Air Pollution Control Equipment Services, Emissions

Putting the NSR Pieces Together

Issue 1 and Volume 113.

Robynn Andracsek, P.E., Burns & McDonnell, and contributing editor

Past columns have discussed the various pieces of New Source Review (NSR) in some detail. We’ve covered netting (August 2007), routine maintenance (October 2007) and reasonable possibility record keeping (September 2008) as well as the penalties for NSR violations (February 2008). Now, let’s put all the elements together into a guide for use in evaluating your facility’s projects to document and determine your NSR applicability.

Your first hurdle is to bring together the right people to identify possible NSR projects so that you can evaluate project permitting needs. Start with your existing process for appropriating funds.

Establish a screening criterion to weed out the smaller projects based on a cost threshold rather than to miss a project that needed an NSR permit. You’ll also need “vertical” buy-in from everyone from maintenance staff to plant manager to CEO.

As projects are identified, bring in the facility or corporate environmental staff to make the actual evaluation. Depending on the conclusion, the project might be canceled, modified or authorized. It is better to evaluate a project for permitting implications early in the schedule before investing time and money developing and defining projects.

While you gather buy-in, develop a plan of communication with your legal staff. What documents will be created? To whom will they be distributed? Which communications are protected by confidentiality? Keep in mind that almost anything is fair game. “Confidential” documents must be specific and limited. Documents previously used in power industry lawsuits include corporate annual reports, talks at industry conferences, employee newsletters, appropriation requests, press releases, life extension studies, interviews in local newspapers and engineering studies.

The EPA specifies a two-step test in determining whether a project triggers Prevention of Significant Deterioration (PSD). The first step is to determine if the project is either a physical or an operational change, excluding routine maintenance, repair and replacement. Other exclusions include an increase in the hours of operation, a production rate increase (within the design capacity) and some fuel switches.

The problem here is the undefined exemption for routine maintenance, repair and replacement. The WEPCO test is the best available guidance and should be used to evaluate your project, including specific documentation of each of the WEPCO criteria in regard to your project. It might also be useful to review recent court cases that have applied the WEPCO test to get the proper perspective. Although “routine” seems like an obvious concept, keep in mind that few projects will meet the WEPCO test for “routine.” The characteristics of a “routine” project are found in the Cinergy, Ohio Edison and Allegheny Energy rulings:

  • Applies to a narrow range of activities
  • Routine for a generating unit, not industry
  • Occurs regularly
  • Involves no permanent improvements
  • Is typically limited in expense
  • Is usually performed in large plants by in-house employees
  • Is treated for accounting purposes as an expense
  • Burden of proving applicability is on the party claiming the benefit
  • Exempts no activity categorically.

Because it will be difficult for most projects to meet the WEPCO test for the “routine” exemption, calculating the emissions increase will be critical in determining a project’s permitting needs. The first consideration should be what exactly the project is and what unit it concerns. Not every project will affect your boiler. For example, modifying a cooling tower’s drift eliminators would not affect the boiler’s operation, but a change to a feed water pump would. Note that including demand growth is not required for NSR applicability but is required for reasonable possibility applicability. If you are attempting to net out of NSR, you must determine your contemporaneous window and include all contemporaneous emissions increases and decreases at your facility. Projects within the window that obtained NSR permits are excluded. Netting is a simple concept that is torturously complicated to execute and should not be attempted without professional assistance. One approach is to start by making the most conservative assumptions and progress to a more detailed analysis—including netting—only if needed and until you either get where you need to go, or hit a permitting road block.

Risk Management

The goal of developing an NSR applicability process is to mitigate your risk of non-compliance with the confusing and poorly defined NSR regulations, not to make yourself bullet-proof. Start a company-wide dialogue on the NSR regulations and your process for evaluating projects. Include state pollutants, such as mercury or sulfuric acid mist, state permitting requirements for minor, non-NSR projects and updates to operating permits or fugitive dust control plans, as applicable. Accept that regulators in your state may not have a clue as to how to deal with your applicability determination requests and reasonable possibility records. Your goal is to establish a defendable process based on your best interpretation of the regulations. Building your baseline emissions is a legitimate corporate strategy. Concede that keeping grandfathered plants out of NSR forever is likely a lost cause; these boilers will continue to be the focus of enforcement initiatives until they are controlled or shut down. You can, however, work within the system to keep control and—as much as possible—shut down on your timetable.