EPA unveils New Source Review changes

By Timothy P. Krause, Sargent & Lundy

On June 13, 2002, the U.S. Environmental Protection Agency (EPA) released recommended changes to New Source Review (NSR), the major air pollution permitting program that applies to most power plant projects. It appears that the recommended changes would not significantly affect new plants, but could make it easier for existing plants to perform maintenance and improvement projects without triggering new pollution control requirements.

Although the documents released by EPA describe the NSR changes as recommendations to President Bush, EPA has indicated that they are proceeding with implementation. EPA is now preparing regulations to implement the changes, which fall into two categories:

  • Some of the changes (specifically, provisions for Plantwide Applicability Limits, Clean Unit Exclusion, Pollution Control and Prevention Projects, and Projected Future Emission Increases) were officially proposed in 1996 and have been extensively commented on by the public. EPA believes they can finalize these changes without further public comment. Therefore, EPA is preparing final regulations to implement these changes. EPA expects to send the final regulations to the Office of Management and Budget (OMB) around the beginning of July 2002. OMB will have 90 days to review the regulations, after which they will be published in the Federal Register. EPA expects these changes to be in effect by the end of 2002.

  • Some of the changes (specifically, provisions for routine maintenance repair and replacement, debottlenecking, and aggregation of projects) have not yet been proposed. For these changes, EPA is preparing proposed regulations, which will be reviewed by OMB and other government agencies, and then published in the Federal Register for public comment. After the comment period closes, EPA will have to resolve all comments and then publish final regulations. EPA expects these changes to be in effect within approximately two years.

Under current NSR regulations, refurbishment or improvement projects can make an existing plant subject to the stringent pollution control requirements normally applied to new plants. However, the criteria for determining which projects trigger new plant requirements are poorly defined, resulting in a great deal of confusion and controversy. The NSR changes recommended by EPA would give plant owners more flexibility and more certainty about what kinds of projects would trigger new plant requirements. For example, the Routine Maintenance Repair and Replacement provisions would establish clear criteria for determining what projects are “routine” and therefore cannot trigger NSR. Similarly, under the Plantwide Applicability Limits and Clean Unit Exclusion, plants that satisfy certain conditions would be exempt from NSR for a specified period of time. Of course, the ultimate impact of any of these provisions will depend on the exact wording of the regulations now being developed by EPA.

It should be noted that several environmental groups and Northeastern states have criticized the recommended changes and indicated that they will file lawsuits to block their implementation.

EPA documents describing the NSR changes are available at http://www.epa. gov/air/nsr-review/.

Krause is an environmental biologist with more than 25 years of experience in the power industry. He currently supervises Sargent & Lundy’s environmental permitting group. He can be reached at 312-269-6616 or at timothy.p.krause@sargentlundy.com.

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