[Federal Register Volume 66, Number 140 (Friday, July 20, 2001)]
[Proposed Rules]
[Pages 38108-38135]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-18094]



[[Page 38107]]

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Part III





Environmental Protection Agency





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40 CFR Part 51



Proposed Guidelines for Best Available Retrofit Technology (BART) 
Determinations Under the Regional Haze Regulations; Proposed Rule

  Federal Register / Vol. 66, No. 140 / Friday, July 20, 2001 / 
Proposed Rules  

[[Page 38108]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 51

[FRL-6934-4]


Proposed Guidelines for Best Available Retrofit Technology (BART) 
Determinations Under the Regional Haze Regulations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The purpose of this proposal is to request comment on EPA's 
proposed guidelines for implementation of the best available retrofit 
technology (BART) requirements under the regional haze rule which was 
published on July 1, 1999 (64 FR 35714). We propose to add the 
guidelines as appendix Y to 40 CFR part 51. We propose to add 
regulatory text requiring that these guidelines be used for addressing 
BART determinations under the regional haze rule. In addition, we are 
proposing one revision to guidelines issued in 1980 for facilities 
contributing to ``reasonably attributable'' visibility impairment.

DATES: We are requesting written comments by September 18, 2001. The 
EPA has scheduled two public hearings on this proposed rule. The first 
public hearing will be held on August 21 in Arlington, Virginia. The 
second public hearing will be held on August 27 in Chicago, Illinois. 
(See following section for times and addresses.)

ADDRESSES: Docket. Information related to the BART guidelines is 
available for inspection at the Air and Radiation Docket and 
Information Center, docket number A-2000-28. The docket is located at 
the U.S. Environmental Protection Agency, 401 M Street, SW, Room M-
1500, Washington, DC 20460, telephone (202) 260-7548. The docket is 
available for public inspection and copying between 8:00 a.m. and 5:30 
p.m., Monday through Friday, excluding legal holidays. A reasonable fee 
may be charged for copying.
    You should submit comments on today's proposal and the materials 
referenced herein (in duplicate if possible) to the Air and Radiation 
Docket and Information Center (6102), Attention: Docket No. A-2000-28, 
U.S. Environmental Protection Agency, 1200 Pennsylvania Avenue, NW, 
Washington, DC 20460. You may also submit comments to EPA by electronic 
mail at the following address: [email protected]. 
Electronic comments must be submitted as an ASCII file avoiding the use 
of special characters and any form of encryption. All comments and data 
in electronic form must be identified by the docket number [A-2000-28]. 
Electronic comments on this proposed rule also may be filed online at 
many Federal Depository Libraries.
    Public Hearings. The first public hearing on this proposed rule 
will be held on August 21 at 10:00 am at the Crowne Plaza Hotel, 1489 
Jefferson Davis Highway, Arlington, VA 22202. The hotel is located near 
the Crystal City metro stop. The second public hearing will be held on 
August 27 at 10:00 am at the Metcalfe Federal Building, Room 331, 77 
West Jackson Boulevard, Chicago, IL 60604.
    If you wish to attend either public hearing or wish to present oral 
testimony, please send notification no later than one week prior to the 
date of the public hearing to Ms. Nancy Perry, Office of Air Quality 
Planning and Standards, Air Quality Strategies and Standards Division, 
MD-15, Research Triangle Park, NC 27711, telephone (919) 541-5628, e-
mail [email protected].
    Oral testimony will be limited to 5 minutes each. The hearing will 
be strictly limited to the subject matter of the proposal, the scope of 
which is discussed below. Any member of the public may file a written 
statement by the close of the comment period. Written statements 
(duplicate copies preferred) should be submitted to Docket No. A-2000-
28 at the address listed above for submitting comments. The hearing 
schedule, including lists of speakers, will be posted on EPA's webpage 
at http://www.epa.gov/air/visibility/whatsnew.html. A verbatim 
transcript of the hearings and written statements will be made 
available for copying during normal working hours at the Air and 
Radiation Docket and Information Center at the address listed above.

FOR FURTHER INFORMATION CONTACT: Tim Smith (telephone 919-541-4718), 
Mail Drop 15, EPA, Air Quality Strategies and Standards Division, 
Research Triangle Park, North Carolina, 27711. Internet address: 
[email protected].

SUPPLEMENTARY INFORMATION: We are providing the public with the 
opportunity to comment on EPA's Proposed BART Guidelines and the 
accompanying regulatory text.

Table of Contents

I. Background on BART Guidelines
    A. Commitment in the Preamble to the Regional Haze Rule
    B. Statutory Requirement for BART Guidelines
II. Proposed Amendments to Part 51
III. Revision to 1980 BART Guidelines for ``Reasonably 
Attributable'' Visibility Impairment
IV. Administrative Requirements
    A. Regulatory Planning and Review by the Office of Management 
and Budget (OMB) (Executive Order 12866)
    B. Regulatory Flexibility Act
    C. Paperwork Reduction Act--Impact on Reporting Requirements
    D. Unfunded Mandates Reform Act
    E. Environmental Justice--Executive Order 12898
    F. Protection of Children from Environmental Health Risks and 
Safety Risks--Executive Order 13045
    G. Executive Order 13132: Federalism
    H. Executive Order 13084: Consultation and Coordination with 
Indian Tribal Governments
    I. National Technology Transfer and Advancement Act
    J. Executive Order 13211. Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use.
    K. Guidelines for BART Determinations Under the Regional Haze 
Rule

I. Background on BART Guidelines

A. Commitment in the Preamble to the Regional Haze Rule

    The EPA included in the final regional haze rule a requirement for 
BART for certain large stationary sources put in place between 1962 and 
1977. We discuss these requirements in detail in the preamble to the 
final rule (see 64 FR 35737-35743). The regulatory requirements for 
BART are codified in 40 CFR 51.308(e). In the preamble, we committed to 
issuing further guidelines to clarify the requirements of the BART 
provision. The purpose of this notice is to provide the public with an 
opportunity to comment on the draft guidelines and the accompanying 
regulatory text.

B. Statutory Requirement for BART Guidelines

    Section 169A(b)(1) of the Clean Air Act (CAA) requires EPA to 
provide guidelines to States on the implementation of the visibility 
program. Moreover, the last sentence of section 169A(b) states:

    In the case of a fossil-fuel fired generating powerplant having 
a capacity in excess of 750 megawatts, the emission limitations 
required under this paragraph shall be determined pursuant to 
guidelines, promulgated by the Administrator under paragraph (1)

We interpret this statutory requirement as clearly requiring EPA to 
publish BART guidelines and to require that States follow the 
guidelines in establishing BART emission limitations for power plants 
with a total capacity exceeding the 750 megawatt cutoff. The

[[Page 38109]]

statute is less clear regarding whether the guidelines must be used for 
sources other than 750 megawatt power plants; however, today's proposed 
rule would require States to use the guidelines for all of the 26 
categories. We believe it is reasonable that consistent, rigorous 
approaches be used for all BART source categories. In addition, we 
believe it is important to provide for consistent approaches to 
identifying the sources in the remaining categories which are BART-
eligible. We request comment on whether the regional haze rule should: 
(1) Require use of the guidelines only for 750 megawatt utilities, with 
the guidelines applying as guidance for the remaining categories, or 
(2)require use of the guidelines for all of the affected source 
categories.

II. Proposed Amendments to Part 51

    We propose:
    (1) BART guidelines, to be added as appendix Y to 40 CFR part 51,
    (2) regulatory text, to be added as sub-paragraph 51.308(e)(1)(C), 
requiring the use of the guidelines.

Overview of Proposed Appendix Y

    We discuss the following general topics in appendix Y, which are 
organized into the following sections:

--Introduction. Section I provides an overview of the BART requirement 
in the regional haze rule and in the CAA, and an overview of the 
guidelines.
--Identification of BART-eligible sources. Section II is a step-by-step 
process for identifying BART-eligible sources.
--Identification of sources subject to BART. Sources ``subject to 
BART'' are those BART-eligible sources which ``emit a pollutant which 
may reasonably be anticipated to cause or contribute to any impairment 
of visibility in any Class I area.'' We discuss considerations for 
identifying sources subject to BART in section III of the proposed 
appendix Y.
--Engineering analysis. For each source subject to BART, the next step 
is to conduct an engineering analysis of emissions control 
alternatives. This step requires the identification of available, 
technically feasible, retrofit technologies, and for each technology 
identified, analysis of the cost of compliance, and the energy and non-
air quality environmental impacts, taking into account the remaining 
useful life and existing control technology present at the source. For 
each source, a ``best system of continuous emission reduction'' is 
selected based upon this engineering analysis. Guidelines for the 
engineering analysis are described in section IV of the proposed 
appendix Y.
--Cumulative air quality analysis. The rule requires a cumulative 
analysis of the degree of visibility improvement that would be achieved 
in each Class I area as a result of the emissions reductions achievable 
from all sources subject to BART. The establishment of BART emission 
limits must take into account the cumulative impact overall from the 
emissions reductions from all of the source-specific ``best 
technologies'' identified in the engineering analysis. Considerations 
for this cumulative air quality analysis are discussed in section V.
--Emission limits. Considering the engineering analysis and the 
cumulative air quality analysis, States must establish enforceable 
limits, including a deadline for compliance, for each source subject to 
BART. Considerations related to these limits and deadlines are 
discussed in section VI.
--Trading program alternative. General guidance on how to develop an 
emissions trading program alternative to BART is contained in section 
VII of the guidance. (Note that more comprehensive guidance for 
emission trading programs generally is described in Section VII).

Regulatory Text

    The proposed regulatory text would require that States follow the 
guidelines for all BART determinations required under the regional haze 
rule. We request public comment on all provisions of the guidelines and 
on the accompanying regulatory text.

III. Revision to 1980 BART Guidelines for ``Reasonably 
Attributable'' Visibility Impairment

    As noted above, the primary purpose of today's proposed rule is to 
provide BART guidelines for the regional haze program. In addition, 
however, we are making limited revisions to longstanding guidelines for 
BART under the 1980 visibility regulations for localized visibility 
impairment that is ``reasonably attributable'' to one or a few 
sources.\1\ The visibility regulations require that States must use a 
1980 guidelines document when conducting BART analyses for certain 
power plants for reasonably attributable visibility impairment. The 
regulatory text for this requirement is found in 40 CFR 
51.302(c)(4)(iii), as follows:

    \1\ U.S. Environmental Protection Agency, Guidelines for 
Determining Best Available Retrofit Technology for Coal-fired Power 
Plants and Other Existing Stationary Facilities, EPA-450/3-80-009b, 
Office of Air Quality Planning and Standards, Research Triangle 
Park, N.C., November 1980 (1980 BART Guidelines).
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    (iii) BART must be determined for fossil-fuel fired generating 
plants having a total generating capacity in excess of 750 megawatts 
pursuant to ``Guidelines for Determining Best Available Retrofit 
Technology for Coal-fired Power Plants and Other Existing Stationary 
Facilities'' (1980), which is incorporated by reference, exclusive 
of appendix E, which was published in the Federal Register on 
February 6, 1980 (45 FR 8210). It is EPA publication No. 450/3-80-
009b and is for sale from the U.S. Department of Commerce, National 
Technical Information Service, 5285 Port Royal Road, Springfield, 
Virginia 22161. It is also available for inspection at the Office of 
the Federal Register Information Center, 800 North Capitol NW., 
suite 700, Washington, DC.

    While the analytical process set forth in these guidelines is still 
generally acceptable for conducting BART analyses for ``reasonably 
attributable'' visibility impairment, there are statements in the 1980 
BART Guidelines that could be read to indicate that the new source 
performance standards (NSPS) may be considered to represent the maximum 
achievable control for existing sources. While this may have been the 
case in 1980 (e.g., the NSPS for sulfur dioxide (SO2) from 
boilers had been recently issued in June 1979), the maximum achievable 
control levels for recent plant retrofits have exceeded NSPS levels. 
Thus, in order to ensure that there is no confusion regarding how the 
1980 guidelines should be interpreted, EPA has included the following 
discussion in today's action and proposes limited clarifying changes to 
the visibility regulations.
    In various sections of the 1980 guideline, the discussion indicates 
that the NSPS in 1980 was considered to generally represent the most 
stringent option these sources could install as BART (i.e., maximum 
achievable level of control). See, e.g., 1980 BART Guidelines at pp. 8, 
11 and 21. For example, a flowchart in the 1980 guidelines indicates 
that if States establish a BART emission limitation equivalent to NSPS 
for the source, then the State would not need to conduct a full-blown 
analysis of control alternatives. See, 1980 BART Guidelines at p. 8. 
Similarly, the visibility analysis described in the guideline assumes 
as a starting point the level of controls currently achieved by the 
NSPS. See, 1980 Guideline at p. 11. In the 20-year period since these 
guidelines were developed, there have been advances in SO2 
control technologies that have significantly increased the level of 
control that is feasible, while costs per ton of SO2 
controlled have declined.

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This is demonstrated by a number of recent retrofits or binding 
agreements to retrofit coal-fired power plants in the western United 
States. These plants include: Hayden (CO), Navajo (AZ), Centralia (WA), 
and Mohave (NV). These cases have shown that control options exist 
which can achieve a significantly greater degree of control than the 70 
percent minimum required by the NSPS for power plants emitting 
SO2 at less than 0.60 lb/million Btu heat input. These 
retrofits have achieved, or are expected to achieve, annual 
SO2 reductions in the 85 to 90 percent range. Additionally, 
an EPA report \2\ published in October 2000 shows that the 
SO2 removal for flue gas desulfurization systems installed 
in the 1990s is commonly 90 percent or more for both wet and dry 
scrubbers, well above the minimum 70 percent control required by the 
1979 NSPS.\3\
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    \2\ U.S. Environmental Protection Agency, Controlling SO2 
Emissions: A Review of Technologies, EPA-600/R-00-093, Office of 
Research and Development, National Risk Management Research 
Laboratory, Research Triangle Park, NC, October 2000, pp 32-34.
    \3\ Note also that part II of the 1980 BART guidelines includes 
an analysis of 90 percent control for three power plants burning 
low-sulfur coal.
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    Given the advances in control technology that have occurred over 
the past 20 years, we believe that it should be made clear that the 
BART analyses for reasonably attributable visibility impairment should 
not be based on an assumption that the NSPS level of control represents 
the maximum achievable level of control. While it is possible that a 
detailed analysis of the BART factors could result in the selection of 
a NSPS level of control, we believe that States should only reach this 
conclusion based upon an analysis of the full range of control options, 
including those more stringent than a NSPS level of control. In sum, 
all ``reasonably attributable'' BART analyses should consider control 
levels more stringent than NSPS, including maximum achievable levels, 
and evaluate them in light of the statutory factors.

IV. Administrative Requirements

    In preparing any proposed rule, EPA must meet the administrative 
requirements contained in a number of statutes and executive orders. In 
this section of the preamble, we discuss how today's regulatory 
proposal for BART guidelines addresses these administrative 
requirements.

A. Regulatory Planning and Review by the Office of Management and 
Budget (OMB) (Executive Order 12866)

    Under Executive Order 12866 (58 FR 51735, October 4, 1993) the 
Agency must determine whether the regulatory action is ``significant'' 
and, therefore, subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, it has been 
determined that this rule is a ``significant regulatory action'' and 
EPA has submitted it to OMB for review. The drafts of rules submitted 
to OMB, the documents accompanying such drafts, written comments 
thereon, written responses by EPA, and identification of the changes 
made in response to OMB suggestions or recommendations are available 
for public inspection at EPA's Air and Radiation Docket and Information 
Center (Docket Number A-2000-28).
    Because today's guidelines clarify, and do not change, the existing 
rule requirements of the regional haze rule, the guidelines do not have 
any effect on the Regulatory Impact Analysis (RIA) that was previously 
prepared for the regional haze rule. This RIA is available in the 
docket for the regional haze rule (A-95-38). As part of the analyses 
included in this RIA, we provided an estimate of the potential cost of 
control to BART sources that is an average of the costs associated with 
the least stringent illustrative progress goal (1.0 deciview reduction 
over a 15-year period) and the most stringent illustrative progress 
goal (10 percent deciview reduction over a 10-year period). The annual 
cost of control to BART sources associated with the final Regional Haze 
rulemaking in 2015, the year for which impacts are projected, is $72 
million (1990 dollars).
    This estimate of the control costs for BART sources for the year 
2015 was calculated after taking into account a regulatory baseline 
projection for the year 2015. The baseline for these calculations 
included control measures estimated to be needed for partial attainment 
of the PM and ozone NAAQS issued in 1997. These baseline estimates were 
contained in an analysis prepared for the RIA for the PM and ozone 
NAAQS, and are summarized in the RIA for the regional haze rulemaking. 
As a result, in this RIA, we calculated relatively small impacts for 
BART, in part because the baseline for the analysis assumed a 
substantial degree of emissions control for BART-eligible sources in 
response to the national ambient air quality standards (NAAQS) for 
PM2.5.
    The EPA provided a benefits analysis of the emissions reductions 
associated with the four illustrative progress goals in the RIA for the 
final rulemaking. This benefits analysis is also incremental to partial 
attainment of the PM and ozone NAAQS issued in 1997. We did not, 
however, include a benefits analysis for the reductions from controls 
specific to the potentially affected BART sources. For more information 
on the benefit analysis for the final Regional Haze rulemaking, please 
refer to the RIA in the public docket for the regional haze rule 
(Docket A-95-38).

B. Regulatory Flexibility Act

    The EPA has determined that it is not necessary to prepare a 
regulatory flexibility analysis in connection with this proposed rule. 
The EPA has also determined that this proposed rule would not have a 
significant impact on a substantial number of small entities because 
the rule would not establish requirements applicable to small entities.
    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA), as 
amended by the Small Business Regulatory Enforcement Fairness Act (Pub. 
L. No.104-121) (SBREFA), provides that whenever an agency is required 
to publish a general notice of proposed rulemaking, it must prepare and 
make available an initial regulatory flexibility analysis, unless it 
certifies that the proposed rule, if promulgated, will not have ``a 
significant economic impact on a substantial number of small 
entities.'' 5 U.S.C. 605(b). Courts have interpreted the RFA to require 
a regulatory flexibility analysis only when small entities will be 
subject to the requirements of the rule. See Motor and Equip. Mfrs. 
Ass'n v. Nichols, 142 F.3d 449 (D.C. Cir. 1998); United Distribution 
Cos. v. FERC, 88 F.3d 1105, 1170 (D.C.

[[Page 38111]]

Cir. 1996); Mid-Tex Elec. Co-op, Inc. v. FERC, 773 F.2d 327, 342 (D.C. 
Cir. 1985) (agency's certification need only consider the rule's impact 
on entities subject to the rule).
    Similar to the discussion in the proposed and final regional haze 
rules, the proposed BART guidelines would not establish requirements 
applicable to small entities. The proposed rule would apply to States, 
not to small entities. The BART requirements in the regional haze rule 
require BART determinations for a select list of major stationary 
sources defined by section 169A(g)(7) of the CAA. However, as noted in 
the proposed and final regional haze rules, the State's determination 
of BART for regional haze involves some State discretion in considering 
a number of factors set forth in section 169A(g)(2), including the 
costs of compliance. Further, the final regional haze rule allows 
States to adopt alternative measures in lieu of requiring the 
installation and operation of BART at these major stationary sources. 
As a result, the potential consequences of the BART provisions of the 
regional haze rule (as clarified in today's proposed guidelines) at 
specific sources are speculative. Any requirements for BART will be 
established by State rulemakings. The States would accordingly exercise 
substantial intervening discretion in implementing the BART 
requirements of the regional haze rule and today's proposed guidelines. 
In addition, we note that most sources potentially affected by the BART 
requirements in section 169A of the CAA are large industrial plants. Of 
these, we would expect few, if any, to be considered small entities. We 
request comment on issues regarding small entities that States might 
encounter when implementing the BART provision.
    For today's proposed BART guidelines, EPA certifies that the 
guidelines and accompanying regulatory text would not have a 
significant impact on a substantial number of small entities.

C. Paperwork Reduction Act--Impact on Reporting Requirements

    The information collection requirements in today's proposal 
clarify, but do not modify, the information collection requirements for 
BART. Reporting requirements related to BART requirements were included 
in an Information Collection Request document that was prepared by EPA 
(ICR No. 1813.02) and a copy may be obtained from Sandy Farmer, by mail 
at Collection Strategies Division; U.S. EPA (2822) 1200 Pennsylvania 
Avenue, NW., Washington, DC 20460, by email at [email protected], or 
by calling (202) 260-2740. A copy may also be downloaded off the 
Internet at http://www.epa.gov/icr. The information requirements are 
not effective until OMB approves them.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.
    Comments are requested on the Agency's need for this information, 
the accuracy of the provided burden estimates, and any suggested 
methods for minimizing respondent burden, including through the use of 
automated collection techniques. Send comments on the ICR to the 
Director, Collection Strategies Division; U.S. Environmental Protection 
Agency (2822); 1200 Pennsylvania Ave., NW., Washington, DC 20460; and 
to the Office of Information and Regulatory Affairs, Office of 
Management and Budget, 725 17th St., NW., Washington, DC 20503, marked 
``Attention: Desk Officer for EPA.'' Include the ICR number in any 
correspondence.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) (UMRA), establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, 2 
U.S.C. 1532, EPA generally must prepare a written statement, including 
a cost-benefit analysis, for any proposed or final rule that ``includes 
any Federal mandate that may result in the expenditure by State, local, 
and tribal governments, in the aggregate, or by the private sector, of 
$100,000,000 or more * * * in any one year.'' A ``Federal mandate'' is 
defined under section 421(6), 2 U.S.C. 658(6), to include a ``Federal 
intergovernmental mandate'' and a ``Federal private sector mandate.'' A 
``Federal intergovernmental mandate,'' in turn, is defined to include a 
regulation that ``would impose an enforceable duty upon State, local, 
or tribal governments,'' section 421(5)(A)(i), 2 U.S.C. 658 (5)(A)(i), 
except for, among other things, a duty that is ``a condition of Federal 
assistance,'' section 421(5)(A)(i)(I). A ``Federal private sector 
mandate'' includes a regulation that ``would impose an enforceable duty 
upon the private sector,'' with certain exceptions, section 421(7)(A), 
2 U.S.C. 658(7)(A).
    Before promulgating an EPA rule for which a written statement is 
needed under section 202 of the UMRA, section 205, 2 U.S.C. 1535, of 
the UMRA generally requires EPA to identify and consider a reasonable 
number of regulatory alternatives and adopt the least costly, most 
cost-effective, or least burdensome alternative that achieves the 
objectives of the rule.
    By proposing to release BART guidelines and to require their use, 
EPA is not directly establishing any regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments. Thus, EPA is not obligated to develop under section 203 of 
the UMRA a small government agency plan.
    Further, EPA carried out consultations with the governmental 
entities affected by this rule in a manner consistent with the 
intergovernmental consultation provisions of section 204 of the UMRA.
    The EPA also believes that because today's proposal provides States 
with substantial flexibility, the proposed rule meets the UMRA 
requirement in section 205 to select the least costly and burdensome 
alternative in light of the statutory mandate for BART. The proposed 
rule provides States with the flexibility to establish BART based on 
certain criteria, one of which is the costs of compliance. The proposed 
rule also provides States with the flexibility to adopt alternatives, 
such as an emissions trading program, in lieu of requiring BART. The 
BART guidelines therefore, inherently provides for adoption of the 
least costly, most cost-effective, or least-burdensome alternative that 
achieves the objective of the rule.
    The EPA is not reaching a final conclusion as to the applicability 
of the requirements of UMRA to this rulemaking action. It is 
questionable whether a requirement to submit a State Implementation 
Plan (SIP) revision

[[Page 38112]]

constitutes a Federal mandate. The obligation for a State to revise its 
SIP that arises out of sections 110(a), 169A and 169B of the CAA is not 
legally enforceable by a court of law and, at most, is a condition for 
continued receipt of highway funds. Therefore, it is possible to view 
an action requiring such a submittal as not creating any enforceable 
duty within the meaning of section 421(5)(A)(i) of UMRA (2 U.S.C. 658 
(5)(A)(i)). Even if it did, the duty could be viewed as falling within 
the exception for a condition of Federal assistance under section 
421(5)(A)(i)(I) of UMRA (2 U.S.C. 658(5)(A)(i)(I)). As noted earlier, 
however, notwithstanding these issues, the discussion in section 2 and 
the analysis in chapter 8 of the RIA constitutes the UMRA statement 
that would be required by UMRA if its statutory provisions applied, and 
EPA has consulted with governmental entities as would be required by 
UMRA. Consequently, it is not necessary for EPA to reach a conclusion 
as to the applicability of the UMRA requirements.

E. Environmental Justice--Executive Order 12898

    Executive Order 12898 requires that each Federal agency make 
achieving environmental justice part of its mission by identifying and 
addressing, as appropriate, disproportionately high and adverse human 
health or environmental effects of its programs, policies, and 
activities on minorities and low-income populations. The requirements 
of Executive Order 12898 have been previously addressed to the extent 
practicable in the RIA cited above, particularly in chapters 2 and 9 of 
the RIA.

F. Protection of Children From Environmental Health Risks and Safety 
Risks--Executive Order 13045

    Executive Order 13045: ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that: (1) is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency. The EPA 
interprets Executive Order 13045 as applying only to those regulatory 
actions that are based on health or safety risks, such that the 
analysis required under section 5-501 of the Order has the potential to 
influence the regulation. The BART guidelines are not subject to 
Executive Order 13045 because they do not establish an environmental 
standard intended to mitigate health or safety risks.

G. Executive Order 13132: Federalism

    Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 
1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' are defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.'' Under 
Section 6 of Executive Order 13132, EPA may not issue a regulation that 
has federalism implications, that imposes substantial direct compliance 
costs, and that is not required by statute, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by State and local governments, or EPA consults with 
State and local officials early in the process of developing the 
proposed regulation. The EPA also may not issue a regulation that has 
federalism implications and that preempts State law unless the Agency 
consults with State and local officials early in the process of 
developing the proposed regulation.
    The EPA concludes that this rule will not have substantial 
federalism implications, as specified in section 6 of Executive Order 
13132 (64 FR 43255, August 10, 1999), because it will not directly 
impose significant new requirements on State and local governments, nor 
substantially alter the relationship or the distribution of power and 
responsibilities between States and the Federal government.
    Although EPA has determined that section 6 of Executive Order 13132 
does not apply, EPA nonetheless consulted with a broad range of State 
and local officials during the course of developing this proposed rule. 
These included contacts with the National Governors Association, 
National League of Cities, National Conference of State Legislatures, 
U. S. Conference of Mayors, National Association of Counties, Council 
of State Governments, International City/County Management Association, 
and National Association of Towns and Townships.

H. Executive Order 13084: Consultation and Coordination With Indian 
Tribal Governments

    On November 6, 2000, the President issued Executive Order 13175 (65 
FR 67249) entitled ``Consultation and Coordination with Indian Tribal 
Governments.'' Executive Order 13175 took effect on January 6, 2001, 
and revokes Executive Order 13084 (Tribal Consultation) as of that 
date. The EPA developed this proposed rule, however, during the period 
when EO 13084 was in effect; thus, EPA addressed tribal considerations 
under EO 13084. The EPA will analyze and fully comply with the 
requirements of EO 13175 before promulgating the final rule.
    Under Executive Order 13084, EPA may not issue a regulation that is 
not required by statute that significantly or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or EPA consults with those 
governments. If EPA complies by consulting, Executive Order 13084 
requires EPA to provide to OMB, in a separately identified section of 
the preamble to the rule, a description of the extent of EPA's prior 
consultation with representatives of affected tribal governments, a 
summary of the nature of their concerns, and a statement supporting the 
need to issue the regulation. In addition, Executive Order 13084 
requires EPA to develop an effective process permitting elected 
officials and other representatives of Indian tribal governments ``to 
provide meaningful and timely input in the development of regulatory 
policies on matters that significantly or uniquely affect their 
communities.''
    Today's proposed rule does not significantly or uniquely affect the 
communities of Indian tribal governments. This proposed action does not 
involve or impose any requirements that directly affect Indian tribes. 
Under EPA's tribal authority rule, tribes are not required to implement 
CAA programs but, instead, have the opportunity to do so. Accordingly, 
the requirements of section 3(b) of Executive Order 13084 do not apply 
to this rule.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Pub. L. No.

[[Page 38113]]

104-113, Sec. 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary 
consensus standards in its regulatory activities unless to do so would 
be inconsistent with applicable law or otherwise impractical. Voluntary 
consensus standards are technical standards (e.g., materials 
specifications, test methods, sampling procedures, and business 
practices) that are developed or adopted by voluntary consensus 
standards bodies. The NTTAA directs EPA to provide Congress, through 
OMB, explanations when the Agency decides not to use available and 
applicable voluntary consensus standards.
    This action does not involve technical standards. Therefore, EPA 
did not consider the use of any voluntary consensus standards.

J. Executive Order 13211. Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)), provides that agencies shall prepare and submit to the 
Administrator of the Office of Information and Regulatory Affairs, 
Office of Management and Budget, a Statement of Energy Effects for 
certain actions identified as ``significant energy actions.'' Section 
4(b) of Executive Order 13211 defines ``significant energy actions'' as 
``any action by an agency (normally published in the Federal Register) 
that promulgates or is expected to lead to the promulgation of a final 
rule or regulation, including notices of inquiry, advance notices of 
proposed rulemaking, and notices of proposed rulemaking: (1)(i) that is 
a significant regulatory action under Executive Order 12866 or any 
successor order, and (ii) is likely to have a significant adverse 
effect on the supply, distribution, or use of energy; or (2) that is 
designated by the Administrator of the Office of Information and 
Regulatory Affairs as a significant energy action.'' Under Executive 
Order 13211, a Statement of Energy Effects is a detailed statement by 
the agency responsible for the significant energy action relating to: 
(i) any adverse effects on energy supply, distribution, or use 
including a shortfall in supply, price increases, and increased use of 
foreign supplies) should the proposal be implemented, and (ii) 
reasonable alternatives to the action with adverse energy effects and 
the expected effects of such alternatives on energy supply, 
distribution, and use. While this rulemaking is a ``significant 
regulatory action'' under Executive Order 12866, EPA has determined 
that this rulemaking is not a significant energy action because it is 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy.
    As discussed above in Unit IV.A, EPA provided an estimate of the 
potential cost of control to BART sources in the RIA for the regional 
haze rule for the year 2015. As specified in the CAA, these BART 
sources include certain utility steam electric plants and sources in 25 
additional industrial source categories. In 1999, EPA estimated that 
BART would impose additional costs of $72 million per year (in 1990 
dollars) in 2015 on affected utility and industrial sources.\4\ It is 
expected that these annual costs will be lower in 2015 than currently 
projected due to continued improvements in scrubber operation and 
design. Included in the total cost is an estimate that roughly 35 
utility units built between the years 1962 and 1977 would be required 
to install additional control equipment, typically scrubbers.
---------------------------------------------------------------------------

    \4\ Regulatory Impact Analysis for the Regional Haze Rule. U.S. 
EPA, Office of Air Quality Planning and Standards. April 22, 1999. 
Unit 6.6.3, pp. 6-40 through 6-42.
---------------------------------------------------------------------------

    Consistent with the RIA, we have looked at the potential energy 
impacts associated with scrubbers. About 60 percent of the overall $72 
million estimate, or about $40 million, was a result of scrubber cost 
calculations. These scrubber cost calculations are based on cost models 
which determine three types of costs for scrubbers: (1) Annualized 
capital costs, (2) fixed operation and maintenance costs, and (3) 
variable operating and maintenance costs. The cost models for variable 
operating and maintenance costs took into account the energy needs of 
the scrubber, which was assumed to be 2.0% of the electricity generated 
by a plant (or approximately 15,000 Megawatt-hours per year (MW-h/yr) 
for a 100 MW scrubber).\5\ Although BART requirements may also be 
achieved with other control strategies and techniques (such as emission 
trading, or switching types of fuels used to produce power), these 
scrubber cost calculations can be used to provide an order of magnitude 
estimate of possible energy costs. The EPA estimates that of the total 
annual cost estimate of $40 million for scrubbers, about 20 to 35 
percent, or about $9 million to $15 million, would be variable 
operating and maintenance costs. The energy costs for the scrubbers 
would be some fraction of this $9 to $15 million estimate, which also 
includes other elements such as the costs of reagents and disposal. 
Applying this energy use to the roughly 35 utility units requires a 
total of 525 million MW-h/yr, or 0.5 billion Kilowatt-hours/year (kWh-
yr) of energy, which is valued at $17 million.\6\
---------------------------------------------------------------------------

    \5\ U.S. Environmental Protection Agency, Controlling SO2 
Emissions: A Review of Technologies, EPA-600/R-00-093, Office of 
Research and Development, National Risk Management Research 
Laboratory, Research Triangle Park, NC, October 2000, pp 32-34.
    \6\ Based on wholesale energy prices for the year 2000.
---------------------------------------------------------------------------

    The EPA also believes that an annual cost of $40 million for the 
electric utility sector for the year 2015 and beyond would not result 
in significant changes in electricity or fuel prices, or in significant 
changes in the consumption of energy.
    For non-utility sources, the costs of the BART requirements may 
result from installing, operating and maintaining pollution control 
equipment or from other control strategies and techniques. As with 
utilities, a fraction of these costs in some cases would be related to 
the energy used to operate the pollution control equipment, thus 
increasing the overall demand for energy and fuels; however, such 
impacts are usually a small fraction of the overall annualized costs of 
control equipment. Thus, EPA believes that the energy costs for non-
utility categories would be a relatively small fraction of the $72 
million cost estimate. The EPA believes that the overall effects on 
energy supply and use for a small fraction of $72 million would be 
trivial, and that this would not significantly affect the price or 
supply of energy.
    Therefore, we conclude that based on the analysis above that the 
BART requirements of the Regional Haze Rule will have a minimal impact, 
if any, on energy prices, or on the supply, distribution, or use of 
energy.

K. Guidelines for BART Determinations Under the Regional Haze Rule

    We are proposing to adopt guidelines for BART determinations under 
the regional haze rule. The guidelines and areas on which comment is 
requested are described below. After we receive comments on these 
guidelines, we will add them to 40 CFR part 51 as 
appendix Y.

Guidelines for BART Determinations Under the Regional Haze Rule

Table of Contents

I. Introduction and Overview

A. What is the purpose of the guidelines?
A. What does the CAA require generally for improving visibility?
C. What is the BART requirement in the CAA?
D. What types of visibility problems does EPA address in its 
regulations?

[[Page 38114]]

E. What are the BART requirements in EPA's regional haze 
regulations?
F. Do States have an alternative to imposing controls on specific 
facilities?
G. What is included in the guidelines?
H. Who is the target audience for the guidelines?

II. How To Identify BART-eligible Sources

A. What are the steps in identifying BART-eligible sources?
    1. Step 1: Identify emission units in BART categories
    2. Step 2: Identify the start-up dates of those emission units
    3. Step 3: Compare the potential emissions to the 250 ton/yr 
cutoff
    4. Final step: Identify the emission units and pollutants that 
constitute the BART-eligible source.

III. How To Identify Sources ``Subject to BART''

A. How can I identify the ``geographic area'' or ``region'' that 
contributes to a given Class I area?

IV. Engineering Analysis of BART Options

A. What factors must I address in the Engineering Analysis?
B. How does a BART engineering analysis compare to a BACT review 
under the PSD program?
C. Which pollutants must I address in the engineering review?
D. What are the five basic steps of a case-by-case BART engineering 
analysis?
    1. Step 1--How do I identify all available retrofit emission 
control techniques?
    2. Step 2--How do I determine whether the options identified in 
Step 1 are technically feasible?
    a. In general, what do we mean by technical feasibility?
    b. What do we mean by ``available'' technology?
    c. What do we mean by ``applicable'' technology?
    d. What type of demonstration is required if I conclude that an 
option is not technically feasible?
    3. Step 3--How do I develop a ranking of the technically 
feasible alternatives?
    a. What are the appropriate metrics for comparison?
    b. How do I evaluate control techniques with a wide range of 
emission performance levels?
    c. How do I rank the control options?
    4. Step 4--For a BART engineering analysis, what impacts must I 
calculate and report? What methods does EPA recommend for the 
impacts analyses?
    a. Impact analysis part 1: how do I estimate the costs of 
control?
    b. How do I take into account a project's ``remaining useful 
life'' in calculating control costs?
    c. What do we mean by cost effectiveness?
    d. How do I calculate average cost effectiveness?
    e. How do I calculate baseline emissions?
    f. How do I calculate incremental cost effectiveness?
    g. What other information should I provide in the cost impacts 
analysis?
    h. Impact analysis part 2: How should I analyze and report 
energy impacts?
    i. Impact analysis part 3: How do I analyze ``non-air quality 
environmental impacts?''
    j. What are examples of non-air quality environmental impacts?
5. Step 5--How do I select the ``best'' alternative, using the 
results of steps 1 through 4?
    a. Summary of the impacts analysis
    b. Selecting a ``best'' alternative
    c. In selecting a ``best'' alternative, should I consider the 
affordability of controls?

V. Cumulative Air Quality Analysis

A. What air quality analysis do we require in the regional haze rule 
for purposes of BART determinations?
B. How do I consider the results of this analysis in my selection of 
BART for individual sources?

VI. Enforceable Limits / Compliance Date

VII. Emission Trading Program Overview

A. What are the general steps in developing an emission trading 
program?
B. What are emission budgets and allowances?
C. What criteria must be met in developing an emission trading 
program as an alternative to BART?
    1. How do I identify sources subject to BART?
    2. How do I calculate the emissions reductions that would be 
achieved if BART were installed and operated on these sources?
    3. For a cap and trade program, how do I demonstrate that my 
emission budget results in emission levels that are equivalent to or 
less than the emissions levels that would result if BART were 
installed and operated?
    4. How do I ensure that trading budgets achieve ``greater 
reasonable progress?''
    5. How do I allocate emissions to sources?
    6. What provisions must I include in developing a system for 
tracking individual source emissions and allowances?
    7. How would a regional haze trading program interface with the 
requirements for ``reasonably attributable'' BART under Sec. 51.302 
of the regional haze rule?

I. Introduction and Overview

A. What Is the Purpose of the Guidelines?

    The Clean Air Act (CAA), in sections 169A and 169B, contains 
requirements for the protection of visibility in 156 scenic areas 
across the United States. To meet the CAA's requirements, EPA recently 
published regulations to protect against a particular type of 
visibility impairment known as ``regional haze.'' The regional haze 
rule is found in this part (40 CFR part 51), in Secs. 51.300 through 
51.309. These regulations require, in Sec. 51.308(e), that certain 
types of existing stationary sources of air pollutants install best 
available retrofit technology (BART). The guidelines are designed to 
help States and others (1) identify those sources that must comply with 
the BART requirement, and (2) determine the level of control technology 
that represents BART for each source.

B. What Does the CAA Require Generally for Improving Visibility?

    Section 169A of the CAA, added to the CAA by the 1977 amendments, 
requires States to protect and improve visibility in certain scenic 
areas of national importance. The scenic areas protected by section 
169A are called ``mandatory Class I Federal Areas.'' In these 
guidelines, we refer to these as ``Class I areas.'' There are 156 Class 
I areas, including 47 national parks (under the jurisdiction of the 
Department of Interior--National Park Service), 108 wilderness areas 
(under the jurisdiction of the Department of Interior-Fish and Wildlife 
Service or the Department of Agriculture--US Forest Service), and one 
International Park (under the jurisdiction of the Roosevelt-Campobello 
International Commission). The Federal Agency with jurisdiction over a 
particular Class I area is referred to in the CAA as the Federal Land 
Manager. A complete list of the Class I areas is contained in 40 CFR 
part 81, Secs. 81.401 through 81.437, and you can find a map of the 
Class I areas at the following internet site: http://www.epa.gov/ttn/
oarpg/t1/fr--notices/classimp.gif
    The CAA establishes a national goal of eliminating man-made 
visibility impairment from the Class I areas where visibility is an 
important value. As part of the plan for achieving this goal, the 
visibility protection provisions in the CAA mandate that EPA issue 
regulations requiring that States adopt measures in their State 
Implementation Plans (SIPs), including long-term strategies, to provide 
for reasonable progress towards this national goal. The CAA also 
requires States to coordinate with the Federal Land Managers as they 
develop their strategies for addressing visibility.

C. What Is the BART Requirement in the CAA?

    Under section 169A(b)(2)(A) of the CAA, States must require certain 
existing stationary sources to install BART. The BART requirement 
applies to ``major stationary sources'' from one of 26 identified 
source categories which have the potential to emit 250 tons per year or 
more of any air pollutant. The CAA requires only sources which were put 
in place during a specific 15-year time interval to install BART. The 
BART requirement applies to sources that existed as of the date of the 
1977 CAA amendments (that is, August 7, 1977)

[[Page 38115]]

but which had not been in operation for more than 15 years (that is, 
not in operation as of August 7, 1962).
    The CAA requires BART when any source meeting the above description 
``emits any air pollutant which may reasonably be anticipated to cause 
or contribute to any impairment of visibility'' in any Class I area. In 
identifying a level of control as BART, States are required by section 
169A(g) of the CAA to consider:

--The costs of compliance,
--The energy and non-air quality environmental impacts of compliance,
--Any existing pollution control technology in use at the source,
--The remaining useful life of the source, and
--The degree of visibility improvement which may reasonably be 
anticipated from the use of BART.

The CAA further requires States to make BART emission limitations part 
of their SIPs. As with any SIP revision, this will be a public process 
that provides an opportunity for public comment and judicial review of 
any decision by EPA to approve or disapprove the revision.

D. What Types of Visibility Problems Does EPA Address in Its 
Regulations?

    The EPA addressed the problem of visibility in two phases. In 1980, 
EPA published regulations addressing what we termed ``reasonably 
attributable'' visibility impairment. Reasonably attributable 
visibility impairment is the result of emissions from one or a few 
sources that are generally located in close proximity to a specific 
Class I area. The regulations addressing reasonably attributable 
visibility impairment are published in Secs. 51.300 through 51.307.
    On July 1, 1999, EPA amended these regulations to address the 
second, more common, type of visibility impairment known as ``regional 
haze.'' Regional haze is the result of the collective contribution of 
many sources over a broad region. The regional haze rule regulations 
slightly modified 40 CFR 51.300 through 51.307, including the addition 
of a few definitions in Sec. 51.301, and added new Secs. 51.308 and 
51.309.

E. What Are the BART Requirements in EPA's Regional Haze Regulations?

    In the July 1, 1999 rulemaking, EPA added a BART requirement for 
regional haze. You will find the BART requirements in 40 CFR 
51.308(e)(1). Definitions of terms used in 40 CFR 51.308(e)(1) are 
found in Sec. 51.301.
    As we discuss in detail in these guidelines, the regional haze rule 
codifies and clarifies the BART provisions in the CAA. The rule 
requires that States identify and list ``BART-eligible sources,'' that 
is, that States identify and list those sources that fall within one of 
26 source categories, that were put in place during the 15-year window 
of time from 1962 to 1977, and that have potential emissions greater 
than 250 tons per year. Once the State has identified the BART-eligible 
sources, the next step is to identify those BART eligible sources that 
may ``emit any air pollutant which may reasonably be anticipated to 
cause or contribute to any impairment of visibility.'' Under the rule, 
a source which fits this description is ``subject to BART.'' For each 
source subject to BART, States must identify the level of control 
representing BART based upon the following analyses:

-- First, paragraph 308(e)(1)(ii)(A) provides that States must identify 
the best system of continuous emission control technology for each 
source subject to BART taking into account the technology available, 
the costs of compliance, the energy and non-air quality environmental 
impacts of compliance, any pollution control equipment in use at the 
source, and the remaining useful life of the source.
-- Second, paragraph 308(e)(1)(ii)(B), provides that States must 
conduct an analysis of the degree of visibility improvement that would 
be achieved from all sources subject to BART that are within a 
geographic area that contributes to visibility impairment in any 
protected Class I area.

    Once a State has identified the level of control representing BART 
(if any), it must establish an emission limit representing BART and 
must ensure compliance with that requirement no later than 5 years 
after EPA approves the SIP. States are allowed to establish design, 
equipment, work practice or other operational standards when 
limitations on measurement technologies make emission standards 
infeasible.

F. Do States Have an Alternative to Imposing Controls on Specific 
Facilities?

    States are given the option under 40 CFR 51.308(e)(2) to adopt an 
alternative approach to imposing controls on a case-by-case basis for 
each source subject to BART. However, while States may instead adopt 
alternative measures, such as an emissions trading program, 40 CFR 
51.308(e)(2)(i) requires States to provide a demonstration that any 
such alternative will achieve greater ``reasonable progress'' than 
would have resulted from installation of BART from all sources subject 
to BART. Such a demonstration must include:

-- a list of all BART-eligible sources;
-- an analysis of the best system of continuous emission control 
technology available for all sources subject to BART, taking into 
account the technology available, the costs of compliance, the energy 
and non-air quality environmental impacts of compliance, any pollution 
control equipment in use at the source, and the remaining useful life 
of the source. Unlike the analysis for BART under 40 CFR 51.308(e)(1), 
which requires that these factors be considered on a case-by-case 
basis, States may consider these factors on a category-wide basis, as 
appropriate, in evaluating alternatives to BART;
-- an analysis of the degree of visibility improvement that would 
result from the alternative program in each protected Class I area.

States must make sure that a trading program or other such measure 
includes all BART-eligible sources, unless a source has installed BART, 
or plans to install BART consistent with 51.308(e)(1).\1\ A trading 
program also may include additional sources. 40 CFR 51.308(e)(2) also 
requires that States include in their SIPs details on how they would 
implement the emission trading program or other alternative measure. 
States must provide a detailed description of the program including 
schedules for compliance, the emissions reductions that they will 
require, the administrative and technical procedures for implementing 
the program, rules for accounting and monitoring emissions, and 
procedures for enforcement.
---------------------------------------------------------------------------

    \1\ As noted in the preamble to the regional haze rule, States 
need not include a BART-eligible source in the trading program if 
the source already has installed BART-level pollution control 
technology and the emission limit is a federally enforceable 
requirement (64 FR 35742). We clarify in these guidelines that 
States may also elect to allow a source the option of installing 
BART-level controls within the 5-year period for compliance with the 
BART requirement [see section VI of these guidelines] rather than 
participating in a trading program.
---------------------------------------------------------------------------

G. What Is Included in the Guidelines?

    In the guidelines, we provide procedures States must use in 
implementing the regional haze BART requirements on a source-by-source 
basis, as provided in 40 CFR 51.308(e)(1). We address general topics 
related to development of a trading program or other alternative 
allowed by 40 CFR 51.308(e)(2), but we will address most of the details 
of guidance for trading programs in separate guidelines.
    The BART analysis process, and the contents of this guidance, are 
as follows:


[[Page 38116]]


-Identification of all BART-eligible sources. Section II of this 
guidance outlines a step-by-step process for identifying BART-eligible 
sources.
-Identification of sources subject to BART. As noted above, sources 
``subject to BART'' are those BART-eligible sources which ``emit a 
pollutant which may reasonably be anticipated to cause or contribute to 
any impairment of visibility in any Class I area.'' We discuss 
considerations for identifying sources subject to BART in section III 
of the guidance.
-Engineering analysis. For each source subject to BART, the next step 
is to conduct an engineering analysis of emissions control 
alternatives. This step requires the identification of available, 
technically feasible, retrofit technologies, and for each technology 
identified, analysis of the cost of compliance, and the energy and non-
air quality environmental impacts, taking into account the remaining 
useful life and existing control technology present at the source. For 
each source, a ``best system of continuous emission reduction'' will be 
selected based upon this engineering analysis. Guidelines for the 
engineering analysis are described in section IV of this guidance.
--Cumulative air quality analysis. The rule requires a cumulative 
analysis of the degree of visibility improvement that would be achieved 
in each Class I area as a result of the emissions reductions achievable 
from all sources subject to BART. The establishment of BART emission 
limits must take into account the cumulative impact overall from the 
emissions reductions from all of the source-specific ``best 
technologies'' identified in the engineering analysis. Considerations 
for this cumulative air quality analysis are discussed in section V of 
this guidance.
--Emissions limits. Considering the engineering analysis and the 
cumulative air quality analysis, States must establish enforceable 
limits, including a deadline for compliance, for each source subject to 
BART. Considerations related to these limits and deadlines are 
discussed in section VI of the guidance.
--Considerations in establishing a trading program alternative. General 
guidance on how to develop an emissions trading program alternative is 
contained in section VII of the guidance.

H. Who Is the Target Audience for the Guidelines?

    The guidelines are written primarily for the benefit of State, 
local and tribal agencies to satisfy the requirements for including the 
BART determinations and emission limitations in their SIPs or tribal 
implementation plans (TIPs). Throughout the guidelines, which are 
written in a question and answer format, we ask questions ``How do I * 
* *?'' and answer with phrases ``you should * * *, you must* * *'' The 
``you'' means a State, local or tribal agency conducting the 
analysis.\2\ We recognize, however, that agencies may prefer to require 
source owners to assume part of the analytical burden, and that there 
will be differences in how the supporting information is collected and 
documented.
---------------------------------------------------------------------------

    \2\ In order to account for the possibility that BART-eligible 
sources could go unrecognized, we recommend that you adopt 
requirements placing a responsibility on source owners to self-
identify if they meet the criteria for BART-eligible sources.
---------------------------------------------------------------------------

II. How To Identify BART-Eligible Sources

    This section provides guidelines on how you identify BART-eligible 
sources. A BART-eligible source is an existing stationary source in 26 
listed categories which meets criteria for startup dates and potential 
emissions.

A. What Are the Steps In Identifying BART-Eligible Sources?

    Figure 1 shows the steps for identifying whether the source is a 
``BART eligible source:''
    Step 1: Identify the emission units in BART categories,
    Step 2: Identify the start-up dates of those emission units, and
    Step 3: Compare the potential emissions to the 250 ton/yr cutoff.

[[Page 38117]]

[GRAPHIC] [TIFF OMITTED] TP20JY01.000

1. Step 1: Identify Emission Units in the BART Categories
    The BART requirement only applies to sources in specific categories 
listed in the CAA. The BART requirement does not apply to sources in 
other source categories, regardless of their emissions. The listed 
categories are:
    (1) Fossil-fuel fired steam electric plants of more than 250 
million British thermal units (BTU) per hour heat input,
    (2) Coal cleaning plants (thermal dryers),
    (3) Kraft pulp mills,
    (4) Portland cement plants,
    (5) Primary zinc smelters,
    (6) Iron and steel mill plants,
    (7) Primary aluminum ore reduction plants,
    (8) Primary copper smelters,
    (9) Municipal incinerators capable of charging more than 250 tons 
of refuse per day,
    (10) Hydrofluoric, sulfuric, and nitric acid plants,
    (11) Petroleum refineries,
    (12) Lime plants,
    (13) Phosphate rock processing plants,
    (14) Coke oven batteries,
    (15) Sulfur recovery plants,
    (16) Carbon black plants (furnace process),
    (17) Primary lead smelters,
    (18) Fuel conversion plants,
    (19) Sintering plants,

[[Page 38118]]

    (20) Secondary metal production facilities,
    (21) Chemical process plants,
    (22) Fossil-fuel boilers of more than 250 million BTUs per hour 
heat input,
    (23) Petroleum storage and transfer facilities with a capacity 
exceeding 300,000 barrels,
    (24) Taconite ore processing facilities,
    (25) Glass fiber processing plants, and
    (26) Charcoal production facilities.
    Some plant locations may have emission units from more than one 
category, and some emitting equipment may fit into more than one 
category. Examples of this situation are sulfur recovery plants at 
petroleum refineries, coke oven batteries and sintering plants at steel 
mills, and chemical process plants at refineries. For Step 1, you 
identify all of the emissions units at the plant that fit into one or 
more of the listed categories. You do not identify emission units in 
other categories.

    Example: A mine is collocated with a electric steam generating 
unit and a coal cleaning plant. You would identify emission units 
associated with the electric steam generating unit and the coal 
cleaning plant, because they are listed categories but not the mine, 
because coal mining is not a listed category.

    The category titles are generally clear in describing the types of 
equipment to be listed. Most of the category titles are very broad 
descriptions that encompass all emission units associated with a plant 
site (for example, ``petroleum refining'' and ``kraft pulp mills''). In 
addition, this same list of categories appears in the PSD regulations, 
for example in 40 CFR 52.21. States and source owners need not revisit 
any interpretations of the list made previously for purposes of the PSD 
program. We provide the following clarifications for a few of the 
category titles and we request comment on whether there are any 
additional source category titles for which EPA should provide 
clarification in the final guidelines:

--``Steam electric plants of more than 250 million BTU/hr heat input.'' 
Because the category refers to ``plants,'' boiler capacities must be 
aggregated to determine whether the 250 million BTU/hr threshold is 
reached.

    Example:  Stationary source includes a steam electric plant with 
three 100 million BTU/hr boilers. Because the aggregate capacity 
exceeds 250 million BTU/hr for the ``plant,'' these boilers would be 
identified in Step 2.

``Steam electric plants'' includes combined cycle turbines because of 
their incorporation of heat recovery steam generators. Simple cycle 
turbines should not be considered ``steam electric plants'' because 
they typically do not make steam.

--``Fossil-fuel boilers of more than 250 million BTU/hr heat input.'' 
The EPA proposes two options for interpreting this source category 
title. The first option is the approach used in the regulations for 
prevention of significant deterioration (PSD). In the PSD regulations, 
this same statutory language has been interpreted in regulatory 
language to mean ``fossil fuel boilers (or combinations thereof) 
totaling more than 250 million British thermal units per hour heat 
input.'' The EPA proposes that this same interpretation be used for 
BART as well. Thus, as in the example above, you would aggregate boiler 
capacities to determine whether the 250 million BTU/hr threshold is 
reached.

    Under the second option, this category would be interpreted to 
cover only those boilers that are individually greater than 250 million 
BTU/hr. This approach would result in differing language from the PSD 
program. It is possible, however, that different approaches may be 
justified. The PSD program ensures that new source projects do not 
circumvent the program by constructing several boilers with capacities 
lower than 250 million BTU/hr. Because the BART program affects only 
sources already in existence as of the date of the 1977 CAA amendments, 
there may be a lesser need to aggregate boilers that are individually 
less than 250 million BTU/hr. The EPA requests comment on both options 
proposed above.

--Petroleum storage and transfer facilities with a capacity exceeding 
300,000 barrels. The 300,000 barrel cutoff refers to total facility-
wide tank capacity for tanks that were put in place within the 1962-
1977 time period, and includes gasoline and other petroleum-derived 
liquids.
--``Phosphate rock processing plants.'' This category descriptor is 
broad, and includes all types of phosphate rock processing facilities, 
including elemental phosphorous plants as well as fertilizer production 
plants.
--``Charcoal production facilities.'' In a letter sent to EPA on 
October 11, 2000, the National Association of Manufacturers (NAM) noted 
that there is some limited legislative history on this source category 
list. Specifically, there is discussion in the Congressional Record 
from July 29, 1976 (Cong. Record S. 12781-12784) which identifies a 
study in the 1970s by the Research Corporation of New England (the TRC 
report). The Congressional Record contains a table extracted from the 
TRC report that identifies 190 source categories considered in 
developing a list of 28 categories that led to the 26 categories 
eventually listed in the CAA. In its October 11, 2000 letter, NAM 
suggests that the Congressional Record and the TRC report are relevant 
to the interpretation of the source category ``charcoal production 
facilities.'' While EPA does not believe that the TRC report or table 
contain any information that would suggest subdividing this category, 
EPA has included the NAM letter and the cited passage from the 
Congressional Record in the docket for this proposed rule. The EPA 
requests comment on whether and how the information cited by NAM is 
relevant to the interpretation of this or other categories.
2. Step 2: Identify the Start-Up Dates of the Emission Units
    Emissions units listed under Step 1 are BART-eligible only if they 
were ``in existence'' on August 7, 1977 but were not ``in operation'' 
before August 7, 1962.
    What does ``in existence on August 7, 1977'' mean?
    The regulation defines ``in existence'' to mean that:

    The owner or operator has obtained all necessary preconstruction 
approvals or permits required by Federal, State, or local air 
pollution emissions and air quality laws or regulations and either 
has (1) begun, or caused to begin, a continuous program of physical 
on-site construction of the facility or (2) entered into binding 
agreements or contractual obligations, which cannot be canceled or 
modified without substantial loss to the owner or operator, to 
undertake a program of construction of the facility to be completed 
in a reasonable time. See 40 CFR 51.301.

Thus, the term ``in existence'' means the same thing as the term 
``commence construction'' as that term is used in the PSD regulations. 
See 40 CFR 51.165(a)(1)(xvi) and 40 CFR 52.21(b)(9). Thus, an emissions 
unit could be ``in existence'' according to this test even if it did 
not begin operating until several years later.

    Example: The owner or operator obtained necessary permits in 
early 1977 and entered into binding construction agreements in June 
1977. Actual on-site construction began in late 1978, and 
construction was completed in mid-1979. The source began operating 
in September 1979. The emissions unit was ``in existence'' as of 
August 7, 1977.

We note that emissions units of this size for which construction 
commenced

[[Page 38119]]

AFTER August 7, 1977 (i.e., were not ``in existence'' on August 7, 
1977) were subject to major new source review (NSR) under the PSD 
program. Thus, the August 7, 1977 ``in existence'' test is essentially 
the same thing as the identification of emissions units that were 
grandfathered from the NSR review requirements of the 1977 CAA 
amendments.
    Finally, we note that sources are not BART eligible if the only 
change at the plant was the addition of pollution controls. For 
example, if the only change at a copper smelter during the 1962 through 
1977 time period was the addition of acid plants for the reduction of 
SO2 emissions, these emission controls would not by 
themselves trigger a BART review.
    What does ``in operation before August 7, 1962'' mean?
    An emissions unit that meets the August 7, 1977 ``in existence'' 
test is not BART-eligible if it was in operation before August 7, 1962. 
``In operation'' is defined as ``engaged in activity related to the 
primary design function of the source.'' This means that a source must 
have begun actual operations by August 7, 1962 to satisfy this test.

    Example: The owner or operator entered into binding agreements 
in 1960. Actual on-site construction began in 1961, and construction 
was complete in mid-1962. The source began operating in September 
1962. The emissions unit was not ``in operation'' before August 7, 
1962 and is therefore subject to BART.

    What is a ``reconstructed source?''
    Under a number of CAA programs, an existing source which is 
completely or substantially rebuilt is treated as a new source. Such 
``reconstructed'' sources are treated as new sources as of the time of 
the reconstruction. Consistent with this overall approach to 
reconstructions, the definition of BART-eligible facility (reflected in 
detail in the definition of ``existing stationary facility'') includes 
consideration of sources that were in operation before August 7, 1962, 
but were reconstructed during the August 7, 1962 to August 7, 1977 time 
period.
    Under the regulation, a reconstruction has taken place if ``the 
fixed capital cost of the new component exceeds 50 percent of the fixed 
capital cost of a comparable entirely new source.'' The rule also 
states that ``Any final decision as to whether reconstruction has 
occurred must be made in accordance with the provisions of Secs. 60.15 
(f)(1) through (3) of this title.'' [40 CFR 51.301]. 
``Secs. 60.15(f)(1) through (3)'' refers to the general provisions for 
New Source Performance Standards (NSPS). Thus, the same policies and 
procedures for identifying reconstructed ``affected facilities'' under 
the NSPS program must also be used to identify reconstructed 
``stationary sources'' for purposes of the BART requirement.
    You should identify reconstructions on an emissions unit basis, 
rather than on a plantwide basis. That is, you need to identify only 
the reconstructed emission units meeting the 50 percent cost criterion. 
You should include reconstructed emission units in the list of emission 
units you identified in Step 1.
    The ``in operation'' and ``in existence'' tests apply to 
reconstructed sources. If an emissions unit was reconstructed and began 
actual operation before August 7, 1962, it is not BART-eligible. 
Similarly, any emissions unit for which a reconstruction ``commenced'' 
after August 7, 1977, is not BART-eligible.
    How are modifications treated under the BART provision?
    The NSPS program and the major source NSR program both contain the 
concept of modifications. In general, the term ``modification'' refers 
to any physical change or change in the method of operation of an 
emissions unit that leads to an increase in emissions.
    The BART provision in the regional haze rule contains no explicit 
treatment of modifications. Accordingly, guidelines are needed on how 
modified emissions units, previously subject to best available control 
technology (BACT), lowest achievable emission rate (LAER) and/or NSPS, 
are treated under the rule. The EPA believes that the best 
interpretation for purposes of the visibility provisions is that 
modified emissions units are still ``existing.'' The BART requirements 
in the CAA do not appear to provide any exemption for sources which 
were modified since 1977. Accordingly, if an emissions unit began 
operation before 1962, it is not BART-eligible if it is modified at a 
later date, so long as the modification is not also a 
``reconstruction.'' Similarly, an emissions unit which began operation 
within the 1962-1977 time window, but was modified after August 7, 
1977, is BART-eligible. We note, however, that if such a modification 
was a major modification subject to the BACT, LAER, or NSPS levels of 
control, the review process will take into account that this level of 
control is already in place and may find that the level of controls are 
already consistent with BART. The EPA requests comment on this 
interpretation for ``modifications.'' \3\
---------------------------------------------------------------------------

    \3\ Another possible interpretation would be to consider sources 
built before 1962 but modified during the 1962-1977 time window as a 
``new'' source at the time of the modification. Under this approach, 
such sources would be considered to have commenced operation during 
the 1962-1977 time period, and thus would be BART eligible. 
Similarly, consistent with this interpretation, a source modified 
after the 1977 date would be treated as ``new'' as of the date of 
the modification and therefore would not be BART-eligible. The EPA 
believes that this approach may be much more difficult to implement, 
given that programs to identify ``modifications'' were not in place 
for much of the 1962-1977 time period.
---------------------------------------------------------------------------

3. Step 3: Compare the potential emissions to the 250 ton/yr cutoff
    The result of Steps 1 and 2 will be a list of emissions units at a 
given plant site, including reconstructed emissions units, that are 
within one or more of the BART categories and that were placed into 
operation within the 1962-1977 time window. The third step is to 
determine whether the total emissions represent a current potential to 
emit that is greater than 250 tons per year of any single visibility 
impairing pollutant. In most cases, you will add the potential 
emissions from all emission units on the list resulting from Steps 1 
and 2. In a few cases, you may need to determine whether the plant 
contains more than one ``stationary source'' as the regional haze rule 
defines that term, and as we explain further below.
    What pollutants should I address?
    Visibility-impairing pollutants include the following:

--Sulfur dioxide (SO2),
--Nitrogen oxides (NOX),
--Particulate matter. (You may use PM10 as the indicator for 
particulate matter. We do not recommend use of total suspended 
particulates (TSP). PM10 emissions include the components of 
PM2.5 as a subset. There is no need to have separate 250 ton 
thresholds for PM10 and PM2.5, because 250 tons 
of PM10 represents at most 250 tons of PM2.5, and 
at most 250 tons of any individual particulate species such as 
elemental carbon, crustal material, etc).
--Volatile organic compounds (VOC), and
--Ammonia.

    What does the term ``potential'' emissions mean?
    The regional haze rule defines 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. Secondary emissions do not 
count in determining the potential to emit of a stationary source.


[[Page 38120]]


This definition is identical to that in the PSD program (40 CFR 51.166 
and 51.18). This means that a source which actually emits less than 250 
tons per year of a visibility-impairing pollutant is BART-eligible if 
its emissions would exceed 250 tons per year when operating at its 
maximum physical and operational design.

    Example: A source, while operating at one-fourth of its 
capacity, emits 75 tons per year of SO2. If it were 
operating at 100 percent of its maximum capacity, the source would 
emit 300 tons per year. Because under the above definition such a 
source would have ``potential'' emissions that exceed 250 tons per 
year, the source (if in a listed category and built during the 1962-
1977 time window) would be BART-eligible.

A source's ``potential to emit'' may take into account federally 
enforceable emission limits.

    Example: The same source has a federally enforceable restriction 
limiting it to operating no more than \1/2\ of the year. Because you 
can credit this under the definition of potential to emit, the 
source would have a potential of 150 tons per year, which is less 
than the 250 tons/year cutoff.

The definition of potential to emit allows only federally enforceable 
emission limits to be taken into account for this purpose, and does not 
credit emission limitations which are enforceable only by State and 
local agencies, but not by EPA and citizens in Federal court. As a 
result of some court cases in other CAA programs, EPA is undertaking a 
rulemaking to determine whether only federally enforceable limits 
should be taken into account. This rulemaking will address the Federal 
enforceability restriction in the regional haze definition as well as 
other program definitions. We expect that this rulemaking will be 
complete well before the time period for determining whether BART 
applies.
    How do I identify whether a plant has more than one ``stationary 
source?''
    The regional haze rule, in 40 CFR 51.301, defines a stationary 
source as a ``building, structure, facility or installation which emits 
or may emit any air pollutant.'' \4\ The rule further defines 
``building, structure or facility'' as:
---------------------------------------------------------------------------

    \4\ Note: Most of these terms and definitions are the same for 
regional haze and the 1980 visibility regulations. For the regional 
haze rule we use the term ``BART-eligible source'' rather than 
``existing stationary facility'' to clarify that only a limited 
subset of existing stationary sources are subject to BART.

    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 
must be considered as part of the same industrial grouping if they 
belong to the same Major Group (i.e., which have the same two-digit 
code) as described in the Standard Industrial Classification Manual, 
1972 as amended by the 1977 Supplement (U.S. Government Printing 
---------------------------------------------------------------------------
Office stock numbers 4101-0066 and 003-005-00176-0 respectively).

    In applying this definition, it is first necessary to draw the 
plant boundary, that is the boundary for the ``contiguous or adjacent 
properties.'' Next, within this plant boundary it is necessary to group 
those emission units that are under ``common control.'' The EPA notes 
that these plant boundary issues and ``common control'' issues are very 
similar to those already addressed in implementation of the title V 
operating permits program and in NSR.
    For emission units within the ``contiguous or adjacent'' boundary 
and under common control, you then group emission units that are within 
the same industrial grouping (that is, associated with the same 2-digit 
Standard Industrial Classification (SIC) code).\5\ For most plants on 
the BART source category list, there will only be one 2-digit SIC that 
applies to the entire plant. For example, all emission units associated 
with kraft pulp mills are within SIC code 26, and chemical process 
plants will generally include emission units that are all within SIC 
code 28. You should apply this ``2-digit SIC test'' the same way you 
are now applying this test in the major source NSR programs.\6\
---------------------------------------------------------------------------

    \5\ The EPA recognizes that we are in transition period from the 
use of the SIC system to a new system called the North American 
industry Classification System (NAICS). Our initial thinking is that 
BART determinations, as a one-time activity, are perhaps best 
handled under the SIC classifications. We request comment on whether 
a switch to the new system for the regional haze rule is warranted--
we expect that few if any BART eligibility determinations would 
hinge on this distinction.
    \6\ Note: The concept of support facility used for the PSD 
program applies here as well. As discussed in the draft New Source 
Review Workbook Manual, October 1990, pages A.3-A.5, support 
facilities, that is facilities that convey, store or otherwise 
assist in the production of the principal product, must be grouped 
with primary facilities even when more than one 2-digit SIC is 
present.
---------------------------------------------------------------------------

    For purposes of the regional haze rule, you group emissions from 
all emission units put in place within the 1962-1977 time period that 
are within the 2-digit SIC code, even if those emission units are in 
different categories on the BART category list.

    Examples: A chemical plant which started operations within the 
1962 to 1977 time period manufactures hydrochloric acid (within the 
category title ``Hydrochloric, sulfuric, and nitric acid plants'') 
and various organic chemicals (within the category title ``chemical 
process plants''), and has onsite an industrial boiler greater than 
250 million BTU/hour. All of the emission units are within SIC 28 
and, therefore, all the emission units are considered in determining 
BART eligibility of the plant. You sum the emissions over all of 
these emission units to see whether there are more than 250 tons per 
year of potential emissions.
    A steel mill which started operations within the 1962 to 1977 
time period includes a sintering plant, a coke oven battery, and 
various other emission units. All of the emission units are within 
SIC 33. You sum the emissions over all of these emission units to 
see whether there are more than 250 tons per year of potential 
emissions.
4. Final Step: Identify the Emissions Units and Pollutants That 
Constitute the BART-Eligible Source
    If the emissions from the list of emissions units at a stationary 
source exceed a potential to emit of 250 tons per year for any 
visibility-impairing pollutant, then that collection of emissions units 
is a BART-eligible source. A BART analysis is required for each 
visibility-impairing pollutant emitted.

    Example: A stationary source comprises the following two 
emissions units, with the following potential emissions:

Emissions unit A
    500 tons/yr SO2
    150 tons/yr NOX
    25 tons/yr PM
Emissions unit B
    100 tons/yr SO2
    75 tons/yr NOX
    10 tons/yr PM

For this example, potential emissions of SO2 are 600 tons 
per year, which exceeds the 250 tons/yr threshold. Accordingly, the 
entire ``stationary source'' that is emissions units A and B are 
subject to a BART review for SO2, NOX, and PM, 
even though the potential emissions of PM and NOX each are 
less than 250 tons/yr.

    Example: The total potential emissions, obtained by adding the 
potential emissions of all emission units in listed categories at a 
plant site, are as follows:

200 tons/yr SO2
150 tons/yr NOX
25 tons/yr PM

    Even though total emissions exceed 250 tons per year, no 
individual regulated pollutant exceeds 250 tons per year and this 
source is not BART-eligible.

III. How To Identify Sources ``Subject To BART''

    After you have identified the BART-eligible sources, the next step 
is determining whether these sources are subject to a further BART 
analysis because they emit ``an air pollutant which may reasonably be 
anticipated to cause or contribute'' to any visibility

[[Page 38121]]

impairment in a Federal Class I area. As we discuss in the preamble to 
the regional haze rule at 64 FR 35739-35740, the statutory language 
represents a very low triggering threshold. In implementing the 
regional haze rule, you should find that a BART-eligible source is 
``reasonably anticipated to cause or contribute'' to regional haze if 
the source emits pollutants within a geographic region from which 
pollutants can be emitted and transported downwind to a Class I area. 
Where emissions from a given geographic region contribute to regional 
haze in a Class I area, you should consider any emissions from BART-
eligible sources in that region to contribute to the regional haze 
problem, thereby warranting a further BART analysis for those sources.

A. How Can I Identify ``the Geographic Area'' or ``Region'' That 
Contributes to a Given Class I Area?

    As noted in the preamble to the regional haze rule, geographic 
``regions'' that can contribute to regional haze generally extend for 
hundreds or thousands of kilometers (64 FR 35722). Accordingly, most 
BART-eligible sources are located within such a geographic region. For 
example, we believe it would be difficult to demonstrate that a State 
or territory's emissions do not contribute to regional haze impairment 
in a Class I area within that State or territory.
    The regional haze rule recognizes that there may be geographic 
areas (individual States or multi-State areas) within the United 
States, (in virtually all cases involving States that do not have Class 
I areas) for which the total emissions make only a trivial contribution 
to visibility impairment in any Class I area. In identifying any such 
State or area, you or a regional planning organization must conduct an 
air quality modeling analysis to demonstrate that the total emissions 
from the State or area makes only a trivial contribution to visibility 
impairment in Class I areas.
    One approach that can be used is to determine whether a State or 
area contributes in a non-trivial way would be to do an analysis where 
you compare the visibility impairment in a Class I area with the 
emissions from a State or area to the visibility impairment in the 
Class I area in the absence of the emissions from the State or area. 
This approach can be referred to as a ``zero-out'' approach where you 
zero out the emissions from the State or area that is suspected to make 
a trivial contribution to visibility impairment in a Class I area. 
Under this approach, you would compare:
    (1) the visibility impairment in each affected Class I area (for 
the average of the 20 percent most impaired days and the 20 percent 
least impaired days) when the emissions from the State or area 
suspected to have a trivial contribution are included in the modeling 
analysis, and
    (2) the visibility impairment in each affected Class I area (for 
the average of the 20 percent most impaired days and the 20 percent 
least impaired days), excluding from the modeling analysis the 
emissions from the geographic area suspected to have a trivial impact.

The difference in visibility between these two model runs provides an 
indication of the impact on visibility of emissions from the State(s) 
in question. In addition, it may be possible in the future to conduct 
analyses of the geographic area that contributes to visibility 
impairment in a Class I area through use of a source apportionment 
model for PM. Source apportionment models for PM are currently under 
development by private consultants. Guidance for regional modeling for 
visibility and PM is found in a document entitled ``Guidance for 
Demonstrating Attainment of Air Quality Goals for PM2.5 and 
Regional Haze.'' [Note: this document is currently in draft form, but 
we expect a final document before final publication of the BART 
guidelines]

IV. Engineering Analysis of BART Options

    This section describes the process for the engineering analysis of 
control options for sources subject to BART.

A. What Factors Must I Address in the Engineering Analysis?

    The visibility regulations define BART as follows:

    Best Available Retrofit Technology (BART) means an emission 
limitation based on the degree of reduction achievable through the 
application of the best system of continuous emission reduction for 
each pollutant which is emitted by * * * [a BART-eligible source]. 
The emission limitation must be established, on a case-by-case 
basis, taking into consideration the technology available, the costs 
of compliance, the energy and non-air quality environmental impacts 
of compliance, any pollution control equipment in use or in 
existence at the source, the remaining useful life of the source, 
and the degree of improvement in visibility which may reasonably be 
anticipated to result from the use of such technology.

In the regional haze rule, we divide the BART analysis into two parts: 
an engineering analysis requirement in 40 CFR 51.308(e)(1)(ii)(A), and 
a visibility impacts analysis requirement in 40 CFR 
51.308(e)(1)(ii)(B). This section of the guidelines address the 
requirements for the engineering analysis. Your engineering analysis 
identifies the best system of continuous emission reduction taking into 
account:

--The available retrofit control options,
--Any pollution control equipment in use at the source (which affects 
the availability of options and their impacts),
--The costs of compliance with control options,
--The remaining useful life of the facility (which as we will discuss 
below, is an integral part of the cost analysis), and
--The energy and non-air quality environmental impacts of control 
options.

We discuss the requirement for a visibility impacts analysis below in 
section V.

B. How Does a BART Engineering Analysis Compare to a BACT Review Under 
the PSD Program?

    In this proposal, we are seeking comment on two alternative 
approaches for conducting a BART engineering analysis. EPA prefers the 
first approach. Under this first alternative, the BART analysis would 
be very similar to the BACT review as described in the New Source 
Review Workshop Manual (Draft, October 1990). Consistent with the 
Workshop Manual, the BART engineering analysis would be a process which 
provides that all available control technologies be ranked in 
descending order of control effectiveness. Under this option, you must 
first examine the most stringent alternative. That alternative is 
selected as the ``best'' unless you demonstrate and document that the 
alternative cannot be justified based upon technical considerations, 
costs, energy impacts, and non-air quality environmental impacts. If 
you eliminate the most stringent technology in this fashion, you then 
consider the next most stringent alternative, and so on.
    The EPA also requests comment on an alternative decision-making 
approach that would not necessarily begin with an evaluation of the 
most stringent control option. Under this approach, you would have more 
choices in the way you structure your BART analysis. For example, you 
could choose to begin the BART determination process by evaluating the 
least stringent technically feasible control option or an intermediate 
control option drawn from the range of technically feasible control 
alternatives. Under this approach, you would then consider the 
additional emission reductions, costs, and other

[[Page 38122]]

effects (if any) of successively more stringent control options. Under 
such an approach, you would still be required to (1) display and rank 
all of the options in order of control effectiveness, including the 
most stringent control option, and to identify the average and 
incremental costs of each option; (2) consider the energy and non-air 
quality environmental impacts of each option; and (3) provide a 
justification for adopting the control technology that you select as 
the ``best'' level of control, including an explanation as to why you 
rejected other more stringent control technologies. While both 
approaches require essentially the same parameters and analyses, the 
EPA prefers the first approach described above, because we believe it 
may be more straightforward to implement than the alternative and would 
tend to give more thorough consideration to stringent control 
alternatives.
    Although very similar in process, BART reviews differ in several 
respects from the BACT review process described in the NSR Draft 
Manual. First, because all BART reviews apply to existing sources, the 
available controls and the impacts of those controls may differ. 
Second, the CAA requires you to take slightly different factors into 
account in determining BART and BACT. In a BACT analysis, the 
permitting authority must consider the ``energy, environmental and 
economic impacts and other costs'' associated with a control technology 
in making its determination. In a BART analysis, on the other hand, the 
State must take into account the ``cost of compliance, the remaining 
useful life of the source, the energy and nonair quality environmental 
impacts of compliance, any existing pollution control technology in use 
at the source, and the degree of improvement in visibility from the use 
of such technology'' in making its BART determination. Because of the 
differences in terminology, the BACT review process tends to encompass 
a broader range of factors. For example, the term ``environmental 
impacts'' in the BACT definition is more broad than the term ``nonair 
quality environmental impacts'' used in the BART definition. 
Accordingly, there is no requirement in the BART engineering analysis 
to evaluate adverse air quality impacts of control alternatives such as 
the relative impacts on hazardous air pollutants, although you may wish 
to do so. Finally, for the BART analysis, there is no minimum level of 
control required, while any BACT emission limitation must be at least 
as stringent as any NSPS that applies to the source.

C. Which Pollutants Must I Address in the Engineering Review?

    Once you determine that a source is subject to BART, then a BART 
review is required for each visibility-impairing pollutant emitted. In 
a BART review, for each affected emission unit, you must establish BART 
for each pollutant that can impair visibility. Consequently, the BART 
determination must address air pollution control measures for each 
emissions unit or pollutant emitting activity subject to review.

    Example: Plantwide emissions from emission units within the 
listed categories that began operation within the ``time window'' 
for BART \7\ are 300 tons per year of NOX, 200 tons per 
year of SO2, and 150 tons of primary particulate. 
Emissions unit A emits 200 tons per year of NOX, 100 tons 
per year of SO2, and 100 tons per year of primary 
particulate. Other emission units, units B through H, which began 
operating in 1966, contribute lesser amounts of each pollutant. For 
this example, a BART review is required for NOX, 
SO2, and primary particulate, and control options must be 
analyzed for units B through H as well as unit A.
---------------------------------------------------------------------------

    \7\ That is, emission uunits that were in existence on August 7, 
1977 and which began actual operation on or after August 7, 1962.
---------------------------------------------------------------------------

D. What Are the Five Basic Steps of a Case-by-Case BART Engineering 
Analysis?

    The five steps are:

Step 1--Identify all \8\ available retrofit control technologies,
---------------------------------------------------------------------------

    \8\ In identifying ``all'' options, you must identify the most 
stringent option and a reasonable set of options for analysis that 
reflects a comprehensive list of available technologies. It is not 
necessary to list all permutations of available control levels that 
exist for a given technology--the list is complete if it includes 
the maximum level of control each technology is capable of 
achieving.
---------------------------------------------------------------------------

Step 2--Eliminate Technically Infeasible Options,
Step 3--Rank Remaining Control Technologies By Control Effectiveness,
Step 4--Evaluate Impacts and Document the Results, and
Step 5--Select ``Best System of Continuous Emission Reduction.''
1. Step 1: How Do I Identify All Available Retrofit Emission Control 
Techniques?
    Available retrofit control options are those air pollution control 
technologies with a practical potential for application to the 
emissions unit and the regulated pollutant under evaluation. Air 
pollution control technologies can include a wide variety of available 
methods, systems, and techniques for control of the affected pollutant. 
Available air pollution control technologies can include technologies 
employed outside of the United States that have been successfully 
demonstrated in practice on full scale operations, particularly those 
that have been demonstrated as retrofits to existing sources. 
Technologies required as BACT or LAER are available for BART purposes 
and must be included as control alternatives. The control alternatives 
should include not only existing controls for the source category in 
question, but also take into account technology transfer of controls 
that have been applied to similar source categories and gas streams. 
Technologies which have not yet been applied to (or permitted for) full 
scale operations need not be considered as available; we do not expect 
the source owner to purchase or construct a process or control device 
that has not already been demonstrated in practice.
    Where a NSPS exists for a source category (which is the case for 
most of the categories affected by BART), you should include a level of 
control equivalent to the NSPS as one of the control options.\9\ The 
NSPS standards are codified in 40 CFR part 60. We note that there are 
situations where NSPS standards do not require the most stringent level 
of available control for all sources within a category. For example, 
post-combustion NOX controls (the most stringent controls 
for stationary gas turbines) are not required under subpart GG of the 
NSPS for Stationary Gas Turbines. However, such controls must still be 
considered available technologies for the BART selection process.
---------------------------------------------------------------------------

    \9\ In EPA's 1980 BART guidelines for reasonably attributable 
visibility impairment, we concluded that NSPS standards generally, 
at that time, represented the best level sources could install as 
BART, and we required no further demonstration if a NSPS level was 
selected. In the 20 year period since this guidance was developed, 
there have been advances in SO2 control technologies, 
confirmed by a number of recent retrofits at Western power plants. 
Accordingly, EPA no longer concludes that the NSPS level of controls 
automatically represents ``the best these sources can install.'' 
While it is possible that a detailed analysis of the BART factors 
could result in the selection of a NSPS level of control, we believe 
that you should only reach this conclusion based upon an analysis of 
the full range of control options.
---------------------------------------------------------------------------

    Potentially applicable retrofit control alternatives can be 
categorized in three ways.
     Pollution prevention: use of inherently lower-emitting 
processes/practices, including the use of materials and production 
processes and work practices that prevent emissions and result in lower 
``production-specific'' emissions,
     Use of, (and where already in place, improvement in the 
performance of) add-on controls, such as scrubbers,

[[Page 38123]]

fabric filters, thermal oxidizers and other devices that control and 
reduce emissions after they are produced, and
     Combinations of inherently lower-emitting processes and 
add-on controls. Example: for a gas-fired turbine, a combination of 
combustion controls (an inherently lower-emitting process) and post-
combustion controls such as selective catalytic reduction (add-on) may 
be available to reduce NOX emissions.
    For the engineering analysis, you should consider potentially 
applicable control techniques from all three categories. You should 
consider lower-polluting processes based on demonstrations from 
facilities manufacturing identical or similar products from identical 
or similar raw materials or fuels. Add-on controls, on the other hand, 
should be considered based on the physical and chemical characteristics 
of the pollutant-bearing emission stream. Thus, candidate add-on 
controls may have been applied to a broad range of emission unit types 
that are similar, insofar as emissions characteristics, to the 
emissions unit undergoing BART review.
    In the course of the BART engineering analysis, one or more of the 
available control options may be eliminated from consideration because 
they are demonstrated to be technically infeasible or to have 
unacceptable energy, cost, or non-air quality environmental impacts on 
a case-by-case (or site-specific) basis. However, at the outset, you 
should initially identify all control options with potential 
application to the emissions unit under review.
    We do not consider BART as a requirement to redesign the source 
when considering available control alternatives. For example, where the 
source subject to BART is a coal-fired electric generator, we do not 
require the BART analysis to consider building a natural gas-fired 
electric turbine although the turbine may be inherently less polluting 
on a per unit basis.
    In some cases, retrofit design changes may be available for making 
a given production process or emissions unit inherently less 
polluting.\10\ (Example: To allow for use of natural gas rather than 
oil for startup). In such cases, the ability of design considerations 
to make the process inherently less polluting must be considered as a 
control alternative for the source.
---------------------------------------------------------------------------

    \10\ Because BART applies to existing sources, we recognize that 
there will probably be far fewer opportunities to consider 
inherently lower-emitting processes than for NSR.
---------------------------------------------------------------------------

    Combinations of inherently lower-polluting processes/practices (or 
a process made to be inherently less polluting) and add-on controls 
could possibly yield more effective means of emissions control than 
either approach alone. Therefore, the option to use an inherently 
lower-polluting process does not, in and of itself, mean that no 
additional add-on controls need to be included in the BART analysis. 
These combinations should be identified in Step 1 for evaluation in 
subsequent steps.
    For emission units subject to a BART engineering review, there will 
often be control measures or devices already in place. For such 
emission units, it is important to include control options that involve 
improvements to existing controls, and not to limit the control options 
only to those measures that involve a complete replacement of control 
devices.

    Example: For a power plant with an existing wet scrubber, the 
current control efficiency is 66 percent. Part of the reason for the 
relatively low control efficiency is that 22 percent of the gas 
stream bypasses the scrubber. An engineering review identifies 
options for improving the performance of the wet scrubber by 
redesigning the internal components of the scrubber and by 
eliminating or reducing the percentage of the gas stream that 
bypasses the scrubber. Four control options are identified: (1) 78 
percent control based upon improved scrubber performance while 
maintaining the 22 percent bypass, (2) 83 percent control based upon 
improved scrubber performance while reducing the bypass to 15 
percent, (3) 93 percent control based upon improving the scrubber 
performance while eliminating the bypass entirely, (this option 
results in a ``wet stack'' operation in which the gas leaving the 
stack is saturated with water) and (4) 93 percent as in option 3, 
with the addition of an indirect reheat system to reheat the stack 
gas above the saturation temperature. You must consider each of 
these four options in a BART analysis for this source.

    You are expected to identify all demonstrated and potentially 
applicable retrofit control technology alternatives. Examples of 
general information sources to consider include:
     The EPA's Clean Air Technology Center, which includes the 
RACT/BACT/LAER Clearinghouse (RBLC);
     State and Local Best Available Control Technology 
Guidelines--many agencies have online information--for example South 
Coast Air Quality Management District, Bay Area Air Quality Management 
District, and Texas Natural Resources Conservation Commission;
     Control technology vendors;
     Federal/State/Local NSR permits and associated inspection/
performance test reports;
     Environmental consultants;
     Technical journals, reports and newsletters, air pollution 
control seminars; and
     EPA's NSR bulletin board--http://www.epa.gov/ttn/nsr;
     Department of Energy's Clean Coal Program--technical 
reports;
     NOX Control Technology ``Cost Tool''--Clean Air 
Markets Division web page--http://www.epa.gov/acidrain/nox/noxtech.htm;
     Performance of selective catalytic reduction on coal-fired 
steam generating units--final report. OAR/ARD, June 1997 (also 
available at http:www.epa.gov/acidrain/nox/noxtech.htm);
     Cost estimates for selected applications of NOX 
control technologies on stationary combustion boilers. OAR/ARD June 
1997. (Docket for NOX SIP call, A-96-56, II-A-03);
     Investigation of performance and cost of NOX 
controls as applied to group 2 boilers. OAR/ARD, August 1996. (Docket 
for Phase II NOX rule, A-95-28, IV-A-4);
     Controlling SO2 Emissions: A Review of 
Technologies. EPA-600/R-00-093, USEPA/ORD/NRMRL, October 2000.
     OAQPS Control Cost Manual.
    You should compile appropriate information from all available 
information sources, and you should ensure that the resulting list of 
control alternatives is complete and comprehensive.
2. Step 2: How Do I Determine Whether the Options Identified in Step 1 
Are Technically Feasible?
    In Step two, you evaluate the technical feasibility of the control 
options you identified in Step one. You should clearly document a 
demonstration of technical infeasibility and should show, based on 
physical, chemical, and engineering principles, that technical 
difficulties would preclude the successful use of the control option on 
the emissions unit under review. You may then eliminate such 
technically infeasible control options from further consideration in 
the BART analysis.
    In general, what do we mean by technical feasibility?
    Control technologies are technically feasible if either (1) they 
have been installed and operated successfully for the type of source 
under review, or (2) the technology could be applied to the source 
under review. Two key concepts are important in determining whether a 
technology could be applied: ``availability'' and ``applicability.'' As 
explained in more detail below, a technology is considered 
``available'' if

[[Page 38124]]

the source owner may obtain it through commercial channels, or it is 
otherwise available within the common sense meaning of the term. An 
available technology is ``applicable'' if it can reasonably be 
installed and operated on the source type under consideration. A 
technology that is available and applicable is technically feasible.
    What do we mean by ``available'' technology?
    The typical stages for bringing a control technology concept to 
reality as a commercial product are:
     Concept stage;
     Research and patenting;
     Bench scale or laboratory testing;
     Pilot scale testing;
     Licensing and commercial demonstration; and
     Commercial sales.
    A control technique is considered available, within the context 
presented above, if it has reached the licensing and commercial sales 
stage of development. Similarly, we do not expect a source owner to 
conduct extended trials to learn how to apply a technology on a totally 
new and dissimilar source type. Consequently, you would not consider 
technologies in the pilot scale testing stages of development as 
``available'' for purposes of BART review.
    Commercial availability by itself, however, is not necessarily a 
sufficient basis for concluding a technology to be applicable and 
therefore technically feasible. Technical feasibility, as determined in 
Step 2, also means a control option may reasonably be deployed on or 
``applicable'' to the source type under consideration.
    Because a new technology may become available at various points in 
time during the BART analysis process, we believe that guidelines are 
needed on when a technology must be considered. For example, a 
technology may become available during the public comment period on the 
State's rule development process. Likewise, it is possible that new 
technologies may become available after the close of the State's public 
comment period and before submittal of the SIP to EPA, or during EPA's 
review process on the SIP submittal. In order to provide certainty in 
the process, we propose that all technologies be considered if 
available before the close of the State's public comment period. You 
need not consider technologies that become available after this date. 
As part of your analysis, you should consider any technologies brought 
to your attention in public comments. If you disagree with public 
comments asserting that the technology is available, you should provide 
an explanation for the public record as to the basis for your 
conclusion.
    What do we mean by ``applicable'' technology?
    You need to exercise technical judgment in determining whether a 
control alternative is applicable to the source type under 
consideration. In general, a commercially available control option will 
be presumed applicable if it has been or is soon to be deployed (e.g., 
is specified in a permit) on the same or a similar source type. Absent 
a showing of this type, you evaluate technical feasibility by examining 
the physical and chemical characteristics of the pollutant-bearing gas 
stream, and comparing them to the gas stream characteristics of the 
source types to which the technology had been applied previously. 
Deployment of the control technology on a new or existing source with 
similar gas stream characteristics is generally a sufficient basis for 
concluding the technology is technically feasible barring a 
demonstration to the contrary as described below.
    What type of demonstration is required if I conclude that an option 
is not technically feasible?
    Where you assert that a control option identified in Step 1 is 
technically infeasible, you should make a factual demonstration that 
the option is commercially unavailable, or that unusual circumstances 
preclude its application to a particular emission unit. Generally, such 
a demonstration involves an evaluation of the characteristics of the 
pollutant-bearing gas stream and the capabilities of the technology. 
Alternatively, a demonstration of technical infeasibility may involve a 
showing that there are unresolvable technical difficulties with 
applying the control to the source (e.g., size of the unit, location of 
the proposed site, or operating problems related to specific 
circumstances of the source). Where the resolution of technical 
difficulties is a matter of cost, you should consider the technology to 
be technically feasible. The cost of a control alternative is 
considered later in the process.
    The determination of technical feasibility is sometimes influenced 
by recent air quality permits. In some cases, an air quality permit may 
require a certain level of control, but the level of control in a 
permit is not expected to be achieved in practice (e.g., a source has 
received a permit but the project was canceled, or every operating 
source at that permitted level has been physically unable to achieve 
compliance with the limit). Where this is the case, you should provide 
supporting documentation showing why such limits are not technically 
feasible, and, therefore, why the level of control (but not necessarily 
the technology) may be eliminated from further consideration. However, 
if there is a permit requiring the application of a certain technology 
or emission limit to be achieved for such technology (especially as a 
retrofit for an existing emission unit), this usually is sufficient 
justification for you to assume the technical feasibility of that 
technology or emission limit.
    Physical modifications needed to resolve technical obstacles do 
not, in and of themselves, provide a justification for eliminating the 
control technique on the basis of technical infeasibility. However, you 
may consider the cost of such modifications in estimating costs. This, 
in turn, may form the basis for eliminating a control technology (see 
later discussion).
    Vendor guarantees may provide an indication of commercial 
availability and the technical feasibility of a control technique and 
could contribute to a determination of technical feasibility or 
technical infeasibility, depending on circumstances. However, we do not 
consider a vendor guarantee alone to be sufficient justification that a 
control option will work. Conversely, lack of a vendor guarantee by 
itself does not present sufficient justification that a control option 
or an emissions limit is technically infeasible. Generally, you should 
make decisions about technical feasibility based on chemical, and 
engineering analyses (as discussed above), in conjunction with 
information about vendor guarantees.
    A possible outcome of the BART procedures discussed in these 
guidelines is the evaluation of multiple control technology 
alternatives which result in essentially equivalent emissions. It is 
not EPA's intent to encourage evaluation of unnecessarily large numbers 
of control alternatives for every emissions unit. Consequently, you 
should use judgment in deciding on those alternatives for which you 
will conduct the detailed impacts analysis (Step 4 below). For example, 
if two or more control techniques result in control levels that are 
essentially identical, considering the uncertainties of emissions 
factors and other parameters pertinent to estimating performance, you 
may evaluate only the less costly of these options. You should narrow 
the scope of the BART analysis in this way, only if there is a 
negligible difference in emissions and energy and non-air quality 
environmental impacts between control alternatives.

[[Page 38125]]

3. Step 3: How Do I Develop a Ranking of the Technically Feasible 
Alternatives?
    Step 3 involves ranking all the technically feasible control 
alternatives identified in Step 2. For the pollutant and emissions unit 
under review, you rank the control alternatives from the most to the 
least effective in terms of emission reduction potential.
    Two key issues that must be addressed in this process include:
    (1) Making sure that you express the degree of control using a 
metric that ensures an ``apples to apples'' comparison of emissions 
performance levels among options, and
    (2) Giving appropriate treatment and consideration of control 
techniques that can operate over a wide range of emission performance 
levels.

In some instances, a control technology may reduce more than one 
visibility impairing pollutant. We request comment on whether and how 
the BART guidelines should address the process for ranking such control 
technologies against control technologies which reduce emissions of 
only one pollutant.
    What are the appropriate metrics for comparison?
    This issue is especially important when you compare inherently 
lower-polluting processes to one another or to add-on controls. In such 
cases, it is generally most effective to express emissions performance 
as an average steady state emissions level per unit of product produced 
or processed.
    Examples of common metrics:
     Pounds of SO2 emissions per million Btu heat 
input, and
     Pounds of NOX emissions per ton of cement 
produced.
    How do I evaluate control techniques with a wide range of emission 
performance levels?
    Many control techniques, including both add-on controls and 
inherently lower polluting processes, can perform at a wide range of 
levels. Scrubbers and high and low efficiency electrostatic 
precipitators (ESPs) are two of the many examples of such control 
techniques that can perform at a wide range of levels. It is not our 
intent to require analysis of each possible level of efficiency for a 
control technique, as such an analysis would result in a large number 
of options. It is important, however, that in analyzing the technology 
you take into account the most stringent emission control level that 
the technology is capable of achieving. You should use the most recent 
regulatory decisions and performance data (e.g., manufacturer's data, 
engineering estimates and the experience of other sources) to identify 
an emissions performance level or levels to evaluate.
    In assessing the capability of the control alternative, latitude 
exists to consider any special circumstances pertinent to the specific 
source under review, or regarding the prior application of the control 
alternative. However, you must document the basis for choosing the 
alternate level (or range) of control in the BART analysis. Without a 
showing of differences between the source and other sources that have 
achieved more stringent emissions limits, you should conclude that the 
level being achieved by those other sources is representative of the 
achievable level for the source being analyzed.
    You may encounter cases where you may wish to evaluate other levels 
of control in addition to the most stringent level for a given device. 
While you must consider the most stringent level as one of the control 
options, you may consider less stringent levels of control as 
additional options. This would be useful, particularly in cases where 
the selection of additional options would have widely varying costs and 
other impacts.
    Finally, we note that for retrofitting existing sources in 
addressing BART, you should consider ways to improve the performance of 
existing control devices, particularly when a control device is not 
achieving the level of control that other similar sources are achieving 
in practice with the same device.
    How do I rank the control options?
    After determining the emissions performance levels (using 
appropriate metrics of comparison) for each control technology option 
identified in Step 2, you establish a list that identifies the most 
stringent control technology option. Each other control option is then 
placed after this alternative in a ranking according to its respective 
emissions performance level, ranked from lowest emissions to highest 
emissions (most effective to least stringent effective emissions 
control alternative). You should do this for each pollutant and for 
each emissions unit (or grouping of similar units) subject to a BART 
analysis.
4. Step 4: For a BART Engineering Analysis, What Impacts Must I 
Calculate and Report? What Methods Does EPA Recommend for the Impacts 
Analysis?
    After you identify and rank the available and technically feasible 
control technology options, you must then conduct three types of 
impacts analyses when you make a BART determination:

Impact analysis part 1: Costs of compliance, (taking into account the 
remaining useful life of the facility)
Impact analysis part 2: Energy impacts, and
Impact analysis part 3: Non-air quality environmental impacts.

In this section, we describe how to conduct each of these three 
analyses. You are responsible for presenting an evaluation of each 
impact along with appropriate supporting information. You should 
discuss and, where possible, quantify both beneficial and adverse 
impacts. In general, the analysis should focus on the direct impact of 
the control alternative.
    a. Impact analysis part 1: How do I estimate the costs of control? 
To conduct a cost analysis, you:

--Identify the emissions units being controlled,
--Identify design parameters for emission controls, and
--Develop cost estimates based upon those design parameters.

    It is important to identify clearly the emission units being 
controlled, that is, to specify a well-defined area or process segment 
within the plant. In some cases, multiple emission units can be 
controlled jointly. However, in other cases it may be appropriate in 
the cost analysis to consider whether multiple units will be required 
to install separate and/or different control devices. The engineering 
analysis should provide a clear summary list of equipment and the 
associated control costs. Inadequate documentation of the equipment 
whose emissions are being controlled is a potential cause for confusion 
in comparison of costs of the same controls applied to similar sources.
    You then specify the control system design parameters. Potential 
sources of these design parameters include equipment vendors, 
background information documents used to support NSPS development, 
control technique guidelines documents, cost manuals developed by EPA, 
control data in trade publications, and engineering and performance 
test data. The following are a few examples of design parameters for 
two example control measures:

------------------------------------------------------------------------
                                                 Examples of design
              Control device                         parameters
------------------------------------------------------------------------
Wet Scrubbers.............................  Type of sorbent used (lime,
                                             limestone, etc.)
                                            Gas pressure drop
                                            Liquid/gas ratio.

[[Page 38126]]

 
Selective Catalytic Reduction.............  Ammonia to NOX molar ratio
                                            Pressure drop
                                            Catalyst life.
------------------------------------------------------------------------

    The value selected for the design parameter should ensure that the 
control option will achieve the level of emission control being 
evaluated. You should include in your analysis, documentation of your 
assumptions regarding design parameters. Examples of supporting 
references would include the Office of Air Quality Planning and 
Standards (OAQPS) Control Cost Manual (see below) and background 
information documents used for NSPS and hazardous pollutant emission 
standards. If the design parameters you specified differ from typical 
designs, you should document the difference by supplying performance 
test data for the control technology in question applied to the same 
source or a similar source.
    Once the control technology alternatives and achievable emissions 
performance levels have been identified, you then develop estimates of 
capital and annual costs. The basis for equipment cost estimates also 
should be documented, either with data supplied by an equipment vendor 
(i.e., budget estimates or bids) or by a referenced source (such as the 
OAQPS Control Cost Manual, Fifth Edition, February 1996, EPA 453/B-96-
001).\11\ In order to maintain and improve consistency, we recommend 
that you estimate control equipment costs based on the EPA/OAQPS 
Control Cost Manual, where possible.\12\ The Control Cost Manual 
addresses most control technologies in sufficient detail for a BART 
analysis. While the types of site-specific analyses contained in the 
Control Cost Manual are less precise than those based upon a detailed 
engineering design, normally the estimates provide results that are 
plus or minus 30 percent, which is generally sufficient for the BART 
review. The cost analysis should take into account site-specific 
conditions that are out of the ordinary (e.g., use of a more expensive 
fuel or additional waste disposal costs) that may affect the cost of a 
particular BART technology option.
---------------------------------------------------------------------------

    \11\ The Control Cost Manual is updated periodically. While this 
citation refers to the latest version at the time this guidance was 
written, you should use the version that is current as of when you 
conduct your impact analysis. This document is available at the 
following Web site: http://www.epa.gov/ttn/catc/dir1/chpt2acr.pdf.
    \12\ You should include documentation for any additional 
information you used for the cost calculations, including any 
information supplied by vendors that affects your assumptions 
regarding purchased equipment costs, equipment life, replacement of 
major components, and any other element of the calculation that 
differs from the Control Cost Manual.
---------------------------------------------------------------------------

    b. How do I take into account a project's ``remaining useful life'' 
in calculating control costs? You treat the requirement to consider the 
source's ``remaining useful life'' of the source for BART 
determinations as one element of the overall cost analysis. The 
``remaining useful life'' of a source, if it represents a relatively 
short time period, may affect the annualized costs of retrofit 
controls. For example, the methods for calculating annualized costs in 
EPA's Control Cost Manual require the use of a specified time period 
for amortization that varies based upon the type of control. If the 
remaining useful life will clearly exceed this time period, the 
remaining useful life has essentially no effect on control costs and on 
the BART determination process. Where the remaining useful life is less 
than the time period for amortizing costs, you should use this shorter 
time period in your cost calculations.
    For purposes of these guidelines, the remaining useful life is the 
difference between:
    (1) January 1 of the year you are conducting the BART analysis (but 
not later than January 1, 2008); \13\ and
---------------------------------------------------------------------------

    \13\ The reason for the year 2008 is that the year 2008 is the 
latest year for which SIPs are due to address the BART requirement.
---------------------------------------------------------------------------

    (2) The date the facility stops operations. This date must be 
assured by a federally-enforceable restriction preventing further 
operation. A projected closure date, without such a federally-
enforceable restriction, is not sufficient. (The EPA recognizes that 
there may be situations where a source operator intends to shut down a 
source by a given date, but wishes to retain the flexibility to 
continue operating beyond that date in the event, for example, that 
market conditions change.) We request comment on how such flexibility 
could be provided in this regard while maintaining consistency with the 
statutory requirement to install BART within 5 years. For example, one 
option that we request comment on is allowing a source to choose 
between:
    (1) Accepting a federally enforceable condition requiring the 
source to shut down by a given date, or
    (2) Installing the level of controls that would have been 
considered BART if the BART analysis had not assumed a reduced 
remaining useful life if the source is in operation 5 years after the 
date EPA approves the relevant SIP. The source would not be allowed to 
operate after the 5-year mark without such controls.
    c. What do we mean by cost effectiveness? Cost effectiveness, in 
general, is a criterion used to assess the potential for achieving an 
objective at least cost. For purposes of air pollutant analysis, 
``effectiveness'' is measured in terms of tons of pollutant emissions 
removed, and ``cost'' is measured in terms of annualized control costs. 
We recommend two types of cost-effectiveness calculations--average cost 
effectiveness, and incremental cost-effectiveness.
    In the cost analysis, you should take care to not focus on 
incomplete results or partial calculations. For example, large capital 
costs for a control option alone would not preclude selection of a 
control measure if large emissions reductions are projected. In such a 
case, low or reasonable cost effectiveness numbers may validate the 
option as an appropriate BART alternative irrespective of the large 
capital costs. Similarly, projects with relatively low capital costs 
may not be cost effective if there are few emissions reduced.
    d. How do I calculate average cost effectiveness? Average cost 
effectiveness means the total annualized costs of control divided by 
annual emissions reductions (the difference between baseline annual 
emissions and the estimate of emissions after controls), using the 
following formula:
[GRAPHIC] [TIFF OMITTED] TP20JY01.004

      

[[Page 38127]]

    Because you calculate costs in (annualized) dollars per year ($/yr) 
and because you calculate emissions rates in tons per year (tons/yr), 
the result is an average cost-effectiveness number in (annualized) 
dollars per ton ($/ton) of pollutant removed.
---------------------------------------------------------------------------

    \14\ Whenever you calculate or report annual costs, you should 
indicate the year for which the costs are estimated. For example, if 
you use the year 2000 as the basis for cost comparisons, you would 
report that an annualized cost of $20 million would be: $20 million 
(year 2000 dollars).
---------------------------------------------------------------------------

    e. How do I calculate baseline emissions? The baseline emissions 
rate should represent a realistic depiction of anticipated annual 
emissions for the source. In general, for the existing sources subject 
to BART, you will estimate the anticipated annual emissions based upon 
actual emissions from a baseline period. For purposes of estimating 
actual emissions, these guidelines take a similar approach to the 
current definition of actual emissions in NSR programs. That is, the 
baseline emissions are the average annual emissions from the two most 
recent years, unless you demonstrate that another period is more 
representative of normal source operations.\15\
---------------------------------------------------------------------------

    \15\ This is the approach in the current NSR regulations. It is 
possible that this definition of baseline period may change based 
upon a current effort to amend the NSR regulations. We propose that 
these guidelines should be amended to be consistent with the 
approach taken in that separate rulemaking.
---------------------------------------------------------------------------

    When you project that future operating parameters (e.g., limited 
hours of operation or capacity utilization, type of fuel, raw materials 
or product mix or type) will differ from past practice, and if this 
projection has a deciding effect in the BART determination, then you 
must make these parameters or assumptions into enforceable limitations. 
In the absence of enforceable limitations, you calculate baseline 
emissions based upon continuation of past practice.

    Examples: The baseline emissions calculation for an emergency 
standby generator may consider the fact that the source owner would 
not operate more than past practice of 2 weeks a year. On the other 
hand, baseline emissions associated with a base-loaded turbine 
should be based on its past practice which would indicate a large 
number of hours of operation. This produces a significantly higher 
level of baseline emissions than in the case of the emergency/
standby unit and results in more cost-effective controls. As a 
consequence of the dissimilar baseline emissions, BART for the two 
cases could be very different.

    f. How do I calculate incremental cost effectiveness? In addition 
to the average cost effectiveness of a control option, you should also 
calculate incremental cost effectiveness. You should consider the 
incremental cost effectiveness in combination with the total cost 
effectiveness in order to justify elimination of a control option. The 
incremental cost effectiveness calculation compares the costs and 
emissions performance level of a control option to those of the next 
most stringent option, as shown in the following formula:

Incremental Cost Effectiveness (dollars per incremental ton removed) =
(Total annualized costs of control option) - (Total annualized costs of 
next control option) 
(Next control option annual emissions) - (Control option annual 
emissions)

    Example 1: Assume that Option F on Figure 2 has total annualized 
costs of $1 million to reduce 2000 tons of a pollutant, and that 
Option D on Figure 2 has total annualized costs of $500,000 to 
reduce 1000 tons of the same pollutant. The incremental cost 
effectiveness of Option F relative to Option D is ($1 million - 
$500,000) divided by (2000 tons - 1000 tons), or $500,000 divided by 
1000 tons, which is $500/ton.
    Example 2: Assume that two control options exist: Option 1 and 
Option 2. Option 1 achieves a 100,000 ton/yr reduction at an annual 
cost of $19 million. Option 2 achieves a 98,000 tons/yr reduction at 
an annual cost of $15 million. The incremental cost effectiveness of 
Option 1 relative to Option 2 is ($19 million - $15 million) divided 
by (100,000 tons - 98,000 tons). The adoption of Option 1 instead of 
Option 2 results in an incremental emission reduction of 2,000 tons 
per year at an additional cost of $4,000,000 per year. The 
incremental cost of Option 1, then, is $2000 per ton - 10 times the 
average cost of $190 per ton. While $2000 per ton may still be 
deemed reasonable, it is useful to consider both the average and 
incremental cost in making an overall cost-effectiveness finding. Of 
course, there may be other differences between these options, such 
as, energy or water use, or non-air environmental effects, which 
also deserve consideration in selecting a BART technology.

    You should exercise care in deriving incremental costs of candidate 
control options. Incremental cost-effectiveness comparisons should 
focus on annualized cost and emission reduction differences between 
``dominant'' alternatives. To identify dominant alternatives, you 
generate a graphical plot of total annualized costs for total emissions 
reductions for all control alternatives identified in the BART 
analysis, and by identifying a ``least-cost envelope'' as shown in 
Figure 2.

    Example: Eight technically feasible control options for analysis 
are listed in the BART ranking. These are represented as A through H 
in Figure 2. The dominant set of control options, B, D, F, G, and H, 
represent the least-cost envelope, as we depict by the cost curve 
connecting them. Points A, C and E are inferior options, and you 
should not use them in calculating incremental cost effectiveness. 
Points A, C and E represent inferior controls because B will buy 
more emissions reductions for less money than A; and similarly, D 
and F will buy more reductions for less money than C and E, 
respectively.

    In calculating incremental costs, you:
    (1) Rank the control options in ascending order of annualized total 
costs,
    (2) Develop a graph of the most reasonable smooth curve of the 
control options, as shown in Figure 2, and
    (3) Calculate the incremental cost effectiveness for each dominant 
option, which is the difference in total annual costs between that 
option and the next most stringent option, divided by the difference in 
emissions reductions between those two options. For example, using 
Figure 2, you would calculate incremental cost effectiveness for the 
difference between options B and D, options D and F, options F and G, 
and options G and H.

[[Page 38128]]

[GRAPHIC] [TIFF OMITTED] TP20JY01.001

    A comparison of incremental costs can also be useful in evaluating 
the viability of a specific control option over a range of 
efficiencies. For example, depending on the capital and operational 
cost of a control device, total and incremental cost may vary 
significantly (either increasing or decreasing) over the operational 
range of a control device.
    In addition, when you evaluate the average or incremental cost 
effectiveness of a control alternative, you should make reasonable and 
supportable assumptions regarding control efficiencies. An 
unrealistically low assessment of the emission reduction potential of a 
certain technology could result in inflated cost-effectiveness figures.
    g. What other information should I provide in the cost impacts 
analysis? You should provide documentation of any unusual circumstances 
that exist for the source that would lead to cost-effectiveness 
estimates that would exceed that for recent retrofits. This is 
especially important in cases where recent retrofits have cost-
effectiveness values that are within a reasonable range, but your 
analysis concludes that costs for the source being analyzed are not 
reasonable.

    Example: In an arid region, large amounts of water are needed 
for a scrubbing system. Acquiring water from a distant location 
could greatly increase the cost effectiveness of wet scrubbing as a 
control option.


[[Page 38129]]


    h. Impact analysis part 2: How should I analyze and report energy 
impacts? You should examine the energy requirements of the control 
technology and determine whether the use of that technology results in 
any significant or unusual energy penalties or benefits. A source owner 
may, for example, benefit from the combustion of a concentrated gas 
stream rich in volatile organic compounds; on the other hand, more 
often extra fuel or electricity is required to power a control device 
or incinerate a dilute gas stream. If such benefits or penalties exist, 
they should be quantified and included in the cost analysis. Because 
energy penalties or benefits can usually be quantified in terms of 
additional cost or income to the source, the energy impacts analysis 
can, in most cases, simply be factored into the cost impacts analysis. 
However, certain types of control technologies have inherent energy 
penalties associated with their use. While you should quantify these 
penalties, so long as they are within the normal range for the 
technology in question, you should not, in general, consider such 
penalties to be an adequate justification for eliminating that 
technology from consideration.
    Your energy impact analysis should consider only direct energy 
consumption and not indirect energy impacts. For example, you could 
estimate the direct energy impacts of the control alternative in units 
of energy consumption at the source (e.g., BTU, kWh, barrels of oil, 
tons of coal). The energy requirements of the control options should be 
shown in terms of total (and in certain cases, also incremental) energy 
costs per ton of pollutant removed. You can then convert these units 
into dollar costs and, where appropriate, factor these costs into the 
control cost analysis.
    You generally do not consider indirect energy impacts (such as 
energy to produce raw materials for construction of control equipment). 
However, if you determine, either independently or based on a showing 
by the source owner, that the indirect energy impact is unusual or 
significant and that the impact can be well quantified, you may 
consider the indirect impact.
    The energy impact analysis may also address concerns over the use 
of locally scarce fuels. The designation of a scarce fuel may vary from 
region to region. However, in general, a scarce fuel is one which is in 
short supply locally and can be better used for alternative purposes, 
or one which may not be reasonably available to the source either at 
the present time or in the near future.
    Finally, the energy impacts analysis may consider whether there are 
relative differences between alternatives regarding the use of locally 
or regionally available coal, and whether a given alternative would 
result in significant economic disruption or unemployment. For example, 
where two options are equally cost effective and achieve equivalent or 
similar emissions reductions, one option may be preferred if the other 
alternative results in significant disruption or unemployment.
    i. Impact analysis part 3: How do I analyze ``non-air quality 
environmental impacts?'' In the non-air quality related environmental 
impacts portion of the BART analysis, you address environmental impacts 
other than air quality due to emissions of the pollutant in question. 
Such environmental impacts include solid or hazardous waste generation 
and discharges of polluted water from a control device.
    You should identify any significant or unusual environmental 
impacts associated with a control alternative that have the potential 
to affect the selection or elimination of a control alternative. Some 
control technologies may have potentially significant secondary 
environmental impacts. Scrubber effluent, for example, may affect water 
quality and land use. Alternatively, water availability may affect the 
feasibility and costs of wet scrubbers. Other examples of secondary 
environmental impacts could include hazardous waste discharges, such as 
spent catalysts or contaminated carbon. Generally, these types of 
environmental concerns become important when sensitive site-specific 
receptors exist or when the incremental emissions reductions potential 
of the most stringent control is only marginally greater than the next 
most-effective option. However, the fact that a control device creates 
liquid and solid waste that must be disposed of does not necessarily 
argue against selection of that technology as BART, particularly if the 
control device has been applied to similar facilities elsewhere and the 
solid or liquid waste problem under review is similar to those other 
applications. On the other hand, where you or the source owner can show 
that unusual circumstances at the proposed facility create greater 
problems than experienced elsewhere, this may provide a basis for the 
elimination of that control alternative as BART.
    The procedure for conducting an analysis of non-air quality 
environmental impacts should be made based on a consideration of site-
specific circumstances. It is not necessary to perform this analysis of 
environmental impacts for the entire list of technologies you ranked in 
Step 3, if you propose to adopt the most stringent alternative. In that 
case, the analysis need only address those control alternatives with 
any significant or unusual environmental impacts that have the 
potential to affect the selection or elimination of a control 
alternative. Thus, any important relative environmental impacts (both 
positive and negative) of alternatives can be compared with each other.
    In general, the analysis of impacts starts with the identification 
and quantification of the solid, liquid, and gaseous discharges from 
the control device or devices under review. Initially, you should 
perform a qualitative or semi-quantitative screening to narrow the 
analysis to discharges with potential for causing adverse environmental 
effects. Next, you should assess the mass and composition of any such 
discharges and quantify them to the extent possible, based on readily-
available information. You should also assemble pertinent information 
about the public or environmental consequences of releasing these 
materials.
    j. What are examples of non-air quality environmental impacts? The 
following are examples of how to conduct non-air quality environmental 
impacts:

 Water Impact

    You should identify the relative quantities of water used and water 
pollutants produced and discharged as a result of the use of each 
alternative emission control system relative to the most stringent 
alternative. Where possible, you should assess the effect on ground 
water and such local surface water quality parameters as ph, turbidity, 
dissolved oxygen, salinity, toxic chemical levels, temperature, and any 
other important considerations. The analysis should consider whether 
applicable water quality standards will be met and the availability and 
effectiveness of various techniques to reduce potential adverse 
effects.

 Solid Waste Disposal Impact

    You should compare the quality and quantity of solid waste (e.g., 
sludges, solids) that must be stored and disposed of or recycled as a 
result of the application of each alternative emission control system 
with the quality and quantity of wastes created with the most stringent 
emission control system. You should consider the composition and 
various other characteristics of the solid waste (such as permeability, 
water retention, rewatering of dried material,

[[Page 38130]]

compression strength, leachability of dissolved ions, bulk density, 
ability to support vegetation growth and hazardous characteristics) 
which are significant with regard to potential surface water pollution 
or transport into and contamination of subsurface waters or aquifers.

 Irreversible or Irretrievable Commitment of Resources

    You may consider the extent to which the alternative emission 
control systems may involve a trade-off between short-term 
environmental gains at the expense of long-term environmental losses 
and the extent to which the alternative systems may result in 
irreversible or irretrievable commitment of resources (for example, use 
of scarce water resources).

 Other Adverse Environmental Impacts

    You may consider significant differences in noise levels, radiant 
heat, or dissipated static electrical energy. Other examples of non-air 
quality environmental impacts would include hazardous waste discharges 
such as spent catalysts or contaminated carbon. Generally, these types 
of environmental concerns become important when the plant is located in 
an area that is sensitive to environmental degradation and when the 
incremental emissions reductions potential of the most stringent 
control option is only marginally greater than the next most-effective 
option.

 Benefits to the Environment

    It is important to consider relative differences between options 
regarding their beneficial impacts to non-air quality-related 
environmental media. For example, you may consider whether a given 
control option results in less deposition of pollutants to nearby 
sensitive water bodies.
5. Step 5: How Do I Select the ``Best'' Alternative, Using the Results 
of Steps 1 Through 4?
    a. Summary of the Impacts Analysis. From the alternatives you 
ranked in Step 3, you should develop a chart (or charts) displaying for 
each of the ranked alternatives:
     Expected emission rate (tons per year, pounds per hour);
     Emissions performance level (e.g., percent pollutant 
removed, emissions per unit product, lb/MMbtu, ppm);
     Expected emissions reductions (tons per year);
     Costs of compliance--total annualized costs ($), cost 
effectiveness ($/ton), and incremental cost effectiveness ($/ton);
     Energy impacts (indicate any significant energy benefits 
or disadvantages);
     Non-air quality environmental impacts (includes any 
significant or unusual other media impacts, e.g., water or solid 
waste), both positive and negative.
    b. Selecting a ``best'' alternative. As discussed above, we are 
seeking comment on two alternative approaches for evaluating control 
options for BART. The first involves a sequential process for 
conducting the impacts analysis that begins with a complete evaluation 
of the most stringent control option. Under this approach, you 
determine that the most stringent alternative in the ranking does not 
impose unreasonable costs of compliance, taking into account both 
average and incremental costs, then the analysis begins with a 
presumption that this level is selected. You then proceed to 
considering whether energy and non-air quality environmental impacts 
would justify selection of an alternative control option. If there are 
no outstanding issues regarding energy and non-air quality 
environmental impacts, the analysis is ended and the most stringent 
alternative is identified as the ``best system of continuous emission 
reduction.''
    If you determine that the most stringent alternative is 
unacceptable due to such impacts, you need to document the rationale 
for this finding for the public record. Then, the next most-effective 
alternative in the listing becomes the new control candidate and is 
similarly evaluated. This process continues until you identify a 
technology which does not pose unacceptable costs of compliance, energy 
and/or non-air quality environmental impacts.
    The EPA also requests comment on an alternative decision-making 
approach that would not begin with an evaluation of the most stringent 
control option. For example, you could choose to begin the BART 
determination process by evaluating the least stringent, technically 
feasible control option or by evaluating an intermediate control option 
drawn from the range of technically feasible control alternatives. 
Under this approach, you would then consider the additional emissions 
reductions, costs, and other effects (if any) of successively more 
stringent control options. Under such an approach, you would still be 
required to (1) display and rank all of the options in order of control 
effectiveness and to identify the average and incremental costs of each 
option; (2) consider the energy and non-air quality environmental 
impacts of each option; and (3) provide a justification for adopting 
the technology that you select as the ``best'' level of control, 
including an explanation as to why you rejected other more stringent 
control technologies.
    Because of EPA's experience in evaluating SO2 control 
options for utility boilers, the Agency is proposing to establish a 
presumption regarding the level of SO2 control that is 
generally achievable for such sources. Based on the cost models in the 
Controlling SO2 Emissions report,\16\ it appears that, where 
there is no existing control technology in place, 90-95 percent control 
can generally be achieved at cost-effectiveness values that are in the 
hundreds of dollars per ton range or less.\17\ We are thus proposing a 
presumption that, for uncontrolled utility boilers, an SO2-
control level in the 90-95 range is generally achievable. If you wish 
to demonstrate a BART level of control that is less than any 
presumption established the final guidelines, you would need to 
demonstrate the source-specific circumstances with respect to costs, 
remaining useful life, non-air quality environmental impacts, or energy 
impacts that would justify less stringent controls than for a typical 
utility boiler. We believe that the ``consideration of cost'' factor 
for source-by-source BART, which is a technology-based approach, 
generally requires selection of control measures that are within this 
level of cost effectiveness. We recognize, however, that the population 
of utility boilers subject to BART may have case-by-case variations 
(for example, type of fuel used, severe space limitations, and presence 
of existing control equipment) that could affect the costs of applying 
retrofit controls. We invite comments on whether the 90-95 percent 
presumption is appropriate, or whether another presumption should be 
established instead. If commenters want to offer a different 
presumption they should provide documentation supporting the basis for 
their proposal.
---------------------------------------------------------------------------

    \16\ Documentation of the presumption that 90-95 percent control 
is achievable is contained in a recent report entitled Controlling 
SO2 Emissions: A Review of Technologies, EPA-600/R-00-
093, available on the internet at http://www.epa.gov/ORD/WebPubs/so2. This report summarizes percentage controls for flue 
gas desulfurization (FGD) systems worldwide, provides detailed 
methods for evaluating costs, and explains the reasons why costs 
have been decreasing with time.
    \17\ The EPA has used the cost models in the Controlling 
SO2 Emissions report to calculate cost-effectiveness ($/
ton) estimates for FGD technologies for a number of example cases. 
(See note to docket A-2000-28 from Tim Smith, EPA/OAQPS, December 
29, 2000).
---------------------------------------------------------------------------

    For evaluating the significance of the costs of compliance, EPA 
requests

[[Page 38131]]

comment on whether the final rule should contain specific criteria, and 
on whether such criteria would improve implementation of the BART 
requirement. For example, in the work of the Western Regional Air 
Partnership (WRAP),\18\ a system is described which views as ``low 
cost'' those controls with an average cost effectiveness below $500/
ton, as ``moderate'' those controls with an average cost effectiveness 
between $500 to 3000 per ton, and as ``high'' those controls with an 
average cost effectiveness greater than $3000 per ton.
---------------------------------------------------------------------------

    \18\ Technical Support Documentation. Voluntary Emissions 
Reduction Program for Major Industrial Sources of Sulfur Dioxide in 
Nine Western States and a Backstop Market Trading Program. An Annex 
to the Report of the Grand Canyon Visibility Transport Commission. 
Section 6A.
---------------------------------------------------------------------------

    c. In selecting a ``best'' alternative, should I consider the 
affordability of controls? Even if the control technology is cost 
effective, there may be cases where the installation of controls would 
affect the viability of continued plant operations.
    As a general matter, for plants that are essentially uncontrolled 
at present, and emit at much greater levels per unit of production than 
other plants in the category, we are unlikely to accept as BART any 
analysis that preserves a source's uncontrolled status. While this 
result may predict the shutdown of some facilities, we believe that the 
flexibility provided in the regional haze rule for an alternative 
reduction approach, such as an emissions trading program, will minimize 
the likelihood of shutdowns.
    Nonetheless, we recognize there may be unusual circumstances that 
justify taking into consideration the conditions of the plant and the 
economic effects of requiring the use of a given control technology. 
These effects would include effects on product prices, the market 
share, and profitability of the source. We do not intend, for example, 
that the most stringent alternative must always be selected, if that 
level would cause a plant to shut down, while a slightly lesser degree 
of control would not have this effect. Where there are such unusual 
circumstances that are judged to have a severe effect on plant 
operations, you may take into consideration the conditions of the plant 
and the economic effects of requiring the use of a control technology. 
Where these effects are judged to have a severe impact on plant 
operations you may consider them in the selection process, so long as 
you provide an economic analysis that demonstrates, in sufficient 
detail for a meaningful public review, the specific economic effects, 
parameters, and reasoning. (We recognize that this review process must 
preserve the confidentiality of sensitive business information). Any 
analysis should consider whether other competing plants in the same 
industry may also be required to install BART controls.

V. Cumulative Air Quality Analysis

A. What Air Quality Analysis Do We Require in the Regional Haze Rule 
for Purposes of BART Determinations?

    In the regional haze rule, we require the following in 40 CFR 
51.308(e)(1)(ii)(B):

    An analysis of the degree of visibility improvement that would 
be achieved in each mandatory Class I Federal area as a result of 
the emission reductions from all sources subject to BART located 
within the region that contributes to visibility impairment in the 
Class I area, based on the * * * [results of the engineering 
analysis required by 40 CFR 51.308(e)(1)(ii)(A)] * * *

    This means that the regional haze rule requires you to conduct a 
regional modeling analysis which addresses the total cumulative 
regional visibility improvement if all sources subject to BART were to 
install the ``best'' controls selected according to the engineering 
analysis described above in section IV of these guidelines. We are 
developing guidelines for regional air quality modeling.\19\
---------------------------------------------------------------------------

    \19\ (The current draft of this document is entitled Guidance 
for Attainment of Air Quality Goals for PM2.5 and 
Regional Haze. We expect this document will be released in final 
form before the publication of the final rule for the BART 
guidelines.)
---------------------------------------------------------------------------

B. How Do I Consider the Results of This Analysis in My Selection of 
BART for Individual Sources?

    You use a regional modeling analysis to assess the cumulative 
impact on visibility of the controls selected in the engineering 
analysis for the time period for the first regional haze SIP, that is, 
the time period between the baseline period and the year 2018. You use 
this cumulative impact assessment to make a determination of whether 
the controls you identified, in their entirety, provide a sufficient 
visibility improvement to justify their installation. We believe that 
there is a sufficient basis for the controls if you can demonstrate for 
any Class I area that any of the following criteria are met:
    (1) The cumulative visibility improvement is a substantial fraction 
of the achievable visibility improvement from all measures included in 
the SIP, or is a substantial fraction of the visibility goal selected 
for any Class I area (EPA believes that for such situations, the 
controls would be essential to ensure progress towards a long-term 
improvement in visibility); OR
    (2) The cumulative visibility improvement is necessary to prevent 
any degradation from current conditions on the best visibility days.
    Note that under 40 CFR 51.308(e)(1)(ii)(B), the passage cited 
above, the rule does not provide for modeling of subgroupings of the 
BART population within a region, nor for determinations that some, but 
not all, of the controls selected in the engineering analysis may be 
included in the SIP. Thus, to comply with 40 CFR 51.308(e)(1), the 
visibility SIP must provide for BART emission limitations for all 
sources subject to BART (or demonstrate that BART-level controls are 
already in place and required by the SIP), unless you provide a 
demonstration that no BART controls are justifiable based upon the 
cumulative visibility analysis.

VI. Enforceable Limits/Compliance Date

    To complete the BART process, you must establish enforceable 
emission limits and require compliance within a given period of time. 
In particular, you must establish an enforceable emission limit for 
each subject emission unit at the source and for each pollutant subject 
to review that is emitted from the source. In addition, you must 
require compliance with the BART emission limitations no later than 5 
years after EPA approves your SIP. If technological or economic 
limitations in the application of a measurement methodology to a 
particular emission unit would make an emissions limit infeasible, you 
may prescribe a design, equipment, work practice, operation standard, 
or combination of these types of standards. You should ensure that any 
BART requirements are written in a way that clearly specifies the 
individual emission unit(s) subject to BART review. Because the BART 
requirements are ``applicable'' requirements of the CAA, they must be 
included as title V permit conditions according to the procedures 
established in 40 CFR part 70 or 40 CFR part 71.
    Section 302(k) of the CAA requires emissions limits such as BART to 
be met on a continuous basis. Although this provision does not 
necessarily require the use of continuous emissions monitoring (CEMs), 
it is important that sources employ techniques that ensure compliance 
on a continuous basis. Monitoring requirements generally applicable to 
sources, including those that are subject to BART, are governed by 
other regulations. See, e.g., 40 CFR

[[Page 38132]]

part 64 (compliance assurance monitoring); 40 CFR 70.6(a)(3) (periodic 
monitoring); 40 CFR 70.6(c)(1) (sufficiency monitoring). Note also that 
while we do not believe that CEMs would necessarily be required for all 
BART sources, the vast majority of electric generating units already 
employ CEM technology for other programs, such as the acid rain 
program. In addition, emissions limits must be enforceable as a 
practical matter (contain appropriate averaging times, compliance 
verification procedures and recordkeeping requirements). In light of 
the above, the permit must:
     Be sufficient to show compliance or noncompliance (i.e., 
through monitoring times of operation, fuel input, or other indices of 
operating conditions and practices); and
     Specify a reasonable averaging time consistent with 
established reference methods, contain reference methods for 
determining compliance, and provide for adequate reporting and 
recordkeeping so that air quality agency personnel can determine the 
compliance status of the source.

VII. Emission Trading Program Overview

    40 CFR 51.308(e)(2) allows States the option of implementing an 
emissions trading program or other alternative measure instead of 
requiring BART. This option provides the opportunity for achieving 
better environmental results at a lower cost than under a source-by-
source BART requirement. A trading program must include participation 
by BART sources, but may also include sources that are not subject to 
BART. The program would allow for implementation during the first 
implementation period of the regional haze rule (that is, by the year 
2018) instead of the 5-year compliance period noted above. In this 
section of the guidance, we provide an overview of the steps in 
developing a trading program \20\ consistent with 40 CFR 51.308(e)(2).
---------------------------------------------------------------------------

    \20\ We focus in this section on emission cap and trade programs 
which we believe will be the most common type of economic incentive 
program developed as an alternative to BART.
---------------------------------------------------------------------------

A. What Are the General Steps in Developing an Emission Trading 
Program?

    The basic steps are to:
    (1) Develop emission budgets;
    (2) Allocate emission allowances to individual sources; and
    (3) Develop a system for tracking individual source emissions and 
allowances. (For example, procedures for transactions, monitoring, 
compliance and other means of ensuring program accountability).

B. What Are Emission Budgets and Allowances?

    An emissions budget is a limit, for a given source population, on 
the total emissions amount \21\ that may be emitted by those sources 
over a State or region. An emission budget is also referred to as an 
``emission cap.''
---------------------------------------------------------------------------

    \21\ An emission budget generally represents a total emission 
amount for a single pollutant such as SO2. As noted in 
the preamble to the regional haze rule (64 FR 35743, July 1, 1999) 
we believe that unresolved technical difficulties preclude inter-
pollutant trading at this time.
---------------------------------------------------------------------------

    In general, the emission budget is subdivided into source-specific 
amounts that we refer to as ``allowances.'' Generally, each allowance 
equals one ton of emissions. Sources must hold allowances for all 
emissions of the pollutant covered by the program that they emit. Once 
you allocate the allowances, source owners have flexibility in 
determining how they will meet their emissions limit. Source owners 
have the options of:

--Emitting at the level of allowances they are allocated (for example, 
by controlling emissions or curtailing operations),
--Emitting at amounts less than the allowance level, thus freeing up 
allowances that may be used by other sources owned by the same owner, 
or sold to another source owner, or
--Emitting at amounts greater than the allowance level, and purchasing 
allowances from other sources or using excess allowances from another 
plant under the same ownership.

    A good example of an emissions trading program is the acid rain 
program under title IV of the CAA. The acid rain program is a national 
program--it establishes a national emissions cap, allocates allowances 
to individual sources, and allows trading of allowances between all 
covered sources in the United States. The Ozone Transport Commission's 
NOX Memorandum of Understanding, and the NOX SIP 
call both provide for regional trading programs. Other trading programs 
generally have applied only to sources within a single State. A 
regional multi-State program provides greater opportunities for 
emission trading, and should be considered by regional planning 
organizations that are evaluating alternatives to source-specific BART. 
The WRAP has recommended a regional market trading program as a 
backstop to its overall emission reduction program for SO2. 
Although regional trading programs require more interstate 
coordination, EPA has expertise that it can offer to States wishing to 
pursue such a program.

C. What Criteria Must Be Met in Developing an Emission Trading Program 
as an Alternative to BART?

    Under the regional haze rule, an emission trading program must 
achieve ``greater reasonable progress'' (that is, greater visibility 
improvement) than would be achieved through the installation and 
operation of source-specific BART. The ``greater reasonable progress'' 
demonstration involves the following steps, which are discussed in more 
detail below:

--Identify the sources that are subject to BART,
--Calculate the emissions reductions that would be achieved if BART 
were installed and operated on sources subject to BART,
--Demonstrate whether your emission budget achieves emission levels 
that are equivalent to or less than the emissions levels that would 
result if BART were installed and operated,
--Analyze whether implementing a trading program in lieu of BART would 
likely lead to differences in the geographic distribution of emissions 
within a region, and
--Demonstrate that the emission levels will achieve greater progress in 
visibility than would be achieved if BART were installed and operated 
on sources subject to BART.
1. How Do I Identify Sources Subject to BART?
    For a trading program, you would identify sources subject to BART 
in the same way as we described in sections II and III of these 
guidelines.
2. How Do I Calculate the Emissions Reductions That Would Be Achieved 
If BART Were Installed and Operated on These Sources?
    For a trading program under 51.308(e)(2), you may identify these 
emission reductions by:

--Conducting a case-by-case analysis for each of the sources, using the 
procedures described above in these guidelines in sections II through 
V;
--Conducting an analysis for each source category that takes into 
account the available technologies, the costs of compliance, the energy 
impacts, the non-air quality environmental impacts, the pollution 
control equipment in use, and the remaining useful life, on a category-
wide basis; or

[[Page 38133]]

--Conducting an analysis that combines considerations on both source-
specific and category-wide information.

    For a category-wide analysis of available control options, you 
develop cost estimates and estimates of energy and non-air quality 
environmental impacts that you judge representative of the sources 
subject to BART for a source category as a whole, rather than analyze 
each source that is subject to BART. The basic steps of a category-wide 
analysis are the same as for a source-specific analysis. You identify 
technically feasible control options and rank them according to control 
stringency. Next, you calculate the costs and cost effectiveness for 
each control option, beginning with the most stringent option. Likely, 
the category-wide estimate will represent a range of cost and cost-
effectiveness values rather than a single number.\22\ Next, you 
evaluate the expected energy and non-air quality impacts (both positive 
and negative impacts) to determine whether these impacts preclude 
selection of a given alternative.
---------------------------------------------------------------------------

    \22\ We request comment on whether these guidelines should 
recommend a weighted average of the values instead of presenting the 
values as a range.
---------------------------------------------------------------------------

    The EPA requests comment on an approach to the category-wide 
analysis of BART that would allow the States to evaluate different 
levels of BART control options (e.g., all measures less than $1000/ton 
vs. all measures less than $2000/ton vs. all measures less than $3000/
ton) through an iterative process of assessing relative changes in 
cumulative visibility impairment. For example, States or regional 
planning organizations could use $1000 or $2000/ton as an initial 
cutoff for selecting reasonable control options. The States or regional 
planning organizations could then compare the across-the-board regional 
emissions and visibility changes resulting from the implementation of 
the initial control option and that resulting from the implementation 
of control options with a $3000/ton cutoff (or $1500/ton, etc). This 
approach would allow States and other stakeholders to understand the 
visibility differences among BART control options achieving less cost-
effective or more cost-effective levels of overall control.
3. For a Cap and Trade Program, How Do I Demonstrate That My Emission 
Budget Results in Emission Levels That Are Equivalent To or Less Than 
the Emissions Levels That Would Result If BART Were Installed and 
Operated?
    Emissions budgets must address two criteria. First, you must 
develop an emissions budget for a future year \23\ which ensures 
reductions in actual emissions that achieve greater reasonable 
visibility progress than BART. This will generally necessitate 
development of a ``baseline forecast'' of emissions for the population 
of sources included within the budget. A baseline forecast is a 
prediction of the future emissions for that source population in 
absence of either BART or the alternative trading program. Second, you 
must take into consideration the timing of the emission budget relative 
to the timetable for BART. If the implementation timetable for the 
emission trading program is a significantly longer period than the 5-
year time period for BART implementation, you should establish budgets 
for interim years that ensure steady and continuing progress in 
emissions reductions.
---------------------------------------------------------------------------

    \23\ As required by 40 CFR 51.308(e)(2)(iii), emissions 
reductions must take place during the period of the first long-term 
strategy for regional haze. This means the reductions must take 
place no later than the year 2018.
---------------------------------------------------------------------------

    In evaluating whether the program milestone for the year 2018 
provides for a BART-equivalent or better emission inventory total, you 
conduct the following steps:

--Identify the source population included within the budget, which must 
include all BART sources and may include other sources,
--For sources included within the budget, develop a base year \24\ 
emissions inventory for stationary sources included within the budget, 
using the most current available emission inventory,
---------------------------------------------------------------------------

    \24\ The base year must reflect the year of the most current 
available emission inventory, in many cases the year 2002, and this 
base year should not be later than the 2000-2004 time period used 
for baseline purposes under the regional haze rule.
---------------------------------------------------------------------------

--Develop a future emissions inventory for the milestone year (in most 
cases, the year 2018), that is, an inventory of projected emissions for 
the milestone year in the absence of BART or a trading program,
--Calculate the reductions from the forecasted emissions if BART were 
installed on all sources subject to BART,
--Subtract this amount from the forecasted total, and
--Compare the budget you have selected and confirm that it does not 
exceed this level of emissions.

    Example: For a given region for which a budget is being 
developed for SO2, the most recent inventory is for the 
year 2002. The budget you propose for the trading program is 1.2 
million tons. The projected emissions inventory total for the year 
2018, using the year 2002 inventory and growth projections, is 4 
million tons per year. Application of BART controls on the 
population of sources subject to BART would achieve 2.5 million tons 
per year of reductions. Subtracting this amount from the project 
inventory yields a value of 1.5 million tons. Because your selected 
budget of 1.2 million tons is less than this value, it achieves a 
better than a BART-equivalent emission total.
4. How Do I Ensure That Trading Budgets Achieve ``Greater Reasonable 
Progress?''
    In some cases, you may be able to demonstrate that a trading 
program that achieves greater emissions progress may also achieve 
greater visibility progress without necessarily conducting a detailed 
dispersion modeling analysis. This could be done, for example, if you 
can demonstrate, using economic models, that the likely distribution of 
emissions when the trading program is implemented would not be 
significantly different than the distribution of emissions if BART was 
in place. If distribution of emissions is not substantially different 
than under BART, and greater emissions reductions are achieved, then 
the trading program would presumptively achieve ``greater reasonable 
progress.''
    If the distribution of emissions is different under the two 
approaches, then the possibility exists that the trading program, even 
though it achieves greater emissions reductions, may not achieve better 
visibility improvement. Where this is the case, then you must conduct 
dispersion modeling to determine the visibility impact of the trading 
alternative. The dispersion modeling should determine differences in 
visibility between BART and the trading program for each impacted Class 
I area, for the worst and best 20 percent of days. The modeling should 
identify:

--The estimated difference in visibility conditions under the two 
approaches for each Class I area,
--The average difference in visibility over all Class I areas impacted 
by the region's emissions. [For example, if six Class I areas are in 
the region impacted, you would take the average of the improvement in 
deciviews over those six areas].


[[Page 38134]]


The modeling study would demonstrate ``greater reasonable progress'' if 
both of the following two criteria are met:

--Visibility does not decline in any Class I area

    Example:

    In Class I area X, BART would result in 2.5 deciviews of 
improvement but the trading program would achieve 1.4 deciviews. The 
criterion would be met because the trading program results in 
improvement of 1.4 deciviews, rather than a decline in visibility.

--Overall improvement in visibility, determined by comparing the 
average differences over all affected Class I areas

    Example: For the same scenario, assume that ten Class I areas 
are impacted. The average deciview improvement from BART for the ten 
Class I areas is 3.5 deciviews (the 2.5 deciview value noted above, 
and values for the remaining areas of 3.9, 4.1, 1.7, 3.3, 4.5, 3.1, 
3.6, 3.8 and 4.5). The average of the ten deciview values for the 
trading program must be 3.5 deciviews or more.
5. How Do I Allocate Emissions to Sources?
    Emission allocations must be consistent with the overall budget 
that you provide to us. We believe it is not appropriate for EPA to 
require a particular process and criteria for individual source 
allocations, and thus we will not dictate how to allocate allowances. 
We will provide information on allocation processes to State and local 
agencies, and to regional planning organizations.
6. What Provisions Must I Include in Developing a System for Tracking 
Individual Source Emissions and Allowances?
    The EPA requests comment generally on what the BART guidelines 
should require in terms of the level of detail for the administration 
of a trading program and for the tracking of emissions and allowances. 
In general, we expect regional haze trading programs to contain the 
same degree of rigor as trading programs for criteria pollutants. In 
terms of ensuring the overall integrity and enforceability of a trading 
program, we expect that you will generally follow the guidance already 
being developed for other economic incentive programs (EIPs) in 
establishing a trading program for regional haze. In addition, we 
expect that any future trading programs developed by States and/or 
regional planning organizations will be developed in consultation with 
a broad range of stakeholders.
    There are two EPA-administered emission trading programs that we 
believe provide good examples of the features of a well-run trading 
program. These two programs provide considerable information that would 
be useful to the development of regional haze trading programs as an 
alternative to BART.
    The first example is EPA's acid rain program under title IV of the 
CAA. Phase I of the acid rain reduction program began in 1995. Under 
phase I, reductions in the overall SO2 emissions were 
required from large coal-burning boilers in 110 power plants in 21 
midwest, Appalachian, southeastern and northeastern States. Phase II of 
the acid rain program began in 2000, and required further reductions in 
the SO2 emissions from coal-burning power plants. Phase II 
also extended the program to cover other lesser-emitting sources. 
Allowance trading is the centerpiece of EPA's acid rain program for 
SO2. You will find information on this program in:

--Title IV of the CAA Amendments (1990),
--40 CFR part 73 at 58 FR 3687 (January 1993),
--EPA's acid rain website, at www.epa.gov/acidrain/trading.html.

    The second example is the rule for reducing regional transport of 
ground-level ozone (NOX SIP call). The NOX SIP 
call rule requires a number of eastern, midwestern, and southeastern 
States and the District of Columbia to submit SIPs that address the 
regional transport of ground-level ozone through reductions in 
NOX. States may meet the requirements of the rule by 
participating in an EPA-administered trading program. To participate in 
the program, the States must submit rules sufficiently similar to a 
model trading rule promulgated by the Agency (40 CFR part 96). More 
information on this program is available in:

--The preamble and rule in the Federal Register at 63 FR 57356 (October 
1998),
--The NOX compliance guide, available at www.epa.gov/acidrain/modlrule/main.html#126,
--Fact sheets for the rule, available at www.epa.gov/ttn/rto/sip/related.html#prop,
--Additional information available on EPA's web site, at www.epa.gov/acidrain/modlrule/main.html.

    A third program that provides a good example of trading programs is 
the the Ozone Transport Commission (OTC) NOX budget program. 
The OTC NOX budget program was created to reduce summertime 
NOX emissions in the northeast United States. The program 
caps NOX emissions for the affected States at less than half 
of the 1990 baseline emission level of 490,000 tons, and uses trading 
to achieve cost-effective compliance. For more information on the 
trading provisions of the program, see:

--Memorandum of Understanding (MOU), available at www.sso.org/otc/att2.HTM,
--Fact sheets available at www.sso.org/otc/Publications/327facts.htm,
--Additional information, available at www.epa.gov/acidrain/otc/otcmain.html.

    The EPA is including in the docket for this rulemaking a detailed 
presentation that has been used by EPA's Clean Air Markets Division to 
explain the provisions of NOX trading programs with State 
and local officials. This presentation provides considerable 
information on EPA's views on sound trading programs.
    The EPA recognizes that it is desirable to minimize administrative 
burdens for sources that may be subject to the provisions of several 
different emission trading programs. We believe that it is desirable 
for any emission trading program for BART to use existing tracking 
systems to the extent possible. At the same time, we request comment on 
whether States and/or regional planning organizations should conduct 
additional technical analyses (and, if so, to what extent) to determine 
whether the time periods for tracking of allowances under existing 
programs (i.e., annual allowances for SO2 for the acid rain 
program, and allowances for the ozone season for NOX) are 
appropriate for purposes of demonstrating greater reasonable regional 
progress vis a vis BART. The EPA expects that if such analyses are 
conducted, they would be conducted in conjunction with the timelines 
for development of SIPs for regional haze.
7. How Would a Regional Haze Trading Program Interface With the 
Requirements for ``Reasonably Attributable'' BART Under 40 CFR 51.302 
of the Regional Haze Rule?
    If a State elects to impose case-by-case BART emission limitations 
according to 40 CFR 51.308(e)(1) of the regional haze rule, then there 
should be no difficulties arising from the implementation of 
requirement for ``reasonably attributable'' BART under 40 CFR 51.302. 
However, if a State chooses an alternative measure, such as an 
emissions trading program, in lieu of requiring BART emissions 
limitation on specific sources, then the requirement for BART is not 
satisfied until alternative measures reduce emissions sufficient to 
make ``more reasonable progress than BART.'' Thus, in that

[[Page 38135]]

period between implementation of an emissions trading program and the 
satisfaction of the overall BART requirement, an individual source 
could be required to install BART for reasonably attributable 
impairment under 40 CFR 51.302. Because such an overlay of the 
requirements under 40 CFR 51.302 on a trading program under 40 CFR 
51.308 might affect the economic and other considerations that were 
used in developing the emissions trading program, the regional haze 
rule allows for a ``geographic enhancement'' under 40 CFR 51.308. This 
provision addresses the interface between a regional trading program 
and the requirement under 40 CFR 51.302 regarding BART for reasonably 
attributable visibility impairment. (See 40 CFR 51.308(e)(2)(v)).
    The EPA recognizes the desirability of addressing any such issues 
at the outset of developing an emissions trading program to address 
regional haze. We note that the WRAP, the planning organization for the 
nine western States considering a trading program under 40 CFR 51.309 
(which contains a similar geographic enhancement provision), has 
adopted policies which target use of the 51.302 provisions by the 
Federal Land Managers (FLMs). In this case for the nine WRAP States, 
the FLMs have agreed that they will certify reasonable attributable 
impairment only under certain specific conditions. Under this approach, 
the FLMs would certify under 40 CFR 51.302 only if the regional trading 
program is not decreasing sulfate concentrations in a Class I area 
within the region. Moreover, the FLMs will certify impairment under 40 
CFR 51.302 only where: (1) BART-eligible sources are located ``near'' 
that class I area and (2) those sources have not implemented BART 
controls. In addition, the WRAP is investigating other procedures for 
States to follow in responding to a certification of ``reasonably 
attributable'' impairment if an emissions trading approach is adopted 
to address the BART requirement based on the sources' impact on 
regional haze.
    The specific pollutants and the magnitude of impacts under the 
regional haze rule and at specific Class I areas may vary in different 
regions of the country. We expect that each State through its 
associated regional planning organization will evaluate the need for 
geographic enhancement procedures within any adopted regional emissions 
trading program.

List of Subjects in 40 CFR Part 51

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Carbon monoxide, Nitrogen dioxide, Particulate 
matter, Sulfur oxides, Volatile organic compounds.

    Dated: June 22, 2001.
Christine T. Whitman,
Administrator.

    In addition to the guidelines described above, part 51 of chapter I 
of title 40 of the Code of Federal Regulations is proposed to be 
amended as follows:

PART 51--REQUIREMENTS FOR PREPARATION, ADOPTION, AND SUBMITTAL OF 
IMPLEMENTATION PLANS

    1. The authority citation for part 51 continues to read as follows:

    Authority: 23 U.S.C. 101; 42 U.S.C. 7410-7671q.

    2. Section 51.302 is amended by revising paragraph (c)(4)(iii) to 
read as follows:


Sec. 51.302  Implementation control strategies for reasonably 
attributable visibility impairment.

* * * * *
    (c) * * *
    (4) * * *
    (iii) BART must be determined for fossil-fuel fired generating 
plants having a total generating capacity in excess of 750 megawatts 
pursuant to ``Guidelines for Determining Best Available Retrofit 
Technology for Coal-fired Power Plants and Other Existing Stationary 
Facilities' (1980), which is incorporated by reference, exclusive of 
appendix E, which was published in the Federal Register on February 6, 
1980 (45 FR 8210), except that options more stringent than NSPS must be 
considered. Establishing a BART emission limitation equivalent to the 
NSPS level of control is not a sufficient basis to avoid the detailed 
analysis of control options required by the guidelines. It is EPA 
publication No. 450/3-80-009b and is for sale from the U.S. Department 
of Commerce, National Technical Information Service, 5285 Port Royal 
Road, Springfield, Virginia 22161.
* * * * *
    3. Section 51.308 is amended by adding paragraph(e)(1)(ii)(C) as 
follows:


Sec. 51.308  Regional haze program requirements.

* * * * *
    (e) * * *
    (1) * * *
    (ii) * * *
    (C) Appendix Y of this part provides guidelines for conducting the 
analyses under paragraphs (e)(1)(ii)(A) and (e)(1)(ii)(B) of this 
section. All BART determinations that are required in paragraph (e)(1) 
of this section must be made pursuant to the guidelines in appendix Y 
of this part.
* * * * *
[FR Doc. 01-18094 Filed 7-19-01; 8:45 am]
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