Regulatory Update
An Overview
Regulatory Overview
ARIPPA
Gary L. Merritt
Regulatory Issues
Air
 Water
 Waste Management
 Advance Energy Resources Portfolio
Standard

Air




Mercury
– Penn Futures Petition
Interstate Transport Rule
– ARIPPA’s Comments
– DEP Comments
– OTC Comments
PM-2.5 Non-Attainment Designations
New Source Review
Mercury Rule

EPA’s Proposal
– Command and Control –MACT Type
Rule
– MACT rule coupled with a trading
program
Proposed Mercury EmissionsExisting Sources





Bituminous Coal
2.0 lbs per trillion Btus or
21 X 10-6 pounds per megawatt hour
Sub-Bituminous Coal 5.8 lbs per trillion Btus or
61 x 10-6 pounds per megawatt hour
Lignite Coal
9.2 lbs per trillion Btus or
98 x 10-6 pounds per megawatt hour
Coal Refuse
0.38 lbs per trillion Btus or
4.1 x 10-6 pounds per megawatt hour
IGCC Units
19 lbs per trillion Btus or
200 X 10-6 pounds per megawatt hour
Proposed Mercury Emission –
New Sources




Bituminous Coal
6.0 x 10-6 pounds per
megawatt hour
Sub-Bituminous Coal 20 x 10-6 pounds per
megawatt hour
Lignite Coal
62 x 10-6 pounds per
megawatt hour
Coal Refuse
1.1 x 10-6 pounds per
megawatt hour
Penn Futures File Petition for
Rule Making on Mercury
DEP will be make recommendations
to the EQB on addressing the
petition
 Petition proposal, in some respects,
is consistent with DEP comments on
the proposed EPA Rule.

Some Critical Aspects of the
Petition

Proposed output based emission
rate of 3.0 mg/MW-hr or 6.6 x 10-6
Lbs/MW-hr
– Mg/MW-hr means the mercury emission
in milligram per megawatt of net
electricity generation

Or a 90% reduction based on the
mercury input to the boiler,
whichever is less.
Continued




Requires Emission Stack Test Every Quarter
Requiring 3-valid stack emission test runs per
quarter
Averaging stack test per quarter, measuring the
net megawatts of generation per quarter and
calculating the weighted mercury emission
Requires simultaneous testing of all stacks tied
to common generator
Continued

However, the major issue is set forth
in Section 2D of the proposed rule:
Section 2D

“The mercury emissions standard specified in
(a)(1) or (2) above are applicable on or after
December 15, 2012, for each owner or operator of
a coal fired boiler who has entered ito an
enforceable agreement with the Department by
December 15, 2009, to install and operate air
pollution control systems to meet the following
standards by December 15, 2012, provide
compliance with (a) above is achieved by
December 15, 2007 for at least 50 percent of the
total coal-fired megawatt capacity of the
Company:
Section 2D Continued



1. The emsiions of nitrogen shall not exceed
0.100 pounds per million BTU for dry bottom
utility boilers and 0.130 pounds per million BTU
for wet bottom utility boilers:
2. The emissions of sulfur dioxide shall not
exceed 0.150 pounds per million BTU; and
3. The emissions of particulate matter shall not
exceed 0.030 pounds per million BTU.
Other
The FACT Sheet references
Pennsylvania Utilities.
 The boilers being cited are “DryBottom utility boiler and Wet-Bottom
utility boiler” means “utility boiler “
equipped with ----”
 The term “utility” is not defined.

The Interstate Transport Rule on
SO2, NOx, and PM-2.5

The proposed rule has resulted in
comments multiple rounds of comments
by ARIPPA
 A critical aspect of the comments by
ARIPPA relates to tying emission
allocations to the Acid Rain Program,
establishing an allocation program based
on 1990 emissions, and not addressing
the exemption for PURPA related projects
from the acid rain program.
Continued

DEP is their initial comments rasied
the concern about the PURPA related
issues by requesting an additional
25,000 tons on SO2 Allowances.
PADEP –OTC Combined
Comments

In the last round of comments, OTC set
forth the following recommendations:
The proposal for emission reductions would
look like this:
By 2008
SO2
3.0 MT
NOX
1.87 MT
Mercury 15 T
By 2012
2.0 MT
1.28 MT
10 T
By 2015
5T
OTC Proposal

The above emission rates were in the
comments to EPA
 The Reduction and Allocations did not
include the 25,000 Tons that PADEP had
requested in their original comments on
the rule.
 The OTC Commissioners have charged a
Subcommittee to develop a model rule!!!!
PM-2.5 Designations
EPA has proposed designating
Counties in Pennsylvania, Ohio,
Delaware and New Jersey as
Nonattainment Areas
 Pennsylvania Counties with ARIPPA
Plants and related Plants

– Mercer County
– Indiana and Cambria Counties
New Source Review

PADEP is in the process of developing
rules to implement the New Source
Review rules promulgated by EPA.
 (Note-The EPA rule is adopted by
reference in the Pennsylvania Program.)
 PADEP will be proposing new rules for
NSR and will file amendments to its
approved air program.
EPA-Baseline Emissions

Defining Baseline Emissions
– Source allowed to look back over last 10 years to select
any 24-month priod upon which to establish baseline
against which emissions increases are measured
– May select different 24-month period for each regulated
NSR pollutant
– Non-utility sources are only required to submit a report
to the permitting authority if post-change emissions
increase by a significant amount and are in excess of
the source’s pre-change projection
Defining Baseline Emissions

Averaging actual or allowable emissions,
whichever is lower, shall be calculated
over a 2 calendar years preceding
replacement of a source
 2-year period is not representative of
normal operation, the Department may
specify a different 2-year period within 5
calendar years.
 Select same 2-year period for all regulated
pollutants for each period.
EPA – NSR Applicability Test

Applicability Test
– Allows the use of “actual-to-projectedactual” emissions test to predict
emissions 5 years into the future
– Expands “demand growth exclusion” to
all existing sources
NSR Applicability Tests

Significant Emission Increase:
– Option 1: Modification to an existing source: Delta
allowable emissions of an existing source considering
bottlenecks and all limitations with a potential to emit
after the modification. Installation of new sources
consider PTE
– Option 2: Use “actual to projected-actuals” test, but
enhance oversight and enforcement tools and eliminate
demand growth exclusion
Significant Emission increases must be summed with all
emission increases and decreases within 5 years of
construction
NSR Applicability Tests Continued

Non Significant Emissions Increase:
– Propose de minimis emission increases must be
summed with all emission increases and decreases
since January 1, 1991. Fox NOx, November 15, 1992.
EPA – Clean Unit Exclusion

Clean Unit Exclusion
– Provides automatic designation as “Clean Unit” for any
unit that has installed BACT or met LAER I the last 10
years
– Allows sources to receive “Clean Unit” status if they
demonstrate other controls are “comparable to BACT”
– Ignores any emission increases from any project at a
“Clean Unit” (I.e., no NSR at Clean Units) for 10 years
– Any source may qualify as a Clean Unit if controls are
comparable to BACT. Owner of source must show that
emissions limitation is equal o the average of all
emissions limitation determined as BACT within the last
five years from the RACT/BACT/LAER database.
Clean Unit Exclusion
Includes special provisions for “Clean
Units”, but does not ignore any emission
increases from a project affecting the unit
 Clean Unit status – effective for 5 years
 Best Available Control
Technology/(BACT)/Lowest Achievable
Emission Rate (LAER) determinations
made within 5 years from date of
application

Pollution Control Project (PCP)
Exclusion

Option 1:
– Major Modification definition (25
PACODE Chapter 121) allows pollution
control projects to be excluded from
NSR review
– Determination made case-by-case basis
– Requires 1 to 1 offset ratio for emission
increases
EPA-Pollution Control Project
(PCP) Exclusion

Pollution Control Project Exclusion
– Expands NSR exemption for PCPs (I.e.,
projects that result from NSR due to decreases
in emissions of another pollutant) to all source
categories
– Eliminates requirement that “primary purpose”
of PCP must be to reduce emissions
– Lists PCPs presumptively deemed
“environmentally beneficial” and allow othrs to
demonstrate that they are “environmentally
beneficial”
Pollution Control Project (PCP)
Exclusion

Option 2:
– Retains “primary purpose” test
– Provides state agency authority to rebut
presumption that a project is
“environmentally beneficial”
– PCP exclusion is not applicable to
replacement or reconstruction of
existing emission unit
EPA – Plantwide Applicability
Limits (PAL)

Plantwide Applicability Limits
– Allows facility to take PAL (I.e., source-wide
emission cap), under which any changes are
exempt from NSR
– PAL based on average actual emissios of 24
months over the past 10 years and the
potential to meit of new sources added after 24
months
– The PAL is 10 years and PAL does not decline
– New source allowed to operate under PAL
without controls
Plantwide Applicability Limits
(PAL)

Allows facility to take PAL under which
any changes exempt from NSR
 PAL based on average actual emissions of
24 months over past 5 years and actual
emissions of new sources added after 24
months
 The PAL is 10 years and does not decline
 New Sources required Best Available
Technology (BAT) determination
NSR - NOTE

A problem can arise especially if you are
proposing a PCP
 You may need to obtain DEP approval (a
time consuming and frustrating item and
may trigger a formal NSR review)
 There are cases in PA where the the
Regions have treated such project as
requiring plan approval and a complete
NSR review analysis.
Water

State Water Plan
Water – STATE WATER PLAN

ACT 220 requires the State and the Department to
develop a water plan for the State to address
quantity issues as well as having a water quality
component.
 The Statewide Committee will be developing and
recommending Guidelines and Policy to the
Regional Committees and the State concerning a
variety of issues.
 The most critical issue will be the criteria to
determine what a critical water planning area is.
However, the criteria established to make this
determination could impact on prior allocations
and release flow criteria used in the past.
Continued
Issues under review include “consumptive
use of energy sectors, non-consumptive
uses of energy sectors, the recognition
that a consumptive use in one part of a
drainage basin may result in increase flow
in another part of a basin”
 (Energy-Power Generation, Mining, and oil
and gas development)

State Water Plan
This is to be an ongoing process.
 The Plan and its criteria are to be
updated every 5-years.
 Part of the process is an analysis of
the statutory, regulatory and policy
impacting the program and whether
there is a need for change.

Waste Management

Coal Combustion Byproducts
Waste Management (CCBs)

The ongoing issues dealing with the
management of coal combustion
byproducts continues
– EPA and OSM
– Tamaqua
– National Academy of Science Study
National Academy of Science
Study

The Study will
– Be conducted under the auspices of the
Committee on Earth Resources of the Board
on Earth Sciences and Resources
– Examine the health, safety, and environmental
risks associated with using coal combustion
wastes (CCW) for reclamation in active and
abandoned coal mines
– look at the placement in abandoned and active,
surface and underground coal mines in all
major coal basins
NAS - Study
– Consider coal mines receiving large quantities
coal combustion wastes
– Focus its efforts on coal combustion wastes
from utility power plants and independent
power producers, rather than small business,
industries, and institutions
– Take into consideration a profile of the utility
industry in designing the study to focus on
the sources producing the greatest quantities
of coal combustion wastes
NAS - Study
– Determine whether CCW were placed
and disposed of in coal mines with
inadequate safeguards and whether this
activity is degrading water supplies in
coal mines in contravention of SMCRA
NAS – Study Points

Points to be considered in the study
– The adequacy of data collection from
surface water and ground water
monitoring points established at CCW
sites in mines
– The impacts of aquatic life in streams
draining CCW placement areas and the
wetlands, lakes, and rivers receiving
these drainage
NAS – Study Points
– The responses of mine operators and
regulators to adverse or unintended impacts
such as the contamination of ground water
and pollution of surface waters
– Whether CCWs and mine(s) in which they are
being disposed are adequately characterized
for such placement to ensure that monitoring
programs are effective and groundwater and
surface waters are not degraded. (This item is
not explicitly in the NAS SOT but is there
implicitly.)
NAS – Study Points
– Whether there are clear performance
standards set and regularly assessed
for projects that use CCW for beneficial
purposes in mines
– The status of isolation requirements
and whether they are needed
NAS - Study Points
– The
adequacy
of monitoring
including:
programs
a. The status of long-term monitoring and the
need for this monitoring after CCW is placed in
abandoned mines and active mines when placement is
completed
and
bonds
released.
b. Whether monitoring is occurring from
enough locations;
c. Whether monitoring occurs for relevant
constituents in CCW as determined by characterization
of the CCW; and
d.
Whether there are clear, enforceable
corrective actions standards regularly required in the
monitoring
NAS – Study Points
– The ability of mines receiving large amounts of
CCW to achieve economically-productive post
mine land uses;
– The need for upgraded bonding or other
mechanisms to assure that adequate
resources area available for adequate periods
to perform monitoring and address impacts
after CCW placement or disposal operations
are completed in coal mines
NAS – Study Points
– The provisions for public involvement in these
questions at the permitting and policy-making
levels and any results of that involvement
– Evaluate the risks associated with
contamination of water supplies and the
environment from the disposal or placement of
coal combustion wastes in coal mines in the
context of the requirements for protection of
those resources by RCRA and SMCRA
NAS Study

The outcome of this study will
– Determine how EPA decides to regulate
the use of ash in mines
– If OSMRE has responded appropriately
in various allegations relating to water
quality problems associated with ash
placement and mining
– if the states are addressing the issues
properly
NAS Study

Two additional concerns:
– Will the outcome impact EPA’s prior
determination to regulate the
management of ash under Subtitle D of
RCRA not Subtitle C
– The “appropriateness of present
leaching tests to evaluate ash when
being placed in coal mines” or
evaluating ash in general.
Advanced Energy Resources
Portfolio Standards

The Rendell Administration is
proposing to develop draft
amendments to an existing proposed
legislation on Renewable Energy
Portfolio Standards
Aspects of the Bill

Definition relating to Waste Coal
– The Administration’s proposed definition of “Eligible
Waste Coal Combustion” is
– “Combustion of waste coal and reclamation of the land
associated with the waste coal in either of the following
situations:
– (1) Combustion of waste coal which was disposed or
abandoned prior to July 31, 1982 or disposed thereafter
in a permitted coal refuse disposal site, regardless of
when disposed, comprises at least 75 percent of the
total energy input at the facility where it is used to
generate electricity; or
– (2)
Other waste coal combustion meeting alternative
eligibility requirements established by regulations”
Definition of Waste Coal
One Group wants to limit waste coal
to only waste coal which was
disposed or abandoned prior to July
31, 1982.
 One suggestion was to use FERC’s
regulations defining waste including
waste coal

Waste Coal Definition

A
waste
coal
consideration is
definition
under
– “Waste coal means an energy input that is
listed below in this subsection that has little or
no current commercial value and exists in the
absences of a waste coal industry. Waste coal
includes, but not limited to, the following
materials from abandoned mine sites, bond
forfeiture sites, and permitted coal mining
operations:
Waste Coal Definition
(Continued)
– (1) Anthracite culm and refuse
– (2) Bituminous coal refuse and slurry
– (3)
Overburden, inter-burden and other acid or
toxic forming materials associated with surface
mining operations that are normally spoiled or
special handled.
– (4)
Waste coal that has been approved by
FERC in a written determination
Definition
Wanted to achieve maximum
flexibility
 Wanted to insure FERC approved
fuels continue to qualify
 Do not want to create problems on
definitions and how they may impact,
if they do, Tax Exempt Bonding
Issues

Waste Coal Definition
(Continued)
– The Department will promulgate regulations
that establish additional requirements for
waste coal eligibility, including but not limited
to Btu and ash content
– A minimum of 75% of the heat input to the
boiler must be from waste coal.
– The Energy Facility must be capable of
burning waste coal in which the waste coal
represents 75% of the heat input to the boiler.”
Advance Energy Resources
The Administration is proposing a
two Tier Process in which Waste
Coal is in Tier Two and is limited to
the amount of Energy that can
qualify under this scenario
 It has been recommended that this
tier be given a 15% allocation.
