with emission control equipment already proposed for
the facility — will demonstrably reduce emissions of regulated
pollutants such as NOX or will otherwise represent BACT. Without
such a showing, the petition fails to establish grounds for
including recycling in the BACT analysis. See. Spokane Regional
Waste-to-Enerov Project. PSD Appeal No. 88-12 at 22 (EPA June 9,
1989). Accordingly, review of DEC'S permit determination is
denied.
So ordered.
Dated: AUG 2 _
William K. Reill-
Administrator
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CERTIFICATE OF SERVICE
I hereby certify that copies of the foregoing order Denying
Review, PSD Appeal No. 89-2, were mailed to the following in the
manner indicated.
First Class Mail
Postage Prepaid:
William J. Muszynski
Acting Regional Administrator
U.S. EPA, Region II
26 Federal Plaza
New York, NY 10278
Steve Riva
U.S. EPA, Region II
26 Federal Plaza
New York, NY 10278
Conrad Simon, Director
Air & Waste Management Division
U.S. EPA, Region II
26 Federal Plaza
New York, NY 10278
David DeRidder
Deputy Regional Permit Admin.
Newark State Department of
Environmental Conservation
Building 40 - SUNY
Stony Brook, NY 11794
Dorothy Gibson, President
CLEAR
21 Platt Place,
Huntington, NY 11743-3527
Gordon Gibson, Executive Director
CLEAR
21 Platt Place,
Huntington, NY 11743-3527
Mike Levin
Nixon, Hargrave, Devans & Doyle
1 Thomas Circle, NW
Suite 800
Washington, DC 20005
Dated:
-3
i.
Brenda H. Selden, Secretary
to the Chief Judicial Officer
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 8-41
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
SEP 11 1989
Mr. Christopher J. Daggett
Commissioner
State of New Jersey
Department of Environmental Protection
CN 402
Trenton, New Jersey 08625-0402
Dear Mr. Daggett:
This is in response to your August 15, 1989 letter to Administrator
William Reilly regarding the use of urea injection in place of ammonia
injection for the control of nitrogen oxides (NOX) from municipal waste
combustors (MMC's). You wish to know if the Environmental Protection Agency
(EPA) would accept urea injection as either innovative control technology or
best available control technology (BACT) for NOX control from MWC's. Also,
you ask if EPA would approve of its use at the proposed Passaic Resource
Recovery Facility (PRRF) and how such approval would likely affect the current
administrative review process for NOX control from the source.
In recent BACT determinations for MMC's, EPA has accepted ammonia
injection as the best and the most appropriate control technology for NOX
control. Consequently, ammonia injection, or a comparable technology in terms
of emissions reduction and other impacts, would currently qualify as BACT.
Therefore, at the present time, if it were adequately shown in an application
for a MWC that urea injection would be comparable to (or better than) ammonia
injection in terms of performance and impacts, urea injection could be
determined to represent BACT. It is important to note, however, that in the
future a more stringent level of control could, of course, supplant ammonia
injection as the "top" control level.
The prevention of significant deterioration (PSD) regulations, in
addition to establishing specific provisions for BACT and modeling
requirements, set out criteria for determining whether a proposed control
technology is innovative. For PSD purposes, "innovative control technology"
is defined at 40 CFR 52.21(b)(19) as "any system of air pollution control that
has not been adequately demonstrated in practice, but would have a substantial
likelihood of achieving a greater continuous emissions reduction than any
control system in current practice or of achieving at least comparable
reductions at lower cost in terms of energy, economics, or nonair quality
environmental impacts." Our initial review of the limited data available to
us indicates that there have been over 20 field demonstrations of urea
injection worldwide on a range of combustor and fuel types (including two MWC
facilities). Although it has not been applied commercially to a MWC facility
in the United States, urea injection has been applied commercially to a MWC
facility in Basel, Switzerland, and a carbon monoxide (CO) boiler in
California. Preliminary indications are that its commercial application at a
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MWC may provide for comparable (or greater) NO control at a lower cost. As
to urea Injection being considered Innovative technology, EPA cannot, however,
rule on the issue until presented with source-specific information and written
justification from the applicant and State addressing 1) why urea injection
should be considered as not having been adequately demonstrated in practice,
2) how the technology fulfills the other innovative technology criteria [as
defined at 40 CFR 52.21(b)(19)], and 3) how it will be applied to the source.
As you are aware, the PSD permit for PRRF Is currently before the
Administrator as a result of his decision to review the State's BACT
determination respecting NOX emissions. Moreover, a petition challenging the
sane determination (and others) was also received from Beth Israel Hospital
and United Passaic Organization. Although a decision by the State to amend
the permit for the purpose of revising the BACT determination to require
either ammonia or urea injection (assuming they are comparable) would probably
moot the NOX Issue, the amendment itself would be subject to applicable public
participation procedures, including appeal procedures under 40 CFR 124.19.
Therefore, the permit could not become effective until those procedures have
been satisfied.
I have asked Region II to take the lead and work with you in evaluating
any information the State or applicant may wish to present for the purpose of
demonstrating urea injection as BACT or innovative control technology, either
at PRRF or another MWC facility. If you have any further questions in regard
to this matter, please contact Conrad Simon, Director, Air and Waste
Management Division, Region II, at (212) 264-2301.
Sincerely,
Gerald A.
Director^
:e of Air Quality Planning
and Standards
cc: Conrad Simon
Frank E. Ferruggia
Robert J. Burcin
Ronald L. McCallum
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8.42
BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
In the Matter of: )
)
Spokane Regional Waste-to-Energy ) PSD Appeal No. 89-4
Pro j ect )
)
Permit Applicant )
ORDER DENYING REVIEW OF REVISED PERMIT DETERMINATION
This order addresses individual appeals filed by Lisa J.
Kilian and Joan Honican and a joint appeal filed by Citizens for
Clean Air and the Council for Land Care and Planning.
On December 13, 1988, the Washington State Department of
Ecology (Ecology) issued a prevention of significant deteriora-
tion (PSD) permit to the Spokane Regional Waste To Energy Project
(Spokane) for construction of an 800-ton-per-day municipal waste
incinerator at an existing landfill west of the City of Spokane.
The landfill is located on property leased from the Spokane
International Airport.
On December 22, 1988, Citizens for Clean Air and the Council
for Land Care and Planning jointly requested EPA to review the
permit determination pursuant to 40 CFR §124.19. Federal review
of the state-issued permit was appropriate because Ecology had
made the permit determination pursuant to a delegation of author-
ity from EPA Region X, Seattle, Washington. Any permit issued by
a delegated state becomes an EPA-issued permit for purposes of
federal law. 40 CFR §124.41; 45 Fed. Reg. 33,413 (May 19, 1980).
On June 9, 1989, following the filing of responses to the
petition by Ecology and Spokane, I issued an order which denied
review of all issues, including the predominant recycling issue,
but which also remanded the permit determination to Ecology so it
could determine the appropriate NOX limitation achievable with
thermal de-NOx or an equivalent technology. §££ Spokane Regional
Waete-to-Enercrv . PSD Appeal No. 88-12 (EPA June 9, 1989) (the
"Remand Order").
Ecology revised the NOK provisions of the permit in response
to the Remand Order and prepared a draft revised permit for
public comment. Public comment was accepted from June 28, 1989
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to July 29, 1989, and Ecology held a public meeting during that
same period, on July 19, 1989. Although public interest in the
permit was evident, Ecology nevertheless decided not to convene
an official public hearing because it found there was little
expression of interest in the specific issue raised by the
remand. Thereafter, Ecology prepared a response to the public
comments and issued its revised final permit determination on
September 1, 1989. The instant appeals followed.
Under the rules governing this proceeding, there is no
appeal as of right from the permit decision. 40 CFR §124.19(a).
Ordinarily, a petition for review of a PSD permit determination
is not granted unless it is based on a clearly erroneous finding
of fact or conclusion of law, or involves an important matter of
policy or exercise of discretion that warrants review. The
preamble to the regulation states, "this power of review should
be only sparingly exercised" and "most permit conditions should
be finally determined at the Regional [State] level * * * ." 45
Fed. Reg. 33,412 (May 19, 1980). The burden of demonstrating
that the permit conditions should be reviewed is therefore on
petitioners. Petitioners have not met their burden in this
instance.
Petition bv Council for Land Care and Planning and Citizens for
Clean Air
These petitioners assert that Ecology erred (i) by not
holding a public hearing, (ii) by not preparing a supplemental
environmental impact statement under state law, and (iii) by
setting the NO, emission limitation too high. The first alleged
error has no merit because the decision to hold a public hearing
(which is more formal than the "public meeting" held by Ecology)
is largely discretionary. :/ Under 40 CFR 124.12(a) the permit
issuer is directed to hold a public hearing whenever the permit
issuer finds that there is a "significant degree of public
interest in a draft permit." Ecology elected not to hold a
public hearing in this instance because the scope of the permit
revision was narrow and it found no significant public interest
in the revised NOX limitation. Under the circumstances, no clear
y 40 CFR §124.12 specifies the criteria for a public hearing,
which include giving prior notice in accordance with §124.10,
allowing written and oral comment from any person, and making a
tape recording or transcript of the proceedings. Although the
specifics are not set forth in the record of this appeal, the
"public meeting" Ecology held during the public comment period
evidently did not meet one or more of these requirements.
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8.42
error is apparent from Ecology's decision not to hold a public
hearing. y
The second alleged error is also without merit insofar as
federal lav is concerned. Questions relating solely to whether
or not Ecology has satisfied a s£a£e. requirement (respecting
preparation of a state supplemental environmental impact
statement) are beyond the purview of this proceeding under 40 CFR
124.19, the purpose of which is to determine Ecology's compliance
with the federal clean Air Act and applicable regulations.
The third alleged error is also not a sufficient reason to
grant review. In sole support of this allegation, petitioners
state that the NO, limitation was based on current projections
for the incinerator's solid waste stream, but that implementation
of a more vigorous waste reduction and recycling program would
decrease the size of the waste stream and thus automatically
reduce NO, emissions. Petition at 5. In other words,
petitioners are again raising the recycling issue. That issue
was rejected, however, as a subject for review for the reasons
stated in the June 9 Remand Order, which remanded the permit to
Ecology for the sole purpose of revising the permit's NOX limita-
tion based on use of thermal de-NOs or an equivalent technology.
The scope of review of the instant permit determination is
therefore restricted by the Remand Order and does not include
waste separation and recycling for control of NOX emissions. As
stated in the Remand Order:
All that remains to be done now is for Ecology to set
numerical emission limitations for the NO, emissions using
the agreed-to technology [thermal de-NO, or equivalent], and
to prescribe monitoring requirements and operating restric-
tions as deemed necessary or appropriate.
Remand Order at 11 (footnote omitted).
Accordingly, I am remanding the permit to Ecology to revise
the permit along these lines. Following reissuance of the
revised permit, Petitioners shall be given the opportunity,
in accordance with 40 CFR §124.19, to appeal any determina-
tion Ecology makes with respect to the revised NO, limita-
tion. Anv such appeal shall be strictly limited to the
scone of the revisions ir\ ^fic NO limitation.
Remand Order at 23-24 (emphasis added).
Petitioners nevertheless contend that waste separation and
recycling should fit within the proper ambit of this appeal since
v Ecology held two public hearings before issuing its December
13, 1988 permit determination.
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implementation of these practices would have the effect of
reducing NO_ emissions. Petition at 5, n.2. I disagree. When
the Remand Order is read in its entirety, it is clear that the
decision to remand the permit for revision of the NO, limitation
was premised on recognition of thermal de-NOE or an equivalent
technology as the "best available control technology" (BACT) for
HO, emissions from this proposed facility. There was no intent
to reopen the waste separation and recycling issue that had just
been addressed at length for this specific permit. Therefore,
since petitioners' grounds for reviewing the NO, limitation would
only reopen that issue, the petition for review must be denied in
the interest of repose. Further consideration of the recycling
issue is beyond the scope of the instant permit determination. -
^ on November JO, 1989, I approved a proposal under Section
lll(b) of the Clean Air Act to issue standards of performance
that contain, among other things, a materials separation
requirement and a NO, emission limit for new municipal waste
combustors. In broad outline, the proposal will require
municipal waste combustors to separate for recovery (i.e., for
"recycling") 25% of the municipal solid waste by weight. The
eligible wastes are paper and paper-board; ferrous metals;
nonferrous metals; glass; plastics; and yard waste (up to 10%
credit allowed). In addition, there will be a prohibition on
incinerating lead-acid vehicle batteries and a program to remove
household batteries. The NOK limit will be set at 120 to 200
ppmv (§ 7 percent oxygen) for large plants based on selective
noncatalytic reduction techniques such as thermal de-NO, and urea
injection. If adopted in final form, the proposal will be
applicable to new municipal waste combustors that "commence
construction" within the meaning of 40 CFR §60.2 fallowing
publication of the proposal in the Federal Register. The pro-
posal appears at 54 Fed. Reg. 52251 (December 20, 1989).
On November 30, 1989, I also approved proposed emission guide-
lines and compliance schedules under section lll(d) of the Act
for existing municipal waste combustors. These guidelines, which
will initiate state action to develop regulations controlling
emissions fron existing facilities, contain the same source
separation provisions as the regulations proposed under section
11Kb), except that the dates for compliance are farther in the
future. The existing source guidelines are applicable to facili-
ties that have "commenced construction" prior to the date of
Federal Register publication. The proposed guidelines appear at
54 Fed. Reg. 52209 (December 20, 1989).
(continued...)
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8.42
Kilian Petition
On October 2, 1989, Lisa J. Kilian of Spokane, Washington,
filed a one-page letter, stating that she was appealing this
agency's decision to issue a PSD permit for the Spokane inciner-
ator in accordance with 40 CFR §124.19. y Her appeal did not,
*'(.. .continued)
In the section lll(b) proposal, EPA outlined the reasons why
that proposal is consistent with the Remand Order in this case
and the decision in Huntinoton Mass-Burn Incinerator. PSD Appeal
No. 89-2 (August 2, 1989). I reaffirm those reasons today in
declining to revisit the recycling issue. Of particular import-
ance are the facts that much of the relevant data underlying the
proposal was not contained in the record of this case, and that
EPA had not made even tentative judgments regarding such data
until the time of the proposal. Moreover, it is also important
to emphasize that the section lll(b) proposal represents only the
provisional views of the Agency regarding the current body of
knowledge regarding municipal waste combustcr emissions, and EPA
is continuing to gather new data. The public will now have an
opportunity to present comments on EPA's proposal, and the Agency
will make a final decision only at the conclusion of that
rulemaking. Thus, EPA's proposals under section 111 do not call
into question the propriety of the earlier Remand Order in this
case, which was a decision based on a record created several
months prior to EPA's recent proposals. Also, should EPA
ultimately promulgate its proposed regulations and guidelines
under sections lll(b) and (d), the Spokane (and Huntington)
facilities will eventually be required to comply with those
applicable source separation and recycling requirements in
addition to PSD permit requirements. For that reason, as well as
in the interest of repose, I find that it would be inappropriate
at this very late stage to hold the Spokane permit hostage to a
potentially lengthy reconsideration process on top of the delays
that have been incurred to date by revisiting the recycling issue
in light of new information not contained in the record of this
case.
V Except to recite that the appeal is being filed pursuant to
40 CFR Part 124, petitioner Kilian does not make even a token
effort to demonstrate compliance with the requirements for
perfecting an appeal. The rules provide that "any person who
filed comments on th(e] draft permit * * * may petition the
Administrator to review any condition of the permit decision,"
whereas those who "failed to file comments * * * on the draft
permit may petition for administrative review only to the extent
of the changes from the draft to the final permit decision." 40
CFR §124.19(a). Petitioner has not demonstrated that she meets
(continued...)
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however, identify the decision with any specificity. This
omission i« problematic because the agency has issued only one
decision involving this facility — the June 9 Remand Order —
and no administrative review of that decision is available under
40 CFR Part 124. If any appeal were to lie from that decision,
it would be to the federal court of appeals, 42 USCA §7607(b),
but not until the PSD permit for the incinerator became final, 40
CFR §124.19(f). It seems more likely that the decision
petitioner is appealing is Ecology's September 2, 1989 revised
permit determination. That decision, as stated previously, was
issued in response to this agency's earlier decision and is
appealable under 40 CFR §124.19 — but, as provided in the
earlier decision, only to the extent the appeal has a direct
bearing on Ecology's NOX determination.
It is readily apparent from the letter's brevity and lack of
detail that petitioner has not satisfied any of the criteria for
having Ecology's permit determination reviewed. Petitioner
briefly expressed concern about emissions that will result from
use of thermal de-NO, technology at the incinerator, and about
the state environmental impact statement that purportedly does
not address these concerns; however, petitioner does not allege
once that issuance of a permit calling for use of this technology
will in any way render Ecology's PSD permit determination invalid
or deficient under federal law. Accordingly, the petition for
review must be denied. ^
Honiean Petition
Joan Honiean of Pullman, Washington, filed a letter, dated
September 27, 1989 (received September 28, 1989), which says that
it is a "formal appeal of your recent decision." (Emphasis
added.) As noted above, however, no administrative review of
this agency's June 9, 1989 decision is available. To the extent
the letter can be construed as referring to Ecology's September 2,
1989 decision, the appeal must still be denied because it falls
outside the scope of review prescribed by the earlier decision;
and to the extent the letter's few comments about Ecology's NO,
determination might be deemed within the scope of review, they
are made in passing and do not persuade me that review is justi-
47 (... continued)
any of these requirements for standing to file a petition or that
they are otherwise inapplicable to her appeal.
^ By letter dated November 28, 1989, Petitioner has sought,
without permission, to expand or substantially modify her
original petition. This communication is not eligible for
consideration because of the 30-day limitation for filing
petitions for review, see 40 CFR §124.19(a).
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8.42
fied. (The comments do not specify whether they are in reference
to the original or the revised Ecology NO, determination.)
Conclusion
Accordingly, I am denying petitioners' appeals. The
Regional Administrator or his delegatee shall publish notice of
this final action in the Federal Register in accordance with 40
CFR §124.19(f)(2).
So ordered. ^
Dated: JAN 2 1990
-' The Air Transport Association of America (ATA) submitted a
letter dated September 29, 1989 (received October 2, 1989),
stating its opposition to issuance of the permit until completion
of an environmental analysis. The ATA letter discussed matters
that arguably fall within the proper scope of review — for
example, referring to the effects of NOX control technology on
aircraft safety and operations near the airport — but ATA made
no showing that it had standing to appeal on these grounds, nor
did it specifically state that it was seeking review of the
permit. Moreover, ATA ties its comments to an alleged need for a
revision to a state environmental impact statement and thus does
not raise any legitimate issue of federal law. I conclude
therefore that the ATA letter does not meet the burden of
persuasion necessary to warrant review of Ecology's permit
determination. Furthermore, I note that because the incinerator
will be located on airport property, the Federal Aviation
Administration and the airport authorities have jurisdiction to
address safety related issues stemming from the incinerator's
operation.
Several letters from Spokane residents who opposed
construction of the incinerator were received after the time for
filing appeals under 40 CFR §124.19 had expired. These letters
are not eligible for consideration because of the 30-day limita-
tion on filing appeals.
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CERTIFICATE OF SERVICE
I hereby certify that copies.of the foregoing Order Denying
Review of Revised Permit Determination, PSD appeal No. 89-4, were
mailed to the following by First class mail, postage prepaid.
Laurie Sillers Halvorson
Assistant Attorney General
Ecology Division ~ M/S PV-11
7th Floor
Highways Licenses Building
Olympia, WA 98504-8711
Stu Clark
wash, state Dep't. of Ecology
Mail Stop PV-11
Olympia, WA 98504-8711
David M. Bricklin
Jean Mischel
Bricklin & Gendler
Fourth & Pike Building
1424 Fourth Avenue, Suite 1015
Seattle, WA 98101
Gary O'Neal
Air and Toxics Division
U.S. EPA, Region X
1200 Sixth Avenue
Seattle, WA 98101
Lisa J. Kilian
E. 13327 Blossey
Spokane, WA 99216
Joan Honican
NW 333 True St.
Pullman, WA 99163
Jay Willenberg
Wash. State Dep't. of Ecology
Mail Stop PV-ll
Olympia, WA 98504-8711
Craig Trueblood
Preston, Thorgrimson, Ellis &
Holman
Suite 1400
W. 601 Riverside Avenue
Spokane, WA 99201
David Birks
Spokane Regional Waste-to-
Energy Project
West 808 Spokane Falls Blvd.
Spokane, WA 99201
Deborah Hilsman
Office of Regional Counsel
U.S. EPA, Region X
1200 Sixth Avenue
Seattle, WA 98101
John E. McNamara
Director
Air Transport Assn. of
America
3333 Quebec Street
Penthouse G
Denver, CO 80207
Dated:
JAN - 3 1990
Brenda H. Selden, Secretary
to the Chief Judicial Officer
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0
8.43
UNITED STATES ENVIRONMENTAL PROTECTION
WASHINGTON, D.C. 20460
JAN I I 1990
OFFICE OF
AIR AND RADIATION
MEMORANDUM
SUBJECT: BACT/LAER Determination Cut-off Date
FROM: John S. Seitz, Director
Stationary Source Compliai
Office of Air Quality Flatting and Standards
TO:
11V1S1O
Air Management Division Directors
Regions III and IX
Air and Waste Management Division Director
Region II
Air, Pesticides and Toxics Management Division
Directors
Regions I, IV, and vi
Air and Radiation Division Director
Region V
Air and Toxics Division Directors
Regions VII, VIII, and X
The purpose of this memorandum is to affirm our present
policy on the BACT/LAER determination cutoff date as stated in a
February 24, 1989 memorandum on the subject. The BACT/LAER
determination for a major new source is not set until the final
permit is issued. We are affirming this policy after reviewing
the Regional responses to the June 19, 1989 memorandum in which
we agreed to revisit our BACT/LAER determination policy and asked
the Regions to comment on an issue paper prepared by the Michigan
Department of Natural Resources. The issue paper questioned the
soundness of our present policy and suggested alternative
BACT/LAER cutoff dates that would be earlier than the issuance of
the final permit.
Contrary to the assertions made in the issue paper, the
Regions indicated that BACT/LAER technology changes were not
causing delays during the permitting process. The Regions
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- 2 -
emphasized that it is the responsibility of the source to
investigate all available and pending control technologies for
consideration as BACT or LAER. Hence, if the source has done a
thorough investigation, a change in the permit conditions between
the proposed and final permit should have been anticipated by the
source.
In addition, the Regions felt that establishing a cutoff
date at any time prior to the public comment period would limit
public participation and the ability of the public to affect
changes in the proposed permit. Furthermore, the present policy
encourages the source to commence construction as soon as
possible and complete such construction within a reasonable time.
Establishing a cutoff date prior to the issuance of a final
permit would enable a source to maintain a BACT/LAER determina-
tion for an extended period of time until the permit is issued;
thus, avoiding more stringent controls.
After considering the above information, we have decided to
affirm our present policy on the BACT/LAER determination cutoff
date. If you have any questions on this matter, please contact
Scott Throwe of raay staff at FTS 382-2811.
cc: Gary McCutchen, NSR Section
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8.44
8.44 DATE: February 16, 1990
SUBJECT: Typical PSD Submittal Outline
FROM: Wallace N. Davis, Executive Director, Virginia Oept. of Air
Pollution Control
TO: William C. Campbell, III, Cogentrix, Inc.
DISCUSSION: The letter provides target emission guidelines for coal-fired
facilities, and includes a typical outline for a PSD submittal.
CR: 10.48 [Hard Copy]
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8.45
Reserved
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i
8.46
BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
In the Matter of: )
)
World Color Press )
) PSD Appeal No. 88-4
Applicant )
)
IEPA ZD Nos. PSD-1988-IL-1, 2, & 3 )
DESIGNATION OF ISSUES
By order dated May 5, 1988, and pursuant to 40 CFR
§124.19(b), notice was given of the Agency's decision to review
several prevention of significant deterioration (PSD) permit
determinations made by the Illinois Environmental Protection
Agency (IEPA) for World Color Press. These permit determinations
would authorize World Color Press to construct six heatset web
offset printing presses at three locations in Illinois. The
Agency's notice observed that the best available control
technology (BACT) ^ determinations for these permits appeared to
I/
The complete text of the statutory definition of BACT states:
The term "best available control technology11 means an
emission limitation based on the maximum degree of reduction
of each pollutant subject to regulation under this chapter
emitted from or which results from any major emitting
facility, which the permitting authority, on a case-by-case
basis, taking into account energy, environmental, and
economic impacts and other costs, determines is achievable
for such facility through application of production proces-
ses and available methods, systems, and techniques, includ-
ing fuel cleaning or treatment or innovative fuel combustion
techniques for control of each such pollutant. In no event
shall application of "best available control technology11
result in emissions of any pollutants which will exceed the
(continued...)
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2
be flawed. No issues for review were designated in the May 5th
order; instead, a separate request for information was made
informally, to aid in deciding what course of action to follow in
exercising the Agency's review authority under 40 CFR §124.19(b).
I am now formally designating the issues to be briefed on review
of lEPA's permit determinations.
Although IEPA concluded that World Color Press had.met all
applicable requirements of the federal PSD regulations (as well
as applicable State requirements), it appears that IEPA
determined, incorrectly, that an alleged absence of significant
photochemical reactivity of the facilities' VOC emissions was-an
"environmental impact" that would justify less stringent emission
limitations, particularly in view of the added monetary costs
associated with more stringent control technologies. I rejected
similar reasoning in a subsequent case, Columbia Gulf
Transmission Company. PSD Appeal No. 88-11 (June 21, 1989), where
I held that negligible impacts of NOX emissions on ambient air
quality did not, by themselves, justify using less than the most
^(...continued) .
emissions allowed by any applicable standard established
pursuant to section 7411 [new source standards] or 7412
[hazardous pollutant standards] of this title.
42 U.S.C. §7479(3).
v See letter dated February 7, 1989, from the Agency's"chief
Judicial Officer to the Director., Illinois Environmental
Protection Agency (IEPA); Response of IEPA, dated March 23, 1989i
Response of World Color Press, dated April 14, 1989.
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8.46
effective control technology available. AS explained in the
decision:
BACT is defined in the Clean Air Act as an "emission
limitation" set by the permit issuer, based on the "maximum
degree of reduction" that can be achieved for each regulated
pollutant, on a case by case basis, after "taking into
account energy, environmental, and economic impacts and
other costs." 42 U.S.C. §7479(3). The latter clause is in
the BACT definition to temper the stringency of the
technology requirements whenever one or more of the
specified "collateral" impacts ~ energy, environmental, or
economic — renders use of the most effective technology in-
appropriate. As explained by Senator Edmund S. Muskie, the
principal architect of the Clean Air Act amendments of 1977:
One objection which has been raised to requiring the
use of the best available pollution control technology
is that a technology demonstrated to be applicable in
one area of the country is not applicable at a new
facility in another area because of difference [sic] in
feedstock material, plant configuration or other
reasons. For this and other reasons, the committee
voted to permit emission limits based on best available
technology on a case-by-case judgment at the State
level. This flexibility should allow such differences
to be accommodated and still maximize the use of
improved technology.
Senate Debate on S.252 (June 8, 1977), reprinted in 3 Senate
Committee on Environment And Public Works, A Legislative
History of the Clean Air Act Amendments of 1977 at 729
(Comm. Print August 1978) (Congressional Research Service,
Serial No. 95-16).* In other words, the collateral impacts
clause operates primarily as a safety valve whenever unusual
circumstances specific to the facility make it appropriate
to use less than the most effective technology. The permit
applicant must install the most effective technology if it
fails to demonstrate to the satisfaction of the permit
issuer that such unusual circumstances exist.
Ifl. at 4-6 (footnotes omitted).
The permit issuer in rojuphja Gulf was the Kentucky
Department of Air Quality, which had determined that the modelled
negligible impact of the proposed facility on air quality was an
environmental impact that could be factored into the BACT
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analysis to justify using less than the most effective technology
to control NOX emissions. The Department reasoned that the
negligible benefits to ambient air quality were outweighed by the
additional economic costs associated with NOX control, estimated
at $2,121.00 for each additional ton of NOX removed. This
argument was rejected as being without merit:
It gives no effect to the primary purpose of the collateral
impacts clause, which, as the legislative history indicates,
is to focus on local impacts that constrain the source from
using the most effective technology. For example, if the
most effective technology would impose exceptional demands
on local water resources, so that use of the technology
would have adverse impacts on the environment, then, under
those circumstances, the applicant would have a sound basis
for foregoing use of the most effective technology in favor
of some less water-intensive technology. This would be a
"water resources" equivalent of a "feedstock" or "plant
configuration" constraint referred to by Senator Muskie.
In the present case, the Department and the applicant
have not demonstrated the existence of any environmental
impacts that would constrain or even remotely circumscribe
the applicant's ability to use the most effective
technology. The negligible air quality impact of the
proposed NOX emissions is clearly not a constraint on t
implementing the most effective technology. Because it is
not a constraint, the modelled impact of the proposed
facility's NOX emissions on air quality should not be
considered for purposes of making the BACT determination.
Id. at 7-8 (footnotes omitted).
It was further explained in Columbia Gulf that the structure
of the Clean Air Act supports the foregoing interpretation.
Specifically, the PSD provisions of the Act make regulatory
distinctions between air quality impact analyses and technology
analyses, and a permit applicant must satisfy the requirements of
both categories to obtain a permit.
Section 165(a)(3) of the Act, 42 USC §7475(a)(3), addresses
the direct impact of regulated pollutants on ambient air
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8.46
quality by requiring an applicant for a PSD permit to
demonstrate that the proposed facility will not cause or
contribute to a violation of national ambient air quality
standards or PSD increments, whereas section 165 (a) (4) of
the Act, 42 USC §7475 (a) (4 ), is concerned exclusively with
BACT, which is principally a technology- forcing measure that
is intended to foster rapid adoption of improvements in
control technology. Both of these provisions of the Clean
Air Act mist be satisfied by an applicant seeking a PSD
permit, and compliance with one provision does not relieve
or lessen an applicant's burden of complying fully with the
other. Thus, even though Columbia Gulf's NOX emissions will
not cause a violation of ambient air quality standards in
contravention of section 165 (a) (3) of the Act, it must still
satisfy the BACT technology requirements imposed by section
165(a)(4).
Id. at 8-9 (footnote omitted).
In the present instance, it appears that World Color Press
and IEPA are attempting to justify the use of less than the most
effective technology for control of VOC emissions by employing
the same faulty reasoning that the permit applicant and the
permit issuer used in Pnjnmhia cuif. Accordingly, in setting
this case for briefing, World Color Press and IEPA shall address
the issue raised by the Columbia Gulf decision, and shall show
cause why the permit determination should not be remanded to IEPA
for revision of the BACT determination in accordance with
- World Color Press and IEPA shall file their
briefs within thirty (30) days of the date of this order.
As directed by 40 CFR §124.10, IEPA shall give public notice
of the May 5th order and of the instant notice, making provision
for the submission" of comments (or briefs) by the public within
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6
thirty (30) days of publication of notice. y See Notice of
Decision to Review Permits at 3 (Hay 5, 1988); also 40 CFR
§§124.19(c) and 124.10(a)(1)(iv).
So ordered.
66££
William
Administrator
Dated
. JUN 7 1990
27 IEPA made its determination pursuant to a delegation of
authority from the-U.S. Environmental Protection Agency, Region
V, Chicago, Illinois. Because of the delegation, lEPA's
authority to issue PSD permits is subject to the review
provisions of the applicable EPA regulations, 40 CFR §124.19
(1989), and any permit it issues will be an EPA-issued permit for
purposes of federal law. 40 CFR §124.41; 45 Fed. Reg. 33413
(Hay 19, 1980).
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8.46
CERTIFICATE OP SBRVICB
I hereby certify that copies of the foregoing Designation of
Issues in the natter of World color Press, PSD Appeal No. 88-4,
were sent by First Class Mail to the following persons:
Dr. Richard J. Carlson, Director
Illinois Environmental Protection Agency
2200 Churchill Road
Springfield, IL 62706
Michael Hayes, Manager
Division of Air Pollution Control
Illinois Environmental protection Agency
2200 Churchill Road
Springfield, IL 62706
William Rogers
World Color Press
P.O. Box 1248
Effingham, IL 62401
David Kee, Director
Air & Radiation Division
U.S. EPA, Region V
230 South Dearborn Street
Chicago, IL 60604
Valdas V. Adaalcus
Regional Administrator
U.S. EPA, Region V
230 South Dearborn Street
Chicago, IL 60604
J. Bennett Clark
Gallop, Johnson & Neuman
Interco Corporate Tower-
101 South Hanley
St. Louis, Missouri 63105
Brenda H. Selden, Secretary
to the Chief Judicial Officer
Dated:
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*
BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
In the Matter of: )
)
Columbia Gulf Transmission Company ) PSD Appeal No. 88-11
)
ID No. 105-0640-0021 )
)
Applicant )
ORDER ON MOTION FOR STAY
Before me is a motion filed by the permit applicant,
Columbia Gulf Transmission Company, and the permit issuer, the
State of Kentucky, which are jointly requesting a stay of the
proceedings on EPA Region IV's appeal from the State's permit
determination. " If a stay is granted, the applicant intends to
supplement the state administrative record with new factual
information which the applicant believes will confirm the visdom
of the State's original permit determination. The information
concerns site-specific costs relevant to the State's
determination of "best available control technology" (BACT) for
the-proposed facility. This information was not in the
administrative record of the original BACT analysis of the
y Currently, an order granting review of the State's permit
determination has been issued. Columbia Gulf Transmission
Company, PSD Appeal No. 88-11 (Order dated June 21, 1989). The
order specifies that the briefing period will commence upon the
State's publication of the Agency's decision granting review of
the State's permit determination. The State has yet to give the
required notice that triggers commencement of the briefing
period.
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2
facility, a fact which prompted EPA Region IV to file its appeal
of the permit determination alleging, inter alia, that evidence
of these costs would be needed to support the State's BACT
determination. In their motion, the State and the permit
applicant express the belief that staying the proceedings would
be the most expeditious means of disposing of this case; they
claim that a remand, for example, would not be desireable because
it might trigger an entirely new and, presumably, time-consuming
public review and comment period under 40 CFR §124.19. The
proposed stay mechanism, on the other hand, would circumvent this
process, but only if the State determines, after evaluating the.
new information, that the original permit determination was
correct (and therefore does not require change). The stay, as
proposed, would restrict opportunity to comment on the new
information to the Region, which was the only commenter on the
original permit determination. The movants reason that there is
no logical basis for soliciting comment from the public since it
previously had the opportunity — but did not exercise it — to
comment on precisely the same permit conditions. (The movants
appear to concede the necessity, however, of soliciting comment
from a broader audience if the State's review produces a
substantially revised permit.)
In opposing the motion, the Region makes several arguments.
First, it argues that the administrative record is already closed
and the applicant should not now be permitted to submit
information it should have submitted 1^ years ago when Kentucky
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8.47
3
was in the process of developing the draft permit determination.
According to the Region,
[t]he Applicant has failed to explain its failure to
provide this information on a timely basis. Applicant's
allegation that Kentucky did not require such information,
even if accurate, is no justification for this omission,
especially in light of the timely comments from Petitioner
[Region IV] that a detailed, source-specific analysis was
required. Applicant responded to the Region's comments by a
letter dated August 12, 1988, but still failed to provide
the necessary information. Consequently, at this late date
such information should not be included in the record put
before the Administrator for review.
Region's Response at 2.
This argument is not cause for denial of the motion. It is
true the regulations contemplate a permit decision being made on
the basis of the administrative record as it exists at the close
of the comment period on the draft permit, see, e.g.. 40 CFR
§124.18(b) (1); and it is also true the permit applicant's
additional information may have been in existence or readily
available on or before that date (thus seeming to eliminate most
legitimate excuses for not submitting the information earlier).
Nevertheless, it does not appear to me that the regulations are
inflexible in this respect, u or that any prejudice would result
from granting the motion (the Region, for example, does not claim
* It is well settled that an administrative agency must follow
procedures set forth in its own regulations. E.g.. United States
ex rel Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499 (1954);
Service V. Dulles, 354 U.S. 363, 77 S. Ct. 1152 (1959). Of
course, if no prejudice results or if some greater interest is
served, an exception to this requirement may be permitted.
Taylor v. Maryland School for the Blind, 409 F. Supp. 148 (O.Md.
1976), aff'd 542 F.2d 1169 (4th Cir. 1976); §ge American Farm
Lines v. Black Ball Freight Service, 397 U.S. 532, 539, 90 S.Ct.
1288, 1292, 25 L.Ed.2d 547, 553 (1970).
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4
it will suffer any). Insofar as the possibility of prejudice to
the public is concerned, it will not incur any because, under the
movants1 proposal, the public is given the right to comment if
the permit is subsequently revised; and, if it is not revised,
further public participation would be unnecessary since, as the
movants correctly point out, the public has already had an
opportunity to comment on the terms of the unrevised permit. **
In my opinion, if the State is willing to reopen the record
to accept and review additional information, it should be the one
to decide the matter in the absence of any prejudice to third
parties. The purpose of closing the record to receipt of
additional evidence is presumably to bring order to the decision-
making process, enabling permit issuers such as the State to
11 The Region is guilty of overgeneralizing when it asserts that
"no information should be reviewed by the Administrator which has
not first been made available to the public for review and
comment." Region Response to Motion at 3. The ultimate purpose
of public comment is to determine whether the conditions of the
permit should be changed. See, e.g.. 40 CFR §124.13 (duty to
raise issues pertaining to whether the "any condition of a draft
permit is inappropriate11); 40 CFR §124.14 {reopened public
comment period allows comments to be filed on "conditions" of the
draft permit that are inappropriate); 40 CFR §124.19 (appeals are
for review of permit "conditions"). Nothing in the statute,
e.g.. Clean Air Act §165(a)(2), 42 U.S.C.A. §7465(a)(2), or the
regulations, e.g.. 40 CFR §52.21(q), can reasonably be read as
mandating solicitation of public comment on information qua
information. Therefore, if, as is possible under the movants1
proposal, the new information might not prompt any alteration of
the permit conditions, no legitimate purpose would be served by
soliciting public comment on the new information. The general
public has already had an opportunity to comment on the permit's
conditions. Further solicitation of public comment under these
circumstances would be redundant. It suffices that the Region,
as the sole petitioner contesting the terms and conditions of the
permit, will have an opportunity to comment on the information.
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8.47
5
manage their dockets efficiently and to bring finality to permit
proceedings. In this manner, the permit issuer can avoid
potentially endless rounds of delays and reconsideration of
matters previously decided. Thus, so long as the permit issuer
is willing to countenance the disruptions attendant to reopening
the record, there is no apparent reason why the record has to be
kept closed. I conclude therefore that this matter is
principally one for the State to decide.
In opposing the motion, the Region also suggests that it
should have the opportunity to submit new information on the
appropriate level of control currently representing BACT for the
applicant's turbine. The Region explains that in reviewing the
PSD permit application, it tolled its assessment of available
control technologies for BACT at the time the public comment
period closed. -' It therefore argues that if the record is
subsequently reopened to admit new information supplied by the
applicant, then the state must also "consider anew*1 what
technology represents BACT. Region Response at 4. I agree,
although "consider anew" perhaps exaggerates the State's
obligation (better to say: the State will have to update its BACT
-' As explained in a previous decision.
Absent unusual delay between the close of the public
comment p^iiod and the date of permit issuance, or the
presence of other extraordinary circumstances, the close of
the public comment period can be used as the reference by
which the adequacy of the administrative record is judged.
Pennsauken County Resource Recovery Facility, PSD Appeal No.
88-8, at 7, n. 11 (November 10, 1988).
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6
determination after giving full consideration to the information
submitted by both the applicant and the Region). The need to
base the permit determination on current information is
fundamental to any determination of "best available control
technology," for old technologies are constantly being replaced
by newer and more advanced ones; and in the absence of overriding
considerations — for example, those bearing on the orderly
administration of the permit program — information on the latest
available technologies should ordinarily receive consider-
ation. v Therefore, whenever the original permit application is
being updated at the behest of the permit applicant, it is only
fair that the applicant's new information be balanced with other
contemporaneous information relevant to the BACT determination.
Accordingly, the parties' motion is granted, with the
proviso that the State shall not only give the Region an
opportunity to comment on the applicant's nev information, but
shall also permit the Region to submit additional information of
its own to ensure that the BACT determination is fully
-' Appropriate allowances for delays inherent in issuing a
permit are nevertheless necessary since, for example, there will
always be some measure of delay between the close of the
administrative record and the time when the final permit is
actually issued. To this end, the Agency ordinarily considers
the close of the public comment period on the draft permit as
tolling the time for consideration of new technologies, see note
4 supra.
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8.47
contemporaneous with the State's updating of the permit
determination.
So ordered.
William K.
Administrator
Dated: JUL 3 1990
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CERTIFICATE 07 SBRVICB
I hereby certify that copies of the foregoing Order on
Motion for Stay in the matter of Columbia Gulf Transmission
Company, PSD Appeal No. 88-11, were sent by First Class Mail to
the following persons:
William C. Eddins, Director
Division for Air Quality
Commonwealth of Kentucky
Dep't. for Environmental Protection
18 Reilly Road
Frankfort, KY 40601
Susan Midyett
Columbia Gulf Transmission Company
3805 West Alabama Avenue
Houston, TX
Richard D. Baley
Manager of Design Engineering
Columbia Gulf Transmission Company
3805 West Alabama Avenue
Houston, TX
Daniel Ransbottom
Senior Consultant
Entrix, Inc.
P. O. BOX 56288
Houston, TX 77256-6288
Michael H. Levin
Nixon, Hargrave, Devans and Doyle
One Thomas circle
Washington, DC 20005
Alan E. Dion
Assistant Regional Counsel
U. S. EPA, Region IV
345 Courtland Street, NE
Atlanta, GA 30365
Bruce P. Miller, Director
Air Programs Branch
U. S. EPA, Region IV
345 Courtland Street, NE
Atlanta, GA 30365
Dated:
JUL - 9 199Q
Brenda H. Selden, Secretary
to the Chief Judicial Officer
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UNI TEJD STATES EMVIRONHENTAL PROTECTION AGENCY
REGION TV
In the matter of: )
LAKE COUNTY WASTE TO ENERGY FACILITY )
} Order
OKAHU.MPKA, FLORIDA )
PROCEEDINGS UNDER }
SECTION 167 OP THE CLEAN )
AIR ACT, AS AMENDED, 42 U.S.C. §7477 )
ADMINISTRATIVE ORDER
This Administrative Order is issued this date by the
Regional Administrator, Reqion IV, United States Environmental
Protection Agency (EPA), pursuant to Section 167 of the Clean
Air Act (the Act), 42 rj.S.C. $7477.
FINPING OF FACT
1. The NRG/Recovery Group, Inc., proposes to construct and
operate a Lake County Waste to Tnerqy Facility (Lake County)
in Okahumnka, Lake County, Florida. The Lake County facility
will consist of two mass burn incinerators which will each
incinerate approximately 250 tons per day of municipal solid
waste. Thefce incinerators will be fueled with a combination
of municipal solid waste and wood chips. These incinerators
will emit particulate matter, sulfur dioxide (S02)f nitrogen
oxides, carbon monoxide, volatile organic compounds, lead,
berylliu-n, fluoride, sulfuric acid mist, mercury, dioxins,
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- 2 -
dibenzofurans, and hydrogen chloride. All 01 Uic . corc--
mentioned pollutants are regulated by the Act except Jaoxins,
dibenzoturans, and hydrogen chloride.
2. The area of construction of the Lake I'^nty Waste to
Energy Facility is located in an attainment: urea "or all
pollutants regulated by the Act. [40 Code ot Federal Regulations
(C.F.R.) §81.310] The facility is considered a major stationary
source oecause its potential emissions (which are subject
to regulations under the Act) are above the Prevention ot
Signnicant Deterioration (PSD) of Air Quality threshold
level. Consequently, this facility is regulated under the
PSD rules and regulations.
3. On March 11, 1986, trie NRG/Recovery Group applied to
tne cloriaa Department ot Environmental Regulation (DER) tor
a PSD permit to construct ana operate two 250 tons per cay
municipal solid waste energy recovery units at its Lake County
racility located on Jim Rogers Road in Okahumpka, Florida,
pursuant to the Florioa State Implementation Plan (SIP)
(Florida Administrative Code (F.A.C.) Rule 17-2.500 et sefl.].
4. On May 20, 1986, in response to said PSD application,
the Florida DER issued a Preliminary Determination which
contained, in the State's judgment, the Best Available
Control Technology (BACT) for the proposed incinerators.
The BACT Determination contained emission limits for all
applicable pollutants regulated by the Act and contemplated
that a oaghouse (to control particulates) in combination
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-3-
with a scrubber (to control acid gases) constituted BAC7.
5. On July 2, 1986, EPA notified the Florida DER that
the S02 emission limit contained in the Florida DER BACT
Determination may not adequately reflect BACT (i.e., proposed
S02 emission limit not sufficiently stringent) and that the BACT
Determination should also consider the effect of controlling
S02 on unregulated pollutants such as hydrogen chloride and
dioxin. Furthermore, EPA informed DER that it was EPA policy
tSiat the control of nonregulated air pollutants may be
considered in imposing a more stringent BACT limit on regulated
pollutants, if there is a reduction in the nonregulated air
pollutants which can be directly attributed to the control
device selected for the abatement of the regulated oollutants.
6. On August 15, 19B6, DER issued a second PSD Preliminary
Determination with a modified BACT Determination. The modified
BACT Determination no longer contained the requirement for acid
gas controls, but only required that the applicant leave
space for the acid gas control equipment in the event there
would be a future state rule change for resource recovery
facilities. Removal of the requirement to employ acid gas
control meant the modified BACT Determination could not
adequately address EPA's concern about a more stringent S02
emission limit.
7. On September 19, 1986, EPA notified DER that EPA was
not persuaded by Lake County's contention that municipal
solid waste incineration with acid gas control is not
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-4-
cconomically feasible.
8. On September 24, 1986, the Florida DER issued its
Final Determination and PSD permit to the NRG/Recovery Group
for the proposed Lake County facility. The Final Determination
and State PSD permit did not require the installation of acid
gas control.
9. On October 23, 1986, EPA notified the Florida DER
that EPA did not concur with DER's Final Determination
regarding the issue of BACT. EPA recommended that the Final
Determination and the Florida DER nermit be reissued with a
BACT Determination which reflects state-of-the-art technology
(acid gas control and more stringent emission limitations
for particulate matter and Sf>2) •
10. On January 30, 1987, EPA-Reqion iv prepared an
independent BACT analysis, which varied from DER's Final
Determination, in that it contained more stringent emission
limitations for particulate^atter and S02 (achieved through
the use of high efficiency particulate emission and acid
gas controls).
11. On February 11, 1987, EPA notified Florida DER that
the DER PSD penalt issued to the NRG/Recovery Group for the
Lake County facility on September 24, 1986, was deficient and
that EPA may initiate appropriate enforcement action against
the Lake County facility to prevent or delay the construction
of the facility.
12. On February 11, 1987, EPA notified the NRG/Recovery
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8.48
-5-
Group that the Florida DER PSD permit was deficient and that
unless the DER. PSD permit was modified to reflect wnat EPA
considers BACT, EPA may initiate appropriate enforcement
action to prevent or delay the construction of the facility.
CONCLUSIONS OF LAW
1. The Administrator of the EPA pursuant to his authority
unaer Section 109 ot the Act, 42 U.S.C. §7409, promulgated
National Primary and Secondary Ambient Air Quality Stanaaras
(NAAOS) for certain criteria pollutants, including total suspended
particulate matter, sulfur oxides (SO;*), nitrogen oxides,
carbon monoxide, ozone, and lead. (40 C.F.R. SSSu.4 - 50.12)
2. Pursuant to Section 110 of the Act, 42 U.S.C. £7410,
the Aaministrator of EPA, in 45 Federal Register 52076
(August 7, 1980), promulgated amended regulations for PSD
in areas where the existing air quality is better than
saia ambient standards and incorporated said regulations
into the various implementation plans ot each state. The
relevant regulations are coditied at 40 C.F.R. $51.24.
3. The Florida SIP contains federally approved PSD
regulations, based on the above-referenced PSD regulations,
for such attainment or "clean air* areas. (F.A.C. Rule
17-2.500)
4. The area of construction for the Lake County Waste to
Energy facility is an attainment area for NAAQS tor all
pollutants. (40 C.F.R. $81.31u)
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- 6 -
5. .NRG/Recovery Group is the owner and operator ot the
major emitting resource recovery facility in Lake County,
Florida, and proposes to construct at that site pursuant
to the PSD permit issued to the Lake County Waste to
Energy facility by Florida OCR on September 24, 1986.
6. EPA finds the Florida DER PSD permit issued to
the Lake County Waste to Energy facility to be deficient
in that it rails to require the installation of acid
gas control. The Florida DER PSD permit also fails to
require more stringent emission limitations tor particu-
late matter and S(>2 • These deficiencies invalidate the
State-issued PSD permit.
7. The construction ot the Lake County Waste to
Energy facility pursuant to an invalid permit will violate
Section 165(a) of the Act, 42 U.S.C. $7475(a), and 40 C.F.R.
§51.24. Consequently, the issuance of this order, pursuant
to Section 167 of the Act, *2 U.S.C. S7477, is required
to prevent such construction.
8. The authority ot the Administrator ot CPA pursuant
to S113(a) of the Act, 42 U.S.C. S?413(a), to make findings
ot violation of the Florida SIP, to issue notices ot violation
and to center with the alleged violator has been delegated,
first, to the Regional Administrator [earlier delegation
consolidateo to Delegations Manual, No. 7-6 (July 25, 1984)]
and second, to the Director, Air, Pesticides, and Toxics
Management Division, Region IV [earlier delegation consolidatec
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8.48
- 7 -
in Region ZV Delegation Manual, No. 4-2 (March Ib, 1985)].
9. The authority of the Administrator ot EPA to issue
orders pursuant to Section 167 of the Act, 42 U.S.C. §7477,
was delegated to the Regional Administrator [earlier delegation
consolidated to Delegations Manual, No. 7-38 (July 25, 1984)].
The Regional Administrator, Region IV, has also consulted
with the Associate Enforcement Counsel for Air and the Director
of the Stationary Source Compliance Division pursuant to
delegation requirement.
ORDER
Consequently, basea upon investigation and analysis of
all relevant facts, including any good taith etforts to
comply, and pursuant to Section 167 of the Clean Air Act,
42 U.S.C. §7477, the NRG/Recovery Group, Inc. (Lake County
Waste to Energy facility), is hereby ORDERED:
1. effective immediately upon receipt ot this Order,
not to commence any on-site construction activity ot a
permanent nature on its two 251) tons per day municipal solia
waste energy recovery units, including, but not limited to,
installation of building supports and foundations, paving,
laying of underground pipe, construction of permanent storage
structures and activities ot a similar nature.
2. not to commence any on-site construction activity
until it has received a Prevention of Significant Deterioration
(PSD) permit and Final Determination that incorporates all
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-8-
tne requirements for PSD pursuant to ana in accordance with
the provisions of Part C, Subpart 1 ot the Clean Air Act, as
amended, 42 U.S.C. $7470 et. seq., the regulations promulgated
thereunder at 40 C.F.R. $51.24 and/or the regulations of the
federally enforceable Florida State Implementation Plan, Rule
17-2.500 of the Florida Administrative Code, and Chapter 403
ot the Florida Statutes including CPA's Best Available Control
Technology analysis, dated January 30, 1987 (which addresses
acia gas control and more stringent emission limitations tor
sulrur dioxide and particulate matter), and;
3. co submit, no later than ten (10) days atter receipt
ot this Order, certitication that the prohibition in paragraph
one (1) ot this Order has been observed ana will continue to
be observed until the permit referenced in paragraph two
(2) ot this Oraer has been issued. Such certitication
snail oe suomitted to:
Winston A. Smith, Director
Air. Pesticides, and Toxics
Management Division
United States Environmental
Protection Agency
345 Courtland Street, N'.E.
Atlanta, Georgia 30365
(404) 347-3043
- 3
. . .
Regional Administrator
Date Jack E. Ravan
l Ad
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8. 9
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
WULP418?
MEMORANDUM
rtized Capital Costs
SUBJECT: Calculating
FROM:/^W' Robert D. Bauman, Chief
' Standards Implementation Branch, CPDD (MD-15)
TO: Stephen H. Rothblatt, Chief
Air and Radiation Branch, Region V (5AR-26)
This is in response to your April 21, 1987, memorandum requesting
clarification regarding the appropriate criteria to be used in calculating
the amortized capital costs of control options in the selection of best
available control technology {BACT). The 1980 "Prevention of Significant
Deterioration Workshop Manual" states that U.S. Internal Revenue Service
(IRS) criteria should be used to determine equipment life expectancy.
However, EPA, in developing new source performance standards (NSPS), uses
economic assumptions based on "useful economic life." You wish to know
which set of criteria to use in the BACT economic analysis.
The EPA still relies on IRS criteria, but there are now several
different IRS equipment life estimation systems and several EPA equipment
life information sources based on IRS data, so it is more difficult now to
know what information to use. Our policy is that unless the source can
offer compelling data to the contrary, the useful life of a control option
should be selected from one of the following:
0 For process-related controls, use:
— the NSPS/national emission standard for hazardous air pollutants
(NESHAP) Background Information Document (if a source is subject
to an NSPS or NESHAP), or
— the IRS Class Life Asset Depreciation Range (CLADR) system
guideline with a mid-point estimate (if no NSPS/NESHAP applies).
0 For "add-on" controls, use the Economic Analysis Branch Control
Cost Manual, which is based on CLADR data.
Regarding the appropriate annual interest ("discount") rate to use in
these analyses, the Office of Management and Budget (OMB) guidelines
recommend 10 percent for regulatory impact analyses. Because all NSPS are
submitted to OMB for review, we have typically used 10 percent in our
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analyses. However, this value represents a very high rate of return because
it is a "real" discount rate (i.e., it does not incorporate inflation). The
OMB has assembled a task force which is now studying this matter and will
likely recommend .a substantially lower value to be used in future EPA risk
assessment analyses; we plan to use the lower value when and if it is
adopted.
The two attachments provide additional information on the economic life
criteria discussed above. I hope this memorandum clarifies the BACT
guidance in this area. If you have any questions about it, please feel
free to contact me at FTS 629-5629 or David Solomon at FTS 629-5375.
2 Attachments
cc: NSR Contacts
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Attachment 1 8.49
Background Information on Capital Cost Criteria
When the 1980 "Prevention of Significant Deterioration Workshop Manual"
stated that the U.S. Internal Revenue Service (IRS) criteria should be used
to determine equipment life standards, it was referring to the IRS "Class
Life Asset Depreciation Range" (CLADRJ system which provides a range of
depreciation periods for each class of assets. Although the CLADR system
was repealed for tax purposes for property placed in service after 1980,
these guidelines still provide estimates of low, medium, and high useful
lives for depreciable assets used in a wide range of business, industrial,
and other activities. The CLADR should not be confused with the current
IRS rules for the Accelerated Cost Recovery System (ACRS). The ACRS is not
recommended for equipment life expectancy because it uses "recovery periods"
which, for many types of equipment, are considerably less than actual useful
equipment life.
In our opinion, the "useful economic life" criterion using CLADR data
is the most realistic one to use when estimating the amortized capital
("capital recovery") costs for control options, be they "add-on" or process-
related controls. The only exception should be if documentation, proving
that the equipment life is shorter, is provided. The CLADR provides a
range of estimates; we recommend using the mid-point CLADR life to obtain
the best estimate of "useful economic life."
Under CLADR, "useful economic life" may vary not only with the type of
equipment but also with where and how that equipment is being used. Consider
a gas turbine installed in an industrial facility for purposes of generating
(or cogenerating) electricity for consumption on site. If the total rated
capacity for electrical production/distribution at the site were greater
than 500 kilowatts (kW), the turbine would fall under "Asset Guideline Class (AGC)'
fiO": "Industrial Steam and Electric Generation and/or Distribution Systems."
The "asset depreciation range" for this class provides a lower limit of
17.5 years, a mid-point of 22 years, and an upper limit of 26.5 years.
However, if this turbine is installed at, say, a plant producing breakfast
food and the electrical production/distribution capacity at this facility
is less than 500 kH, the lives to use would be 13.5 (low), 17 (mid-point),
and~Z5T5 years (high) (AGC 20.1, "Manufacture of Grain and Mill Products").
A complete listing of the CLADR values can be found in IRS Publication 534.
Ideally, all control options should be amortized using useful lives
that are not only representative but standardized. The IRS CLADR meets
both requirements In this respect, as do the background information documents
(BID) written to support the setting of new source performance standards
and national emission standards for hazardous air pollutants. A BID'S cost
and economic analyses contain useful life data for the source category
subject to the standard. These life data have been based, in turn, on
information obtained from the industry (e.g., via section 114 letters),
control equipment vendors, and other reliable sources.
-------
It may prove difficult in some cases to determine useful life of
add-on control equipment in the IRS listings. Accordingly, EPA has tabulated
low, midpoint, and high economic lives for eight commonly used add-on
control devices (see attachment). These data were taken from Capital and
Operating Costs of Selected Air Pollution Control Systems (EPA 450/5-80-002,
December 1978).This report, now retltled the EcpnomicTnalysis Branch
Control Cost Manual (Third Edition), is being revised; for a copy, contact
Bill Vatavuk at (FT5) 629-5309.
Attachment
-------
Attachment 2 -8.49
TABLE 3.6 GUIDELINES FOR PARTS AND EQUIPMENT LIFE
MATERIALS AND PARTS LIFE
Filter bags
Adsorbents
Catalyst
Refractories
EQUIPMENT LIFE
Electrostatic Preci pita tors
Venturi Scrubbers
Fabric Filters
Thermal Incinerators
Catalytic Incinerators
Adsorbers
Absorbers
Refrigeration
Flares
LOU
(Years)
.3
2
2
1
5
5
5
5
5
5
5
5
5
AVERAGE
(Years)
1.5
5
5
5
20
10
20
10
10
10
10
10
15
HIGH
(Years;
5
8
8
10
40
20
40
20
20
20
20
20
20
*
Based on discussions with manufacturers and operators with corroborating
data from refs. 19, 20. 37, 38. 40, 78 and 82.
Source: Capital and Operating Costs of Selected Air Pollution Control
Systems (EPA 450/5-80-002, December 1978)
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3.50
UNITED STATES ENVWONMENTAL PROTECTION AGENCY
OATE: DEC $ 1 1987 REQION '
Request for Administrator to Initiate Review of
SUBJECT: PSD Pernlt for Caa^en County Resource Recovery Facility.
Christopher
FROM: Regional I
T0: Lee W. Thomas
Administrator
I am requesting that, pursuant to 40 C.F.R. 124.19, you
review the PSD portion of the air pollution permit issued
to Camden County Energy Recovery Associates for construction
of the Camden County Resource Recovery Facility in Camden,
New Jersey (CCRRF). The failure of the New Jersey State
__ Department of Environmental Protection (DEP) to include an
emission limit for PMjg in the permit, to address BACT
adequately for PM10 and to provide for public comment on PMjQ
as a PSD affected pollutant are grounds for reviewing the DEP's
actions in issuing the permit and for staying the effective.
ness of the permit until all PSD requirements have been
met. As explained below, if you agree that review of this
permit is appropriate, you will have to notify the permittee
by January 11, 1988, that you are initiating review of the
PSD portion of the permit.
This permit was issued under various authorities including
EPA's PSD permit authority, 40 C.F.R. 52.21, which is dele.
gated to DEP. Due to the promulgation of the new NAAOS for
PMin on July 1, 1987. the emissions of particulate matter
from the CCRRF became subject to the PSD rules. Particulate
matter was not previously subject to PSD because the area
was classified as nonattainment for the now withdrawn NAAOS
for total suspended particulate (TSP). My staff has
concluded that the permit and the permit review procedures
do not adequately address PM10 under the applicable PSD
regulations.
— DEP was aware several months before it issued the permit
that the new PM10 NAAOS for particulate matter would require
PSD review. Nevertheless, the permit does not include an
emission limitation for particulate matter expressed as
PM10 emissions from the facility. Also, the analysis of the
control technology falls to demonstrate that the system
selected would provide the best degree of emission control
currently available for PM10 particulates. Finally, there is
a procedural problem with the permit as well. DEP did not
provide notice and an opportunity for the public to comment
on the PM10 aspect of the permit, contrary to the regulatory
requirements and the express advice of Region II.
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S.E:
. 2 -
The Delegation of PSD Authority to PEP
EPA Region II delegated PSD new source review authority to
DEP pursuant to 40 C.F.R. 52.21(u). The PSD permitting
authority delegated to the DEP is not restricted in any
way. The. delegation is general in nature and includes all
PSD requirements as they are from time to time revised by
rulemaking.
Applicability of PMio Requirements to CCRRF Permit
The application for the CCRRF air pollution control permit
was submitted on April 30, 1986. The DEP required the
application to be augmented until the application was
considered complete and the DEP noticed the permits for
public comment on April 28, 1987. A public hearing was
held on May 28, 1987, in Camden, New Jersey, and the public
comment period ended on June 12, 1987.
PSD requirements are applicable to this permit for particulate
matter because it is not in the class of permits and permit
applications that are covered by the grandfathering exemptions
of the PM10 promulgation. No PSD application addressing partic-
ulate matter was submitted for the CCRRF before July 31. 1987.
At the time of the notice period, the facility was required
to undergo precons true t ion review under the SIP for TSP
because the area was nonattainment (secondary) for TSP but
Federal and State permits were not issued until December 7,
1987. Only sources with PSD applications for particulate
matter or with all Federal and State precons true t ion approvals
or permits before July 31. 1987, are exempt from PSD review
for PM10. See, 40 C.F.R 52.21(c)(4)(ix) and (x) (52 Fed.
Reg. 2471 4, "July 1, 1987).
We reminded the DEP, both orally and in writing, of the need
to satisfy the PSD requirements at 40 C.F.R. 52.21 for
sources of partieulate matter as a result of the PM10 pro-
mulgation. The DEP was informed that the CCRRF was not
grandfathered and required additional PSD review to account
for
BACT Emission Limit Necessary for PMm
The permit has no emission limitation for PM10. BACT is. by
definition, an emissions limitation rather than merely specified
types of equipment. 40 C.F.R. 52.21(b)(12). (The only exception
is when there are technological or economic limitations on the
application of measurement methodology.) Clearly the «ran°-
fathering provisions were meant to limit the class of major new
sources for which the particulate emission limit is expressea
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- 3 -
as TSP under the Clean Air Act. Without an express limit
on PMio *• a permit condition, we are concerned that there
will be no sufficiently stringent, enforceable limit on
participate natter for this facility.
Even if the difference between the actual rate of particulate
matter emissions smaller than 10 microns in size occuring as
a result of the TSP limit now in the permit and the PUio
limit that should be in the permit proves to be small or
nonexistent, failing to correct this permit will leave a
muddled and uncertain basis for future enforcement. EPA
regulations clearly require that particulate matter emissions
be addressed under the PSD regulations for this permit and
that an emission limit be expressed in terms of PMjo*
Region II is concerned that a TSP emission limit in an instance
where PM10 was the PSD regulated pollutant may be unenforceable
especially in light of EPA's conclusion that the NAAQS which
triggers PSD for particulate matter in the case of CCRRF's
permit is the new PM10 NAAQS. See. 52 Ped. Reg. 24694.
The State BACT Analysis
The DEP'S Hearing Officer found that there is no predictable
difference between a baghouse and an electrostatic precipitator
(ESP) with respect to PM^o collection efficiency and, there-
fore, concluded that the ESP determined adequate for TSP is
also adequate as BACT for PHio- Region II considers the
BACT analysis by which the DEP reached its conclusion to be
unacceptably thin in its review of available data. The
only analysis which appears to be available is in a report
submitted by letter from the permittee dated November 16,
1987, responding to a November 2, 1987, request from DEP.
Our review of the BACT analysis shows that it is incomplete
and an inadequate basis for making necessary technical
judgments. Some questions are so fundamental that we
cannot make meaningful technical comments. For example:
1. What are the sources of the engineering
and economic data?
2. iby is there no comparison of the particulate
size and garbage characteristics at the
cited facilities and what is anticipated
at CCRRP?
3. What were the test methods employed in
obtaining the emissions data from the
cited failities?
4. Why were three United States facilities
referenced but not considered in the
analysis?
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- 4 -
5. fas the removal efficiency data based on
a system comparable to CCRRF's which
includes a dry scrubber before the
electrostatic precipitator or bagbouse?
These are just some of the questions that we have and which
we would normally review with a PSD permit applicant before
public comments are solicited. With the date of the submission
being November 16, 1987, and the permit issuance date being
December 7, 1987, we do not believe that any meaningful
questioning of the permittee's analysis was done by the
DEP. The mere three weeks between the submission of the
report and permit issuance did not allow the Region a
meaningful opportunity to resolve EPA concerns.
Public Comment on PMm PSD Review
In early November, 1987, DEP informed Region XI that it had
completed the necessary PSD analysis for PMio but needed to
issue the permit with little or no time for a public comment
period with respect to PM10 because of aa impending financing
deadline. On the basis of DEP assurances that PM10 had
been adequately addressed. Region II staff suggested to DEP
staff that DEP might be able to justify a shortened public
comment period, but emphasized that an opportunity for
public comment to review the PM10 analysis was necessary.
(EPA's OGC and OAQPS orally concurred with Region II's pos-
ition.) DEP acknowledged the need for public comment and
agreed to follow appropriate, but shortened, procedures.
Region II received a copy of and began to review the
permittee's November 16, 1987, submission. With no notice
for public comment and no further notice to EPA, DEP issued
the air permits to CCRRP along with SPDES and solid waste
permits on December 7, 1987*
Region II's advice with respect to the comment period
assumed adequate treatment of PM10 under PSD requirements.
Having subsequently reviewed the BACT analysis and the
permit itself, we now believe that these do not meet the
requirements of PSD and any reason to allow less than 30
days for public comment on the PM10 analysis would be
unjustified.
Recommendation
I am asking that you initiate review of the CCRRP permit
with respect to compliance with PSD review procedures
applicable to PM10. Specifically, the review should address:
1. The failure to include BACT expressed as a PM10
emission limit in the permit.
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8.50
- 5 -
2. The adequacy of the review of available technology
in establishing BACT.
3. .The failure to provide for public comment regarding
the PM limitations.
A December 1, 1987, memorandum from Craig Potter, Assistant
Administrator for Air and Radiation, calls for regional offices
to monitor state compliance with precons true t ion reviews to
prevent instances such as this. We have done so in this case
but were not consulted by the DEP when it decided to reject
EPA 's direction and issue the permit. We expect that the OEP
and the permittee will correct this action rather than go
through the entire review process but the issuance of the
permit leaves us with no choice but to seek to commence review
to prevent the action taken by DEP from becoming final action.
We are prepared to continue working with the DEP to act on the
permit ezpeditiously should the DEP and the permittee agree to
remedy the deficiencies discussed above. We have also explained
to the DEP that, if appropriate. Region II could request a stay
of EPA* s permit review proceedings in the interim. In this
regard, the DEP has contacted Region IX and is exploring ways
to take valid legal action on their own which would eliminate
the need for you to act on this request for review by January 11.
If the DEP should take such action, we will notify you immediately.
I request that you alert me before you issue an order under
S124.19(c).
Procedures and Time Limitations
We are concerned that review procedures be initiated within
the time period allowed by the regulations, 40 C.F.R. Part 124,
so that we are not foreclosed from raising these important
issues. Under S124.19(a), if this is construed as a petition
for review, the petition must be filed within 30 days of service
of the notice by the OEP of its final permit decision and the
Administrator must issue an order granting the review within a
reasonable time. $124.19(c). If for any reason you determine
that $134.19(4) is not the proper procedure, we would request
you to initiate review on your own initiative under $124.19(b),
which appears to require you to act within the initial 30 days.
Based on the issuance of the permit on December 7, 1987, we
calculate that the 30 day period from the issuance of the
permit will end on January 11, 1988. Pursuant to $124.20(a).
the time began to run on the day after permit issuance. Since
service of the DEP notice was by mail, we have added three days
to the prescribed time in accordance with $124.20(d). The
thirty-third day after December 7, 1987, is January 9, 1988.
which is a Saturday, and Sl24.20(c) provides that the time
period is extended to the next working day which is Monday,
January 11. 1988* If this is construed as a review on your
-------
- 6 -
own initiative, notice must be given by this date and we recommend
that notice g Anting review in either ease be provided by
January 11, 1988.
The regional office filed comments on the draft permit
within the OEP's public comment period. See, Hearing
Officer's Report, December 7, 1987, Appendix B. We construe
the definition of person in $124.41 to include an EPA
regional office. Therefore the Region, as a person who filed
comments, is a proper party to file a petition for review under
$124.19(a).
By whichever means review is initiated, the review procedure
is intended to prevent raising facts or issues on appeal that
were not raised in the public comment period. See. 45 Fed.
Reg. 33411, Col. 3 (May 19, 1980). Section 124.19(a) requires
a statement that the issues being raised for review were raised
during the comment period to the extent required by Part 124.
A person's obligation is to "raise all reasonably ascertain-
able issues and submit all reasonably available arguments
... by the close of the public comment period." $124.13.
The issues raised herein were not required to be raised earlier
since these issues could not have been known at the time the
comment period closed on June 12, 1987. Indeed, we had advised
the DEP that a public comment period should be provided so that
public comments could be received on the PH^Q permit decision.
Notice of the initiation of the review procedures should be
sent to:
Mr. Robert Donahue
President
Camden County Energy Recovery Associates
110 South Orange Avenue
Livingston, New Jersey 07039
Mr. Richard T. Dewling
Commissioner
New Jersey State Department of
Environmental Protection
401 Bast State Street
01-027
Trenton, New Jersey 08625
Mr. Gary Pierce
Chief
Bureau of Engineering and
Regulatory Development
Division of Environmental Quality
New Jersey State Department of
Environmental Protection
401 East State Street
CN-027
Trenton, New, Jersey 08625
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8.50
- 7 -
Enclosed are copies or* the following documents upon which this
request is based:
1. PERMIT TO CONSTRUCT, INSTALL, OR ALTER
CONTROL APPARATUS OR EQUIPMENT AND TEMPORARY
CERTIFICATE TO OPERATE CONTROL APPARATUS OR EQUIPMENT
AND PREVENTION OP SIGNIFICANT DETERIORATION PERMIT
December 7, 1987
2. HEARING OFFICER'S REPORT FOR THE
APPLICATION BT CAMDEN COUNTY ENERGY RECOVERY ASSOCIATES
TO CONSTRUCT AND OPERATE
A SOLID WASTE RESOURCE RECOVERY FACILITY
December 7, 1987
3. Letter from Robert F. Donahue. President, Camden
County Energy Recovery Associates to Jorge H.
Berkowitz, New Jersey State Department of Environmental
Protection, Subject: Camden County Resource Recovery
Facility PM10 BACT Analysis, with enclosure
November 16, 1987
Enclosures (3)
cc: Thomas L. Adams, LE-133
Francis S. Blake, LE-130
J. Craig Potter, ANR-443
Ronald L. MCCallum, A-101
-------
9. PSD
Class I Areas
V)
0
-------
10. PSD
Permits/Permit Processing/Public
-------
10.30
0.30 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 23, 1987
Opinion in U.S. v Louisiana-Pacific Corporation, D. Colo.,
Interpreting Certain PSD Regulations
Thomas L. Adams, Jr.
Assistant Administrator for Enforcement and Compliance Monitoring
J. Craig Potter for Air and Radiation (ANR-443)
This memo summarizes the October 30, 1987, opinion by Judge Arraj
of the US District Court in Colorado regarding summary judgement
and legal matters involved in the case of U.S. vs. Louisiana-
Pacific Corporation (LPC). Judge Arraj denied motions for summary
judgement, finding that a trial was needed to resolve questions of
fact. Two legal issues are discussed. First, EPA can not sue LPC
for the NOV of major modification rules, because the major source,
upon which the major modification must be based, did not exist for
more than 30 days after the NOV was issued (as required by Section
113(b)(2) of the Clean Air Act). EPA's second NOV to LPC for
construction of a major stationary source must be heard at the
trial. Sec'ond, state permit limitations can not be a defense for
a source if they were not in effect when an alleged violation
commenced. Further, restrictions on actual, [annual] emissions,
alone, are not appropriate as a consideration in determining a
source's potential to emit.
2.27 [Hard Copy]; 3.28; 14.
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10.31
10.31
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 31, 1987
Request for Administrator to Initiate Review of PSD Permit for
Camden County Resource Recovery Facility
Christopher J. Daggett
Regional Administrator
Lee M. Thomas
Administrator
Region II requests review of a PSD permit issued for construction
of a resource recovery facility because no emission limit was
included for PM1ft, BACT for PM1n was not adequately addressed, and
•10»
no public comment on PM.0 occurred.
December 7, 1987; new NAAQS for PM
1987.
8.24 [Hard Copy]; 11.9
The NJ DEP issued the permit
10 were promulgated on July 1,
-------
10.32
10.32 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 31, 1988
Transmittal of OAQPS Interim Control Policy Statement
John S. Sietz, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
Regions I-X Division Directors
The memo provides final Interim Control Policy for developing
compliance schedules that require replacement or upgrading of
existing air pollution control equipment. During the interim
period, interim controls that may be more effective in reducing
emissions may be installed, if no delay results in installation of
the final control equipment.
8.25 [Hard Copy]; 11.10
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10.33
f gi Tj
\*x
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
JUL 15668
MEMORANDUM
SUBJECT: Procedures for EPA to Address Deficient New Source
Permits Under the Clean Air Act
FROM;
TO:
Michael s. Alushin
Associate Enforcement counsel for Air
Office of Enforcement and^fompliance Monitoring
John S. Seitz, Director t . . ^. „
Stationary source Compliance Division
Office of Air Quality Planning and Standards
Addressees
INTRODUCTION
This memorandum transmits the final guidance for your use
in addressing deficient new source permits. After we distributed
the draft guidance for comment on December 16, 1987, several
Regional Offices took action on deficient new source permits.
The events surrounding those permit actions, as well as your
thoughtful comments on the draft guidance, have shaped the final
policy.
RESPONSE TO COMMENTS
we have incorporated most of your comments into the final
guidance. As you requested, we have included examples of forms
showing a request for permit review under 40 C.F.R. 5124.19, a
S167 order, and a $113(a)(5) finding of violation.
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-2-
Sone commenters suggested that we include a section on
actions that can be taken, not against the source, but against
the state issuing the deficient permit. We agree that this topic
should be included in the guidance because it surfaces repeatedly
in individual cases. Therefore, we have added a section on
possible actions against states for issuing deficient permits.
we have also .clarified the guidance to indicate that EPA should
send a state written comments at both the draft and final permit
stage when a state is issuing rfhat EPA considers a deficient
permit.
Some reviewers requested further elaboration of when to use
alternative enforcement responses. We have indicated relevant
considerations in determining which action to take. One commenter
pointed out that the guidance did not define what was meant by a
"deficient permit." This involves a determination that requires
the exercise of judgment. However, we have tried to list most of
the criteria that will support a finding of deficiency. We
realize, however, that we may not have anticipated every deficiency
that may present itself to every Regional Office in the future.
Concern was expressed over the requirement to respond to a
deficient permit within thirty days. We realize that this is an
ambitious objective, but it is a legal requirement for permit
review under 40 C.F.R S124, and greatly enhances EPA's equitable
position in challenges under S167 and S113(a}(5). It will be
easier to meet this deadline if Regional Offices have routine
procedures in place for prompt receipt of all permits from their
states and for thorough review of permits as they are received.
A few commenters wanted the guidance expanded to apply to
"netting" actions and "synthetic minor" sources. We agree that
guidance in this area would be useful, but the topic is too broad
to be folded into the same document as the guidance on deficient
permits. We have begun work to address appropriate enforcement
action for improper "synthetic minors" in the context of the
Federal Register notice announcing the program for federally
enforceable state operating permits. If you think that separate
enforcement guidance is needed on this subject, please let us
know.
Finally, a few reviewers questioned the guidance regarding
EPA directly-issued permits. We agree that, in all cases where
we find a deficiency, It is preferable to change the permit by
modifying its terms. If the source is amenable, we should do so.
However, if EPA cannot get the source to accept new permit condi-
tions, our only options are review under S124.19(b), revocation
of the permit, and/or enforcement action. A S124.19(b) review
must be taken within 30 days after the permit was issued. The
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10.33
regulations ace unclear on EPA's authority to revoke PSD permits.
In an enforcement action to force a source, involuntarily, to
accept a penit change when the source has not requested the change
or made any modification to its facility or operations, EPA must
always keep in Bind the litigation practicalities and equities.
These make enforcing against a permit we have issued when we are
not basing 'our action on any new information a difficult
proposition.
CONCLUSION
We hope that this guidance will help EPA Regions act to
challenge deficient new source permits. Many of the practices
advocated in this document may be litigated in pending or future
cases. We will amend the guidance as necessary in light of
judicial developments. If you have any questions, please contact
attorney Judith Katz at PTS 382-2843.
Attachment
Addressees:
Regional Counsels
Regions I-X
Regional Counsel Air Branch Chiefs
Regionx I-X
Air and Waste Management Division Director
Region II
Air Management Division Directors
Regions I, III, and IX
Air and Radiation Division Director
Region V
Air, Pesticides, and Toxics Management Division Directors
Regions IV and VI
Air and Toxics Division Directors
Region* VII, VIII, and X
PSD Contacts
Regions I-X
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-4-
Alan Bckert
Associate General Counsel
Greg.Foote, OGC
Gary HcCutchen
NPPB, AQMD (MD-15)
Ron McCallum
Chief Judicial Officer
EPA
David Buente, Chief
Environmental Enforcement Section
DOJ
-------
10.33
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
JULI5
MEMORANDUM
SUBJECT: Procedures for EPA to Address Deficient New
Source Permits Under the Clean Air Act
FROM: Michael S. Alushin
Associate Enforcement Counsel for Air
Office of Enforcement an id compliance Monitoring
John S. Seitz, D
Stationary Source compliance Dwlsion
Office of Air Quality Planning and standards
TO: Addressees
I. Introduction
This guidance applies to permits issued for major new
sources and major modifications under both the prevention of
significant deterioration (PSD) program and the nonattainment
new source review (NSR) program. It contains three sets of
procedures — one for permits issued pursuant to EPA-approved
state programs (NSR permits and PSD permits in more than half
the states) one for permits issued by states pursuant to dele-
gations of authority from EPA, and one for instances where EPA
issues the permit directly. An appendix of model forms
appears at the end.
The need for this guidance has become increasingly evident
in the last two years. Before then, EPA had attempted only once,
in 1981, to enforce against sources constructing or operating
with new source permits the Agency determined to be deficient.
in 1986, EPA litigated Greater Detroit Recovery Facility v.
Adamkus et al. No. 86-CU-72910-DT (October 21, 1986). In that
case, EPA wanted to enforce against a major stationary source
constructing with a PSD permit issued by Michigan under a dele-
gation agreement with EPA. The Agency had first determined that
the best available control technology (BACT) determination for
S02 in the permit was inadequate. Before EPA started formal
enforcement action, the source filed suit against the Agency,
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-2-
arguing that EPA had no authority to "second guess" the 8ACT
determination and that/ in any event, we should be equitably
foreclosed froa challenging the permit because we had remained
silent during the two years since we had failed to comment on the
permit. The court agreed and granted the source's motion for
summary judgment.
The Detroit case was an example of the need for prompt and
thorough EPA review of and written comments on new source permits.
Our ability to influence the terms of a permit, both informally
and through legal procedures, diminishes markedly the longer EPA
waits after a permit is issued before objecting to a specific
term. This is due both to legal constraints, that is, tight time
limits for comments provided in the regulations, and to equitable
considerations that make courts less likely to require new sources
to accept more stringent permit conditions the farther planning
and construction have progressed. Accordingly, as a prerequisite
to successful enforcement action, it is imperative that EPA
review all major source permit packages on a timely basis and
provide detailed comments on deficiencies. If EPA does not
obtain adequate consideration of those comments, it is also
important for EPA to protect air quality by prompt and consistent
enforcement action against sources whose permits are found lacking.
Because PSD permits are issued on a case-by-case basis,
taking into consideration individual source factors, permitting
decisions involve the exercise of judgment. However, although
not an exhaustive list, any one of the following factors will
normally be sufficient for EPA to find a permit "deficient"
and consider enforcement action:
1. 3ACT determination not using the "top-down" approach.
2. BACT determination not based on a reasoned analysis.
3. No consideration of unregulated toxic pollutants in
BACT determination.
4. Public notice problems - no public notice 6 comment
period or deficiencies in the public notice.
5. Inadequate air quality modeling demonstrations.
6. Inadequate air quality analysis or impact analysis.
7. unenforceable permit conditions.
8. For sources that impact Class I areas, inadequate
notification of Federal Land Manager or inadequate
consideration of impacts on air quality related
values of Class I areas.
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10.33
In NSR permitting, each of the following factors, while not
necessarily an exhaustive list, are grounds for a deficient
permit:
1. Incorrect LAER determination, i.e., failure to be at
least as stringent as the most stringent level achieved
in practice or required under any SIP or federally
enforceable permit.
2. No finding of state-wide compliance.
3. No emissions offsets or incorrect offsets.
4. Public notice problems - no public notice and comment
or deficiencies in public notice.
5. Unenforceable permit conditions.
II. Timing of EPA Response
A. Comment
Although EPA should know about every permit, at least by the
time it is published as a proposal, the Agency sometimes does not
learn about a permit during its development prior to the time the
final permit is issued. If we do become aware of the permit and
have objections to any of its terms, we should comment during the
developmental stage before the permit becomes final.
state agencies should send copies of all draft permit public
notice packages and all final permits to EPA immediately upon
issuance. (The requirements for contents of public notice packages
are set forth at 40 C.F.R. 551. 166(q) (2) ( iii ) . ) The Regional Office
should review all draft permit public notice packages and final
permits during the 30 day comment periods provided for in the
federal regulations. It should write detailed comments whenever
Agency staff does not agree with the terms of a draft or final
permit. To make sure they get permits in time for review, Regional
Offices should consider requiring states with approved new source
programs, through Section 105 Grant Conditions, to notify them of
the receipt of all major new source permit applications. They
should also require states to send them copies of their draft
permits at the beginning of the public comment period.
Final permits should be required to be sent to EPA immediately
upon issuance. (Note that the requirement for Regions to review
draft and final permits is contained in guidance issued by Craig
Potter on December 1, 1987.) Regions should carefully check
their agreements with delegated states. These agreements require
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-4-
states to send draft permits to EPA during the comment period.
In addition, 40 C.P.R. S52.21(u)(2)(ii) requires delegated agencies
to send a copy of any public comment notice to the appropriate
regional office. Pursuant to 40 C.F.R. §124.15, a final permit
does not become effective until 30 days after issuance, unless
there are no comments received during the comment period, in
which case it' becomes effective immediately. Regions should make
sure that delegated states know about permit appeal procedures at
40 C.F.R. S124 and, if necessary, issue advisory memoranda
notifying them that EPA will use these procedures if the Agency
determines a permit is deficient.
B. Formal Enforcement Action
If the permit was issued under a delegated program, it is
important to initiate formal review or appeal within 30 days after
the final permit is issued. (This response is set forth in
Section IV below. The 30 day period is required by the regula-
tions at 40 C.F.R. §124.19). When enforcing against permits
issued under state programs, the same legal requirement to initiate
enforcement within 30 days does not exist, but it is still
extremely important to act expeditiously.
III. Enforcement Against the source v. Enforcement Against
the State
If a state has demonstrated a pattern of repeatedly issuing
deficient permits, EPA may consider revoking the delegation for a
delegated state or acting under Section 113(a)(2) of the Act to
assume federal enforcement for an approved state. It is not
appropriate to issue a §167 order to a state. Revocations of
delegated authority as to individual permits and revocations of
actual permits are theoretically possible, but they are unneces-
sary where EPA can act under Part 124 (i.e. within 30 days of
issuance). Revocation may be appropriate where Part 124 appeals
are unavailable, but likely will be subject to legal challenge.
IV. Procedures to Follow When Enforcing Against
Deficient Permits in Delegated Programs
A. If possible, the following actions before construction
conences:
1. Take action under 40 C.F.R. §124.19(a) or (b) within
30 days of the date the final permit was issued to
review deficient provisions of the permit.
a. §124.19(a) is an appeal, which may be taken by
any person who commented during the public comment
period.
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-5-
b. S124.19(b) is a review of the terms of the permit
by the Administrator under his own initiative.
Regional Offices informally request the Admini-
strator to take this action. They need not have
commented during the public comment period. The
Administrator has demonstrated a preference for
using S124.19(b) over S124.19(a). In the four
instances thus far when he was given the choice
of acting under (a) or (b), he chose (b). However,
the Administrator may not have sufficient time to
act within 30 days in every situation in the
future.
2. In the majority of situations, it is more appropriate
for the Agency to act as one body to initiate review
under 5124.19(b). In some instances, however, the
third party role for a Regional Office, through 40
C.F.R. 5124.19(a) may be preferable. Regions should
pick (a) or (b). However, if both provisions are
legally available, they should request, in the
alternative, that the Administrator act under the
provision other than the one chosen by the Region
should he deem it more appropriate. In particular,
if a Region requests the Administrator to act under
S124.19(b), it should ask that its memorandum be
considered as a petition for review under S124.19(a)
should review under S124.19(b) not be granted within
30 days. This is to protect the Regions' right to
appeal a permit if the Administrator does not have
sufficient time to act. Therefore, all memoranda
requesting review should be written to withstand
public scrutiny if considered as petitions under
S124.19U).
3. If the 30 day period for appeal has run and strong
equities in favor of enforcement exist, issue a S167
order and be prepared to file a civil action to
prohibit commencement of construction until the
source secures a valid permit. (See Section IV B(2))
below.
B. For sources where construction has already commenced:
1. If the permit was issued less than 30 days previously
take action under 40 CPR 5124.19.
2. If the permit was issued more than 30 days previously,
issue a S167 order requiring immediate cessation of
construction until a valid permit is obtained. This
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-6-
step should only be taken if extremely strong equities
in favor of enforcement exist. Regions should be
keeping state and source informed of all informal
efforts to change permit terms before the S167 order
La issued. $167 ocdecs caay be used both foe sources
which have and have not commenced construction.
However, because the $124.19 administrative appeal
and review process is available in delegated programs,
it is greatly preferred for challenging deficient
permits in states where it can be used.
3. If EPA determines that penalties are appropriate,
issue a NOV under Section 113(a)(l) of the Act for
commencement of construction of a major source or
major modification without a valid permit. This is
necessary because $167 contains no penalty authority.
Note that strong equities for enforcement must exist
before taking this step. EPA can issue both a $167
order requiring immediate injunctive relief and a
NOV if we decide that both are appropriate.
4. Follow up with judicial action under $167 and S113(b)(2)
if construction continues without a new permit.
c. Note that the appeal provisions of 40 C.F.R. §124.19
apply to all delegated PSD programs even if $124.19
is not specifically referenced in the delegation.
V. Procedures to Follow When Enforcing Against Permits in
EPA-Approved State Programs (All NSR and More Than
Half of the PSD Programs)
A. Issue S113(a)(5) order {for HSR) or 167 order (for
PSD) as expeditiously as possible, preferably within
30 days after the permit is issued, requiring the
source not to commence construction, or if already
started, to cease construction (on the basis that it
would be constructing with an invalid permit), and to
apply for a new permit. Note that EPA should issue
a S167 order if it has determined that there is a
reasonable chance the source will comply, otherwise,
the Region should move directly to section V.D below.
B. from the outset of EPA's involvement, keep the
source informed of all EPA's attempts to convince
the permitting agency to change the permit.
C. Issue an NOV (113(a)) as soon as construction commences
if EPA determines penalties are appropriate.
-------
-7- 10'33
D. If source does not comply with order, follow up with
judicial action under S167, S113(b)(5), or, if MOV
issued, $113(b)(2). If penalties are appropriate,
issue NOV and later amend complaint to add a $113
count when 30 day statutory waiting period has run
after initial action is filed under S167.
VI. For EPA-issued Permits (Non-delegated)
A. If source submitted inadequate information
(e.g., misleading, not identifying all options)
and EPA recently found out about it,
1. If within 30 days of permit issuance, request
review by the Administrator under 40 C.F.R.
S124.19(b).
2. If permit has been issued for more than 30 days,
issue $167 or S113(a)(5) order preventing start-
up or, if appropriate, immediate cessation of
construction.
3. Issue NOV if construction has commenced and EPA
determines penalties to be appropriate.
4. If necessary, request additional information from
source; if source cooperates, issue new permit.
5. Consider talcing judicial action if appropriate.
EPA recognizes the distinction between permits based on
faulty and correct information only for EPA directly-issued
permits. This distinction is necessary for EPA permits due
to equitable considerations.
B. If source submitted adequate information and EPA
issued faulty permit, we should attempt to get source
to agree to necessary changes and accept modification
of its permit. However, if source will not agree,
only available options are revoking the permit and
enforcing, consolidated permit regulations are
unclear about EPA's authority to revoke PSD permits.
Because of this and the equitable problems associated
with enforcing against our own permits, unless new
information about health effects or other significant
findings is available, we may choose to accept the
permit. If faulty permit produces unacceptable
environmental risk, act under 40 C.P.R. 5124.19, if
possible. If action under 40 C.P.R. S124.19 not
possible, first revoke permit and then act as set
forth in Section IV.
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-8-
Addressees:
Regional Counsels
Regions I-X
Regional Counsel Air Contacts
Regions Z-X
Air and Haste Management Division Director
Region II
Air Management Division Directors
Regions I, III, and IX
Air and Radiation Division Director
Region V
Air, Pesticides, and Toxics Management Division Directors
Regions IV and VI
Air and Toxics Division Directors
Regions VII, VIII, and X
PSD Contacts
Regions I-X
Alan Eckert
Associate General Counsel
Greg Foote, OGC
Gary McCutchen
NPPB, AQMD (MD-15)
Ron McCallum
Chief Judicial Officer
Bob Van Heuvelen
Environmental Enforcement Section
Department of Justice
David Buente, Chief
Environmental Enforcement Section
Department of Justice
-------
10.33
Appendix
1. Request for Review under 40 C.F.R.S124.19
2. S167 Order
3. S113(aX(S) finding of violation and accompanying S113(a)(l)
Notice of violation
-------
10.34
10.34
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 28, 1988
Supplemental Guidance on Implementing the North County Prevention
of Significant Deterioration (PSD) Remand
John Calcagni, Director
Air Quality Management Division (MD-15)
Addressees (Regional Air Division Directors)
The memo discusses 2 issues that have arisen from the
Administrators remand decision in the North County PSD permit
appeal, and that are beyond the scope of the September 22, 1987,
document providing initial guidance on the subject.
(1) Although BACT is determined case-by-case, the permitting
authority must consider the full range of pollution control
options available and choose the most effective means of
limiting emissions, unless shown compelling reasons of
economic or energy impracticality.
(2) Emission of noncriteria pollutants should be evaluated
carefully, including consultation with the sources listed.
Where a municipal waste combustor is involved, OAQPS has
provided rather detailed guidance on methods to factor air
toxics considerations into the BACT decision.
(3) In the public notice, the level of detail and identification
of specific toxic substances should be consistent with the
concern posed by the air toxics.
8.27 [Hard Copy]
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10.35
10.35 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
November H, 1988
Request for Administrator to Initiate Review of PSD Permit for
Columbia Gulf Transmission Company, Clementsville Compressor
Station, Kentucky
Greer C. Tidwell, Regional Administrator
Lee M. Thomas, Administrator
Review is requested of the permit issued by KY DER for a natural -
gas-fired turbine, because dry controls do not constitute BACT for
NOX for the source.
8.29 [Hard Copy]
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10.36
BEFORE TEE ADMINISTRATOR
U.S. EHVXROHMBHTAL FBOTECTZON XOBHCY
WASHINGTON, D.C.
In the Matter of:
Colmac Energy, Inc.
(Riverside County, CA)
Applicant
PSD Appeal No. 88-9
J
ORDER DENYING REVIEW
In a petition filed pursuant to 40 CFR 124.19 (1987), the
County of Riverside and the Coachella Valley Association of
Governments requested review of a Prevention of Significant
Deterioration (PSD) permit issued to Colmac Energy, Inc. for the
construction of a 49 megawatt biomass-fueled electrical power
plant on the Cabazon Indian Reservation in Riverside County,
California. V The permit determination was made by EPA Region
IX, San Francisco, California, on July 28, 1988.
Under the rules governing this proceeding, there is no
appeal as of right from the permit decision. Ordinarily, a
petition for review of a PSD permit determination is not granted
y Several municipalities filed letters expressing opposition
to the Colmac facility and requesting that Region IX's permit
determination be reviewed and overturned. Each of the letters
was untimely; therefore, review at the behest of these
petitioners must be denied for that reason. I note, however,
that most if not all of the municipalities belong to the
Coachella Valley Association of Governments, whose petition was
timely. The municipalities are the Cities of Rancho Mirage,
Indio, Palm Springs, Palm Desert, Coachella, and Desert Hot
Springs. An untimely petition was also received from Virginia
Schmidt; it too is denied.
-------
2
unless it is based on a clearly erroneous finding of fact or
conclusion of lav, or involves an important matter of policy or
exercise of discretion that warrants review. The preamble to the
regulations states that "this power of review should be only
sparingly exercised," and that "most permit conditions should be
finally determined at the Regional level * * *." 45 Fed. Reg.
33,412 (Hay 19, 1980). The burden of demonstrating that the
permit conditions should be reviewed is therefore on the pe-
titioners. Petitioners have not satisfied that burden in this
instance.
Petitioners have raised twelve different objections to the
issuance of the permit, which can be grouped into three major
categories. First, petitioners contend the South Coast Air
Quality Management District of California (the "District") and
the Riverside County Waste Management Director (the "Director")
should receive notifications from the facility and have the same
rights of access and inspection as the EPA, and the District's
new source rules should specifically apply to the project.
Second, petitioners contend Region IX failed to analyze unregu-
lated pollutants properly and did not consider the environmental
problems of odor and vecC0£ control. Third, petitioners complain
that certain conditions are vague or inadequate and should be
clarified.
These objections do not persuade me to review the permit.
The first category fails to recognize the District's and the
Director's lack of jurisdiction over the facility under the PSD
-------
10.36
3
program. It is located on Indian land and therefore jurisdiction
resides with the appropriate federal agencies and the tribe, not
with the state and local agencies. Region IX has indicated;
however, that it is likely at some point in the future to desig-
nate the District to act as EPA's representative in this matter.
In the meantime, EPA is the exclusive permitting, inspecting, and
enforcing authority for the Colmac facility with respect to Clean
Air Act issues.
The second category of objections must fail because the
record shows that emissions of unregulated pollutants from the
facility were considered in accordance with applicable EPA policy
and legal interpretations, as set forth in North County Resource
Recovery Associates. PSD Appeal No. 85-2 (June 3, 1986). Nothing
further was required of the permit applicant under federal law.
EPA concluded that the emission controls proposed as best avail-
able control technology (BACT) for the Colmac facility (baghouse
with teflon laminated bags, limestone injection, ammonia injec-
tion, and a circulating fluidized bed combustor with a minimum
temperature of 1,600 F and with a residence time of 3 to 5
seconds) would be among the most effective for reducing toxic air
emissions.2' As to odor i8OL vector concerns expressed by the
v Petitioners have submitted a critique of Colmac's health
risk assessment to support their contention that the permit
determination does not comply with the worth county decision,
supra. See Petition (Exhibit H); Emily D.P. Nelson, "Health Risk
Assessment for Colmac Biomass-Fueled Power Plant, Cabazon Indian
Reservation, Riverside County, California" (Sept. 4, 1988).
(Colmac had submitted the assessment as part of an environmental
impact statement for non-EPA related aspects of the project. The
(continued...)
-------
4
petitioners, they were given appropriate consideration under the
circumstances, for EPA looked at other biomass power plants in
operation in California, but none demonstrated any such problems.
The fuel to be used is baled straw and wood chips; the facility
will not burn garbage or other food sources. Petitioners have
not established that their concerns are anything other than
speculative, which is not a sufficient basis to justify exercise
of the review powers under the applicable regulations.
The third category of objections concerns allegedly vague or
inadequate matters requiring clarification. The Region has
addressed these concerns by, for example, stating that it
interprets the provision for a "wind enclosed*1 fuel hog as
meaning "completely enclosed"; that it believes the requirement
for watering of the fuel storage pile during 12 mph+ winds is
sufficient to control any dust problems that might arise; and
^(...continued)
project required federal approvals from the Bureau of Indian
Affairs of the United States Department of the Interior.)
Petitioners assert that the assessment is deficient in certain
respects and therefore does not satisfy the dictates of the North
county decisionV However, the critique does not address the
critical issue posed by the north County decision, namely, do the
environmental impacts of unregulated pollutants call for.an
adjustment of the BACT diSfermination for the regulated
pollutants. In other words, will the environmental impacts of
the unregulated pollutants affect the choice of control techno-
logy designated as BACT, necessitating a more stringent emission
limitation on the regulated pollutants. Petitioners have not
shown or alleged by their critique that any such alteration is
necessary or appropriate. EPA Region IXf as stated above, has
concluded that the technology proposed as BACT is among the most
effective in controlling the unregulated pollutants. According-
ly, no alteration of the emission limitation on the regulated
pollutants is required.
-------
10.36
5
that the expression of the NOx emission limit in terms of pounds
per hour (Ib/hr) and parts per million (ppm) provides ample
protection for the environment, thereby obviating any need to
express the limit in other terms. In conclusion, none of the
objections in this last category raises any concerns about the
validity of the Region's permit determination.
For the reasons stated above, it is my conclusion that
review of Region IX's permit determination is not warranted. The
Region factored in all necessary requirements of federal law and
EPA does not have the authority to impose state or local require-
ments in the permit in the absence of the permit applicant's
consent. I note in this latter respect that the applicant in a
number of instances has agreed to inclusion of provisions in the
permit that reach well beyond the bare minimum requirements of
the PSD provisions of the Clean Air Act. These additional
requirements include, for example, provisions for offsets of all
emissions in accordance with ARB/CAPCOA v procedures; and
measurement of non-regulated pollutants such as polycyclic
organic matter A. dioxins and furans, and metals. The fact that
some or all of these additional undertakings may fall short of
petitioners' expectations under state law is legally irrelevant
to the federally issued permit. Therefore, the petition for
review is denied. In accordance with 40 CFR 124.19(f)(2), the
^ ARB/CAPCOA is a joint reference to the "California Air
Resources Board" and the "California Air Pollution Control
Officers Association."
-------
6
Regional Administrator or his delegatee shall publish notice of
this final action in the Federal Register.
So ordered.
Lee M. Thomas
Administrator
Dated: V^-€_AJ-*
-------
10.37
10.37 DATE: January 4, 1989
SUBJECT: Valero Hydrocarbons BACT Analyses
FROM: Anthony P. Wayne, Chief, TX/NM Enforcement Section
TO: Lawrence E. Pewitt, PE, Director, Permits Division,
Texas Air Control Board
DISCUSSION: (1) Valero Hydrocarbons should reevaluate its study of feasible
BACT alternatives for its proposed natural gas processing
plant, particularly with respect to the technical, cost, and
economic issues mentioned.
(2) The memo discusses the steps Valero must take to keep their
PSD permit active, because they are coming up on the one-year
date by which EPA must make a decision.
CR: 8.31 [Hard Copy]
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10.38
10.38 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 27, 1989
Discounted Cash Flow (DCF) Analysis for Craven County Project New
Source Review
Frank L. Bunyard, Economic Analysis Section, ASB, AQMD
Allen C. Basala, Chief, Economic Analysis Section, ASB, AQMD
The EPA Economic Analysis Section reviewed a discounted cash flow
analysis describing feasibility of thermal de-NOx as BACT. This
memo states reasons EPA is not convinced on infeasibility and
recommends the PSD applicant be asked to provide more substantive
justification for key assumptions. Memos 10.39 and 10.40 are
closely related to this one.
8.32 [Hard Copy]
-------
10.39
10.39 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 27, 1989
Review of Craven County Wood Energy Project
Allen C. Basala, Chief, Economic Analysis Section, ASB
Bruce P. Miller, Chief, Air Programs Branch, Region IV
This memo provides notification to Region IV that a discounted
cash flow analysis provided by a PSD applicant was not found to be
convincing of the infeasibility of thermal de-NOx controls. Memos
10.38 and 10.40 are closely related.
8.33 [Hard Copy]
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10.40
10.40 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
February 13, 1989
BACT Determination for Craven County Wood Energy Project
Bruce P. Miller, Chief
Air Programs Branch; Air, Pesticides and Toxics
Management Division
N. Ogden Gerald, Chief Air Quality Section
NC Department of Natural Resources and Community Development
PSD permit applicant must provide additional verification as
described of economic data presented regarding thermal de-NO as
BACT for NOX emissions. The memo references economic evaluations
in Economic Analysis Section Documents 10.38 and 10.39.
8.35 [Hard Copy]
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(5>
1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D C. 20460
FEB 24B89
10.41
MEMORANDUM
SUBJECT:
Opinion in Frank J
Commission , Michicr
Commission
FROM:
TO:
Kellev. Michigan Natural Resources
,n Air Pollution
Control
Albar Industries.
Terrell-Er^HGnt
Associate Enforcement Counsel
Air Enforcement Division
Edward E. Reich
Acting Assistant Administrator
for Enforcement and Compliance Monitoring
Don R. Clay
Acting Assistant Administrator
for Air and Radiation
On February 7, 1989, the U.S. District Court for the Eastern
District of Michigan issued a decision upholding the right of a
State to bring suit in Federal court as a citizen under the Clean
Air Act.
The State of Michigan recently filed suit against Albar
Industries under Section 304 of the Clean Air Act (the citizen
suit provision) in U.S. District Court, alleging that Albar had
violated certain new source permitting requirements contained in
the federal new source regulations and the Michigan State
Implementation Plan. Albar challenged Michigan's standing to sue
under Section 304. The court upheld Michigan's right to maintain
the action, stating that "the inquiry should end with the plain
language of the statute." Opinion at page 2.
-------
-2-
The court was persuaded, as well, by the decision in Hancock
v. Train. 426 U.S. 167, 196, 48 L. Ed. 555, 575 (1976). The
Supreme Court found, in Hancock, that states have standing to sue
under Section 304. The Albar court noted that, in drafting the
Clean Air Act Amendments of 1977, Congress chose to let the
effect of Hancock stand by not altering 304 and 302(e) to
preclude state access to federal courts.
Albar's motion to strike Michigan's request for civil
penalties was also denied on the ground that while the Clean Air
Act does not authorize penalties under Section 304, the state can
collect then under the authority of the state statute.
A copy of the decision is attached below.
Attachment
cc: Gerald Emison, Director
Office of Air Quality Planning and -Standards
Alan w. Eckert
Associate General Counsel
Air and Radiation Division
John S. Seitz, Director
Stationary Source Compliance Division
Air Branch Chiefs/Team Leaders
Offices of Regional Counsel
Regions I-X
Air Compliance Branch Chiefs
Air Divisions
Regions I-X
-------
10.41
'J C - - ' '--">i\
UNITED STATES DISTRICT COURT^ " s''r-
EASTERN DISTRICT OF MICHIGA> .7 /
SOUTHERN DIVISION - FLINT "" ' 1?ie'"C
FRANK J. KELLEY, Attorney General
of the State of Michigan; and
FRANK J. KELLEY, ex rel, MICHIGAN
NATURAL RESOURCES COMMISSION,
MICHIGAN AIR POLLUTION CONTROL
COMMISSION, and DAVID F. HALES,
Director of the Michigan Department
of Natural Resources,
Plaintiffs,
v.
ALBAR INDUSTRIES, INC.,
Defendant.
'•ft:
]§3 fr'*£•'•
L-j * '* £ A
r/<
r^
•/
t o r
l>.i. £i-^'^^- Co,.
CIVIL ACTION
NO: 88-CV-40302-FL
MEMORANDUM 0?IXI OX A.VD CR
Before the Court is defendant's Motion to Disniss, October 25,
19»oo. This motion is DENIED; plair.ticcs have standing to sue. The
notion is also DENIED as to civil per.alties, subject to the con-
dition herein specified.
I. STANDING
This is an action brought by the State of Michigar. pursuant to
$ 304 of the Clean Air Act, 42 U.S.C. $ 76U4, against Albar
Industries, a spray painting concern, for enforcement of air pollu-
tion standards. At issue is whether the state may sue under the
"citizen suits" provision of the Act, which permits commencement of
-------
civil actions by any "person." Id. "Person" is defined in the Act
as including a state. § 302, 42 U.S.C. $ 7602(e).
The Court is persuaded by plaintiffs' argument that the inquiry
should end-with the plain language of the statute. The United
States Supreme Court rejected a similar argument against state use
•
of § 304 in Hancock v. Train, 426 U.S. 167, 196, 48 L.Ed.2d 555, 575
(1976). The Court wrote that the "only means provided by the Act"
for the states to enforce § 118 of the Act against federal facili-
ties was via a §§ 304 and 302(e) "citizen suit."
Congress overruled the substance of the Hancock decision the
following year by enacting an amendment to § 118, which required the
states to sue federal installations for air quality violations by
means of state enforcement actions. Defendant here argues tha~ the
-------
10.41
is authorized. See also Alabama ex rel. Graddick, 648 F.Supp. 1208,
1210 (M.D. Ala. 1966); New York v. Thomas. 613 F.Supp. 1473 (D.C.
D.C. 1985).
Defendant's other arguments to the contrary are unconvincing.
Defendant urges that ambiguity exists, sufficient to justify judi-
cial interpretation of the otherwise plain language of the statute,
by pointing to a provision requiring that prior to instituting suit,
a citizen plaintiff must notify the federal Environmental Protection
Agency (EPA), the violator, and the state. Defendant argues from
this that a reading of "person" to include a state would render this
provision nonsensical: it would require a. state to notify itself.
Although perhaps not a model of statutory draftsmanship, this is not
necessarily as illogical a situation as defendant would have it.
First, the notice provision weald still require a stat= plaintifi to
inform the violator and the EPA. Second, as plaintiff argues, the
suing agency might need to notify other agencies within the state
entity that also have an interest in the litigation. Neither of
these is an exercise in nonsense.
Moreover, as a practical matter, defendant has failed to con-
vince this Court that the states, as primary enforcers of the Clean
Air Act but aided by federal monies and leadership, 42 'J.S.C.
§£ 7401(a)(3) and (4), should not be permitted to retain the choice
between the state or the federal forums. Defendant's policy
argument—that the federal courts should not be burdened with this
litigation—is unpersuasive. Therefore, it is hereby found that the
state of Michigan has standing in federal court to sue a private
- 3 -
-------
corporation under the citizen suit provision of the Clean Air Act.
The Court will, accordingly, exercise its pendent jurisdiction to
decide plaintiff's state claims arising out of the same operative
core of facts.
II. CIVIL PENALTIES
Defendant has moved to strike plaintiffs request for civil
penalties on the ground that the statute does not authorize such
recovery to citizen suit plaintiffs. The Court agrees insofar as
the federal statute is concerned, but will permit penalty claims
jnder the state statute ir such are provided for.
In a citizen suit brought under § 304, the plain language of
the statute empowers a court only to order compliance with the
c.-ission standards or limitations sought to be enforced. $ 304. 42
•J.S.C. $ 7604(a). The statute reads in pertinent part, "[t]he
district courts shall have jurisdiction ... to enforce . . . an
emission standard or limitation, or such an order [issued by the
EPA Administrator or the state], or to order the Administrator to
perform such act or duty, as the case may be." As another district
cojrt has stated, "neither the plain language nor the legislative
history of Section 304 can support the broad construction [--that
federal courts can transplant state monetary penalties into the
federal statute—] which plaintiff seeks to have placed thereon."
Illinois v. Commonwealth Edison Co., 490 F.Supp. 1145, 1150-51 (N.D.
111. 1980); see also California v. Department of the Xavy, 431
F.Supp. 1271, 1293 (M.D. Cal. 1977). Thus, there is no federal sta-
tutory authority for the granting of civil penalties.
- 4 -
-------
10.41
There is authority, however, for the imposition in federal
court of sanctions as they may be provided in state law. The Court
is persuaded that such is the case, for the reasons stated in
Graddick. £48 F.Supp. at 1211. In that case, the court wrote that
"[gliven the complex and interrelated nature of state and federal
regulations governing air pollution and the concurrent authority to
enforce said regulations shared by both the state and federal agen-
cies, [Alabama] cannot be said to be attempting to enforce state
regulations without also being found to be enforcing federal
regulations.*
Plaintiffs' right to pursue civil enforcement penalties, there-
fore, exists insofar as it is grounded in state law. As such,
plaintiffs may pursue penalties in this forun, on the condition that
plaintiffs here file an enumeration of Michigan statutory authority
for such penalties within ten days of the date c: this writing.
Based on that condition, defendant's Motion to dismiss the penalties
relief is DENIED.
SO ORDERED.
Dated:
t I
STEWART A. NEX3LATT
United States District Judge
* The Court notes defendant's attempt to distinguish Graddick from
the case at bar, by which defendant argues that the Graddick defen-
dant was a federal facility governed by sJ 118 o: the Act. The
Graddick court's written consideration of § lie's legislative
history, which indeed does not apply to this case, was primarily
devoted to whether the government had waived sovereign immunity.
This factor does not affect Graddick's reasoning with regard to the
interrelatedness of the state and federal reyulatory schemes,
which, as noted, has persuaded the Court.
-------
CERTIFICATION OF SERVICE
UNITED STATES OF AMERICA ) 88-40302
) SS CASE -NO>
EASTERN DISTRICT OF MICHIGAN )
I, the undersigned, hereby certify that I have /on the
7th February 9
day of , 198 , nailed a copy of the
Memorandum Opinion and Order . jn tne foregoing
cause, pursuant to Rule 77(d). Fed.R.Civ.P., to the following
persons at the addresses given:
Stewart H. Freeman
Assistant Attorney General
Environmental Protection Division
720 Law Building
525 West Ottawa
Lansing, MI 48913
Joseph M. Polito, Esq.
William A. Kichers, II, Esq.
Mark R. Werder, Esq.
Robert A. Hykan, Esq.
2290 First National Bldg.
Detroit, MI 48226
C'l ^ >- -f '.^—-•:.
Colette J. Lehoux, Secretary to
Stewart A. Newblatt
United States District Judge
-------
10.42
10.42
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 9, 1989
Order Denying Review of PSD Permit for Spokane Regional Waste-to-
Energy Project
William K. Reilly, Administrator, EPA
Citizens for Clean Air and Council for Land Care and Planning
Petitioners requested review of PSD permit because BACT for NO ,
which should be thermal de-NOx, was not required, and because fuel
cleaning and separation, and recycling, were not adequately
considered as emission reduction techniques. Spokane agreed to
install thermal de-NOx before this opinion was written, so the
court dismissed that petition. The Administrator stated that
petitioners did not make an adequate case for reviewing the permit
on the other issues.
8.37 [Hard Copy]
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10.43
10.43 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 19, 1989
Order on Petition for Review, Nibbing Taconite Co.
William K. Reilly, Administrator, EPA
David Kee, Director Air and Radiation Services Division, Region V,
Gerald L. Willet, Commissioner, Minn. Pollution Control Agency,
and Others
This document remands to the Minnesota Pollution Control Agency
review of four issues raised by EPA Region V in a petition for
review of PSD permit authorizing Hibbing Taconite Company to
modify its furnaces to burn petroleum coke as a fuel. Review of
three issues raised by EPA was denied as described below.
1. Bact for SO, - discussion of fuel chosen for "base case" in
analyzing BACT for SO,, cost comparison in BACT analyses,
appropriate justification of fuel choice in defining viable
control strategy, and the need for a detailed description and
engineering analysis of the planned emissions reduction
system. (Remanded)
2. Unregulated pollutants (Denied)
3. Prescribed emission limits for entire life of the permit
(Remanded)
4. BACT for PM (Remanded)
5. Ambient Air and Public acess (Remanded)
6. BACT for CO (Denied)
7. Preconstruction monitoring (Denied)
8.39 [Hard Copy]; 7.8; 11.13
-------
10.44
10.44
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
August 2, 1989
Administrative Order Denying Review of an Amended PSD Permit for a
Mass-Burn Municipal Waste Incinerator for Huntington, NY
William K. Reilly, Administrator, U.S. EPA
Citizens for a Livable Environment and Recycling
The order states that the amended permit does require the facility
to use BACT, and the BACT analysis is not deficient. Petitioner
confused "de minimis"
8.40 [Hard Copy]
emissions limits with limitations for NO,
-------
10.45
10.45 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
October 17, 1989
Ambient Air
Robert D. Bauman, Chief
S02/Particulate Matter Programs Branch (MD-15)
Gerald Fontenot, Chief
Air Programs Branch, Region VI (6T-A)
This memo responds to the August 24, 1989, memo from Hathaway to
Calcagni [6.27].
(a) PSD modeling by a permit applicant can discount the
contribution of a background source to the predicted
concentration as described.
(b) Where a proposed source has a significant impact on any
increment violation, the permit should not be approved unless
the increment violation is corrected prior to operation of
the proposed source. (See also July 15, 1988, memo from
OAQPS to Region 6 [6.23]).
6.29 [Hard Copy]
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10.46
10.46
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 2, 1990
Order Denying Review of Revised Permit Determination for Spokane
Regional Waste to Energy Project
F. Henry Hubicht, Acting Administrator, EPA
Lisa J.Kilian, Joan Honican, Citizens for Clean Air, and the
Council for Land Care and Planning
This order denies the appeals filed against the revised permit for
the Spokane Regional Waste to Energy Project. The Washington
State Department of Ecology did not act inappropriately in not
holding a public hearing. Questions relating to State
requirements are beyond the purview of this proceeding. The
recycling issue is again rejected as a subject for review for the
same reasons as stated in the June 9, 1989, remand [8.37].
8.42 [Hard Copy]; 11.14
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10.47
10.47
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 4, 1990
Remand order concerning the denial of the PSD application of Bio
Energy Corporation, West Hopklnton, NH
William K. Reilly, Administrator, EPA
Timothy Williamson, Office of Regional Counsel, US EPA, Region I,
William Dell Orfano, President, Bio Energy Corporation, and others
All matters regarding the PSD Permit Denial Decision dated
November 15, 1989, concerning Bio Energy's PSD application for its
wood-fired power plant are remanded to Region I so that further
comments and technical information may be received to supplement
the administrative record.
11.15 [Hard Copy]
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0S8I
912
80:£I 06. fl
10.48
E. REED. CHAIRMAN
CHAPLOTTESVILLE
TOOTHY c.BAfttow.
VlOE CHAIRMAN
VMGMA BEACH
SAM C. BROWN. JR.
VWSMIA BEACH
RICHARD L. COOK
nCHMONO
BTO-033-90
COMMONWEALTH of VIRGINIA
Department of Air Pollution Control
ROOM B01. NINTH STREET OFFICE BUILDING
POST OfflCE BOX 10089
RICHMOND. VIRGINIA 33240
WALLACE N. OAVIS
exBCunve DIRECTOR
nCHMONO
MX «(804) 2254939
TOO •
February 16, 1990
Mr. William c. Campbell, in
cogentrix, Inc.
9405 Arrovpoint Boulevard
Charlotte, NC 28217
Dear Mr. Campbell:
We know that you are anxious to expedite the processing of
your PSD permit for a power-generation facility. We, too, are
committed to that goal, but we must work together to achieve it.
In order to enhance the process, we have developed target
emission guidelines which we believe are both technically and
economically feasible for coal-fired facilities. Each applicant
must do a copnlete PSD review and thorough study and documentation
of "top-down" Best Available Control Technology. This should
include starting with the most stringent control option. The
technical and economic feasibility of that option should be
carefully reviewed and documented. If you believe that such a
control option is inappropriate for your facility, then select the
next "best" control option and repeat the technical and economic
feasibility analysis. This process should continue until a control
option cannot be discarded on technical or economic feasibility
issues. BACT is a case-by-case determination and it remains the
responsibility of the applicant to demonstrate the appropriate
option for his facility.
A copy of a typical outline for a PSD submittal is enclosed
for your information and use.
-------
0981 L6S SI2 60:Sl 06l
LTMTTS FOR COAL-FTRED UNTTS
Total Suspended Particulates (TSP) 0.020 Ibs/nillion btu
PM-10 0.018 Ibs/aillion btu
0.16 Ibs/million btu
Miniaum SQz scrubber efficiency 92%
NOX 0.3 Ibs/aillion btu
co 0.20 Ibs/nillion btu
VOC 0.03 Ibs/aillion btu
If you have any questions or comments on any of the above,
please contact John H. Daniel, Jr. (804) 786-3248 or Pan Faggert
(804) 786-5481.
Sincerely,
Wallace H. Davis
Executive Director
cc: Asst. Executive Director - Technical Operations
Director, Div. of Technical Evaluation
Regional Directors
Director, Div. of Computer Services
jd-033
-------
0581 i6£ £12
06.
10.48
BTO-026-90
TYPICAL OUTLINE
for
PSD PERMIT APPLICATION
TARI P np CONTENTS
1.0 INTRODUCTION
1.1 Purpose Project
1.2 Need for Project and Site Selection Process
1 .3 Project Description
1 .4 Applicable Regulations
1 .5 BACT Analysis
1.6 Air Quality Impacts
1.7 Additional Impacts
2.0 BACKGROUND
2.1 Need for Project
2.2 Site Selection Process
3.0 PROJECT DESCRIPTION
3.1 Description of Facilities
3.1.1 Combustion/Generation Systems
3.1.2 Exhaust Systems & Pollution Control Equipment
3.1.3 Materials Handling and Storage Systems
3.1.3.1 Coai
3.1,3.2 FGD System Reagents
3.1.3.3 Ash and FGD Waste
3.1.3.4 Fuel Tanks
3.1 .4 Cooling Water Systems
3.1.5 Transportation Systems
3.1 .6 Miscellaneous Sources of Air Pollution
3.1.6.1 Auxiliary Boiler
3.1 .6.2 Emergency Generators
3.1 .6.3 Roads
3.1.6.4 Other Sources
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S00'39bd 0S8I i6S 512
3.1.7 Construction Facilities
3.2 Fuels and Raw Materials
3.2.1 Coal
3.2.1.1 Sources
3.2.1.2 Specifications
3.2.2 Oil
Sources
3.2.2.2 Specifications
3.2.3 FGO System Reagents
3.2.3.1 Sources
3.2.3.2 Specifications
3.3 Site Description
3.3.1 Location
3.3.2 Class I and Nonattainment Areas
3.3.3 Topography
3.3.4 Climatology
3.3.5 Land Use
3.3.6 Demography
3.4 Project Schedule
3.5 Plant Operation
4.0 APPLICABLE REGULATIONS
4.1 PSD Regulations
4.1.1 Area Classifications
4.12. Source Definition
4.1.3 Potential Emissions
4.1.4 PSD Review Requirements
4.2 Nonattainment Regulations
4.3 New Source Permit Requirements
4.4 New Source Performance Standards
4.4.1 Emission Limitations
4.4.2 Continuous Emission Monitoring Requirements
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0S810I:sl 06
4.5 Standards for Noncriteria Pollutants
4.6 Other Requirements
4.7 Proposed Legislation
4.7.1 State and Local Legislation
4.7.2 Federal Legislation
4.7.2.1 Acid Rain
4.7.2.2 Hazardous Air Pollutants
4.7.2.3 Dispersion Techniques
4.7.2.4 Ambient Air Quality Standards
4.7.2.5 New Source Performance Standards
4.7.2.6 Visibility
5.0 BEST AVAILABLE CONTROL TECHNOLOGY ANALYSES
5.1 Introduction
5.1.1 Purpose
5.1.2 Guidance for SACT Analysis
5.1.3 Selection Procedure
5.1.4 Parameters and Assumptions for Analysis
5.1.4.1 Fuels
5.1.4.2 Operations Data and Assumptions
5.1.4.3 Economic Analysis Assumptions
5.1.5 Status of Engineering
5.2 Sulfur Dioxide
5.2.1 Control Technology Alternatives
5.2.2 Fuel Selection
5.2.3 Technical Considerations
5.2.4 Economic Impacts
5.2.4.1 Capital Costs
5.2:4.2 Operation and Maintenance Costs
5.2.4.3 Auxiliary Power Costs
5.2.4.4 Reagent Costs
5.2.4.5 Waste Disposal Costs
5.2.4.6 Economics Summary
5.2.5 Energy Impacts
5.2.6 Environmental Impacts
5.2.7 BACT Determination
-------
i0B-39Wd 0S8I
SIS "'SI 06
5.3 Particulate Matter (Stack Emissions)
5.3.1 Control Technology Alternatives
5.3.2 Economic impacts
5.3.3 Energy Impacts
5.3.4 Environmental impacts
5.3.5 BACT Determination
5.4 Participate Matter (Non-Stack Emissions)
5.4.1 Control Technology Alternatives
5.4.2 Economic impacts
5.4.3 Energy Impacts
5.4.4 Environmental Impacts
5.4.5 BACT Determination
•S.5 FGD System Reagent Handling and Storage
5.5.1 Control Technology Alternatives
5.5.2 Economic impacts
5.5.3 Energy Impacts
5.5.4 Environmental Impacts
5.5.5 BACT Determination
5.6 Ash & FGD System Waste Handling & Storage
5.6.1 Control Technoioty Alternatives
5.6.2 Economic impacts
5.6.3 Energy Impacts
5.6.4 Environmental Impacts
5.6.5 BACT Determination
5.7 Nitrogen Oxides
5.7.1 Control Technology Alternatives
5.7.2 Economic impacts
5.7,3 Energy Impacts
5.7.4 Environmental Impacts
5.7.5 BACT Determination
5.8 Carbon Monoxide
5.9 Ozone (Volatile Organic Compounds)
5.9.1 Control Technology Alternatives
5.9.2 Economic impacts
5.9.3 Energy impacts
5.9.4 Environmental Impacts
5.9.5 BACT Determination
5.10 Sulfuric Acid Mist
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800-39bd 0981 i6S 912 II:SI 06' *l * 10.48
5.11 Trace Elements
5.11.1 Lead
5.11.2 Beryllium
5.11.3 Fluorides
5.11.4 Mercury
5.12 Other Noncriteria Pollutants
6.0 AIR QUALITY ANALYSES
6.1 Air Quality Analysis Objectives
6.2 Site Characteristics
6.2.1 Station Design Data
6.2.1.1 Primary/Fugitive Emissions
6.2.1.2 Non-Criteria Pollutant Emissions
6.2.1.2 GEP Stack Height/Downwash Analysis
6.2.2 Other Source Data
6.2.2.1 Impact Area Determination
6.2.2.2 Source Selection
6.2.2.3 Downwash Analysis
6.2.2.4 Emissions inventory
6.2.3 Urban/Rural Classification
6.2.4 Background Concentrations
6.2.4.1 On-Site Air Quality Monitoring
6.2.4.2 Regional Air Quality Monitoring
6.2.5 Regional Air Quality Attainment Status
6.3 Model/Options Selection
6.3.1 Model Selection
6.3.2 Data Base Requirements
6.3.3 Receptor Grid Selection
6.3.3.1 Intermediate and Complex Terrain
6.3.3.2 Coarse Polar Grid
6.3.3.3 Fine Polar Frid
6.3.3.4 Discrete Receptors
6.3.3.5 Receptor Elevations
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0581
6.4 Meteorological Data Base
6.4.1 On-Stte Meteorological Data Collection
6.4.2 On-SIte Data Enhancements
6.4.3 Off-Site Data Requirements (Mixing Heights)
6.4.4 Combined Processed Data Base
6.5 Impact Analyses
6.5.1 Worst Case Load
6.5.2 Model Predictions
6.5.2.1 Primary Pollutants impact
6.5.2.2 Non-Criteria Pollutants Impact
6.5.3 PSD Increment Consumption
6.5.4 NAAQS Compliance Demonstration
6.5.5 Fugitive Dust Impacts
7.0 ADDITIONAL IMPACTS ANALYSIS
7.1 Growth Analysis
7.2 Impact on Soils and Vegetation
7.2.1 Sulfur Dioxide
7.2.2 Participates
7.2.3 Nitrogen Oxides
7.2.4 Carbon Monoxide
7.2.5 Lead
7.2.6 Beryllium
7.2.7 Mercury
7.2.8 Fluorides
7.2.9 Suifuric Acid Mist
7.3 Visibility impact
7.3.1 Purpose
7.3.2 Methodology
7.3.3 Screening Analysis Procedure
7.3.4 Screening Analysis Results
8.0 REFERENCES
APPENDICES
A. State Registration/Application Forms
B.1 Potential Emission Calculations
B.2.1 Modeling - Stack Emission Calculations
-------
0I0'39dd 0S8I i6S StE 2I:S1 0B
B.2.2 Modeling • Non-Stack Emission Calculations
B.2.3 Modeling - Trace Element Emission Calculations
C. Modeling Plan
0. Emissions inventory and Screening Procedure
E. Emissions Inventory Data Sheets
F. Monitoring Plan
G. Ambient Air Quality Monitoring Data
H. On-SIte Meteorological Monitoring Data
I. Monitoring Quality Assurance Program
J. Meteroiogicai Data Base for Modeling
K. Mixing Height Computation Methodology
L1-L15 Computer Modeling Diskettes
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10.49
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION III
841 Chestnut Building
Philadelphia. Pennsylvania 19107
APR. 25 1990
Mr. John M. Daniel, Jr., P.E.
Assistant Executive Director
Department of Air Pollution Control
Room 801
Ninth Street Office Building
Richmond, VA 2324(
Dear Mr. Daniel:
The purpose/ of this letter is to respond to your letters,
dated February 6, 1990 and February 9, 1990, regarding the issuance
of prevention of significant deterioration (PSD) permits in
attainment areas where violations have been modeled. The enclosed
attachment outlines the procedures that must be followed when
issuing PSD permits in these areas.
If you have any questions, please do not hesitate to call me
at (215) 597-9075.
Sincerely,
Jl
a L. Spi
rograms Branch
Enclosure
cc: Wallace Davis, Executive Director
Virginia Department of Air Pollution Control
Richmond, VA
James Sydnor
Assistant Executive Director
Virginia Department of Air Pollution Control
Richmond, VA
-------
Attachment
A. PROCEDURES FOR ISSUING PSD PERMITS TO SOURCES WITH NO
SIGNIFICANT IMPACTS IN AREAS WITH MODELED VIOLATION(S)
FROM EXISTING SOURCES
The source seeking the PSD permit may be permitted,
constructed, and allowed to operate at its permitted,
enforceable allowable emission rate because at that emission
rate, the source has no significant impact. Although the
State "owes" EPA a revision to its SIP to correct the modeled
violation(s) from the existing source(s), that SIP revision
and the issuance of the PSD permit are independent events.
(Note: The existing sources are to be modeled in accordance
with Table 9-1 of EPA's Guideline for Air Quality Models.
Nothing in the WEPCO v. EPA case changes this requirement).
B. PROCEDURES FOR ISSUING PSD PERMITS TO SOURCES WITH SIGNIFICANT
IMPACTS IN AREAS WITH MODELED VIOLATIONS FROM EXISTING SOURCES
AND FOR PROCESSING THE ASSOCIATED SIP REVISIONS
1. The source seeking the PSD permit may accept permit
conditions such that it, in and of itself, no longer has
a significant impact.
or
2a. Reductions or mitigating measures must be identified at
existing sources such that modeling the PSD source and
these existing sources indicates no significant
impact(s).
2b. This identification of the reductions at existing sources
and the modeling demonstrating no significant impact(s)
must be done prior to and as part of the preliminary
determination on the PSD application to afford the
opportunity for public comment.
2c. The reductions or mitigating measures necessary at the
existing sources must be made federally enforceable.
Until and unless the State has an approved SIP operating
permit program, the only means available for making the
reductions at the existing sources federally enforceable
is through source-specific SIP revisions. The state must
formally commit to submit the necessary SIP revision(s)
to EPA at the time it issues the preliminary
determination.
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10.49
2d. Those SIP revisions must be adopted by the state and
approved by EPA prior to the time the PSD source
commences operation. The State must follow all of the
procedures for submittal of a SIP revision including
public notice and hearing. The State could
simultaneously offer public notice and hearing on the
preliminary determination of the PSD permit and on the
SIP revisions for the existing sources. The public
notice must be explicit and a public hearing must be held
because there are SIP revisions involved. (Public
participation for PSD permits usually requires only the
opportunity for public hearings.)
2e. The PSD permit must contain the following conditions:
1) Until and unless the (STATE) has imposed the
necessary restrictions on (EXISTING SOURCE NAMES) to
reflect the Scenario modeled as part of this permit
review demonstrating no significant impact and those
restrictions have been approved by the United States
Environmental Protection Agency for incorporation
into the approved SIP, the (PSD SOURCE NAME) may not
commence operation except as conditioned below:
2) (Here conditions should be imposed on the source
seeking the PSD permit such that it, in and of
itself, would have no significant impact.)
NOTE: In the past, PM and S02 SIP revisions setting new SIP
allowable emissions have required technical support consisting of
full attainment demonstrations. In general, EPA expects that the
SIP revisions submitted demonstrate no significant impact will also
demonstrate no violations of NAAQS. However, there may be isolated
cases where two rounds of SIP revisions occur. The first SIP
revision would enforce the reductions necessary at existing sources
to demonstrate no significant impact (when modeled with a source
seeking a PSD permit). Where this SIP revision does not
demonstrate protection of the NAAQS (i.e., the elimination of all
predicted violations), the State still "owes" EPA a SIP revision
to correct the modeled violations of the NAAQS and may have to once
again redefine the allowable emissions at one or more of the same
sources affected in the previous SIP revision. The commitment
must also be made at the time the state issues its preliminary
determination to issue the PSD permit.
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, EL -"
10.50
BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
In the Matter of: )
Hadson Power 12 — Altavista )
) PSD Appeal Nos. 90-2,
) 90-3, 90-4, & 90-5
Applicant )
DAPC Registration No. 30859 )
ORDER DENYING REVIEW
Larry Hendricks (Appeal No. 90-2), Herbert Bolin (Appeal No.
90-3), Lena C". Frazier (Appeal No. 90-4), and Roy E. St. John,
Jr. (Appeal No. 90-5) filed separate requests for review of a
Prevention of Significant Deterioration (PSD) permit that author-
izes construction of a steam electricity cogenerating facility at
Altavista, Virginia. The Virginia Department of Air Pollution
Control (DAPC) issued the permit to the applicant, Hadson Power
12, on February 21, 1990, pursuant to a delegation of authority
from EPA Region III, Philadelphia, Pennsylvania. Because of the
delegation, DAPC's permit determination is subject to the review
provisions of 40 CFR §124.19, and any permit it issues will be an
EPA-issued permit for purposes of federal law. 40 CFR §124.41;
45 Fed. Reg. 33,413 (May 19, 1980).
DAPC responded to the petitions on May 25, 1990, arguing in
each instance that the grounds for review alleged in the
petitions did not meet the threshold for review established by
the rules governing this proceeding. DAPC also noted that in
-------
2
numerous instances the issues raised by two of the petitioners
(Bolin and St. John) had not been raised at the public hearing or
during the public comment period and, therefore, were not
eligible for consideration on appeal. DAPC is correct on both
counts:
First, a petition must contain a statement demonstrating
"that any issues being raised were raised during the public
comment period (including any public hearing) to the extent
required by these regulations * * *." 40 CFR §124.19(a). The
latter, in turn, require participants in the permit proceedings
to "raise all'reasonably ascertainable issues and submit all
reasonably available arguments supporting their position by the
close of the public comment period * * *." 40 CFR §124.13.
Collectively, the purpose of these regulations is to ensure that
all matters are first raised with the permit issuer. In this
manner, the permit issuer can make timely and appropriate
adjustments to the permit determination, or, if no adjustments
are made, the permit issuer can include an explanation of why
none are necessary. As explained in the preamble to the
regulations, "[t]he later stages [of the permit proceedings] are
appellate in nature and new issues should not be raised on
appeal." 45 Fed. Reg. 33411 (discussing §124.13). None of the
petitions contains the requisite statement under 40 CFR
§124.19(a), and many of the issues raised by two of the
petitioners, as DAPC correctly alleges, had not in fact been
raised with the permit issuer in a timely manner. Those issues
-------
10.50
3
(identified in DAPC's response to the petitions) are therefore
ineligible for review on appeal.
Second, as to the few issues that satisfy the foregoing
requirements, DAPC is correct in asserting that they do not meet
the threshold for review. Under the rules, there is no appeal as
of right from the permit determination. Ordinarily, a petition
for review of a PSD permit determination is not granted unless it
is based on a clearly erroneous finding of fact or conclusion of
law, or involves an important matter of policy or exercise of
discretion that warrants review. The preamble to the regulations
states that "this power of review should be only sparingly
exercised," and "most permit conditions should be finally
determined at the Regional [state] level * * *." 45 Fed. Reg.
33,412 (May 19, 1980). The burden of demonstrating that the
permit conditions should be reviewed is therefore on the peti-
tioner. Upon consideration of the petitions, and for the reasons
stated in DAPC's response, I conclude that none of the
petitioners has met his or her burden, respectively, of showing
that the permit should be reviewed.
Accordingly, for the reasons stated above, review of DAPC's
permit determination is denied.
So ordered.
Dated: JUL 3 0 1990
William K.
Administrator
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CERTIFICATE OF SERVICE
I hereby certify that copies of the foregoing Order Denying
Review, PSD Appeal Nos. 90-2, 90-3, 90-4, and 90-5, were mailed
to the following in the manner indicated.
First Class Hail Wallace N. Davis
Postage Prepaid: Executive Director
Virginia Department of
Air Pollution Control
Ninth Street Office Building
200-2003 N. North Street
Richmond, VA 23219
Harcia Mulkey
Regional Counsel
U.S. EPA - Region III
841 Chestnut Street
Philadelphia, PA 19107
Herbert J. Bolin
1614 Avondale Dr
AltaVista, VA 24517
Larry Hendricks
1114, 8th St.
AltaVista, VA 24517
Lena C. Frazier
1117 7th St.
AltaVista, VA 24517
Roy E. St. John, Jr.
Rt. 3 Box 400
Hurt, Va 24563
Douglas G. White
Assistant Regional Counsel
U.S. EPA - Region III
841 Chestnut Building
Philadelphia, PA 19107
Dated: ^
j'cr" Brenda H. Selden, Secretary
JUL 3 1 1990 to the chief Judicial Officer
-------
10.51
10.51
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 23, 1987
Opinion in U.S. v Louisiana-Pacific Corporation, D. Colo.,
Interpreting Certain PSD Regulations
Thomas L. Adams, Jr.
Assistant Administrator for Enforcement and Compliance Monitoring
J. Craig Potter for Air and Radiation (ANR-443)
This memo summarizes the October 30, 1987, opinion by Judge Arraj
of the US District Court in Colorado regarding summary judgement
and legal matters involved in the case of U.S. vs. Louisiana-
Pacific Corporation (LPC). Judge Arraj denied motions for summary
judgement, finding that a trial was needed to resolve questions of
fact. Two legal issues are discussed. First, EPA can not sue LPC
for the NOV of major modification rules, because the major source,
upon which the major modification must be based, did not exist for
more than 30 days after the NOV was issued (as required by Section
113(b)(2) of the Clean Air Act). EPA's second NOV to LPC for
construction of a major stationary source must be heard at the
trial. Second, state permit limitations can not be a defense for
a source if they were not in effect when an alleged violation
commenced. Further, restrictions on actual, [annual] emissions,
alone, are not appropriate as a consideration in determining a
source's potential to emit.
2.27 [Hard Copy]; 3.29; 14.9
-------
10.52
10.52 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
December 31, 1987
Request for Administrator to Initiate Review of PSD Permit for
Canideri County Resource Recovery Facility
Christopher J. Daggett
Regional Administrator
Lee M. Thomas
Administrator
Region II requests review of a PSD permit issued for construction
of a resource recovery facility because no emission limit was
BACT for PM.n was not adequately addressed, and
included for PM1(J,
comment
CR:
no public
December 7, 1987;
1987.
8.50 [Hard Copy]; 11.18
10 .,
on PM.n occurred.
new NAAQS for PM
10
The NJ DEP issued the permit
were promulgated on July 1,
-------
11. PSD
Permit Changes/Extensions/Expiration
-------
11.9
11.9
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 31, 1987
Request for Administrator to Initiate Review of PSD Permit for
Camden County Resource Recovery Facility
Christopher J. Daggett
Regional Administrator
Lee W. Thomas
Administrator
Region II requests review of a PSD permit issued for construction
of a resource recovery facility because no emission limit was
included for PM10, BACT for PM10 was not adequately addressed, and
no public comment on PM.0 occurred. The NJ DEP issued the permit
December 7, 1987; new NAAQS for PM10 were promulgated on July 1,
1987.
8.24 [Hard Copy]; 10.31
-------
11.10
11.10
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 31, 1988
Transmittal of OAQPS Interim Control Policy Statement
John S. Sietz, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
Regions I-X Division Directors
The memo provides final Interim Control Policy for developing
compliance schedules that require replacement or upgrading of
existing air pollution control equipment. During the interim
period, interim controls that may be more effective in reducing
emissions may be installed, if no delay results in installation
the final control equipment.
8.24 [Hard Copy]; 10.32
of
-------
11.11
11.11
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
April 22, 1988
Interim Policy on Stack Height Regulatory Actions
J. Craig Potter, Assistant Administrator for Air and Radiation
Air Division Directors, Regions I-X
A Court of Appeals ruling on January 22, 1988, remanded three
portions of EPA's stack height regulations. This memo discusses
the impact of these changes. Permits issued under fully approved
or delegated NSR and PSD programs prior to promulgation of revised
rules should provide notice that any permit is subject to review
and modification if the source is later found to be affected by
EPA's revised rules.
8.26 [Hard Copy]; 15.5; 28.5
-------
11.12
TRANSMITTAL NOTICE: 2-88
September 8, 1988
MEMORANDUM
SUBJECT: EPA Region IX Policy on PSD Permit Extensions
FROM: *
New .^Source Section
TO: Region IX States and Districts
NSR/PSD Permitting Contacts
Attached for your information is a copy of a guidance document
prepared by my staff addressing EPA Region IX's policy on PSD
permit extensions. The purpose of this document is to clarify
the criteria EPA examines prior to extending the 18-month com-
mencement of construction deadline found in 40 CFR 52.21 (r)(2).
At the heart of these requirements are assurances of current BACT
determinations and continued public participation when permits
are extended. Our hope is that this policy will enhance agree-
ment among permitting agencies in implementing PSD regulations.
We hope you will find this document helpful. If you have any
questions, please contact me at (415) 974-8249.
-------
11 "* *"
EPA Region IX i£C
New Source-Section
Guidance Document: 1-88
Date:-3/23/38 (PMF)
Revised: 7/6/88
EPA" REGION IX POLICY
ON
PSD PERMIT EXTENSIONS
The following is EPA Region IX's policy regarding
Prevention of Significant Deterioration (PSD) permit exten-
sions. This policy clarifies the subject of extensions of
the 18-month commencement of construction deadline found in
40 CFR 52.21 (r)(2).
The intent of this policy is to grant a permit
extension of the 18-month deadline to any good faith ap-
plication, provided the following requirements are met. If
these requirements are not met or if the extension request
is denied, the permit will become invalid after its expira-
tion date. The applicant, however, may choose to file a
project application for consideration as a new permit. In
general, the import of this policy is to ensure that the
proposed permit meets the current EPA requirements, and that
the public is kept apprised of the proposed action (i.e.
through the 30-day public comment period).
I. ADMINISTRATIVE REQUIREMENTS
(1) Submittal
An extension request must be submitted and
received by EPA-Region IX prior to the expiration
date of the permit.
(2) Justification
The extension request must include an acceptable
justification why the commencement of construction
did not commence as scheduled. The request must
also include a revised construction schedule which
assures that construction will be initiated during
the extension period and that construction will be
continuous.
(3) Certification
The extension request must be signed by a
responsible representative of the company
proposing the project.
II. TECHNICAL REQUIREMENTS
(1) BACT Analysis
A BACT reanalysis. is required in all permit exten-
sion requests, as in an application for a new PSD
-------
11.12
permit. It should also be-noted that, according
to a recent EPA policy, any new BACT determination
being prescribed for any regulated pollutant must
also .consider .the impact of the proposed BACT on
the emissions of unregulated or toxic pollutants.
(2) Additional PSD Review Requirement
A reanalysis of the PSD increment consumption and
air quality impacts is required. Interim source
growth in the area may have occurred and caused
significant degradation of air quality. Therefore,
the review agency is responsible for ensuring that
the source requesting an extension would not cause
or contribute to a PSD increment or NAAQS ex-
ceedances.
(3) New PSD Regulations or Requirements
It is not the Intent of this policy to exempt
projects from meeting new requirements. There-
fore, all new or interim PSD requirements will be
applied as in an application for a new PSD permit.
III. PROCEDURAL ISSUES
(1) Duration of Extensions
Due to concerns of growth rights and public par-
ticipation, EPA may limit an extension to 12 months,
or less, from the initial date the permit was
to expire. This allows for an extension, if
necessary, while ensuring that impacted States,
Districts and the public have control of their own
air resources and growth rights and that state-
of-the-art BACT will be employed.
(2) Public Comment
EPA will require the same public comment procedure
for extension requests as for permit modifications
including a 30-day public comment period. Requests
for public hearings and petitions for permit appeals
shall follow the-applicable procedures of 40 CFR
Part 124.
(3) Extensions of Later Units of Phased Multi-Unit Projects
Determinations for phased multi-unit projects are
very complex involving the independence or depen-
dence of a project and often different construction
dates. Therefore, please consult with EPA regarding
any questions addressing phased construction projects.
EPA Staff Contact:
Peter Fickenscher (415) 974-8226 (FTS 454-8226)
Section Chief:
Wayne Blackard (415) 974-8249 (FTS 454-8249)
-------
11.13
11.13
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 19, 1989
Order on Petition for Review, Hibbing Taconite Co.
William K. Reilly, Administrator, EPA
David Kee, Director Air and Radiation Services Division, Region V,
Gerald L. Willet, Commissioner, Minn. Pollution Control Agency,
and Others
This document remands to the Minnesota Pollution Control Agency
review of four issues raised by EPA Region V in a petition for
review of PSD permit authorizing Hibbing Taconite Company to
modify its furnaces to burn petroleum coke as a fuel. Review of
three issues raised by EPA was denied as described below.
1. Bact for SO, - discussion of fuel chosen for "base case" in
analyzing BACT for SO,, cost comparison in BACT analyses,
appropriate justification of fuel choice in defining viable
control strategy, and the need for a detailed description and
engineering analysis of the planned emissions reduction
system. (Remanded)
2. Unregulated pollutants (Denied)
3. Prescribed emission limits for entire life of the permit
(Remanded)
4. BACT for PM (Remanded)
5. Ambient Air and Public acess (Remanded)
6. BACT for CO (Denied)
7. Preconstruction monitoring (Denied)
8.39 [Hard Copy]; 7.8; 10.43
-------
11.14
11.14
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 2, 1990
Order Denying Review of Revised Permit Determination for Spokane
Regional Waste to Energy Project
F. Henry Hubicht, Acting Administrator, EPA
Lisa J.Kilian, Joan Honican, Citizens for Clean Air, and the
Council for Land Care and Planning
This order denies the appeals filed against the revised permit for
the Spokane Regional Waste to Energy Project. The Washington
State Department of Ecology did not act inappropriately in not
holding a public hearing. Questions relating to State
requirements are beyond the purview of this proceeding. The
recycling issue is again rejected as a subject for review for the
same reasons as stated in the June 9, 1989, remand (8.38).
8.42 [Hard Copy]; 10.46
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i 7 i .-
- i. 10
BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
In the Matter of: )
)
Bio Energy Corporation )
West Hopkinton, NH ) PSD Appeal No. 89-6
)
PSD File No. 041-121-NH07 )
REMAND ORDER
Upon the joint request of the Regional Administrator of
Region I of the U.S. Environmental Protection Agency and Bio
Energy Corporation, and pursuant to 40 CFR §124.19, all matters
regarding the PSD Permit Denial Decision dated November 15, 1989,
concerning Bio Energy's PSD application for its wood-fired power
plant located in West Hopkinton, New Hampshire, are remanded to
the Regional Administrator of Region I so that further comments
and technical information may be received to supplement the
administrative record.
All further action by the Administrator with respect to Bio
Energy's PSD appeal is stayed until Region I notifies the
Administrator that the Region has reached a final determination
in response to the remand.
Pursuant to this remand, Bio Energy will be allowed to
submit further information requested by the Region to supplement
the administrative record, and the Region will be allowed to
reopen the comment period and to consider revising its permit
determination .
-------
This remand to the Regional Administrator shall be without
prejudice to Bio Energy's rights under its Petition for Review by
the Administrator, and to the Regional Administrator's findings
in the final determination dated November 15, 1989, to the extent
the supplemental administrative record on remand does not address
or modify those findings.
Region I's determination on remand will be subject to review
under 40 CFR §124.19, and appeal of its decision on remand will
be required to exhaust administrative remedies under 40 CFR
§124.19(f).
So ordered.
Dated: [- L
" j.
A
William if. Reilly
AdBi/iistrator
-------
11.15
CERTIFICATE OF SERVICE
I hereby certify that copies of the foregoing Remand Order
in the matter of Bio Energy Corporation, PSD Appeal No. 89-6 were
mailed to the following persons in the manner indicated:
First class Mail
Postage prepaid:
Timothy Williamson
Office of Regional Counsel
U.S. EPA, Region I
John F. Kennedy Federal Building
Boston, MA 02203
Paul Keough
Acting Regional Administrator
U.S. EPA, Region I
John F. Kennedy Federal Building
Boston, MA 02203
Donald L. Anglehart
Cuddy, Lynch, Manzi & Bixby
One Financial Center, 43rd Floor
Boston, MA 02111
William Dell Orfano, President
Bio Energy Corporation
Route 127
Rural Route 2
Box 85
West Hopkinton, NH 03229
Dated:
2 ,
C-
Jrenda H. Selden, S^ecVetary
'to the Chief JudiciaVof f icer
-------
11.16
11.16 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 7, 1990
Designation of Issues for Review of Illinois EPA's Permit
Determinations Regarding World Color Press
William K. Reilly, Administrator, EPA
Richard J. Carlson, Director, Illinois EPA
This paper designates the issues to be briefed in the review of
World Color Press PSD permit determinations made by the Illinois
EPA. World Color Press and IEPA must reexaraine their reasoning in
stating, incorrectly, that an alleged absence of significant
photochemical reactivity of the facilities' VOC emissions was an
"environmental impact" that would justify less stringent
limitations.
8.46 [Hard Copy]
-------
11.17
11.17
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 9, 1990
Order on Motion for Stay on Appeal of Permits for Columbia Gulf
Transmission Company
William K. Reilly, Administrator, EPA
William C. Eddins, Director, Division for Air Quality,
Commonwealth of Kentucky
Susan Midgett, Director, Air Programs Branch, USEPA, Region IV,
and others
The Administrator hereby grants a stay to the appeal by EPA Region
IV of the PSD permit granted by the State of Kentucky to Columbia
Gulf Transmission Company. The stay enables the applicant to
supplement the state administrative record with new factual
information, which the applicant believes will confirm the wisdom
of the State's original permit determination. Further, the Region
may submit additional information to ensure that the BACT
determination is fully contemporaneous. If the permit is
subsequently revised, the public will be given the right to
comment.
8.47 [Hard Copy]
-------
11.18
11.18 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 31, 1987
Request for Administrator to Initiate Review of PSD Permit for
Camden County Resource Recovery Facility
Christopher J. Daggett
Regional Administrator
Lee W. Thomas
Administrator
Region II requests review of a PSD permit issued for construction
of a resource recovery facility because no emission limit was
included for PM.Q, BACT for PMJO was not adequately addressed, and
no public comment on PM1(l occurred. The NJ DEP issued the permit
December 7, 1987; new NAAQS for PM.n were promulgated on July 1,
1987.
8.50 [Hard Copy]; 10.52
-------
12. PSD
Relation to Nonattainment Program
-------
12.13
12.13
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
July 5, 1988
Air Quality Analysis for Prevention of Significant Deterioration
(PSD)
Gerald E. Emison, Director
Office of Air Quality Planning Standards (MD-10)
Thomas J. Maslany, Director
Air Management Division (3AMOO)
The memo relays a policy decision on the approach to use to
interpret dispersion modeling results to determine whether a
source will cause or contribute to a violation of NAAQS or PSD
increment. Under this approach, air quality concentrations are
projected throughout the proposed source's impact area, but do not
automatically cause a source to cause or contribute to a
violation. Instead, where a modeled violation is predicted,
further analysis is done to determine whether the impact is
significant at the point and time of the modeled violation.
6.22 [Hard Copy]
-------
12.14
12.14
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 28, 1988
Emission Offset Exemptions for Resource Recovery Facilities
Gerald A. Emison, Director, OAQPS
Conrad Simon, Director, Air and Haste Management Division, Region
II
States that have offset exemptions for RRF's in their SIP's should
initiate SIP revisions that would remove the exemptions. EPA will
no longer approve SIP's containing offset exemptions for RRF's
unless they contain an approved growth allowance. Appendix S is
no obstable to deletion of the exemptions, because it has been
largely superceded.
25.13 [Hard Copy]; 28.6
-------
12.15
12.15 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 17, 1989
Offset Exemption for Resource Recovery Facilities in Part 231 of
the New York SIP
Conrad Simon, Director, Air and Waste Management Division
Thomas M. Allen, PE, Acting Director, Division of Air Resources,
NY DEC
New York should voluntarily revise Part 231 of its SIP to remove
the offset exemption for resource recovery facilities. When NY
NSR rules were approved in 1980, the Agency had not promulgated
any Part 51 regulations giving requirements for approval of NSR
programs, and thus, was guided by Appendix S in its approval.
Appendix S has now been largely superseded by 40 CFR 51.165(a)
establishing the current requirements for NSR programs.
25.14 [Hard Copy]; 13.10; 15.8; 25.15; 28.9
-------
12.16
12.16
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 17, 1989
Response to Petition Regarding Emissions Offset Exemption for
Resource Recovery Facilities in Part 231 of the HYSIP
William Muszynski, Acting Regional Administrator, EPA Region 11
Eric Goldstein, National Resources Defense Council, Inc., Charles
S. Warren, Berle, Kass, and Case
EPA will hold petition regarding the exemption in question in
abeyance pending further EPA action on the current SIP call. This
is, in part, because the merits of the petitions are closely
linked with EPA's outstanding call for revisions to the NY SIP to
correct the State's failure to meet ozone and CO air quality
standards
25.15 [Hard Copy]; 13.11; 15.9; 28.10
-------
12.17
12.17 DATE: April 25, 1990
SUBJECT: Issuance of PSD Permits in Attainment Areas where Violations Have
Been Modeled
FROM: Marcia L. Spink, Chief, Air Programs Branch
TO: John M. Daniel, Jr., Asst. Executive Director, Virginia Department
of Air Pollution Control
DISCUSSION: The attachment to this letter provides procedures for issuing PSD
permits in areas with modeled violation(s) both to sources with no
significant impacts and to sources with significant impacts. In
the latter case, procedures for processing the associated SIP
revisions are also discussed.
CR: 10.49 [Hard Copy]; 6.31; 15.11
-------
13. PSD
Temporary Source/Portable Source/
Other Exemptions
-------
13.9
13.9
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
August 31, 1988 j j iinl
Whether Facilities That Use Glass Fibers Are Considered Glass
Fiber Processing Plants"
Dennis Crumpler, New Source Review Section
Noncriteria Pollutant Programs Branch
Michael A. Stawarz, NY DEC Region 5
Facilities that use glass fibers to manufacture other products,
such as fiberglass-reinforced composites, were not intended to be
included in the "glass fiber processing" category. "Glass fiber
processing" was intended to include only those facilities engaged
in making glass fiber.
3.31 [Hard Copy]
-------
13.10
13.10 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 17, 1989
Offset Exemption for Resource Recovery Facilities in Part 231 of
the New York SIP
Conrad Simon, Director, Air and Waste Management Division
Thomas M. Allen, PE, Acting Director, Division of Air Resources,
NY DEC
New York should voluntarily revise Part 231 of its SIP to remove
the offset exemption for resource recovery facilities. When NY
NSR rules were approved in 1980, the Agency had not promulgated
any Part 51 regulations giving requirements for approval of NSR
programs, and thus, was guided by Appendix S in its approval.
Appendix S has now been largely superseded by 40 CFR 51.165(a)
establishing the current requirements for NSR programs.
25.14 [Hard Copy]; 12.15; 15.8; 25.15; 28.9
-------
13.11
13.11
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 17, 1989
Response to Petition Regarding Emissions Offset Exemption for
Resource Recovery Facilities in Part 231 of the NYSIP
William Muszynski, Acting Regional Administrator, EPA Region 11
Eric Goldstein, National Resources Defense Council, Inc., Charles
S. Warren, Berle, Kass, and Case
EPA will hold petition regarding the exemption in question in
abeyance pending further EPA action on the current SIP call. This
is, in part, because the merits of the petitions are closely
linked with EPA's outstanding call for revisions to the NY SIP to
correct the State's failure to meet ozone and CO air quality
standards
25.15 [Hard Copy]; 12.16; 15.9; 28.10
-------
14. PSD
Allowable Constructive Activities Prior to
Permit Issuance
-------
14.9
14.9
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 23, 1987
Opinion in U.S. v. Louisiana-Pacific Corporation. D. Colo.,
Interpreting Certain PSD Regulations
Thomas L. Adams, Jr.
Assistant Administrator for Enforcement and Compliance Monitoring
J. Craig Potter
Assistant Administrator for Air and Radiation (ANR-443)
This memo summarizes the October 30, 1987, opinion by Judge Arraj
of the US District Court in Colorado regarding summary judgement
and legal matters involved in the case of U.S. vs. Louisiana-
Pacific Corporation (LPC). Judge Arraj denied motions for summary
judgement, finding that a trial was needed to resolve questions of
fact. Two legal issues are discussed. First, EPA can not sue LPC
for the NOV of major modification rules, because the major source,
upon which the major modification must be based, did not exist for
more than 30 days after the NOV was issued (as required by Section
113(b)(2) of the Clean Air Act). EPA's second NOV to LPC for
construction of a major stationary source must be heard at the
trial. Second, state permit limitations can not be a defense for
a source if they were not in effect when an alleged violation
commenced. Further, restrictions on actual, [annual] emissions,
alone, are not appropriate as a consideration in determining a
source's potential to emit.
2.27 [Hard Copy]; 3.28; 10.30
-------
14.9
14.9
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 23, 1987
Opinion In U.S. v. Louisiana-Pacific Corporation, D. Colo.,
Interp'reting Certain PSD Regulations
Thomas L. Adams, Jr.
Assistant Administrator for Enforcement and Compliance Monitoring
J. Craig Potter
Assistant Administrator for Air and Radiation (ANR-443)
This memo summarizes the October 30, 1987, opinion by Judge Arraj
of the US District Court in Colorado regarding summary judgement
and legal matters involved in the case of U.S. vs. Louisiana-
Pacific Corporation (LPC). Judge Arraj denied motions for summary
judgement, finding that a trial was needed to resolve questions of
fact. Two legal issues are discussed. First, EPA can not sue LPC
for the NOV of major modification rules, because the major source,
upon which the major modification must be based, did not exist for
more than 30 days after the NOV was issued (as required by Section
113(b)(2) of the Clean Air Act). EPA's second NOV to LPC for
construction of a major stationary source must be heard at the
trial. Second, state permit limitations can not be a defense for
a source if they were not in effect when an alleged violation
commenced. Further, restrictions on actual, [annual] emissions,
alone, are not appropriate as a consideration in determining a
source's potential to emit.
2.27 [Hard Copy]; 3.29; 10.51
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15. PSD
SIP Processing
-------
15.4
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON D C 20460
KOV i 8
OFFICE OF
GENERAL. COUNSEL
MEMORANDUM
SUBJECT: Approval of Local Implementation Plans
FROM: Howard J. Hoffman ^.../ ' ?• .-J"''^ -
Attorney
'^i i i '/
THRU: Peter H. Wyckoff ('?*• "U-j-'"|'
Assistant General Counsel '
Alan W. Eckert
Associate GeneraY^Counsel
TO: Bruce P. Miller
Chief, Air Programs Branch
Jewell Harper
Chief, Air and Toxics Law Branch
This memorandum contains our views on the four legal
questions concerning local implementation plans contained in
your memorandum dated June 18, 1987. I apologize for the
delay in responding, but many other very pressing issues
intervened.
Your questions concern local plans in three separate states,
each with their own factual and state law variations. Time
constraints have precluded a careful analysis of these facts
and state law issues. Some uncertainty remains in my mind
on such questions as (i) what precise changes would be made
in the state implementation plans ("SIPs") by virtue of EPA's
approval of the local plans; (ii) what authority does each
state actually have to enforce local regulations (or the
state equivalent); and (iii) what leverage could EPA bring to
compel state or local officials to do better. Accordingly,
this memorandum will discuss in a broad manner the questions
you have raised, and will not focus on any particular state
law provisions or actual factual circumstances. Also, the
memorandum does not necessarily reflect the views of other
headquarters offices. As you know, OAQPS, in particular, may
have strong doubts about the wisdom of approving some of the
local NSR regulations.
-------
-2-
Question 1; You asked whether the following basic position
is legally correct:
Providing that each local regulation is equal to the
corresponding EPA-approved State regulation, EPA may
approve the local regulations as merely a transfer of
enforcement authority, rather than as a substantive
revision to the SIP. Thus, the regulations would not
have to be accompanied by new attainment demonstrations,
SIP narratives, and other provisions of Part 51 applicable
to SIP revisions.
We think this position is legally defensible, assuming
that the record shows that the net effect of the approval
would be to strengthen the enforceability of the regulatory
regime as a whole, as your memorandum suggests it would.
First, EPA could argue that section 110(a) implicitly
authorizes the approval of a rearrangement in the SIP whenever
its net effect would be to improve the SIP in relation to the
requirements of section 110(a), regardless of whether the SIP
after the change would fully satisfy those requirements.
This argument finds support in several judicial decisions:
Michigan v. Thomas, 805 F.2d 176 (6th Cir. 1986); National
Steel Corp. v. Gorsuch, 700 F.2d 314 (6th Cir. 1983); Public
Service Co. v. EPA, 682 F.2d 626 (7th Cir.), cert denied 459
U.S. 1127 (1982). In any event, the Agency has embraced the
argument firmly in the Final Emissions Trading Policy Statement,
51 Fed. Reg. 43838 (December 4, 1986).
The recent opinion of the Ninth Circuit in Abramowitz v.
EPA, No. 84-7642 (9th Cir., Nov. 3, 1987) (petition for
rehearing pending), however, casts some doubt on the strength
of this argument. The opinion suggests that EPA must reject
an individual SIP revision if the SIP after the revision
would not fully satisfy the requirements of sections 110 and
172. See pages 14-15 of the attached copy of the opinion.
See also Connecticut Fund for the Environment v. EPA, 672
F.2d 998, 1011 (2d Cir. 1982), cert, denied sub nom., Manchester
Environmental Coalition v. EPA, 459 U.S. 1035 (1982). EPA is
asking the Ninth Circuit to clarify or reconsider its opinion.
In any event, its decision would have only persuasive, not
binding, significance for your situations.
Second, EPA could argue that the prior attainment
demonstration, in the case of a SIP that currently enjoys full
approval, is adequate support for approval of a SIP revision that
would strengthen the SIP, at least in the absence of any
conclusive evidence in the agency's possession to the contrary.
This is also an argument embraced by the Final Emissions
Trading Policy. We gather, however, that it may not be
applicable to many of your situations.
-------
15.4
-3-
Wnile the position you seek is defensible, it should be
accompanied by express statements that EPA, in approving the
local measures in question, is not intending to determine the
adequacy of the SIP as a whole or of the measure in relation
to applicable NSR or RACT requirements in the Act.
Question 2; You asked whether the following basic
position is legally correct:
The local regulations cannot be treated as separable
from the SIP which the State submits and implements, but
must be considered as part of it. Thus, the regulations
must be submitted by the State to EPA along with a
request that they be made a part of the SIP.
EPA may take the position that this statement is legally
correct. Section 110(a)(l) states: "Each State shall, after
reasonable notice and public hearings, adopt and submit to
the Administrator [an implementation plan]." (Emphasis added).I/
Similarly, EPA regulations state: "Plans shall be adopted by
the State and submitted to the Adminstrator by the Governor
as follows: [setting out timing requirements, etc.]". 40 CFR
§51.5(a) (emphasis added). Section 110(a)(3)(A), which concerns
SIP revisions, is generally to the same effect, although it
does not explicitly identify who should submit the SIP:
The Administrator shall approve any revision of an
implementation plan ... it he determines that it meets
the requirements of paragraph (2) and has been adopted
by the State after reasonable notice and public hearings."
(Emphasis added.)
Because 40 CFR 51.5(a) indicates by its terms that SIPs
must be submitted by the Governor, it is a short and logical
step to conclude that SIP revisions, too, must be submitted
by the Governor. This conclusion is consistent with the
spirit of section 110(a)(3)(A), which tracks the SIP require-
ments for SIP revisions.
I/ Similarly, section 107(a) states:
Each State shall have the primary responsibility
for assuring air quality within the entire geographic
area comprising such State by submitting an
implementation plan for such State .... (Emphasis
added.)
-------
-4-
Moreover, the provisions cited above do not by their
terms allow the Governor to delegate this authority to a
political subdivision of the State. For this reason, EPA may
take the position that no such delegation is at least at pre-
sent permissible. Not allowing such delegation is also
consistent with the proposition/ discussed below, that Congress
and EPA have sought to keep the state accountable for SIPs.
On the other hand, the provisions cited above do not
expressly disallow delegation, and the concerns about con-
sistency with other state laws that you expressed could be
addressed by requiring any delegate to make a demonstration
sufficient to allay the concerns. Futhermore, we have not
researched EPA's actual practice over the years. It may be
that EPA has countenanced delegation in the past. Has it
done so for instance, in connection with submittals from the
relevant agency for Jefferson County, Kentucky?
Question 3; You asked whether the following basic
position is legally correct:
Since State law requires that local regulations be
equal to or more stringent than corresponding state
regulations, the State must certify to EPA that each
regulation has been reviewed by the State and found to
meet this requirement.
Me agree that EPA may take the position that each state is
required to make this certification. Although we have no
judgment as to whether this certification is necessary as a
matter of state law, it can be required as part of the state's
burden of demonstrating that the local regulations are au-
thorized and enforceable and will not jeopardize attainment
or maintenance of the NAAQS.
Question 4; You asked whether the following basic position
is legally correct:
Irrespective of any transfer of authority to local
agencies, the State must retain overall authority and
responsibility for developing and implementing the SIP.
Thus, the State must have the ability to enforce either
the local regulations or identical state regulations if
the local fails to enforce.
EPA may take the position that this statement is legally
correct. Several provisions of the Clean Air Act provide
direct support for this statement. Section 110(a)(2)(F)
states that one of the requirements for approval of a SIP
(or SIP revision) is that — "it provides (i) necessary
assurances that the State will have adequate personnel,
funding, and authority to carry out such implementation plan".
(Emphasis added.) Section 113)(a)(2) provides:
-------
-5-
Whenever/ on the basis of information available to
him, the Administrator finds that violations of an
applicable implementation plan are so widespread that
such violations appear to result from a failure of the
State in which the plan applies to enforce the plan
effectively, he shall so notify the State.
(Emphasis added.) These provisions do not by their terms
authorize states to delegate these responsibilities to local
governments.^/
EPA regulations are more explicit on the responsibilities
of the state. Under 40 CFR 51.11(a):
Each plan shall show that the State has legal authority
to carry out the plan, including authority to . . . (2)
[ejnforce applicable laws, regulations, and standards,
and seek injunctive relief.
The regulations authorize the state to share this responsiblity
with local government, but not to delegate it away:
The State may authorize a local agency to carry out a
plan, or portion thereof, within such local agency's
jurisdiction: .... Provided, That such authorization
shall not relieve the State of responsibility under the
Act for carrying out such plan, or portion thereof.
(Emphasis added.)
I hope this discussion has been helpful. Please let me
know if you have any questions.
cc: Rich Biondi
Tom Helms
Nancy Mayer
Gary NcCutcheon
John Silvasi
David Soloman
ORC Air Team Leaders,
Regions I-III, V-X
2/ Indeed, other Clean Air Act provisions may be read to
suggest that Congress sought to limit the role of political
subdivisions of states to (i) promulgating regulations stricter
than Clean Air Act requirements, if they so chose; and (ii)
consulting with the states. See section 116 (Clean Air Act
requirements preclude states or political subdivisions thereof
from adopting stricter controls than provided under the Act);
section 121 (requiring the state, in carrying out various
Clean Air Act requirements, to "provide a satisfactory process
of consultation with general purpose local governments").
-------
15.5
15.5
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
April 22, 1988
Interijn Policy on Stack Height Regulatory Actions
J. Craig Potter, Assistant Administrator for Air and Radiation
Air Division Directors, Regions I-X
A Court of Appeals ruling on January 22, 1988, remanded three
portions of EPA's stack height regulations. This memo discusses
the impact of these changes. Permits issued under fully approved
or delegated NSR and PSD programs prior to promulgation of revised
rules should provide notice that any permit is subject to review
and modification if the source is later found to be affected by
EPA's revised rules.
8.26 [Hard Copy]; 11.11; 28.5
-------
15.6
UNITED STATES hiWIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
MAY i ? ;e£ j
MEMORANDUM
he Interim Policy for Stack Height
ions
„— ^.. rector
fir Quali,ty Management Division (MD-15)
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 rulemaking 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.
-------
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 Hetsa
(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
J. Hetsa
S. Reinders
R. Roos-Collins
S02.S&P Contacts
Stack Height Contacts, Regions I-X
-------
lb.7
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
FEd 1 5 1989
MEMORANDUM
SUBJECT: Guidance on Early Delegation of Authority for the
Nitrogen Dioxide (N02) Increments Program^
FROM: / Gerald A. Emison, Director
-------
In answer to your first question, a State desiring delegation of the
N02 increment provisions of the revised 40 CFR Part 52 PSO program must
submit an amended PSD delegation agreement to its Region for review and
approval. The form of this proposed amendment may follow that of the PSD
delegation agreement now in force. It should contain an explanation of how
the State plans to meet the new N02 increment requirements. In particular,
it must demonstrate that the State has adequate legal authority under State
law to accept the delegation. Also, the amended delegation agreement must
address how increment consumed since the February 8, 1988 baseline date will
be determined and possible exceedances corrected, and how increment consump-
tion in the future will be tracked. In addition, in accordance with the
discussion in the preamble to the final rule (53 FR 40659), the amended
delegation agreement or an accompanying document must contain a stipulation
by the appropriate State official that the State does not intend to submit
the necessary Part 51 SIP revisions within 21 months of the promulgation of
the N02 increment regulations. Such a stipulation would not, however,
prevent the State from later changing its mind and submitting Part 51
revisions within the allotted time.
Some States may not be able to demonstrate adequate legal authority
under State law to accept delegation. For example, a State may be prohibited
from adopting any rule more stringent than EPA's, and this could be
interpreted by the State to preclude accepting delegation of EPA rules which,
although they have been promulgated, are not yet in effect. There is no
mechanism available to EPA to enable such States to adopt the N02 increments
prior to EPA's effective date.
As to the second question, when an acceptable application for early
delegation has been received from a State, the Region should place a
direct-final notice in the Federal Register, unless it anticipates adverse
public comment. Although Headquarters' review of N02 PSD SIP revisions is
not required, we would be willing (and 06C would like) to review at least
the first of these notices. The notice should explain that the effective
date of 40 CFR Part 52 is being advanced for that State as provided for in
EPA's promulgation of the N02 increments regulation. An accompanying
revision to the Part 52 subpart for the State in question should provide
that: "The provisions of section 52.21 (b) through (w), including revisions
promulgated on October 17, 1988, at 53 FR 40671, are hereby incorporated and
made a part of the applicable State plan for the State of ."
Regardless of whether a State desires delegation of the N02 increment
regulations prior to (or on) the general effective date of the revised
40 CFR 52.21, the Region should use that opportunity to review the current
delegation and revise it, as appropriate, to ensure consistency with EPA
policies.
If you have any questions about the guidance provided in this
memorandum, please contact Eric Noble at FTS 629-5362, Gary McCutchen at
FTS 629-5592, or Greg Foote at FTS 382-7625.
-------
15.7
cc: 0. Clay
E. Claussen
G. Foote
E. Lillis
G. McCutchen
E. Noble
Air Division Director, Regions II-X
-------
15.8
15.8
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 17, 1989
Offset Exemption for Resource Recovery Facilities in Part 231 of
the New York SIP
Conrad Simon, Director, Air and Waste Management Division
Thomas M. Allen, PE, Acting Director, Division of Air Resources,
NY DEC
New York should voluntarily revise Part 231 of its SIP to remove
the offset exemption for resource recovery facilities. When NY
NSR rules were approved in 1980, the Agency had not promulgated
any Part 51 regulations giving requirements for approval of NSR
programs, and thus, was guided by Appendix S in its approval.
Appendix 5 has now been largely superseded by 40 CFR 51.165(a)
establishing the current requirements for NSR programs.
25.14 [Hard Copy]; 12.15; 13.10; 28.9
-------
15.9
15.9
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 17, 1989
Response to Petition Regarding Emissions Offset Exemption for
Resource Recovery Facilities in Part 231 of the NYSIP
William Muszynski, Acting Regional Administrator, EPA Region 11
Eric Goldstein, National Resources Defense Council, Inc., Charles
S. Warren, Berle, Kass, and Case
EPA will hold petition regarding the exemption in question in
abeyance pending further EPA action on the current SIP call. This
is, in part, because the merits of the petitions are closely
linked with EPA's outstanding call for revisions to the NY SIP to
correct the State's failure to meet ozone and CO air quality
standards
25.15 [Hard Copy]; 12.16; 13.11; 28.10
-------
15.10
15.10 DATE:
SUBJECT
August 24, 1989
Guidance on Implementing the Nitrogen Dioxide (N02) Prevention of
Significant Deterioration (PSD) Increments
FROM: John Calcagni, Director, Air Quality Management Division (MD-15)
TO: William B. Hathaway, Director, Air, Pesticides and Toxics
Division, Region VI
DISCUSSION: The memo discusses general and specific aspects of the NO. PSD
increment regulation. States should require N02 increment
consumption analysis as soon as possible to help to avoid a
situation where a proposed new source would violate NO, increment
CR:
before the State's
6.27 [Hard Copy]
NO. increments regulations are in
IlK/n I II \* (
effect.
-------
15.11
15.11
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
April 25, 1990
Issuance of PSD Permits in Attainment Areas where Violations Have
Been Modeled
Marcia L. Spink, Chief, Air Programs Branch
John M. Daniel, Jr., Asst. Executive Director, Virginia Department
of Air Pollution Control
The attachment to this letter provides procedures for issuing PSD
permits in areas with modeled violation(s) both to sources with no
significant impacts and to sources with significant impacts. In
the latter case, procedures for processing the associated SIP
revisions are also discussed.
10.49 [Hard Copy]; 6.31; 12.17
-------
ts>
21. NAA
Transition/Grandfathering
-------
22. NAA
Potential to Emit/
Limitations on Capacity to Emit
-------
22.7
22.7
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 13, 1989
Guidance on Limiting Potential to Emit New Source Permitting
Terrell E. Hunt
Associate Enforcement Counsel
Air Enforcement Division
Office of Enforcement and Compliance Monitoring
Addressees
This 22-page memo contains final guidance on conditions in
construction permits that can legally limit a source's potential
to emit to minor or de minimus levels. The memo includes sections
of the Louisiana Pacific rulings. Types of limitations that are
Federally enforceable, and, therefore, legitimate restrictions on
potential to emit, are discussed, including restrictions on
production rates, operating hours, control device limitations, and
averaging periods for determining emission rates and control
efficiencies. Characteristics of "sham" permits are identified
and enforcement is discussed. The memo includes sections of the
Louisiana-Pacific rulings as a basis for policy and includes
several examples to illustrate the principles.
2.31 [Hard Copy]; 4.41
-------
23. NAA
Definition/Classification of Source
-------
23.22
UNITED STATE ENVIRONMENTAL PROTECTION AGENCY
REGION V
FINDING OF VIOLATION
EPA-5-86-A-50
IN REGARDING: )
Indiana Department of Environmental
Management'
St. Joseph County Health
Department
Air Pollution, Permit to Operate
Dated February 6, 1986. to
A.M. General Coporatlon
A PROCEEDING PURSUANT TO )
SECTION 113(a)(5) OF THE )
CLEAN AIR ACT. AS AMENDED )
(42 U.S.C. Section 7413 (a)) I
INTRODUCTION
On February 6( 1986, the St. Joseph County Health Department, as
duly authorized delegate of the State of Indiana, Issued a permit to
operate several air pollution sources operated by AM General Corporation
located at 13200 McKlnley, Mlshawaka, Indiana.
FINDING OF VIOLATION
For reasons set forth below, the Administrator finds that the permit
to operate, Issued by the St. Joseph County Health Department on February 6,
1986, to AM General Corporation, (AMG) failed to comply with the requirements
of Indiana A1r Pollution Control Regulation APC-19 Section 4 and ft that the
St. Joseph County Health Department, as duly authorized delegate of the
State of Indiana, did not act 1n compliance with those requirements.
The permit to operate Issued by St. Joseph County Health Department on
February 6, 1986, to AM General Corporation Increased the Volatile Organic
Compounds (VOC) emissions from 197.3 tons per year to 377.0 tons per year.
This VOC emission Increase of 179.7 tons per year allowed to AMG, subjects
the facility to Regulation APC-19.
-------
2
Regulation APC-19'Section 4 b(4) requires any person proposing the
construction. Modification or reconstruction of a major facility which will
Impact on the 4lr quality of a nonattalnment area or which will be located
1n a nonattalnment area, shall comply with the requirement of Section 8 of
this regulation, as applicable.
Regulation APC-19 Section 8 requires the same person to demonstrate
along with other requirements:
(1) Increased emissions of the pollutant are to be offset and
are equal to 90 percent or less of the offsetting emissions.
(2) Application of emissions limitation devices or techniques
such that the Lowest Achievable Emission Rate (LAER) for
the pollutant will be achieved.
This document serves as notification that the Administrator, by duly
delegated authority, has made a finding under Section 113(a)(5) of the Clean
Air Act, as amended, 42 U.S.C $74l3(a)(5). and 1s served on both the State
of Indiana and Us delegate, the St. Joseph County Health Department, as
well as AM General Corporation to provide an opportunity to confer with
the Administrator prior to Initiation of a civil action pursuant to Section
113(b)(5). By offering the opportunity for such a conference or participating
in one, the Administrator does not waive his right to commence a civil action
immediately under Section 113(b).
0«e: __
)avid Kee, Director
Air Management Division
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
23.22
REGION V
In the Matter of: )
AM GENERAL CORPORATION ) NOTICE OF VIOLATION
MISHAWAKA,. INDIANA ) EPA-5-86-A-49
)
Proceedings Pursuant to )
Section 113(a)(l) of the )
Clean Air Act, as amended )
[42 U.S.C. Section 7413(a)(l)] )
STATUTORY AUTHORITY
This Notice of Violation 1s Issued pursuant to Section 113(a)(l) of the
Clean Air Act. as amended, [42 U.S.C. Section 7413(a)(l)]; hereafter
referred to as the "Act".
FINDINGS OF VIOLATION
The Administrator of the United States Environmental Protection Agency
(U.S. EPA), by authority duly delegated to the undersigned, finds:
1. Indiana A1r Pollution Control Board (IAPCB) Regulation
APC-19 dealing with Permits, PSO» Emission Offsets, Is
part of the applicable Implementation plan for the State
of Indiana approved by U.S. EPA on February 16. 1982.
at 47 Federal Register 6621 and establish operating and
construction permit requirements pertaining to AM General
Corporation's facility located at 13200 McKlnley Highway,
Mishawaka, Indiana.
2. As Indicated more specifically below:
AM General Corporation (AMG) operates a miscellaneous metal part
coating facility 1n Mishawaka, Indiana which 1s 1n violation
of IAPCB regulation APC-19 as given below:
(a) On February 6. 1986 AM General Corporation was Issued a
permit to operate, by St. Joseph County Health Department.
This permit to operate allows AMG, to Increase Its volatile
organic compounds (VOC) emissions from 197.3 tons per year
to 377 tons per year. This VOC emission Increase of 179.7
tons per year allowed to AMG subject the facility to IAPCB
regulation APC-19.
(b) This per-i:C to operate Issued to AMG. failed to comply
with t*» requirements of IAPC8 regulation APC-19, Section
4 and •» i ; :
-------
(t) the applicant did not apply emission limitation
devices or techniques such that the Lowest
Achievable Emission Rate (LAER) for VOC was
not achieved.
(11) the Increased VOC emissions were not offset by
a reduction In VOC emission by existing facilities.
NOTICE OF VIOLATION
The Administrator of the U.S. EPA. by authority duly delegated to the under-
signed, notifies the State of Indiana and the AH General Corporation, that
the facility described above 1s In violation of the applicable Implementation
plan as set forth in the Finding of Violation.
David Kee, Director
Air Management Division
-------
JUN-29-1990 03=11 FROM USEPfl-REGIGN U-flRD TO 36290804 F
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 23-23
OCT 24 1980
Definition of " Installation" -ton (^attainment Regulations
Walter C. Barber, Director) • (JfxT Oi^
Office of Air Quality Planning and StafiMrds
Director, Air and Hazardous Materials
Regions I-X
The definition of source in the regulations pertaining to review of
major new sources and modifications in nonattainment areas is focused at
two levels: the entire plant and an installation within the plant. The
term Installation refers to "an identifiable piece of process equipment".
(See. August 7, 1330 Federal Register, p. 52742 and 52744.) I and my
Staff have responded orally to questions over the past year or so on how
to interpret the term "installation", especially in cases where an KSPS
applies to a source category. Our guidance has been that where an NSPS
exists or is under development, the "affected facility" definition is
usually the most appropriate definition of "installation". This memo
restates that guidance in writing.
If an HS?S identifies an "affected facility", the reviewing agency
should consider such an affected facility as an installation for the
purpose of new source review applicability determinations. For example,
an installation at a power plant would be any electric utility steam
generating unit.
wntre a portion of a plant is not specifically defined as an affected
facility, either because an T1SPS is silent or there is no NSPS for the
source category, the reviewer should still refer to the USPS approach
for guidance as to how small a portion of a plant the term installation
should apply to. To illustrate, in October 1979 EPA proposed an N'SPS
for auto surface coating operations which defined the affected facilities
as the prime coat, surface coat, and top coat lines. Spray booths,
flash-off areas and ovens within these lines are not defined as affected
facilities by the proposal. Therefore, such Hne elements should not be
considered Installations; 1n this case, an Installation 1s one of the
three lines noted above.
This position 1s not new; 1t has been the basis for decisions for
more than a year. It is being presented here for clarification and to
avoid inconsistency in the new source review process. If your staff has
any questions on this subject in the future, please contact our New
Source Review Office (FTS 629-5291).
cc: Director, Enforcement Division, Regions I-X
E. Reich 0. Hawkins
P. Wyckoff S. Kuhrtz
L. Uegman E. Tuerk
R. Blond 1 H. Trutna
0. Rhoads 0. Goodwin
cc: S.Rothblatt/J.Palsle/R.Val^rsbenjen/R.Gulezian/M.Ryan/DICee-liPi
10-Zo-c
i*tv.
-------
23.24
Reserved
-------
23,25
.- 'i UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
§ ^W? 3 Office of Air Quality Planning and Standards
"' -^"^ / Research Triangle Park. North Carolina 27711
%
OCT 6 1987
MEMORANDUM
SUBJECT: Emissions from Landfills
FROM: Gerald A. Emison, Director
Office of Air Quality Planning and Standards (MD-10)
TO: David P. Howekamp, Director
Air Management Division, Region IX
This is in response to your September 1, 1987, memorandum requesting
clarification regarding how landfill emissions should be considered for the
purpose of determining nonattainment new source review (NSR) applicability
under 40 CFR 51.18.
As you are aware, a landfill is subject to NSR if its potential to
emit, excluding fugitive emissions, exceeds the 100 tons per year applicable
major source cutoff for the pollutant for which the area is nonattainment.
Fugitive emissions are defined in 40 CFR (j)(l)(ix) as ". . . those emissions
which could not reasonably pass through a stack, chimney, vent, or other
functionally equivalent opening." Landfill emissions that could reasonably
be collected and vented are therefore not considered fugitive emissions
and must be included in calculating a source's potential to emit.
For various reasons (e.g., odor and public health concerns, local
regulatory requirements, economic incentives), many landfills are.
constructed with gas collection systems. Collected landfill gas may be
flared, vented to the atmosphere, or processed into useful energy end
products such as high-Btu gas, steam, or electricity. In these cases, for
either an existing or proposed landfill, it is clear that the collected
landfill gas does jiot qualify as fugitive emissions and must be included
in the source's potential to emit when calculating NSR applicability.
The preamble to the 1980 NSR regulations characterizes nonfugitive
emissions as ". . . those emissions which would ordinarily be collected and
discharged through stacks or other functionally equivalent openings."
Although there are some exceptions, it is our understanding that landfills
are not ordinarily constructed with gas collection systems. Therefore,
emissions from existing or proposed landfills without gas collection
systems are to be considered fugitive emissions and are not included in the
NSR applicability determination. This does not mean that the applicant's
decision on whether to collect emissions is the deciding factor; in fact,
the reviewing authority makes the decision on which emissions would
ordinarily be collected and which therefore are not considered fugitive
emissions.
-------
It should be noted that NSR applicability is pollutant specific.
Therefore, where the landfill gas is flared or otherwise combusted or
processed before release to the atmosphere, it is the pollutant released
which counts toward NSR applicability. As an example, landfill gas is
composed mostly of volatile organic compounds, but when this gas is burned
in a flare, it is the type and quantity of pollutants in the exhaust gas
(e.g., nitrogen oxides and carbon monoxide) that are used in the NSR
applicability determination.
If you have any questions regarding this matter, please contact
Gary McCutchen, Chief, New Source Review Section, at FTS 629-5592.
cc: Chief, Air Branch
Regions I-X
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IX
215 Fremont Street
San Francisco. Ca. 94105 ,
MEMORANDUM
DATE:
SUBJECT'
Control of Emissions from Landfills
FROM: Dav
Al
owekamp, Director
vision
TO: Gerald Emison, Director
Otfice of Air Quality Planning and Standards (MD-10)
On May 28, 1987, Region IX received an inquiry from Mr. Russ
Baggerly regarding a proposed landfill in Ventura County,
California (copy enclosed). Mr Baggerly's concern, from an
air quality point of view, is over significant fugitive
emissions of reactive organic compounds from the site itself,
and ROC and NOX from associated mobile sources and possible
1C engines.
Our proposed response (enclosed) delineates the exclusion of
fugitive emissions from NSR regulations. The critical question
then becomes, what is the meaning of the definition of fugitive
emissions stated in 40 CFR 51.18? As defined they are;
"those emissions which could not reasonably pass through a
stack, chimney, vent or other functionally equivalent opening."
If emissions from a landfill could feasibly be collected and
passed through a gas recovery system, what criteria would be
needed to then call it a reasonable option? Is it possible
that such a landfill could be required to collect these emissions?
This has not been done in the past. Please send us a written
response providing guidance on this issue.
Enclosures
cc: G. McCutchen, RTP
-------
22 May 19
REGJONg
MAY 2 8 ?987
Mr. David P. Howekamp
Director - Air Management Division
United States Environmental Protection Agency
Region IX
215 Fremont Street
San Francisco, CA 94105
Dear Mr. Howekamp:
An interesting problem is about to surface here in
Ventura County in regard^ to a possible major source.
That source is a canyon landfill site currently in the
process for environmental review through the Resource
Management Agency of Ventura County.
Previous environmental review concerning this site was
documented in the County Solid Waste Management Plan
(CoSWMP). It was this document that originally divulged the
fact that the Weldon Canyon landfill site, based upon the
projected wastestream, would have the potential of emitting
more than 100 TPY of ROC. Further study reveals that even
after gas recovery mitigation the site will produce more
than 100 TPY. This would of course make the project a Major
Stationary Source according to 40 CFR Ch.l §51.18 et seq..
The specific problems are these; 1. the district has
never issued a permit for a landfill site as an area source.
They have issued permits for the 1C engines used for
electrical generation on other sites for NOx, but landfill
site fugitive emissions have never been permitted. 2. The
incremental indirect emissions from mobile sources
associated with this project may or may not be included in
the total number of emissions attributed to this project. 3.
The total emissions from the landfill site should be the NOx
an^ROC emissions from mobile, 1C engine and all other
sources added to the primary source that are the fugitive
emissions from the site itself.
What I would like to know is how EPA views landfill
sites, and the procedure for permitting such a source. Are
all the emissions associated with the site accumulated into
one figure for calculating the offsets required; e.g.
incremental indirect (mobile) emissions, sludge drying
ponds, leachate retention ponds, gas recovery wells,
electrical generating engines, and the fugitive emissions
from the landfill site itself. The possibility of emissions
from all mitigation measures employed at the site should be
included.
-------
Thank you for your time and consideration concerning
this item of some concern to the people of the Ojai Valley
Airshed.
Respectfully,
RUSS Baggerly
119 S. Poli Avenue
Meiners Oaks, CA 93023
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23.26
I!-! T'FPLY A-3-J
RFFFK 70s i-'SA 2-
''r. fuss Paonerly
UP S. roll Ave. i3"OV1987
Peinors ray?l ca. 03023
.Mr.
Thank you ^or yaur ?'ay 2C , 1984 inquiry to Cavid P. Kow«kamp
c environmental review of f'ir omissions iron A landfill
rite in Ventura County. The issues you raised in your latter
rocarrfino landfill ^sniscions ar-; not unlcue to Ventura Co. A land-
fill can 1*0 a significant source cf emissions, and could he con-
•sidrred to ^e a stationary source.
A landfill woulri he subject to Now Source Peview (r:sn) , if
its ^otsntial to emit» excluding fuoitive emissions, exceeds the
apolicablc rajor source cut-off. Fugitive emissions as ciefinea
in ^0 CFP. 51.13 (j)(l)(ix) are "those emissions which could not
reasonably pace through a stack, chimney, vent, or other func-
tionally eouivilent opsninq." The preamble to-.the 1900 VSP regu-
lations characterizes nonfunitive emissions as "...those emissions
which would ordinarily be collected and discharged through stacks
or other functionally eouivalent openings'i " •'' NatT6«*vide, landfills
are not ordinarily constructed with cas colleetidrt-'rystcm*.
Therefore, emissions from existing or prooosed landfills without
gas collection systems are considered fugitive omissions and are
not considered in federal HSR applicability determinations. We
havr discussed this issue with our Veadauartcrs Office ana a
cooy of their resoonse is attached Cor your information.
Landfill emissions that are collected would not qualify as
fugitive rmissions and could cause the landfill to be subject to
NSP. If this is the case then it would be the actual pollutants
emitted through the recovery system that would be subject to
regulation. For example, if the gas is flared, the typical
pollutants would be NOX and CO rather than vocs.
District reaulations may be more, but not—less' strinaent than
federal. In California, some local districts such as the Pay
/*rea fir nuality Management District consider cas recovery systems
to be the norm." In that District there are about twenty Jandfills
that have been or are-' being permitted with gas collection systems.
In the ?outh Coast Air Cuaiity Management District uncer its rule
1150.1, all new land fills must include a gas recovery system.
Fxisting landfills must have collection rystems by January 1, 1989.
As a point of clarification, 40 CFR 51. IB sets fcrth
-------
r-'-nuirop'f'nt.E for the 7tatc or district cc rovelcr .1 ctuts
Tirrl---r-«'p.tation Flan 'or stationary sources. ?leato notr tt-.?.t in
i-u« i-*?«s of t!-* I->lvon Canyon lanafil), r.r r-ower to r.rocose -mission contrc.ic, off-
= «-'tr, rr ^th^r roouirfnenf "ayonci those rcquirsc1 i'.y currrrt
.1 rcoulations, <^E part oi itr pla" to achiewe attainment of
*ir Cuality Ftandaros.
If vr>u !-.j»v" further rjuostions renarcUno r.his -ratter, please
contact j-jnet rtrornt-erc" cf the Now courre Section at (-US) 974-5219,
Sincerely,
Wayne
fic ». Flackard, Chief
r:sv Source Cacrion
"nclcr-ura
CAP?, Attn: Pav ."enehroker
•.•*>rtura county '-Pen, Attnt
bcr^OAOPS, Attn: Gary McCutchen
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23.27
23.27 DATE: June 9, 1988
SUBJECT: Emissions from Rocket Firing at Test Stands; Fugitive or Point
Source Emissions
FROM: Ronald Shafer, Chief
Policy and Guidance Section
TO: John Dale
Air Programs Branch, Region VIII
DISCUSSION: Emissions from rocket nozzles are point sources.
CR: 3.30 [Hard Copy]; 5.23; 24.13
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23.28
23.28 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 10, 1988
May 2S, 1988 conference call
Monica Smyth
Assistant Regional Counsel
File, CPC Argo
An increase or decrease in actual emissions is creditable in the
netting equation only if EPA has not relied on it in issuing a
major source permit under the PSD or Non-Attainment regulations.
Minor source permits and specific emission increases that might be
permitted through such minor source permits must be included in
the netting equation, as long as those increases occur during the
contemporaneous time period.
4.36 [Hard Copy]; 25.11
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23.29
23.29
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
September 9, 1988
Applicability of Prevention of Significant Deterioration (PSD)
and New Source Performance Standards (NSPS) Requirements to the
Wisconsin Electric Power Company (WEPC) Port Washington Life
Extension Project
Don R. Clay, Acting Assistant Administrator for Air and
Radiation (ANR-443)
David A. Kee, Director
Air and Radiation Division, Region V
Although not an official applicability determination, this memo
provided the preliminary opinion, based on the information
collected up to the date of issue, that PSD and NSPS would apply
to a "life extension" project at Port Washington Power Plant.
Each element of PSD applicability via major modification and NSPS
applicability were discussed in the context of information
provided. This project involves restoring the physical and
operational capabilities of each unit to its original capacity and
extending the useful life of the units well beyond the planned
retirement dates that would otherwise apply. This work appears to
be non-routine, and, thus, to constitute a "physical change"; a
significant net emissions increase would occur as a result of the
work.
4.37 [Hard Copy]
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23.30
23.30 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 12, 1989
Guidance on Several Issues Related to Determining Applicability
of New Major Source Regulations in Granting Construction Permits
Edward J. Lillis, Chief
Noncriteria Pollution Programs Branch
Air Quality Management Division
Michael J. Hayes, Manager
Division of Air Pollution Control, Illinois EPA
Memo provides guidance on several issues related to determining
applicability of major source regulations in granting construction
permits to modified sources.
(1) A reviewing agency must base determination of whether a
source is "major" on "major" source definitions in the
Federal Register.
(2) Whether the emissions increase related to a modification is
significant is determined before any netting calculation is
done. If it is, netting calculations are then performed to
determine whether the "net emissions increase" associated
with that modification is significant.
(3) Contemporaneous emissions increases and decreases are
discussed, as well as other factors affecting whether they
are "creditable".
(4) An example of a netting calculation is shown. Emissions
increases or decreases used in issuing a previous major
source permit cannot be creditable to a subsequent increase.
3.33 [Hard Copy]; 4.40
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23.31
23.31
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
February 6, 1990
Determination of Lowest Achievable Emission Rate for Coors
Contai'ner Corporation, Canline CX3
Douglas M. Skie, Chief, Air Programs Branch, Region VIII
Brad Beckham, Director, Air Pollution Control Division, CO Dept.
of Health
Because LAER is determined for each modified emissions unit, each
emissions unit at Coors Canline CXB that has an increase in
emissions due to the major modification must have an independent
LAER determination. These LAER determinations must be based on a
comparison of emissions from other similar operations on a
normalized basis.
26.12 [Hard Copy]
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24. NAA
Geographic/Pollutant Applicability
-------
24.9
Reserved
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24.10
Reserved
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24.11
24.11
DATE:
FROM:
SUBJECT:
TO:
DISCUSSION:
CR:
October 6, 1987
Gerald A. Emison, Director
Office of Air Quality Planning and Standards (MD-10)
Emissions from Landfills
David P. Howekamp, Director, Air Management Division, Region IX
Memo written in response to documents 23.23 and 23.24. A landfill
is subject to NSR if its potential to emit, excluding fugitive
emissions, exceeds the 100 tpy applicable major source cutoff for
the pollutant for which the area is nonattainment. Landfill
emissions that could reasonably be collected and vented are not
considered fugitive emissions and must be included in calculating
a sources potential to emit. Where landfill gas is combusted or
processed before release, the pollutant released counts toward NSR
applicability.
23.25 [Hard Copy]
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24.12
24.12 DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
November 10, 1987
Air Emissions from a Landfill
Wayne A. Blackard, Chief, New Source Section
Russ Baggerly, Meiners Oaks, CA
Emissions from existing or proposed landfills without gas
collection systems are considered fugitive emissions and are not
subject to NSR. Landfill emissions that are collected would not
qualify as fugitive and could cause the landfill to be subject to
NSR.
23.26 [Hard Copy]
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24.13
24.13 DATE: June 9, 1988
SUBJECT: Emissions from Rocket Firing at Test Stands; Fugitive or Point
Source Emissions
FROM: Ronald Shafer, Chief
Policy and Guidance Section
TO: John Dale
Air Programs Branch, Region VIII
DISCUSSION: Emissions from rocket nozzles are point sources.
CR: 3.30 [Hard Copy]; 5.23; 23.27
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25. NAA
Offsets
Ul
-------
25.11
25.11
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 19, 1986
Finding of Violation in Issuance of Permit to Operate to AM
General Corporation, Indiana
David Kee, Director, Air Management Division, Region V
State of Indiana, St. Joseph County Health Department, AM General
Corporation
A permit to operate given to a metal part coating facility is in
violation of applicable Federal and State regulations. In
particular, applicant did not apply LAER, and increased VOC
emissions were not offset by a reduction in VOC emission by
existing facilities.
23.22 [Hard Copy]; 26.3
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25.12
25.12
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 10, 1988
May 25, 1988 conference call
Monica" Smyth
Assistant Regional Counsel
File, CPC Argo
An increase or decrease In actual emissions is creditable in the
netting equation only if EPA has not relied on it in issuing a
major source permit under the PSD or Non-Attainment regulations.
Minor source permits and specific emission increases that might be
permitted through such minor source permits must be included in
the netting equation, as long as those increases occur during the
contemporaneous time period.
4.36 [Hard Copy]; 23.28
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25.13
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
i Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
DEC 2 8 1988
MEMORANDUM
SUBJECT: Emission offset Exemptions for Resource Recovery
Facilities (RRF's)
FROM: Gerald A. Emison, Direct;
Office of Air Quality Planning and Standards (MD-15)
TO: Conrad Simon, Director
Air and Waste Management Division, Region II
You have asked for guidance regarding the provision in
Section IV(B)(i) of the Emission Offset Interpretative Ruling,
40 CFR 51, Appendix S, that exempts RRF's from the general
requirement that major new sources and modifications locating in
designated nonattainment areas obtain emission offsets. Your
request stems from the offset exemptions for RRF's contained in'
the New York and New Jersey State implementation plans (SIP's).
Both States cite the following reasons as the basis for their
reluctance to delete these exemptions from their SIP's:
1. Their SIP offset requirements were originally crafted
using Appendix S as a guide;
2. The Environmental Protection Agency (EPA) approved the
relevant SIP measures, including the exemptions for RRF's; and
3. Section lV(B)(i) of Appendix S still provides for this
exemption.
As discussed below, Appendix S has been largely superseded,
and EPA will no longer approve SIP's containing offset exemptions
for RRF's unless they contain an approved growth allowance.
Thus, you may advise these States that Appendix S is no obstacle
to deletion of the exemptions in question.
At the time these new source review (NSR) programs were
submitted, EPA had not promulgated its Part 51 regulations
setting forth the requirements for approval of State NSR programs
under Part D of the Clean Air Act. Those regulations, originally
designated as 40 CFR 51.18(j) and presently codified at 51.165,
were promulgated on August 7, 1980 (45 FR 52676, 52687, 52743).
Rather, EPA was guided by the Offset Ruling in Appendix S to
40 CFR Part 51 [see 44 FR 3282 (January 16, 1979)].
Section IV(B)(i) of the Offset Ruling does contain provisions
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for exempting RRF'S from the offset requirement under certain
conditions. However, the Offset Ruling has been largely
superseded by the Part 51 regulations.
The Offset Ruling governs permitting of major sources in
newly designated nonattainment areas that are subject to Part D
requirements, while the affected State makes necessary revisions
to its NSR rules [see 44 FR 20372, 20379 n.36 (1979)]. In
addition, EPA still utilizes the Offset Ruling for guidance
purposes in certain respects. Nevertheless, as a matter of
policy, EPA no longer adheres to the RRF's offset exemption in
the Offset Ruling. Thus, EPA will not approve a proposed SIP
revision which contains such an exemption without an approved
growth allowance.
Accordingly, you may inform these States that they should
proceed at this time to initiate SIP revisions that would remove
the offset exemptions.
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25.13
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION II
DATE: SEP 2 7 1988
•CT: Application and Validity of the Emission Offset Interpretative
Ruling (Appendix S)
FROM: Conrad simon, Director
Air and Waste Management^Wisfon (2AWM)
TO:
Gerald A. Emison, Director
Office of Air Quality Planning and standards (MD-10)
The purpose of this memorandum is to make you aware of a
recurring problem we are facing in Region II regarding the
application and validity of the Emission Offset Interpretative
Ruling, contained at 40 CFR 51, Appendix S. The presence of
Appendix S in Part 51 has generated confusion about the
Environmental Protection Agency's (EPA's) requirements and has
become a major barrier to our efforts to make our states' new
source review regulations consistent with Federal requirements.
In 1980 and 1981, EPA approved New York and New Jersey's new
source review regulations which impose emission offset require-
ments on major stationary sources of air pollution. However,
both New York's Part 231 and New Jersey's Subchapter 18 exempt
resource recovery facilities from those requirements. We
understand that this is true of as many as twenty-two other
states' new source review regulations.
Earlier this year, we undertook an effort to eliminate the
differences between New York and New Jersey's new source review
nonattainment rules and the federal new source review require-
ments. We have found workable solutions to most of these
problems. However, New York and New Jersey expressed strong
reservations about removing the offset exemption for resource
recovery facilities from their regulations. Both states have
correctly indicated that their offset requirements were original-
ly crafted using Appendix S as a guide and that EPA subsequently
approved these regulations. We have responded on several
occasions, based on the advice of Office of Air Quality and
Planning Standards staff, that Appendix S has largely been
superceded by the Part 51 regulations and is applicable in only
very limited circumstances. Further, we have indicated that
offset exemptions are only valid when accompanied by an approved
growth allowance. Our states, however, remain unconvinced and
cite Section IV.B.i of Appendix S in EPA new source review
regulations as their justification for retaining the offset
exemption for resource recovery facilities. Frankly, we have
concluded based on our own review and a review by the Regional
Counsel's office that the state's interpretation is plausible.
REGION II FORM 132O-1 (9/85)
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- 2 -
in light of this confusion with the interpretation of EPA's
emission offset requirements and the obvious friction that this
ambiguity creates in working with our states, we are requesting
that the Emission Offset interpretative Ruling, contained at 40
CFR 51, Appendix S, be removed from EPA regulations. At the very
least, that portion that contains the exemption from the emission
offset requirements needs to be removed, or a clear policy
memorandum needs to be issued which clarifies and provides a
legal basis for the Agency's present requirements. Lacking this,
I am not optimistic that this issue can be resolved.
cc: G. Me Cutchen, OAQPS
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25.14
ENCLOSURE C
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION I I
26 FEDERAL PLAZA
NEW YORK NEW YORK 1O278
MAR 17 1989
Thomas M. Allen, P.E.
Acting Director
Division of Air Resources
New York State Department of
Environmental Conservation
50 Wolf Road
Albany, New York 12233
Dear Mr. Allen:
This is in reference to our prior correspondence regarding the
offset exemption for resource recovery facilities in Part 231 of
the New York SIP.
As you know, several parties have petitioned EPA to call upon
New York, pursuant to section 110(a)(2)(H) of the Act, to revise
its SIP to remove the emissions offset exemption. EPA has now
responded by holding the petition in abeyance (See Letter,
William J. Muszynski, Acting Regional Administrator, to Eric A.
Goldstein and Charles S. Warren, March 17, 1989). As explained
in that letter, one of the reasons for withholding final action
at this time is to give New York a further opportunity to
voluntarily revise its SIP. I ask again that you do so.
In the past, you have expressed reluctance to remove this
exemption on the ground that it is allowed by section IV.B.i of
Appendix S to 40 CFR Part 51. I must disagree. As discussed in
the letter to Goldstein and Warren-, EPA was guided by Appendix S
when it approved New York's new source review (NSR) rules in
1980, because at that time the Agency had not promulgated any
Part 51 regulations setting forth requirements for approval of
NSR programs under Part D of the Act. Shortly after EPA approval
of the New York rules, however, EPA promulgated 40 CFR 51.18(j),
now designated as 51.165(a) establishing the current requirements
for NSR programs. Unlike Appendix S, the Part 51 regulations do
not provide for offset exemptions for resource recovery
facilities. Appendix S thus has been largely superseded.
It remains in place because it still applies in some narrow
categories of permitting circumstances (primarily, in newly
designated nonattainment areas subject to Part D). However, the
Agency no longer adheres to the offset exemption in Appendix S,
and will not approve a SIP revision which contains such an
exemption.
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-2-
Your timely attention to this matter would be much appreciated.
Sincerely,
Conrad Simon, Director
Air and Waste Management Division
Enclosure
cc: Edward Davis
Division of Air Resources
New York state Department of
Environmental Conservation
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r
25.13
.X/
32
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION II
26 FEDERAL PLAZA
NEW YORK NEW YORK 1O276
Eric A. Goldstein, Esquire
Natural Resources Defense Council, Inc.
122 East 42nd Street, 45th Floor
New York, New York 10168
Charles S. Warren, Esquire
Berle, Kass and Case
45 Rockefeller Center
New York, New York 10111
Gentlemen:
This is in further response to your petition regarding the
emissions offset exemption for resource recovery facilities in
Part 231 of the New York State Implementation Plan (SIP). You
asked the Environmental Protection Agency (EPA) to call for
revisions to the New York SIP to eliminate this exemption. For
the reasons discussed below, EPA is not taking final action on
your petition at this time. Rather, because the merits of your
petition are closely linked with EPA's outstanding call for
revisions to the New York SIP to correct the State's failure to
meet ozone and carbon monoxide air quality standards, and for
other reasons, the petition will be held in abeyance pending
further action on the current SIP call.
I. THE SIP CALL PROCESS
Section 110(a)(2)(H) of the Clean Air Act establishes a process
whereby states are to revise their SIPs "whenever the
Administrator finds on the basis of information available to him
that the plan is substantially inadequate to achieve the national
ambient air quality standard INAAQS] ... or to otherwise comply
with any additional requirements established under the Clean Air
Act Amendments of 1977." It is clear from this provision and the
overall statutory scheme that whether the Administrator should
make a finding of "substantial inadequacy," and hence, call for
corrective SIP revisions by the state, is a matter within the
Administrator's discretion. This discretion extends to both the
finding of substantial inadequacy and the content of the
corrective measures that the Administrator may require of the
state in response to the SIP call.
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II. THE NEW SOURCE REVIEW OFFSET REQUIREMENT AND PART D SIP
ADEQUACY
The new source review (NSR) provisions. Part D of the Clean Air
Act and the current EPA regulations at 40 C.F.R. 51.165, contain
numerous requirements applicable generally to major new
stationary sources of air pollution and major modifications
locating in an area designated as nonattainment for a particular
pollutant under section 107 of the Act. As you point out in your
petition, section 172(b)(6) provides that new major sources and
major modifications must obtain a permit in accordance with
section 173. The state must determine, as a condition for
granting that permit, that the new source has obtained offsetting
emissions reductions from other sources such that operation of
the source will represent "reasonable further progress" toward
attainment of the NAAQS (see section 173(1)(A)), or that
emissions from the new source will not exceed a growth allowance
for the pollutant that the state has established under section
172(b) (see section 173(1)(B)). 40 C.F.R. 51.165(a)(2) directs
states to adopt a NSR program meeting the requirements of
sections 172(b)(6) and 173. The EPA regulations in 40 C.F.R.
51.165 do not specifically allow nor prohibit exemptions from the
offset provision.
Although the above provisions establish the general requirements
of new source review under Part D, neither the Act nor EPA's
regulations are self-executing. Rather, the specific NSR
requirements that must be met in a given state are those
contained in the regulations set forth in the state's NSR
program as it has been approved by EPA as part of the SIP. Thus,
the New York SIP, at 6 N.Y.C.R.R. Part 231.6, imposes emissions
offset requirements .on .major-sources generally. .However, Part
231.9(c)(l) exempts resource recovery facilities from that
requirement. EPA approved New York's offset rules, and the
resource recovery exemption, as part of the State's SIP on May
21, 1980 (45 Fed. Reg. 33981). No party sought judicial review
of EPA's approval during the 60-day period provided in section
307(b)(l) of the Act.
At the time EPA approved New York's NSR program, the Agency had
not promulgated any Part 51 regulations setting forth the
requirements for approval of state NSR programs under Part D.
Those regulations, originally designated as 40 C.F.R. 51.18(j)
and presently codified at 51.165, were not promulgated until
August 7, 1980 (45 Fed. Regs. 52676, 52687, 52743). Rather, in
reviewing the New York program, EPA was guided by the Emission
Offset Interpretative Ruling appearing in Appendix S to 40 C.F.R.
Part 51. See 44 Fed. Reg. 3282 (Jan. 16, 1979). Section iV.B.i
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25.15
of the Offset Ruling contains provisions for exempting resource
recovery facilities from the offset requirement under certain
conditions.
Although the Offset Ruling has been largely superseded by the
Part 51 regulations EPA still utilizes it for guidance purposes
in certain respects1. Nevertheless, at least as a matter of
policy, EPA no longer adheres to the resource recovery facility
offset exemption in the Offset Ruling. Thus, as explained in a
March 14, 1988 letter from Conrad Simon, Director, Air and Waste
Management Division, Region II, to Harry H. Hovey, Jr., P.E. ,
Director, Division of Air Resources, New York State Department of
Environmental Conservation (Enclosure A), EPA will not approve a
proposed SIP revision which contains such an exemption.
III. THE ADEQUACY OF NEW YORK'S NSR PROGRAM AND THE NEED FOR A
SIP CALL
As noted above, whether and when the Administrator makes a
finding of SIP inadequacy is a matter within his discretion under
the scheme of the Clean Air Act. Beyond the statutory framework,
this discretion is vitally important as a practical matter to
enable EPA to discharge its many duties under the Act. Thus, in
addressing potential SIP discrepancies, it is necessary to
determine the severity of the matter at issue, establish its
priority in relation to other pressing business, consider the
range of available curative options, and evaluate the effects of
a given course of action on other matters. Only then can the
Agency decide whether a particular matter rises to the level of a
substantial inadequacy justifying a call for SIP revision under
section 110(a)(2)(H).
In light of the above, EPA has considered the following factors
to be important in evaluating your petition.
A. EPA's Informal Attempts to Resolve the Matter.
EPA is currently attempting to resolve the issues raised in your
petition through informal means.
JThe Offset Ruling applies only in narrow circumstances.
For example, it governs permitting of major sources in newly
designated nonattainment areas that are subject to Part D
requirements while the affected state makes necessary revisions
to its new source review rules. See 44 Fed. Regs. 20372,
20379 n. 36 (1979).
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EPA has requested New York to amend its NSR program to eliminate
several differences between Part 231 and the federal NSR
requirements. See the March 14, 1988 letter from EPA Region II
to New York (Enclosure A). The letter asks, as part of New
York's fiscal year 1988 grant workplan, that the State address
several issues, including the emission offset for resource
recovery facilities. This effort at informal resolution is
ongoing, as indicated by the state's response to the March 14
letter. See letter, Harry H. Hovey, Jr., P.E., to Conrad Simon,
April 4, 1988 (Enclosure B).
In addition, EPA has recently written the state to explain that
40 C.F.R. 51.165, and not the Offset Ruling, presently governs
the approvability. of NSR rules. Hence, the letter explains, the
Offset Ruling is not an obstacle to the removal of the offset
exemption from the New York SIP. See letter, Conrad Simon to
Thomas M. Allen, P.E., Acting Director, Division of Air
Resources, New York State Department of Environmental
Conservation, March 17, 1989 (Enclosure C).
B. Determining the Impact of the Exemption on the
Adequacy of the New York SIP.
In determining whether the offset exemption renders the New York
SIP substantially inadequate to achieve the NAAQS or meet the NSR
requirements of Part D, it is appropriate to evaluate the
environmental impact of the offset exemption in question. This
impact is relevant because it is apparent from the statute that
the primary purpose of the NSR requirements as a whole, and the
offset provision in particular, is as a planning tool to insure
that new source growth is consistent with reasonable further
progress toward attainment of the NAAQS. It follows that to the
extent an offset exemption has no significant bearing on a
state's ability to attain the NAAQS, it is unlikely, standing
alone« to be considered a substantial inadequacy in the NSR
portion of the SIP. In light of other current 'Clean Air Act
requirements and prospective additional measures (discussed
below) EPA doubts that it could establish at this time that the
resource recovery offset exemption presents a substantial
environmental problem that by itself creates a substantial
inadequacy in the New York SIP.
1. The Affected Pollutants.
With respect to offsets from resource recovery facilities in New
York, the pollutants relevant to your petition are carbon
monoxide and particulate matter (i.e., total suspended
particulates, or TSP). These are the only criteria pollutants
potentially affected by offset provisions, because they are the
only pollutants subject to Part D requirements for which the
State has designated nonattainment areas and which typically are
-------
25.15
emitted in major amounts (greater than 100 tons per year) by
resource recovery facilities. See 40 C.F.R. 81.333.
Regarding carbon monoxide, as discussed below, EPA plans to
consider, in conjunction with the second phase of New York's
response to the outstanding SIP call for ozone and carbon
monoxide, whether formal action on New York's offset exemption is
necessary to address a substantial SIP inadequacy. With respect
to particulate matter, the prevention of significant
deterioration (PSD) program should preclude a substantial SIP
inadequacy.
2. New York Is Currently Experiencing No Violations
of the New PM-10 Standards for Particulate Matter.
In Addition, EPA Requires Offsetting of Particulate
Emissions Under the PSD Provisions of Part C of the
Act, and May Soon Eliminate the Part D Requirements
for Particulates Altogether.
EPA is in the midst of a transition to a revised set of
regulatory standards for particulate matter. When this
transition is complete, the Part D requirements will be
eliminated. In the meantime, new sources must offset their
particulate emissions under the Act's PSD requirements so as to
not cause or contribute to a NAAQS violation. In addition, there
are currently no violations of the revised standards in New York.
Accordingly, the offset exemption in the New York SIP apparently
does not present a substantial SIP inadequacy as to particulates.
On July 1, 1987, EPA replaced TSP as the NAAQS indicator for
particulate matter pollution. See 52 Fed. Reg. 24635. Under the
revised NAAQS, EPA employs a new indicator, termed "PM-10," that
includes only those particles with an aerodynamic diameter less
than or equal to a nominal 10 micrometers. (It should be noted
that the vast majority of particulate emissions of resource
recovery facilities are 10 micrometers or less in diameter.) In
the implementing regulations which accompanied the revised
particulate matter standards, EPA provided that the requirements
2Using the example of the Brooklyn Navy Yard project cited
in your petition at p.l n.l, resource recovery facilities
typically also emit major amounts of sulfur dioxide and nitrogen
oxides. However, New York has no designated nonattainment area
for those pollutants. While there are designated ozone
nonattainment areas in the State, resource recovery facilities
(e.g., the Brooklyn Navy Yard project) generally do not emit
volatile organic compounds in major amounts.
-------
6.
of a state's preexisting TSP SIP, including new source review
requirements under Part D of the Act, generally will remain in
place until EPA approves a PM-1O SIP for the state. See 52 Fed.
Regs. 24672, 24679. New York submitted a PM-10 SIP to EPA for
approval on May 31, 1988. The state's PM-1O SIP is currently
undergoing review in Region II, and likely will be submitted to
EPA headquarters for approval in January 1989. Upon approval of
New York's PM-1O SIP, the Part D requirements governing
particulates, including the TSP offset provisions, will be
eliminated.
During this transition period, the PSD provisions of Part C of
the Clean Air Act independently require that major new sources,
including resource recovery facilities, obtain emissions offsets
essentially similar to those you assert are required under
Part D. Under section 165(a}(3), major new sources subject to
PSD must not "cause or contribute to" a NAAQS violation. This
requirement is set forth in EPA's PSD regulations. See 40 C.F.R.
51.166OO (requirements for state PSD plans); 40 C.F.R. 52.21(u)
(federal PSD regulations). New York does not have an approved
PSD rule. Hence, EPA has delegated to New York the authority to
issue PSD permits in the state pursuant to 52.21(u). See
52.1689. Under 52.21(k), a major new source that would locate in
an area within New York that is lacking an approved PM-10 plan
and is experiencing PM-1O violations must obtain sufficient
offsetting emissions reductions at other facilities so as to
provide a net air quality benefit and thereby help remedy the
nonattainment problem. In an area within New York that is
lacking an approved PM-1O plan but is without current PM-10
violations, a new source that would cause a violation of the
PM-10 standards must provide offsets that compensate on a one-
for-one basis for its adverse air quality impacts, and thereby
prevent the NAAQS violation. See 52 Fed. Reg. 24684 n. 14,
24686-87, 24699.3
Monitoring data has not disclosed any violations of the PM-10
standards in New York during the last three years. Thus, at the
present time, major new resource recovery facilities in New York
would need to offset their ambient impacts on a one-for-one basis
if necessary, to prevent a violation of the new particulate
matter standards. Because particulate emissions of resource
3In addition, as a condition for approval of its PM-10 SIP,
New York must adopt an emissions offset program meeting the
requirements of 40 C.F.R. 51.165(b) and section 110(a)(2)(D) of
the Act. That program must be at least as stringent as the PSD
offset program described above.
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25.15
recovery facilities are predominantly PM-10 emissions, the
PM-10 offsets required by PSD would provide virtually the same
amount of reductions in particulate emissions as would be
provided by TSP offsets under a Part D offset requirement.
In sum, as to major new sources of particulate emissions, the
offset provisions of Part D are largely vestigial, and upon
completion of the transition to PM-10, will disappear altogether.
That transition is underway in New York. In the meantime, in
order to comply with applicable PSD requirements, major new
particulate sources, including resource recovery facilities,
must still offset their ambient impact if they would cause or
contribute to a NAAQS violation. No monitored violations of the
revised PM-10 standards are extant at present. If any should
arise, then a new resource recovery facility would have to obtain
sufficient offsets so as to provide a net air quality benefit.
Under these circumstances, it does not appear that the Part D
offset exemption for resource recovery facilities in the New York
SIP presents a substantial inadequacy as to particulate matter
within the meaning of section 110
-------
8
to take regarding the offset exemption for resource recovery
facilities in its SIP. At this time, however. EPA has not
determined what specific additional measures will be necessary to
enable New York to attain the (ozone and) carbon monoxide NAAQS
in an expeditious manner. Thus, it would be premature to decide
now whether New York must remove the offset exemption for
resource recovery facilities.
III. CONCLUSION
From the foregoing, it is clear that EPA must consider many
factors in deciding how to respond to your petition. The
petition highlights a potential deficiency in the New York SIP
that is of particular concern to you. The Agency agrees that
this is an important matter. However, EPA's range of concerns-is
much broader, encompassing not only the entire NSR program, but
the Act's Part D requirements as a whole.
The offset requirements of the PSD program for PM-10 under Part C
of the Act should prevent a substantial SIP inadequacy as to
particulate emissions during the transition away from Part D
requirements affecting major new sources of particulates.
Regarding carbon monoxide, EPA is presently considering what
additional phase two corrective measures New York must adopt in
response to the current SIP call. Those deliberations will
include consideration of the offset exemption in question.
Although EPA's forthcoming phase two requirements may include the
relief you seek, it would be premature to take separate action on
your petition now. In light of this ongoing process, your
petition will be held in abeyance at this time. EPA anticipates
that it will take dispositive action on the petition following a
final decision on the phase two corrective measures for the
outstanding New York SIP call.
Sincerely.,
•*•%*•"»••»• • • /• "i S JCf^^yOtrff*
William JXwCs'zyX^Ki
Acting Regional>"Administrator
Enclosures
cc: Thomas C. Jorling, Commissioner
New York state Department of
Environmental Conservation
Thomas M. Allen, P.E., Acting Director
Division of Air Resources, NYSDEC
-------
bcc: J. Calcagni, OAQPS
G. McCutchen, OAQPS ,
D. Grumpier, OAQPS /
G. Toote, OGC
C. Simon, 2AHM
R. Werner, 2AWM-AP
D. DiMarcello, 2AWM-AP
D. stone, 20RC-AIR
25.15
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25.16
25.16
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 19, 1986
Finding of Violation in Issuance of Permit to Operate to AM
General Corporation, Indiana
David Kee, Director, Air Management Division, Region V
State of Indiana, St. Joseph County Health Department, AM General
Corporation
A permit to operate given to a metal part coating facility is in
violation of applicable Federal and State regulations. In
particular, applicant did not apply LAER, and increased VOC
emissions were not offset by a reduction in VOC emission by
existing facilities.
23.22 [Hard Copy]; 26.13
-------
0-s
26. NAA
LAER
-------
rs.4
** UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
I Office of Air Quality Planning and Standards
/ Research Triangle Park, North Carolina 27711
APR 2 5 1988
MEMORANDUM
SUBJECT: LAER Emission Limits fpj^utomobile a nd"\i grit-Duty Truck
Topcoat Operations
FROM: Jack R. Farmer, Di
Emission Standards DivMon (MD-13)
TO: See Below
At the March Air Directors' meeting in Seattle, Washington, some
questions were raised concerning the Agency's current position regarding
Lowest Achievable Emission Rate (LAER) emission limits for automobile and
light-duty truck topcoat operations. This memorandum describes our position
on this issue.
The LAER emission limit for automobile and light-duty truck topcoat
operations should be at least as stringent as 12.26 pounds of volatile
organic compound (VOC) per gallon of solids deposited with compliance
on a daily basis using actual measured transfer efficiency values. This
limit should apply regardless of the material of construction (substrate)
of the vehicles being coated (e.g. metal, plastic or combination.)
The basis for citing this emission limit as LAER is the permit (see
attachment) for Subaru/Isuzu in Lafayette, Indiana. The permit for
Toyota in Georgetown, Kentucky, may also be used to support this limit.
When the industry has argued for less stringent emission limits because
of the type of coating or the type of substrate planned, we have maintained
that "painting cars is painting cars," and these factors do not justify less
stringent emission limits. We have taken this position because technology
and manufacturing processes constantly change and evolve; the manufacturer
is responsible for ensuring that any new process meets environmental as
well as product requirements.
The procedure which we feel is most appropriate for determining
compliance with this LAER limit is the protocol which we have been devel-
oping in conjunction with the Motor Vehicle Manufacturers Association
(MVMA). We met with the MVMA on March 22, 1988, to discuss the draft
-------
protocol. We are making some changes in the protocol based upons the
discussion at this meeting. We expect to have the final protocol ready
soon. If you have an immediate need to provide a compliance procedure for
a topcoat LAER determination, please contact Dave Salman at FTS-629-5417.
Attachment
Addressees:
Irvrin Oickstein, Reg VIII
Louis Gitto, Reg I
William Hathaway, Reg VI
David Howekamp, Reg IX
David Kee, Reg V
Thomas Maslany, Reg III
Gary O'Neal, Reg X
Conrad Simon, Reg II
Winston Smith, Reg IV
William Spratlin, Reg VII
cc: Kike Alushin, LE-134A
John Calcagni, MD-15
Jerry Emison, MD-10
Joan LaRock, A-101
John Seitz, EN-341
bcc:
Wayne Aronson, Reg IV
Tom Helms, MD-15
Lars Johnson/Brent Marable, Reg V
Paul Kahn, Reg II
Vishnu Katari, EN-341
Floyd Ledbetter, Reg IV
Nancy Mayer, MD-15
Gary McCutchen, MD-15
Mindy Moore/Lee Hanley, Reg VIII
Bob O'Meara/Tom Elter, Reg I
Bill Repsher, LE-134A
Steve Rosenthal, Region V
Cynthia Stahl, Reg III
David Sullivan/Willie Kelly, Reg VI
Jean Thompson, Reg III
Mary Tietjen, Reg VII
Tim Williamson, Reg I
Bill Wruble/Dennis Beauregard, Reg IX
-------
2 'd SSMO iS'8I/£0 '09IH3 9'3
CONSTRUCTION PERMIT **-na0005^
OFFICE OF AIR MANAGEMENT Ptge l of —
INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT
10S South Meridian Street
Indianapolis. Indiana 46223
Subaru-Iauiu Automotive incorporated. Indiana Plant
Intersection of State Noad 38
and
Interstate 65
near Lafayette, Indiana
to hereby •uthorizMl to conicruei
a new automobile and lignt duty truck ass«*ly plant at the above location southeast
of Lafayette, Indiana, consisting of a standing shop, body shop, paint shop, and
trim and final assembly shop. Bnission of air pollutants will occur pzuarily fzoa
metal working operations, surface coating operations and confeuation of natural ess.
Thi* paxnat is uauad under provisions of %il« 323 IAC 2-1.1, with findings aid
oonditiona listad on ths attached pages.
Identification No. P8P (79) 1<51 Date Issued
Expiration Dace N/A Issued by
S'tn Perm r«0 •
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26.5
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park. North Carolina 27711
August 29, 1988
MEMORANDUM
SUBJECT: Transfer of. Technology in Determining Lowest
Achievable Emission" Rate (LAER)
FROM: John Calcagni, Director
Air Quality Management Division (MD-15)
TO: David Kee, Director
Air and Radiation Division, Region V
This is in response to your memorandum of August 9, 1988, requesting
guidance on the transfer of control technology between source categories for
the purpose of determining LAER for a source. This issue was raised by the
Michigan Department of Natural Resources in proposing that the control
achieved by incineration of oven and spray booth emissions from a truck parts
surface coating line (which is considered to be miscellaneous metals) should
also be achievable by an automobile surface coating line. You stated that
the policy set forth in the January 16, 1979 Federal Register (page 3280)
would appear to support this position; however, the sentence at the end of
the citation, "Comments on this interpretation and whether it is appropriate
to revise the regulatory definition are solicited," suggests that the
Environmental Protection Agency might have changed its policy since that
time.
This is to reaffirm the policy stated in the January 16, 1979 Federal
Register. Our quick investigation of the regulatory history since the
publication of that policy indicates that no comments were ever received on
that issue. Consequently, the policy has never been revisited. Furthermore,
we interpret the last sentence you cited to mean that we would consider
whether to redefine LAER to clearly reflect policy, not that we would change
the policy on transfer of control technology.
There are two types of potentially transferable control technologies:
1) gas stream controls, and 2) process controls and modifications. For the
first type of transfer, we consider the class or category of sources to
include any sources that produce similar gas streams that could be controlled
by the same or similar technology. The process that generates a volatile
organic compound (VOC) laden gas stream, for example, is immaterial. What
matters is whether the gas stream characteristics, such as composition and
-------
-2-
VOC concentration, are sufficiently similar to a stream from which incineration
technology, for example, may be transferred. The same would be true for the
control of particulate matter or sulfur dioxide in a gas stream using control
devices such as baghouses or scrubbers.
For the second type of transfer, process similarity governs the decision.
For example, coating compositions and application technology probably do not
vary substantially across the entire class of motor vehicle coating sources.
A source within that category would, therefore, have to clearly demonstrate
the unique process characteristics that preclude it from using otherwise
transferable LAER technology used by a similar but not necessarily identical
source. We would be more cautious, however, before grouping more disparate
operations, such as coating semiconductor circuit boards, in the same class as
coating motor vehicles.
Based on your memorandum, Michigan's application of the technology
transfer policy is based on treatment of the first type (i.e., control of the
gas stream). Consequently, we agree with their position and your support of
it. Incineration of spray booth emissions is a transferable technology in a
LAER determination. Whether it is actually selected as LAER depends, of
course, on the actual gas stream characteristics. Requiring the same level
of control, based on process-related factors such as coating formulation and
coating transfer efficiency, would be a more subjective call but is not the
focus of your question.
In a follow-up telephone conversation with Gary HcCutchen on August 24,
1988, your staff requested our policy on LAER determinations for individual
emissions units versus the entire facility. Our policy is that LAER is
primarily an emissions unit determination. Each emissions unit must achieve
the lowest possible emissions rate. Once LAER has been decided for each
emissions unit, the reviewer should then assess LAER for the entire building,
structure, facility, or source. If some more effective LAER exists by
controlling the entire facility (e.g., the entire building exhaust instead
of units within the building), then the "facility-wide" LAER should be
considered. However, there are three hurdles to determining "facility-wide"
LAER. The first Is that an overall limit on multiple units is difficult if
not impossible to enforce. The second is that a "facility-wide" LAER is
often a combination of emissions unit and facility control, so sources seldom
explore this option. The third is that most "facility-wide" LAER approaches
proposed by sources are actually bubbles. They do not really represent the
sum of the LAER's for the respective units, as explained at the beginning of
this paragraph. As you know, LAER cannot be bubbled.
Finally, your staff also asked whether LAER can be considered individually
for each aspect of control of a source. Specifically, they wanted to know if
LAER for surface coating can be considered first for the composition of the
coating, then for the transfer efficiency, and finally for the exhaust gas
stream. The answer is yes, although reviewers must be aware that one decision
affects the others. For example, a requirement for low VOC paint may result
-------
26.5
-3-
in gas stream VOC concentrations so low that incineration of the gas stream
is not considered feasible in terms of LAER. However, it is acceptable to
consider composition from one source, application technology (transfer effi-
ciency) from another source, and incineration from a third source when
performing a LAER determination, as long as each of those sources meets the
control technology transfer criteria discussed above.
If you have further questions regarding transfer of technology in LAER
determinations, please contact Gary McCutchen at FTS 629-5592.
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», 26.6
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
§ Office of Air Quality Planning and Standards
f Research Triangle Park, North Carolina 27711
n-p I '-'"
i1 j i •*. <
MEMORANDUM
SUBJECT: RACT Requirements in Ozone Nonattainraent Areas
FROM: Gerald A. Emison, Directc
Office of Air Quality Manning and Standards (MD-10)
TO: William A. Spratlin, Director
Air and Toxics Division, Region VII
This is in response to your memorandum of October 12, 1988
concerning reasonably available control technology (RACT)
requirements for automobile assembly plants in ozone
nonattainment areas.
We agree that automobile assembly plants in ozone
nonattainment areas should have volatile organic compound
emission requirements that are at least as stringent as RACT.1
As described below, the requirements for new source performance
standards (NSPS) or lowest available emission rate (LAER) (as
determined at the time of permit issuance) for two plants in the
St. Louis area may not be as stringent as RACT. Therefore, the
St. Louis State implementation plan should contain RACT
requirements for these plants.
There are important differences in the format and compliance
demonstration methodology for automobile coating RACT and NSPS.
Topcoat and surfacer RACT require daily averaging and actual
transfer efficiency, while the NSPS allows monthly averaging and
table transfer efficiency values. These differences may result
in RACT being more stringent than NSPS. The OAQPS recommends
that the June 1988 protocol be used as the basis for determining
compliance with the RACT limit.
The Ford Hazelwood plant is subject to NSPS and RACT. The
State has proposed to delete the RACT requirements for Ford
Hazelwood on the basis that the NSPS is more stringent. This
claim is not correct. Therefore, the RACT requirements for Ford
Hazelwood should not be deleted, rather they should be maintained
lFor this discussion, RACT for topcoat means an appropriate
emission limit for which compliance is demonstrated on a daily
basis using the June 1988 protocol. For surfacer, the RACT
requirement should also specify daily compliance and actual
transfer efficiency.
-------
and the June 1988 protocol adopted as the compliance
determination procedure.
The GM Wentzville plant was permitted as a new source in the
early 1980's. This source is subject to NSPS and LAER, which was
set equal to NSPS for topcoat and surfacer. Since the St. Louis
RACT requirements for automobile coating were source specific and
the GM Wentzville plant did not exist when the RACT requirements
were first adopted, there are currently no RACT requirements for
this plant. The NSPS and LAER requirements for this plant may
not be as stringent as RACT. Therefore, RACT requirements should
be adopted for GM Wentzville.
Thank you for bringing this situation to our attention.
Questions concerning this matter should be addressed to
Bill Polglase (629-5246) or Dave Salman (629-5417).
cc: J. Calcagni
R. Campbell
T. Helms
J. Berry
D. Salman
G. McCutchen
D. Grumpier
B. Polglase
J. Silvasi
Director, Air Management Div., Regions I, III, V, IX
Director, Air and Haste Management Division, Region II
Director, Air, Pesticides, and Toxics Division, Regions IV, VI
Director, Air and Toxics Division, Regions VII, VIII, X
Chief, Air Branch, Regions I-X
Chief, Air Compliance Branch, Regions IV, V
Chief, Air Enforcement Branch, Region III
Chief, Air Operations Branch, Region IX
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U.?. EPP
TEL llo.2u:-T?:-<:'ii?0
Man 25.f9 10 = 21 Uo.005 P. 10/10
26.7
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
FEB
OFFICE OF
AIR AND RADIATION
MEMORANDUM
SUBJECT: Cut-off Date for Determining LAER in Major New Source
Permitting
FROM: John seitz, Director
Stationary Source Com'
Office of Air Quality>"Planning
TO: David Kee, Director
Air and Radiation Division
Region V
ndards
This memorandum responds to a February 22, 1989 telephone
request by Bill McDowell of your staff for a written answer to
the following question:
When a permitting agency is issuing a new source review
permit involving a LAER determination, must that LAER
determination reflect the most stringent LAER construction permit
which has been issued anywhere in the country in the time period
up to and including the public comment period on the permit
currently under consideration?
The answer to your question is yes. The conditions in a new
source permit are not set until the final permit is issued. The
final permit is not issued until after a draft permit has been
published, there has been a public comment period, and the
permitting agency has had an opportunity to consider any new
information that may have come to light during the comment
period. If the permitting agency cannot consider new information
it learns during the comment period, including recent
technological advances, the comment period does net serve its
intended purpose.
Since a new source may not legally begin to construct until
after it has received a final permit, a source is not put to an
equitable disadvantage by having the permit conditions change
between the proposed and final permit.
If you have any questions about this matter, do not hesitate
to call me, or to refer to Judy Katz of OECM (382-2843) or sally
Farrell of my staff (382-2875).
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
3 FEE 1989
MEMORANDUM
SUBJECT: Guidance.xOn Determining Lowest Achievable
Emission Rate
FROM:
At/Quality Management Division (MD-15)
TO: David Kee, Director
Air & Radiation Division, Region V
This is in response to your memorandum of January 6, 1989, requesting
additional information on determining LAER. The following responses are in
the same order and format as the questions in your letter.
1. Economic Feasibility of LAER
Traditionally, little weight has been given to economics in LAER
determinations, and this continues to be the case. The extract in your
memorandum from the record of the House and Senate discussion of the Clean
Air Act (Act) contains the sentence:
"If the cost of a given control strategy is so great that
a new major source could not be built or operated, then
such a control would not be achievable and could not be
required by the Administrator."
We interpret this statement in the record to be used in a generic sense.
That is, that no new plants could be built in that industry if emission
limits were based on levels achievable only with the subject control tech-
nology. However, if some other plant in the same (or comparable) industry
uses that control technology, then such use constitutes de facto evidence
that the economic cost to the industry of that technology control is not
prohibitive. Thus, for a new source in that same industry, LAER costs should
be considered only to the degree that they reflect unusual circumstances
which, in some manner, differentiate the cost of control for that source from
the costs of control for the rest of that industry. These unusual circum-
stances should be thoroughly analyzed to ensure that they really do represent
compelling reasons for not requiring a level of control that similar sources
are using. Therefore, when discussing costs, applicants should compare the
cost of control for the proposed source to the costs for source(s) already
using that level of control.
-------
a. You asked whether LAER for a coating operation would necessarily
require add-on controls if low solvent coatings are used which produce volatile
organic compound (VOC) concentrations of 20-100 ppro, and also whether LAER for
a boiler would be both low sulfur coal and scrubbing.
Your questions pose hypothetical issues of whether sources which have
selected fuels or process materials with inherently low emissions should be
forced to utilize add-on controls as well. It is difficult and potentially
misleading to respond to such hypothetical situations, since certain factors
not presented may alter the response (source type, pollutant, emission rate,
economics, etc). Nevertheless, the following generalizations can be made.
Sources are required to meet LAER as defined in the Act, which is
essentially a waste gas stream limit. For a coating operation, this may mean
low (or no) VOC solvent coatings, high transfer efficiencies, an add-on
control device on the gas stream, or some combination of these. Of course,
use of either of the first two will affect gas stream concentrations, which
in turn can influence decisions on whether additional control is needed to
meet the intent of LAER requirements. A LAER requirement for low sulfur
coal would depend, at least in part, on whether such fuel was available and
in use in the nonattainment area in question. A final determination depends
on the specific case.
b. You ask whether permit applicants can put air pollution control
costs "on the margin," even though many other variables could affect project
viability, and whether States and Regions have the expertise needed to
adequately evaluate a claim of economic non-viability.
It is true that many permit applicants present the cost of emissions
controls as marginal costs and argue that they cannot afford such controls.
However, these issues were addressed in the April 22, 1987 memorandum on
determining best available control technology (BACT).1 Since costs play less
of a role in LAER than in BACT determinations, vie believe the issues are
adequately addressed in that memorandum, so we will not repeat them here.
2. Achievability of Existing State Implementation
Plan (SIP) Limitations
The most stringent emissions limitation contained in a SIP for a
class or category of source must be considered LAER, unless a) a more
stringent emissions limitation has been achieved in practice, or b) the
SIP limitation is demonstrated by the owner or operator of the proposed
source to be unachievable [Act, section 171(3)].
Huntsville Incinerator - Determining BACT, from Gary McCutchen, CPDD,
to Bruce Miller, Region IV, dated April 22, 1987. [See section 8.15
of the New Source Review Prevention of Significant Deterioration and
Nonattainment Area Guidance Notebook.]
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26.3
There is, of course, a range of certainty in such a definition. The
greatest certainty for a proposed LAER limit exists when that limit is
actually being achieved by a source. However, a SIP limit, even if it has
not yet been applied to a source, should be considered initially to be the
product of careful investigation and, therefore, achievable. A SIP limit's
credibility diminishes if a) no sources exist to which it applies; b) it is
generally acknowledged that sources are unable to comply with the limit, and
the State is in the process of changing the limit; or c) the State has
relaxed the original SIP limit. Case-by-case evaluations need to be made in
these situations to determine the SIP limit's credibility.
The same logic applies to SIP limits to which sources are subject but
with which they are not in compliance. Noncompliance by a source with a SIP
limit, even if it is the only source subject to that specific limit, does not
automatically constitute a demonstration that that limit is unachievable.
The specific reasons for noncompliance must be determined, and the ability of
the source to comply assessed. However, such noncompliance may prove to be
an indication of nonachievability, so the achievability of such a SIP
limitation should be carefully studied before it is used as the basis of a
LAER determination.
3. LAER and Performance Specifications
Your question about the use of company-mandated product specifications
(for coatings) in determining LAER for sources of VOC is too hypothetical to
address, given various site-specific factors that could exist. Each case must
attempt to differentiate between product (and materials) specifications that
are simply desired by an applicant (which would generally not be considered
relevant) and specifications that are required (e.g., an industry standard).
However, your interpretation of my August 29 memorandum is correct, in that a
permit applicant would have to demonstrate that the presumptive LAER could
not be met by some other combination of coatings, transfer efficiency, and
add-on control.
4. If Presumptive LAER Cannot be Achieved
We generally concur with your requirement that where a presumptive
SIP-based LAER is not achievable, the applicant must meet the more stringent
of the two limits defined in your memorandum. However, case-by-case factors
may also affect the decision.
Please contact Gary McCutchen (FTS 629-5592) if you have any questions
on the information provided in this memorandum and Allen Basala (FTS 629-5622)
if you need assistance in evaluating the economics of specific permit
applications.
cc: A. Basala T. Helms
E. Lillis R. Biondi
6. McCutchen G. Foote
E. Noble
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.0 ,.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 26-9
3 Office of Air Quality Planning and Standards
J' Research Triangle Park, North Carolina 27711
1389
MEMORANDUM
SUBJECT: Reasonably Available Control Technology (RACT)
for New Automobile Assembly Plants
FROM: G. T. Helms, Chief °Q " ' r^*^
Ozone/Carbon Monoxide Programs Branch (MD-15)
TO: Steve Rothblatt, Chief
Air and Radiation Branch (5AR-26)
This is in response to your memorandum of November 21, 1988,
concerning the applicability of reasonably available control
technology (RACT) to new or modified automobile assembly plants
in ozone nonattainment areas. Your memorandum explained that
about eight assembly plants in Michigan which were constructed or
modified after July 1, 1979, but before the end of 1986, are not
subject to the RACT regulation in the Michigan State
implementation plan (SIP). These facilities are rather subject
to the new source performance standards (NSPS) and in some cases
lowest achievable emission rate (LAER) which was set equal to the
NSPS.
As noted in Jerry Emison's December 1, 1988, response (copy
attached) to a similar question from Art Spratlin in Region VII,
we agree that automobile assembly plants in ozone nonattainment
areas should have volatile organic compound (VOC) emission
requirements that are at least as stringent as RACT.1
The NSPS and LAER requirements for the plants you identified in
Michigan may not be as stringent as RACT. Therefore, we agree
with your recommendation that Michigan be directed to institute
(or reinstitute) RACT requirements for these facilities. [See
Section 172(b)(2)]. The State should also examine whether it
would be possible in the future for an existing source which
becomes subject to the NSPS through modification or
reconstruction, but does not at the same time become subject to
LAER, to no longer be subject to RACT. If this is a possibility,
then the SIP should be amended, perhaps through adoption of a
generic RACT rule for automobile coating, to ensure that all
sources will at a minimum be subject to RACT.
'For this discussion, RACT for topcoat means an appropriate
emission limit for which compliance is demonstrated on a daily
basis using the automobile topcoat protocol. The most recent
version of the protocol was published in December 1988 as
document number EPA 450/3-88-018. For surfacer, the RACT
requirement should also specify daily compliance and actual
transfer efficiency.
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We also recommend that you again strongly urge Michigan to
modify its SIP to specify the automobile topcoat protocol as the
compliance determination procedure for all of the automobile
topcoat RACT requirements. This is consistent with Agency
guidance on automobile topcoat RACT compliance determination
procedures and averaging time. The necessary changes are
described in Jerry Emison's June 21, 1988, memorandum (copy
attached) which transmitted the protocol to the Regional Offices.
Adoption of the protocol in Michigan is particularly critical
since that State has the most assembly plants.
Should you have any questions concerning this matter, please
contact Bill Polglase (FTS 629-5246) or Dave Salman (FTS 629-
5417).
Attachment
cc: J. Berry
J. Calcagni
R. Campbell
D. Grumpier
G. McCutchen
R. Ossias
B. Polglase
S. Rosenthal
D. Salman
J. Silvasi
Director, Air Management Div., 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
Chief, Air Branch, Regions I, II, III, IV, VI, X
Chief, Air Compliance Branch, Regions IV, V
Chief, Air Enforcement Branch, Region III
Chief, Air Operations Branch, Region IX
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26.9
UNITED STAltc, r:'\iviRQNMEIM TA'. r'WIcCT'ON AGENC'-
Office of A-- Quality Planmr-.ri and Standards
Rysejrch Tnancjl.; P.irk, Noun Caiolmj 27711
0 : DEC 1038
MEMORANDUM
SUBJECT: RACT Requirements in Ozone No/iattainment Areas
FROM: Gerald A. Emison, Directc _^
Office of Air Quality Manning and Standards (MD-10)
TO: William A. Spratlin, Director
Air and Toxics Division, Region VII
This is in response to your memorandum of October 12, 1988
concerning reasonably available control technology (RACT)
requirements for automobile assembly plants in ozone
nonattainment areas.
We agree that automobile assembly plants in ozone
nonattainment areas should have volatile organic compound
emission requirements that are at least as stringent as RACT.1
As described below, the requirements for new source performance
standards (NSPS) or lowest available emission rate (LAER) (as
determined at the time of permit issuance) for two plants in the
St. Louis area may not be as stringent as RACT. Therefore, the
St. Louis State implementation plan should contain RACT
requirements for these plants.
There are important differences in the format and compliance
demonstration methodology for automobile coating RACT and NSPS.
Topcoat and surfacer RACT require daily averaging and actual
transfer efficiency, while the NSPS allows monthly averaging and
table transfer efficiency values. These differences may result
in RACT being more' stringent than NSPS. The OAQPS recommends
that the June 1988 protocol be used as the basis for determining
compliance with the RACT limit.
The Ford Hazelwood plant is subject to NSPS and RACT. The
State has proposed to delete the RACT requirements for Ford
Hazelwood on the basis that the NSPS is more stringent. This
claim is not correct. Therefore, the RACT requirements for Ford
Hazelwood should not be deleted, rather they should be maintained
'For this discussion, RACT for topcoat means an appropriate
emission limit for which compliance is demonstrated on a daily
basis using the June 1988 protocol. For surfacer, the RACT
requirement should also specify daily compliance and actual
transfer efficiency.
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and the June 1988 protocol adopted as the compliance
determination procedure.
The GM Wentzville plant was permitted as a new source in the
early 1980's. This source is subject to NSPS and LAER, which was
set equal to NSPS for topcoat and surfacer. Since the St. Louis
RACT requirements for automobile coating were source specific and
the GM Wentzville plant did not exist when the RACT requirements
were first adopted, there are currently no RACT requirements for
this plant. The NSPS and LAER requirements for this plant may
not be as stringent as RACT. Therefore, RACT requirements should
be adopted for GM Wentzville.
Thank you for bringing this situation to our attention.
Questions concerning this matter should be addressed to
Bill Polglase (629-5246) or Dave Salman (629-5417).
cc: J. Calcagni
R. Campbell
T. Helms
J. Berry
0. Salman
G. McCutchen
D. Grumpier
B. Polglase
J. Silvasi
Director, Air Management Div., 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
Chief, Air Branch, Regions I-X
Chief, Air Compliance Branch, Regions IV, V
Chief, Air Enforcement Branch, Region III
Chief, Air Operations Branch, Region IX
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26.9
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park. North Carolina 27711
JUN 21 1988
MEMORANDUM
SUBJECT: Transmittal of Automobile
FROM: Gerald A. Emison, Direct
Office of Air Quality VI anni ngiran
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The SIP's should be revised to require owner/operator use of the
protocol to demonstrate compliance with automobile and light-duty truck
topcoat RACT regulations. In order to be amenable to use of the protocol,
a SIP must: (1) state the topcoat emission limit in units of pounds of VOC
per gallon of solids deposited, (2) require that compliance be demonstrated
for each day, and (3) treat the entire topcoat operation (all topcoat
spray booths, flash-off areas, and bake ovens) as a single entity. Each
SIP must also include provisions for retaining records, completing calculations
in a timely manner, and reporting results consistent with proper implementation
of the protocol and applicable EPA policies and guidelines. The owner/operator
should generally be capable of completing the emission calculations for
each day in a month by the end of the following month. Proper adoption
and use of the protocol should eliminate disputes about averaging, transfer
efficiency and bake oven exhaust control "credits," and the VOC and
volume solids content of coatings.
It may require as much as 18 to 24 months to amend existing regulations
and obtain final Federal approval of the SIP revisions. Until final EPA
approval of SIP revisions is obtained, the current regulations remain
applicable and are to be interpreted in accordance with letters to the
MVMA from Craig Potter on November 20, 1986, and from Alan Eckert on
December 23, 1986. Copies of these letters are attached.
Please-forward a copy of the protocol to your State air directors as
an addendum to your recent follow-up letters on VOC deficiencies and
deviations. We will be providing additional information and support in
the near future to enable States to effectively implement the protocol.
Questions about the protocol should be directed to Dave Salman at
FTS 629-5417.
3 Attachments
cc: Mike Alushin (LE-134A)
John Calcagni (MD-15)
Alan Eckert (LE-132A)
Jack Farmer (MD-13)
John Seitz (EN-341)
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26.10
^«B Sf«>
******
UMTED STATES ENVIRONMENTAL PROTECTION AGENCY
WASH LNGTON.D.C. 20460
AUG 9
OFFICE OF
AIR AND RADIATION
MEMORANDUM
SUBJECT: LAER Determination for a Previously Constructed Source
FROM: John S. Seitz, Director
Stationary Source Oxnpliano^Bfv'ision
Office of Mr Quality Planning and Standards
TO: Thomas J. Maslany, Director
Air Management Division
Region III
This is in response to your memorandum of November 8, 1988, requesting
guidance on when IAER should be evaluated for a previously constructed source.
To clarify what you stated in your November 8 memorandum, the permitting
agency makes the initial IAER assessment at the time of the completed
application. However, this is not to say that IAER is determined at the time
of complete permit application, since evaluation of LAER continues until the
final permit is issued.
With respect to sources subject to NSR but constructed without undergoing
review, your second option applies. Making the initial EAER assessment should
take into consideration any technologies, practices or SIP limits' in effect as
of the date of the complete permit. Consistent with our policy for BftCT/LAER
evaluation, failure of a source to comply with the permitting requirements is
not a basis for grandfathering the date for determining the appropriate IAER
to some date other than the date of complete application. Further, the final
IAER determination is not made until the issuance of the final permit.
If you have questions, please contact Scott Throwe of my staff at FTS-
382-2811.
cc: Gary McCutchen, NSR Section
Judy Katz, OECM
Greg Foote
NSR Contacts, Regions I-X
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26.11
26.11
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
January 11, 1990
BACT/LAER Determination Cut-Off Date
John Seitz, Director, Stationary Source Compliance Division, OAQPS
Regional Air Directors, Regions I-X
The BACT/LAER determination for a major new source is not set
until the final permit is issued. The source has the
responsibility to investigate all available and pending control
technologies for consideration as BACT or LAER. Establishment of
a cutoff date prior to the public comment period would limit
public participation. A cutoff date established prior to permit
issuance could allow a source to avoid more stringent controls.
8.43 [Hard Copy]
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26.12
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION VIU
999 18th STREET - SUITE 500
DENVER, COLORADO 80202-2405
FEB C 5 jggg
Ref: 8AT-AP
Brad Beckham, Director
Air Pollution Control Division
Colorado Department of Health
4210 East nth Avenue
Denver, Colorado 80220
Re: Determination of Lowest Achievable Emission Rate for
Coors Container Corporation Canline CX3
Dear Brad:
At the request of Tom Tistinic of your staff, we are
providing the following guidance for the determination of lowest
achievable emission rate (LAER) for Coors Container Corporation.
Review of the definition of LAER, as contained within 40 CFR
51 .I65(a)( 1 Mxiii), indicates that "lowest achievable emission
rate" means, for any source, the more stringent rate of emissions
based on the following:
"(A) The most stringent emissions limitation which is
contained in the implementation plan of any State for such
class or category of stationary source, unless the owner or
operator of the proposed stationary source demonstrates that
such limitations are not achievable; or
(B) The most stringent emissions limitation which is
achieved in practice by such class or category of stationary
sources. This limitation, when applied to a modification,
means the lowest achievable emissions rate for the new or
modified emissions units within (the) stationary source. In
no event shall the application of the term permit a proposed
new or modified stationary source to emit any pollutant in
excess of the amount allowable under an applicable new
source standard of performance."
Note that for modified major sources, such as Coors
Container Canline CX3, LAER is determined for each modified
emissions unit. This requirement was reiterated in an August 29,
1988, memorandum (see Attachment i), which states that "each
emissions unit must achieve the lowest possible emission rate".
The term "emissions unit" is defined in 40 CFR 5 1 .1 65(a ) ( 1 ) ( vn )
as "any part of a stationary source which emits or has the
potential to emit any pollutant subject to regulation under the
Act".
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For beverage can coating, EPA has determined that an
emissions unit consists of an individual coating operation. This
determination parallels that being used for the autocoating
industry, in which each coating operation (topcoat, basecoat,
etc.) is treated as a separate emissions unit. The rationale for
this determination is also based upon the definition of an
affected facility, contained within the new source performance
standard for beverage can coating, 40 CFR 60 Subpart ww. As
stated in section 60.490(a), the provisions of Subpart ww apply
to the following affected facilities: exterior base coating
operations, overvarnish coating operations, and inside spray
coating operations. (Note that a given modified can line may
contain other modified emission units; however, the new source
performance standard only addresses the three operations listed
above.) Each coating operation is composed of an application
station, a flashoff area, and a curing oven. The new source
performance standard sets a unique emission limitation for each
affected facility, due to the distinct nature of the three
coating operations.
It is important to note that an emissions unit may consist
of a single piece of equipment, such as a valve, flange, or pump,
since each of these fits the definition of emissions unit
specified in 40 CFR 51.165(a)(1)(vii). The October, 1980,
Prevention of Significant Deterioration Workshop Manual
references these and other emission units (see Attachment 2), and
discusses the need to include each emissions unit in a best
available control technology (BACT) analysis. Note that all
emissions units involved in a major modification which have an
increase in emissions of the applicable pollutant must undergo
BACT analysis. Similarly, for Canline CX3, all emissions units
which have an increase in emissions due to the major modification
must undergo LAER analysis. Therefore, this LAER determination
should be made independently for each emissions unit (or coating
operation) within Coors Canline CX3 which has had an increase in
VOC emissions as a result of the major modification. The
emissions from each emission unit undergoing LAER analysis should
be compared to those for the similar coating operation which are
contained within the implementation plan of any State, to those
from previously-issued LAER and BACT determinations, as veil as
to those contained within the applicable new source performance
standard.
In addition, the LAER determination for a modified emissions
unit, such as the internal coating operation at Canline CX3,
should be based upon a comparison of emissions from that
particular operation to emissions from other similar operations
on a normalized basis. For example, it would be unfair to
restrict Canline CX3 to an emission limit of x pounds of volatile
organic compounds (VOCs) per hour, when the other coating line(s)
which have achieved the LAER of x pounds/hr actually coat a
smaller number of cans. Therefore, in order to equitably
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26.12
determine LAER for an internal coating operation, VOC emissions
from this operation at CX3 should be compared to VOC emissions
from other beverage can internal coating operations, on the basis
of pounds of VOC emitted per gallon of coating solids applied (or
another similar basis). Comparing LAER on the basis of solids
applied will normalize factors such as number of cans coated, can
size, thickness of coating applied, etc.
Once the lowest achievable emissions limitation is
determined, it should be specified in federally-enforceable
permit conditions, which set limits on can production, coating
VOC content and usage, capture and control efficiency of add-on
controls, and other parameters as needed. These conditions will
provide for the continued utilization of the control technology
determined necessary to achieve LAER, even during periods of
reduced operating rates. The actual emission rate of the LAER
determination is then calculated, in units such as pounds of VOC
per day, from the enforceable permit conditions.
The procedures discussed above have received concurrence
from the appropriate EPA headquarters staff. If there are any
questions or comments about this determination, please feel free
to contact John Dale at (303) 293-1886, or Mindy Mohr at (303)
294-7539.
Sincerely,
MASkie, Chief
Branch
Attachments
cc: Tom Tistinic, CDH
Dennis Crumpler, NSR Section, AQMD
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26.13
26.13
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
June 19, 1986
Finding of Violation in Issuance of Permit to Operate to AH
General Corporation, Indiana
David Kee, Director, Air Management Division, Region V
State of Indiana, St. Joseph County Health Department, AM General
Corporation
A permit to operate given to a metal part coating facility is in
violation of applicable Federal and State regulations. In
particular, applicant did not apply LAER, and increased VOC
emissions were not offset by a reduction in VOC emission by
existing facilities
23.22 [Hard Copy]; 25.16
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27. NAA
ts>
Statewide Compliance
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27.5
27.5 DATE: October 28, 1988
SUBJECT: Review of De Minimis Emissions - Sanctions
FROM: Ronald Shafer, Chief
Policy and Guidance Section
Stationary Source Compliance Division
TO: Ron Van Mersbergen
Air and Radiation Branch (5AR-26) Region V
DISCUSSION: Qe minimis net emission increases that accumulate within a
contemporaneous (5 year) time frame should not be combined and
would not trigger PSD review when significance levels are reached.
However, de minimis increases do consume PSD increment, and, in
nonattainment areas, aggregated de minimis emissions will trigger
sanctions when significance levels are reached.
CR: 4.39 [Hard Copy]; 5.24
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28. NAA
SIP Processing
ts>
oo
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28.5
28.5
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
April 22, 1988
Interim Policy on Stack Height Regulatory Actions
J. Craig Potter, Assistant Administrator for Air and Radiation
Air Division Directors, Regions I-X
A Court of Appeals ruling on January 22, 1988, remanded three
portions of EPA's stack height regulations. This memo discusses
the impact of these changes. Permits issued under fully approved
or delegated NSR and PSD programs prior to promulgation of revised
rules should provide notice that any permit is subject to review
and modification if the source is later found to be affected by
EPA's revised rules.
8.26 [Hard Copy]; 11.11; 15.5
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28.6
28.6
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
December 28, 1988
Emission Offset Exemptions for Resource Recovery Facilities
Gerald A. Emison, Director, OAQPS
Conrad Simon, Director, Air and Waste Management Division,
Region II
States that have offset exemptions for RRF's in their SIP's should
initiate SIP revisions that would remove the exemptions. EPA will
no longer approve SIP's containing offset exemptions for RRF's
unless they contain an approved growth allowance. Appendix S is
no obstable to deletion of the exemptions, because it has been
largely superceded.
25.13 [Hard Copy], 12.14
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28.7
An official copy of this letter may be obtained from EPA Region IV
January 31, 1989
Mr. Paul J. Bontrager, Director
Bureau of Pollution Control
Metropolitan Health Department
Nashville-Davidson County
311 23rd Avenue, North
Nashville, Tennessee 37203
Dear Mr. Bontrager:
During a conversation with Tom Hansen of my staff on December 7,
1988, you raised a question regarding the use of the growth
allowable contained in Part D SIPs under the Clean Air Act for
areas included in the Post 1987 SIP call. This letter is in
response to your question.
EPA approved control strategy demonstrations in Part D SIPs which
provided for the use of a growth allowance in lieu of source-
specific offsets to meet the requirements of section 173(1) of the
Act. An implicit condition of EPA's approval of the growth
allowance was that it could be used in lieu of source-specific
offsets to satisfy the requirements of section 173(1) only so long
as the SIP continued to be adequate to demonstrate attainment of
the NAAQS. However, many areas for which such allowances were
approved failed to attain the ozone standard by the end of 1987.
The fact of continued nonattainment of the ozone NAAQS extending
beyond the statutory deadline created a conclusive presumption
that the previously approved growth allowance has been depleted.
Under these circumstances, the issuance of a permit allowing
construction of a major new or modified source without source-
specific offsets clearly would not result in reasonable further
progress toward attainment, but would instead exacerbate the
nonattainment problem.
As you are aware, on May 26, 1988, EPA issued a SIP call to the
governor of Tennessee indicating that areas in Tennessee,
including Nashville, were continuing to show violations of the
standard for ozone, and, therefore, that the SIP is substantially
inadequate to meet the requirements of Part D. Accordingly, since
Nashville did not achieve attainment of the ozone standard by
December 31, 1987, and the SIP has been declared deficient,
the growth allowance built into the SIP is no longer available for
use in lieu of offsets for new sources locating in nonattainment
areas.
An additional question that you raised is whether banked credits
from shutdown of sources can be used for offsets in nonattainment
areas needing but lacking an attainment demonstration. Except for
on-site replacement facilities, credits from shutdowns can be used
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as offsets for new sources only if they occur on the day the
application is "complete" or any subsequent day up until actual
operations begin. The shutdown must also be federally
enforceable.
Should you have any additional questions, please do hesitate to
call Tom Hansen or Kay Prince of my staff at (404) 347-2864.
Sincerely,
Bruce P. Miller, Chief
Air Programs Branch
Air Pesticides & Toxics
Management Division
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28.8
28.8 DATE: March 2, 1989
SUBJECT: Reasonably Available Control Technology (RACT) for New Automobile
Assembly Plants
FROM: G. T. Helms, Chief
Ozone/Carbon Monoxide Programs Branch (MD-15)
TO: Steve Rothblatt, Chief
Air and Radiation Branch (5AR-26)
DISCUSSION: Automobile assembly plants in ozone non-attainment areas should
have VOC emission requirements that are at least as stringent as
RACT. Where NSPS and LAER requirements are not as stringent as
RACT, RACT requirements should be instituted.
CR: 26.9 [Hard Copy]
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28.9
28.9
DATE:
SUBJECT:
FROM:
TO:
DISCUSSION:
CR:
March 17, 1989
Offset- Exemption for Resource Recovery Facilities in Part 231 of
the New York SIP
Conrad Simon, Director, Air and Waste Management Division
Thomas M. Allen, PE, Acting Director, Division of Air Resources,
NY DEC
New York should voluntarily revise Part 231 of its SIP to remove
the offset exemption for resource recovery facilities. When NY
NSR rules were approved in 1980, the Agency had not promulgated
any Part 51 regulations giving requirements for approval of NSR
programs, and thus, was guided by Appendix S in its approval.
Appendix 5 has now been largely superseded by 40 CFR 51.165(a)
establishing the current requirements for NSR programs.
25.14 [Hard Copy]; 12.15; 13.10; 15.8
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28.10
28.10 DATE:
SUBJECT
March 17, 1989
Response to Petition Regarding Emissions Offset Exemption for
Resource Recovery Facilities in Part 231 of the NYSIP
FROM: William Muszynski, Acting Regional Administrator, EPA Region 11
TO: Eric Goldstein, National Resources Defense Council, Inc., Charles
S. Warren, Berle, Kass, and Case
DISCUSSION: EPA will hold petition regarding the exemption in question in
abeyance pending further EPA action on the current SIP call. This
is, in part, because the merits of the petitions are closely
linked with EPA's outstanding call for revisions to the NY SIP to
correct the State's failure to meet ozone and CO air quality
standards.
CR: 25.15 [Hard Copy]; 12.16; 13.11; 15.9
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