By Roy Belden

The US Environmental Protection Agency issued new rules in March that explain the Clean Air Act air toxics permitting procedures for owners and operators of combustion turbines.  Understanding these new rules is crucial to ensuring compliance and avoiding enforcement risks. The new rules were released on the EPA’s web page on March 6 and are available at http://www.epa.gov/ttn/oarpg/t3pfpr.html.

Background

The 1990 Amendments to the Clean Air Act initially exempted electric steam generating units from compliance with new technology-based air toxics provisions.  Many thought that the exemption also covered combined-cycle systems that generate electricity using combustion turbines, heat recovery steam generators, and steam turbines.  Compounding the confusion was the fact that different EPA offices reached different conclusions about whether combustion turbines were currently in or out of the air toxics program.

In May 2000, EPA clarified that all combustion turbines are subject to the so-called “section 112” air toxics provisions of the Clean Air Act.

In December that same year, EPA decided that hazardous air pollutant, or “HAP,” emissions — in particular mercury emissions — from coal- and oil-fired power plants are a potential concern for public health. The agency added such power plants to the list of pollution sources that are subject to section 112 of the Clean Air Act. (Natural gas-fired electric steam generating units are exempt from the air toxics provisions.) By including coal and oil-fired power plants under the federal air toxics program, EPA obligated itself to propose a final HAP emissions standard, which is scheduled to be issued by December 2004.

The significance of the May 2000 interpretation and the December 2000 finding is that power plant owners must make sure that they are in compliance with the federal air toxic permitting requirements. There are currently two federal air toxics programs under section 112.  They are referred to as “112(j)” and “112(g).” The 112(j) program applies to both existing and new plants. The 112(g) program applies to new and reconstructed plants.

112(j)

The idea behind the 112(j) program is to have state pollution control authorities establish pollution control standards on a case-by-case basis for categories of pollution sources for which EPA has not yet issued emissions standards by a specific date — May 15, 2002. The rules issued last month outline the permitting procedures under which state permitting authorities are to determine “maximum achievable control technology,” or “MACT,” limits for covered sources.

To date, EPA has not announced section 112 air toxic standards for combustion turbines, and the agency will clearly miss the statutory deadline of May 15 this year to do so.  Recognizing that it was not going to meet the deadline for more than 60 categories and subcategories of sources, EPA bought itself some time in the new permitting procedures by allowing sources up to 24 additional months to submit detailed case-by-case section 112(j) permit applications.

The agency has established a two-part application process under the section 112(j) program.  Existing and new power plants with combustion turbines that will emit air toxics above major source thresholds will have to comply with the new section 112(j) rules.  Major source thresholds are 10 tons per year of any one of the 188 listed HAPs or more than 25 tons of any combination of HAPs.  Power plants are currently not subject to the section 112(j) permit application requirements because the deadline for proposing MACT standards for the category has not yet expired.

The first part of the 112(j) application is due by May 15, 2002 and involves giving notice that the plant is a major HAP source, identifying the location of the plant, and listing the units subject to the source category. The part one application must be submitted to the permitting authority that is implementing the “Title V” air operating permit program in that particular state.  Air toxics requirements will ultimately be incorporated into a plant’s Title V permit.  Like Title V applications, a responsible official of the company must sign the application.

The second part of the application is much more complex and requires detailed information about emissions and emission units, including identification of applicable emission limitations and any existing control technology, emission rates for controlled and uncontrolled air toxics, and information relevant to establishing the MACT emission standard.  The company may also submit a recommended MACT standard.  For existing sources, MACT must be at least as stringent as the average emission limitation achieved by the best performing 12% of existing sources in the category.  New source MACT is generally based on the emission control achieved in practice by the best-controlled similar source.

The part two application is due 24 months after the part one application is submitted. The permitting authority will have 18 months after the date it receives a complete part two application to issue a case-by-case determination.  The section 112(j) rule application process is set up with a sufficiently long lead time to allow EPA an opportunity to announce the remaining air toxics emission standards before permitting authorities are forced to act on case-by-case MACT determinations.

In the event that EPA does not come up with the source category MACT standards in time, then the section 112(j) determination will be incorporated into a plant’s Title V permit and the permitting agency has the discretion to leave it in place as long as the case-by-case MACT standard is of at least equivalent stringency to the MACT standard ultimately promulgated by EPA.  If the EPA’s subsequently-issued standard is more stringent, plants will generally have up to eight years to comply with the new EPA MACT standard.

Failure to file the requisite section 112(j) air permit applications by the appropriate deadlines will constitute a violation, and penalties could run as high as $27,500 a day per violation.

112(g)

New or reconstructed combustion turbines and new or reconstructed coal- and oil-fired electric utility units are also subject to section 112(g) requirements.  Section 112(g) requires a case-by-case MACT determination for new or reconstructed sources in a source category where emissions standards have not yet been promulgated.

A “reconstructed” source generally means a source where components of an existing process or unit were replaced, but only if the replacement cost for the new components exceeds 50% of the cost to construct a comparable process or unit.  Under the section 112(g) rules, a source must apply for a case-by-case MACT determination as part of its preconstruction approval process.  It must submit detailed information similar to that required by the section 112(j) part two application.  Section 112(g) determinations will be incorporated into a plant’s preconstruction permit or combined preconstruction/Title V permit.

The new section 112(j) rule issued in March provides guidance on how the section 112(j) application process and the section 112(g) determination will interact.  A section 112(g) MACT standard will be required to be in place before the plant starts operations, and this determination will typically satisfy the section 112(j) requirements.