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Pennsylvania Electric Company (Pennelec)
1400 L Street, N.W.
Washington, D.C. 20005-3502
(202) 371-5700
Lydia N. Wegman
Deputy Director
OAQPS
U. S. Environmental Protection Agency
Mail Drop 10
Research Triangle Park, NC 2771 1
Dear Lydia:
The Homer City Owners and I appreciate your participation in our February 28, 1997 conference call with Lisa Lund and Chris Knopes. The discussion was refreshingly candid; clear, concise and left no doubt (or hope) regarding EPA's position on whether the Homer City Station. qualifies for the XL Program.
At the conclusion of our conversation, you mentioned
the possibility of developing a "new source bubble" as an alternative
path for retaining (and enhancing) the environmental benefits at the
Homer City Station. You also mentioned reservations among some in the
General Counsel's office about the lawfulness of such an approach. In
response, I discussed the Owner's 1981 and 1982 petitions requesting
that EPA establish new source performance standards for the Homer City
Station. The petitions and related correspondence are enclosed. Our
November 12, 1982 letter to Kathleen Bennet directly addressed, and
we believe resolved, the legal issue whether EPA has authority to establish
NSPS for Homer City-like situations.
John P. Proctor
Encl.
cc: Vincent J. Brisini
Benjamin Kalkstein, Esq.
Lisa Lund
Phillip M. Murphy
August 5, 1982
Mrs. Anne M. Gorsuch
Administrator
U.S. Environmental Protection Agency
401 M Street, S.W.
Washington, D.C. 20460RE: Request for Status Of Petitions for
Revision of 40 C.F.R. Part 6O, Subtitle DDear Mrs. Gorsuch:
On June 23, 1981 and November 13, 1981 Pennsylvania Electric Company ("Pennelec") and New York State Electric & Gas Corporation ("NYSEG") (hereinafter "Petitioners") filed requests for a revision of the Standards of Performance for Fossil-fuel Fired Steam Generators for which Construction is commenced after August 17, 1971 (4O C.F.R. Part 60, Subpart D).
Specifically, the June 23, 1981 Petition (Attachment 1, hereto) requested that the U.S. Environmental Protection Agency ("EPA" or the "Agency") revise, consistent with 40 C.F.R. Part 60, Subpart Da, the requirements for determining excess emissions of sulfur dioxide (40 C.F.R. Section 60.45(g(2), by authorizing a thirty (30)-day rolling average as an alternative to the 3-hour basis. The November 13, 1981 Petition (Attachment 2, hereto) requested, in part, that EPA initiate a rulemaking to establish, pursuant to Section 111(b)(1)(B) of the Clean Air Act, a standard of performance applicable to emissions of sulfur dioxide from a "class" or "type" (Section 111(b)(2)) of fossil-fuel fired stationary sources which utilize Multi-stream Coal Cleaning Systems ("MCCS"). To date, the Agency has not responded to either Petition.
The initiation of rulemakings to revise 40 C.F.R. Part 60, Subpart D in accordance with Petitioners' requests is necessary to assure that the environmental and economic benefits resulting from the operation of Petitioners' Homer City Steam Electric Generating Station will continue. As set forth in the November 13, 1981 Petition, emissions of sulfur dioxide from the three units at the Station have been approximately the same as before the operation of Unit No. 3. During the eight months since the innovative technology waiver for Petitioners' Unit No. 3 expired (November 30, 1981, see, 40 C.F.R. Section 60-47), emissions of sulfur dioxide have been approximately 8,740 tons less than if the three units had been achieving the individually applicable State Implementation Plan and new source performance standard requirements. The cumulative net reduction since the waiver was proposed on February 6, 1981, has been approximately 20,716 tons of sulfur dioxide (Attachment 3, hereto).* These reductions have been achieved at a cost savings to Petitioners' customers of more than 60 million compared to the costs of importing low sulfur coal to achieve the NSPS applicable to emissions of sulfur dioxide from Unit no. 3. And, the MCCS is producing coal averaging less than 1.5 lbs of sulfur dioxide per million Btu, within three (3) tenths of the applicable NSPS.
The combination of Agency action to authorize an alternative thirty (30)-day rolling average compliance basis and a NSPS for units utilizing MCCS is necessary to make permanent the benefits that are being derived presently from the operation of Romer City Units Nos. 1, 2 and 3. Otherwise, emissions of sulfur dioxide will increase, operating costs will soar and capital and coal mining employment will be relocated beyond the borders of the commonwealth of Pennsylvania. In view of this, Petitioners hereby reiterate their June 23 and November 13, 1981 requests.* Additional environmental benefits are discussed at 46 Fed. Reg. 55975 (November 13, 1981) and on page 7 of Attachment 2, hereto.
Representatives of Petitioners and I are available to meet with you and members of your staff, at your earliest convenience, to discuss the Petitions and any other information the Agency may need to initiate the requested rulemakings, in detail.Respectfully submitted,
John Proctor
Debevoise & Liberman
1200 Seventeenth Street, N.W.
Washington, D.C. 20036
(202) 857-9800 Norman W. Spindel
Huber Lawrence & Abell
99 Park Avenue
New York, New York 10016
(212) 682-6200Attachments
bcc w/attachments: J. Cannon
D. Foster
J. Jaksch
K. Ladd
M. Levine
E. Salo, Esquire
bcc wo/attachments: S. Silverman, Esquirebbcc wo/attachments: D. Carey
R. Conrad
P. Feldman
D. Fyock
J. Leva
A. Slowik
N. Spindel, Esquire
R. Wise
Law Offices of
DEBEVOISE & LIBERMAN
1200 Seventeenth Street, N.W.
Washington, D.C. 20036
Telephone (202) 857-9800
June 23, 1981
Mrs. Anne M. Gorsuch
Administrator
U.S. Environmental Protection Agency
401 M Street, S.W.
Washington, D.C. 20460RE: Petition for Revision of 40 C.F.R.
Part 60, Subpart DDear Mrs. Gorsuch:
Pursuant to Section 111(b)(1)(B) of the Clean Air Act ("Act"), New York State Electric Gas Corporation and General Public Utilities Corporation and its operating subsidiaries, Pennsylvania Electric Company and Metropolitan Edison Company of Pennsylvania and Jersey Central Power & Light Company of New Jersey (hereinafter "Petitioners") request a revision of the Standards of Performance for Fossil-Fuel-Fired Steam Generators for Which Construction is Commenced After August 17, 1971 (40 C.F.R. Part 60, Subpart D). Specifically, Petitioners request that the U.S. Environmental Protection Agency ("EPA" or the "Agency") revise, consistent with 40 C.F.R. Part 60, Subpart Da, the requirements for determining excess emissions of sulfur dioxide (40 C.F.R. Section 60.45(g)(2)) by authorizing a thirty-day rolling average as an alternative to the three-hour basis.
By way of background information, on June 11, 1979 (44 Fed. Reg. 33580), in accordance with Section 111(a)(1)(A) the Clean Air Act, the EPA promulgated revised New Stationary Source Performance Standards ("NSPS" or "standards") for electric utility steam generating units (40 C.F.R. Part 60, Subpart Da). Under the revised standards, "new" electric utility steam generating units which are constructed, modified or reconstructed after September 18, 1978 generally would have to achieve emission limitation requirements more stringent than those applicable to "old" units --those constructed between August 17, 1971 and September 18, 1978. Importantly, however, "old" and "new" units which combust 6% (or greater) sulfur content Eastern Midwest or Northern Appalachian coal are required to achieve identical mass emission limitations. For example, an "old" unit constructed in 1972 would have to achieve an emission limitation for emissions of sulfur dioxide resulting from the combustion of such coal equal to or less than 1.2 LBS. of sulfur dioxide per million BTU heat input. The same unit, combusting the same coal, constructed after September 18, 1978 would have to achieve a 90% reduction in potential emissions of sulfur dioxide and an emission limitation equal to or less than 1.2 LBS. of sulfur dioxide per million BTU heat input. A 90% reduction for 6% sulfur content coal is equivalent to about 1.2 LBS. of sulfur dioxide per million BTU heat
Thus, in both cases, the effective emission limitation requirement is 1.2 LBS. of sulfur dioxide per million BTU heat input.
For the "new" unit, compliance with the emission rotation and percentage reduction requirements would be determined on the basis of a "30-day rolling average...." (40 C.F.R. Section 60.43a(g)). In part, a thirty day rolling average (as opposed to a 24-hour or shorter average) was selected by EPA for purposes of determining compliance because it "allows adequate time for owners or operators to respond to operating problems affecting FGD efficiency, permits greater flexibility in procedures necessary to operate FGD systems in compliance with the standard, and can reduce the effects of sulfur coal variability on maintaining compliance with the final S02 standards without the application of coal-blending systems." (44 Fed. Reg. 33595) In short, the Agency's rationale for adapting the thirty-day rolling average rather than a 24-hour or shorter averaging period as proposed (40 C.F.R. Section 60.46a(c), 43 Fed. Req. 42176) is compelling; so compelling that Petitioners believe the rationale should be extended to the emission and fuel monitoring requirements (40 C.F.R. Section 60-45) applicable to "old" units.
Presently, owners or operators of such "old" units are required to report (in accordance with 40 C.F.R. Section 60.7(c)) emissions for "any three-hour period during which the average emissions (arithmetic average of three contiguous one-hour periods) of sulfur dioxide..." exceed the applicable standard under 40 C.F.R. Section 60.43 (40 C.F.R. Section 60.45(g)(2)(i)). Obviously, the period for determining excess emissions of "old" units (three-hour average) is more restrictive than the period applicable to "new" units thirty day rolling average). Furthermore, as EPA recognized in the rulemaking to establish standards for "new" units, such shorter period does not take into account and reflect accurately the effects of coal sulfur variability on maintaining compliance with the standards applicable to emissions of sulfur dioxide. The Agency has continued to recognize the importance of coal sulfur variability for assessing and maintaining compliance with emission and ambient air quality standards. Interestingly, Mr. Walter C. Barber, in his position as Director, office of Air Quality Planning and Standards, in a memorandum (EPA Memorandum on Proposal for Determining compliance with Sulfur Dioxide Standard) to the Deputy Administrator dated December 6, 1979, acknowledged that "coal, even from the same mine, will change in sulfur content from day-to-day_; ... EPA has had a number of contractors studying the mathematical form of the variation, the impact of coal cleaning and handling, the variability of selected coal reserves and the impact of FGD units on variability of stack emissions." (Emphasis added). One contractor, Systems Applications, Inc., in a report (The Ex Ex Method: Incorporating Variability In Sulfur Dioxide Emissions Into Power Plant Impact Assessment) dated July 23, 1980, confirmed that coal... exhibits short-term variability in (sulfur) composition; the result is that S02 emissions from coal burning show stochastic variation from one-time period to another." (Emphasis added). More recently, on January 8, 1981, the Agency "announced" a one-year program "to expand the availability of short-term S02 emissions data from certain coal-fired electric utility steam generating units..." (46 Fed. Req. 2186). In pertinent part, according to the Agency, the program is necessary "because of the tendency for power plants burning coal to experience highly variable emissions, especially over short averaging periods of 24 hours or less." (Emphasis added). Clearly, the variability of sulfur in coal has important implications for compliance determinations. Unfortunately, however, the emission and fuel monitoring requirements applicable to "old" units fail to reflect such implications. As a result, in order to provide a "margin of safety" to assure compliance during every three-hour period of operation, owners or operators of affected facilities such as Petitioners must purchase coal and operate sulfur control systems at a level substantially (at least 10%) below the applicable standard.
Importantly, the economic implications of providing a "margin of safety" to assure compliance with the three-hour requirement, compared to a thirty-day rolling average, are substantial. For example, at Unit No. 3 of Petitioners' Homer City Steam Electric Generating Station, the incremental cost of coal procurement and sulfur control system operation is at least $28 million in capital costs and $3.3 million in operating costs each year. A revision of the emission and fuel monitoring requirements of 40 C.F.R. Part 60, Subpart D, to authorize alternative requirements identical to those set out in 40 C.F.R. Section 60.43a(g), would provide an opportunity for avoiding such costs. Moreover, the revision would encourage further the use of locally available higher sulfur-content coal -- a major objective of the 1977 amendments to the Clean Air Act.
More importantly, implementation of the alternative requirements would make consistent the compliance times for "old" and "new" units and thus simplify enforcement of the standards. Under the revision, an owner or operator of an "old" unit utilizing the thirty-day rolling average alternative would continue to obtain data on hourly emissions of sulfur dioxide. However, such owner or operator, as well as EPA or the applicable state regulatory agency, would not be required to invest the time and resources necessary to evaluate, prepare and file reports on each three-hour period during which the arithmetic average of the three contiguous one-hour periods exceeded the standards. Such reports have no legal significance with regard to the critical issue whether the unit is in compliance with the standards. specifically, under 40 C.F.R. Section 60-11(a), compliance with the sulfur dioxide standards applicable to "old" units "shall be determined only by performance tests established by Section 60.8...." (Emphasis added). Thus, such evaluations and reports are simply meaningless exercises in paper preparation; at most, they may be an "indicator" of a possible compliance problem at the "old" unit. Of course, if the emission and fuel monitoring requirements of 40 C.F.R. Section 60.45 were revised in accordance with Petitioners' request, the requirements of Section 60.11(a) would be satisfied because a "'separate performance test" would be completed at the end of each boiler operating day and a new thirty-day average emission rate for sulfur dioxide would be calculated to demonstrate compliance with the standards in the same manner as set forth in 40 C.F.R. Section 60.46a(e) obviously, any question as to an "old" unit's compliance with the standards would be resolved expeditiously, moreover, it would be resolved without resort to the cumbersome and costly, process of conducting performance tests under 40 C.F.R. Section 60.8. In short, the requested revision would provide an opportunity to simplify and thus make more meaningful enforcement of the standards applicable to emissions of sulfur dioxide from the operation of "old" units. Attachment 1, hereto, is Petitioners proposed revision to 40 C.F.R. Part 60, Subpart D.In conclusion, Petitioners believe strongly that the factors supporting a revision of 40 C.F.R. Part 60, Subpart D are compelling. As a result, Petitioners respectfully request that the Administrator initiate a rulemaking, in accordance with the requirements of Section 111(b)(1)(B) of the Clean Air Act, to implement the revisions which are the subject of this petition.
Respectfully submitted, NEW YORK STATE ELECTRIC & GAS CORPORATION
GENERAL PUBLIC UTILITIES CORPORATION
PENNSYLVANIA ELECTRIC COMPANY
METROPOLITAN EDISON COMPANY
JERSEY CENTRAL POWER &, LIGHT COMPANYby: John P. Proctor
Debevoise & Liberman 1200 Seventeenth Street, N.W.
Washington,D.C. 20036
Norman W. Spindel
Huber, Magill, Lawrence Farrell
99 Park Avenue
New York, N.Y. 10016
(212) 682-6200
Their Attorneys Attachment
Attachment I D R A F T
Proposed Revision to 40 C.F.R. Part 60, Subpart D
Section 60.45 Emission, fuel monitoring and compliance provisions.Section 60.45(g)(2) Sulfur dioxide. Excess emissions
for affected facilities are defined as:(i) Any three-hour period during which the average emissions (arithmetic average of three
contiguous one-hour periods) of sulfur dioxide as measured by a continuous monitoring
system exceed the applicable standard under Section 60.43; or,
(ii) Excess emissions for affected facilities may, subject to the Administrator's approval,
be defined on the basis of a 30-day rolling average as determined in accordance with the
requirements of paragraph (h) of this section. Any affected facility which does not meet
the requirements of paragraph (h) of this section shall be subject to paragraph (g)(2) (i) of
this section.
Section 60.45(h) Compliance with the sulfur dioxide emission limitations under Section 60.43 determined an the basis of a 30-day rolling average.
(1) For the initial performance test required under Section 60.8, compliance with the sulfur dioxide emission limitations under Section 60.43 is based on the average emission rate for sulfur dioxide for the first 30 successive boiler operating days. The initial performance test is to be scheduled so that the first boiler operating day of the 30 successive boiler operating days is completed within 60 days after achieving the maximum production rate at which the affected facility will be operated, but not later than 180 days after initial start-up of the facility.
(2) After the initial performance test required under Section 60.8, compliance with the sulfur dioxide emission limitations under Section 60.43 is based on the average emission rate for 30 successive boiler operating days. A separate performance test is completed at the end of each boiler operating day after the initial performance test, and a new 30-day average emission rate for sulfur dioxide is calculated to show compliance with the standards.
(3) Compliance is determined by calculating the arithmetic average of all hourly emission rates for sulfur dioxide for the 30 successive boiler operating days.
(4) If an owner or operator has not obtained the minimum quantity of emission data as required under paragraph (i) of this section, compliance of the affected facility with the emission requirements under Section 60.43 of this subpart for the day on which the 30-day period ends, may be determined by the Administrator by following the applicable procedures in Section 6.0 and 7.0 of Reference Method 19 (Appendix A).Section 60.45(i) When emission data are not obtained because of continuous monitoring or fuel sampling and analysis system breakdowns, repairs, calibration checks and zero and span adjustments, emission data will be obtained by using other monitoring or fuel sampling systems as approved by the Administrator or the reference methods as described in paragraph (j) of this section to provide emission data for a minimum of 18 hours in at least 22 out of 30 successive boiler operating days.
Section 60.45(j) Reference methods used to supplement continuous monitoring or fuel sampling and analysis system data to meet the minimum data requirements in Section 60-45(h)(1) will be used as specified below or otherwise approved by the Administrator.
(1) Reference Methods 3 and 6, as applicable, are used. The sampling location(s) are the same as those used for the continuous monitoring or fuel sampling and analysis system.
(2) For method 6, the minimum sampling time is 20 minutes and the minimum sampling volume is 0.02 dscm (0.71 dcsf) for each sample. Samples are taken at approximately 60-minute intervals. Each sample represents a 1-hour average.
(3) For Method 3, the oxygen or carbon dioxide sample is to be taken for each hour when continuous sulfur dioxide data are taken or when Method 6 is required. Each sample
shall be taken for a minimum of 30 minutes in each hour using the integrated bag method specified in Method 3. Each sample represents a 1-hour average.
. (4) For each 1-hour average, the emissions expressed in ng/J (lb/million BTU) heat input are determined and used as needed to achieve the minimum data requirements of paragraph (i) of this section.
DEBEVOISE & LIBERMAN
1200 SEVENTEENTH STREET, N.W.
WASHINGTON, D.C. 20036-3088
(202) 857-9800
Mrs. Anne M. Gorsuch
Administrator
U.S. Environmental Protection Agency
401 M Street, S.W.
Washington, D.C. 20460 RE: Petition for Revision of 40 C.F.R. Part 60, Subpart D, Section 60.47Dear Mrs. Gorsuch:
Pursuant to Section 111(b)(1)(B) and 111(j) of the Clean Air Act ("Act"), New York State Electric & Gas Corporation ("NYSEG") and Pennsylvania Electric Company ("Pennelec") (hereinafter "Petitioners") request a revision of the innovative technology waiver promulgated by the U.S. Environmental Protection Agency ("EPA" or the "Agency") on November 13, 1981, (40 C.F.R. Section 60.47, 46 Fed. Reg. 55975).
Specifically, Petitioners request that EPA revise 40 C.F.R. Section 60.47(b), (c), and (e)(1), the effective date (November 30, 1981) of the innovative technology waiver and compliance date (December 1, 1981) for Unit No. 3 of the Petitioners' Romer City Steam Electric Generation Station, by extending such dates to December 10 and 11, 1982, to reflect time lost as a result of the EPA run-of-mine coal demonstration test and evaluation program, strikes and work stoppages. Similarly, Petitioners request that EPA revise 40 C.F.R. section 60.47 (d) by extending the requirement to demonstrate compliance with 40 C.F.R. Section 60.43(a)(2) to February 9, 1983. Petitioners also request that EPA revise the installation schedule set forth at 40 C.F.R. Section 60.47(f) (4), (S), by extending the deadlines therein to reflect the effects of the 1981 United Mine Workers of America ("UMW) coal strike. As demonstrated herein, without such extension, including an extension of the installation schedule requirements, the waiver will expire before Petitioners are able to complete the implementation and final testing of the Multistream Coal Cleaning System ("MCCS"), the innovative technological system in which the waiver was based.
By way of background information, Unit No.3 was scheduled to commence operation less than four months after Section 111(j) was enacted (August 7, 1977). Despite the newness of the law, and in view of the necessity for Unit No. 3 to commence operation, on November 10, 1977, the Petitioners requested that the Administrator, EPA, waive (until December 1, 1981) the applicability of the standard of performance for emissions of sulfur dioxide from the operation of Unit NO. 3. Nineteen (19) days later, on November 29, 1977, the Petitioners executed a Pennsylvania Department of Environmental Resources ("DER" or "Department") Consent Order and Agreement (Attachment 1, hereto).
As herein pertinent, the Consent Order and Agreement was necessary to implement a run-of-mine coal demonstration test and evaluation program proposed by EPA on September 22, 1977 (Attachment 2, hereto). Under the EPA program, the Petitioners were requested to combust run-of-mine coal, coincidental with the initial operation of Unit no. 3 (December 1, 1977), in order to establish a data base against which EPA, the Electric Power Research Institute and Petitioners could assess the effectiveness of MCCS as an innovative sulfur dioxide removal system. Since there was a possibility that the Department's applicable emission limitation requirement (4.0 LBS of sulfur dioxide per million BTTJ heat input) would be exceeded during the program, the EPA requested DER's "cooperation" in order to avoid any legal liability to Petitioners for any exceedence of such emission limitation which might occur during the program.
Operating in accordance with the Consent Order and Agreement, and its extension as a result of the UMW coal strike of December 6, 1977 (Attachment 1, hereto), the petitioners completed the EPA program on October 30, 1978. The United Mine Workers of America coal strike lasted from December 6, 1977 to March 27, 1978.
In EPA's view, "the proposed tests (were) essential to the development and demonstration of coal cleaning as a cost effective S02 pollution control method." (Attachment 2, hereto.) Unfortunately, however, it was technically infeasible to conduct the EPA program, and operate MCCS at the same time. Put another way, the EPA program took precedence over, and thus affected materially, the ability of Petitioners to obtain vital technological information which would have been derived from the operation of MCCS. Furthermore, an additional complication stemmed from the fact that the UMW was (and remains) the Union representing the workers who construct, operate and maintain the MCCS. Thus, during the 1977-1978 strike, and those which followed, including the 1981 strike, all work on MCCS had to be terminated. As a result, the Petitioners "lost" approximately eleven (11) months of engineering, construction and operating experience during the initial and most critical phase of implementation of the innovative technological system. (See Attachment 3, hereto). Thereafter, as set forth in Attachment 4, hereto, an additional thirty nine (39) days were lost as a result of strikes and work stoppages.
The effects of the 1981 UMW strike were particularly devastating. In early 1981, Petitioners were in the final stages of completing the construction of the modifications to the MCCS 93B (innovative) circuit. In recognition of this, and the fact that the proposed waiver (46 Fed. Reg. 11493, February 6, 1981) required that such modifications be implemented by September 15, 1981, Petitioners requested (March 4, 1981) that the UMW provide a "waiver" from any strike requirements which could affect the continued construction of the MCCS 93B circuit. (See, Attachment 5, hereto). Unfortunately, the Petitioners' request was denied and no construction occurred for the duration of the strike. The United Mine Workers of America coal strike lasted from March 27, 1981 to June 9, 1981.As a result, Petitioners "lost" another ninety one (91) days during the period when they were required to complete construction of the innovative circuit.
The effects of the 1981 strike, and their implications for compliance with the installation schedule of the waiver are obvious; unless an extension is granted, the installation schedule requirements of the waiver will not be achieved. (See, Attachment 6, hereto). Moreover, even if the waiver were revised to extend such requirements, the effective date of the waiver also must be revised so that Petitioners are provided an adequate opportunity to test the MCCS 93B circuit and thereafter implement any modifications necessary to demonstrate the circuit will operate effectively and provide coal of a quality and quantity necessary to achieve compliance with the applicable new source performance standard. Such opportunity, that is, the availability of adequate time to demonstrate the effectiveness of an innovative technological system of continuous emission reduction, once it is operational, goes to the heart of the legislative objectives inherent in the enactment of Section 111(j). Thus, unless Petitioners are provided such opportunity, particularly in view of the facts of this case, the relief available under Section 111(j) is meaningless and the section is a dead letter.
Petitioners are well aware that Section 111(j)(1)(E) of the Act states that a waiver may not extend beyond a date four years after the date on which "such source or portion thereof" commences operation. Obviously, a narrow and cramped reading of the Section, as reflected in the Response to Comments on the waiver, would preclude EPA from extending the waiver to reflect the time lost as a result of the EPA test program and UMW strikes and work stoppages. (See, however, Central Illinois Public Service Co. v. EPA, 594 F-2pd 636, 12 ERC 2022 (7th Cir. 1979)). Of course, if that were to occur, similar relief may be provided by establishing, pursuant to Section Ill (b)(1)(B) of the Act, a standard of performance applicable to emissions of sulfur dioxide from a "class" or "type" (Section 111(b)(2)) of fossil-fuel fired stationary sources which utilize MCCS. Indeed, the Response to Comments on the waiver recognizes explicitly that "standard setting either under Section 111(b)(1)(B) or 111(j) is within the sale power of the Administrator of EPA (Emphasis added). In view of such power, and in recognition of the fact that "issuance of a Section 111(i) waiver is in the nature of standard setting", a Section 111(b)(1)(B) standard may be established easily in this case. The technical, technological, environmental and economic bases for the waiver, as well as the record of Public Comments, all support the establishment of such standard. In any event, in the Petitioner's view, the facts and circumstances of this case are compelling; relief is warranted under either provision.
As discussed above, EPA requested that the Petitioners forego the operation of MCCS in order to "help us (EPA) evaluate the long-term improvements in air quality which can be achieved by the pre-combustion removal of mineral contaminants from coal.." (Attachment 2, hereto). Such benefits are not merely theoretical. For example, since the waiver was proposed on February 6, 1981 the "bubble" emission rate has been achieved or bettered for all time periods specified in the waiver. In fact, emissions of sulfur dioxide have been approximately 10,000 tons less than if Units No. 1, 2 and 3 had been achieving the individually applicable state implementation plan and new source performance standard requirements. Moreover, total emissions from the three units have been virtually the same as emissions before the addition of Unit No. 3. The beneficial air quality effects are obvious. Finally, the costs of operating Unit No. 3 during this period have been more than $25.2 million less than would be the case if Unit No. 3 had been required to meet the applicable new source Performance standard by importing low-sulfur coal. Of course, the environmental benefits achieved during the waiver period will continue-during any extension.
EPA requested Pennsylvania DER's permission and cooperation in performance. of the plant tests...." (Attachment 2, hereto.) And, EPA determined that the run-of-mine coal program was "essential to the development and demonstration of coal cleaning (Attachment 2, hereto). Unquestionably, but for the EPA initiated program, the Petitioners would have had an additional three hundred thirty five (335) days of operational experience with MCCS. The UMW strike and work stoppages only served to exacerbate the impact of the time lost. As a result, and to the same extent that EPA has recognized the effect of force majeure events on the assessment of noncompliance penalties under Section 120 of the Clean Air Act (See e.g., 40 C.F.R. Section 66.31(a) (4), (c)) or included provisions covering such events in virtually all its' Consent Decrees, the Agency must exercise the discretion available to it under Section 111(b) (1) (B) or 111 (j) and establish a standard applicable to sources which utilize MCCS or determine that the "Portion" (i.e., MCCS) of the source for which the waiver was sought did not start operating until November 1, 1978.
Any other determination would penalize Petitioners unfairly for events over which they not only had no control, but for which EPA was primarily responsible. Equity, and the sense of "fair play" which Petitioners expected would result from their agreement to the EPA test program, justify an interpretation of Section 111(b) (1) (B) or 111(j) which returns to Petitioners, at the time they need them most, the days lost between December 1, 1977 and the effective date of the waiver (November 13, 1981). Accordingly, the waiver should be effective to December 10, 1982, the compliance date should be December 11, 1982, the compliance test deadline should be extended to February 9, 1963 and the installation schedule set forth at 40 C.F.R. Section 60.47 (f) (4), (5) should be revised by adding ninety one (91) days to the deadlines set forth therein to reflect the effects of the 1981 UMW coal strike.Respectfully submitted,
NEW YORK STATE ELECTRIC & GAS CORPORATION
PENNSYLVANIA ELECTRIC COMPANY
by: John P. Proctor
Debevoise & Liberman
1200 Seventeenth Street, N.W.
Washington, D.C. 20036
(202) 857-9857Norman W. Spindel
Huber, Magill, Lawrence &Farrell
99 Park Avenue
New York, N.Y. 10016
(212) 682-6200
Their Attorneys
Attachmentscc w/Attch: W.P. Allen, Jr.
R.W. Conrad
J.K. Hambright
S.I. Silverman, Esq.
A.A. Slowik
W.A.Verrochi
SUMMARY OF OPERATING DATA - JUNE, 1982
HOMER CITY COAL PREPARATION PLANT
| Tons | BTU | % Ash | % Moisture | Lbs SO2/106 BTU | |
| Raw Coal |
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| Units 1 & 2 Product |
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| Unit 3 Product* |
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| Refuse |
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| Cumulative Units 1, 2, & 3 Product |
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*This product contains a mixture of deep cleaned coal and "A" circuit middling coal, and therefore, is not representative of a deep cleaned coal product.
UNITED STATES ENVIRONMENTAL. PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF AIR, NOISE, AND RADIATION
Mr. John P. Proctor
Debevoise & Liberman
1200 Seventeenth Street, N.W.
Washington, D,.C. 20036
Dear Mr. Proctor:This is in response to the letter of August 5, 1982, from you and Mr. Norman Spindel of Huber Lawrence and Abell, to the Administrator of EPA in which you requested revision of the Subpart D standard of performance for fossil-fuel-fired steam generators. The revisions you requested would define the SO2 emission averaging time as 30 days, and would establish a standard of performance based on multi-stream coal cleaning systems.
With regard to averaging time, we are currently reviewing the suggested Subpart D standard. One proposal pending before the Agency, to define the averaging time for each sulfur dioxide performance test as 30 days. As soon as a decision is made, it will be announced in the Federal Register as a proposed rule; and we will, of course, provide opportunity for public comment.
Your second request asks that we relax the 1971 standard for boilers, 40 CFR Part 60, Subpart D, by making special provision for boilers firing coal cleaned by the multi-stream coal cleaning systems. However, you have not provided the basis on which the Agency would justify such a relaxation. In view of the 1973 review of the Subpart D sulfur dioxide standard by the D.C. Circuit Court, and the Court's conclusion that the SO2 emission limit is achievable, we would find such a change difficult to justify. The subsequent revision of the standard in Subpart Da and the associated judicial review and conclusions pertaining to the capability of control technology must also be taken into account.
I hope you will elaborate on what you believe to be the basis for your request.
Sincerely yours,
Kathleen Bennett
Assistant Administrator
for Air, Noise, and Radiation
cc: Mr. Norman W. Spindel
Huber Lawrence and Abell
99 Park Avenue
New York, New York 10016
(202) 857-9800
LAW OFFICES OF
BISHOP, LIBERMAN, COOK, PURCELL & REYNOLDS
1200 SEVENTEENTH STREET, N.W.
WASHINGTON, D.C.20036
July 19, 1985
Michael H. Levin
Chief, Regulatory Reform Staff
Office of Policy, Planning and Evaluation (PM-223)
401 M Street, S.W.
Washington, D.C. 20460
Dear Mike:Representatives of Pennsylvania Electric Company, New York State Electric & Gas Corporation ("Owners") and I appreciate greatly your meeting with us last week to discuss EPA efforts concerning compliance bubbles for new and existing sources and their particular applicability to the three units at Owner's Homer City Steam Electric Generating Station. Your candor about the schedule for the Agency's consideration of the Owner's 1981 petition to establish a compliance bubble for the Homer City Station was refreshing. Unfortunately, as we had discussed, the Owner's schedule for decisions under the Second Amended Consent Decree is less flexible than the schedule you outlined.
In any event, at the conclusion of our meeting, you requested information on the Owner's efforts to make permanent the benefits of operating the station in accordance with a compliance bubble. Specifically, you requested information on the environmental, economic and regulatory bases to justify expedited section on the Owner's petition. That information is enclosed. Of course, we believe it is compelling.
As you know, Owner's are exploring a number of compliance options for Unit No. 3. Among them are the use of MCCS coal in combination with low volatile coal, Pennsylvania or out-of-state compliance coal or gas, as well as limestone injection or the construction and operation of a flue gas desulfurization system. Studies are underway presently to support a September, 1985 decision on the options to be implemented in accordance with the requirements of the Decree. Given the sensitivity of our relationship with the Commonwealth, and the status of our discussions with Region III, we would appreciate your treating as confidential the options we discussed.
Should you have any questions about the enclosures, or require any further information, please call me. With warm regards,
John P. Proctor
cc (w/enc): D. Foster
(w/o enc): D. Carey
D. Fyock
J. Greco
A. Slowik
N. Spindel, Esq.
C. WilsonMrs. Kathleen M. Bennett
DEBEVOISE & LIBERMAN
1200 SEVENTEENTH STREET, N.W.
WASHINGTON, D.C. 20036-3088
(202) 857-9800
November 12, 1982
Assistant Administrator for
Air, Noise, and Radiation
United States Environmental
Protection Agency
401 M Street, S.W.
Washington, D.C. 20460
Dear Mrs. Bennett:The Owners of the Homer City Steam Electric Generating Station and I appreciate your October 4, 1982, response to our Petitions for rulemakings to amend the new source performance standards ("NSPS").
The possibility of rulemaking proceedings to authorize a thirty (30)-day rolling average compliance basis as an alternative to the three (3)-hour compliance test method, is most encouraging. Such alternative methodology will recognize the variability of sulfur in coal, without jeopardizing compliance with the standards, and will provide accurate information continuously about an owner's status of compliance with the standards. Obviously, we look forward to the rulemaking.
Your letter also requested further information about our legal rationale for requesting that the Administrator establish a NSPS for units utilizing Multi-stream Coal Cleaning Systems ("MCCS"). As discussed below, we do not consider this a request for relaxation of the standards.
As the Agency determined when it granted the innovative technology waiver for Unit No. 3 of the Homer City Station, the MCCS represents an innovative mechanism for achieving compliance with the NSPS (46 Fed. Reg. 55975, November 13, 1981). Thus, although emissions of sulfur dioxide from the operation of Unit No. 3 are not controlled to the level required by the NSPS (1-2 lbs. of sulfur dioxide per million BTU heat input), operation of the MCCS has resulted in emissions from the three units substantially below the level authorized by the NSPS and State Implementation Plan (SIP). This experience, and the environmental and economic benefits described in our November 13, 1981 Petition and August 5, 1982 Request for Status, encouraged the Owners to ascertain whether the USPS could be amended to reflect operations at the Station.
A starting point for the Owners' investigation was Section III of the Act. Specifically, Section 111(b)(2). This section provides that the Administrator "may distinguish among classes, types and sizes within categories of new sources for the purpose of establishing such standards". Unquestionably, the Administrator may exercise the discretion provided by section 111(b) (2) and determine that sources using MCCS constitute a "separate class" or "type" of source subject to NSPS. But what would the standard apply to?
Historically, the Agency has utilized only one portion of the definition of the stationary source" (Section 111 (a) (3)) when establishing standards. That is, the Agency has utilized the word "facility" to denote sources subject to the standards. Thus, for example, the Standards of Performance for Fossil-fuel Fired Steam Generators for Which Construction is Commenced After August 17, 1971 (40 C.F.R. Section 60, Subpart D) (e.g. Homer City Unit No. 3) apply to "affected facilities". (40 C.F.R. Section 60.2, 60.40(a).) "Affected facilities", in turn are categorized as each "fossil-fuel fired steam generator" which is defined as "a furnace or boiler". (40 C.F.R. Section 60.40(a)(1), 60.41(a)) In short, by using the term "affected facilities" to denote sources subject to the standards, to the exclusion of the words "building, structure or installation" as set forth in Section 111, the Agency has painted itself into a regulatory corner. By limiting its standard setting authority to discrete units (e.g. furnaces or (i.e. "installations") the Agency has created a regulatory precedent that has become so ingrained that change is perceived as extremely difficult.
But change would not be unlawful. In fact, a careful reading of Section 111 does not reveal any requirement that standards must apply solely to discrete units such as a boiler or furnace. In our view, then, aside from the historic predilection of the Agency, there is no legal bar to utilizing the other portions of the definition of "stationary source" to denote the sources subject to NSPS. Thus, in the case of Homer City, the Agency would be operating lawfully if it were to initiate a rulemaking to establish a standard applicable to emissions of sulfur dioxide from the operation of the three units utilizing MCCS.
The standard we envision would consist of several emission limitation and reduction requirements. For example, the emission limitation requirements for Units Nos. I and 2 would be 2.8 lbs. of sulfur dioxide per million BTU heat input. This is substantially less than 3.7 lbs. as authorized by the Pennsylvania SIP. The emission limitation requirement for Unit No. 3 would be 1.7 lbs. of sulfur dioxide per million BTU heat input. Although this limitation is higher than the standard applicable historically to "boilers", the combination would assure that emissions from the "installation" would be approximately the same as before the operation of Unit No. 3. The emission limitation requirement for the installation would be 2.8 lbs. of sulfur dioxide per million BTTJ heat input. This is based on the combined SIP and historic NSPS emission limitation. requirements (3.7 + 3.7 + 1.2 / 3 = 2.87). Additionally, a percentage reduction requirement of approximately 50 to 55 percent would apply to emissions from the installation. Thus, the limitations would not be achieved by purchasing low sulfur coal only rather, operation of MCCS would reflect the objectives set out in Section 111(a)(1)(ii) of the Act. And, as discussed in our August 5, 1962 letter, the air quality benefits are obvious. Of course, as units at the installation are retired, modified or undergo more than a deminimus operational change, the standard for the installation would be recalculated and reduced. Finally, the regulatory and enforcement benefits which would flow from subjecting the three units to NSPS are substantial. The utilization of a thirty (30)-day rolling average compliance basis and continuous emission monitoring systems to determine compliance would provide the Agency and Commonwealth with an accurate and timely mechanism for enforcing the standards. Rather than conducting sporadic performance tests and reviewing legally meaningless excess emission reports, the compliance methodology would extend to all units at the installation and emission data would provide the basis for expeditious enforcement.
Having concluded that the rulemaking we envision would be consistent with the Act, we investigated whether the case law would pose any insurmountable hurdles. It would not.
We read Asarco, Alabama Power and NRDC v. Gorsuch as establishing several fundamental principles concerning air quality and new source standards.11 NRDC v. Gorsuch, 685 F.2d 718 (D.C. Cir. 1982); Alabama Power v. Costle, 636 F.2d 323 (D.C. Cir. 1979); and Asarco v. EPA, 578 F.2d 319 (D.C. Cir. 1978). First, new source performance standards must be applied so that air quality is improved. Of course, this is a cornerstone of the Act, as set forth in Section 101(b). But in Asarco, the establishment of emission "caps" for modifications of new or existing sources located at the same stationary site was held unlawful because air quality never would improve. That is, as long as units under the "cap" could be modified with offsetting emission reductions, NSPS never would apply, the "status quo" would be maintained and, of course, air quality would not improve.
The decision in Asarco is limited to the proposition that sources may not avoid the applicability of USPS. The decision does not prohibit the Agency from utilizing the statutory authority available to it under Section 111 to determine how the standards apply. Thus, the Agency may decide lawfully that under appropriate circumstances a standard may be established for an installation which utilizes MCCS as the emission limitation and reduction control mechanism. As long as the standard is written to require emission limitations, equivalent to the limitations contained in the historic standards, Asarco would be no bar. And, the requirement that the limitations decline as units at the installation are modified, retired or undergo more than a deminimus operational change, would assure that air quality will continue to improve. The decisions in Alabama Power and NRDC v. Gorsuch do not alter this determination.
Another principle flowing from the cases involves the issue whether EPA must adhere to the use of the word facility when defining the stationary sources to which standards will apply. The decisions are clear; the Agency may utilize all components of the statutory definition of stationary source. Thus, there is no legal impediment to an Agency determination that NSPS will be written for installations, or buildings, or structures. In short, the standard we envision would be consistent, if not encouraged by, the relevant case law. But what about the statements of concern that may issue from those who have became comfortable with the Agency's historic method of standard setting?
Our final consideration was amorphous; it involved evaluation of policy, public perception and political issues. Undaunted, the Owners assessed whether the public would be outraged by a rulemaking proceeding that would result in the utilization of local coal, save hundreds of millions for ratepayers and result in emissions and air quality better than would occur if the historic norm were to apply. Discussion within the environmental community and among regulators suggested strongly that the benefits which would flow from the rulemaking would outweigh, by a wide margin, the inconvenience mentally to those accustomed to the historic approach. The owners also determined that any concerns about the approach being perceived as a regulatory loophole could be addressed and resolved fully by a rulemaking with such obvious environmental, economic and energy benefits. After all, blind adherence to the historic norm will be environmentally and economically counterproductive. In fact, politically, the Owners believe strongly that few rulemaking proceedings have as much potential for implementing meaningful regulatory reform; perhaps "regulatory innovation" would be a more precise term.
In any event, a carefully and tightly drawn standard along the lines of that discussed above, should assure that any possible objections would be addressed and resolved satisfactorily. In short, the owners' rulemaking proposal is authorized by the provisions of the statute, is consistent with the relevant case law and should not encounter meaningful opposition. Finally, it would make permanent, in a timely manner, the enormous environmental and economic benefits resulting from the operation of the Homer City Station.
Very truly yours,
John P. Proctor