[Federal Register Volume 69, Number 87 (Wednesday, May 5, 2004)]
[Proposed Rules]
[Pages 25184-25232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-9863]



[[Page 25183]]

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Part II





Environmental Protection Agency





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40 CFR Part 51



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

  Federal Register / Vol. 69, No. 87 / Wednesday, May 5, 2004 / 
Proposed Rules  

[[Page 25184]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 51

[FRL-7653-6]
RIN 2060-AJ31


Regional Haze Regulations and Guidelines for Best Available 
Retrofit Technology (BART) Determinations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: On July 1, 1999, EPA promulgated regulations to address 
regional haze, (64 FR 3714). These regulations were challenged, and on 
May 24, 2002, the U.S. Court of Appeals for the District of Columbia 
Circuit issued a ruling vacating the regional haze rule in part and 
sustaining it in part. American Corn Growers Ass'n v. EPA, 291 F.3d 1 
(D.C. Cir. 2002). Today's proposed rule addresses the court's ruling in 
that case.
    In addition, prior to the court's decision, EPA had proposed 
guidelines for implementation of the best available retrofit technology 
(BART) requirements under the regional haze rule, (66 FR 38108; July 
20, 2001). The proposed guidelines were intended to clarify the 
requirements of the regional haze rule's BART provisions. We proposed 
to add the guidelines and also proposed to add regulatory text 
requiring that these guidelines be used for addressing BART 
determinations under the regional haze rule. In addition, we proposed 
one revision to guidelines issued in 1980 for facilities contributing 
to ``reasonably attributable'' visibility impairment.
    In the American Corn Growers case, the court vacated and remanded 
the BART provisions of the regional haze rule. To respond to the 
court's ruling, we are proposing new BART provisions and reproposing 
the BART guidelines. The American Corn Growers court also remanded to 
the Agency its decision to extend the deadline for the submittal of 
regional haze plans. Subsequently, Congress amended the deadlines for 
regional haze plans (Consolidated Appropriations Act for Fiscal Year 
2004, Public Law 108-199, January 23, 2004). We are proposing to amend 
the rule to conform to the new statutory deadlines.

DATES: Comments on this proposal must be received by July 6, 2004.

ADDRESSES: Submit your comments, identified by Docket ID No. OAR-2002-
0076 by one of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
on-line instructions for submitting comments. Agency Web site: http://www.epa.gov/edocket. EDOCKET, EPA's electronic public docket and 
comment system, is EPA's preferred method for receiving comments. 
Follow the on-line instructions for submitting comments.
    E-mail: http://www.epa.gov/edocket.
    Fax: 202-566-1741.
    Mail: OAR Docket, Environmental Protection Agency, Mailcode: B102, 
1200 Pennsylvania Ave., NW., Washington, DC 20460. Please include a 
total of 2 copies.
    Hand Delivery: EPA/DC, EPA West, Room B102, 1301 Constitution Ave., 
NW., Washington, DC. Such deliveries are only accepted during the 
Docket's normal hours of operation, and special arrangements should be 
made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. OAR-2002-0076. 
EPA's policy is that all comments received will be included in the 
public docket without change and may be made available online at http://www.epa.gov/edocket, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through EDOCKET, regulations.gov, or e-
mail. The EPA EDOCKET and the federal regulations.gov Web sites are 
``anonymous access'' systems, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through EDOCKET or regulations.gov, your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket visit EDOCKET on-line or see the Federal Register of May 31, 
2002 (67 FR 38102).
    For additional instructions on submitting comments, go to unit II 
of the SUPPLEMENTARY INFORMATION section of this document.
    Docket: All documents in the docket are listed in the EDOCKET index 
at http://www.epa.gov/edocket. Although listed in the index, some 
information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in EDOCKET or in hard 
copy at the OAR Docket, EPA/DC, EPA West, Room B102, 1301 Constitution 
Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The 
telephone number for the Public Reading Room is (202) 566-1744, and the 
telephone number for the OAR Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Kathy Kaufman at 919-541-0102 or by e-
mail at [email protected] or Todd Hawes at 919-541-5591 or by e-
mail [email protected].

SUPPLEMENTARY INFORMATION: 

I. Regulated Entities

    The promulgation of the proposed rule would affect the following: 
State and local permitting authorities and Indian Tribes containing 
major stationary sources of pollution affecting visibility in federally 
protected scenic areas.
    This list is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This list gives examples of the types of entities EPA is now 
aware could potentially be regulated by this action. Other types of 
entities not listed could also be affected. To determine whether your 
facility, company, business, organization, etc., is regulated by this 
action, you should examine the applicability criteria in Part II of 
this preamble. If you have any questions regarding the applicability of 
this action to a particular entity, consult the person listed in the 
preceding FOR FURTHER INFORMATION CONTACT section.

II. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through 
EDOCKET, regulations.gov or e-mail. Clearly mark the part or all of the 
information that you claim to be CBI. For CBI information in a disk or 
CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as 
CBI and then identify electronically within the disk or CD-ROM the 
specific information that

[[Page 25185]]

is claimed as CBI). In addition to one complete version of the comment 
that includes information claimed as CBI, a copy of the comment that 
does not contain the information claimed as CBI must be submitted for 
inclusion in the public docket. Information so marked will not be 
disclosed except in accordance with procedures set forth in 40 CFR part 
2.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
    A. Identify the rulemaking by docket number and other identifying 
information (subject heading, Federal Register date and page number).
    B. Follow directions--The agency may ask you to respond to specific 
questions or organize comments by referencing a Code of Federal 
Regulations (CFR) part or section number.
    C. Explain why you agree or disagree; suggest alternatives and 
substitute language for your requested changes.
    D. Describe any assumptions and provide any technical information 
and/or data that you used.
    E. If you estimate potential costs or burdens, explain how you 
arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    F. Provide specific examples to illustrate your concerns, and 
suggest alternatives.
    G. Explain your views as clearly as possible, avoiding the use of 
profanity or personal threats.
    H. Make sure to submit your comments by the comment period deadline 
identified.
    Outline. The contents of today's preamble are listed in the 
following outline.

I. Overview of Today's Proposed Actions
II. Background
    A. Regional Haze Rule
    B. Partial Remand of the Regional Haze Rule in American Corn 
Growers
    C. Proposed Changes to the Visibility Regulations
    D. Reproposal of the BART Guidelines
III. Detailed Discussion of Reproposed BART Guidelines
    A. Introduction
    B. How to Identify BART-eligible Sources
    C. How to Determine Which BART-eligible Sources are Subject to 
BART
    D. The BART Determination Process
    E. Trading Program Guidance
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer Advancement Act
    J. Executive Order 12898: Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. Overview of Today's Proposed Actions

    Today's rulemaking provides for the following proposed changes to 
the regional haze regulations:
    (1) Revised regulatory text in response to the American Corn 
Growers court's remand, to require that the BART determination includes 
an analysis of the degree of visibility improvement resulting from the 
use of control technology at each source subject to BART,
    (2) revised regulatory text in 40 CFR 51.308(b) and deletion of 40 
CFR 51.308(c) Options for regional planning in response to 
Congressional legislation amending the deadlines for submittal of 
regional haze implementation plans. This provision had provided for an 
alternative process for States to submit regional haze implementation 
plans in attainment areas,
    (3) BART guidelines, contained in a new appendix Y to 40 CFR part 
51,
    (4) new and revised regulatory text, to be added to 40 CFR 
51.308(e) to require the use of appendix Y in establishing BART 
emission limits, and
    (5) revised regulatory language at 51.302 to clarify the 
relationship between New Source Performance Standards (NSPS) and BART 
for reasonably attributable visibility impairment.
    How This Preamble Is Structured. Section II provides background on 
the regional haze rule, the D.C. Circuit Court decision which remanded 
parts of the rule, and the proposed changes to the rule and reproposal 
of the BART guidelines in response to the remand. Section III discusses 
in more detail the reproposed BART guidelines, including changes from 
the July 2001 proposal based the court decision and certain comments 
that we received on the initial proposal. Section IV provides a 
discussion of how this rulemaking complies with the requirements of 
Statutory and Executive Order Reviews.

II. Background

A. Regional Haze Rule

    In 1999, we published a final rule to address a type of visibility 
impairment known as regional haze (64 FR 35714; July 1, 1999). The 
regional haze rule requires States to submit implementation plans 
(SIPs) to address regional haze visibility impairment in 156 Federally-
protected parks and wilderness areas. These 156 scenic areas are called 
``mandatory Class I Federal areas'' in the Clean Air Act (CAA),\1\ but 
are referred to simply as ``Class I areas'' in today's rulemaking. The 
1999 rule was issued to fulfill a long-standing EPA commitment to 
address regional haze under the authority and requirements of sections 
169A and 169B of the CAA.
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    \1\ See, e.g., CAA Section 169A(a)(1).
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    As required by the CAA, we included in the final regional haze rule 
a requirement for BART for certain large stationary sources that were 
put in place between 1962 and 1977. We discussed these requirements in 
detail in the preamble to the final rule (64 FR 35737-35743). The 
regulatory requirements for BART were codified at 40 CFR 51.308(e), and 
in definitions that appear in 40 CFR 51.301.
    The CAA, in sections 169A(b)(2)(A) and in 169A(g)(7), uses the term 
``major stationary source'' to describe those sources that are the 
focus of the BART requirement. To avoid confusion with other CAA 
requirements which also use the term ``major stationary source'' to 
refer to a somewhat different population of sources, the regional haze 
rule uses the term ``BART-eligible source'' to describe these sources. 
The BART-eligible sources are those sources which have the potential to 
emit 250 tons or more of a visibility-impairing air pollutant, were put 
in place between August 7, 1962 and August 7, 1977, and whose 
operations fall within one or more of 26 specifically listed source 
categories. Under the CAA, BART is required for any BART-eligible 
source which ``emits any air pollutant which may reasonably be 
anticipated to cause or contribute to any impairment of visibility in 
any such area.'' Accordingly, for stationary sources meeting these 
criteria, States must address the BART requirement when they develop 
their regional haze SIPs.
    Section 169A(g)(7) of the CAA requires that States must consider 
the following factors in making BART determinations:
    (1) The costs of compliance,
    (2) The energy and nonair quality environmental impacts of 
compliance,
    (3) Any existing pollution control technology in use at the source,
    (4) The remaining useful life of the source, and
    (5) The degree of improvement in visibility which may reasonably be

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anticipated to result from the use of such technology.
    These statutory factors for BART were codified at 40 CFR 
51.308(e)(1)(ii).
    In the preamble to the regional haze rule, we committed to issuing 
further guidelines to clarify the requirements of the BART provision. 
The purpose of this proposed rulemaking is to fulfill this commitment 
by providing guidelines for States to use in identifying their BART-
eligible sources, in identifying which of those sources must undergo a 
detailed BART analysis (i.e., which are ``sources subject to BART''), 
and in conducting the technical analysis of possible controls in light 
of the statutory factors listed above (``the BART determination'').

B. Partial Remand of the Regional Haze Rule in American Corn Growers

    In response to challenges to the regional haze rule by various 
petitioners, the D.C. Circuit in American Corn Growers et al. v. EPA, 
291 F.3d 1 (2002) issued a ruling striking down the regional haze rule 
in part, and upholding it in part. This section discusses the court's 
opinion in that case, as background for the discussion of specific 
changes to the regional haze rule and the BART guidelines presented in 
the next two sections, respectively.
    We explained in the preamble to the 1999 regional haze rule that 
the BART requirements in section 169A(b)(2)(A) of the CAA demonstrate 
Congress' intent to focus attention directly on the problem of 
pollution from a specific set of existing sources (64 FR 35737). The 
CAA requires that any of these existing sources ``which, as determined 
by the State, emits any air pollutant which may reasonably be 
anticipated to cause or contribute to any impairment of visibility [in 
a Class I area],'' shall install the best available retrofit technology 
for controlling emissions.\2\ In determining BART, the CAA requires the 
State to consider several factors that are set forth in section 
169(g)(2) of the CAA, including the degree of improvement in visibility 
which may reasonably result from the use of such technology.
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    \2\ CAA Sections 169A(b)(2) and (g)(7).
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    The regional haze rule addresses visibility impairment resulting 
from emissions from a multitude of sources located across a wide 
geographic area. Because the problem of regional haze is caused in 
large part by the long-range transport of emissions from multiple 
sources, and for certain technical and other reasons explained in that 
rulemaking, we had adopted an approach that required States to look at 
the contribution of all BART sources to the problem of regional haze in 
determining both applicability and the appropriate level of control. 
Specifically, we had concluded that if a source potentially subject to 
BART is located within an upwind area from which pollutants may be 
transported downwind to a Class I area, that source ``may reasonably be 
anticipated to cause or contribute'' to visibility impairment in the 
Class I area. Similarly, we had also concluded that in weighing the 
factors set forth in the statute for determining BART, the States 
should consider the collective impact of BART sources on visibility. In 
particular, in considering the degree of visibility improvement that 
could reasonably be anticipated to result from the use of such 
technology, we stated that the State should consider the degree of 
improvement in visibility that would result from the cumulative impact 
of applying controls to all sources subject to BART. We had concluded 
that the States should use this analysis to determine the appropriate 
BART emission limitations for specific sources.\3\
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    \3\ See 66 FR 35737-35743 for a discussion of the rationale for 
the BART requirements in the 1999 regional haze rule.
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    In American Corn Growers v. EPA, industry petitioners challenged 
EPA's interpretation of both these aspects of the BART determination 
process and raised other challenges to the rule. While rejecting 
industry's other challenges, the court in American Corn Growers 
concluded that the BART provisions in the 1999 regional haze rule were 
inconsistent with the provisions in the CAA ``giving the states broad 
authority over BART determinations.'' 291 F.3d at 8. Specifically, with 
respect to the test for determining whether a source is subject to 
BART, the court held that the method that EPA had prescribed for 
determining which eligible sources are subject to BART illegally 
constrained the authority Congress had conferred on the States. Id. 
However, the court expressly declined to hold that the general 
collective contribution approach to determining BART applicability was 
necessarily inconsistent with the CAA, were it not for the infringement 
on State authority. Id. at 9. Rather, the court stated that the 
collective contribution approach may have been acceptable if EPA had 
allowed for a State exemption process based on an individualized 
contribution determination. Id. at 12.
    The court in American Corn Growers also found that EPA's 
interpretation of the CAA requiring the States to consider the degree 
of improvement in visibility that would result from the cumulative 
impact of applying controls in determining BART was inconsistent with 
the language of the Act. 291 F.3d at 8. Based on its review of the 
statute, the court concluded that the five statutory factors in section 
169A(g)(2) ``were meant to be considered together by the states.'' Id. 
at 6.
    Finally, the court remanded the schedule in the regional haze rule 
for the submission of implementation plans for areas that commit to 
regional planning, indicating that the use of such a ``committal SIP'' 
does not appear to satisfy statutory requirements. The court declined 
to vacate the provision, however, in light of the need to change SIP 
requirements in order to satisfy the ruling on the BART issue. Id. at 
15.

C. Proposed Changes in the Visibility Regulations

    Today's proposed rule responds to the American Corn Growers court's 
decision on the BART provisions by proposing changes to the regional 
haze rule at 40 CFR 51.308, and by reproposing the BART guidelines. 
This section outlines the changes to the regional haze rule due to the 
court's remand and to subsequent Congressional action regarding 
deadlines for the submission of regional haze implementation plans. It 
also explains the minor change we are proposing to the section of the 
regulation governing the use of the 1980 BART guidelines when 
conducting BART analyses for certain power plants for reasonably 
attributable (i.e., localized) visibility impairment.
1. Determination of Which Sources Are Subject to BART
    Today's proposed action addresses the American Corn Growers court's 
vacature of the requirement in the regional haze rule requiring States 
to assess visibility impacts on a cumulative basis in determining which 
sources are subject to BART. Because this requirement was found only in 
the preamble to the 1999 regional haze rule (see 291 F.3rd at 6, citing 
64 FR 35741), no changes to the regulations are required. Instead, this 
issue is addressed in the BART guidelines, which provide States with a 
number of options for determining which BART-eligible sources ``may 
reasonably be anticipated to cause or contribute to any impairment of 
visibility in any mandatory Class I Federal area.'' These options have 
been designed to address the holding of American Corn Growers by 
eliminating the previous constraint on State discretion, as explained 
in

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further detail in sections II.D. and III below.
2. Consideration of Anticipated Visibility Improvements in BART 
Determinations
    Pursuant to the remand in American Corn Growers, we are proposing 
to amend the regional haze rule to require the States to consider the 
degree of visibility improvement resulting from a source's installation 
and operation of retrofit technology, along with the other statutory 
factors set out in CAA section 169A(g)(2), when making a BART 
determination. This would be accomplished by listing the visibility 
improvement factor with the other statutory BART determination factors 
in section 308(e)(1)(A), so that States will be required to consider 
all five factors, including visibility impacts, on an individual source 
basis when making each individual source BART determination.
    In addition, Section 308(e)(1)(B), which formerly required States 
to assess visibility on a cumulative basis (i.e., for all BART-eligible 
sources), would be replaced with a requirement to use the BART 
guidelines at appendix Y. The guidelines, as will be explained in the 
next section and in greater detail in section III, provide for source-
specific analysis of anticipated improvement in visibility. These 
changes, therefore, address the court's holding with respect to the 
isolation of the visibility improvement factor at this stage of the 
BART analysis.
3. Implementation Plan Deadlines
    As noted above, the 1999 regional haze rule contained a committal 
SIP mechanism (section 308(c)) which the American Corn Growers court 
remanded without vacating. This mechanism was intended to allow states 
to harmonize regional haze SIP submittals for all areas within the 
state. At the time the rule was promulgated, the deadline for regional 
haze SIPs varied depending on the PM2.5 attainment or 
nonattainment status of the area.\4\
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    \4\ Transportation Equity Act for the 21st Century, Pub. L. 105-
178, 112 Stat. 107, 463 (1998) (TEA-21).
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    In the Omnibus Appropriations Act of 2004,\5\ Congress harmonized 
both designations and regional haze SIP deadlines. Under the Omnibus 
Appropriations Act, we are required to promulgate PM2.5 
designations for all areas of each state no later than December 31, 
2004. Designations will become effective 30 days afterward, or no later 
than January 31, 2005. The Omnibus Appropriations Act further provides 
that regional haze SIPs, for each entire state, are then due not later 
than 3 years after promulgation of the PM2.5 designation.\6\ 
Thus, regional haze SIPs are due no later than January, 31, 2008. We 
are proposing to amend 40 CFR 51.308(b) and 51.308(c) to comport with 
the new statutory deadlines, and to eliminate the ``comittal'' SIP 
provision.
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    \5\ Consolidated Appropriations Act for Fiscal Year 2004, Pub. 
L. 108-199, January 23, 2004.
    \6\ CAA Section 107(d)(7)(A), as amended by the Consolidated 
Appropriations Act for Fiscal Year 2004, now reads: ``In General.--
Notwithstanding any other provision of law, not later than 3 years 
after the date on which the Administrator promulgates the 
designations referred to in Paragraph (6)(B) for a State, the State 
shall submit, for the entire State, the State implementation plan 
revisions to meet the requirements promulgated by the Administrator 
under section 169B(e)(1) (referred to in this paragraph as `regional 
haze requirements').''
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    We are also proposing to amend certain sections of 40 CFR 51.309 to 
comport with the new statutory deadlines. Under Section 309 as 
currently codified, the initial SIPs for states utilizing Section 309 
were due in 2003, and a second set of SIPs for those states are due no 
later than December 31, 2008. This date was designed to coincide with 
the latest date Section 308 SIPs could be due under the statutory 
scheme prior to amendment by the Omnibus Act. The Omnibus Amendments 
contain a ``no preclusion'' provision, clarifying that nothing therein 
precludes the submission of section 309 SIPs by December 31, 2003.\7\ 
The ``no preclusion'' provision does not expressly provide that the 
later (currently 2008) section 309 deadlines are not precluded. There 
is therefore some ambiguity as to whether the 3-year-after-designation 
deadline applies to subsequent section 309 SIPs. We believe that policy 
interests of certainty, clarity, and coordination of efforts are best 
served by establishing consistent deadlines for SIPs under sections 308 
and 309 where appropriate, and by avoiding any ambiguity regarding 
future section 309 SIP deadlines. Therefore, we are proposing to amend 
sections 309(d)(4)(v), 309(g)(2), and 309(g)(3), by replacing 
``December 31, 2008'' with ``January 31, 2008'', to coincide with 
section 308 SIPs.\8\
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    \7\ CAA section 107(d)(7)(B) ``No Preclusion of Other 
Provisions.--Nothing in this paragraph precludes the implementation 
of of the agreements and recommendations stemming from the Grand 
Canyon Visibility Transport Commission Report dated June 1996, 
including the submission of State implementation plan revisions by 
the States of Arizona, California, Colorado, Idaho, Nevada, New 
Mexico, Oregon, Utah, or Wyoming by December 31, 2003, for 
implementation of regional haze requirements applicable to those 
States.''
    \8\ These are the section of 309 establishing deadlines for SIP 
revisions which contain major new policy initiatives which should, 
for efficiency, be coordinated with the development of section 308 
SIPs; specifically long term strategies and BART requirements for 
stationary source NOX and PM, if determined to be 
necessary (section 309(d)(4)(v)), and reasonable progress provisions 
for additional (non-Colorado Plateau) class I areas (section 
309(g)(2)-(g)(3)).
    We are aware that 2008 deadlines also appear in section 
309(d)(10) (progress reports) and section 309(b)(6) (mobile source 
tracking and revisions if necessary). We are not proposing to amend 
these sections because they are part of a scheme establishing check 
points for Sec.  309 strategies in 2008, 2013, and 2018, rather than 
development of new strategies, and thus do not require integration 
with Sec.  308 SIPs.
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4. Proposed Revisions to the 1980 BART Guidelines
    Background. One of the primary purposes of this reproposal is to 
provide BART guidelines for the regional haze program. As described in 
the 2001 proposed BART guidelines (66 FR 38108, 38109), however, we are 
also proposing to make 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.\9\ The visibility regulations require States to use a 1980 
guidelines document when conducting BART analyses for certain power 
plants for reasonably attributable visibility impairment. 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 NSPS may be considered to 
represent best 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), best control 
levels for recent plant retrofits have exceeded NSPS levels. Therefore, 
we are proposing to amend this provision of the 1980 visibility 
regulations to clarify that BART should not be interpreted under the 
1980 regulations to preclude control options which are more stringent 
than NSPS standards.
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    \9\ 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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D. Reproposal of the BART Guidelines

    Prior to the American Corn Growers decision, we had proposed 
guidelines for the regional haze BART process. Specifically, on July 
20, 2001, the proposed BART guidelines were published in the Federal 
Register (66 FR 13108-13135). We requested written

[[Page 25188]]

comments on the proposal and conducted two public hearings. The 
deadline for written comments was extended from September 18, 2001 to 
October 5, 2001 in a separate Federal Register notice (66 FR 50135).
    Public hearings were held on August 21, 2001 in Alexandria, 
Virginia and on August 27, 2001 in Chicago, Illinois. Transcripts for 
these public hearings are available in the public docket for the 
regulation (Docket A-2000-28, Docket numbers IV-F-01 and IV-F-02). Oral 
testimony in both public hearings was predominantly from private 
citizens supportive of the proposed BART guidelines.
    We received written comments on the package from many citizens and 
stakeholder groups.
    Today, we are reproposing the BART guidelines to take into account 
the changes that we are proposing to make to the regional haze rule. 
Although in reproposing the BART guidelines we have taken into account 
some of the comments that we received in response to the 2001 action, 
much of what is set forth in the BART guidelines proposed today is 
identical to the earlier proposal. Both for those proposed requirements 
in the BART guidelines which are unchanged from the 2001 proposal, as 
well as for those that we have changed since 2001, you do not need to 
resubmit comments unless you have additional information that you would 
like us to consider, because we will carefully consider all comments 
previously submitted during the comment period on the 2001 proposal in 
making our final decision on the BART guidelines.
    The proposed BART process is set forth in the BART guidelines we 
are reproposing today in response to the remand. The rest of this 
section provides an overview of this proposed BART process. The 
overview summarizes both (1) the process for determining which BART-
eligible sources may be reasonably anticipated to cause or contribute 
to visibility impairment, and thus should be subject to BART, and (2) 
the process for evaluating visibility impacts for an individual 
source's BART determination. (We will discuss these issues in further 
detail in section III below.)

The BART Process

    The process of establishing BART emission limitations can be 
logically broken down into three steps: First, States identify those 
sources which meet the definition of ``BART-eligible source'' set forth 
in 40 CFR 51.301.\10\ Second, States determine whether such sources 
``emit[] any air pollutant which may reasonably be anticipated to cause 
or contribute to any impairment of visibility [in a Class I area.]'' A 
source which fits this description is ``subject to BART.'' Third, for 
each source subject to BART, States then identify the appropriate type 
and the level of control for reducing emissions.
---------------------------------------------------------------------------

    \10\ ``BART-eligible source'' is defined as a stationary source 
of air pollutants that falls within one of 26 listed categories 
which was put into operation between August 7, 1962 and August 7, 
1977, with the potential to emit 250 tons per year of any air 
pollutant. CAA Sec. Sec.  169(b)(2)(A) and (g)(7); 40 CFR Sec.  
51.301.
---------------------------------------------------------------------------

Identifying BART-Eligible Sources

    The CAA defines BART-eligible sources as those sources which fall 
within one of 26 specific source categories, were built during the 15-
year window of time from 1962 to 1977, and have potential emissions 
greater than 250 tons per year. The remand did not address the step of 
identifying BART-eligible sources, which is conceptually the simplest 
of the three steps.

Sources Reasonably Anticipated To Cause or Contribute To Visibility 
Impairment (Sources Subject to BART)

    As we noted in the preamble to the 1999 regional haze rule, 
defining the individual contributions of specific sources of the 
problem of regional haze can be time-consuming and expensive. Moreover, 
Congress established a very low threshold in the CAA for determining 
whether a source is subject to BART. We are accordingly proposing 
several approaches for States for making the determination of whether a 
source ``emits any pollutants which may reasonably be anticipated to 
cause or contribute to any visibility impairment.'' The first two of 
these approaches would allow States to avoid undertaking unnecessary 
and costly studies of an individual source's contribution to haze by 
allowing States to adopt more streamlined processes for determining 
whether, or which, BART-eligible sources are subject to BART.
    In 1999, we adopted an applicability test that looked to the 
collective contribution of emissions from an area. In particular, we 
stated that if ``a State should find that a BART-eligible source is 
``reasonably anticipated to cause or contribute'' to regional haze if 
it can be shown that the source emits pollutants within a geographic 
area from which pollutants can be emitted and transported downwind to a 
Class I area.'' \11\ Under today's proposal, a State has the discretion 
to consider that all BART-eligible sources within the State are 
``reasonably anticipated to cause or contribute'' to some degree of 
visibility impairment in a Class I area.
---------------------------------------------------------------------------

    \11\ 64 FR 335740, July 1, 1999. The regional haze rule 
discusses at length why we believe that States should draw this 
conclusion. 64 FR 35739-40.
---------------------------------------------------------------------------

    This option is consistent with the American Corn Growers court's 
decision. As previously noted, the court's concern with our original 
approach governing BART applicability determinations was that it would 
have ``tie[d] the states'' hands and force[d] them to require BART 
controls at sources without any empirical evidence of the particular 
source's contribution to visibility impairment.'' 291 F.3d at 8. By the 
same rationale, we believe it would be an impermissible constraint of 
State authority to force States to conduct individualized analysis in 
order to determine that a BART-eligible source ``emits any air 
pollutant which may reasonably be anticipated to cause or contribute to 
any impairment of visibility in any [Class I] area.'' \12\ In this 
respect, we believe that it is important to note that the court in 
American Corn Growers expressly declined to hold that consideration of 
visibility impact on a cumulative basis would be invalid in all 
circumstances. 291 F.3d at 9. Given the court's emphasis on the 
importance of the role of the States in making BART determinations, we 
believe that a State's decision to use a cumulative analysis at the 
eligibility stage would be consistent with the CAA and the findings of 
the D.C. Circuit.
---------------------------------------------------------------------------

    \12\ CAA Sec.  169A(b)(2)(A).
---------------------------------------------------------------------------

    We believe there is ample technical evidence supporting a finding 
by a State that all BART-eligible sources within the State are subject 
to BART, without further analysis at that stage in the process.\13\ Any 
potential for inequity towards sources would be addressed at the BART 
determination stage, where we are proposing to require the 
individualized consideration of a source's contribution in establishing 
BART emission limits.
---------------------------------------------------------------------------

    \13\ See 64 FR 35714, 35721. See also July 29, 1997 memorandum 
to the regional haze docket A-95-38, ``Supporting Information for 
Proposed Applicability of Regional Haze Regulations,'' by Richard 
Damberg, EPA, Office of Air Quality Planning and Standards.
---------------------------------------------------------------------------

    The reasoning underlying this approach is discussed in more detail 
in section III below.
    We are also proposing to provide States with the option of 
performing an analysis to show that the full group of BART-eligible 
sources in a State cumulatively do not cause or contribute

[[Page 25189]]

to any visibility impairment in Class I areas. We anticipate that in 
most, if not all States, the BART-eligible sources are likely to cause 
or contribute to some visibility impairment in Class I areas. However, 
it is possible that using a cumulative approach, a State could show 
that its BART sources do not collectively pose a measurable problem.
    Finally, we are also proposing that States may consider the 
individualized contribution of a BART-eligible source to determine 
whether a specific source is subject to BART. Specifically, States may 
choose to undertake an analysis of each BART-eligible source in the 
State in considering whether each such source meets the test set forth 
in the CAA of ``emit[ting] any air pollutant which may reasonably be 
anticipated to cause or contribute to any impairment of visibility in 
any [Class I] area.'' Alternatively, States may choose to presume that 
all BART-eligible sources within the State meet this applicability 
test, but provide sources with the ability to demonstrate on a case by 
case basis that this is not the case. This approach is consistent with 
the D.C. Circuit's statement that a collective contribution approach 
may be appropriate so long as the States are allowed to exempt sources 
on the basis of an individualized contribution determination. 291 F.3d 
at 8.
    For assessing the impact of BART-eligible sources located greater 
than 50 kilometers (km) from a Class I area, we are proposing that the 
States use an air quality model able to estimate a single source's 
contribution to visibility impairment. We are also requesting comment 
on methods appropriate for Class I areas closer than 50 km; and on 
other potential methods of assessing a source's individualized 
contribution to regional haze visibility impairment. (This is explained 
in greater detail in section III below).

The BART Determination

    The State must determine the appropriate level of BART control for 
each source subject to BART. Section 169A(g)(7) of the CAA requires 
States to consider the following factors in making BART determinations: 
(1) The costs of compliance, (2) the energy and nonair quality 
environmental impacts of compliance, (3) any existing pollution control 
technology in use at the source, (4) the remaining useful life of the 
source, and (5) the degree of improvement in visibility which may 
reasonably be anticipated to result from the use of such technology. 
The remand did not address the first four steps of the BART 
determination (the ``engineering analysis''). The remand did address 
the final step, mandating that EPA must provide a way for States to 
take into account the degree of improvement in visibility that would 
result from imposition of BART on each individual source.
    The BART engineering analysis, comprising the first four factors, 
is addressed in detail in section IV below, and is substantially 
similar to the engineering analysis in the original BART guidelines 
proposed in July, 2001. Section IV also contains a detailed discussion 
of available and cost-effective controls for reducing SO2 
and nitrogen oxicdes (NOX) emissions from large coal-fired 
electric generating units (EGUs).
    For assessing the fifth factor, the degree of improvement in 
visibility from various BART control levels, we are proposing that 
States require individual sources to run CALPUFF, or other EPA-approved 
model, using site-specific data. To estimate a source's impact on 
visibility, the source would run the model using current allowable 
emissions, and then again at the post-control emissions level (or 
levels) being assessed. Results would then be tabulated for the average 
of the 20% worst modeled days at each receptor. The difference in the 
resulting level of impairment predicted is the degree of improvement in 
visibility expected.
    Alternatively, we request comment on the option of using the hourly 
modeled impacts from CALPUFF and assessing the improvement in 
visibility based on the number of hours above a visibility threshold 
for the pre- and post-control emission rates.

III. Detailed Discussion of Reproposed BART Guidelines

A. Introduction

    In this section of the preamble, we discuss the details of the 
reproposed BART guidelines where we are proposing to make changes to, 
or to clarify, the BART guidelines proposed in July, 2001. As noted in 
section II, we will be reviewing the comments received during the 
comment period on the 2001 proposal and responding to those comments 
when we issue a final guideline. For each provision of the guidelines 
that we are changing or clarifying, we provide discussion of, as 
appropriate:

--Background information,
--What we proposed in the July 2001 action,
--A summary or partial summary of the comments received on the 
provision, and
--The changes or clarifications that we are proposing and the reasons 
for these changes or clarifications.

B. How To Identify BART-Eligible Sources

    The CAA, in section 169A(g)(7), provides a specific list of the 
types of ``major stationary sources'' that are covered by the BART 
requirement. Our visibility regulations include this same list in 40 
CFR 51.301 in the definition of the term ``existing stationary 
facility'' and by reference, ``BART-eligible source.'' Because the 
terms ``major stationary source'' and ``existing stationary facility'' 
are general in nature and used for other air quality programs, we 
decided to eliminate any potential confusion by using the term ``BART-
eligible source'' in the regional haze portions of the visibility 
regulations that were published in 1999. As defined in 40 CFR 51.301, a 
``BART-eligible source'' means the same thing as an ``existing 
stationary facility'' as defined in EPA's 1980 visibility regulations, 
and means the same thing as a ``major stationary source'' as defined in 
CAA section 169A(g)(7).
    Section II of the reproposed BART guidelines contains a step-by-
step process for identifying stationary sources that are ``BART-
eligible'' under the definitions in the regional haze rule. Today's 
action reproposing the BART guidelines includes the same four basic 
steps as in the proposed rule. The four basic steps are:

Step 1: Identify the emission units in the BART categories
Step 2: Identify the start-up dates of those emission units
Step 3: Compare the potential emissions from units identified in Steps 
1 and 2 to the 250 ton/yr cutoff
Step 4: Identify the emission units and pollutants that constitute the 
BART-eligible source.

    We received a number of comments on this proposed approach to 
identifying BART-eligible sources. In this section of the preamble, we 
discuss some of the previously submitted comments and any changes we 
are proposing in light of these comments.

Step 1: Identify the emission units in the BART cateories.

    Background. The CAA uses the following 26 source category titles to 
describe the types of stationary sources that are BART-eligible:
    (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),

[[Page 25190]]

    (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,
    (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.

Most of the source category titles are general descriptors that are 
inclusive of all the operations at a given plant. Some plant sites may 
have more than one of the categories present. Examples of this would 
include plants with both ``petroleum refineries'' and ``sulfur recovery 
plants,'' or with both ``iron and steel mill plants'' and ``sintering 
plants.'' On the other hand, some plant sites may include some 
emissions units meeting one of these 26 descriptions, but other 
emissions units that do not.

    2001 Proposed Rule. In the 2001 proposed BART guidelines, we noted 
that the category titles were generally clear and we proposed to 
clarify a few issues, including interpretations where we believed there 
were ambiguities in the source category titles. We requested comment on 
whether any other clarifications were needed. The 2001 proposed 
guidelines clarified that in identifying emissions units for inclusion 
as a BART-eligible source, States should identify all emissions units 
at a plant site meeting one or more of the source category 
descriptions. The 2001 proposed rule provided specific interpretations 
for five of the 26 source category titles:
    (1) ``Steam electric plants of more than 250 million BTU/hr heat 
input.'' The 2001 proposal noted that because the category title refers 
to ``plants,'' boiler capacities must be aggregated to determine 
whether the 250 million BTU/hr threshold is reached.
    (2) ``Fossil-fuel boilers of more than 250 million BTU/hr heat 
input.'' We proposed two options for interpreting this source category 
title. The first option, the approach used in the regulations for 
prevention of significant deterioration (PSD) program, would be to 
aggregate boiler capacities to determine whether the 250 million BTU/hr 
threshold is reached. Under the second option, only those boilers that 
are individually greater than 250 million BTU/hr would fall within the 
BART source category.
    (3) ``Petroleum storage and transfer facilities with a capacity 
exceeding 300,000 barrels.'' In the 2001 proposal, we noted our 
interpretation that 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.
    (4) ``Phosphate rock processing plants.'' In the 2001 proposal, we 
noted that this category descriptor should be interpreted broadly to 
include all types of phosphate rock processing facilities, including 
elemental phosphorous plants as well as fertilizer production plants.
    (5) ``Charcoal production facilities.'' In the 2001 proposal, we 
noted information provided by the National Association of Manufacturers 
(NAM) on the legislative history for this source category. In its 
letter, NAM suggested that the legislative history supported a 
conclusion that BART should cover only a subset of the charcoal 
production industry. While we indicated that we did not agree with this 
assessment, we requested comment on whether and how the information 
cited by NAM is relevant to the interpretation of this or other 
categories.

Finally, in the 2001 proposal, we requested comment generally on 
whether any additional source category titles needed clarification.

    Comments on the 2001 Proposal. We received a number of comments 
related to the interpretation of the source category titles. Some of 
these comments related to the category-specific clarifications we 
provided in the proposed guidelines. In addition, there were a few 
comments in response to our request for additional category titles 
needing clarification. In this section, we only discuss the previously 
submitted comments that have led to the changes we are proposing in 
today's action.
    We received many comments related to our interpretation of the term 
``fossil-fuel boilers of more than 250 million BTUs per hour heat 
input.'' A number of comments from environmental groups and States were 
supportive of an interpretation which would require States to compare 
the aggregate capacities of boilers against the 250 million BTU/hr 
cutoff. These comments agreed with our assessment that this would 
promote consistency with the PSD program. Environmental group comments 
also noted that the plural term ``boilers'' was used in the CAA, rather 
than the singular term ``any boiler.''
    Many commenters from industry groups and some State agencies 
supported the alternative interpretation of the category, which would 
require States to consider as BART-eligible only those boilers which 
are individually greater than 250 million BTU/hr. These commenters 
generally asserted that this was the plain reading of the source 
category title, and also that such an approach would be consistent with 
EPA programs such as NSPS and the NOX SIP Call.\14\ These 
commenters noted that, unlike the PSD program, circumvention of the 
requirements is not possible because BART only applies to boilers 
already in existence. Other commenters noted that aggregation of 
boilers may result in inclusion of very small boilers for which BART 
controls would not be cost effective.
---------------------------------------------------------------------------

    \14\ The NOX SIP call requires a number of Eastern 
States to reduce the Summertime emissions of NOX from 
sources within these States. 63 FR 57356 (Oct. 27, 1998).
---------------------------------------------------------------------------

    In addition to the general comments on the interpretation of the 
size cutoff for boilers, we received comments on two other aspects of 
the term ``fossil fuel boilers.'' Some boilers burn solid fuels that 
are not fossil fuels, such as wood products. A number of industry 
commenters suggested that we should interpret the term ``fossil fuel'' 
as it was interpreted for the NOX SIP Call, which treats as 
``fossil fuel'' only those boilers that burn more than 50 percent 
fossil fuels, on an annual heat input basis. One commenter noted as an 
example that a boiler that has fossil fuel capacity greater than 250 
million BTU/hr, but that only burns such fuels during startup and 
shutdown, should not be considered as a ``fossil fuel fired boiler'' 
for purposes of BART. Comments from the paper industry requested that 
EPA clarify in the guidelines that a multi-fuel boiler, with a capacity 
of greater than or equal to 250 million Btu/hr, would not be considered 
BART-eligible if the boiler is subject to an enforceable limitation 
that would prohibit combustion at greater than 250 million BTU/hr.

[[Page 25191]]

    Several commenters requested that we provide a specific 
interpretation for the term ``secondary metal production facilities.'' 
The commenters requested that we formally define the term to include 
only those facilities within the Standard Industrial Classification 
(SIC) code 3341, ``Secondary Smelting and Refining of Nonferrous 
Metals.'' Also, the commenters recommended that a ``Secondary Metal 
Production Facility'' be defined to mean one or more emission units 
that derive more than fifty percent of the metal(s) it produces from 
purchased scrap and dross.
    Reproposal. After considering these comments, we are proposing some 
changes to the source category definitions.
    We agree that the interpretation of ``fossil-fuel boilers of more 
than 250 million BTU/hr heat input'' is best read to include only those 
boilers at a power plant individually greater than 250 million BTU/hr. 
We agree with comments that this interpretation is a better reading of 
the category title than the alternative under which States would 
compare the cumulative boiler capacity over all boilers at a power 
plant to the 250 million BTU/hr cutoff. We do not agree with comments 
that any particular meaning can be taken from the use of the plural 
word ``boilers'' in the category title. On the other hand, if a boiler 
smaller than 250 million BTU/hr is an integral part of an industrial 
process in a BART source category other than electric utilities--for 
example, part of the process description at a chemical process plant--
then we believe that the boiler should be considered for controls as 
part of the BART source. The logic here is that a State should consider 
all emission points at an integral industrial process to be part of the 
BART-eligible source, so that later, when making the actual BART 
determination, the State would be certain that it has not prematurely 
ruled out any sensible control options for that process as a whole. 
That way the State will have retained as much discretion as possible to 
require control on all or part of an industrial process, on a case-by-
case basis, considering all of the BART factors.
    We do not believe that this interpretation is likely to have a 
substantial impact on the amount of BART emissions reductions achieved, 
because smaller boilers are generally less cost effective to control. 
Also, we believe that covering only individual utility boilers greater 
than 250 million BTU/hr may help address States' concerns over the 
implementation burden of the program.
    We also agree with the two clarifications suggested by commenters 
relating to the term ``fossil fuel.'' We propose to add a statement to 
the reproposed guidelines clarifying that ``fossil fuel boilers'' 
refers to boilers burning greater than 50 percent fossil fuels. We 
believe that this is a reasonable approach to interpreting the 
definition in the CAA. Also, we agree that enforceable operational 
limits for a multi-fuel boiler would be relevant to determining whether 
its ``fossil fuel'' capacity exceeds 250 million BTU/hr and that it 
would be reasonable for States to take such limitations into account. 
We are proposing to add this clarification to the BART guidelines.
    We also wish to clarify that, consistent with other EPA rules, the 
definition of ``steam electric plants of more than 250 million BTU/hr 
heat input'' refers only to plants that generate electricity for sale. 
We are proposing to add this clarfication to the BART guidelines.
    The reproposed guidelines do not take a position on the 
recommendations in the comments regarding ``petroleum storage and 
transfer facilities with a capacity exceeding 300,000 barrels.'' We 
believe that this question is largely moot given that these storage and 
transfer facilities are already subject to maximum achievable control 
technology (MACT) standards and in many cases stringent SIP regulations 
related to ozone nonattainment. Regardless of the interpretation, we 
believe that it is unlikely that BART emissions limitations will 
require further controls.
    We have reviewed comments suggesting that ``secondary metal 
production facilities'' may be interpreted to include only those 
facilities within SIC code 3341. We note that the term ``secondary 
metal production'' is broader than SIC code 3341. ``Secondary metal 
production'' would include secondary ferrous metals facilities such as 
secondary iron and steel facilities. On the other hand, SIC code 3341 
includes only nonferrous metals facilities such as secondary copper, 
aluminum and lead facilities. We believe, however, that secondary iron 
and steel facilities are also included within the broad category ``iron 
and steel mill plants.'' Accordingly, we are proposing that in 
identifying unique ``secondary metal production'' facilities that are 
not in any other BART category, States may identify those unique 
facilities based upon SIC code 3341.

Step 2: Identify the start-up dates of those emission units. The EPA 
interpretation of the terms ``in existence'' and ``in operation.''

    Background. Step 2 in the proposed process for identifying BART-
eligible sources would be to identify all emissions units within the 
listed categories which met the two tests in the definitions in the 
regional haze rule: (1) The unit was ``in existence on August 7, 1977 
and (2) the unit began operation after August 7, 1962. Our visibility 
regulations define ``in existence'' and ``in operation'' in 40 CFR 
51.301. We are proposing to retain the same definitions of ``in 
existence'' and ``in operation'' as we had included in the 2001 
proposal. The term ``in existence'' includes sources not yet in 
operation where the owner or operator has not begun operating but which 
has:

--Obtained all necessary preconstruction approvals,
--Began on-site construction, or
--Entered into binding agreements or contractual obligations to begin 
construction of the facility within a reasonable time period.

In contrast, the term ``in operation'' includes only sources which are 
actually operating. In the reproposed BART guidelines, as in the 
previous proposal, we provide examples that illustrate the definitions 
in the regional haze rule.
    We also wish to eliminate any confusion over power plants having 
boilers built both before 1962 and boilers built within the 1962-1977 
time period. The BART guidelines would not require States to find that 
all boilers at a facility are BART-eligible if one or more boilers at 
the facility were put in place between the 1962 and 1977 dates. Under 
Step 2 of the proposed process for identifying BART-eligible sources, 
States would identify only those boilers that were put in place within 
the 1962-1977 time period. Only those boilers are carried over to Step 
3, and only those boilers would be subject to a BART engineering 
analysis. We have included clarifying language in the reproposed 
guidelines on this issue.

Step 3: Compare the potential emissions from the units identified in 
steps 1 and 2 to the 250 ton/yr cutoff.

    Background. Under the definition of ``major stationary source'' in 
CAA section 169A(g)(7) and the corresponding definition of ``BART-
eligible source'' in the regional haze rule, BART applies only to a 
stationary source if it meets the category description and time window 
criteria described above, and only if it has the potential to emit 250 
tons or more of ``any pollutant.''

[[Page 25192]]

    There are two issues needing clarification with respect to the 250 
tons per year threshold--one regarding what pollutants should be 
addressed, and two, the definition of stationary source.

What Pollutants Should I Address?

    2001 Proposed Rule. The 2001 proposal clarified that the 250 tons 
per year cutoff applies only to visibility-impairing pollutants and 
included a list of pollutants to address: SO2, 
NOX, particulate matter, volatile organic compounds (VOC), 
and ammonia.
    Comments. We received a number of comments related to the proposed 
inclusion of ammonia. One comment cited three reasons for not including 
ammonia on the list of visibility-impairing pollutants. First, the 
commenters believed that we had provided no scientific basis for 
suggesting that ammonia contributes to visibility impairment. Second, 
the commenters believed that we should not include ammonia on the list 
of pollutants without fully discussing the implications for other 
programs. For example, if ammonia became a ``regulated pollutant'' 
under the CAA based upon its inclusion in the guidance, the commenters 
believed that there would be implications for PSD and other program 
requirements. Third, the commenters believed that inclusion of ammonia 
would have the unintended consequence of discouraging selective 
catalytic reduction (SCR) as a control measure for NOX, 
because of the unavoidable but small amount of ``ammonia slip'' that 
occurs in using SCR technology.
    Reproposal. Based on the comments received on ammonia, and based on 
our current state of knowledge regarding the role of ammonia in 
PM2.5 formation and the effects on regional haze that would 
be expected from reductions in ammonia emissions, we believe that 
ammonia should not be included on the list at this time.
    The following is a our rationale for proposing not to include 
ammonia. Ammonia is a gas and does not impair visibility directly. It 
can, however, react with acidic particles or gases in the air to form 
ammonium compounds. The most common acidic substances with which 
ammonia reacts are sulfuric acid and nitric acid, which in turn are 
formed from the reaction of SO2 and NOX with 
other substances in the atmosphere. Because ammonia generally forms 
visibility-impairing fine particles in the presence of acidic particles 
or gases, reductions in SO2 and NOX emissions 
will tend to reduce concentrations of ammonia-based particles in the 
air.
    In other words, to reduce ammonium fine particles, States may 
either require the reduction of ammonia or of SO2 and 
NOX emissions. In determining the proper approach to 
reducing ammonium, it is worth noting that as SO2 and 
NOX emissions are decreased, the marginal effectiveness of 
hypothetical ammonia controls will also tend to decrease.
    The available ammonia emissions inventory is uncertain, although 
EPA and other organizations are pursuing improvements. Consequently, 
compared to the case for SO2 and NOX, the ability 
to identify opportunities for emissions control and to quantify the 
effects of such actions in advance is limited.\15\
---------------------------------------------------------------------------

    \15\ For a more in-depth discussion of the contribution of 
ammonia emissions from stationary sources to long-range transport of 
PM2.5, see discussion in the proposed Interstaste Air 
Quality Rule (IAQR): 69 FR 4566, January 30, 2004.
---------------------------------------------------------------------------

    Because of the uncertainties in assessing the impact of ammonia 
emissions reductions on visibility, and because PM2.5 will 
decrease due to SO2 and NOX controls, we are 
proposing not to include ammonia on the pollutant list at this time. We 
request comment on this determination.
    Also included in the original pollutant list are VOCs. We propose 
that VOCs remain on the list.
    Our understanding of the relationship between VOC emissions and the 
formation of PM2.5 is rapidly evolving. We recognize that 
VOC emissions are most likely to contribute to particle formation, and 
thus to visibility impairment, in the presence of NOX. In 
rural areas, anthropogenic VOC emissions generally do not appear likely 
to be a significant contributor to PM2.5 formation,\16\ 
while VOC emissions in urban areas are likely to be a contributor to 
PM2.5 formation. This is because VOC emissions are most 
often present with NOX emissions in urban areas. In rural 
areas, by contrast, VOC emissions are not as often present with 
NOX emissions.
---------------------------------------------------------------------------

    \16\ See discussion in the NOX SIP call at 63 Fed. 
Reg. 57,356 (Oct. 27, 1998).
---------------------------------------------------------------------------

    We also recognize that some specific uncertainties about VOCs 
remain. For example, only certain organic gases are precursors to 
PM2.5, but available inventories cover VOC as an aggregate. 
It is therefore difficult to estimate emissions of the precursor 
compounds from these inventories. In addition, available models for 
estimating air quality from individual source emissions have more 
uncertainty in predicting ambient PM2.5 changes from 
reductions in emissions of organic gases.
    Finally, we recognize that many industrial sources and most mobile 
sources of organic gases have been subjected to VOC control 
requirements that have the effect of reducing emissions of the 
particular compounds that are PM2.5 precursors. Given that 
fact, as well as the uncertainties about VOCs outlined above, we 
request comment on the level of discretion States should exercise in 
making BART determinations. Specifically, we request comment on whether 
States should focus greater control requirements on VOC emissions from 
BART sources in urban areas. We also request comment on the 
circumstances under which, in rural areas, for sources subject to BART, 
States may determine that BART would be no control for VOC.

What Is a ``Stationary Source?''

    The definition of ``building, structure or facility'' in the 
regional haze rule is based, in part, upon grouping of pollutant-
emitting activities by 2-digit category according to the SIC Manual. As 
in the NSR program, however, facilities that convey, store or otherwise 
assist in the production of the principal product, are considered to 
fall within the same industrial grouping as the primary facility. 
Despite this general rule, however, we would like to clarify that in 
practice, this so-called ``support facility'' test for BART is narrower 
than for other programs. We are proposing to add language to the 
guidelines noting that emission units at a plant, even if they are a 
``support facility'' for purposes of other programs, would not be 
considered for BART-eligibility unless they were within one of the 26 
listed source categories, and unless they were put in place within the 
1962 to 1977 time period. For example, a mine, even if a ``support 
facility'' for a power plant, would not be considered for BART 
eligibility.

Step 4: Identify the emission units and pollutants that constitute the 
BART-eligible source.

    Background. The final step in the identification of BART-eligible 
sources would be to use the results from the previous three steps to 
identify the universe of equipment that is BART-eligible. If the total 
allowable emissions from the stationary source exceed a potential to 
emit of 250 tons per year for any individual visibility-impairing 
pollutant, then that collection of emissions units is a BART-eligible 
source. A BART analysis would be required for each visibility-impairing 
pollutant emitted from this collection of emissions units.

[[Page 25193]]

    2001 Proposed Rule. The 2001 proposed guidelines included two 
examples to clarify this point. In the first example, a source has two 
emissions units having cumulative emissions exceeding 250 tons for 
SO2, but not for NOX and particulate matter (PM). 
For this example, we noted that BART would be required for all three 
pollutants. In the second example, the source has potential emissions 
that are less than 250 tons for each individual pollutant, but more 
than 250 tons from the sum over all pollutants. For this second 
example, we noted that the source would not be BART-eligible.
    Reproposal. We received comments on the 2001 proposal suggesting 
that some BART-eligible sources emit visibility-impairing pollutants at 
levels that would make a de minimis contribution to regional haze. For 
example, a source may be BART-eligible because it emits 500 tons per 
year of one visibility-impairing pollutant, but it may also emit only 
one ton per year of another pollutant, the emission of which would have 
little effect on regional emissions loadings and visibility impairment. 
A 1 ton/yr amount from a given BART-eligible source would likely 
represent a de minimis fraction of a total regional inventory.
    As noted previously, we believe that once a source is BART-eligible 
according to the definition in CAA section 169A(g)(7), CAA section 
169A(b)(2)(A) requires BART for ``any'' visibility-impairing pollutant 
regardless of the amount. Notwithstanding this apparent directive, we 
are proposing to provide the States with the flexibility to identify de 
minimis levels of pollutants at BART-eligible sources. We believe that 
it would be appropriate for States to have this flexibility once they 
have collected more information on the BART population. We also agree 
with comments that sources emitting pollutants at values considered de 
minimis under the PSD program could be de minimis for BART as well. 
Accordingly, the reproposal includes a provision that any de minimis 
values that States adopt should not be higher than the PSD levels: 40 
tons per year for SO2, NOX and VOC, and 15 tons/
yr for PM10. We request comment on this provision, and on 
the idea of including de minimis values. Finally, if a commenter 
contends that ammonia should be included as a precursor to 
PM2.5, then the commenter should also comment on an 
appropriate de minimis value for ammonia.

C. How To Determine Which BART-Eligible Sources Are Subject to BART

    Background. Section 169A of the Act establishes a low triggering 
threshold for determining whether a BART eligible source is required to 
procure and install appropriate retrofit technology. States must 
determine whether BART eligible sources emit ``any air pollutant which 
may reasonably be anticipated to cause or contribute to any impairment 
of visibility in [a Class I] area.'' In the Regional Haze Rule, we 
interpreted these statutory provisions as requiring a State to find 
that a BART-eligible source is ``reasonably anticipated to cause or 
contribute'' to regional haze if it can be shown that the source emits 
pollutants within a geographic area from which pollutants can be 
emitted and transported downwind to a Class I area.\17\
---------------------------------------------------------------------------

    \17\ 64 FR at 35740.
---------------------------------------------------------------------------

    Reproposal. As explained earlier, as part of the BART process, a 
State identifies and lists all ``BART-eligible'' sources. The State 
must then determine which of those BART-eligible sources may ``emit any 
air pollutant which may reasonably be anticipated to cause or 
contribute to any impairment of visibility in any [Class I] area.'' A 
source which fits this description is ``subject to BART.'' This section 
explains our proposed process for determining which BART-eligible 
sources should be subject to BART. We request comment on all aspects of 
this process.

Determining Which Sources Are Reasonably Anticipated To Cause or 
Contribute To Visibility Impairment (Sources Subject to BART)

    Three options are proposed. First, the State may choose to consider 
that all BART-eligible sources in the State are subject to BART (i.e., 
that none are exempt). As explained previously, we believe this 
conclusion is reasonable in light of currently available information 
[reference 1999 study]. We also believe that given American Corn 
Growers' emphasis on State's prerogatives in making BART 
determinations, we may lack the authority to deny this option to 
States.
    Second, the State may choose to demonstrate, using a cumulative 
approach, that none of its BART-eligible sources contribute to 
visibility impairment. We propose that States should have the option of 
performing an analysis to show that the full group of BART-eligible 
sources in a State cumulatively do not cause or contribute to any 
visibility impairment in Class I areas. We request comment on the types 
of analyses that could be used. For instance, one approach may be for 
States to use a regional scale grid model \18\ to demonstrate that its 
BART-eligible sources do not cause or contribute to regional haze. We 
anticipate that in most, if not all States, the BART-eligible sources 
are likely to cause or contribute to visibility impairment in Class I 
areas. However, it is possible that, using regional scale modeling, a 
State could show that its BART sources do not collectively cause or 
contribute to visibility impairment. In such a case, a State could 
complete its BART analysis relatively quickly, without the need for 
investing in studies of source-specific contributions to regional haze. 
At this time, we are neither requiring nor encouraging all States to 
undertake a cumulative approach.
---------------------------------------------------------------------------

    \18\ For regional haze applications, regional scale modeling 
typically involves use of a photochemical grid model that is capable 
of simulating aerosol chemistry, transport, and deposition of 
airborne pollutants, including particulate matter and ozone. 
Regional scale air quality models are generally applied for 
geographic scales ranging from a multi-state to the continental 
scale. Such modeling may not be appropriate for all States, as 
regional models are most applicable to situations involving multiple 
BART-eligible sources. Because of the design and intended 
applications of grid models, they may not be appropriate for all 
BART assessments, so States should consult with the appropriate EPA 
Regional Office prior to carrying out any such modeling.
---------------------------------------------------------------------------

    Finally, the State may choose to determine which sources are 
subject to BART through the use of an individual exemption process, 
described below.
Individualized Source Exemption Process
    We are proposing to provide States with the option of determining 
which sources are subject to BART through the use of an individualized 
exemption process. For this option, we propose that States use an air 
quality model for an individual source to demonstrate no contribution 
to visibility impairment in a Class I area. We also request comment on 
alternative approaches that may be used in lieu of this approach, or as 
a first step in the process by which States may determine which BART-
eligible sources, if any, to exempt.
    For modeling an individual BART-eligible source located more than 
50 km from a Class I area, we propose that an air quality model, such 
as CALPUFF, be used. The CALPUFF system consists of a diagnostic 
meteorological model, a gaussian puff dispersion model with algorithms 
for chemical transformation and complex terrain, and a post processor 
for calculating concentration fields and visibility impacts. CALPUFF 
was incorporated into the ``Guideline on Air Quality Models'' (the 
Guideline) (40

[[Page 25194]]

CFR Part 51, Appendix W) in April 2003.
    Traditionally, EPA has used transport and diffusion modeling to 
predict the effect of directly emitted PM2.5 emissions on 
PM2.5 ambient concentrations. To simulate the effect of 
precursor pollutant emissions on PM2.5 concentrations 
requires air quality modeling that not only addresses transport and 
diffusion, but also chemical transformations. While we believe that it 
is technically feasible to model secondary PM formation, and there is 
at least one model, described above, which incorporates algorithms for 
estimating secondary transformation, we have not yet fully tested such 
modeling to determine whether its application is justified as a sole 
determinant of air quality impacts involving secondary transformation. 
However, where the statutory criteria for determining regulatory 
applicability involve relatively low thresholds, or where regulatory 
decisions involve considerations of multiple factors including, but not 
limited to, model results, we believe transport and diffusion models 
such as CALPUFF can be appropriate regulatory tools for evaluating air 
quality impacts involving secondary transformation. Consequently, we 
believe its use by States to assess whether a source is reasonably 
anticipated to cause or contribute to impairment of visibility in Class 
I areas is reasonable.
    We are proposing that a CALPUFF assessment of an individual source 
be used as the preferred approach for determining whether a BART-
eligible source may be exempt from BART. The CALPUFF assessment is 
specific to each source, taking into account the individual source's 
emission characteristics, location, and particular meteorological, 
topographical, and climatological conditions, any of which may have an 
impact on the transport of PM2.5 and its precursors. Thus, 
this approach may be more determinative than a non-modeling approach in 
determining which sources are not contributing to visibility impairment 
in a Class I area.
    Results from the CALPUFF assessment would be used to determine the 
source's impact on visibility in a Class I area. If a source has an 
estimated impact on visibility that is lower than the established 
threshold (described in the section below), then the State may choose 
to exempt the source from further BART analysis. If the source's impact 
is equal to or greater than the threshold, the State would determine 
that the source is subject to BART.
    The State or source would apply CALPUFF for source-receptor 
distances greater than 50 km, since CALPUFF is generally intended for 
use on scales from 50 km from a source to hundreds of kilometers. 
However as the modeling domain increases in size, the requirements for 
experience in the application of CALPUFF becomes more demanding (e.g., 
in processing and quality assurance of the meteorology, in 
understanding the implications of the various model processing 
options). Therefore we propose that any application of CALPUFF for 
distances greater than 200 km requires development of a written 
modeling protocol describing the methods and procedures to be followed, 
and that the protocol be approved by the appropriate reviewing 
authority. For source-receptor distances less than 50 km, we are 
recommending that States use their discretion for determining 
visibility impacts giving consideration to both CALPUFF and other EPA-
approved methods. For example, States would have the option of 
exempting these sources if air quality modeling results, using an 
appropriate local-scale model such as PLUVUEII,\19\ show that their 
emissions are below a level that would be reasonably anticipated to 
cause or contribute to visibility impairment in any Class I area.
---------------------------------------------------------------------------

    \19\ PLUVUEII is a model used for estimating visual range 
reduction and atmospheric discoloration caused by plumes resulting 
from the emissions of particles, nitrogen oxides, and sulfur oxides 
from a single source. The model predicts the transport, dispersion, 
chemicals reactions, optical effects and surface deposition of point 
or area source emissions. It is available at http://www.epa.gov/scram001/tt22.htm#pluvue.
---------------------------------------------------------------------------

Metric for Visibility Degradation

    In providing an individual source exemption option, a metric is 
needed to assess a source's contribution to visibility degradation. The 
metric we are using in the regional haze rule is the deciview, which is 
derived directly from light extinction, an index commonly used to 
measure visibility degradation.
    As outlined in the 1999 Regional Haze rule (64 FR 35725-35727, July 
1, 1999), a one deciview change in haziness is a small but noticeable 
change in haziness under most circumstances when viewing scenes in a 
Class I area. The deciview can be used to express changes in visibility 
impairment that correspond to a human perception in a linear, one for 
one, manner. The deciview concept was introduced in 1994 in an article 
appearing in a peer-reviewed journal (Pitchford and Malm, Atmospheric 
Environment, 28 (5), 1994). We believe that visible changes of less 
than one deciview are likely to be perceptible in some cases, 
especially where the scene being viewed is highly sensitive to small 
amounts of pollution. We acknowledge that for other types of scenes, 
with other site-specific conditions, a change of more than one deciview 
might be required in order for the change to be perceptible.

Threshold Levels

    A 1991 report from the National Acid Precipitation Assessment 
Program (NAPAP) states that ``changes in light extinction of 5% will 
evoke a just noticeable change in most landscapes.'' \20\ Converting a 
5 percent change in light extinction to a change in deciviews yields a 
change of approximately 0.5 deciviews. This is a natural breakpoint at 
which to set the exemption level, since visibility degradation may 
begin to be recognized by human observer at this extinction level.\21\ 
Thus, we are proposing a 0.5 deciview change as the threshold for 
determining that an individual source is causing visibility impairment 
at a Class I area. This level would be calculated by measuring the air 
quality screening modeling results for an individual source against 
natural visibility conditions. Natural visibility conditions are those 
conditions that are estimated to exist in a given Class I area in the 
absence of human-caused impairment.\22\ We believe that measuring 
against natural visibility conditions is appropriate because the 
ultimate goal of the regional haze program is a return to natural 
conditions. Additionally, regional haze strategies are developed to 
make reasonable progress towards this goal, and visibility degradation 
and improvement are appropriately measured against natural conditions.
---------------------------------------------------------------------------

    \20\ National Acid Precipitation Assessment Program (NAPAP). 
Acid Deposition: State of Science and Technology Report 24, 
Visibility: Existing and Historical Conditions--Causes and Effects, 
Washington, DC, 1991. See Appendix D, p. 24-D2.
    \21\ Ibid.
    \22\ U.S. EPA. September 2003. Guidance for Estimating Natural 
Visibility Conditions Under the Regional Haze Rule. http://www.epa.gov//ttncaaa1/t1/memoranda/rh_envcurhr_gd.pdf This 
document has estimates of default conditions as well as measures to 
develop refined estimates of natural conditions.
---------------------------------------------------------------------------

    We also request comment on using a threshold that is more or less 
than 0.5 deciviews. Given uncertainties over the deciview change that 
is perceptible, and the modeling of a source's contribution to haze in 
a Class I area, a different threshold may be appropriate. Furthermore, 
we recognize that there may be situations where impacts from

[[Page 25195]]

more than one BART-eligible source, when taken together, would 
adversely affect visibility at a particular Class I area even though 
the impact of each individual source would be below the visibility 
threshold. In this case, there would be a noticeable impact on 
visibility from BART-eligible sources because of the contribution of 
multiple sources, yet impacts from an individual source alone would not 
be noticeable. Given the statutory language that a source ``which may 
reasonably be anticipated to cause or contribute to visibility 
impairment'' is subject to BART,\23\ a lower threshold may be 
appropriate as it would effectuate Congress's intent that the BART 
applicability test not establish a high hurdle. We accordingly request 
comment on what threshold would be appropriate to address these issues.
---------------------------------------------------------------------------

    \23\ CAA Sec.  169A(b)(2) (emphasis added).
---------------------------------------------------------------------------

Alternative Approaches to the Assessment Using CALPUFF
    The CALPUFF assessment described previously can be a time-consuming 
and data-intensive approach; we are concerned about the resource 
burdens this might pose for States and sources. Therefore, we are also 
considering alternative approaches that would be credible and require 
fewer resources. These approaches could serve as a first step in the 
process for determining whether a source contributes to visibility 
impairment in a Class I area. We are considering several alternative 
approaches for making this exemption determination. These approaches, 
in no particular order, include: (1) A simpler screening assessment 
using CALPUFF (2) look-up tables (i.e., tables that require emissions 
and distance information for making an exemption determination), (3) 
source ranking, and (4) using Emissions divided by Distance, known as 
the Q/D method.
    Each approach has strengths and limitations. We request comment on 
all of these approaches. A more complete and detailed explanation of 
the four alternative approaches, including examples, is available in a 
memo to the docket.\24\
---------------------------------------------------------------------------

    \24\ Memorandum to the docket: Summary of Alternative Approaches 
for Individual Source BART exemptions, Todd Hawes, March 12, 2004. 
Docket No. OAR-2002-0076.
---------------------------------------------------------------------------

A Screening Assessment Using CALPUFF

    We are proposing that CALPUFF be run in a screening assessment to 
evaluate individual sources. This approach would be less data- and 
time-intensive than running CALPUFF in the assessment described 
previously due to greatly simplified preparation and processing of 
input data. This simpler screening assessment utilizes source and 
receptor location, as well as meteorological, topographical and 
climatological conditions from a regionally-specific profile. However, 
like the assessment described previously, this screening assessment 
also utilizes the individual source's particular emission 
characteristics. The table below illustrates the differences between 
the screening assessment of the kind described previously as the 
preferred approach and the simpler, more generalized screening 
assessment.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Type........................  CALPUFF Assessment..  CALPUFF Screening
                                                     Assessment.
Model used..................  CALPUFF.............  CALPUFF.
Input meteorology...........  Process 5 years of    Representative met
                               location-specific,    location (data
                               meteorology data.     already processed).
Terrain included............  Site-specific         No (assumed flat).
                               terrain included.
Source-Receptor distances...  Source to Class I     Source to Class I
                               area receptor.        area receptor.
Location of Visibility        Maximum impact at     Maximum impact in
 impact.                       receptor using        any direction at
                               appropriate           source-receptor
                               distance and          distance.
                               direction from
                               source.
------------------------------------------------------------------------

    Results from this screening assessment would be used to determine 
the source's impact on visibility in a Class I area. If a source has an 
estimated impact on visibility that is lower than the established 
threshold, the State may choose to exempt the source from further BART 
analysis. If the source's impact is equal to or greater than the 
threshold, the State would determine that the source is subject to 
BART. The source would then have the option of performing the screening 
assessment described previously as the preferred approach to 
demonstrate that its visibility impacts do not exceed the threshold 
level and that it qualifies for exemption.
    We request comment on the use of this approach as an assessment of 
individual source impacts on visibility.

Look-Up Tables Developed From Screening-Level Air Quality Modeling

    For even greater ease of use, look-up tables could be developed for 
application in the individual source exemption process. Under this 
approach, a State or source would use a look-up table developed by EPA 
to determine the source's predicted impact on a Class I area and, 
consequently, its exemption status. The State or source would use the 
source's emissions information and distance from a Class I area to 
determine if it is exempt from BART.
    The look-up tables could be developed by first using CALPUFF in 
screening assessments to estimate levels of visibility impairment (in 
deciviews) associated with different combinations of distance to a 
Class I area and tons per year of emissions. A table would show the 
distance from the representative BART-eligible source to a Class I area 
and the associated allowable emissions of visibility-impairing 
pollutants (e.g., SO2, NOX, and direct 
PM2.5) at that distance that will yield a modeled impact of 
0.5 deciviews. A State or source could ``look up'' a source's distance 
and emission combination and compare its allowable emissions of 
visibility-impairing pollutants to the table to make the BART exemption 
determination for the source.
    If a BART-eligible source has emissions of visibility-impairing 
pollutants that are less than the emissions shown on the table for 
sources that are the same distance as the source from a Class I area, 
the State could exempt the source from BART. Alternatively, if a BART-
eligible source's emissions of visibility-impairing pollutants are 
greater than the emissions shown on the table, the State could 
determine that the source is subject to BART. The source would have the 
option of running the CALPUFF model, or other EPA-approved model, to 
demonstrate that its visibility impacts do not exceed a change in light 
extinction of 0.5 deciviews and that it qualifies for exemption.
    An example of a look-up table for EGUs is shown in the technical 
memo

[[Page 25196]]

to the docket.\25\ A more in-depth discussion of the look-up table 
development is given in the Summary of Technical Analysis for the 
Proposed Rule.\26\ The advantages of the look-up tables are that they 
are easy to use and no modeling would be required. However, they may be 
too general to represent all source categories. For instance, the 
source category in the example is for EGUs. Another source category 
will likely have entirely different source and emissions 
characteristics which may require development of a separate look-up 
table. Several sets of look-up tables requiring several sets of 
assumptions would be cumbersome and complex.
---------------------------------------------------------------------------

    \25\ Ibid.
    \26\ Summary of Technical Analyses for the Proposed Rule, Mark 
Evangelista, U.S. Environmental Protection Agency, April 12, 2004, 
Docket No. OAR-2002-0076.
---------------------------------------------------------------------------

Source Ranking

    A source ranking approach is another possible option for 
determining whether an individual source may be exempted from BART. 
This approach would require a separate analysis for each Class I area.
    First, a State would determine the universe of BART-eligible 
sources within a prescribed distance from the Class I area. Then, using 
a pre-determined common metric, such as total emissions of visibility 
impairing pollutants at each source, a State would sort the sources in 
descending order according to the metric and determine the cumulative 
frequency (a running total or percentage) of the ranked sources 
according to the chosen metric. The sources that fall below a pre-
determined frequency level could be presumed to be insignificant 
contributors, and the State could exempt them from BART. A source that 
falls above the pre-determined frequency level would be subject to 
BART. The source would have the option of running the CALPUFF screening 
model, or other EPA-approved model, to demonstrate that its visibility 
impacts do not exceed the threshold level and that it qualifies for 
exemption. A more complete and detailed explanation of this approach, 
including an example, is available in a memo to the docket.\27\
---------------------------------------------------------------------------

    \27\ Memorandum to the docket: Summary of Alternative Approaches 
for Individual Source BART Exemptions, Todd Hawes, March 12, 2004. 
Docket No. OAR-2002-0076.
---------------------------------------------------------------------------

    We request comment on the source ranking approach and on an 
appropriate frequency level for determining individual source 
exemption.

Emissions Divided by Distance (Q/D) Method

    Another option for exemption for which we request comment is a non-
modeling based approach identified as Q/D (with ``Q'' being allowable 
emissions, in tons per year, and ``D'' representing the distance, in 
km, to the nearest Class I area, multiplied by a prescribed constant). 
The method, originally developed by the North Carolina Department of 
Environment and Natural Resources, is a tool to eliminate distant, 
insignificant emission sources from ambient assessments submitted under 
the Prevention of Significant Deterioration (PSD) program.\28\ The Q/D 
method determines a source to be insignificant if the allowable 
emissions in tons per year (Q) divided by a constant times the distance 
in kilometers (D) is greater than a value of 1. For example, North 
Carolina uses a constant of 20, which was determined empirically. 
Therefore, a source could be considered insignificant if its emissions 
divided by 20 times its distance, in km, from the nearest Class I area 
is greater than 1. For this application for determining exemption from 
BART, the combined emissions of SO2, NOX, and 
PM2.5 of a BART-eligible unit could be divided by the 
distance to the nearest Class I area. If that quotient is less than 1, 
the source would not be subject to BART. If a source is not found to be 
exempt under this approach, the CALPUFF screening analysis could still 
be used for an exemption determination.
---------------------------------------------------------------------------

    \28\ A Screening Method for PSD, Memorandum from Bruce P. 
Miller, U.S. Environmental Protection Agency, to Eldewins Haynes, 
North Carolina Department of Natural Resources and Community 
Development, September 12, 1985, Docket No. OAR-2002-0076.
---------------------------------------------------------------------------

    We request comment on the Q/D method, including comment on what 
value for the constant would be appropriate and why.

D. The BART Determination Process

    Background. Section 169A(g)(7) of the CAA requires States to 
consider the following factors in making BART determinations: (1) The 
costs of compliance, (2) the energy and nonair quality environmental 
impacts of compliance, (3) any existing pollution control technology in 
use at the source, (4) the remaining useful life of the source, and (5) 
the degree of improvement in visibility which may reasonably be 
anticipated to result from the use of such technology. The D.C. 
Circuit's decision did not address the first four steps of the BART 
determination (the ``engineering analysis''), which are discussed in 
detail in the guideline. The court's opinion did address the final 
step, mandating that the degree of improvement in visibility that would 
result from imposition of BART on each individual source be taken into 
account in determining BART.
    2001 Proposed Rule. Section IV of the 2001 proposed BART guidelines 
was entitled ``Engineering Analysis of BART Options.'' The purpose of 
this section was to address the requirement in 40 CFR 
51.308(e)(1)(ii)(B) in the regional haze rule that States identify the 
``best system of continuous emissions control technology'' taking into 
account ``the technology available, the costs of compliance, the energy 
and nonair quality environmental impacts of compliance, any pollution 
control equipment in use at the source, and the remaining useful life 
of the source.'' Thus, in the 2001 proposed guidelines, section IV 
addressed four of the five statutory factors to be considered in the 
BART determination. Section V, ``Consideration of Visibility Impacts,'' 
contained a consolidated discussion, addressing visibility 
considerations in deciding both which BART-eligible sources should be 
subject to BART, as well as the fifth statutory factor--assessing the 
degree of visibility improvement which may reasonably be anticipated to 
result from control technology.
    Reproposal. In the proposed guidelines, we are adding a fifth step 
to the Engineering Analysis. The five proposed steps in the engineering 
analysis are as follows:
    1--Identify all available retrofit control technologies,
    2--Eliminate technically infeasible options,
    3--Rank remaining control technologies by control effectiveness,
    4--Evaluate impacts and document the results, and
    5--Evaluate the visibility impacts of applying controls.
    In this portion of the preamble, we discuss a number of other 
issues.
    1. How does BART relate to maximum achievable control technology 
(MACT) standards developed under CAA section 112?
    In the 2001 proposed rule, we did not provide any discussion of the 
relationship of BART controls to MACT requirements. A number of 
commenters suggested that there are cases where additional controls 
beyond MACT are not warranted. We believe that for VOC and PM sources 
subject to MACT standards, States may streamline the BART analysis by 
including a discussion of the MACT controls and whether any major new 
technologies

[[Page 25197]]

have been developed subsequent to the MACT standards.
    We believe that there are many sources, particularly sources of VOC 
and PM emissions, that are well-controlled because they are regulated 
by the MACT standards. Examples of MACT sources which effectively 
control VOC and PM emissions include (among others) secondary lead 
facilities, organic chemical plants subject to the hazardous organic 
national emissions standard for hazardous air pollutants (HON), 
pharmaceutical production facilities, and equipment leaks and 
wastewater operations at petroleum refineries. (We believe this is also 
true for emissions standards developed for municipal waste incinerators 
under the CAA amendments of 1990.) In many cases, it will be unlikely 
that States will identify emission controls more stringent than the 
MACT standards without identifying control options that would cost many 
thousands of dollars per ton. Unless there are new technologies 
subsequent to the MACT standards which would lead to cost-effective 
increases in the level of control, we believe that States may conclude 
that a source meeting MACT standards in these cases will satisfy the 
BART requirement.
    The reproposed guidelines have been revised to include the 
discussion of MACT standards. The reproposed guidelines would require 
that a State identify any source where they are relying on MACT 
standards to achieve a BART level of control. Moreover, the reproposed 
guidelines would require a State to provide the public with a 
discussion of its decision to rely on a MACT standard as BART for a 
given source and pollutant.
    2. How do I identify all available retrofit emission control 
techniques?
    2001 Proposed Rule. In the 2001 proposed guidelines, we discussed a 
number of concepts regarding the identification of ``all available'' 
retrofit technologies. This discussion noted that ``all'' means a 
reasonable set of technologies. For example, the guidelines noted that 
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.
    The proposed guidelines made clear that the list of ``available'' 
technologies should reflect a comprehensive review, including 
technologies applied outside of the United States, and including 
technologies that may have only been applied previously to new sources. 
The proposed guidelines noted that control measures could include add-
on control devices, switching to inherently lower-emitting processes, 
or a combination of the two. The proposed guidelines stated that BART 
did not require a source to undertake a complete replacement of the 
source with a lower-emitting design. The guidelines included a list of 
references which are available for identifying possible control 
measures, noting that the list was not necessarily all-inclusive. 
Finally, this passage of the proposed guidelines noted that sources 
with existing control devices in place must consider any available 
options for improving the performance of those control devices.
    Comments. We received a few comments on this part of the 2001 
proposal. Some comments recommended that controls typically used at new 
sources, such as those representing best available control technology 
(BACT) or lowest acheiveable emission rate (LAER), would be more 
stringent than BART should require. One commenter representing a 
utility company noted that the requirement to consider all controls, 
including those outside of the United States, could be burdensome to 
States. This commenter recommended that the analysis be limited to a 
``reasonable range'' of technologies.
    Reproposal. We are proposing to amend the language in the BART 
guidelines on the topic of identification of ``all'' retrofit 
technologies. We do not believe that it is necessary that States 
conduct detailed evaluations of control measures that are very unlikely 
to be selected as BART. Accordingly, we believe that, in order to 
reduce the administrative burden, States may consider developing 
screening levels based on the ``cost effectiveness'' of emissions 
control (i.e. the cost of emission control technology per each ton of 
emissions reduced). We view such dollar/ton screening levels as 
criteria for rejecting control options for consideration on the basis 
of costs and not as the sole basis for a BART decision. The overall 
BART decision must be made in consideration of all of the statutory 
factors.
    We also recognize that there may be cases where States may wish to 
consider control measures above whatever screening levels they may 
establish. For example, the effect of nitrate particles varies and 
there are a few areas where nitrates are likely to be more important 
than for the rest of the nation. Also, a few sources may emit levels of 
NOX higher than the presumptive control level of 0.2 lbs/
MMBtu, even after consideration of all available control technologies 
(such as low NOX burners and other combustion controls) 
below any established screening levels (see discussion in section III. 
6. below).
    Within the above constraints, we believe that the BART analysis 
should begin with a comprehensive review of those technologies that 
could be used to reduce emissions from a given BART-eligible source. We 
note that this analysis may be limited to a reasonable range of options 
and need not consider all permutations of control levels for a given 
technology.
    In this proposal, we are seeking comment on two alternative 
approaches for conducting a BART engineering analysis. We prefer 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.
    We also request 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 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

[[Page 25198]]

technologies. While both approaches require essentially the same 
parameters and analyses, we prefer 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.
3. Consideration of Nonair Quality Environmental Impacts
    2001 Proposed Rule. The 2001 proposal called for States to address 
environmental impacts other than air quality, and energy impacts, due 
to controlling emissions of the pollutant in question. Such 
environmental impacts include solid or hazardous waste generation and 
discharges of polluted water from a control device.
    The proposed guidelines contained a number of examples of the types 
of nonair quality impacts that should be considered. The guidelines 
noted that States should take into account that there are beneficial 
nonair quality environmental impacts that could result from control 
measures. For example, control measures under consideration for BART 
may reduce acid deposition.
    The guidelines clarified that the procedure for conducting an 
analysis of nonair quality environmental impacts should be based on a 
consideration of site-specific circumstances. Under the proposed 
guidelines, in Step 3 it would not be necessary to perform this 
analysis of environmental impacts for the entire list of technologies, 
if a State proposes to adopt the most stringent alternative. Instead, 
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.
    Comments. One utility commenter requested that EPA better clarify 
the BART determination factors other than costs of compliance. A State 
commenter wanted EPA to explain the bounds of a nonair quality review 
on environmental effects, citing possible requirements to assess 
statewide water quality standards as an example of how broad and open-
ended the analysis could be. Several environmental groups asked us to 
be more specific with respect to consideration of the beneficial nonair 
quality related effects of implementing emissions controls as part of 
the BART determination. The comments pointed out that acid and total 
nitrogen loading affects water quality in rivers, lakes, coastal waters 
and also affects soil chemistry. These comments point out that these 
impacts can be magnified at higher elevations due to direct cloud 
deposition. Acidic deposition and increased nitrogen loading appear to 
be linked to damage to forested ecosystems, such as declines in 
sensitive tree species, death of aquatic organisms and poor water 
quality. Some comments pointed out that even a qualitative assessment 
of these beneficial impacts can inform the BART determination and 
should be part of the process. Comments from several Midwestern States 
requested that the guidelines provide that incompatibility with control 
for another pollutant, such as mercury, should be a criterion for 
rejecting (or modifying) a BART control option.
    Reproposal. The Guidelines discussion of energy impacts remains the 
same as the discussion in the 2001 proposal. For nonair quality 
impacts, we agree that more clarification is needed. We do not see this 
factor as requiring an open-ended analysis of every affected nonair 
resource. We also do agree with commenters that the nonair quality 
assessment should include the beneficial effects of control options 
being considered in the BART determination. Both quantitative and 
qualitative information can be used in this assessment. We do not view 
this factor as requiring States to conduct an analysis of every 
possibly affected nonair quality effect, but rather as requiring States 
to consider clearly documented nonair quality effects. Moreover, we 
expect the Federal Land Managers to provide available information for 
assessing the ability of emission controls to reduce impacts on 
forests, soils, native species and other resources through the 
consultation requirement for regional haze SIP development contained in 
40 CFR 51.308(i)(2)of the regional haze rule. This information should 
identify the specific nonair quality effects to consider and specific 
criteria for evaluating their significance, so that States are not 
faced with open-ended analyses.
    States should also consider other information on beneficial effects 
which include specific data on nonair quality concerns made available 
to them, such as through public comments, in making the BART 
determination. We also agree with the Midwestern States comments that 
when controls for a visibility-impairing pollutant are shown to be 
incompatible with control of another air pollutant, this may create air 
quality or nonair quality related environmental concerns that should be 
taken into account in comparing control alternatives. At the same time, 
we note that it is important to evaluate fully and document the 
magnitude and nature of the concern identified. The mere presence of an 
actual or theoretical concern should not be cited as the reason for 
eliminating an option. Also, once a source-specific BART determination 
is made for two regulated pollutants, if the result is two different 
BART technologies that do not work well together, a State could then 
substitute a different technology or combination of technologies that 
achieve at least the same emissions reductions for each pollutant.
4. Evaluating the Significance of the Costs of Control
    2001 Proposed Rule. The 2001 proposed rule requested comment on 
evaluating the significance of the costs of compliance--specifically, 
on whether the guidelines should contain specific criteria, and on 
whether such criteria would improve implementation of the BART 
requirement.
    Comments. A few industry commenters, and two State commenters, 
suggested that specific criteria for evaluating cost, or for comparing 
cost with visibility benefits, should be included, but did not suggest 
what those specific criteria should be. Several environmental groups 
and environmental consulting firms suggested that specific cost 
criteria would not improve BART determinations, because BART sources 
and source categories vary considerably.
    Reproposal. We are proposing a sequential process for conducting 
the impacts analysis that includes a complete evaluation of the costs 
of control. For evaluating the significance of the costs of control, we 
continue to request comment on whether such criteria would improve 
implementation of the BART requirement. If commenters believe such 
criteria are warranted, we request comment on what criteria would be 
appropriate. For example, we request comment on whether it would be 
helpful to include criteria such as those in the work of the Western 
Regional Air Partnership (WRAP),\29\ wherein 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.
---------------------------------------------------------------------------

    \29\ 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.

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[[Page 25199]]

5. Sulfur Dioxide Controls for Utility Boilers
    2001 Proposed Rule. In the 2001 proposed guidelines, we cited a 
report by EPA's Office of Research and Development to support a 
presumption that, for utility boilers where there is no existing 
control technology in place, a 90-95 percent reduction in SO2 is 
generally cost effective to achieve using scrubbers. This document is 
entitled Controlling SO2 Emissions: A Review of 
Technologies, EPA-600/R-00-093. We also provided, in a memorandum to 
the docket for the proposal, calculations showing scrubber costs of 
about $200-$1000 per ton of SO2 removed for the 90-95 
percent control levels. The proposal made clear that we would allow 
States to consider 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 requested comments on whether the 90-95 percent presumption is 
appropriate or whether another presumption should be established 
instead.
    Comments. We received many comments on the 90-95% control 
presumption for utility boilers.
    Many utility industry comments were critical of the presumptive 
level. These comments did not address whether the 90-95 percent level 
was achievable, nor did they address EPA's cost calculations. Instead, 
the comments were generally critical of the provision as a Federal 
mandate that would reduce State flexibility in making BART 
determinations.
    Comments from States in the Northeast and from environmental groups 
were generally supportive of the presumptive levels of control. Some of 
these comments expressed concerns that the technology may advance to 
greater levels of achievable control before BART decisions are made. 
Accordingly, those comments recommended that we add language to the 
final guidelines to ensure that the 90-95 percent level would not be 
considered to represent the maximum level of control that States could 
consider.
    Comments from several Midwestern States recommended that the 
presumptive level be expressed as a performance level, for example as a 
pounds/million BTU level, rather than as a percent control level. These 
comments expressed concerns that facilities which have already reduced 
emissions for purposes of the acid rain program could inappropriately 
be treated in the same way as those that had not yet reduced their 
emissions.
    Reproposal. In today's action reproposing the BART guidelines, we 
are proposing a level of SO2 control that is generally 
achievable for electric generating units (EGU)s of a certain size. 
Specifically, we are proposing that in establishing BART emission 
limits, States, as a general matter, must require owners and operators 
of greater than 750 MW power plants to meet specific control levels of 
either 95 percent control, or controls in the range of .1 to .15 lbs/
MMBtu, on each EGU greater than 250 MW. We are proposing to establish 
such a default requirement based on the consideration of certain 
factors discussed below. Although we believe that this level of control 
is likely appropriate for all greater than 750 MW power plants subject 
to BART, a State may establish a different level of control if the 
State can demonstrate that an alternative determination is justified 
based on a consideration of the evidence before it. In addition, for 
power plants 750 MW and less in size, we are establishing a rebuttable 
presumption that States should require any EGU between 250 MW and 750 
MW in size to meet these same control levels.
    This presumption would apply unless the State has persuasive 
evidence that an alternative determination is justified. Our intent is 
that it should be extrememly difficult to justify a BART determination 
less than the default control level for a plant greater than 750 MW, 
and just slightly less difficult for a plant 750 MW or smaller.
    As stated earlier, by specifically singling out, in section 169A of 
the CAA, a specific set of existing sources to be addressed by the 
States (or the Administrator) in their plans, Congress clearly signaled 
through the BART requirements a particular concern that the States and 
EPA focus on pollution from these sources. The CAA gives the States the 
authority ``to decide which sources impair visibility and what BART 
controls should apply to those sources.'' American Corn Growers v. EPA, 
291 F.3d at 8. However, section 169A further states that ``[i]n the 
case of a fossil-fuel fired generating plant having a total generating 
capacity in excess of 750 MW, the [BART] emission limitations * * * 
shall be determined pursuant to guidelines' issued by EPA. This 
language, and the legislative history, indicate that although Congress 
generally left the determination of BART emission limits to the States 
(subject to the requirements of EPA's implementing regulations), it 
intended EPA to take a more active role in the process of establishing 
BART emission limits for large power plants. Furthermore, the 
legislative history from 1977 makes clear that Congress understood 25 
years ago that a specific type of SO2 controls (flue gas 
desulfurization (FGD) or ``scrubbers'') was readily available for these 
plants. We believe it is consistent with Congress' mandate that EPA 
establish guidelines for determining BART emission limitations for this 
category of sources and, given the availability and low cost of 
controls for these sources, for EPA to require that these power plants 
meet specific control levels, unless the State has persuasive evidence 
that an alternative determination is justified.
    In addition to the statutory language and the legislative history, 
we believe that requiring specific BART emission limitations for 
greater than 750 MW power plants in most cases is supported by sound 
policy considerations and a careful review of the information we have 
regarding these sources' emissions, costs of control, and impacts on 
visibility. First, sulfates resulting from SO2 emissions are 
an important contributor to visibility impairment nationwide, and 
preliminary data that we have suggests that the estimated 28 BART-
eligible EGUs located at 750 MW power plants emit over one million tons 
of SO2 per year, or, on an individual EGU basis, an average 
of over 39,000 tons of SO2 per year.\30\ In other words, 
these sources are some of the largest emitters of SO2 in the 
United States.
---------------------------------------------------------------------------

    \30\ See http://www.epa.gov/airmarkets/epaipm/results2003.html. 
This is the Table of Parsed Run Data for EPA Modeling Applications 
Using IPM. Most of the 750 MW power plants addressed by this 
provision contain one or more 250 MW boilers constructed between 
1962 and 1977. Thus, on average, most (each) plant emits far more 
than 39,000 tons per year of SO2 from units covered by 
the BART requirement.
---------------------------------------------------------------------------

    Second, as discussed below, highly effective control technologies 
(i.e., FGD) are available to control SO2 emissions from 
utility boilers; the average costs per ton of emissions removed from 
such EGUs (usually between $200 and $1300 per ton) are well within the 
levels considered for application under many CAA regulatory programs. 
Based on the cost models in the Controlling SO2 Emissions report,\31\ 
for example, it appears that, where there is no existing control 
technology in place, 95 percent control can generally be achieved at 
EGUs using coal with relatively high

[[Page 25200]]

sulfur content at cost-effectiveness values cited above.\32\ Similarly, 
for EGUs using relatively low sulfur coal, reducing SO2 
emission levels to 0.1 to 0.15 lbs/MMBtu is also cost-effective as 
compared to other measures to reduce pollution, falling within the same 
range of cost effectiveness as that discussed above.\33\
---------------------------------------------------------------------------

    \31\ 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 FGD systems 
worldwide, provides detailed methods for evaluating costs, and 
explains the reasons why costs have been decreasing with time.
    \32\ We have 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/OAPS, December 29, 
2000). We also believe it is reasonable to expect States to consider 
the maximum level that these scrubbers are capable of achieving. 
Thus, for example, we believe that a scrubber installation which 
allowed part of the flue gas stream to bypass the scrubber and 
remain uncontrolled, or be controlled to a lesser degree, should not 
be considered to represent BART.
    \33\ Ibid.
---------------------------------------------------------------------------

    Third, we believe that individual BART-eligible EGUs subject to 
this provision contribute substantially to visibility impairment in 
Class I areas. For example, based on modeling runs using CALPUFF for a 
typical 250 MW EGU, modeling results have shown visibility effects 
greater than 7 deciviews at Class I areas at distances of 200 km.\34\ 
At 90 percent control for a 250 MW source, the maximum modeled impact 
would improve to 1.3 deciviews. A 95 percent control level would yield 
further substantial improvement in visibility to just under 1 deciview. 
Note however that even at a 95 percent control level, just one source 
can have maximum impacts above the threshold of the visible range (0.5 
deciviews) and may still impair visibility at the nearest Class I area.
---------------------------------------------------------------------------

    \34\ Summary of Technical Analyses for the Proposed Rule, Mark 
Evangelista, U.S. Environmental Protection Agency, April 12, 2004, 
Docket No. OAR-2002-0076.
---------------------------------------------------------------------------

    Therefore considering the range of the costs of compliance for 
these sources and the degree of improvement in visibility that may be 
anticipated from the use of the highly effective control technologies 
that are available for these sources, we have determined that it is 
appropriate to establish in these guidelines specific control levels 
for States to use in determining BART for these sources. We are 
proposing that as a general matter, States must find that for EGUs 
greater than 250 MW at 750 MW power plants subject to BART, the 
appropriate BART emission limitation reflects either at least 95 
percent control, or a comparable performance level of 0.1 to 0.15 lbs 
of SO2 per million BTU range, unless the State has 
persuasive evidence (as discussed below) that an alternative 
determination is justified.
    We are proposing a performance level as an alternative to a 
percentage reduction to account for the difference between coal with 
higher, as opposed to lower, sulfur content. As noted, we received 
comments on the proposed 2001 BART guidelines that the control 
technology presumption should be expressed as a performance level (lb/
million BTU) rather than as a percentage control. In response to these 
comments, we are taking into account the fact that the actual level of 
performance after application of scrubber technologies will be 
influenced not only by the percentage control, but also by the sulfur 
content of the fuel used.
    As discussed above, we believe that this proposal of 95 percent 
control, or a comparable performance level of 0.1 to 0.15 lbs of 
SO2 per million BTU, represents controls that are achievable 
at reasonable cost-effectiveness levels. These control levels are 
functionally equivalent to the 90-95% control levels contained in the 
2001 proposal. However the choice between 95 percent and an emission 
rate in the range of 0.1 to 0.15 lbs/MMBtu better reflects a 
recognition of the differences in overall emissions that are achievable 
by using different coal types. For example, coal boilers in the West 
generally use lower sulfur content Western coals. The low end of the 
range in the 2001 proposal recognized that dry scrubbers employed in 
the West would have difficulty achieving a 95% level of control. 
However, the 2001 proposal did not explicitly recognize that 90% 
control in the West may actually represent a lower overall sulfur 
emission rate, given the lower sulfur content in the coal used. 
Conversely, wet scrubbers employed in the East could easily get 95% 
control or more. But because Eastern coal boilers generally use higher 
sulfur content Eastern coals, the overall sulfur emission rate might 
still remain higher in the East than in the West.
    While emission rates vary by both sulfur content and scrubber type, 
the following table illustrates demonstrated control efficiencies for 
the West and East.
    Emission Rates and Scrubber Control Percentages for Bituminous Coal

   Emission Rates and Scrubber Control Percentages for Bituminous Coal
------------------------------------------------------------------------
Sulfur  Coal  (percent)    Scrubber  (percent)       SO2/MMBtu  (lbs)
------------------------------------------------------------------------
                                  WEST
------------------------------------------------------------------------
              0.7                       90                     0.10
------------------------
              1.0                       90                     0.15
------------------------
                                  EAST
------------------------------------------------------------------------
              2.5                       95                     0.18
              2.5                       96                     0.15
------------------------------------------------------------------------

Assume: 13,000 lb Coal/Btu and 1 MW = 10.5 x 106 Btu/hr, 
from AP-42 \35\
---------------------------------------------------------------------------

    \35\ Examples of SO2 control calculations for various 
sulfur contents in bituminous coal, Note from Todd Hawes to Docket 
OAR-2002-0076, April 8, 2004.
---------------------------------------------------------------------------

    We request comment on whether these control levels are appropriate, 
or whether different levels should be established instead. We also 
request comment on which specific target number in the 0.1 to 0.15 lb/
million BTU range should be considered to represent BART, especially 
for those EGUs that cannot achieve 95 percent control. For whatever 
target levels commenters wish to offer, they should provide 
documentation supporting the basis for their proposals.
    Although we are proposing to establish a requirement that these 
control levels are BART for 250 MW EGUs at greater than 750 MW power 
plants that are subject to BART, States would still have the ability to 
take into account any unique circumstances that support an alternative 
determination. The CAA identifies five factors that the States 
generally must consider in making a BART determination. CAA section 
169A(g)(2). If, in any specific case, the State finds that these 
factors demonstrate that the presumed control levels do not represent 
BART, we propose that the State may make a reasoned determination as to 
the appropriate level of control. If a State chooses to deviate from 
the required level, it must provide documentation supporting and 
explaining its determination.
    Nevertheless, we believe that it would be extremely difficult to 
argue, in any instance, that the above control levels should not be 
determined to be BART for these units at these large power plants. For 
the reasons outlined above, we believe that only in extremely rare and 
unique circumstances could a State determine that such controls are not 
cost effective, or that the visibility impact of such a plant does not 
warrant

[[Page 25201]]

such controls. We also believe that only under extreme circumstances 
would consideration of any of the remaining three factors (energy and 
nonair quality environmental impacts, existing pollution control 
technology in place, and remaining useful life of the source) suggest 
that these control levels are too stringent to be determined to be 
BART. For example, a source might show proof that it will be shutting 
down within the next 5 years. Or a source might be located in a remote 
desert area, where use of water for FGD would deplete an aquifer. As 
discussed above, however, in the vast majority of cases, we believe 
that these control levels should be considered to represent BART.
    In addition, the control levels at issue are based on our 
understanding of the current capabilities of scrubbers, as well as the 
costs faced by the utility industry for installing these controls. We 
recognize that it is possible that capabilities of scrubber 
technologies may improve and it is likely that scrubber costs will 
continue to decline as scrubber technologies improve.\36\ \37\ 
Accordingly, we have added a brief discussion to the reproposed 
guidelines to ensure that States take into account updated information 
on scrubber performance as scrubber technology improves.
---------------------------------------------------------------------------

    \36\ Zipper and Gilroy, Sulfur Dioxide Emissions and Market 
Effects under the Clean Air Act Acid Rain Program (Air and Waste 
Management Association, 1998, vol. 48, pp. 829-37) shows that 
capital costs for FGD fell by 50 percent between 1989 and 1996. See 
http://www.awma.org/journal/ShowAbstract.asp?Year=1998&PaperID=748.
    \37\ See also, Market-Based Advanced Coal Power Systems--Final 
Report (Office of Fossil Energy, US Department of Energy, 1999), 
section 1, at http://fossil.energy.gov/programs/powersystems/publications/marketbasedsystems/.
---------------------------------------------------------------------------

    We also believe that States should find that the control levels 
described above are cost effective for all utility boilers greater than 
250 MW in size, regardless of the size of the power plant at which they 
are located. There appears to be no significant difference in utility 
boilers at power plants that are greater than 750 MW, and those 750 MW 
or less, other than the number of boilers located at the facility. For 
the most part, plants greater than 750 MW generally consist of multiple 
units, many of which are smaller than 750 MW each.\38\ Absent unusual 
circumstances which would lead to substantially higher costs than for 
typical facilities, a utility boiler greater than 250 MW in size should 
be able to achieve either a 95 percent reduction in SO2 
emissions or a comparable performance level of 0.1 to 0.15 lbs/MMBtu at 
a very reasonable cost. We request comment on whether this level of 
control is reasonable for such sources. Such unusual circumstances 
could be similar to the examples cited above with regard to greater 
than 750 MW plants (that a source might show proof that it will be 
shutting down within the next 5 years, or a source might be located in 
a remote desert area, where use of water for FGD would deplete an 
aquifer.) Although the hurdle for not achieving the default control 
level for greater than 750 MW plants is intended to be higher than the 
hurdle for less than 750 MW plants, we are unable to think of an 
example that would apply to 250 MW units and above at one size plant 
but not the other. We request comment on any such examples that might 
exist.
---------------------------------------------------------------------------

    \38\ See http://www.epa.gov/airmarkets/epaimp/#documentation. 
This is the NEEDS (National Electric Energy System) Database for IPM 
V.2.1, NEEDS (National Electric Energy System) Database for IPM 
2003. The NEEDS database contains the generation unit records used 
to construct the ``Model'' plants that represent existing and 
planned/committed units in EPA modeling applications of IPM. NEEDS 
includes basic geographic, operating, air emissions, and other data 
on all the generation units that are represented by ``model'' plants 
in EPA's v. 2.1 update of IPM. See Chapter 4 of the Documentation 
Report (link) for a discussion of the data sources underlying NEEDS.
---------------------------------------------------------------------------

6. Nitrogen Oxide Controls for Utility Boilers
    Background. In addition to being a major source of SO2 
emissions, EGUs and other combustion units are a major source of 
NOX emissions. NOX emissions also contribute to 
regional haze, both through formation of light scattering nitrate 
particles in a manner similar to sulfate formation from SO2 
emissions, but also through promoting the formation of sulfate 
particles. Based on an examination of the contribution to haze in Class 
I areas from the IMPROVE network, SO2 emissions comprise the 
most significant contribution. However, in some areas and at some 
times, the NOX contribution can be greater than the 
SO2 contribution. Also, NOX emissions can be an 
important direct and indirect contributor to PM2.5 formation. In 
addition, in areas with high EGU SO2 and NOX 
contributions, a reduction only of SO2 emissions would 
result in nitrate `substitution' for sulfates, reducing the regional 
haze benefits.\39\
---------------------------------------------------------------------------

    \39\ See http://vista.cira.colostate.edu/improve/Publications/Reports/2000/PDF/Cahpter3final100.pdf. These are summary statistics 
of exctinction by species from the IMPROVE network.
---------------------------------------------------------------------------

    2001 Proposed Rule. In discussing the process for identifying all 
available retrofit emission control techniques in the 2001 proposed 
guidelines, we identified general information sources that address 
NOX control strategies (66 FR 38123). The proposed 
guidelines, however, did not contain a detailed discussion of available 
NOX control strategies for utilities.
    Comments. We received several comments from environmental and 
multi-state organizations requesting that we specifically address 
technologies for control of NOX at BART sources. These 
commenters provided information showing that NOX emissions 
result in the formation of visibility-impairing nitrate particles. In 
addition, these commenters requested that we establish a presumptive 90 
percent removal of emissions of NOX from currently 
uncontrolled utility boilers. The commenters provided information 
regarding the level of visibility impairment in Class I areas, as well 
as in urban areas, created by secondary particles related to emissions 
of NOX. The commenters noted that, while nitrate contributes 
less to visibility impairment, relative to sulfate, on the worst 
impaired days in summer, it has a more significant role in visibility 
impairment in winter when some of the worst days occur. In addition, 
the commenters point out that major reductions in SO2 
emissions, and the ammonium sulfate particles they create in the 
atmosphere, could lead to increases in nitrate particles. The reason 
for this is that reductions in ammonium sulfate particles could ``free 
up'' ammonia, making it available to form ammonium nitrate particles. 
The commenters argued that BART should control SO2 and 
NOX simultaneously.
    In addition to direct visibility concerns in and around Class I 
areas, commenters stated that NOX emissions reductions would 
contribute to improved public health. One commenter noted that 
reductions of NOX emissions from BART sources would result 
in enhanced benefits to ecosystems in high elevation Class I areas. 
Another commenter noted increasing trends in particulate nitrate 
concentrations at several Class I areas and suggested that EPA conduct 
a review of technologies, similar to the ORD report on SO2 
emissions controls, to be used as basis for a presumptive level of 
control.
    Reproposal. We agree that emissions of NOX from sources 
subject to BART, and the resulting nitrate particles formed by 
NOX in the atmosphere, should be appropriately addressed in 
a BART analysis. We also agree with commenters that greater control of 
SO2 at large coal-fired utility plants may result in greater 
availability of NOX in the atmosphere. Recent data from 
EPA's IMPROVE monitoring networks confirms that the contribution of

[[Page 25202]]

nitrates to visibility impairment is significant, and may be 
increasing, at a number of sites in the West.\40\
---------------------------------------------------------------------------

    \40\ See http://wrapair.org/forums/ioc/meetings/030728/index.html (especially presentation by John Vimont, National Park 
Service).
---------------------------------------------------------------------------

    The approach to assessing the available methods for removal of 
NOX differs from the approach used to assess controls for 
removal of SO2. The engineering approach for removal of 
SO2 from existing combustion sources is generally removal 
technology applied to the flue gas stream. For reducing emissions of 
NOX at existing combustion sources, there are two somewhat 
distinct engineering approaches available.\41\ One is to use combustion 
modifications (including careful control of combustion air and/or low-
NOX burners) and the other is removal technology applied to 
the flue gas stream (selective catalytic reduction (SCR) or selective 
non-catalytic reduction (SNCR)). These overall techniques can be 
applied alone or in combination.
---------------------------------------------------------------------------

    \41\ An overview of NOX control technologies is 
available at the following Web site: http://www.fetc.doe.gov/coalpower/environment/nox/index.html.
---------------------------------------------------------------------------

    Unlike the methods for controlling SO2, which overall 
fall within a fairly narrow range of cost effectiveness and control 
efficiencies, the removal efficiencies and costs associated with the 
two overall categories of control techniques for NOX vary 
considerably, depending upon the design and operating parameters of the 
particular boiler being analyzed.\42\ In general combustion controls 
and low-NOX burners are cost effective for utility boilers 
burning sub-bituminous coal, and may be less cost effective for units 
burning lignite.\43\
---------------------------------------------------------------------------

    \42\ See http://www.epa.gov/ttn/catc/products.html#cccinfo (EPA 
Air Pollution Control Cost Manual), section 4 (NOX 
controls), chapter 2.
    \43\ See http://www.epa.gov/airmarkets/epa-ipm/#documentation. 
This is the NEEDS Database for IPM V.2.1, the NEEDS Database for IPM 
2003. The NEEDS database contains the generation unit records used 
to construct the ``model'' plants that represent existing and 
planned/committed units in EPA modeling applications of IPM. The 
NEEDS database includes basic geographic, operating, air emissions, 
and other data on all the generation units that are represented by 
``model'' plants in EPA's v. 2.1 update of IPM. See Chapter 4 of the 
Documentation Report for a discussion of the data sources underlying 
NEEDS. Data on units, their controls and characteristics are also 
part of the NEEDS database.
---------------------------------------------------------------------------

    In this rulemaking, we are proposing that States, in establishing 
BART emission limits for NOX, must, as a general matter, 
require sources to determine BART as discussed below. For sources 
currently using controls such as SCR to reduce NOX emissions 
during part of the year, we are proposing that a State should presume 
in a BART determination that using these same controls year-round would 
be cost effective.\44\ As the most significant costs associated with 
SCR are capital costs, the additional costs of operating this control 
technology throughout the year would be relatively modest.\45\
---------------------------------------------------------------------------

    \44\ In 1998, we issued a rule requiring a number of Eastern 
States to reduce the summertime emissions of NOX from 
sources within these States. 63 FR 57356, October 27, 1998). As a 
result of this rule, 19 States and the District of Columbia have 
required power plants to reduce NOX emissions seasonally.
    \45\ See Status Report on NOX Control Technologies 
and Cost-Effectiveness for Utility Boilers, Northeast States for 
Coordinated Air Use Management and Mid-Atlantic Regional Air 
Management Association, June 1998, at: http://www.nescaum.org/pdf/execsum_nox.pdf.
---------------------------------------------------------------------------

    For all other power plants subject to BART, we believe that States 
should require the lowest emission rate that can be achieved without 
the installation of post-combustion controls. Thus, we are proposing 
that the States must, as a general matter, require these sources to 
achieve a control level of 0.2 lbs/MMBtu.\46\ We are proposing to 
establish such a presumption because for most of the utilities subject 
to this rule, a 0.2 lb/MMBtu emission rate can be generally achieved 
through the use of combustion controls or low-NOX burners. 
We request comment on this emission rate. We also request comment on 
whether another emission rate higher or lower than 0.2 lb/MMBtu 
reflects an emission rate that can generally be achieved through the 
use of combustion controls or low-NOX burners. These 
controls are applicable to most EGUs, are relatively inexpensive,\47\ 
and are already widely applied. We recognize that a small number of the 
largest power plants may need to install an SCR unit to meet this 
control level. In such relatively rare cases, a State, at its 
discretion, may find SCR to be appropriate if the source causes 
visibility impacts sufficiently large to warrant the additional capital 
cost.
---------------------------------------------------------------------------

    \46\ The EPA Clean Air Market Division's ``Cost Tool'' gives 
information on control effectiveness (dollar/ton removed) and 
overall NOX control efficiencies for various control 
technologies.
    \47\ http://www.epa.gov/airmarkets/epa-ipm/#documentation This 
is the Documentation Report (2003 Analyses), and Documentation 
Report (V. 2.1 Update). Data on units, their controls and 
characteristics are also part of the NEEDS database, referenced 
above.
---------------------------------------------------------------------------

    Notwithstanding the general assessment presented above, we ask for 
comment in particular on the question of what rate of NOX 
emissions can be achieved with low NOX burners or advanced 
combustion controls on certain specific types of boilers. For instance, 
we recognize that some wall-fired dry bottom boilers may not be able to 
meet an emissions rate of 0.2 lb/MMBtu without post-combustion 
controls. Similarly, we also recognize that, without post-combustion 
controls, wet bottom, cyclone, and cell burners probably cannot achieve 
a rate of 0.2 lb/MMBtu due to unique design and operational 
characteristics, such as relatively small furnace size or relatively 
large heat release rate. We also seek comment on the impact of coal 
rank on NOX emissions rates that can be achieved without 
post-combustion controls.
    If you choose to comment on any of these issues, please provide 
data or technical information supporting your comments and 
recommendations.
    We believe that States should determine in almost every case that 
these control levels represent a reasonable determination of BART for 
large EGUs. As discussed above, achieving these emissions reductions is 
generally cost effective. In addition, as commenters on the 2001 
guideline noted, nitrates contribute significantly to regional haze. 
Thus, a State considering the costs of meeting these control levels and 
the degree of improvement in visibility should, in most instances, find 
that at a minimum, these controls represent BART. We acknowledge that 
there could be unique or extreme circumstances, for those few of the 
largest EGUs that cannot achieve 0.2 lbs/MMBtu without SCR or SNCR, 
under which a State might find SCR or SNCR to be unreasonable. We 
request comment on what specific circumstances might exist, if any, to 
justify a lesser degree of control. Commenters should provide 
documentation for any such examples.
7. Consideration of Visibility Impacts.
    2001 Proposed Rule. Under the 2001 proposed guidelines, States 
would have been required to use a regional modeling analysis to assess 
the cumulative impact on visibility of the controls selected in the 
engineering analysis. States would use this cumulative impact 
assessment to make a determination of whether the controls, in their 
entirety, provide a sufficient visibility improvement to justify 
installation.
    Comments. We received many comments regarding the cumulative nature 
of our process for considering the degree of visibility improvement. 
These commenters believed that the degree of visibility analysis should 
consider source-specific visibility impacts. These commenters also 
asserted that our process was not consistent with the requirements for 
BART in the CAA.

[[Page 25203]]

    Reproposal. The fifth statutory factor addresses the degree of 
improvement in visibility which may reasonably be anticipated to result 
from the use of control technology. The American Corn Growers decision, 
discussed in detail in section II above, vacated the approach in the 
regional haze rule of requiring States to assess the degree of 
visibility improvement from the imposition of controls on all sources 
subject to BART in a State. We understand the court decision to require 
that we allow for an analysis of impacts that focuses on each 
individual source undergoing a BART determination.
    Therefore, this reproposal focuses on the use of single source 
emissions modeling for assessing the degree of improvement in 
visibility from various BART control levels. For the purpose of the 
BART determination, a State or individual source would run the CALPUFF 
model, or other EPA-approved model, using source-specific and site-
specific data. We recognize that such models may be useful in analyses 
where modeling results alone are not determinative of regulatory 
consequences. We believe that CALPUFF is based on sufficiently sound 
technical grounds to inform regulatory decisions that are based on a 
cumulative weight of evidence such as the statutorily-defined factors 
for consideration in assessing BART for regional haze.
    For sources subject to BART that are located greater than or equal 
to 50 km from all receptors in a Class I area, the State or source 
would run the model at the current allowable emissions level, and then 
again at the post-control emissions level (or levels) being assessed. 
Results would be tabulated for the average of the 20% worst modeled 
days at each receptor. The difference in the resulting level of 
impairment predicted is the degree of improvement in visibility 
expected. For example, if the average impact from the 20% worst days 
for a source's pre-control emission rate for a particular receptor is a 
change of 1.0 deciviews, and its post-control impact is 0.4 deciviews, 
the net visibility improvement is 0.6 deciviews (60 percent). All 
receptors in the Class I area should be analyzed.
    For sources subject to BART that are located less than 50 km from a 
Class I area, the State would use its discretion in determining 
visibility impacts for current allowable versus post-control emissions 
giving consideration to both CALPUFF and other EPA-approved methods 
such as PLUVUEII.\48\ We request comment on this and other possible 
approaches to calculating the degree of visibility improvement expected 
for sources located less than 50 km from a Class I area.
---------------------------------------------------------------------------

    \48\ PLUVUEII is a model used for estimating visual range 
reduction and atmospheric discoloration caused by plumes resulting 
from the emissions of particles, nitrogen oxices, and sulfur oxides 
from a single source. The model predicts the transport, dispersion, 
chemical reactions, optical effects and surface deposition of point 
or area source emissions. It is available at http://www.epa.gov/scram001/tt22.htm#pluvue.
---------------------------------------------------------------------------

    We also note that the proposed methodology is for Regional Haze 
Rule BART determination only; other metrics may be used for BART 
determinations made in response to certification of impairment by a 
Federal Land Manager.
    Alternatively, we are requesting comment on the option of using the 
hourly modeled impacts from CALPUFF and assessing the improvement in 
visibility based on the number of hours above the 0.5 deciview 
threshold for the pre- and post-control emission rates. We also request 
comment on combinations of the proposed and alternative options above. 
For example, the deciview change for each hour of the 20% worst modeled 
days could be assessed. Finally, we request comment on the use of the 
simpler screening version of CALPUFF to do the analysis.

E. Trading Program Guidance

    Background. The regional haze rule allows States the option of 
implementing an emissions trading program or other alternative measure 
instead of requiring BART (40 CFR 51.308(e)(2)). 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.
    2001 Proposed Rule. In the 2001 proposed guidance, we provided an 
overview of the steps involved in developing a trading program 
consistent with 40 CFR 51.308(e)(2). We focused this discussion on 
emission cap and trade programs which we believe will be the most 
common type of economic incentive program (EIP) developed as an 
alternative to BART. The BART guidelines discussed three basic steps 
for cap and trade programs: (1) Developing emission budgets; (2) 
allocating emission allowances to individual sources; and (3) 
developing a system for tracking individual source emissions and 
allowances.
    The proposal noted that an emissions budget generally represents a 
total emissions 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 generally 
preclude interpollutant trading for addressing visibility impairment.
    Once an emissions budget or ``cap'' is set, the next step in an 
emission trading program alternative to BART is to issue allowances to 
individual sources, consistent with the cap. Once the allowances are 
established, it is also necessary to have in place a tracking system to 
ensure that the allowances are met.
    In the 2001 proposed guidelines, we did not include detailed 
recommendations on how to allocate emissions or how to develop a 
tracking system. We noted that it would not be appropriate for us to 
require a particular process and criteria for individual source 
allocations. The 2001 proposal noted that we did, however, agree to 
provide information on allocation processes to State and local 
agencies.
    Comments. Regarding the sources to include in a trading program, 
some commenters suggested that a trading program could be expanded 
beyond the set of BART-eligible sources.
    With regard to the geographic area covered by a trading program for 
BART, the WRAP enquired whether the backstop emissions trading program 
under section 309 of the regional haze rule could be expanded to other 
western States when they submit their section 308 SIPs.
    Comments from the environmental officials for Indian Tribes 
suggested that the guidelines should ensure that some number of 
allowances are set aside for Tribes. Otherwise, the commenters believed 
that a trading program may perpetuate historical barriers to economic 
development in Indian country.
    Reproposal. The reproposed guidelines largely reflect the same 
overall approach and level of detail as the 2001 proposal. We continue 
to believe that the trading program alternative provided by the 
regional haze rule can serve to reduce the administrative burden of the 
program while providing greater long-term environmental benefits. We 
discuss specific issues below.
    Consistent with the regional haze rule, we propose that the 
guidelines continue to require participation by BART sources and allow 
for the option of additional participation. We note that by enlarging 
the universe of sources affected, it will be more likely that more 
sources with relatively low-cost emission reduction potential will be 
included. Therefore broader participation in the program is likely to

[[Page 25204]]

provide greater opportunities for emissions trading and cost savings. 
In addition, regional trading programs can potentially lower 
transaction costs and produce efficiencies by creating uniform 
requirements for firms which operate sources in multiple states. 
Therefore, we believe that States should consider whether it is 
appropriate to design and implement a trading program in conjunction 
with other States. Consistent with this overall approach, in the 
proposed Interstate Air Quality rule (IAQR) (69 FR 4566, January 30, 
2004), we requested comment on whether compliance with the IAQR by 
affected EGUs in affected States would satisfy, for those sources, the 
BART requirements of the CAA, provided that a State imposes the full 
amount of SO2 and NOX emissions reductions on 
EGUs that the IAQR deemed highly cost effective. We are in the process 
of evaluating those comments. Based on our current evaluation, we 
believe the IAQR, as proposed, is clearly better than BART for those 
affected EGUs in the affected States which we propose to cover under 
the IAQR. We thus expect that the final IAQR would satisfy the BART 
requirements for affected EGUs that are covered pursuant to the final 
IAQR.
    We continue to believe that there are no legal or regulatory 
obstacles to expanding the WRAP trading program to other States in the 
WRAP area, provided that technical analyses support such a plan.\49\ 
Consistent with the regional haze rule, such a program must demonstrate 
greater reasonable progress for the Class I areas affected by sources 
in those States. We continue to request comment on how greater 
reasonable progress could be demonstrated, including in particular on 
whether overall visibility improvements across Class I areas, on 
balance, would be sufficient to determine that such a trading program 
is ``better than BART.''
---------------------------------------------------------------------------

    \49\ Letter from Lydia Wegman to Rick Sprott, Director, Utah 
Division of Air Quality, July 31, 2002.
---------------------------------------------------------------------------

    Finally, in 1980, we published regulations addressing visibility 
impairment from one or more sources close to a Class I area. This type 
of visibility impairment is referred to as ``reasonably attributable'' 
impairment under the 1980 regulations. These regulations included a 
requirement for BART to address reasonably attributable impairment in 
40 CFR 51.302. Given that these requirements remain in place even after 
publication of the regional haze rule, one issue needing clarification 
in the BART guidelines is the interface between these BART requirements 
established in 1980 and the requirements for BART under the regional 
haze program, and between the 1980 BART requirements and the provisions 
of a trading program alternative to BART.
    We believe that the proposed guidelines appropriately clarify that 
the 1980 provisions for reasonably attributable impairment, including 
the BART requirement, remain in effect until the BART requirement is 
satisfied. We believe that it is relatively unlikely that many--if 
any--sources will be found to be subject to the 1980 BART requirement, 
given that Federal Land Managers (FLMs) have certified impairment on 
only a few occasions since 1980. Nonetheless, if evidence were to 
suggest that an individual source was causing localized visibility 
impairment, we believe that it would be improper to remove FLMs' and 
States' ability to craft a solution using the tools provided by our 
visibility regulations. We note that the regional haze rule includes 
provisions allowing ``geographic enhancements'' to trading programs 
that can address local visibility concerns up front. Accordingly, we 
continue to believe that States and FLMs have the ability to provide 
assurances to sources that any trading program established for regional 
haze will satisfy all of the BART provisions in EPA's visibility 
regulations.

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), EPA 
must determine whether the regulatory action is ``significant'' and, 
therefore, subject to Office of Management and Budget (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,'' thus 
EPA has submitted this rule to OMB for review. The drafts of the 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 OAR-2002-0076). The EPA has prepared 
the document entitled ``Regulatory Impact Analysis of the Proposed 
Guidelines for Best Available Retrofit Technology Determinations Under 
the Regional Haze Regulations' (RIA) to address the requirements of 
this executive order.
    The RIA presents estimates of the health and welfare benefits and 
the estimated costs of the BART reproposal in 2015 and the estimated 
benefits and costs of the recently signed IAQR proposal (69 FR 4566, 
January 30, 2004). Reviewing these results, it is important to 
recognize that the BART and IAQR proposals are likely to be overlapping 
actions that address many of the same power plants. However, IAQR as 
proposed will affect a 29 State and the District of Columbia region in 
the eastern U.S., and the BART rule is applicable nationwide. In the 
proposed IAQR, we requested comment on whether compliance with the IAQR 
by affected EGUs in affected States would satisfy, for those sources, 
the BART requirements of the CAA, provided that a State imposes the 
full amount of SO2 and NOX emissions reductions 
on EGUs that the IAQR deemed highly cost effective. We are in the 
process of evaluating those comments. Based on our current evaluation, 
we believe the IAQR, as proposed, is clearly better than BART for those 
affected EGUs in the affected States which we propose to cover under 
the IAQR. We thus expect that the final IAQR would satisfy the BART 
requirements for affected EGUs that are covered pursuant to the final 
IAQR. EPA projects that both of these rules are likely to achieve 
significant health and welfare benefits. The BART analysis presented 
here is limited to the electric utility sector because of limitations 
in the data currently available on non-EGU sources. It is also 
important to note that States will make the ultimate decisions as to 
how the BART requirements are implemented.

[[Page 25205]]

Thus, the analysis results reported reflect the EPA's best estimate of 
the benefits and costs of this State determined process.
    Significant health and welfare benefits are likely to occur as a 
result of this rule. Based upon EPA estimates, thousands of premature 
deaths and other serious health effects would be prevented each year. 
The EPA estimates monetized annual benefits of approximately $44 
billion (assuming a 7 percent discount rate) or $47 billion (assuming a 
3 percent discount rate) in 2015 (1999$). Table IV-1 presents the 
primary estimates of reduced incidence of PM health effects for 2015 
for the source-specific BART proposal and the IAQR proposed rule. 
Specifically, the table lists the PM-related benefits associated with 
the reduction of ambient PM.
    In interpreting the results, it is important to keep in mind the 
limited set of effects we are able to monetize. Thus, the benefits 
reported for this rule are understated due to the omissions listed in 
Table II-4.
    Nonetheless, the benefits quantified and monetized are substantial 
both in incidence and dollar value. In 2015, we estimate that reduction 
in exposure to PM2.5 from the BART rule will result in 
approximately 7,400 fewer premature deaths annually associated with 
PM2.5, as well as 3,900 fewer cases of chronic bronchitis, 
9,800 fewer nonfatal heart attacks (acute myocardial infarctions), 
6,000 fewer hospitalizations (for respiratory and cardiovascular 
disease combined), and significant reductions in days of restricted 
activity due to respiratory illness (with an estimate of 4.4 million 
fewer cases). We also estimate substantial health improvements for 
children from reductions in upper and lower respiratory illnesses, 
acute bronchitis, and asthma attacks.
    Table IV-2 presents the estimated monetary value of reductions in 
the incidence of health and welfare effects. PM-related health benefits 
are estimated to be approximately $43 billion (assuming a 7 percent 
discount rate) or $46 billion (assuming a 3 percent discount rate) in 
2015. Estimated annual visibility benefits in the U.S. brought about by 
the BART rule due to visibility improvements in federal Class I areas 
in the Southeast, Southwest, and California are estimated to be 
approximately $940 million in 2015. All monetized estimated values are 
stated in 1999$. Table IV-2 shows the total annual monetized benefits 
for the year 2015. This table also indicates with a ``B'' those 
additional health and environmental effects that we were unable to 
quantify or monetize. These effects are additive to the estimate of 
total benefits, and the EPA believes there is considerable value to the 
public of the benefits that could not be monetized.

                Table IV-1.--Estimated Reductions in Incidence of Health Effects of the BART Rule
                                                    [In 2015]
----------------------------------------------------------------------------------------------------------------
                   Endpoint                               Constituent                  BART        IAQR proposal
----------------------------------------------------------------------------------------------------------------
Premature Mortality--adult...................  PM2.5                                       7,400          13,000
Mortality-infant.............................  PM2.5                                          17              29
Chronic bronchitis...........................  PM2.5                                       3,900           6,900
Acute myocardial infarction--total...........  PM2.5                                       9,800          18,000
Hospital admissions--respiratory.............  PM2.5                                       3,200          *8,100
Hospital admissions--cardiovascular..........  PM2.5                                       2,800           5,000
Emergency room visits, respiratory...........  PM2.5                                       5,300          9,400*
Acute bronchitis.............................  PM2.5                                       9,000          16,000
Lower respiratory symptoms...................  PM2.5                                     110,000         190,000
Upper respiratory symptoms...................  PM2.5                                     350,000         620,000
Asthma exacerbation..........................  PM2.5                                     150,000         240,000
Acute respiratory symptoms (MRADs)...........  PM2.5                                   4,400,000    8,500,000\*\
Work loss days...............................  PM2.5                                     740,000       1,300,000
School loss days.............................  O\3\                                         \**\        390,000
----------------------------------------------------------------------------------------------------------------
MRADs = minor restricted activity days.
*Includes estimates for ozone health effects. Although ozone health benefits occur with the BART proposal, ozone
  health effects are not estimated.
** School loss days are not estimated for BART.

    A listing of the benefit categories that could not be quantified or 
monetized in our estimate is provided in Table IV-3. Major benefits not 
quantified for this proposed rule include ozone health benefits, the 
value of increases in yields of agricultural crops and commercial 
forests, the value of improvements in visibility in places where people 
live and work and recreational areas outside of federal Class I areas, 
and the value of reductions in nitrogen and acid deposition and the 
resulting changes in ecosystem functions.
    In summary, EPA's primary estimate of the annual benefits of the 
rule is approximately $44 + B billion (assuming a 7% discount rate) or 
$47 + B billion (assuming a 3 percent discount rate) in 2015. These 
estimates account for growth in the willingness to pay for reductions 
in environmental health risks due to growth in real gross domestic 
product (GDP) per capita between the present and 2015.

         Table IV-2.--Results of Human Health and Welfare Benefits Valuation for the Proposed BART Rule
                                         [Millions of 1999 dollars] a b
----------------------------------------------------------------------------------------------------------------
                                 Endpoint                                          BART          IAQR Proposalf
----------------------------------------------------------------------------------------------------------------
Premature mortality c
     Long-term exposure, (adults, >30yrs)
        3% discount rate..................................................            $43,000            $77,000
        7% discount rate..................................................             40,000             72,000

[[Page 25206]]

 
    Long-term exposure (child, < 1 yr)....................................                100                180
Chronic bronchitis (adults, 26 and over)..................................              1,500              2,700
Non-fatal myocardial infarctions
    3% discount rate......................................................                810              1,500
    7% discount rate......................................................                790              1,400
Hospital Admissions from Respiratory Causes...............................                 55               e130
Hospital Admissions from Cardiovascular Causes............................                 59                110
Emergency Room Visits for Asthma..........................................                1.5              e 2.6
Acute bronchitis (children, 8-12).........................................                3.3                5.7
Lower respiratory symptoms (children, 7-14)...............................                1.7                3.0
Upper respiratory symptoms (asthmatic children, 9-11).....................                 16                 17
Asthma exacerbations......................................................                5.8                 10
Work loss days (adults, 18-65)............................................                 97                170
Minor restricted activity days (adults, age 18-65)........................                230              e 440
School absence days (children, age 6-11)..................................                (e)                 28
Worker productivity (outdoor workers, age 18-65)..........................                (e)                 17
Recreational visibility (SE, SW, and CA Class I areas)....................                940              1,400
Monetized Total d.........................................................
    Base estimate
        3% discount rate..................................................         47,000 + B           e 84,000
        7% discount rate..................................................         44,000 + B           e 79,000
----------------------------------------------------------------------------------------------------------------
\a\ Monetary benefits are rounded to two significant digits.
\b\ Monetary benefits are adjusted to account for growth in real GDP per capita between 1990 and the analysis
  year (2015).
\c\ Valuation assumes the 5 year distributed lag structure described earlier. Results reflect the use of two
  different discount rates; a 3 percent rate that is recommended by EPA's Guidelines for Preparing Economic
  Analyses (U.S. EPA, 2000b) and OMB's Circular A-4 (OMB, 2003) and 7 percent which is also recommended by OMB's
  Circular A-4 (OMB, 2003).
\d\ B represents the monetary value of the nonmonetized health and welfare benefits. A detailed listing of
  unquantified PM, ozone, and mercury related health effects is provided in Table IV-4.
\e\ Results presented for the IAQR proposal include benefits associated with modeled ozone reductions. Ozone-
  related benefits are not generated for BART.
\f\ The estimated benefits for the IAQR proposal are based upon a control scenario for EGU sources only in the
  29 State + DC proposed IAQR region.

Costs of the Proposed BART Rule
    EPA modeled the costs and economic impacts to the EGU sector 
anticipated to result from the source-specific BART requirements. 
Modeling assumptions for the SO2 affected units included the 
choice of meeting a 0.1 lbs/mmBtu emission rate or achieving 90 percent 
reductions from base case emissions. Affected units were also required 
to meet a 0.2 lbs/mmBtu emission rate limit for NOX. In the 
model, EPA required controls only on BART-eligible units, a subset 
representing 179 GW out of about 305 GW total coal-fired U.S. 
generation. BART-eligible units were defined as units greater than 250 
MW that were online after August 7, 1962 and under construction prior 
to August 7, 1977. No additional necessary controls were assumed for 
any units within the five WRAP 309 States of UT, AZ, WY, OR or NM that 
have existing agreements to achieve reduction goals. Also, because of 
modeling limitations, no additional reductions were assumed from units 
with existing scrubbers, even if they were performing at less than 90 
percent removal. This assumption, the assumption of 90 percent removal 
rather than the proposed 95 percent removal rate, and an analysis that 
focuses on EGU sources only, are limitations of the analysis that would 
tend to understate the estimated costs, emission reductions, and 
benefits of the rule.
    Based upon the foregoing modeling assumptions, the EPA estimates 
the annual costs of the BART rule to be $3.9 billion in 2015 (1999 
dollars). The costs are estimated using a discount rate that 
approximates the cost of capital for firms in the EGU industry and 
ranges from 5.34 to 6.74 percent.
Benefit-Cost Comparison
    The estimated annual social benefits of the BART rule are compared 
to the annual estimated cost to implement the proposed rule in Table 
IV-3.

 Table IV-3.--Summary of Annual Benefits, Costs, and Net Benefits of the
                            BART Rule in 2015
                       [Billions of 1999 dollars]
------------------------------------------------------------------------
                                                                  IAQR
                     Description                        BART    proposal
                                                                    e
------------------------------------------------------------------------
Social costs a......................................      $3.9      $3.7
Social benefits b c.................................      47+B      84+B
Ozone-related benefits..............................         f     f 0.1
PM-related health benefits..........................        46      82.3
Visibility benefits.................................       0.9       1.4
Net benefits (benefits-costs) a b c d...............      43+B      80+B
Net benefits (benefits-costs) a c d g...............      40+B     75+B
------------------------------------------------------------------------
\a\ Note that costs are the annual total costs of reducing pollutants
  including NOX and SO2. Costs of the rules are estimated using the
  Integrated Planning Model (IPM) assuming discount rates that
  approximate the cost of capital for firms operating EGUs ranging from
  5.34 to 6.74 percent.
\b\ As the table indicates, total benefits are driven primarily by PM-
  related health benefits. Benefits in this table are associated with
  NOX and SO2 reductions. Benefits presented assume a 3% discount rate
  for monetization.
\c\ Not all possible benefits or disbenefits are quantified and
  monetized in this analysis. B is the sum of all unquantified benefits
  and disbenefits. Potential benefit categories that have not been
  quantified and monetized are listed in Table IV-4.

[[Page 25207]]

 
\d\ Net benefits are rounded to the nearest billion. Columnar totals may
  not sum due to rounding.
\e\ The estimated IAQR proposal benefits and costs relate to a control
  strategy for EGU sources only in the 29 + DC State IAQR proposed
  region.
\f\ Ozone health benefits will result from the BART rule and IAQR
  proposal, but monetary benefits are estimated for the IAQR proposal
  only.
\g\ Benefits presented assume a 7% discount rate for monetization.

    EPA estimates the costs of implementing the rule at $3.9 billion in 
2015. Thus, the annual quantified net benefits (social benefits minus 
social costs) of the program in 2015 are approximately $40 + B billion 
(assuming a 7 percent discount rate for benefits) or $43 + B billion 
(assuming a 3 percent discount rate for benefits). Therefore, 
implementation of the proposed rule is expected to provide society with 
a net gain in social welfare based on economic efficiency criteria.
    Every benefit-cost analysis examining the potential effects of a 
change in environmental protection requirements is limited to some 
extent by data gaps, limitations in model capabilities (such as 
geographic coverage), and uncertainties in the underlying scientific 
and economic studies used toconfigure the benefit and cost models.

     Table IV-4.--Additional Nonmonetized Benefits of the BART Rule
------------------------------------------------------------------------
             Pollutant                      Unquantified effects
------------------------------------------------------------------------
Ozone Health......................  Premature mortality a.
                                    Increased airway responsiveness to
                                     stimuli.
                                    Inflammation in the lung.
                                    Chronic respiratory damage.
                                    Premature aging of the lungs.
                                    Acute inflammation and respiratory
                                     cell damage.
                                    Increased susceptibility to
                                     respiratory infection.
                                    Non-asthma respiratory emergency
                                     room visits.
Ozone Welfare.....................  Decreased yields for commercial
                                     forests.
                                    Decreased yields for fruits and
                                     vegetables.
                                    Decreased yields for commercial and
                                     non-commercial crops.
                                    Damage to urban ornamental plants.
                                    Impacts on recreational demand from
                                     damaged forest aesthetics.
                                    Damage to ecosystem functions.
PM Health.........................  Low birth weight.
                                    Changes in pulmonary function.
                                    Chronic respiratory diseases other
                                     than chronic bronchitis.
                                    Morphological changes.
                                    Altered host defense mechanisms.
                                    Non-asthma respiratory emergency
                                     room visits.
PM Welfare........................  Visibility in many Class I areas.
                                    Residential and recreational
                                     visibility in non-Class I areas.
                                    Soiling and materials damage.
                                    Damage to ecosystem functions.
Nitrogen and Sulfate Deposition     Impacts of acidic sulfate and
 Welfare.                            nitrate deposition on commercial
                                     forests.
                                    Impacts of acidic deposition to
                                     commercial freshwater fishing.
                                    Impacts of acidic deposition to
                                     recreation in terrestrial
                                     ecosystems.
                                    Reduced existence values for
                                     currently healthy ecosystems.
                                    Impacts of nitrogen deposition on
                                     commercial fishing, agriculture,
                                     and forests.
                                    Impacts of nitrogen deposition on
                                     recreation in estuarine ecosystems.
                                    Damage to ecosystem functions.
Mercury Health....................  Neurological disorders.
                                    Learning disabilities.
                                    Developmental delays.
                                    Potential cardiovascular effects *.
                                    Altered blood pressure regulation *.
                                    Increased heart rate variability *.
                                    Myocardial infarction *.
                                    Potential reproductive effects *.
Mercury Deposition Welfare........  Impact on birds and mammals (e.g.,
                                     reproductive effects).
                                    Impacts to commercial, subsistence,
                                     and recreational fishing.
                                    Reduced existence values for
                                     currently healthy ecosystems.
------------------------------------------------------------------------
a Premature mortality associated with ozone is not separately included
  in this analysis.
* These are potential effects as the literature is either contradictory
  or incomplete.

Deficiencies in the scientific literature often result in the inability 
to estimate quantitative changes in health and environmental effects, 
such as potential increases in fish populations due to reductions in 
nitrogen loadings in sensitive estuaries. Deficiencies in the economics 
literature often result in the inability to assign economic values even 
to those health and environmental outcomes that can be quantified. 
Although these general uncertainties in the underlying scientific and 
economics literatures (that can cause the valuations to be higher or 
lower) are discussed in detail in the economic analyses and its 
supporting documents and references, the key uncertainties that have a 
bearing on the results of the benefit-cost analysis of this proposed 
rule include the following:
     The exclusion of potentially significant benefit 
categories (such as health and ecological benefits of ozone),
     Errors in measurement and projection for variables such as 
population growth and baseline incidence rates,

[[Page 25208]]

     Uncertainties in the estimation of future-year emissions 
inventories and air quality,
     Variability in the estimated relationships of health and 
welfare effects to changes in pollutant concentrations,
     Uncertainties in exposure estimation,
     Uncertainties in the size of the effect estimates linking 
air pollution and health endpoints,
     Uncertainties about relative toxicity of different 
components within the complex mixture,
     Uncertainties in quantifying visibility benefits, and
     Uncertainties associated with the effect of potential 
future actions to limit emissions.

Despite these uncertainties, we believe the benefit-cost analysis 
provides a reasonable indication of the expected economic benefits and 
costs of the proposed rulemaking in future years under a set of 
reasonable assumptions.
    In addition, in valuing reductions in premature fatalities 
associated with PM, we used a value of $5.5 million per statistical 
life. This represents a central value consistent with a range of values 
from $1 to $10 million suggested by recent meta-analyses of the wage-
risk value of statistical life (VSL) literature.\50\
---------------------------------------------------------------------------

    \50\ Mrozek, J.R. and L.O. Taylor, What determines the value of 
a life? A Meta Analysis, Journal of Policy Analysis and Management 
21 (2), pp. 253-270.
---------------------------------------------------------------------------

    The benefits estimates generated for the proposed BART rule are 
subject to a number of assumptions and uncertainties, that are 
discussed throughout the RIA document. As Table IV-2 indicates, total 
benefits are driven primarily by the reduction in premature fatalities 
each year, that account for a significant portion of total benefits. 
For example, key assumptions underlying the primary estimate for the 
premature mortality category include the following:
    (1) Inhalation of fine particles is causally associated with 
premature death at concentrations near those experienced by most 
Americans on a daily basis. Although biological mechanisms for this 
effect have not yet been definitively established, the weight of the 
available epidemiological evidence supports an assumption of causality.
    (2) All fine particles, regardless of their chemical composition, 
are equally potent in causing premature mortality. This is an important 
assumption, because PM produced via transported precursors emitted from 
EGUs may differ significantly from direct PM released from automotive 
engines and other industrial sources, but no clear scientific grounds 
exist for supporting differential effects estimates by particle type.
    (3) The C-R function for fine particles is approximately linear 
within the range of ambient concentrations under consideration. Thus, 
the estimates include health benefits from reducing fine particles in 
areas with varied concentrations of PM, including both regions that are 
in attainment with fine particle standard and those that do not meet 
the standard.
    Although recognizing the difficulties, assumptions, and inherent 
uncertainties in the overall enterprise, these analyses are based on 
peer-reviewed scientific literature and up-to-date assessment tools, 
and we believe the results are highly useful in assessing this 
proposal.
    We were unable to quantify or monetize a number of health and 
environmental effects. A full appreciation of the overall economic 
consequences of today's action requires consideration of all benefits 
and costs expected to result from the proposed rule, not just those 
benefits and costs that could be expressed here in dollar terms. A 
listing of the benefit categories that could not be quantified or 
monetized in our estimate is provided in Table IV-4. These effects are 
denoted by ``B'' in Table IV-3 above and are additive to the estimates 
of benefits.
    The Regulatory Impact Analysis (RIA) supporting this proposal is 
subject to OMB's new Circular A-4, Guidelines for the Conduct of 
Regulatory Analysis. These guidelines set forth a number of analytical 
requirements, most of which overlap with EPA's own Economic Guidelines. 
Because of the consent decree deadline for proposing this rule, the 
Agency has not yet completed all the analyses called for in EPA's and 
OMB's guidelines. Thus, the Agency will be conducting additional 
analytical work and including the results of this work in the public 
docket. We will publish a notice of data availability (NODA) to advise 
the public when these materials are available. In particular, the 
Agency plans to conduct and make available the following analyses:
    (1) Quantitative Analysis of Uncertainty. This rule will have 
economic impacts (benefits plus costs) that total more than $1 billion 
per year. Circular A-4 calls for a formal quantitative analysis of the 
relevant uncertainties about benefits and costs for such rules.
    (2) Cost-effectiveness analysis. In addition to the benefit-cost 
analysis, EPA will conduct a cost-effectiveness analysis because the 
primary benefits of this rule are improved public health.
    (3) Analysis of all regulated entities. Because the Agency already 
has extensive data about electric generating units, the current RIA 
includes a detailed analysis of the power sector. The Agency intends to 
gather additional data about BART-eligible sources in other sectors and 
conduct a more complete analysis of the costs, benefits, and cost-
effectiveness of controls on non-EGU sources covered by the rule.
    (4) Options and incremental analysis. The proposed rule identifies 
the proposed IAQR as an additional regulation that will likely affect 
the number of EGUs that will be covered by this rule. We currently 
believe that the IAQR, as proposed, is ``better than BART'' for those 
affected EGUs in the affected States that we propose to cover under the 
IAQR. We thus expect that the final IAQR would satisfy this rule for 
affected EGUs that are covered pursuant to the final IAQR. EPA intends 
to assess the incremental costs and benefits of this rule, assuming 
that the IAQR, as proposed, is in place.

B. Paperwork Reduction Act

    Today's proposal clarifies but does not modify the information 
collection requirements for BART. Therefore, this action does not 
impose any new information collection burden. However, the OMB has 
previously approved the information collection requirements contained 
in the existing regulations [40 CFR Part 51] under the provisions of 
the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned 
OMB control number 2060-0421, EPA ICR number 1813.04. A copy of the OMB 
approved Information Collection Request (ICR) may be obtained from 
Susan Auby, Collection Strategies Division; U.S. Environmental 
Protection Agency (2822T); 1200 Pennsylvania Ave., NW., Washington, DC 
20460 or by calling (202) 566-1672.
    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

[[Page 25209]]

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 in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's proposed rule on 
small entities, small entity is defined as: (1) A small business as 
defined by the Small Business Administrations' regulations at 13 CFR 
121.201; (2) a small governmental jurisdiction that is a government of 
a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    In the July 1, 1999 regional haze rule (64 FR 35760) and in the 
July 20, 2001 BART guidelines proposal (66 FR 38110) the EPA determined 
that it was not necessary to prepare a regulatory flexibility analysis 
in connection with either action. The EPA also determined that the 1999 
regional haze rule and the 2001 BART guidelines proposal would not have 
a significant economic impact on a substantial number of small entities 
because neither would establish requirements applicable to small 
entities. After considering the economic impacts of today's proposed 
rule on small entities, we certify that this action, proposing new 
regulations to address the BART requirements remanded by the D.C. 
Circuit and reproposing the 2001 BART guidelines proposal, will not 
have a significant economic impact on a substantial number of small 
entities.
    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended 
by the Small Business Regulatory Enforcement Fairness Act (Public Law 
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 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. 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, today's reproposal of the BART rules and 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 
reproposal of the BART 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 
provisions.
    Although not required, a small business impact analysis was 
conducted for entities owning potentially affected BART-eligible EGUs. 
We found that 66 entities (companies or governments) currently own the 
EGU units subject to BART. Of these 66 entities, only two are 
considered small. One of the entities is a small government and the 
other an investor-owned company. The BART rule is not anticipated to 
have an impact on the government entity. The small business may 
experience a cost-to-sales impact of approximately 4 percent.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (Public Law 
104-4) 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 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.'' 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). 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 UMRA, section 205, 2 U.S.C. 1535, of 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.
    The RIA prepared by EPA and placed in the docket for this 
rulemaking is consistent with the requirements of section 202 of the 
UMRA. Furthermore, 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 today's proposal meets the UMRA 
requirement in section 205 to select the least costly and burdensome 
alternative in light of

[[Page 25210]]

the statutory mandate for BART. As explained above, we are proposing 
the BART rule and guideline following the D.C. Circuit's remand of the 
BART provisions in the 1999 regional haze rule. The 1999 regional haze 
rule provides substantial flexibility to the States, allowing them to 
adopt alternative measures such as a trading program in lieu of 
requiring the installation and operation of BART. Today's reproposal 
does not restrict the ability of the States to adopt such alternatives 
measures. The regional haze rule accordingly already provides an 
alternative to BART that gives States the ability to chose the least 
costly and least burdensome alternative.
    The EPA is not reaching a final conclusion as to the applicability 
of UMRA to today's rulemaking action. The reasons for this are 
discussed in the 1999 regional haze rule (64 FR 35762) and in the 2001 
BART guidelines proposal (66 FR 38111-38112). Notwithstanding this, the 
discussion in chapter 8 of the RIA constitutes the UMRA statement that 
would be required by UMRA if its statutory provisions applied. 
Consequently, we continue to believe that it is not necessary to reach 
a conclusion as to the applicability of the UMRA requirements.

E. 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' 
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 EPA consults 
with State and local officials early in the process of developing the 
proposed regulation.
    We have concluded that today's action, reproposing the BART 
guidelines, will not have federalism implications, as specified in 
section 6 of the Executive Order 13132 (64 FR 43255, August 10, 1999), 
because it will not have substantial direct effects on the States, nor 
substantially alter the relationship or the distribution of power and 
responsibilities between the States and the Federal government. 
Nonetheless, we consulted with a wide scope of State and local 
officials, including 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, during the course of 
developing this rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by Tribal officials in the development of regulatory 
policies that have Tribal implications.''
    This proposed rule does not have Tribal implications as defined by 
Executive Order 13175. It does not have a substantial direct effect on 
one or more Indian Tribes. Furthermore, this proposed rule does not 
affect the relationship or distribution of power and responsibilities 
between the Federal government and Indian Tribes. The CAA and the TAR 
establish the relationship of the Federal government and Tribes in 
developing plans to attain the NAAQS, and this proposed rule does 
nothing to modify that relationship. Because this proposed rule does 
not have Tribal implications, Executive Order 13175 does not apply.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    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, Section 5-501 of the Order directs the Agency to 
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 BART proposed rule and guideline are not subject to the 
Executive Order because it does not involve decisions on environmental 
health or safety risks that may disproportionately affect children. The 
EPA believes that the emissions reductions from the strategies proposed 
in this rulemaking will further improve air quality and will further 
improve children's health.

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

    We have conducted a Regulatory Impact Analysis for this reproposed 
rule, that includes an analysis of energy impacts and is contained in 
the docket (Docket No. OAR-2002-0076). According to Executive Order 
13211, ``Actions Concerning Regulations That Significantly Affect 
Energy Supply, Distribution, or Use'', this proposed rule is 
significant because it has a greater than a 1 percent impact on the 
cost of energy production. We are reproposing today's rule following 
the D.C. Circuit's remand of the BART provisions in the 1999 regional 
haze rule. The 1999 regional haze rule provides substantial flexibility 
to the States, allowing them to adopt alternative measures such as a 
trading program in lieu of requiring the installation and operation of 
BART. This rulemaking does not restrict the ability of the States to 
adopt alternative measures. The regional haze rule accordingly already 
provides an alternative to BART that reduces the overall cost of the 
regulation and its impact on the energy supply. The BART proposal 
itself offers flexibility by offering the choice of meeting 
SO2 requirements between an emission rate and a removal 
rate.
    For a State that chooses to require case-by-case BART, today's rule 
would establish default levels of controls for SO2 and 
NOX for EGUs that the State finds are subject to BART. Based 
on its consideration of various factors set forth in the regulations, 
however, a State may conclude that a different level of control is 
appropriate. The States will accordingly exercise substantial 
intervening discretion in implementing the final rule. Additionally, we 
have assessed that the proposed compliance dates will provide adequate 
time for EGUs to install the required emission controls.

[[Page 25211]]

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer Advancement Act 
of 1995 (NTTAA), Public Law No. 104-113, Sec.  12(d)(15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards (VCS) 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 VCS bodies. The NTTAA directs EPA to provide Congress, 
through OMB, explanations when the EPA decides not to use VCS.
    This action does not involve technical standards; thus, EPA did not 
consider the use of any VCS.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898, ``Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations,'' requires 
federal agencies to consider the impact of programs, policies, and 
activities on minority populations and low-income populations. 
According to EPA guidance \51\, agencies are to assess whether minority 
or low-income populations face risks or a rate of exposure to hazards 
that are significant and that ``appreciably exceed or is likely to 
appreciably exceed the risk or rate to the general population or to the 
appropriate comparison group.'' (EPA, 1998)
---------------------------------------------------------------------------

    \51\ U.S. Environmental Protection Agency, 1998. Guidance for 
Incorporating Environmental Justice Concerns in EPA's NEPA 
Compliance Analyses. Office of Federal Activities, Washington, DC, 
April, 1998.
---------------------------------------------------------------------------

    In accordance with E.O. 12898, the Agency has considered whether 
this proposed rule may have disproportionate negative impacts on 
minority or low income populations. Because the Agency expects this 
proposed rule to lead to reductions in pollutant loadings and exposures 
generally, negative impacts to these sub-populations that appreciably 
exceed similar impacts to the general population are not expected.

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: April 15, 2004.
Michael O. Leavitt,
Administrator.

    For the reasons set forth in the preamble, 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 revising paragraphs (b), (c), and 
(e)(1)(ii) to read as follows:


Sec.  51.308  Regional haze program requirements.

* * * * *
    (b) When are the first implementation plans due under the regional 
haze program? Except as provided in Sec.  51.309(c), each State 
identified in Sec.  51.300(b)(3) must submit, for the entire State, an 
implementation plan for regional haze meeting the requirements of 
paragraphs (d) and (e) of this section no later than 3 years after the 
date on which the Administrator promulgates for the State the 
designation for the PM2.5 National Ambient Air Quality 
Standard at 40 CFR Part 81.
    (c) In no event may the State's regional haze implementation plan 
be submitted later than January 31, 2008.
* * * * *
    (e) * * *
    (1) * * *
    (ii) A determination of BART for each BART-eligible source in the 
State that emits any air pollutant which may reasonably be anticipated 
to cause or contribute to any impairment of visibility in any mandatory 
Class I Federal area. All such sources are subject to BART.
    (A) The determination of BART must be based on an analysis of the 
best system of continuous emission control technology available and 
associated emission reductions achievable for each BART-eligible source 
that is subject to BART within the State. In this analysis, the State 
must take into consideration the technology available, the costs of 
compliance, the energy and nonair quality environmental impacts of 
compliance, any pollution control equipment in use 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.
    (B) Appendix Y of this part provides guidelines for conducting the 
analyses under paragraphs (e)(1)(ii) and (e)(1)(ii)(A) 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.
* * * * *
    4. Section 51.309 is amended by revising paragraphs (d)(4)(v), 
(g)(2), and (g)(3) to read as follows:


Sec.  51.309  Requirements Related to the Grand Canyon Visibility 
Transport Commission

* * * * *
    (d) * * *
    (4) * * *
    (v) Provisions for stationary source NOX and PM. The 
plan submission must include a report which assesses emissions control 
strategies for stationary source NOX and PM, and the degree 
of visibility improvement that would result from such strategies. In 
the report, the State must evaluate and discuss the need to establish 
emission milestones for NOX and PM to avoid any net increase 
in these pollutants from stationary sources within the transport 
region, and to support potential future development and implementation 
of a multipollutant and possibly multisource market-based program. The 
plan

[[Page 25212]]

submission must provide for an implementation plan revision, containing 
any necessary long-term strategies and BART requirements for stationary 
source PM and NOX (including enforceable limitations, 
compliance schedules, and other measures) by no later than January 31, 
2008.
* * * * *
    (g) * * *
    (2) In a plan submitted no later than January 31, 2008, provide a 
demonstration of expected visibility conditions for the most impaired 
and least impaired days at the additional mandatory Class I Federal 
area(s) based on emissions projections from the long-term strategies in 
the implementation plan. This demonstration may be based on assessments 
conducted by the States and/or a regional planning body.
    (3) In a plan submitted no later than January 31, 2008, provide 
revisions to the plan submitted under (c) of this section, including 
provisions to establish reasonable progress goals and implement any 
additional measures necessary to demonstrate reasonable progress for 
the additional mandatory Federal Class I areas. These revisions must 
comply with the provisions of Sec.  51.308(d)(1)-(4).
* * * * *
    5. Appendix Y to Part 51 to read is added to read as follows:

Appendix Y to Part 51--Guidelines for BART Determinations Under the 
Regional Haze Rule

Table of Contents

I. Introduction and Overview
    A. What is the purpose of the guidelines?
    B. 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?
    E. What are the BART requirements in EPA's regional haze 
regulations?
    F. Do States have an alternative to requiring BART controls at 
specific facilities?
    G. What is included in the guidelines?
    H. Who is the target audience for the guidelines?
    J. Do EPA regulations require the use of these 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 the BART categories
    2. Step 2: Identify the start-up dates of the 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''
IV. The BART Determination: 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. How does a BART review relate to maximum achievable control 
technology (MACT) standards under CAA section 112?
    E. 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?
    3. Step 3: How do I develop a ranking of the technically 
feasible alternatives?
    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 should I consider visibility impacts in the BART 
determination?
    F. How do I select the ``best'' alternative, using the results 
of Steps 1 through 5?
    1. Summary of the impacts analysis
    2. Selecting a ``best'' alternative
    3. In selecting a ``best'' alternative, should I consider the 
affordability of controls?
    4. SO2 limits for utility boilers
    5. NOX limits for utility boilers
V. Enforceable Limits / Compliance Date
VI. 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, we 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 Sec. Sec.  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--U.S. 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, Sec. Sec.  81.401 through 81.437, and you 
can find a map of the Class I areas at the following internet site: 
http://

[[Page 25213]]

www.epa.gov/ttn/oarpg/ t1/fr--notices/classimp.gif.
    The CAA establishes a national goal of eliminating man-made 
visibility impairment from all Class I areas. 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?

    1. 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 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) but which had not been in 
operation for more than 15 years (that is, not in operation as of 
August 7, 1962).
    2. 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:
    (a) The costs of compliance,
    (b) The energy and non-air quality environmental impacts of 
compliance,
    (c) Any existing pollution control technology in use at the source,
    (d) The remaining useful life of the source, and
    (e) The degree of visibility improvement which may reasonably be 
anticipated from the use of BART.
    3. The CAA further requires States to make BART emission 
limitations part of their SIPs. As with any SIP revision, States must 
provide an opportunity for public comment on the BART determinations, 
and EPA's action on any SIP revision will be subject to judicial 
review.

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

    1. We addressed the problem of visibility in two phases. In 1980, 
we 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 Sec. Sec.  51.300 through 
51.307.
    2. On July 1, 1999, we 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 slightly 
modified 40 CFR 51.300 through 51.307, including the addition of a few 
definitions in Sec.  51.301, and added new Sec. Sec.  51.308 and 
51.309.

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

    1. In the July 1, 1999 rulemaking, we added a BART requirement for 
regional haze. You will find the BART requirements in 40 CFR 51.308(e). 
Definitions of terms used in 40 CFR 51.308(e)(1) are found in Sec.  
51.301.
    2. 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 the 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 factors:

--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, the 
remaining useful life of the source, and the degree of visibility 
improvement that may be expected from available control technology.

    3. After 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 may 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 Requiring BART Controls at Specific 
Facilities?

    1. States are given the option under 40 CFR 51.308(e)(2) of 
adopting an alternative approach to requiring controls on a case-by-
case basis for each source subject to BART. If a State chooses to adopt 
alternative measures, such as an emissions trading program, under 40 
CFR 51.308(e)(2)(i) the State must demonstrate 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) A list of all BART-eligible sources;
    (b) 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;
    (c) An analysis of the degree of visibility improvement that would 
result from the alternative program in each affected Class I area.
    States must ensure 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

[[Page 25214]]

may include sources not subject to BART. A State may also work together 
with other States to develop a common trading program. Under 40 CFR 
51.308(e)(2) States must also 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 it 
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?

    1. 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).
    2. The BART analysis process, and the contents of these guidelines, 
are as follows:
    (a) Identification of all BART-eligible sources. Section II of 
these guidelines outlines a step-by-step process for identifying BART-
eligible sources.
    (b) 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.
    (c) The BART determination process. For each source subject to 
BART, the next step is to conduct an 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. This 
step also requires taking into account the degree of visibility 
improvement that would be achieved in each affected Class I area as a 
result of the emissions reductions achievable from sources subject to 
BART. The visibility impacts analysis must take into account the degree 
of improvement in visibility from the emissions reductions from the 
``best technologies'' identified. For each source, a ``best system of 
continuous emission reduction'' will be selected based upon these 
analyses. Procedures for the BART determination step are described in 
section IV of these guidelines.
    (d) Emissions limits. States must establish enforceable limits, 
including a deadline for compliance, for each source subject to BART. 
Considerations related to these limits are discussed in section VI of 
these guidelines.
    (e) Considerations in establishing a trading program alternative. 
General guidance on how to develop an emissions trading program 
alternative is contained in section VII of these guidelines.

H. Who Is the Target Audience for the Guidelines?

    1. The guidelines are written primarily for the benefit of State, 
local and Tribal agencies, and describe 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. We also recognize that much of the data collection, 
analysis, and rule development may be performed by Regional Planning 
Organizations, for adoption within each SIP or TIP.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    2. The preamble to the 1999 regional haze rule discussed at length 
the issue of Tribal implementation. As explained there, requirements 
related to visibility are among the programs for which Tribes may be 
determined eligible and receive authorization to implement under the 
``Tribal Authority Rule'' (``TAR'') (40 CFR 49.1 through 49.11). Tribes 
are not subject to implementation plan deadlines and may use a modular 
approach to CAA implementation. We believe there are very few BART-
eligible sources located on Tribal lands. Where such sources exist, the 
affected Tribe may apply for delegation of implementation authority for 
this rule, following the process set forth in the TAR.

I. Do EPA Regulations Require the Use of These Guidelines?

    Section 169A(b) requires us to issue these guidelines for States to 
follow in establishing BART emission limitations for fossil-fuel fired 
generating power plants having a capacity in excess of 750 megawatts. 
This document is intended to fulfill that requirement. These guidelines 
also establish procedures that States must follow in establishing BART 
emission limitations for all other BART sources. Under 40 CFR 
308(e)(1)(ii)(B), we are requiring States to follow these guidelines in 
all BART determinations. We believe this approach will promote 
equitable application of the BART requirement to source owners with 
similar sources in different States.

II. How To Identify BART-Eligible Sources

    This section provides guidelines on how to identify BART-eligible 
sources. A BART-eligible source is an existing stationary source in any 
of 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 the 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.
    Figure 1. How to determine whether a source is BART-eligible:
    Step 1: Identify emission units in the BART categories.
    Does the plant contain emissions units in one or more of the 26 
source categories?

 [rtarr2]         No                  [rtarr2]           Stop
 [rtarr2]         Yes                 [rtarr2]           Proceed to Step
                                                          2
 

    Step 2: Identify the start-up dates of these emission units.
    Do any of these emissions units meet the following two tests?
    In existence on August 7, 1977 and, began operation after August 7, 
1962.

 [rtarr2]         No                  [rtarr2]           Stop
 [rtarr2]         Yes                 [rtarr2]           Proceed to Step
                                                          3
 

    Step 3: Compare the potential emissions from these emission units 
to the 250 ton/yr cutoff.
    Identify the ``stationary source'' that includes the emission units 
you identified in Step 2.
    Add the current potential emissions from all the emission units 
identified in Steps 1 and 2 that are included within the ``stationary 
source'' boundary.

[[Page 25215]]

    Are the potential emissions from these units 250 tons per year or 
more for any visibility-impairing pollutant?

 [rtarr2]         No                  [rtarr2]           Stop
 [rtarr2]         Yes                 [rtarr2]           These emissions
                                                          units comprise
                                                          the ``BART-
                                                          eligible
                                                          source.''.
 

1. Step 1: Identify Emission Units in the BART Categories
    1. 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,
(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.
    2. Some plants 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 an electric steam generating 
plant and a coal cleaning plant. You would identify emission units 
associated with the electric steam generating plant and the coal 
cleaning plant, because they are listed categories, but not the 
mine, because coal mining is not a listed category.

    3. 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:
    (1) ``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. This definition also includes those plants that 
cogenerate steam and electricity. Also, consistent with other EPA 
rules, the definition only includes those plants that generate 
electricity for sale.

    Example: A 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 are not ``steam electric plants'' because they typically do 
not make steam.
    (2) ``Fossil-fuel boilers of more than 250 million BTU/hr heat 
input.'' We interpret this category title to cover only those boilers 
that are individually greater than 250 million BTU/hr. However, an 
individual boiler smaller than 250 million BTU/hr should be subject to 
BART if it is part of a process description at a plant that is in a 
different BART category--for example, a boiler at a chemical process 
plant.
    Also, you should consider a multi-fuel boiler to be a fossil-fuel 
boiler if it burns at least 50 percent fossil fuels. You may take 
federally enforceable operational limits into account in determining 
whether a multi-fuel boiler's fossil fuel capacity exceeds 250 million 
Btu/hr.
    (3) ``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.
    (4) ``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.
    (5) Charcoal production facilities.'' We interpret this category to 
include charcoal briquet manufacturing and activated carbon production.
    (6) ``Chemical process plants'' and pharmaceutical manufacturing. 
Consistent with past policy, we interpret the category ``chemical 
process plants'' to include those facilities within 2-digit SIC 28. 
Accordingly, we interpret the term ``chemical process plants'' to 
include pharmaceutical manufacturing facilities.
    (7) ``Secondary metal production.'' We interpret this category to 
include nonferrous metal facilities included within SIC code 3341, and 
secondary ferrous metal facilities that we also consider to be included 
within the category ``iron and steel mill plants.''
2. Step 2: Identify the Start-up Dates of the Emission Units
    1. 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?

    2. The regional haze rule 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.


[[Page 25216]]


    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.


Emissions units of this size for which construction commenced 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.
    3. Sources are not BART-eligible if the only change at the plant 
during the relevant time period 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?

    1. 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?'

    2. 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.
    3. 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 Sec. Sec.  
60.15 (f)(1) through (3) of this title.'' [40 CFR 51.301]. ``Sec. Sec.  
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.
    4. 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. You need consider as possible 
reconstructions only those emissions units with the potential to emit 
more than 250 tons per year of any visibility-impairing pollutant.
    5. 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?

    1. 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.
    2. 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 BART requirements in the CAA 
do not appear to provide any exemption for sources which were modified 
since 1977. Therefore we believe that the best interpretation of the 
CAA visibility provisions is that a subsequent modification does not 
change a unit's construction date for the purpose of BART 
applicability. Accordingly, an emissions unit which began operation 
within the 1962-1977 time window, but was modified after August 7, 
1977, is BART-eligible. However, 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.'' 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 the level of control that is already in place and may 
find that the level of controls are already consistent with BART.
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:
    (1) Sulfur dioxide (SO2),
    (2) Nitrogen oxides (NO\2\),
    (3) Particulate matter. (You may use PM10 as the 
indicator for particulate matter. We do not recommend use of total 
suspended particulates (TSP). Emissions of PM10 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.), and
    (4) Volatile organic compounds (VOC).

Can States Establish De Minimis Levels of Emissions for Pollutants at 
BART-Eligible Sources?

    In order to simplify BART determinations, States may choose to 
identify de minimis levels of pollutants at BART-eligible sources. De 
minimis values should be identified with the purpose of excluding only 
those

[[Page 25217]]

emissions so minimial that they are unlikely to contribute to regional 
haze. Any de minimis values that States consider must not be higher 
than the PSD applicability levels: 40 tons/yr for SO2, 
NOX and VOC, and 15 tons/yr for PM10.

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.


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 (and considering all federally 
enforceable permit limits).

    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.

How Do I Identify Whether a Plant Has More Than One ``Stationary 
Source?''

    1. 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.'' \3\ The rule further defines 
``building, structure or facility'' as:
---------------------------------------------------------------------------

    \3\ 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).
    2. In applying this definition, it is necessary to determine which 
facilities are located on ``contiguous or adjacent properties.'' Within 
this contiguous and adjacent area, it is also necessary to group those 
emission units that are under ``common control.'' We note 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.
    3. For emission units within the ``contiguous or adjacent'' 
boundary and under common control, you must group emission units that 
are within the same industrial grouping (that is, associated with the 
same 2-digit Standard Industrial Classification (SIC) code).\4\ 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. The ``2-digit SIC test'' applies in the same 
way as the test is applied in the major source NSR programs.\5\
---------------------------------------------------------------------------

    \4\ We recognize that we are in a transition period from the use 
of the SIC system to a new system called the North American Industry 
Classification System (NAICS). For purposes of identifying BART-
eligible sources, you may use either 2-digit SICS or the equivalent 
in the NAICS system.
    \5\ Note: The concept of support facility used for the NSR 
program applies here as well. 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 
the facilities fall within separate SIC codes. For purposes of BART 
reviews, however, such support facilities (a) must be within one of 
the 26 listed source categories and (b) must have been in existence 
as of August 7, 1977, and (c) must not have been in operation as of 
August 7, 1962.
---------------------------------------------------------------------------

    4. For purposes of the regional haze rule, you must 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 at each BART-eligible source.

    Example: A stationary source comprises the following two 
emissions units, with the following potential emissions:
    Emissions unit A--200 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 300 tons/
yr, 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 at each emissions unit 
are less than 250 tons/yr each.

    Example: The total potential emissions, obtained by adding the 
potential emissions of all emission units in a listed category 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/yr, no individual 
regulated pollutant exceeds 250 tons/yr and this source is not BART-
eligible.

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

    Once you have identified and compiled your list of BART-eligible 
sources, you need to determine which of those sources may cause or 
contribute to any visibility impairment in a Class I area (i.e., which 
of those sources should be subject to BART). First, you may choose to 
consider that all of the BART-eligible sources in your State are 
subject to BART (i.e., none are exempt). Alternatively, you may submit 
to EPA a demonstration, based on overall visibility impacts, that the 
sum of all emissions from BART-eligible sources

[[Page 25218]]

in your State do not cause or contribute to any visibility impairment 
in a Class I area (i.e., none of your BART-eligible sources are subject 
to BART; all are exempt).
    However, if you cannot or choose not to demonstrate to EPA that the 
sum total of emissions from BART-eligible sources in your State do not 
cause or contribute to any visibility impairment in Class I areas, and 
if you also choose not to consider that all BART-eligible sources 
should automatically be subject to BART, you may use the third 
exemption option, individual source modeling. The individual source 
exemption process is presented below.
1. Individual Source Exemption Process (CALPUFF Modeling)
    You may elect to do the modeling or to require the source to do the 
modeling. If the source is making the visibility impact determination, 
you should review and approve or disapprove of the source's analysis 
before making the exemption determination. For each BART-eligible 
source:
    a. Submit a Modeling protocol to EPA. If you are having your 
sources do the modeling, they should prepare a modeling protocol that 
is acceptable to you and the EPA. If modeling is to be conducted for 
receptors greater than 200 km from the emission unit, a modeling 
protocol is required. Some critical items to include are meteorological 
and terrain data, as well as source-specific information (stack height, 
temperature, exit velocity, elevation, and allowable emission rate of 
applicable pollutants), and receptor data from appropriate Class I 
areas. Distances from the actual BART-eligible emission unit that is 
modeled to each Class I area should be measured from the nearest point 
in the Class I area. All receptors in the Class I area should be 
analyzed. The State should bear in mind that, for sources 50 km from a 
Class I area, some receptors within that Class I area may be less than 
50 km from the source while other receptors within that same Class I 
area may be greater than 50 km from the same source; this situation may 
result in two different modeling approaches for the same Class I area 
and source, depending upon the State's chosen method for modeling 
sources less than 50 km.
    b. Once the modeling methodology is approved, for each Class I 
area:
    i. Run CALPUFF for receptors in the Class I area that are greater 
than or equal to 50 km from the source. For CALPUFF setup 
(meteorological data and parameter settings), we recommend following 
EPA's Interagency Workgroup on Air Quality Modeling (IWAQM) Phase 2 
Summary Report and Recommendations for Modeling Long Range Transport 
Impacts.
    (a) Tabulate Results --Calculate 24-hr values for each receptor as 
the change in deciviews compared against natural visibility conditions.
    (b) Make the exemption determination--If the change in the maximum 
24-hour value at any receptor is greater than 0.5 deciviews, the source 
is subject to BART.
    ii. For sources not subject to BART under i. above and where the 
distance from the BART-eligible unit modeled to the nearest receptor at 
any Class I area is less than 50 km:
    (1) You will need to determine whether or not to exempt the source. 
Use your discretion for determining visibility impacts giving 
consideration to CALPUFF and to other EPA-approved methods.
    Note that each of the modeling options may be supplemented with 
source apportionment data or source apportionment modeling that is 
acceptable to the State and the EPA regional office.

IV. The BART Determination: 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.
    The BART analysis requirement in 40 CFR 51.308(e)(1)(ii)(A) has two 
parts: an engineering analysis and a visibility impacts analysis. This 
section of the guidelines addresses the requirements for the 
engineering analysis. Your engineering analysis identifies the best 
system of continuous emission reduction taking into account:

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

    We discuss the requirement for a visibility impacts analysis below 
in section V.
(4) How Does a BART Engineering Analysis Compare to a BACT Review Under 
the PSD Program?
    The process for a BART analysis is 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 requires that all available control technologies be ranked in 
descending order of control effectiveness (i.e. percent control). You 
must examine the most stringent alternative first. That alternative is 
selected as the ``best'' unless you demonstrate and document that the 
alternative cannot be justified based upon the consideration of the 
five statutory factors discussed below. If you eliminate the most 
stringent technology in this fashion, you then consider the next most 
stringent alternative, and so on.
    Although very similar in process, BART reviews differ in several 
respects from the BACT review 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 from source to 
source. 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,

[[Page 25219]]

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.
(5) 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 \6\ are 300 tons/yr of NOX, 200 tons/yr of 
SO2, and 150 tons/yr of primary particulate. Emissions 
unit A emits 200 tons/yr of NOX, 100 tons/yr of 
SO2, and 100 tons/yr 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.
---------------------------------------------------------------------------

    \6\ That is, emission units that were in existence on August 7, 
1977 and which began actual operation on or after August 7, 1962.
---------------------------------------------------------------------------

D. How Does a BACT Review Relate to Maximum Achievable Control 
Technology (MACT) Standards Under CAA Section 112?

    For VOC and PM sources subject to MACT standards, States may 
streamline the analysis by including a discussion of the MACT controls 
and whether any major new technologies have been developed subsequent 
to the MACT standards. We believe that there are many VOC and PM 
sources that are well controlled because they are regulated by the MACT 
standards, which EPA developed under CAA section 112. For a few MACT 
standards, this may also be true for SO2. Any source subject 
to MACT standards must meet a level that is as stringent as the best-
controlled 12 percent of sources in the industry. Examples of these 
hazardous air pollutant sources which effectively control VOC and PM 
emissions include (among others) secondary lead facilities, organic 
chemical plants subject to the hazardous organic NESHAP (HON), 
pharmaceutical production facilities, and equipment leaks and 
wastewater operations at petroleum refineries. We believe that, in many 
cases, it will be unlikely that States will identify emission controls 
more stringent than the MACT standards without identifying control 
options that would cost many thousands of dollars per ton. Unless there 
are new technologies subsequent to the MACT standards which would lead 
to cost-effective increases in the level of control, you may rely on 
the MACT standards for purposes of BART. We believe that the same 
rationale also holds true for emissions standards developed for 
municipal waste incinerators under CAA section 111(d).
    Where you are relying on MACT standards to achieve a BART level of 
control, you must provide the public with a discussion of how you have 
reached the conclusion that it is appropriate to rely on MACT 
standards, and a discussion of whether any new technologies are 
available subsequent to the date the MACT standards were published.

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

    The five steps are:
STEP 1--Identify All \7\ Available Retrofit Control Technologies,
---------------------------------------------------------------------------

    \7\ 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--Evaluate Visibility Impacts.
1. STEP 1: How do I Identify all Available Retrofit Emission Control 
Techniques?
    1. 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.
    2. Where an 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.\8\ 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.
---------------------------------------------------------------------------

    \8\ 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 an NSPS level was 
selected. In the 20 year period since this guidance was developed, 
there have been advances in SO2 control technologies as 
well as technologies for the control of other pollutants, 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 an NSPS level of control, we 
believe that you should only reach this conclusion based upon an 
analysis of the full range of control options.
---------------------------------------------------------------------------

    3. 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

[[Page 25220]]

result in lower ``production-specific'' emissions,
     Use of, (and where already in place, improvement in the 
performance of) add-on controls, such as scrubbers, 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.
    4. 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 using 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.
    5. 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.
    6. 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.
    7. In some cases, retrofit design changes may be available for 
making a given production process or emissions unit inherently less 
polluting.\9\ (Example: use of low NOX burners). 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.
---------------------------------------------------------------------------

    \9\ Because BART applies to existing sources, we recognize that 
there will probably be far fewer opportunities to consider 
inherently lower-emitting processes than may be available for NSR.
---------------------------------------------------------------------------

    8. 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. (Example: use of low NOX burner and add-on 
SCR for NOX control).
    9. 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.

    10. 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
     The EPA's NSR bulletin board--http://www.epa.gov/ttn/nsr;
     Department of Energy's Clean Coal Program--technical 
reports;
     The NOX Control Technology ``Cost Tool''--Clean 
Air Markets Division Web page--http://www.epa.gov/airmarkets/arp/nox/controltech.html;
     Performance of selective catalytic reduction on coal-fired 
steam generating units--final report. OAR/ARD, June 1997 (also 
available at http://www.epa.gov/airmarkets/arp/nox/controltech.html);
     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, item 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, item IV-A-4);
     Controlling SO2 Emissions: A Review of 
Technologies. EPA-600/R-00-093, USEPA/ORD/NRMRL, October 2000; and
     The 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 2, you evaluate the technical feasibility of the control 
options you identified in Step 1. 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

[[Page 25221]]

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 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?

    1. 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.

    2. 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.
    3. 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?
    1. 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.
    2. 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.
    3. 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).
    4. 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.
    5. 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 our 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

[[Page 25222]]

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.
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.

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?
    1. 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.
    2. 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.
    3. 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.
    4. 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?
    1. To conduct a cost analysis, you: (1) Identify the emissions 
units being controlled, (2) identify design parameters for emission 
controls, and (3) develop cost estimates based upon those design 
parameters.
    2. 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.
    3. 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:

[[Page 25223]]



------------------------------------------------------------------------
             Control device               Examples of design parameters
------------------------------------------------------------------------
Wet Scrubbers..........................  Type of sorbent used (lime,
                                          limestone, etc.)
                                         Gas pressure drop Liquid/gas
                                          ratio
Selective Catalytic Reduction..........  Ammonia to NOX molar ratio
                                          Pressure drop Catalyst life
------------------------------------------------------------------------

    4. 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.
    5. 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).\10\ In order to maintain and improve 
consistency, cost estimates should be based on the EPA/OAQPS Control 
Cost Manual, where possible.\11\ 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.
---------------------------------------------------------------------------

    \10\ 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
    \11\ 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?
    1. 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.
    2. 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, 2007)\12\; and
---------------------------------------------------------------------------

    \12\ The reason for the year 2007 is that the year 2007 is the 
latest year for which a BART analysis will be conducted in order to 
be included in a regional haze SIP.
---------------------------------------------------------------------------

    (2) the date the facility permanently stops operations. Where this 
affects the BART determination, 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.
    3. We recognize 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. Where this is the 
case, your BART analysis may account for this, but it must maintain 
consistency with the statutory requirement to install BART within 5 
years. Where the source chooses not to accept a federally enforceable 
condition requiring the source to shut down by a given date, it is 
necessary to determine whether a reduced time period for the remaining 
useful life changes the level of controls that would have been required 
as BART. If the reduced time period does change the level of BART 
controls, you may identify, and include as part of the BART emission 
limitation, the more stringent level of control that would be required 
as BART if there were no assumption that reduced the remaining useful 
life. You may incorporate into the BART emission limit this more 
stringent level, which would serve as a contingency should the source 
continue operating more than 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. If a source does operate after the 5-
year mark without BART in place, the source is considered to be in 
violation of the BART emissions limit for each day of operation.
c. What Do We Mean by Cost Effectiveness?
    Cost effectiveness, in general, is a criterion used to assess the 
potential for achieving an objective in the most economical way. 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:

Average cost effectiveness (dollars per ton removed) = Control option 
annualized cost \13\ Baseline annual

[[Page 25224]]

emissions--Annual emissions with Control option
---------------------------------------------------------------------------

    \13\ 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).
---------------------------------------------------------------------------

    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.
e. How Do I Calculate Baseline Emissions?
    1. 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.
    2. 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.
    3. For example, 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?
    1. 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 1,000 ton/yr reduction at an annual 
cost of $1,900,000. This represents an average cost of ($1,900,000/
1,000 tons) = $1,900/ton. Option 2 achieves a 980 tons/yr reduction 
at an annual cost of $1,500,000. This represents an average cost of 
($1,500,000/980 tons) = $1,531/ton. The incremental cost 
effectiveness of Option 1 relative to Option 2 is ($1,900,000--
$1,500,000) divided by (1,000 tons--980 tons). The adoption of 
Option 1 instead of Option 2 results in an incremental emission 
reduction of 20 tons per year at an additional cost of $400,000 per 
year. The incremental cost of Option 1, then, is $20,000 per ton--11 
times the average cost of $1,900 per ton. While $1,900 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 should be considered in selecting a BART 
technology.

    2. 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. (A ``least-cost envelope'' represents the set of options that 
should be dominant in the choice of a specific option.)
BILLING CODE 6560-50-P

[[Page 25225]]

[GRAPHIC] [TIFF OMITTED] TP05MY04.000

BILLING CODE 6560-50-C
Figure 2. Least-Cost Envelope
    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.

    3. 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. This is to show the ``least-cost 
envelope'' discussed above; 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

[[Page 25226]]

for the difference between options B and D, options D and F, options F 
and G, and options G and H.
    4. 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. Also, the greater the number of possible 
control options that exist, the more weight should be given to the 
incremental costs vs. average costs.
    5. 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 what has been considered a reasonable range, but 
your analysis concludes that costs for the source being analyzed are 
not considered reasonable. (A reasonable range would be a range that is 
consistent with the range of cost effectiveness values used in other 
similar permit decisions over a period of time.)

    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.
h. Impact Analysis Part 2: How Should I Analyze and Report Energy 
Impacts?
    1. 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 consider such penalties to be an 
adequate justification for eliminating that technology from 
consideration.
    2. 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.
    3. 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.
    4. 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.
    5. 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?'
    1. 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.
    2. 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 more 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 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.
    3. 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 
general, the analysis need only address those control alternatives with 
any significant or unusual environmental impacts that have the 
potential to affect the selection of a control alternative, or 
elimination of a more stringent control alternative. Thus, any 
important relative environmental impacts (both positive and negative) 
of

[[Page 25227]]

alternatives can be compared with each other.
    4. 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:
(1) 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.
(2) 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, 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.
(3) 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).
(4) 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 particularly 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, but the environmental impact is of greater concern.
(5) 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, in particular 
nitrogen compounds, to nearby sensitive water bodies (lakes, rivers, 
coastal waters). You may also consider effects which may be unique to 
high elevation ecosystems. In some eastern Class I areas with 
elevations above 1000 meters, there may be direct deposition of acid 
and nitrogen compounds on vegetation and soil from cloud impacts. 
Growth rates and competition between alien and native species might be 
affected by pollution loadings as well. As part of the consultation 
requirement between States and the Federal Land Managers in 40 CFR 
51.308(i)(2), we expect the Federal Land Managers to provide 
information on non-air quality indicators to be considered in 
determining BART and other implementation strategies. The States should 
also consider such information available from other sources, such as 
public comments.
5. Step 5: How Should I Determine Visibility Impacts in the BART 
Determination?
    The following is the approach to determine visibility impacts (the 
degree of visibility improvement for each source subject to BART) in 
the BART determination. You may elect to conduct the modeling or 
require the source to conduct the modeling. If modeling is to be 
conducted for receptors greater than 200 km from the emission unit, a 
modeling protocol is required. If the source is conducting the 
modeling, you should review and approve or disapprove of the source's 
analysis. Note that distances from the actual BART-eligible emission 
unit that is modeled to each Class I area should be measured from the 
nearest point in the Class I area. All receptors in the Class I area 
should be analyzed. The State should bear in mind that, for sources 50 
km from a Class I area, some receptors within that Class I area may be 
less than 50 km from the source while other receptors within that same 
Class I area may be greater than 50 km from the same source; this 
situation may result in two different modeling approaches for the same 
Class I area and source, depending upon the State's chosen method for 
modeling sources less than 50 km.
    1. For receptors in the Class I area that are greater than or equal 
to 50 km from the emission unit:
    (1) Run CALPUFF, at pre-control allowable emission rates and post-
control allowable emission rates.
    For CALPUFF setup (meteorological data and parameter settings), we 
recommend following EPA's Interagency Workgroup on Air Quality Modeling 
(IWAQM) Phase 2 Summary Report and Recommendations for Modeling Long 
Range Transport Impacts. Choose an emission control level representing 
the most stringent control option available for the post-control 
scenario.
    (2) Tabulate Results;
    (i) Calculate 24-hr values for each receptor as the change in 
deciviews compared against natural visibility conditions (conditions 
that are estimated to exist in a given Class I area in the absence of 
human-caused impairment). Tabulate pre-control and post-control 
results.
    (b) Make the net visibility improvement determination:
    (i) Assess the visibility improvement based on the change in 
visibility impact of the average 20% worst modeled days between the 
pre-control and post-control emission rates. For example, if average 
impact from the 20% worst days

[[Page 25228]]

for a source's pre-control emission rates for a particular receptor is 
a change of 1.0 deciviews, and its post-control impact is 0.4 
deciviews, the net visibility improvement is 0.6 deciviews (60%). All 
receptors in the Class I area should be analyzed.
    2. For sources that have not determined their degree of visibility 
improvement under 1. above and where all receptors at a Class I area 
are less than 50 km from the BART-eligible unit:
    (1) Estimate visibility impacts for pre-control and post-control 
emissions. Give consideration to CALPUFF or other EPA-approved methods 
or local scale models for determining visibility impacts for pre-
controlled and post-controlled emissions.
    (2) Estimate the degree of visibility improvement expected.
    Note that each of the modeling options may be supplemented with 
source apportionment data or source apportionment modeling that is 
acceptable to the State and the EPA regional office.

F. How Do I Select the ``Best'' Alternative, Using the Results of Steps 
1 Through 5?

1. 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:
    (1) Expected emission rate (tons per year, pounds per hour);
    (2) Emissions performance level (e.g., percent pollutant removed, 
emissions per unit product, lb/MMbtu, ppm);
    (3) Expected emissions reductions (tons per year);
    (4) Costs of compliance--total annualized costs ($), cost 
effectiveness ($/ton), and incremental cost effectiveness ($/ton);
    (5) Energy impacts (indicate any significant energy benefits or 
disadvantages);
    (6) Non-air quality environmental impacts (includes any significant 
or unusual other media impacts, e.g., water or solid waste), both 
positive and negative; and
    (7) Modeled visibility impacts.
2. Selecting a ``Best'' Alternative
    1. 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.''
    2. 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.
    3. We also request 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.
    4. In the case where you are conducting a BART determination for 
two regulated pollutants on the same source, if the result is two 
different BART technologies that do not work well together, you could 
then substitute a different technology or combination of technologies, 
provided that they achieve at least the same emissions reductions for 
each pollutant.
3. In Selecting a ``Best'' Alternative, Should I Consider the 
Affordability of Controls?
    1. 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.
    2. 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 forced shutdowns.
    3. 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.
4. Sulfur Dioxide Limits for Utility Boilers
    You must require 750 MW power plants to meet specific control 
levels of either 95% control, or controls in the range of .1 to .15 
lbs/MMBtu, for each EGU greater than 250 MW, unless you determine that 
an alternative control level is clearly justified based on a careful 
consideration of the statutory

[[Page 25229]]

factors. Thus, for example, if the source convincingly demonstrates 
unique circumstances affecting its ability to cost-effectively reduce 
its emissions, you should take that into account in determining whether 
the presumptive levels of control are appropriate for that facility. 
For an EGU greater than 250 MW in size, but located at a power plant 
smaller than 750 MW in size, you should similarly find that such 
controls are cost-effective as a general matter when taking into 
consideration the costs of compliance in your BART analysis. You should 
consider these control levels as the minimum that may be required. 
While these levels may represent current control capabilities, we 
expect that scrubber technology will continue to improve and control 
costs continue to decline. You should be sure to consider the level of 
control that is currently best achievable at the time that you are 
conducting your BART analysis.
5. Nitrogen Oxide Limits for Utility Boilers
    You should establish specific numerical limits for NOX 
control for each BART determination. For sources currently using 
selective catalytic reduction (SCR) or selective non-catalytic 
reduction (SNCR) for part of the year, you should presume that use of 
those same controls year-round is highly cost-effective.
    For all other utility boilers, you should also presume that a 
NOX emission limit of 0.2 lbs/MMBtu is cost-effective. Most 
utility boilers can achieve a degree of removal of 0.2 lbs/MMBtu with 
relatively inexpensive controls such as low NOX burners and 
combustion control. For those sources who cannot achieve this control 
level without SCR, you may find SCR to be appropriate if you finds 
visibility impacts that are of high enough concern to warrant the 
additional capital cost.

V. 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 regional haze 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 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.

VI. 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 \14\ consistent with 40 CFR 51.308(e)(2).
---------------------------------------------------------------------------

    \14\ 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?

    1. 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).
    2. 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. The recently proposed 
Interstate Air Quality Rule (69 FR 4566, January 30, 2004) would 
establish statewide emissions budgets and allows for trading programs 
to achieve the budgets. Other trading programs generally have applied 
only to sources within a single State. In the proposed Interstate Air 
Quality rule (IAQR) (69 FR 4566, January 30, 2004), we requested 
comment on whether compliance with the IAQR by affected EGUs in 
affected States would satisfy, for those sources, the BART requirements 
of the CAA, provided that a State imposes the full amount of SO2 and 
NOX emissions reductions on EGUs that the IAQR deemed highly 
cost effective. We are in the process of evaluating those comments. 
Based on our current evaluation, we believe the IAQR, as proposed, is 
clearly better than BART for those affected EGUs in the affected States 
which we propose to cover under the IAQR. We thus expect that the final 
IAQR would satisfy the BART requirements for affected EGUs that are 
covered pursuant to the final IAQR.
    3. In creating a trading program as an alternative to source-
specific BART, a

[[Page 25230]]

State may wish to work with other States through a regional planning 
organization to develop a regional, multi-state program. Such a program 
would provide greater opportunities for emission trading. Coordination 
through the Regional Planning Organization (RPO) would ensure 
compatibility of the core elements of the trading program--budgets, 
allocations, tracking, etc.--between the SIPs and TIPs of participating 
States and Tribes. The WRAP has adopted such a regional market trading 
program as a backstop to its overall emission reduction program for 
SO2. Although regional trading programs require more 
interstate coordination, we have expertise that we can offer to States 
wishing to pursue such a program.

B. What Are Emission Budgets and Allowances?

    An emissions budget is a limit, for a given source population, on 
the total emissions amount \15\ that may be emitted by those sources 
over a State or region. An emission budget is also referred to as an 
``emission cap.''
---------------------------------------------------------------------------

    \15\ 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:
    (1) Emitting at the level of allowances they are allocated (for 
example, by controlling emissions or curtailing operations),
    (2) 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
    (3) 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.

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:
    (1) Identify the sources that are subject to BART,
    (2) Calculate the emissions reductions that would be achieved if 
BART were installed and operated on sources subject to BART,
    (3) 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,
    (4) 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
    (5) 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?
    1. For a trading program under 51.308(e)(2), you may identify these 
emissions reductions by:
    (1) Conducting a case-by-case analysis for each of the sources, 
using the procedures described above in these guidelines in sections II 
through V;
    (2) 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
    (3) Conducting an analysis that combines considerations on both 
source-specific and category-wide information.
    2. 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. 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.
    3. We note that States and RPOs have the flexibility to adopt an 
approach to the category-wide analysis of BART that would involve the 
evaluation of 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 \16\ 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

[[Page 25231]]

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.
---------------------------------------------------------------------------

    \16\ 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:
    (1) Identify the source population included within the budget, 
which must include all BART sources and may include other sources,
    (2) For sources included within the budget, develop a base year 
\17\ emissions inventory for stationary sources included within the 
budget, using the most current available emission inventory,
---------------------------------------------------------------------------

    \17\ See 2002 Base Year Emission Inventory SIP Planning: 8-hr 
Ozone, PM2.5 and Regional Haze Programs. memorandum of November 18, 
2002, from Lydia Wegman and Peter Tsirigotis. This document is 
available at the following Web site: http://www.epa.gov/ttn/oarpg/t1/memoranda/2002bye_gm.pdf.
---------------------------------------------------------------------------

    (3) 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,
    (4) Calculate the reductions from the forecasted emissions if BART 
were installed on all sources subject to BART,
    (5) Subtract this amount from the forecasted total, and
    (6) 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].
    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, and
--Overall improvement in visibility, determined by comparing the 
average differences over all affected Class I areas.

    Example: Assume that ten Class I areas are affected. You would 
take the average deciview improvement from BART for each of the ten 
Class I areas--one value for each Class I area--and average them 
together. If the ten values are 2.5, 3.9, 4.1, 1.7, 3.3, 4.5, 3.1, 
3.6, 3.8 and 4.5, then the average deciview improvement from BART 
for the ten Class I areas is 3.5 deciviews. Therefore, 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 us to 
require a particular process and criteria for individual source 
allocations, and thus we will not dictate how to allocate allowances. 
When developing an allocation methodology, the State or regional 
planning organization should consult with any Indian Tribes located 
within the trading area, regardless of whether BART-eligible sources 
are currently on Tribal lands. We will provide information on 
allocation processes to State, Tribal, and local agencies, and to RPOs.
6. What Provisions Must I Include in Developing a System for Tracking 
Individual Source Emissions and Allowances?
    1. 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.
    2. 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.
    3. The first example is our 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:
    (1) Title IV of the CAA Amendments (1990),
    (2) 40 CFR part 73 at 58 FR 3687 (January 1993),
    (3) EPA's acid rain Web site, at www.epa.gov/acidrain/trading.html.

[[Page 25232]]

    4. The second example is the rule for reducing regional transport 
of ground-level ozone (NOX SIP Call). The NOX SIP 
Call 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:
    (1) The preamble and rule in the Federal Register at 63 FR 57356 
(October 1998),
    (2) The NOX compliance guide, available at www.epa.gov/acidrain/modlrule/main.html#126,
    (3) Fact sheets for the rule, available at www.epa.gov/ttn/rto/sip/related.html#prop,
    (4) Additional information available on EPA's Web site, at 
www.epa.gov/acidrain/modlrule/main.html.
    5. A third program that provides a good example of trading programs 
is 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:
    (1) Memorandum of Understanding (MOU), available at www.sso.org/otc/att2.HTM,
    (2) Fact sheets available at www.sso.org/otc/Publications/327facts.htm,
    (3) Additional information, available at www.epa.gov/acidrain/otc/otcmain.html.
    6. We are 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.
    7. We recognize 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. We believe that any trading program 
established by States for BART should be fully consistent with the 
recently proposed NOX/SOX Transport rule. Should 
the transport rule not be in effect for the same time period or in the 
same States as any BART trading program, we recommend that States and/
or regional planning organizations should conduct additional technical 
analyses to determine whether the time periods for tracking of 
allowances under other 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. 
Further, we recommend that you conduct any such analysis 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 Sec.  51.302 of 
the Regional Haze Rule?
    1. 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 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)).
    2. We recognize 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.
    3. 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.

[FR Doc. 04-9863 Filed 5-4-04; 8:45 am]
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