May 6, 1994


Randolph Hill, Esquire
Office of General Counsel
U.S. Environmental Protection Agency
401 M Street, S.W.
Washington, D.C. 20460

     Re:  Edison Electric Institute, et al. v. U.S. Environmental
          Protection Agency, No. 93-1474 (D.C. Cir.)             

Dear Randy:

     Outlined below are the outstanding issues in the above
referenced litigation involving the Edison Electric Institute's
("EEI") challenge to EPA's May 3, 1993 used oil technical
amendments and EEI's proposals for resolving these issues.  After
you have had a chance to review the same, we would like to meet
with EPA to try to resolve this matter.

     I.  Management of Materials Containing Used Oil
         That is Not Free-Flowing                   

     One of EEI's major issues involves EPA's clarification that
materials containing used oil from which used oil has been
removed to the extent possible such that "no visible signs of
free-flowing oil remain in or on the material" are not used oil
and are not subject to the Part 279 used oil management
standards.  58 Fed. Reg. 26420, 26425 (May 3, 1993) (to be
codified at 40 C.F.R.  279.10(c)).  Expressly excluded from this
provision are materials "containing or otherwise contaminated
with used oil that are burned for energy recovery."  Id.
(emphasis added).  In other words, materials that contain or are
contaminated with used oil that are burned for energy recovery
are regulated as used oil fuel, even if the used oil contained in
the material is not "free-flowing."  This provision raises two
issues on which EEI seeks clarification.

-----------------------------------------------------------------

Randolph Hill, Esquire
May 6, 1994
Page 2

          A.  Regulatory Status of Soils

     A common utility practice for managing soil containing trace
amounts of used oil is to burn the soil in utility boilers. 
These materials do not contain free-flowing used oil and are not
burned for energy recovery.  Rather, combustion simply offers the
most practical and effective management option for these
non-hazardous materials.  Because the soils are not burned for
energy recovery, they fall within the general exclusion from the
definition of used oil for materials that do not contain
free-flowing used oil and are not subject to regulation under
Part 279.

     We believe that the Agency concurs in this position, but
would like confirmation by EPA of the following points:

          1.  Soil containing used oil that is not free-flowing
          (e.g., soil that contains used oil from a spill) and
          that is not burned in an industrial boiler is not used
          oil and is not subject to regulation under Part 279;

          2.  Soil containing used oil that is not free-flowing,
          has a fuel value of less than 5,000 Btu (EPA's
          benchmark for determining whether a material has fuel
          value), and is burned in an industrial boiler or
          furnace, is not used oil fuel and is not subject to
          Part 279 because it is not being burned for energy
          recovery; and

          3.  Soil containing used oil that meets the
          "specification" limits in 40 C.F.R.  279.11 is not
          subject to the Part 279 requirements (with the
          exception of the on-specification marketer requirements
          in  279.72-.74).

          B.  Regulatory Status of Absorbent Materials

     A related issue involves the burning of absorbent materials
used to cleanup used oil spills.  After the cleanup process is
complete, these absorbent materials -- e.g., commercial
booms/pads -- are often burned in utility boilers.  As part of
the marketing of these products, the absorbents are intentionally
manufactured using ingredients (e.g., polypropylene) that have a
fuel value greater than 5,000 Btu/lb so that they can be burned
as fuel after the cleanup

-----------------------------------------------------------------

Randolph Hill, Esquire
May 6, 1994
Page 3

is complete.1  This option makes economic and environmental sense
because it allows companies engaged in spill response activities
to recycle the cleanup materials in their boilers as a
supplemental fuel, thus avoiding excessive land disposal costs
and the uncertainties associated with any off-site management of
waste materials.

     EEI is concerned, however, that absorbent materials managed
in the above manner could inadvertently be classified as "used
oil fuel" under the Agency's technical amendments simply because
they are being recycled as a fuel, even though the primary fuel
value of the material is contained in the commercial absorbent. 
We do not believe this is EPA's intent since such an erroneous
classification would sharply curtail an environmentally sound
management practice and most likely would result in spill cleanup
materials being land disposed as opposed to being recycled as
supplemental fuel.

     EEI therefore seeks clarification from EPA that such
absorbent materials are not "used oil" because (1) the oil is
not free-flowing, and (2) the  material with the fuel value is
the absorbent material itself since it was intentionally
manufactured to be burned as a fuel after the cleanup process is
complete.  Confirmation of this point is important to EEI members
because the recycling of spill cleanup absorbent materials as a
supplemental fuel has proven to be a cost-effective and
environmentally sound management option that should not be
discouraged.

     EEI believes that an interpretive letter clarifying the
above two points regarding the regulatory status of soils and
absorbent materials would be satisfactory.

     II.  Application of Used Oil to Coal Piles

            EEI also seeks clarification regarding the regulatory
consequences of applying used oil to coal piles or into coal feed
hoppers.  This practice is conducted by a number of electric
utilities because applying used oil to coal, which is then fed
into a boiler, is often the most practical method for injecting

________________________

1  Indeed, certain commercial products are marketed as having a
   heating value ranging from 10,000 Btu/lb to 20,000 Btu/lb.

-----------------------------------------------------------------

Randolph Hill, Esquire
May 6, 1994
Page 4

the used oil into the boiler.  EEI raises this issue because it
is aware of language in the preamble to the September 10, 1992
final used oil rules that states that the application of used oil
to coal in a rail car for purposes of dust suppression converts
the used oil/coal mixture to used oil fuel.  See 57 Fed. Reg.
41566, 41583 (Sept. 10, 1992).  While EEI is not familiar with
the specific circumstances regarding this particular practice, we
seek confirmation that this result does not apply in cases where
used oil is applied to a coal pile or a feed hopper for purposes
of feeding the used oil into the boiler and thus does not convert
the entire coal pile or into "used oil fuel," with all the
attendant consequences of used oil storage requirements (e.g.,
storage in tanks or containers with secondary containment).  Such
a reading of the regulations would be nonsensical.  It would be
virtually impossible to attempt to manage an entire electric
utility coal pile in a container or tank simply because small
amounts of used oil have been applied to the coal pile prior to
the coal being inserted into the boiler.2  Indeed, one EEI member
reports that its coal piles range in size from five to 50 acres
and have a maximum height of four stories.  We expect that these
numbers are representative of coal piles throughout the industry.

     Aside from being completely unworkable, this interpretation
is wholly unnecessary from an an environmental perspective. 
While there is no uniform used oil to coal ratio, based on
discussions with EEI member companies, the amount of used oil
that could potentially be applied to a coal pile is minute and
inconsequential when compared to the total volume of the coal
pile.  Moreover, even for these extremely small volumes, the coal
acts as an effective absorbent of oil and therefore makes it
highly unlikely that any material volume of such oil would pose a
run-off concern.  Even assuming such effects could be identified,
any possible run-off would be adequately addressed by a
facility's coal pile runoff controls, which are often
incorporated into a facility's NPDES permits.  Finally, where
such application takes place, it occurs on the active portion of
the coal pile where the coal is generally inserted into

________________________

2  EEI notes that this issue is being raised only in the context
   of "off-specification" used oil being applied to a coal pile
   since "specification" used oil that is burned for energy
   recovery is not subject to the 40 C.F.R. Part 279 standards.
   See id. at  279.11.

-----------------------------------------------------------------

Randolph Hill, Esquire
May 6, 1994
Page 5

the boiler within a week, if not on the same day.  Again, this
practice minimizes any possibility of run-off.

     EEI recognizes that if off-specification used oil fuel is
applied to a coal pile prior to its injection into a boiler, the
owner/operator of the facility is a used oil burner and must
comply with all applicable used oil burner requirements,
including ensuring that the boiler is qualified to burn
off-specification used oil fuel.  Furthermore, prior to its
application onto the coal pile, the used oil must be stored in
accordance with applicable storage requirements.  EEI seeks
confirmation only of the position that the mere application of
used oil onto a coal pile or into a feed hopper does not convert
the entire pile or hopper into used oil fuel, thus subjecting the
pile or hopper to the used oil storage requirements.

     III.  The Regulatory Status of Used Oil Containing PCBs

     Finally, EEI believes that in attempting to clarify the
applicability of the TSCA and EPA regulations to certain used
oils containing PCBs, EPA's technical amendment to 40 C.F.R 
279.10(i) could be mistakenly construed as sweeping all used oils
containing PCBs into the Part 279 program.  EEI does not believe
this was EPA's intent since used oil containing greater than 50
ppm PCBs is comprehensively regulated under TSCA and therefore
was expressly excluded from the Part 279 program in the September
10, 1992 used oil rules.  EEI does not believe that EPA intended
to eliminate this important determination through a "technical
clarification."

     Rather, EEI believes that what EPA was attempting to do in
the May 1992 technical correction was to clarify that used oils
containing between 2 ppm and 50 ppm PCBs that are burned for
energy recovery are subject to both the TSCA  761.20(e) rules
and the applicable Part 279 rules governing the burning of used
oil fuel under RCRA.  As EPA explained in the preamble, the
Agency mistakenly excluded this category of used oil from the
Part 279 rules altogether, and therefore in the May 1992
technical correction was simply attempting to reinstate the
pre-existing RCRA rules that applied to these used oils prior to
the promulgation of the new Part 279 rules (i.e., the former 40
C.F.R. Part 266 used oil rules, now recodified at 40 C.F.R.
Subparts G & H (applicable to burners and marketers of used oil
fuel)).

           The problem, however, is that EPA's technical
amendment to 40 C.F.R.  279.10(i) could be construed as sweeping
far broader than simply addressing used oil containing between 2
ppm and 50 ppm PCBS.  The former regulation -- promulgated on
September 10, 1992 -- provided that "PCB-

-----------------------------------------------------------------

Randolph Hill, Esquire
May 6, 1994
Page 6

containing used oil regulated under part 761 [of TSCA] is exempt
from regulation under [Part 279]."  The amended regulatory
language, however, provides that

          [i]n addition to the requirements of 40 C.F.R. Part
          279, marketers and burners of used oil who market used
          oil containing any quantifiable level of PCBs are
          subject to the requirements found at 40 C.F.R. 
          761.20(e).

58 Fed. Reg. at 26425 (emphasis added).  Because there is no
qualification on the type of used oil addressed under this
regulation, the rule could be mistakenly construed as completely
eliminating the exclusion from the Part 279 program for all used
oil containing PCBs, specifically used oil containing greater
than 50 ppm PCBs.  EPA has made clear, however, that such used
oils are not subject to regulation under RCRA.  Indeed, in the
preamble to the September 10, 1992 rule, EPA stated that

          [t]he manufacture, use, import, and disposal of ...
          (PCBs) in used oils are controlled under ... (TSCA).
          TSCA controls the manufacture, import, use, and
          disposal of oils containing over 50 ppm PCBs.  In
          addition, TSCA requires reporting of any spill of
          material containing 50 ppm or greater PCBs, into
          sewers, drinking water, surface water, grazing lands,
          or vegetable gardens ....  Note that used oils
          containing less than 50 ppm of PCBs are covered under
          RCRA.

57 Fed. Reg. at 41569 (emphasis added).  Further, in direct
response to comments on this issue, EPA explained during the rule
making that

          [u]sed oils containing greater than 50 ppm PCBs are
          subject to TSCA regulation, rather than RCRA
          regulation.  Thus, management requirements currently in
          place under TSCA supersede the newly promulgated used
          oil management standards if the used oil contains PCBs
          at a concentration of greater than 50 ppm.

EPA Public Comment and Response on Used Oil Proposed Rule:
General Issues (Nov. 29, 1985), G. 10 (Relationship to Other EPA
Programs - TSCA) at comment UO 004 (emphasis added).  Thus, it
has always been EPA's position that used oil containing between 2
ppm and 50 ppm PCBs is regulated under

-----------------------------------------------------------------

Randolph Hill, Esquire
May 6, 1994
Page 7

applicable provisions of both TSCA and RCRA, while used oil
containing greater than 50 ppm PCBs is regulated exclusively
under TSCA.

     In view of the detailed consideration given this issue
during the development of the September 1992 used oil rules, EEI
is confident that EPA was not attempting to reverse this position
through its May 3, 1992 technical amendment.  Nonetheless,
because the new regulatory language could possibly be construed
in this manner by the states adopting the Part 279 rules, EEI
requests that EPA clarify this position as soon as possible in
writing.  Specifically, EEI requests that EPA clarify that the
purpose of the technical amendment to 40 C.F.R.  279.10(i) was
to clarify that used oil fuel containing between 2 ppm and 50 ppm
PCBs is subject to both applicable Part 279 rules (including 40
C.F.R. Subparts G and H), in addition to the TSCA controls under
40 C.F.R.  761.20(e).  EPA should also confirm that used oil
containing greater than 50 ppm PCBs is not subject to the Part
279 program.

                       *   *   *   *   *

     Please call me after you have had an opportunity to review
the above issues.  We look forward to meeting with EPA staff
shortly to resolve these matters.


                              Sincerely yours,



                              Douglas H. Green
                              Counsel to the Edison Electric Institute

cc:  Eileen T. McDonough, Esq.