By Robynn Andracsek, P.E., Burns & McDonnell
The good news is that America’s air quality has measurably improved since Congress passed the 1970 Clean Air Act. The bad news is that political maneuvering and concessions in the original Act and its subsequent amendments have left several “holes” in its coverage, which have yet to be resolved.
Consider one crucial exemption to Prevention of Significant Deterioration (PSD) applicability: routine maintenance, repair and replacement (RMRR). Don’t look in the Act for the meaning of “routine.” You won’t find it.
The EPA specifies a two-step test in determining whether a modification triggers PSD. The first step is to determine if the modification is either a physical or an operational change. Left out from a PSD modification is RMRR, the “routine” portion of which is critical but left undefined, one of the Clean Air Act’s several idiosyncrasies.
If the change is indeed determined to be a PSD modification, the second step is to determine whether emissions will increase above the PSD “significant emission rate” thresholds as a result of the change. This involves “netting” emissions at a facility (discussed in an August 2007 column).
As part of this two-step test, each facility must determine which modifications are “routine” and which are subject to PSD permitting. Trouble is, besides failing to define “routine,” the Clean Air Act also fails to provide a list of possible changes that require a PSD permit. (So, for example, changing a light bulb might be routine whereas replacing a boiler probably would not be.)
The Problem with Grandfather Status
When Congress passed the Clean Air Act, the electric utility industry argued that its oldest (and dirtiest) plants should be exempt from new, stringent limits. The thinking was that those plants would soon be replaced by new plants built under PSD. Those new plants would be subject to best available control technology (BACT). So Congress granted existing facilities “grandfather status” protecting them from the more stringent emission control requirements. This loophole meant RMRR activities were excluded in the regulations from being a physical change that could trigger PSD.
PSD requires grandfathered facilities to upgrade their pollution control equipment whenever they make significant modifications that increase air pollution. PSD excludes RMRR activities. However, industry proved adept at nursing along these older plants avoiding the need to decommission and replace them. Thus, the grandfathered facilities, already considered old in 1970, grew older still. Many remain in operation today, never having been required to meet Clean Air Act requirements.
Judicial Attempt: WEPCO Ruling
Industry was left with no guidance on the meaning of “routine.” A landmark court case on the subject became Wisconsin Electric Power Co. (WEPCO) vs. Reilly. The case came about after WEPCO planned a retrofit project on existing coal-fired boilers. In 1988, WEPCO sued the EPA for failing to grant a PSD exemption under the RMRR provisions. As you may have guessed, the RMRR exemption from “physical change” was never clearly defined. The court’s decision (known as the “WEPCO rule”) described a test for RMRR using five factors: nature, extent, purpose, frequency and cost. These factors’ main attributes are presented in Table 1.
To date, the “WEPCO rule” remains the only detailed explanation of what is and is not routine maintenance. The regulation itself has not been changed. There are no definitive lists of possible modifications or direction as to under which classification each would fall. Every change must be analyzed and all conclusions are open to debate. In short, utilities are left to guess their PSD applicability.
Executive Attempt: Equipment Replacement Provision
For decades prior to the WEPCO case, EPA enforcement of PSD was nonexistent. Then, in 1999, the U.S. Department of Justice filed suit against seven utilities claiming that “repairs” undertaken over the past two decades violated PSD, since corresponding pollution control devices were not installed.
In October 2003, under direction from the Bush administration and in response to industry’s outcry over lawsuits, the EPA finalized guidance through the equipment replacement provision of the PSD review of RMRR exclusion. As part of the equipment replacement provision, replacing process components with an identical or functionally equivalent component is considered RMRR, and thus excluded from PSD. This is true provided that:
- Replacement may not change basic
- design parameters of the process unit
- Efficiency of a process unit is not a basic design parameter
- Permitted emissions of the process unit may not be exceeded, and
- Fixed capital cost of the replacement may not exceed 20 percent of the cost to construct a new process unit.
However, a December 2003 order of the U.S. Court of Appeals for the District of Columbia Circuit prevented the EPA from implementing the equipment replacement provision (along with the exemptions for pollution control projects and clean unit provisions). In essence, it was as if the provisions had never happened.
Congressional Attempt: Clean Smokestacks Act
Rep. Henry A. Waxman (D-Calif.) twice has tried to close the grandfather loophole with the Clean Smokestacks Acts of 2001 and 2005. These acts would have required power plants to meet the new source performance standards (NSPS) either 30 years after the power plant began operations or five years after the Clean Smokestacks Act became law. While best available control technology requires emission rates that are lower than those required by NSPS, the NSPS limits are, in turn, much lower than the current operating levels of grandfathered boilers. In effect, the Clean Smokestacks Act would have mandated emissions lower than currently allowed but not as low as required for a new boiler. Neither of the proposed acts became law.
The lack of regulatory guidance on RMRR is widely recognized by all three branches of government. Even so, utilities are left to gamble with their PSD compliance. Might industry and environmentalists alike have been better off if the original Clean Air Act included a 30-year expiration on grandfather status? As things stand today, efficiency improvements (which could do much to decrease much-publicized CO2 emissions), are routinely abandoned for fear of triggering PSD. Industry deserves clearly defined regulations that spell out precisely when permitting is required.