[Federal Register Volume 60, Number 180 (Monday, September 18, 1995)]
[Rules and Regulations]
[Pages 48037-48039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23107]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 69

[FRL-5296-9]


Special Exemptions From Requirements of the Clean Air Act for the 
Territory of Guam

AGENCY: Environmental Protection Agency (``EPA'').

ACTION: Direct final rulemaking.

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SUMMARY: On July 14, 1995, the Governor of Guam filed a petition 
(``Petition'') with the Administrator seeking a waiver of certain Clean 
Air Act (``CAA'') requirements which apply to Guam Power Authority 
(``GPA''). The Petition was filed under Section 325(a) of the CAA. The 
waiver will help to ease a severe energy emergency on Guam. Based upon 
the information in the Petition and supplementary information from GPA 
and the Guam Environmental Protection Agency (``GEPA''), EPA is 
granting the waiver requested. EPA finds that there is good cause for a 
direct final rulemaking and that notice and public procedures are 
impracticable, unnecessary, and contrary to the public interest.
    The waiver allows, with certain conditions, one baseload diesel 
electric generating facility to operate at the Cabras Power Plant prior 
to the receipt of a final Prevention of Significant Deterioration 
(``PSD'') permit by GPA. The waiver also allows the construction, but 
not operation, of a second baseload diesel unit at the Cabras Power 
Plant prior to GPA's receipt of a final PSD permit.

EFFECTIVE DATE: This direct final rule is effective September 18, 1995.

FOR FURTHER INFORMATION CONTACT: Norman Lovelace, Chief, Office of 
Pacific Islands and Native American Programs (E-4), Office of External 
Affairs, U.S. Environmental Protection Agency, Region IX, 75 Hawthorne 
Street, San Francisco, California 94105. Telephone: (415) 744-1599.

SUPPLEMENTARY INFORMATION:

Background

    The Petition was submitted by Governor Gutierrez of Guam to the 
Administrator of EPA in a letter dated July 14, 1995. It is accompanied 
by supporting documentation, including newspaper accounts describing 
traffic safety, water supply, and political problems caused by the 
significant electrical energy shortage on Guam. The Petition 
incorporates an air quality analysis, based upon computer modeling, 
which demonstrates the effects of the waiver upon air quality, 
particularly in the offshore direction, from the generating facilities 
involved.
    The Petition seeks a waiver of certain CAA requirements for the 
operation and construction by GPA of two baseload diesel electric 
generators. Both units are part of the Cabras Power Plant. The first 
facility involved is designated as Cabras Unit No. 3. This forty 
megawatt diesel generator was constructed, pursuant to 40 CFR 
69.11(a)(1), prior to GPA's receipt of a final PSD permit. (This unit 
is designated Cabras Diesel No. 1 in 40 CFR 69.11(a)(1). Its 
designation has been changed since the 1993 promulgation of that rule.) 
The Petition asks EPA to waive CAA requirements as necessary to allow 
operation of Cabras Unit No. 3, subject to conditions, prior to receipt 
of a final PSD permit by GPA.
    The waiver describes two conditions accompanying the operation of 
Cabras Unit No. 3. First, during operations under the waiver a lower 
sulfur fuel oil will be fired in the Cabras Power Plant and in the 
adjacent Piti Power Plant during certain periods. These power plants 
operate under a fuel switching intermittent control strategy, and the 
sulfur-in-fuel reduction in the waiver application applies to 
operations under offshore wind conditions. Second, the waiver will last 
only until August 15, 1996, or until issuance of a final PSD permit to 
GPA for this unit, whichever occurs first.
    The Petition also seeks a waiver of CAA requirements as necessary 
to allow GPA to construct a second forty megawatt baseload unit at the 
Cabras Power Plant. This facility is designated as Cabras Unit No. 4. 
The waiver application seeks to allow construction of Cabras Unit No. 4 
prior to a receipt by GPA of a PSD permit. Cabras Unit No. 4 will not 
operate prior to receipt of final PSD permit.
    Guam has experienced a longstanding shortage of electrical energy, 
repeatedly leading to rotating blackouts of areas of the island. The 
background to this energy shortage is described in the 1993 waiver 
proceeding before EPA. 50 FR 15579, 15580. The Petition describes how 
the 1993 energy shortage has continued despite a substantial capital 
development program by GPA, and in some respects has grown worse. The 
energy shortage was created originally because of very rapid growth in 
energy demand due to increased residential electrical consumption and a 
boom in tourism. The Petition describes how energy shortfalls are now 
exacerbated as a result of substantial facility outages caused by 
equipment failures.
    As EPA noted in the 1993 waiver proceeding, Guam is an isolated 
island. 58 FR 13580. GPA generates almost all electric power used on 
the island (other than power generated by the United States Navy). 
Unlike power authorities on the mainland United States, GPA does not 
have the option of purchasing power from other sources. Guam is, and 
must remain, self sufficient with regard to energy generation.
    The Petition states that Guam's energy shortfall has worsened in 
recent months because of facility outages caused by planned and 
unplanned maintenance requirements. The longstanding nature of the 
energy shortage has required GPA to use its existing facilities at peak 
capacity for several years. GPA has also deferred planned maintenance, 
when safety considerations have allowed, to permit units to remain in 
service. Because of the length of time which has elapsed since the 
beginning of the emergency, the result is now substantially reduced 
reliability of GPA's electric generating units. The Petition describes 
several significant and unplanned recent maintenance outages.
    The construction and operation of additional, reliable baseload 
generating units will enable GPA to satisfy electrical demand with an 
appropriate margin of safety, while at the same time allowing for 
planned maintenance outages of generating units. Once sufficient 
baseload capacity exists and can be operated, routine, as well as 
unplanned blackouts on the island will be ended. Cabras Units Nos. 3 
and 4 are such baseload units.
    The Petition states that Cabras Unit No. 3 will be ready to begin 
operation and electrical generation on approximately August 15, 1995. 
The building which houses Cabras Unit No. 

[[Page 48038]]
3 and will house Cabras Unit No. 4 has already been constructed under 
40 CFR 69.11. The remaining construction of Cabras Unit No. 4 can be 
carried out immediately pursuant to this rulemaking.
    The Petition describes a second potential difficulty with PSD 
permitting for the operation of Cabras Unit No. 3 and the construction 
of Cabras Unit No. 4. Absent changes in the current operations of the 
Cabras and Piti Power Plants, GPA's computer modeling suggests that the 
operation of the new units, combined with existing facilities, may 
cause exceedences of sulfur dioxide National Ambient Air Quality 
Standards (``NAAQS'') on Orote Point, a peninsula of elevated terrain 
located in the offshore direction from the power plants.
    GPA is re-evaluating its computer modeling results using state of 
the art wind tunnel modeling. Preliminary results of wind tunnel 
modeling seem to confirm the possibility of the exceedences projected 
by computer models. If a final analysis upholds that result, 
significant changes to power plant operations likely will be necessary 
in order for PSD permits to be issued for Cabras Units Nos. 3 and 4.
    Section 325(a) of the CAA allows a waiver of certain CAA 
requirements, based upon local factors, only if the waiver will not 
cause exceedences of the primary NAAQS or violations of the hazardous 
air pollutant provisions of the CAA. The hazardous air pollutant 
provisions of the CAA are not affected by the Petition. The Petition is 
accompanied by an air quality analysis, utilizing computer modeling, 
which demonstrates that all NAAQS will be protected if the requested 
waivers are granted and incorporate the operating conditions described 
below.
    GPA operates the Cabras and Piti Power Plants under an intermittent 
control strategy which utilizes fuel switching. This intermittent 
control strategy is described in an EPA document entitled the ``Cabras 
Area ICS.'' This strategy has required the use of fuel oil with a 
maximum sulfur content of 1.19 percent when winds blow in an onshore 
direction, and the use of fuel oil with a maximum sulfur content of 
2.84 percent when winds blow in an offshore direction.
    As a condition of the waiver sought, GPA is to reduce the sulfur 
content in the fuel oil fired in the Cabras Power Plant and the Piti 
Power Plant when winds blow in an offshore direction. The sulfur 
content of the fuel used will be reduced to a maximum content of 2.00 
percent. The Petition describes how GPA will obtain and assure the use 
of such fuel oil prior to beginning the operation of Cabras Unit No. 3.
    EPA is granting the Petition, with the conditions contained 
therein, and is issuing the requested waiver. Cabras Unit No. 3 will be 
allowed to operate prior to receipt of a PSD permit. This operation is 
subject to the use of fuel oil with a maximum sulfur content of 2.00 
percent at the Cabras and Piti Power Plants during offshore wind 
conditions. Moreover, this waiver for Cabras Unit No. 3 is granted only 
until August 15, 1996, or until a final PSD permit is secured by GPA, 
whichever event occurs sooner. Cabras Unit No. 4 may be constructed, 
but not operated, prior to receipt of a PSD permit. Finally, a report 
on the results of GPA's Orote Point evaluation shall be filed with EPA 
by October 15, 1995.
    Cabras Unit No. 3 is subject to a conditional permit to construct, 
issued by GEPA on May 12, 1994. GPA has filed an application to GEPA 
for authority to operate this unit. During the period of this waiver, 
GPA must comply with the requirements of these GEPA permits.
    This rule is promulgated on a direct final basis. EPA is convinced 
that the energy emergency on Guam creates significant adverse 
consequences which require immediate action. As documented in the 
Petition, continuing planned and unplanned power outages on Guam create 
substantial public health and safety concerns. EPA has been furnished 
with descriptions of traffic intersections at which traffic lights 
cannot operate. The water supplies to areas on Guam are serviced by 
electric pumps, and EPA has also been furnished with descriptions of 
interruptions of water supplies due to power outages. Finally, as would 
be expected, significant and sustained citizen displeasure has been 
voiced regarding this problem. These factors constitute good cause for 
EPA to waive notice requirements. In this instance, a delay in the 
effectiveness of this waiver granted would be impracticable and 
contrary to the public interest. In addition, based on the lack of 
negative comments in the 1993 waiver proceeding, EPA believes that this 
is a noncontroversial rulemaking action. Therefore, EPA finds that 
there is good cause for a direct final rulemaking, pursuant to 5 U.S.C. 
553(d)(3), and that notice and public procedures are impracticable, 
unnecessary, and contrary to the public interest.
    GEPA has received and reviewed a copy of the Petition. It supports 
the issuance of this waiver.

Regulatory Analysis

    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a Regulatory Flexibility Analysis assessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, EPA may certify that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Small entities include small businesses, small not-for-profit 
enterprises, and government entities with jurisdiction over populations 
of less than 50,000.
    This direct final rule applies only to large sources of air 
emissions used to generate electrical power on Guam. These sources of 
electrical power will be constructed, owned, and operated by GPA. This 
organization is not a small entity. Therefore, this rulemaking will not 
impact small entities.
    This action has been classified as a Table 3 action for signature 
by the Administrator under the procedures published in the Federal 
Register on January 19, 1989 (54 FR 2214-2225). The Office of 
Management and Budget has exempted this regulatory action from 
Executive Order 12866 review.

List of Subjects in 40 CFR Part 69

    Air pollution control.

    Dated: September 11, 1995.
Carol Browner,
Administrator.
    Part 69 of chapter I, title 40 of the Code of Federal Regulations 
is amended to read as follows:

PART 69--[AMENDED]

    1. The authority citation for part 69 continues to read as follows:

    Authority: Section 325, Clean Air Act, as amended (42 U.S.C. 
7625-1).

    2. Section 69.11 is amended by adding paragraph (c) to read as 
follows:


Sec. 69.11  New exemptions.

* * * * *
    (c) Pursuant to Section 325(a) of the CAA and a petition submitted 
by the Governor of Guam on July 14, 1995 (``1995 Petition''), the 
Administrator of EPA conditionally exempts Guam Power Authority 
(``GPA'') from certain CAA requirements.
    (1) A waiver of the requirement to obtain a PSD permit prior to 
construction is granted for the electric generating unit identified in 
the 1995 Petition as Cabras Unit No. 4, with the following conditions:
    (i) Cabras Unit No. 4 shall not operate until a final PSD permit is 
received by GPA for this unit;
    (ii) Cabras Unit No. 4 shall not operate until it complies with all 
requirements 

[[Page 48039]]
of its PSD permit, including, if necessary, retrofitting with BACT;
    (iii) If Cabras Unit No. 4 operates either prior to the issuance of 
a final PSD permit or without BACT equipment, Cabras Unit No. 4 shall 
be deemed in violation of this waiver and the CAA beginning on the date 
of commencement of construction of the unit.
    (2) A waiver of the requirement to obtain a PSD permit prior to the 
operation of the unit identified in the 1995 Petition as Cabras Unit 
No. 3 is granted subject to the following conditions:
    (i) The protocol to be followed for the ICS of fuel switching for 
electric generating units shall be modified to require the use of fuel 
oil with a sulfur content of 2.00 percent or less during offshore wind 
conditions. This fuel shall be fired in Cabras Power Plant Units Nos. 1 
through 3 and in Piti Power Plant Units Nos. 4 and 5.
    (ii) Cabras Unit No. 3 shall operate in compliance with all 
applicable requirements in its permits to construct and to operate as 
issued by Guam Environmental Protection Agency.
    (iii) The waiver provisions allowing Cabras Unit No. 3 to operate 
prior to issuance of a PSD permit shall expire on August 15, 1996, or 
upon the receipt by GPA of a PSD permit for Cabras Unit No. 3, 
whichever event occurs first.
    (3) On or before October 15, 1995, GPA shall submit to EPA, Region 
IX, a report concerning the operation of Cabras Unit No. 3 and the 
construction of Cabras Unit No. 4. The report shall contain:
    (i) A summary of GPA's conclusions from its wind tunnel study;
    (ii) A description of the alternatives available to assure 
compliance with all air quality requirements, including PSD 
requirements, during the operation of Cabras Units Nos. 3 and 4;
    (iii) A description of the alternative GPA chooses to assure 
compliance with all air quality requirements, including PSD 
requirements, during the operation of Cabras Units Nos. 3 and 4; and
    (iv) A plan of implementation by GPA.

[FR Doc. 95-23107 Filed 9-15-95; 8:45 am]
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