UNITED STATES ENVIRONMENTAL PROTECTION AGENCY§§§

REGION III

1650 Arch Street

Philadelphia, Pennsylvania 19103-2029

November 23, 1998

Mr. John M. Daniel, Jr., P.E., DEE

Director, Division of Air Program Coordination

Commonwealth of Virginia

Department of Environmental Quality

P.O. Box 10009

Richmond, Virginia 23240

Dear Mr. Daniel:

I am writing in response to your letter dated September 24, 1998, regarding a PSD applicability question on a recent PSD-avoidance permit action for Intermet Corporation's Archer Creek Facility. In your letter you ask EPA to respond to the following question:

What constitutes debottlenecking, and how are the emission increases from debottlenecked units calculated?

In order to respond to your question, you must refer to the PSD regulations at 40 C.F.R. §52.21(b)(2) which defines "major modification" as one in which a physical change in or change in the method of operation of a major stationary source results in a significant net emissions increase. The first step in this process is to determine the emissions change from the proposed project. At this point, only emissions increases expected to result from the proposed project are examined. This includes emissions increases from the new and modified emissions units and any other plant-wide emissions increases (e.g. debottlenecking increases) that will occur as a result of the proposed modification. (See the October 1990 Draft New Source Review Workshop Manual, page A.46).

In your question, you are asking for EPA's position on the quantification of the plant-wide emissions increases from the mold cooling lines resulting from replacement of the cupolas. Prior to the modification, the capacity of the mold cooling lines was limited or hindered by the maximum throughput of the cupolas. The replacement of these cupolas has removed this hindrance or bottleneck by increasing the rate at which molten metal can be fed to the cooling lines. Hence, although the design capacity of the mold cooling lines has not been changed as a result of the modification, its effective capacity and potential to emit have been changed. This effective change in capacity of the mold cooling lines constitutes debottlenecking, and these emissions increases must be included in the initial PSD applicability calculations.

In calculating the emissions change resulting from the modification and debottlenecked units, EPA requires that the emissions change for these units be based on their allowable emissions after the change minus their current actual emissions. "Actual emissions" before the change equals the average rate in tons per year at which the unit actually emitted the pollutant during the 2-year period (or more representative period) which precedes the change [see 40 CFR 52.21(b)(21)(ii)}. The allowable emissions level for a new or modified emissions unit is its potential to emit. EPA's policy on determining whether a physical change or change in the method of operation at a source will result in a "significant emissions increase" is discussed in more detail in EPA's October 1990 Draft NSR Workshop Manual. EPA's policy is also discussed in a September 18, 1989, memorandum from John Calcagni , Director Air Quality Management Division , EPA Office of Air Quality Planning and Standards (OAQPS), which you referenced and enclosed with your letter, and in a memorandum entitled "Potential Enforcement Action Against Masonite Corporation", from John S. Seitz , Director, EPA's Office of Air Quality Planning And Standards and Michael S. Alushin , Enforcement Counsel for Air to David Howekamp , Director, Air and Toxics , EPA Region IX and Nancy Marvel, Regional Counsel, EPA Region IX (enclosed for your information).

EPA's current guidance is clear on calculating significant emissions increases resulting from major source modifications and requires the Option 1 approach outlined in your letter. EPA does not allow the approach outlined in Option 2. Although certain examples may have been discussed at a workshop which you feel support the Option 2 approach, these types of informal discussions do not address issues in their full context and certainly are not to be viewed as representing a formal EPA position on an issue, nor should they be relied upon by a State or source as a basis for establishing new policy or, in this case, deviating from established EPA policy. In your letter, you also state that discussions with EPA OAQPS staff members lend support to using the Option 2 approach. Telephone conversations with EPA staff, which may take comments out of context, do not establish EPA policy. EPA's OAQPS, Office of General Counsel, and Office of Enforcement and Compliance Assistance have been consulted on this matter and all agree that Option 1 is the correct approach to be followed as it conforms with established EPA policy on debottlenecking .

If you have any questions or comments, please contact me at (215) 814-2175 or Donna Weiss of my staff at (215) 814-2198.

Sincerely,

Kathleen Henry, Chief

Permits and Technical Assessment Branch

Enclosure

cc: Gary McCutchen , RTP Environmental Associates, Inc.