APPA Comments on EPA’s Section 111(b)
Modified and Reconstructed EGUs
EPA-HQ-OAR-2013-0603
FRL 9910-00-OAR
RIN 2060-AR88
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Executive Summary
The Environmental Protection Agency (EPA) has proposed new source performance standards
(NSPS) for modified or reconstructed electric generating units (EGUs) under Section 111(b) of
the Clean Air Act (CAA), 79 Fed. Reg. 34,960 (June 18, 2014) (hereinafter referred to as the
Modified/Reconstructed Proposed Rule). The American Public Power Association (APPA)
believes that many aspects of EPA’s Modified/Reconstructed Proposed Rule are not founded on
documented, justifiable, and/or lawful factors. Many components, as described below in Section
II, are arbitrary and capricious. The Proposed Rule does not include the emissions data used to
set the proposed limits nor adequate justification that the benefits justify the costs, as required
under the Act in Section 307(d)(3). For all these reasons, the Proposed Rule should be
withdrawn and re-proposed.
I.
Introduction
APPA is the national service organization representing the interests of not-for-profit, publicly
owned electric utilities throughout the United States. More than 2,000 public power utilities
provide over 15 percent of all kilowatt-hour sales of electricity to ultimate customers, and do
business in every state except Hawaii. All APPA utility members are load serving entities
(LSEs), with the primary goal of providing customers in the communities they serve with
reliable electric power and energy at the lowest reasonable cost, consistent with good
environmental stewardship. This orientation aligns the interests of APPA-member electric
utilities with the long-term interests of the residents and businesses in their
communities. Collectively, public power utilities serve over 47 million customers.
II.
General Comments
EPA has proposed NSPS for modified and reconstructed EGUs under section 111(b) of the Clean
Air Act. 79 Fed. Reg. at 34,960. On the same date that EPA published its proposed NSPS for
modified and reconstructed EGUs, it also published proposed emissions guidelines for existing
EGUs under section 111(d) of the Clean Air Act. 79 Fed. Reg. 34,830 (June 18, 2014). APPA
will be submitting comments on the proposed emissions guidelines and incorporates those
comments herein. For the reasons outlined below, the Modified/Reconstructed Proposed Rule is
unlawful and should be withdrawn.
A.
A CO2 NSPS for Modified and Reconstructed EGUs Is Unnecessary.
EPA has not established a reason for promulgating a NSPS for carbon dioxide (CO 2) emissions
from modified and reconstructed EGUs. On the contrary, the Modified/Reconstructed Proposed
Rule states that EPA does not expect many units to trigger modification or reconstruction
requirements, id. at 34,963, and that the rule will not result in “any significant costs or benefits,”
Regulatory Impact Analysis for the Proposed Carbon Pollution Guidelines for Existing Power
Plants and Emission Standards for Modified and Reconstructed Power Plants at 9-1 (RIA). A
rule that will provide no benefits cannot be promulgated consistent with the Clean Air Act. See
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CAA § 301(a) (authorizing the Administrator to promulgate only “such regulations as a re
necessary” to carry out her functions under the Act) (emphasis added).
EPA, moreover, has previously exercised its authority to exempt modified or reconstructed units
from NSPS requirements. For example, it has done so in the Standards of Performance for
Asphalt Processing and Asphalt Roofing Manufacture, 40 C.F.R. § 60.472(a)(3), and the
Standards of Performance for VOC Emissions from Petroleum Refinery Wastewater Systems, 40
C.F.R. § 60.692-2(d). Given the lack of any benefit from the Modified/Reconstructed Proposed
Rule (and the significant problems posed by the proposal, as described below), EPA should
withdraw the Modified/Reconstructed Proposed Rule.
B.
Issues Common to Modified and Reconstructed Subpart Da and
Subpart KKKK EGUs
EPA raises several issues in the Modified/Reconstructed Proposed Rule that are common to both
Subpart Da and Subpart KKKK EGUs.
1.
EPA Cannot Regulate EGUs Under Both Section 111(b) and Section
111(d) of the Clean Air Act.
In numerous parts of the Modified/Reconstructed Proposed Rule, EPA suggests that EGUs that
become subject to a state plan under section 111(d) and then undergo a modification or
reconstruction must remain subject to the requirements of the state plan in addition to having to
comply with the requirements for modified and reconstructed EGUs proposed here. See, e.g., 79
Fed. Reg. at 34,962-63, 34,965. This is not the case. Under the Clean Air Act, a source is either
“existing” or it is “new.” It cannot be both at the same time. Compare CAA § 111(a)(2)
(definition of “new source”) with CAA § 111(a)(6) (definition of “existing source”). Therefore,
a source that is regulated under section 111(b), either because it is a “new source” or because it
underwent a major modification or reconstruction and became subject to section 111(b), cannot
simultaneously be subject to regulation under section 111(d) as an “existing source.” If a state
wishes to keep an EGU that is modified or reconstructed within its section 111(d) state plan, it
may do so as a matter of state law. See id. § 116. EPA cannot, however, require states to keep
that EGU within its section 111(d) state plan.
2.
The Compliance Period Should Be a Calendar Year or Longer.
EPA requests comment on whether compliance should be on a rolling 12-operating-month period
or on an annual basis. See, e.g., 79 Fed. Reg. 34,973. EPA should adopt a single compliance
period each year on a calendar year or longer basis. This approach would increase operational
flexibility without any environmental impacts. EPA should take the same approach in any final
rules for new units.
3.
EPA Lacks Authority To Set NSPS Using Energy Efficiency Audits.
For sources that are modified after a section 111(d) plan has become applicable, EPA proposes
allowing unit-specific emission standards based on an energy efficiency audit for modified
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Subpart Da units, and the Agency requests comment on whether to allow such limits for Subpart
KKKK units. Id. at 34,975, 34,988. EPA cannot authorize such audit-based limits.
The Clean Air Act authorizes EPA to regulate categories or subcategories of sources—not
individual sources—under the NSPS provisions. See CAA § 111(a)(1), (b)(2). Where Congress
intended to authorize EPA to regulate individual sources, it has done so explicitly, such as in the
Act’s best available control technology (BACT) and best available retrofit technology
provisions, which authorize unit-specific, control technology-based emission limits. Id. §§
169(3), 169A; see also id. § 407(d) (authorizing source-specific limits pursuant to Title IV).
Section 111(b), on the other hand, contains no such unit-specific provisions. EPA cannot
“rewrite clear provisions of the statute” to craft the rule it may prefer. UARG v. EPA, 134 S. Ct.
2427, 2446 (2014).
Further, the Modified/Reconstructed Proposed Rule is far too vague with respect to what an
energy audit might entail. EPA proposes that such an audit would include “[a] visual inspection
of the facility”; “[a] review of available engineering plans and facility operation and maintenance
procedures and logs”; and “[a] comprehensive report detailing the ways to improve efficiency,
the cost of specific improvements, benefits, and the time frame for recouping those investments.”
Proposed 40 C.F.R. § 60.46Da (c)(3)(ii)(A)-(C). Without any further explanation, use of such a
procedure would not be practical. The lack of detail, moreover, is inadequate to satisfy EPA’s
notice and comment obligations under the Clean Air Act.
4.
Relative Stringency of the Modified/Reconstructed Proposed Rule
The standards EPA has proposed for modified and reconstructed sources are actually less
stringent than the proposed emissions guidelines for existing sources under section 111(d).
Specifically, existing sources would be required to achieve heat rate improvements of up to six
percent, 79 Fed. Reg. at 34,861, whereas modified or reconstructed sources would have to reduce
their emissions two percent below their best historical annual CO2 emission rate, 79 Fed. Reg. at
34,962, Table 1. There is no logical or technical justification for requiring more from existing
units than EPA would require from units that are substantially modified or reconstructed.
Indeed, the opposite should be the case. This illustrates the fundamental flaws and arbitrary
nature of both the existing source proposed emissions guidelines and the Modified/Reconstructed
Proposed Rule.
C.
EPA’s Proposed NSPS for Reconstructed Subpart Da Units Is
Unlawful.
Reconstruction is triggered when an owner or operator replaces the components of an existing
facility to such an extent that the fixed capital cost of the new components exceeds 50 percent of
the fixed capital cost that would be required to construct a comparable entirely new facility. 40
C.F.R. § 60.15(b)(1). The Modified/Reconstructed Proposed Rule states that “[h]istorically, few
EGUs have undertaken reconstruction.” 79 Fed. Reg. at 34,971. For that reason alone, as stated
above, EPA should withdraw the Modified/Reconstructed Proposed Rule and decline to set a
standard.
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EPA’s proposed NSPS for reconstructed Subpart Da units also suffers from significant flaws.
First, EPA asserts that the best system of emission reduction (BSER) for these units is “t he most
efficient generating technology,” including use of a supercritical pulverized coal or supercritical
circulating fluidized bed boiler for large sources, and the use of the highest available subcritical
steam conditions for small sources. Id. at 34,981, 34,383. This BSER determination is
unsupported, infeasible in practice, and accordingly, unlawful. See 40 C.F.R. § 60.15(b)
(standards must be “technologically and economically feasible”). EPA’s support for its BSER
determination is a study of two units, both of which burn subbituminous coal. See OAQPS, Best
System of Emissions Reduction (BSER) for Reconstructed Steam Generating Units and
Integrated Gasification Combined Cycle (IGCC) Facilities (June 2014). EPA acknowledges,
however, that “[u]tility boilers are numerous and diverse in size and configuration.” 79 Fed.
Reg. at 34,982. EPA’s record, therefore, cannot support its proposed BSER determination. 1
Next, relying on its unlawful BSER finding, EPA proposes that sources with a heat input above
2,000 MMBtu/hr (large units) meet an emission limit of 1,900 lb CO 2/MWh-net and sources with
a heat input equal to or less than 2,000 MMBtu/hr (small units) meet an emission limit of 2,100
lb CO2/MWh-net. Id. at 34,985. Any NSPS under section 111 must be achievable. Portland
Cement Ass’n v. Ruckelshaus, 486 F.2d 375, 402 (D.C. Cir. 1973). EPA has provided no support
for its assertion that its proposed standards for Reconstructed Subpart Da units are feasible, and,
as such, the Modified/Reconstructed Proposed Rule must be withdrawn.
Finally, EPA’s general reconstruction rule requires an analysis of whether it is technologically
and economically feasible to meet a limit, including a consideration of the estimated life of the
facility after the replacements. 40 C.F.R. § 60.15(f). EPA fails, however, to even mention this
requirement in the Modified/Reconstructed Proposed Rule. Any final NSPS must include
provisions to implement 40 C.F.R. § 60.15(f).
D.
EPA’s Proposed NSPS for Modified Subpart Da Units Is Unlawful.
EPA’s general modification rule is codified in 40 C.F.R. part 60, which applies to all categories
of NSPS sources. It states that “a physical or operational change to an existing facility which
results in an increase in the emission rate to the atmosphere of any pollutant to which a standard
applies shall be considered a modification…” Id. § 60.14(a). The general modification rule also
contains a number of exclusions. See id. § 60.14(e). The provisions of the
Modified/Reconstructed Proposed Rule addressing proposed NSPS for modified Subpart Da
sources contains numerous flaws.
For instance, EPA neglects to address the fact that the NSPS established through this rulemaking
will become the minimum emission limit that must be achieved as BACT pursuant to the Act’s
new source review (NSR) requirements. See CAA § 169(3) (definition of “best available control
1
EPAalsorequestscommenton“theapplicabilityofbuildingblockstwo,threeandfour”fromthe
existingsourceProposedRuletoreconstructedSubpartDasources.76Fed.Reg.at34,983.EPAhasno
authoritytoconsideractionsthatmustbetaken“beyondthefenceline”ofanaffectedsourceindetermining
BSERundersection111(b).
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technology”). These NSR enforcement considerations are significant, and EPA’s failures even to
mention—much less effectively address—these concerns is problematic.
There are also serious flaws in EPA’s proposed BSER determination for modified Subpart Da
units. EPA’s proposed BSER “is each unit’s own best potential performance based on a
combination of best operating practices and equipment upgrades.” 79 Fed. Reg. at 34,964. But
EPA has provided no analysis supporting this conclusion. For this reason alone, the
Modified/Reconstructed Proposed Rule for modified Subpart Da EGUs is unlawful. CAA §
307(d)(3). Further, many of the best operating practices EPA cites as mechanisms for achieving
heat rate improvements apply “outside the fenceline,” which is impermissible under section
111(b). APPA defers to the more detailed comments of the Utility Air Regulatory Group
(UARG) addressing these many impermissible actions.
In addition to its flawed BSER determination, EPA has proposed two alternative standards for
modified Subpart Da EGUs that conflict with the Clean Air Act. In the first alternative, modified
units would be subject to a “site-specific 12-operating month rolling average CO2 emission limit
calculated as 2 percent lower than (e.g., 98 percent) the best demonstrated annual historical
operating performance for the affected facility using historical CO 2 emissions data for the
calendar years 2002 through the most recent full calendar year the affected facility was operating
prior to the modification.” Proposed 40 C.F.R. § 60.46Da(c)(3)(i)(A); see 79 Fed. Reg. at
34,973. EPA’s alternative proposal is “a unit-specific emission limit that would be determined
… based on the source’s expected performance after implementation of identified unit-specific
energy efficiency improvement opportunities.” 79 Fed. Reg. at 34,965. Under either proposal,
EPA would require source-specific NSPS determinations. Section 111(b) does not authorize
such individual, source-specific standards.
Even if such standards were legally permissible—and they are not—EPA has not provided the
necessary support for the Modified/Reconstructed Proposed Rule. The docket does not include
the emissions data EPA relied upon, and it does not include any EPA calc ulations demonstrating
the emission rates EPA believes affected EGUs can achieve. Failure to produce that information
violates the procedural requirements of section 307(d)(3) of the Clean Air Act.
EPA’s proposed NSPS for modified Subpart Da units is legally invalid and inadequately
supported by the record in this rulemaking. As such, EPA must withdraw the
Modified/Reconstructed Proposed Rule.
E.
EPA’s Proposed NSPS for Reconstructed Subpart KKKK Units Is
Unlawful.
There are also significant flaws in the proposed NSPS for reconstructed Subpart KKKK units.
EPA’s proposed BSER determination raises several issues. Proposed BSER for reconstructed
subpart KKKK units is “NGCC technology.” 2 79 Fed. Reg. at 34,989. Precisely what EPA
means by “NGCC technology” requires clarification. That technology has evolved over decades,
2
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NaturalGasCombinedCycletechnology
and it is not possible for every NGCC unit to achieve the emission rates of NGCC units
constructed today, regardless of the work performed.
In addition, NGCC is not BSER for a simple cycle turbine, and rebuilding such turbines as
NGCC units would not be “technologically and economically feasible” as required by 40 C.F.R.
§ 60.15(b)(2).3 Such a requirement would also violate the statutory prohibition on requiring “any
new or modified source to install and operate any particular technological system of continuous
emission reduction to comply with any new source standard of performance.” CAA § 111(b)(5).
Because simple cycle turbines cannot meet the proposed standards for reconstructed turbines,
APPA urges that simple cycle combustion turbines be explicitly exempt from the
Modified/Reconstructed Proposed Rule.
The Agency proposes standards of performance for reconstructed units of 1,000 lb CO2/MWhgross for large (850 MMBtu/hr or less) units and 1,100 lb CO2/MWh-gross for small (more than
850 MMBtu/hr) units. 79 Fed. Reg. at 34,989. These standards are identical to EPA’s proposed
standards for new Subpart KKKK units. Existing sources are not likely to be capable of meeting
the same emission rates as new sources, and EPA has not provided a basis for proposing
otherwise here. Unless EPA can provide technical information supporting otherwise,
reconstructed NGCC units should have a standard at least 100 lb CO2/MWh-gross higher than
new units. APPA believes that the EPA failed to identify what additional “headroom” the
NGCC where those units are intermittent (mostly wind) following might need if the state has
existing or new renewable energy requirements. As NGCC units age, they lose efficiency.
NGCC units that engage in heavy ramping for wind following may actually increase their CO2
emissions as those NGCC units age or as more intermittent renewables are added. APPA does
not know what that headroom should be but knows that higher CO2 emissions should be
anticipated as the modified/reconstructed units age.
EPA has also failed to provide data or analysis in the record explaining why EPA believes these
particular rates are achievable under the range of operating conditions these units will
experience. Yet EPA is required to “(1) identify variable conditions that might contribute to the
amount of expected emissions, and (2) establish that the test data relied on by the agency are
representative of potential industry-wide performance, given the range of variables that affect the
achievability of the standard.” Sierra Club v. Costle, 657 F.2d 298, 377 (1981) (citing Nat’l
Lime Ass’n, 627 F.2d 416, 433 (D.C. Cir. 1980)). This generally requires a showing that at least
99 percent of new units would be expected to be able to comply with the NSPS. New Source
Performance Standards, Subpart Da – Technical Support for Proposed Revisions to NOx
Standard at Section 3.2.3 (Analysis of Long-Term Continuous Emission Monitoring Data) at 343, 3-49, 3-55 (June 1997), available at http://nepis.epa.gov/Exe/ZyPURL.cgi?Dockey=
2000IMGW.TXT. Absent that information, the standards, if finalized, would necessarily be
arbitrary and capricious.
Finally, as noted above, reconstructed units are not required to meet the NSPS if it is not
“technologically and economically feasible” to do so. 40 C.F.R. § 60.15(b)(2). EPA must
3
ItisnotclearifEPAisproposingtomakesuchafindingfromthetextofthe
Modified/ReconstructedProposedRule.
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include provisions implementing this requirement and should state expressly that imposition of
any limit that would require the unit to shut down is per se economically infeasible.
F.
EPA’s Proposed NSPS for Modified Subpart KKKK Units Is Unlawful.
EPA states that its analysis supporting its proposal for reconstructed Subpart KKKK units also
applies to modified units. 79 Fed. Reg. at 34,989. As stated above, however, that analysis is
absent from the rulemaking docket, and EPA has provided no additional studies or TSDs
supporting its proposal for modified units. Accordingly all of the flaws identified with respect to
the reconstructed portions of the Modified/Reconstructed Proposed Rule apply here and also
require EPA’s withdrawal of the Modified/Reconstructed Proposed Rule.
In particular, the modified Subpart KKKK proposal is based on an invalid proposed BSER
determination. As noted above, NGCC technology may be the appropriate starting point for an
analysis of BSER, but EPA must clarify what it means by the term and cannot reasonably expect
older units to be capable of achieving emission rates achieved by newly constructed NGCC
units.
In addition, as with the reconstructed unit proposal, EPA’s rule suggests that EPA is proposing
that BSER for modified simple cycle units would be reconstruction as an NGCC unit. Id. at
34,990. As stated above, EPA should explicitly exempt simple cycle combustion turbines
because they cannot achieve the proposed standards.
EPA also proposes to establish standards identical to those for new units: 1,000 lb CO 2/MWhgross for large (more than 850 MMBtu/hr) units and 1,100 lb CO 2/MWh-gross for small (850
MMBtu/hr or less) units. Id. As stated above, EPA has not provided any record evidence
supporting the achievability of these standards. As such, they are per se arbitrary and capr icious.
Finally, EPA requests comment on an alternative unit-specific standard to be determined “based
on implementation of identified energy efficiency improvement opportunities applicable to the
source.” Id. EPA does not have authority under section 111(b) of the Clean Air Act to require
an energy efficiency audit or to impose source-specific standards.
G.
EPA Should Exempt Certain Operational Modes from Subpart KKKK
Compliance.
EPA’s rules for modified and reconstructed NGCC units should expressly exclude modes of
operation that are not normal for NGCC combustion turbines. First, many combustion turbines
are permitted to fire oil as a back-up fuel for up to 30 days per year, particularly during
curtailments when natural gas supplies are short. The Agency has provided no emissions data to
justify any NSPS for combined cycle combustion turbines when they are firing oil.
Second, NGCC units that would be subject to the modified or reconstructed source NSPS have
designs that allow the operators to bypass the steam cycle and operate in simple cycle mode
when necessary. Simple cycle mode operations should also be exempt from compliance with the
NSPS when an NGCC unit falls below the 33 percent capacity factor in that mode.
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H.
EPA Should Retain the One-Third Sales Criterion for Subpart Da
Units.
In its January 2014 proposed GHG NSPS for new EGUs, 79 Fed. Reg. 1430 (Jan. 8, 2014), EPA
proposed that the NSPS would apply to a new boiler or integrated gasification combined cycle
unit only if it (1) “combusts fossil fuel for more than 10.0 percent of the heat input during any 3
consecutive calendar years,” and (2) “supplies more than one-third of its potential electric output
and more than 219,000 MWh net-electric output to a utility power distribution system for sale on
an annual basis.” Id. at 1502; Proposed 40 C.F.R. § 60.46Da(a). Here, however, EPA has
proposed to eliminate both of these applicability criteria in the GHG NSPS for modified and
reconstructed Subpart Da units, effectively expanding the source category beyond that proposed
in its January 2014 proposal. 79 Fed. Reg. at 34,973. EPA should retain the one-third sales
criterion and the low fossil use criterion.
As a legal matter, EPA cannot eliminate these applicability criteria in the NSPS fo r modified and
reconstructed boilers because doing so would expand the scope of those standards of
performance beyond the source category that EPA defined in its January 2014 proposal for new
units. EPA cannot define a source category differently for new, modified, and reconstructed
sources. Nor can the Agency propose to alter the applicability criteria for its new EGU NSPS in
this rulemaking for modified and reconstructed EGUs.
It appears that EPA’s only justification for eliminating the one-third sales criterion and the low
fossil use criterion is its desire to broaden the scope of its proposed emission guidelines for
existing EGUs under section 111(d). The Agency admits that it is proposing to “delet[e] the
criteria to be considered an EGU” in order to “clarify that existing boiler and IGCC facilities
would continue to be included in CAA section 111(d) state programs regardless of their actual
electric sales or fossil fuel use.” 79 Fed. Reg. at 34,979. This is not a valid basis on which to
define a source category for regulation under section 111 of the CAA. Section 111 is clear that
EPA must determine whether to list a source category based on the merits of regulating new
sources in that category alone—including whether such new sources “cause[], or contribute[]
significantly to, air pollution which may reasonably be anticipated to endanger public health or
welfare”—independent of whether existing sources will eventually be subject to regulation.
CAA § 111(b)(1)(A).
Therefore, EPA has not provided a valid justification for eliminating the one-third sales criterion
or the low fossil use criterion for modified or reconstructed Subpart Da units. Accordingly, EPA
should retain those applicability criteria.
III.
Incorporation of Other Technical and Legal Comments by Reference
APPA is a member of UARG, and APPA endorses the comments submitted by UARG regarding
the Modified/Reconstructed Proposed Rule.
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IV.
EPA Should Consider Any Reliability Impacts That May Be Contained
in Assessments by Appropriate Reliability Entities Completed After the
Public Comment Period
APPA is aware that additional reliability assessments regarding the Modified/Reconstructed
Proposed Rule, as well as the proposed emission guidelines under Section 111(d), may be
forthcoming. Such assessments conducted by appropriately designated reliability entities such as
the Federal Energy Regulatory Commission, the North American Reliability Corporation, and/or
regional transmission organizations would be of high value to EPA, the public, and industry.
Moreover, it is likely that such assessments would not be concluded until after the close of the
public comment period for the Modified/Reconstructed Proposed Rule on October 16, 2014.
Given the importance of reliability in general and the specific concerns about reliability that may
accrue as a result of the Proposed Rule, APPA urges EPA to fully consider the results of any
reliability assessments in any final rule for modified and reconstructed EGUs issued under
Section 111(b)
Of particular concern is the performance required of modified/reconstructed existing natural gas
units necessary to back up deliveries from intermittent renewable generation sources such as
wind and solar. For example, the Western Electric Coordinating Council requires a ten or fifteen
minute response time for units providing that service. This can be difficult if not impossible for
units that do not have natural gas storage onsite or nearby. As the use of intermittent renewables
increases, so too do these types of demands for ramping, cycling, and quick response by natural
gas-fired units, some of which may be covered by the requirements of the
Modified/Reconstructed Proposed Rule. The reliability assessments mentioned above are likely
to address this issue, among others, and, again, APPA urges EPA to full consider these issues in
its promulgation of final rules.
V.
Reference to Related Comments
APPA will file more detailed comments on December 1, 2014 regarding the related emissions
guidelines for existing EGUs under section 111(d) (EPA-HQ-OAR-2013-0602).
Contacts:
Theresa Pugh
Director, Environmental Services
(202) 467-2943
tpugh@publicpower.org
Joe Nipper
Senior Vice President, Regulatory Affairs and Communications
(202) 467-2931
jnipper@publicpower.org
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