In the Matter of:             ) PRIVATE

                              )

HEARING TO TAKE COMMENT ON    )

EPA'S PROPOSED RULEMAKING     )

ENTITLED, "STATE              )

IMPLEMENTATION PLANS:         )

RESPONSE TO PETITION FOR      ) Docket No. EPA-HQ-OAR

RULEMAKING; FINDINGS OF       )            2012-0322

SUBSTANTIAL INADEQUACY; AND   )

SIP CALLS TO AMEND PROVISIONS )

APPLYING TO EXCESS EMISSIONS  )

DURING PERIODS OF STARTUP,    )

SHUTDOWN, AND MALFUNCTION     )

Pages:  1 through 76

Place:  Washington, D.C.

Date:   March 12, 2013

	IN THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

In the Matter of:             )

                              )

HEARING TO TAKE COMMENT ON    )

EPA'S PROPOSED RULEMAKING     )

ENTITLED, "STATE              )

IMPLEMENTATION PLANS:         )

RESPONSE TO PETITION FOR      ) Docket No. EPA-HQ-OAR

RULEMAKING; FINDINGS OF       )            2012-0322

SUBSTANTIAL INADEQUACY; AND   )

SIP CALLS TO AMEND PROVISIONS )

APPLYING TO EXCESS EMISSIONS  )

DURING PERIODS OF STARTUP,    )

SHUTDOWN, AND MALFUNCTION     )

			Room 1153

			Ariel Rios Building EPA East

			1200 Pennsylvania Avenue, N.W.

			Washington, D.C.

			Tuesday,

			March 12, 2013

		The parties met, pursuant to notice, at 9:09 a.m.

		BEFORE:  Joseph Dougherty, EPA, Office of Air

		         Quality Planning and Standards

		         Geoffrey Wilcox, EPA, Office of General

		         Counsel

SPEAKERS:

ROBERT ALVEY, President, Board of Public Utilities, Kansas City, MO

ROBERT MANNING, Hopping Green & Sams, Tallahassee, FL, on behalf of
Florida Electric Power Generating Group

MICHAEL DOWD, Director, Air Division, Virginia Department of
Environmental Quality

STEPHANIE MADDIN, D.C. Office of Earthjustice

SPEAKERS:  (Cont'd)

JEFF HOLMSTEAD, Electric Reliability Coordinating Council

BRUCE BUCKHEIT, Fairfax, VA

LESLIE RITTS, National Environmental Development Association, Clean Air
Project

MAXINE LIPELES, Washington University School of Law, Interdisciplinary
Environmental Clinic

SPARSH KHANDESHI, Environmental Integrity Project

TAMARA EVANS, Sierra Club, Environmental Law program

TERRY MCGUIRE, Sierra Club

ALEX BOND, Director of Air Quality, National Mining Association

	P R O C E E D I N G S

	(9:09 a.m.)

		MR. DOUGHERTY:  My name is Joseph Dougherty, and I'm representing
EPA's Office of Air Quality Planning and Standards.  I'll be chairing
today's hearing.  Joining me on this hearing panel is Geoffrey Wilcox,
EPA's Office of General Counsel, in our air and Radiation Law office.

		Thank you for attending this public hearing held by the U.S.
Environmental Protection Agency.  We're holding this hearing to take
comment on EPA's proposed rulemaking entitled, "State Implementation
Plans:  Response to Petition for Rulemaking; Findings of Substantial
Inadequacy; and SIP Calls to Amend Provisions Applying to Excess
Emissions During Periods of Startup, Shutdown, and Malfunction."

		This proposed rulemaking was signed on February 12, 2013, and posted
on the internet the next day.  The proposed rulemaking was published in
the Federal Register on February 22, 2013, at page 12460.

		We are here today to listen to your comments on EPA's proposed action.
 The purpose of this hearing is to listen to your comments, but not for
Mr. Wilcox or me to expand upon, discuss, or debate the proposal.
Today's hearing is one opportunity for the public to comment on EPA's
proposed rulemaking.  You may also submit written comments.  A four-page
fact sheet of the proposal is available in the registration area and
also online summarizing the proposal and includes detailed information
for submitting written comments.

		The EPA invites public comment on specific elements of the proposed
rulemaking as well as on any other issues raised by the proposal.  The
rule would ensure that states have plans in place to require industrial
facilities across the country to follow air pollution rules even during
times when the facility is starting up and shutting down or when a
malfunction occurs.  Air pollution emitted during these periods of
startup and shutdown or malfunction, periods that collectively are often
referred to as SSM for short, may adversely affect the health of people
nearby and may contribute to smog and other problems in communities that
are further downwind.

		As explained in our fact sheet, the proposed action responds to a
petition for rulemaking that the Sierra Club filed with the EPA
Administrator in 2011.  The Petition included three interrelated
requests concerning the treatment of excess emissions of air pollution
that may occur when an industrial facility is starting up or shutting
down or when a malfunction occurs, specifically how those emissions are
treated in state implementation plan provisions that the EPA approved in
the past.

		Along the lines of the Petition's three requests, let me now summarize
three main aspects of the proposed rulemaking.  First, the EPA proposes
to deny the request in the Petition that EPA prohibit affirmative
defenses in SIPs.  Rather, the EPA is revising its previous policy to
continue to allow affirmative defenses in SIPs for states that choose to
provide them, for excess emissions that occur when a facility is
experiencing a malfunction, but not for excess emissions that occur when
a facility is operating in a planned startup or shutdown mode.

		An affirmative defense is allowable when well-managed facilities
experience malfunctions due to circumstances beyond their control, and
the affirmative defense would shield the facility from monetary
penalties but not from the responsibility to take action to limit future
problems.

		Second, the EPA proposes to grant the Petitioner's claim for 36 of the
39 states identified in the Petition by proposing to determine that
these 36 states have approved SIPs that include one or more SSM
provisions that are inconsistent with the Clean Air Act.

		The EPA is proposing a "SIP Call" for each of these 36 states.  Under
the SIP Calls, the EPA would direct the affected states to correct
specific SIP provisions related to SSM.  The 36 states are listed in the
fact sheet that I mentioned earlier.

		Related to the proposed SIP Calls, the EPA has in the same notice
proposed to issue findings that SSM provisions in the SIPs of these 36
states do not meet the requirements of the Clean Air Act.  As a matter
of procedure, in accordance with the Clean Air Act, the EPA must make
such "inadequacy" finding in order to call upon a state to revise and
resubmit its plan.

		According to our proposal, once the EPA makes its final finding of
inadequacy, affected states would have 18 months within which to correct
and submit their SIP provisions to the EPA.

		Third, the EPA proposes to deny the request in the Petition that EPA
discontinue reliance on interpretive letters from states to clarify any
potential ambiguity in the state SIP submission.

		Before we open the floor for testimony, allow me to explain how this
hearing will operate and how to comment.  Today we will be accepting
oral comments in our proposed rulemaking, and we will be preparing a
written transcript of this hearing.  The transcript will be available to
the public as part of the official record for this rule, and EPA will
consider both oral comments and written comments as we move forward in
the rulemaking process.

		As explained in the proposal notice at page 12461, we are extending
the comment period to 30 days beyond today's public hearing date, and so
will accept written comments on the proposed rule until April 11, 2013.

		For those who will be providing oral comments today, I will call each
scheduled speaker to the microphone, which is right there.  When it is
your turn to speak, please state your name and your affiliation.  It
will help the court reporter over there in preparing our transcript if
you also spell your name.  If you wish to speak but have not already
registered to speak, either through the pre-registration or today at the
registration desk, please check in with our staff at the registration
table located just outside the entrance to this room.  That's Crystal
outside.

		We ask that you limit your testimony to not longer than five minutes.
After you finish your testimony, Mr. Wilcox or I may ask you clarifying
questions to be sure that we and others in EPA understand your comments.
 If in addition to the transcript you would also like to put the full
text of your written statements into the docket, please be sure to give
a copy of any written comments to our staff at the registration table.
We intend to stay until 6 p.m. this evening or one hour after the last
registered speaker has spoken, whichever is later.

		The lunch break is scheduled from 12:30 p.m. until 2 p.m.  I would
like to thank you all for participating today.  And if I have a chance
to call our first speaker, it's David Alvey.

		MR. ALVEY:  Good morning.  I am David Alvey, A-L-V-E-Y.  I'm the
President of the Board of Public Utilities, Kansas City, Kansas.  We
appreciate this opportunity to present the Board of Public Utilities'
views concerning the impact of EPA's proposal to issue a SIP call
regarding Kansas regulation emissions during startup, shutdown, and
malfunction, the effect it will have on BPU's efforts to comply with its
obligations both to provide affordable, reliable electric service to its
customers and to meet the several recent EPA rules limiting emissions by
electric generating units.

		Just some basic facts about the Board of Public Utilities.  We are a
municipally owned, not-for-profit utility.  We are governed by an
elected board.  We are subject to the laws, the regulations, and Charter
Ordinances of the Unified Government of Wyandotte County, Kansas City,
Kansas.  I and five other board members, together with our General
Manager, Don Gray, who is present this morning, govern the day-to-day
business and strategic business planning for the BPU.

		The BPU operates water and electric utilities for the benefit of
residents and businesses and industries in Wyandotte County and provides
electricity for the operation of the public water supply for neighboring
Johnson County, Kansas.  The BPU also provides power to the City of
Columbia, Missouri, and to the Kansas Municipal Electric Association for
distribution.

		In BPU's Wyandotte County service area, we have approximately 65,000
residential, commercial, and industrial electric BPU customers.  Our
larger customers include the Kansas Speedway, Hollywood Casino, and
Schlitterbahn Vacation Village and Water Park, that makes up our village
west area.  It's the most popular tourist destination in Kansas.

		We also have several important industrial customers, General Motors,
Certain Teed Corporation, Owens Corning, Procter & Gamble, Griffin
Wheel, and the University of Kansas Medical Center.  Nonetheless,
Wyandotte County is one of the poorest counties in Kansas and by some
statistics would be the poorest county in Kansas.  More than 20 percent
of our citizens live below the poverty level.  Many of them are
disabled.  They live on fixed incomes.

		We make sure our electric service is affordable for these and for all
of our customers.  That is our top priority.  To that end, the BPU has
managed its resources carefully to comply with applicable laws,
including air quality laws and regulations, and to operate as a
responsible utility that utilizes a mix of electric generation,
including coal-fired units as well as renewables, wind, hydro, landfill
gas, as well as energy efficiency programs.

		The proposed rule would have its biggest impact on the BPU's operation
of its three coal-fired electric generating units, two units at the
Quindaro Station and one at the Nearman Station.  These baseload units
offer the most affordable electricity generation to our customers.

		In addition to transmission constraints that restrict BPU's ability to
import electricity, one of the Quindaro units is for all practical
purposes the only reliable source of electricity for about half of our
residential customers, and that would be in the poorest area of the
county.

		All three units operate in compliance with the terms of their air
permits and under the terms of the Kansas Clean Air Act State
Implementation Plan.  The Kansas SSM regulation at issue, Kansas
Administrative Regulation ( 28-19-1, approved by the EPA in 1971, has
been relied upon by the BPU since then to assure that BPU remains in
compliance with applicable emissions requirements during times of
startup, shutdown, and malfunction at its coal-fired units.

		The Kansas SSM regulation is designed to cover very small periods of
time in the range of .25 to 1.5 percent when BPU's units are in
operation.  The amount of SSM emissions during these times does not
jeopardize the air quality or the ability of the BPU to meet its
emission obligations at other times.  The Kansas SSM regulation, and as
EPA's proposed rule recognizes, responds to this simple fact.
Technology is imperfect.

		Despite BPU's best efforts to maintain and to operate our units within
the financial limits of our not-for-profit charter and the political
realities we face, emissions do vary.  And the Kansas SSM offers a
balance between assuring that the overall emissions limits are met and
at the same time providing leeway for varying operating conditions.  And
this leeway assists the BPU in meeting its goal to provide reliable
electricity that its customers can afford.

		The Kansas SSM regulation offers protection against potential monetary
penalties that could be incurred if some leeway is not allowed for the
limits, as applied to BPU's current generation capability.  As you are
well aware, the size of the penalties can be multiplied very quickly
into staggering amounts of money that would clearly cripple BPU
significantly, if not fatally.  And again, as a municipally-owned
utility, should it cripple the BPU, it would also cripple our unified
government.

		While BPU understands that those penalties are intended to be an
incentive to ensure compliance, EPA's recent, more stringent emission
limits places a tremendous compliance burden on BPU and other public
power entities that given the legal and political realities we face
simply cannot be speeded up regardless of the potential monetary
penalties related to violations.

		To pick one example from the plethora of new Clean Air Act regulations
that apply to electric generating units within which BPU must comply, we
estimate that the controls necessary to meet the limits set by EPA's
Mercury and Air Toxic Standards for the Nearman unit alone will cost
$250 million.  Obviously, it will cost even more to fund needed controls
for our other units and for other EPA rules.

		In today's economic and political climate, it has taken and will
continue to take us considerable time to obtain all the approvals that
we need from city, county, state, and federal governmental and
regulatory bodies.  There is no way around those realities.  Making BPU
subject to potential monetary penalties related to SSM events offers no
realistic incentive for speeding this process.  In fact, it would only
make BPU's situation more difficult.

		In sum, the bottom line is the BPU is making good faith efforts to
comply with the regulation's requirements of the Clean Air Act.  At the
same time, we have a specific responsibility to do so in a way that we
can continue to sustain our county and our citizenry financially.  And
this additional burden would simply make that perhaps not possible.

		We don't need penalties to encourage us to make these changes.  Thank
you again for the opportunity to address this matter.  If you have any
questions, I'll be happy to answer them.

		MR. DOUGHERTY:  Thank you very much.

		MR. ALVEY:  Thank you.

		MR. MANNING:  Good morning.  My name is Robert Manning.  Excuse me.
I'm with the law firm of Hopping Green & Sams in Tallahassee, Florida.
I'm here today on behalf of the Environmental Committee of the Florida
Electric Power Coordinating Group, also known as the FCG-EC.  Thank you.

		The FCG-EC is a nonprofit organization in the state of Florida that
represents investor-owned utilities, electric cooperatives, and
municipal utilities on environmental issues affecting the electric
utility industry.  The FCG-EC is very concerned about EPA's proposed SIP
call relating to emissions during startup, shutdown, and malfunction.
EPA's proposal has serious flaws and will have serious consequences if
finalized as proposed.

		Procedurally, EPA has not provided sufficient time to prepare comments
in advance of this hearing today, and given the unique state-specific
issues involved, the FCG-EC has requested that EPA conduct hearings in
each affected state or at a minimum in each EPA region.

		Also, EPA is not providing sufficient time to develop meaningful
comments on this proposal, and the FCG-EC has requested a 90-day
extension of that public comment period until July 10, 2013.  The FCG-EC
is awaiting EPA's response.  And I would like to ask at this time if EPA
has a schedule for responding.

		MR. WILCOX:  It's been taken under advisement to evaluate anyone who's
asked for an extension of time, and it will be evaluated.

		MR. MANNING:  Okay.  Thank you.  There are 36 states directly affected
by EPA's proposal, and no two state SSM rules are alike.  Most of the
provisions at issue were added to SIPs and approved by EPA decades ago.
Florida's SSM rules, for example, were approved by EPA over 30 years
ago.  Notably, during this period, air emissions in Florida have
decreased substantially, and there have been very few issues with
attaining and maintaining the National Ambient Air Quality Standards.

		The Clean Air Act authorizes EPA to issue a SIP call after it finds
that a SIP is substantially inadequate.  EPA's unsupported allegations
do not meet this standard.  EPA has declined to present any data showing
that any of the state rules are having a negative impact on the
attainment or maintenance of National Ambient Air Quality Standards, nor
any data that the rules are prohibiting or hindering enforcement.

		In Florida, for example, we are not aware of any issue related to
ambient standards and SSM rules, and EPA states in the proposal that
Florida's rules are directly, "directly enforceable by the state, the
EPA, [and] members of the public."

		And I would also like to ask at this time -- I know that EPA did not
provide any of that type of information, but does EPA have that
information and it just doesn't feel that it needs to provide it, or --

		MR. WILCOX:  Well, I think we are interested in any data that you
provide, Mr. Manning.  We're certainly interested to see what you have.
And this is something that the agency evaluates.  As you know, we don't
necessarily think it's necessary to establish those particular problems,
but we are interested in what you have.

		MR. MANNING:  Great.  Thank you.  EPA has also declined to properly
evaluate the substantial consequences of this proposal, which will
involve revising 36 states' rules, including EPA's review and approval
of SIP provisions, revising every permit that contains the SSM rules at
issue, which in Florida is every permit; developing reporting protocols
for immediately advising permitting agencies, which will be a
substantial increase in their workload; and the possibility of
restricting operations, developing alternative SSM limits, reducing
emissions, which is not even technically possible in many SSM
situations, or reporting and annually certifying noncompliance regarding
operations that are currently authorized.

		In sum, there is no evidence of a problem here, and the consequences
of EPA unraveling decades of history are severe.  EPA's proposal
contains serious flaws, and the FCG-EC requests that EPA reevaluate its
action, develop additional data regarding its proposal, and provide
additional time for the public to review and comment on such
information.

		Thank you for the opportunity to present our initial comments today.

		MR. DOUGHERTY:  Thank you.

		MR. MANNING:  Thanks.

		MR. DOWD:  Good morning.  I am Michael Dowd, Director of the Air
Division for the Virginia Department of Environmental Quality.  Thank
you for the opportunity to provide oral comment on this proposed SIP
call.

		Virginia is one of the states affected by the proposed SIP call, which
with respect to Virginia focuses exclusively on the alleged inadequacy
of a single regulatory provision concerning malfunctioning facilities
found at 9 Virginia Administrative Code 5-20-180G.

		Unfortunately, the proposed SIP call took that regulation out of
context and failed to account for other provisions of Virginia's air
pollution regulations that constrain DEQ's discretion with respect to
malfunctions.  EPA's proposed SIP call overlooked two significant
Virginia regulatory provisions:  9 VAC 5-40-20E and 9 VAC 5-50-20E,
which require owners to maintain and operate facilities and air
pollution control equipment in a manner to minimize emissions at all
times, including periods of malfunction.  Both of these regulations are
approved as part of the Virginia State Implementation Plan.

		A related provision of Virginia's air pollution control regulations
also ignored by EPA is 9 VAC 5-20-180I, which requires facilities to
operate in compliance with National Ambient Air Quality Standards.  This
provision allows DEQ to order a facility to reduce operations or shut
down if necessary in order to prevent a violation of a NAAQS.  It does
not exempt NAAQS exceedances caused by malfunctions.

		Virginia's air pollution control regulations when read in their
entirety do not give DEQ the discretion to allow a facility to operate
in noncompliance with its emission limitations due to malfunction.  In
fact, Virginia facilities are under a continuing, federally enforceable
obligation to minimize emissions at all times, including periods of
malfunction.

		Therefore, 9 VAC 5-20-180G simply does not present a bar to obtaining
injunctive relief to remedy emission exceedances or NAAQS violations
caused by malfunctions.  Perhaps EPA's failure to consider the effect of
these other regulations on 9 VAC 5-20-180G is understandable.  After
all, Virginia's air pollution control program is complicated.

		However, the program was legally adopted by Virginia and approved by
EPA in the SIP process in accordance with the Clean Air Act's mandate
for a federal-state partnership.

		Okay then.  Virginia asks the following three things of EPA as it
finalizes the SIP call.  First, have an open mind.  EPA should carefully
consider comments from affected states like Virginia.  State air
pollution control programs like Virginia's are complicated.  EPA should
recognize where it has overlooked or misinterpreted relevant provisions
of a state air pollution control program and revise the final SIP call
accordingly.

		Second, EPA should respect the federal-state partnership created by
the Clean Air Act.  The Agency should not substitute its judgment for
that of a state absent clear evidence that the state implementation plan
violates the Clean Air Act and is not merely at odds with EPA guidance.
EPA therefore should not focus on whether a single provision of the
Virginia SIP adheres to the letter of unpromulgated guidance documents.

		Instead, EPA should consider whether the Virginia SIP as a whole
provides the state with effective tools to ensure that malfunctioning
facilities are brought into compliance with their emission limitations
as soon as possible.  The current Virginia SIP does that.

		Indeed, Virginia's approach is at least as protective of the
environment as EPA's, if not more so because it focuses on the rapid
resolution of malfunctions without first resorting to enforcement.
Initial resort to the enforcement process is not the appropriate way to
resolve emission exceedances caused by malfunctions that are beyond the
control of a facility.  That approach is neither required by the Clean
Air Act nor conducive to the prompt resolution of malfunction
situations.

		And third, EPA should not impose a one-size-fits-all solution on
states affected by this proposal.  State air pollution control programs
and state implementation plans are unique.  Therefore, solutions to fix
alleged deficiencies in individual SIPs should be custom-tailored to
individual state programs.

		Again, thank you for this opportunity to make this presentation.  The
Virginia DEQ will be submitting written comments on this proposal, and I
have copies of my oral statement also available if you'd like those.  We
look forward to working with EPA to achieve a fair resolution of this
matter.  I'd be happy to answer any questions.

		MR. WILCOX:  Thank you, Mr. Dowd.  And as you said, your comments that
you have articulated, you have them?

		MR. DOWD:  Yes, sir.  Yes, sir.

		MR. WILCOX:  Appreciate it.  Thank you for commenting.

		MR. DOWD:  You're welcome.

		MR. DOUGHERTY:  We have no one immediately scheduled next.  We'll take
a 10-minute break.

		(Whereupon, a brief recess was taken.)

		MR. DOUGHERTY:  Back on the record.  Stephanie Maddin.

		MS. MADDIN:  (Away from the microphone.)

		MR. DOUGHERTY:  I'm sorry?  Yes.  Right up there, please.

		MS. MADDIN:  And I have a couple of -- a copy for the person that's I
guess doing the --

		MR. DOUGHERTY:  We can take that, that's fine.  Thanks a lot.

		MS. MADDIN:  I can just go ahead?  Okay.  Good morning.  My name is
Stephanie Maddin.  I'm legislative counsel at the D.C. office of
Earthjustice.  I will be reading testimony prepared by Paul Cort, the
practice chair for our air practice group at Earthjustice.  We're also
going to be filing more robust technical comments, so this is just going
to be a brief summary.

		We welcome EPA's action to remove the numerous state exemptions that
have excused pollution violations caused by startups, shutdowns, and
malfunctions.  These loopholes undermine the public health and welfare
guidelines and guarantees of the Clean Air Act.  The Clean Air Act
envisions a state-federal partnership in ensuring that areas with
unhealthy air quality clean up pollution, but this deference to states
has been abused and used as an excuse to ignore practices that undermine
the more basic goals and promises of the Act.

		We agree with EPA that the Act compels EPA to remove SSM exemptions
from state implementation plans.  We disagree, however, with the
proposed conclusion that some affirmative defenses can be retained where
they are limited to a defense against penalties for unavoidable
malfunctions.  We will submit our legal comments in writing.

		Today, I just want to focus on the reasons why EPA's decision to allow
these affirmative defenses is bad policy.  There can be no dispute that
malfunctions injure public health and welfare.  It does not matter that
they are accidents or that they are unplanned.  When those events result
in spikes in pollution, the surrounding communities suffer and sometimes
in horribly tragic ways.

		As such, EPA policy should be to minimize these events.  EPA
acknowledges in the proposal that "Removal of [the] monetary incentive
to comply with the SIP reduces a source's incentive to design, operate,
and maintain its facility to meet emission limitations at all times" (78
Fed Reg. at 12485).  This incentive applies equally to malfunctions.
Sources can be designed to be more or less failsafe.  Even when
accidents happen, the consequences can be more or less severe depending
on the investments and the decisions that the source has made in
anticipation of such upsets.

		These decisions regarding -- are cost-benefit calculations made by the
sources, the costs of building in safety compared to the risks and costs
of failure.  Allowing states to waive penalties for malfunctions
undermines the incentives to make sure accidents simply don't happen.
So why would EPA allow such exemptions?

		The theory seems to be one of fairness.  But nothing prevents
enforcement agencies or the courts from exercising such notions of
fairness.  EPA's approach short-circuits that case-specific analysis for
no apparent reason other than to undermine the preventive incentives
that penalties provide.  EPA should abandon the proposed distinction
between planned and unplanned events and remove all exemptions and
affirmative defenses from these SIPs.

		Thank you, and that's the conclusion of my testimony.

		MR. DOUGHERTY:  Thank you.  Thank you very much.  Our next speaker
isn't until 10:30, so we will break until then.

		(Whereupon, a brief recess was taken.)

		MR. DOUGHERTY:  Let me call Jeff Holmstead.

		MR. HOLMSTEAD:  Well, thank you for giving me the chance to speak
today.  I'm a little behind schedule because I think the wrong address
may have been on the -- so I went to the other building.

		MR. DOUGHERTY:  I apologize for that.

		MR. HOLMSTEAD:  No, no.  I just -- you would think I would know where
I was going.  My name is Jeff Holmstead.  I'm speaking this morning on
behalf of the Electric Reliability Coordinating Council.

		MR. DOUGHERTY:  Just a second, Mr. Holmstead.  Is the microphone
turned on so that other people can hear?  I'm sorry.  I can barely hear
myself over the rain.

		MR. HOLMSTEAD:  Yes.

		(Pause.)

		MR. HOLMSTEAD:  All right.  Can you hear me better now?

		MR. DOUGHERTY:  That's better, okay.  With all that rain, it was hard
to hear.

		MR. HOLMSTEAD:  All right.  No.  I thought that was maybe something
that Bruce Buckheit arranged to drown out my testimony.  But as I think
the two of you know, I've worked on Clean Air Act issues for almost 25
years as a member of the White House staff during the debate over the
enactment and implementation of the 1990 amendments, then as an attorney
in private practice, and also as the head of EPA's Air Office from 2001
to 2005.

		As I've said many times, I have a great deal of respect for my former
colleagues at EPA and do recognize that they do a great deal of
important work to protect human health and the environment.  The
proposed SIP calls unfortunately do not fall into this category and in
my view represent EPA at its worst.

		As the result of private negotiations between EPA and a single
environmental group, EPA now proposes to impose a very substantial
burden on 36 states by forcing them to change regulatory provisions that
were previously approved by EPA and in most cases have worked quite well
for many decades.

		This is especially troubling in light of the fact that these SIP calls
at least according to EPA will have little or nothing to do to improve
air quality or public health.  As the proposal itself makes clear, EPA
and states already have all the tools they need to regulate emissions
that occur when a plant is starting up or shutting down.  There's never
been any question about EPA's ability to impose injunctive relief.

		So the only purpose as far as I can see of the proposed SIP call is to
make it easier for a handful of environmental advocacy groups to bring
lawsuits seeking monetary penalties.  If EPA finalizes these SIP calls
as proposed, 36 states will be forced to use their limited resources to
go through a long and cumbersome regulatory process that in the end will
do nothing to improve public health or the environment but will enrich a
small group of plaintiffs' lawyers.  This strikes me as a silly waste of
time and resources.

		But it's not just a waste of time and resources.  It also represents,
I think, a fundamental shift in the balance that Congress struck in the
Clean Air Act between states and EPA.  Congress and a number of courts,
including the Supreme Court, have made it clear that states do have
broad discretion in terms of how they deal with sources of emissions
within their boundaries, and EPA cannot force a state to change its SIP
unless the SIP is "substantially inadequate, one, to attain or maintain
a national ambient air quality standard; or two, substantially
inadequate to comply with certain specific enumerated requirements in
section 110 of the Clean Air Act," unquote.

		Now this proposal does not say that these provisions somehow make the
SIP substantially inadequate to attain or maintain the NAAQS.  Instead,
EPA has apparently discovered a new requirement in section 110 that EPA
is now announcing for the first time in the proposed SIP call.
Apparently, the Clean Air Act makes it very clear that states must allow
lawsuits to be brought to seek monetary penalties for emissions that
occur during startup and shutdown even though state environmental
officials believe that there is nothing that can be done to reduce these
emissions.

		This is puzzling to think that a disagreement over this issue has now
made 36 state implementation plans substantially inadequate.  In the
proposed SIP calls, EPA finds fault with any SIP that provides state
officials with any discretion in deciding whether monetary fines should
be imposed for emissions that occur when a plant is starting up or
shutting down.

		This actually is amazing to me, that EPA is critical of allowing even
this little bit of amount of discretion for state officials when in
recent years EPA has claimed enormous discretion for itself over a
number of matters that are much more important in terms of protecting
air quality.  So EPA apparently can exercise enormous discretion where
states can't even have this little bit of discretion.

		Perhaps as troubling as the substance is the process by which the SIP
calls were developed.  They were issued, as I mentioned before, as a
result of negotiations.  EPA is very clear about that.  And so
apparently while there have been ongoing discussions between one
environmental advocacy group and EPA officials now for over two years,
the states who are now being told that they have 30 days to comment on
this proposal have been left out of that process.

		I think it is troubling that now after more than two years of apparent
discussions between EPA and Sierra Club, the 36 states that are affected
now have been told they have only 30 days to deal with this fundamental
shift in the way the Clean Air Act works.  So I just find it troubling
that at a time when EPA has limited and diminishing resources, when
states have limited and diminishing resources, we're being told that
people need to spend their time focusing on this as a nonissue that
really only matters to a small group of people that like to bring
lawsuits.

		So, as you may have inferred from my comments, I'm not in favor of the
proposal.  I think at the very least EPA is going to be under some
pressure to allow for additional time for comment beyond the 30 days.
So, at the very least, I think that's something that states and
companies who are affected by these changes deserve.  So, if you have
any questions, I'd be happy to answer.

		MR. WILCOX:  Mr. Holmstead, thank you very much for your testimony.
We assume you'll be giving us more detailed written comments.

		MR. HOLMSTEAD:  Yes, we will be.  Thank you.

		MR. WILCOX:  Great.   Thank you very much.

		MR. DOUGHERTY:  Bruce Buckheit.

		MR. BUCKHEIT:  Good morning.  Thank you for the opportunity to comment
on EPA's proposed response to the petition filed by the Sierra Club
requesting that EPA address a number of allegedly deficient startup,
shutdown, and malfunction state implementation plans.

		My name is Bruce Buckheit, and I reside in Fairfax, Virginia.  From
1984 until 2003, I served as the Senior Counsel in the Environmental
Enforcement Section of the Justice Department prosecuting violations of
the nation's environmental statutes, including the Clean Air Act.

		Subsequently, I served as the Director of EPA's Air Enforcement
Division.  I coordinated headquarters and regional enforcement
activities with state and local air program managers to advance the
efficacy and efficiency of both federal and state programs.

		Since my retirement from federal service in 2003, I have worked as a
consultant in energy and environmental issues for a broad range of
clients, including federal and state agencies, corporations, and NGOs.
I also served a four-year term as a member of Virginia's Air Pollution
Control Board, which under Virginia statutes oversees the Virginia DEQ
and the implementation of Virginia's air program.

		The remarks that I provide today are based on my years of experience
in these matters and do not represent views of any organization other
than myself. In other words, I'm speaking on behalf of myself.  And I
find that for not the first time in the past decade I disagree with my
former colleague, Mr. Holmstead, as to the appropriateness of addressing
the deficiencies in the SIPs that the Sierra Club has identified.

		The SIP provisions that the Sierra Club has identified are
inconsistent with the Clean Air Act as a matter of law, and they're poor
policy choices as a matter of policy.  EPA's proposal to correct these
deficient SIPs is long overdue and should be adopted without delay.

		Prior to 1955, state and local governments were solely responsible for
addressing the problem of air pollution and developing regulations to
address excessive air pollution.  In 1955, a federal presence was
commenced with the Air Pollution Control Act of 1955, which provided
limited research and development capabilities but no broad oversight
authority.

		In the decades or so that followed, it was widely understood that
state regulation by itself of air pollution failed.  And so the 1970
Clean Air Act established a strong federal presence, defined specific
targets and established obligations on the newly created EPA to maintain
a level playing field among states and prevent the race to the bottom
that had prevented or interfered with state efforts to address the
problem in the first instance.

		While section 101 of the Clean Air Act does contain hortatory language
suggesting that Clean Air Act protections are the primary responsibility
of the states, the first listed purpose of the Clean Air Act is to
protect and enhance the quality of the nation's air resources.

		Importantly, the Clean Air Act does not merely encourage states to
submit SIPs or say that they should submit SIPs.  It says that they
shall submit SIPs.  While it's left to state and local authorities to
determine the best mix of pollution controls and where and which sources
should be controlled to meet defined budgets, it is not left to states
to determine that compliance should be voluntary or should be based on
encouragements.

		Rather, the SIPs under the Clean Air Act must contain enforceable
emission limitations sufficient to meet the Clean Air Act's requirements
on a continuous basis.  Further, the Clean Air Act mandates, that is to
say, it requires that EPA review and approve each SIP.  And the Clean
Air Act states that EPA shall require, shall require -- it's not
optional on EPA's part.  EPA shall require a state to revise a SIP
whenever it finds that that plant is substantially inadequate.

		Thus, one good reason for EPA to make the SIP corrections suggested by
the Sierra Club petition is that as a law enforcement agency EPA should
itself comply with the law as set out in the Clean Air Act.

		At its core, the Sierra Club petition identifies a number of state SIP
provisions that are identical to SIP provisions that EPA has determined
to be inadequate and rejected.  These broad startup, shutdown,
malfunction, scheduled maintenance, and director discretion issues have
been identified in several public policy determinations over the years
and in a number of SIP disapprovals over the time.

		While it can be argued that nothing in the Clean Air Act requires EPA
to go back over the past 30 years and root out and find all the errors
that may have crept into the program, once this issue is put in front of
it squarely by the Sierra Club petition, it's difficult to see how EPA
could deny the petition without reversing 30 years of policy as set out
by the Bennett and Herman memoranda.

		EPA's written policy on excess emissions during startup and shutdown
relies on the statutory requirement that sources must comply with
emission limits at all times.  EPA's policy does not require that
sources comply with emission limitations that are technically
infeasible.  And so this whole proceeding is not about attempting a game
of gotcha where sources can be caught up with emission limitations that
they can't meet but rather in an effort to provide more accurate and
technically sound emission limitations so that these broad-based
exemptions don't result in a broad category of emissions that simply
aren't captured by the program.

		For example, oftentimes NAAQS control devices in particular require
that the operating unit be up to a certain temperature before you start
injecting ammonia, and so it is reasonable to provide specific startup
provisions for that kind of an operation.  But there's nothing in the
technology of, for instance, a fabric filter that would require that
kind of exemption based on temperature.

		A broad-based exemption that just covers startup periods exempts both
of these technologies, and obviously the latter technology, there's no
need for that.  Similarly, when permitting authorities pay attention to
startup issues, you see provisions such that, for example, coal-fired
sources must start up on natural gas, or oil-fired units are not -- oil
is not allowed to be fired because it would clog an ESP, for instance.
And those kind of technical limitations are what we're talking about
addressing, specifically through better permitting.

		Perhaps the most important reason to correct the deficient SIPs is
that it's good policy.  Obtaining optimum emission reductions from
already-installed pollution control devices is highly efficient.
Correcting the SIPs, as suggested by the Sierra Club, also provides a
level playing field with those states that have complied with the Clean
Air Act and are currently disadvantaged in that race to the bottom when
competing for new industry in the states that have the deficient SIPs.

		Here it should be understood that where pollution controls that
achieve a 90 to 99 percent or better control efficiency, bypassing those
controls could substantially increase emissions.  For example, bypassing
a PM control device with a control efficiency of 99.8 increases the
emission factor by -- increases the emission rate by a factor of 500
over uncontrolled and the modeled emission rates.

		Thus, bypassing that fabric filter or ESP for just 1.5 hours a month
doubles the annual PM emissions from the unit, and at 500 times the
normal emission rate, such emission rates can threaten short-term
national ambient air quality standards as well.

		Startup and shutdown policies should also reflect the fact that
startup times for large coal-fired units can approach or exceed 24
hours, that simple cycle turbines can go through several shorter startup
and shutdown cycles each day, and that batch processing operations at
synthetic chemical manufacturing facilities can spend the majority of
their time in startup and shutdown modes.

		Under broadly structured startup and shutdown provisions, these
emissions are not reliably tracked or accounted for in the SIP
demonstration modeling, and that is a key point.  It is not that one
should expect a control technology to operate at 100 percent
effectiveness at all times.  It's that you understand when they can't
operate at full capacity, and you account for those excess emissions in
the SIP demonstration process.

		Those emissions are real.  They show up in the air we breathe and in
the monitoring that ultimately demonstrates whether or not the SIP has
been achieved.  Eliminating the broad exemption for startup and shutdown
will not lead to the imposition of infeasible obligations but simply
focus the attention of permitting authorities and lead to a set of
requirements that is tailored to the particular technology that is in
place.

		It should be noted that a number of states have for several decades
enforced SIPs that do not contain an exemption for startup and shutdown
operations, and I'm unaware of any significant difficulty that those
SIPs have presented either for the permitting authorities or for the
states -- for the sources located in those states.

		Now EPA has proposed to alter the existing policy to provide for the
imposition of civil penalties for failure to comply with emission
limitations during startup and shutdown.  This is entirely appropriate
since such limitations will reflect the performance and operating
practices that are expected during startup and shutdown given the
limitations of the technology.

		Thus, for instance, where a source has a permit that instructs it only
to fire natural gas until a certain operating temperature is reached, if
that source violates that restriction, it's like any other restriction
in the permit and should be treated no differently.  I mean, the key
here is to tailor the operating limitation to what the technology can
do.

		There was a pitched battle in the '70s over whether compliance was to
be continuous or intermittent.  This was a highly visible confrontation
that TVA led the charge on, and it went on for some time.  It was a
highly visible activity.  For this reason, the inclusion of the
continuous compliance language in section 110 is not to be dismissed
lightly.

		As with startups and shutdown, any malfunction event that leads to a
bypass of a pollution control device or operation of a process unit
without a functioning control device can result in dramatically
increased emissions that threaten both long- and short-term max limits.

		The Sierra Club petition identifies a number of SIPs that are clearly
deficient.  Some extreme examples include one state that exempts
emissions from failure of any component at a facility, irrespective of
whether the source had attempted to minimize emissions, and another
where emissions are exempted so long as they are infrequent or brief.
These are subjective terms that cannot be reliably enforced.

		One SIP limits malfunction excuses to 15 percent of the operating time
of the unit, implicitly authorizing exempted emissions many times the
permitted limits of facilities in that state.  Such releases can also
pose substantial threats to the public health beyond the NAAQS through
uncontrolled releases of benzene, chromium, and other hazardous air
pollutants that are otherwise captured by the pollution controls
required under the SIP.

		A weakness experience with uncontrolled flaring in refinery
enforcement initiative of a decade ago shows that with proper attention
by management the frequency of malfunction events can be substantially
reduced.  Emission during malfunction events should not be exempt but
should be covered so that it is clear to permitting agencies and sources
that preventive agency programs can be developed and required where
appropriate.

		The penalty issue during the time of malfunction is a little more
complicated issue.  EPA has proposed to retain its current policy for
penalty assessments that occur as a result of malfunction events.  On
its face, this exemption is neither lawful nor necessary because if
emissions are in fact covered by a SIP, then section 113 is pretty clear
that exceedances of the SIP limit are subject to enforcement action,
including penalties.

		Additionally, it doesn't seem appropriate to instruct an Article III
judge in penalty issues where Congress does not.  And yet it seems
foolish to suggest that a source should be subject to penalties for an
occurrence that is entirely beyond its control, and at least one court
has endorsed EPA's approach.

		In many federal programs, this issue is addressed by way of grants of
enforcement discretion where EPA in effect authorizes the use of
noncompliance gasoline during or after a blizzard or additional hours of
operation has occurred.

		MR. DOUGHERTY:  I'm sorry, Mr. Buckheit.  We are required to keep
public statements to about a 10-minute minimum.

		MR. BUCKHEIT:  Okay.

		MR. DOUGHERTY:  We will accept any written comments you have, though,
at any length.

		MR. BUCKHEIT:  Thank you.  I will submit the rest of my comments for
the record.

		MR. DOUGHERTY:  Thank you, Mr. Buckheit, for your comments.  And any
other speaker who had more extended comments who'd like to pass forward
now -- Mr. Buckheit was our last registered speaker of the morning, so
anyone else feel free to step forward.

		MR. WILCOX:  Mr. Dowd, would you have more that you would want to say
since you're with us?  Do you want to add to your comments since you're
still with us?  Okay.

		(Whereupon, a luncheon recess was taken.)

A F T E R N O O N  S E S S I O N

(2:00 p.m.)

		MR. DOUGHERTY:  Good afternoon.  My name is Joseph Dougherty, and I'm
representing the EPA's Office of Air Quality Planning and Standards.
Joining me on the panel is Geoff Wilcox, representing the Office of
General Counsel.

		I'll run through the introduction more briefly than this morning.
Thank you all for attending this public hearing held by the U.S. EPA.
We're holding this hearing to take comment on EPA's proposed rulemaking
entitled, "State Implementation Plans:  Response to Petition for
Rulemaking; Findings of Substantial Inadequacy; and SIP Calls to Amend
Provisions Applying to Excess Emissions During Periods of Startup,
Shutdown, and Malfunction."

		This proposed rulemaking concerns the treatment of excess emissions of
air pollution that may occur when an industrial facility is starting up
or shutting down or when a malfunction occurs, specifically, how those
emissions are treated in state implementation plan provisions.  Air
pollution emitted during these periods of startup, shutdown, or
malfunction may adversely affect the health of people nearby and may
contribute to smog and other problems in communities that are further
downwind.  The proposed rulemaking was published in the Federal Register
on February 22, 2013, at page 12460.

		At today's hearing, we're accepting oral comments on the EPA's
proposed rulemaking, and we'll be preparing a written transcript of this
hearing.  The transcript will be available to the public as part of the
official record of this rule, and EPA will consider both oral comments
and written comments as we move forward in the rulemaking process.

		We're accepting written comments on the proposed rule until April 11,
2013.  We have a fact sheet available in the registration area that
summarizes our proposed action.  It includes detailed information for
submitting written comments.  If you wish to speak but have not already
registered to do so, please check in with our staff at the registration
table located just outside the entrance to this room.

		We intend to stay until either 6 p.m. this evening or one hour after
the last registered speaker has spoken, whichever is later.

		Again, thank you for participating in our public hearing today.  I'll
now reopen the floor for oral testimony.  We ask that you limit your
testimony to no longer than five [sic] minutes.  We have a little light
up here that helps you out.  It goes green, then yellow, then red.  And
first is Leslie Ritts.

		MS. RITTS:  Five minutes?  I thought it was 10.  We'll just get
through it.

		MR. DOUGHERTY:  We will cut you off promptly in time just in general.

		MS. RITTS:  Thank you.  I'm here representing the National
Environmental Development Association's Clean Air Act Project.  We're a
multisector manufacturing coalition, and we've been around since 1979.
Our goal is to offer a balanced perspective on protecting the
environment while giving appropriate attention to issues that
manufacturers face in the global economy.

		We appreciate the opportunity to testify on the proposed findings of
SIP inadequacies and the SIP call to amend state provisions to exclude
from violations excess emissions during SSMs.  I will refer to startup,
shutdown, and malfunctions as SSMs, as I'm sure many of the speakers
have already.

		We also appreciate the opportunity to comment on the availability of
the affirmative defense if excess emissions occur during at least
malfunctions, which petitioners seek to have rescinded.  NEDA/CAP's
members own and operate plants throughout the country and thus are
subject to the SIP requirements as well as national emission standards
and requirements and are directly affected by both regulatory and legal
issues in this rulemaking package.

		The subject of this rulemaking and the Petition for Rulemaking filed
by citizen groups addresses the startup, shutdown, and malfunction of
plant process equipment.  EPA's SSM policy has been an issue of concern
to our members since 1982-83 when Assistant Administrator Kathleen
Bennett issued guidance documents to regional EPA offices and the states
regarding emission violations during SSMs.

		At this time, our members have been -- since that time, NEDA's members
have been in lengthy discussions with Agency officials regarding
significant concerns that plants have during startup and shutdown of
process equipment and also the emission consequences of malfunctions
when process equipment malfunctions make it critical to vent to
atmosphere in order to prevent harm to employees and process equipment.

		We've been particularly proactive in reducing emissions from flaring
frequently associated with certain types of SSM events and in designing
SSM plants and O&M procedures for process equipment to prevent excess
emissions.  Beyond reducing the need for flaring, it should be noted
that when new industrial processes are designed or modified, rigorous
evaluations are undertaken by the companies to identify potential issues
and risks that can occur during startup and shutdown and to design and
maintain equipment to minimize those risks.

		In 1999, NEDA/CAP challenged EPA's excess emissions policy in the D.C.
Circuit as an unlawful rulemaking because of the policy's significant
legal and operational consequences to our members.  That litigation led
to an agreement that EPA would apply the 1999 guidance policy
prospectively but not retroactively to state and local air pollution
requirements that the Agency already had approved in prior SIP actions.

		Our other concern was that the policy impermissibly interfered with
state discretion to decide its own SIP strategy, including how each
state established technology-based standards and limits on EPA's
authority and, excuse me, their SIP strategies, including how each one
established technology-based emission standards and limitations, and
that EPA's authority was limited to thereafter approving or disapproving
such strategies absent evidence of NAAQS violations, in which case other
procedures for redesignation in new SIP planning figured in.

		Even with the notice and opportunity EPA is now providing for comments
on these SIPs and SIP calls, without evidence that SSM exclusions
violate a NAAQS, we believe EPA's proposed action is inconsistent with
the Clean Air Act, its legal structure, and its federalist
underpinnings.

		The February 2013 proposed findings of SIP deficiency and associated
SIP calls are of even greater concern to NEDA/CAP because of their
effect on startups and shutdowns for process equipment.  The proposed
rule would require states to remove general exclusions for startups and
shutdowns because EPA argues those SIP emission limits are continuous
operating requirements even though when states adopted the measures they
were not intended to be continuous operating requirements.

		Like the federal NSPS, such emission limits were set historically for
normal representative operations and thus excluded emissions, including
excess emissions, during equipment startup and shutdown.  While most
equipment is not turned on any longer by lighting a fire in a fire box,
process equipment also is generally not started by flipping on a switch.

		Most equipment has to be evaluated and warmed up before it is used,
and purging the equipment of dust and other fine particles or VOCs left
from reactions or to prevent contamination to the equipment from other
processes when the equipment is campaigned for other products prevents
fires and potential explosions that can be dangerous.  Add to the fact
that few plants in the U.S. run three shifts a day and they shut down to
conserve raw material resources and energy, it's also critical for EPA
and the public to be aware of these facts in the context of this
proposed action.

		We'd like to call EPA's attention to the fact that the NSPS shutdown
provisions highlight that operations during periods of SSM shall not
constitute representative conditions for the purpose of performance
tests, nor shall emissions in excess of the level of the applicable
emission limit during periods of SSM be considered a violation of the
applicable emission limit unless otherwise specified.

		Removal of excess emission exclusions for startup, shutdown provisions
in the SIPs necessarily makes the standards tighter and violates the
Clean Air Act's provisions by disallowing state discretion for them to
design their own SIP strategies.

		As NEDA/CAP will detail in our written comments, many NSPS and MACT
requirements now include detailed SU/SD procedures following the Court's
decision vacating the general MACT SSM provisions in Sierra Club v. EPA.
 NEDA was a party in that case.

		For instance, in the gas turbine NSPS, the standards exclude emissions
during SU/SD from the standards for important technical reasons.  Many
turbines use steam injection and SCR technologies to reduce NOx
emissions.  So during the startup of a diffusion flame stationary
combustion turbine at a cogeneration facility, which generates steam for
use at the facility as well for steam injection in the turbine engine
itself, it takes time for the hot air to start from the turbine to
generate steam necessary for NOx emission reduction in the turbine.

		In addition, it takes time for exit temperatures of the hot air in the
SCR ductwork to stabilize to the proper temperature necessary for
effective SCR/NOx reduction.  There is no way for this type of system or
many similar systems to meet the NOx emissions limits during startup or
shutdown.

		Let me cruise forward, and you can read some of the testimony
yourself.  We think it's extremely troubling that EPA has given little
thought to the resources that the state and local agencies will need to
direct to the SIP provision process if the proposed actions are
finalized.

		In the aftermath of Sierra Club v. EPA, vacating the general MACT
provisions, the Agency and DOJ combed through all the MACTs that had
been issued identifying first whether the NESHAPs relied on the general
MACT SSM exclusion by incorporating 40 C.F.R. 63.6(e) by reference, then
reviewing the specific provisions of either -- of other NESHAPs, excuse
me, that did not incorporate the SSM exclusion by reference.

		Then the Agency reopened most of the latter MACTS for industries on
which the Agency relied on the 63.6 exclusion, and with industry
consultation, emissions testing, and other resources, modified those
standards for which emissions increases were valid to expect during
startup and shutdown.

		States don't have the resources to rectify emission standards which
were adopted and approved by EPA historically to graft onto those
standards the existing startup and shutdown provisions.  And this notice
doesn't even hint that this is what a state will be required to do to
allow most industries to continue to operate their equipment so as not
to be in violation of a RACT or other technology-based requirement.

		The proposed action also doesn't consider the impact or the cost of
removing SSM SIP exclusions from existing operating permits.  The
rulemaking mentions only state requirements adopted under 40 C.F.R.
70.6(g) applicable to emergencies, not to these types of malfunctions.
The rule does not consider the fact that Congress intended that the
Title V operating permits mirror Clean Air Act requirements, including
those in the SIPs.

		Removal of the existing air pollution control standards adopted and
implemented by the states in the federal operating permits will pose
additional significant compliance and operational difficulties and
administrative costs, largely because those requirements are found in
the general provisions.

		We're going to -- would you like me to stop?

		MR. DOUGHERTY:  I'm sorry.  I do have to cut you off.  I'm sorry.

		MS. RITTS:  Okay.  I thought I had 10 minutes, so I apologize.  We
want to definitely support the affirmative defenses.

		MR. DOUGHERTY:  We will definitely accept all written comments and
your full comments at this time.

		MS. RITTS:  We'll submit full written comments, especially on the
affirmative defenses, but I appreciate the opportunity to get up here
and tell you how exercised we are about this rulemaking.

		MR. DOUGHERTY:  Thank you very much for your comments.

		MS. RITTS:  Thanks very much.

		MR. DOUGHERTY:  Maxine Lipeles.

		MS. LIPELES:  Good afternoon.  Thank you for the opportunity to
testify.  My name is Maxine Lipeles.  I'm the Co-Director of the
Interdisciplinary Environmental Clinic at Washington University School
of Law.  We prepared the petition on behalf of the Sierra Club that EPA
is responding to in the proposed rule, and we've had some direct
experience in particular on behalf of another client, the American
Bottom Conservancy, with a large steel facility in Illinois subject to
the Illinois SSM provisions, which are proposed to be -- or the petition
proposes to grant.

		And what I'd like to do for today is to focus on that as kind of a
case study of why this proposed rule is so important to communities
across the country that are breathing these essentially exempted excess
emissions.  So what I'd like to do first is just give you a little bit
of an overview of the U.S. Steel facility in Granite City and just give
you a little bit of information about the environmental justice context,
and then I'm going to go through some pictures.  And a lot of my
testimony is going to be the pictures, and we'll submit some written
comments as well.  And then I want to focus at the end on the Illinois
SIP provisions and how they key into this.

		So the U.S. Steel Granite City Works facility is a very large iron and
steel manufacturing plant.  It's in Granite City, Illinois, which is
part of the actually St. Louis metropolitan region.  It's on the eastern
side of the Mississippi River, just a few miles from the city of St.
Louis.  It's a large industrial facility, as I said.  It dates back to
the 1890s, and it's surrounded by residences, schools, parks.  A
hospital is right there.  There are homes right up against the plant on
a couple of places.  It's adjacent to a large state park.  And I'll show
you pictures of all this.  And it's the principal source of the region
being nonattainment for fine particulate matter, including under the
revised standard for PM 2.5.

		Here's some environmental justice statistics.  About 100,000 people
live within five miles of the plant.  A little over half of those are
minority groups.  Twenty-three point six percent live below the poverty
line, which those numbers are quite a bit lower than the county as a
whole.  So this shows you the area right around the plant is
disproportionately minority and low income.

		There are five schools within one mile of the plant.  Ninety-five
percent of the kids in those schools are of minority background; 81
percent qualify for free or reduced lunch.  There's a preschool directly
across the street from the coke plant, which is a high-emissions unit.
And there's an elementary school just a few blocks from the plant.  And
I'm going to show you a few pictures.

		I've got first a couple of Google Earths to just show you this in
perspective.  So you can see the heavy industrial in the middle, and
then above a little bit to the left, above a little bit to the right,
and below you can see these are all sort of all residential areas.  It's
a large complex, so it needed two Google Earth shots to be able for you
to see it.

		This is a map which has an overlay of schools.  The red flags are
schools within proximity.  That sort of brown area is actually only part
of the plant because part of it is even below that.  The green is state
park.  You can see what's Horseshoe Lake that used to be part of the
Mississippi River.  It's an oxbow lake.  And the land in the middle of
it is Horseshoe Lake State Park.  About 350,000 people use that state
park each year.  Many people fish in the lake, and many people eat and
rely on the fish that they catch from that lake.

		There's also some local parks and playgrounds that are shown in
lighter green, and the blue trapezoid is the hospital right next to the
plant.  This shot was taken at the end of a residential street, so this
is just to give you the perspective of how close people live to the
manufacturing facility.  There are houses to the right, to the right and
to the left as you're taking this picture.

		Now I've got a series of 10 pictures that are going to show apparent
malfunction events at the facility, taken at different times by people
that live nearby there.  All these are taken from public places, so the
public is exposed to these sorts of emissions.

		Okay, which leads us to the Illinois SIP.  The Illinois SIP has a
provision that says you can't operate during malfunction or breakdown,
or you can't operate during startup in violation of your limits unless
you have advance permission in your operating permit.  And so the SIP
then sets up a provision where they basically invite permit applicants
to submit a request for advance permission to violate their limits.  And
that's just quoting from the statute up there, permission to continue to
operate during malfunction or breakdown, and other language there that
shows when it will be at malfunction or breakdown and will cause
violations.  And then for startups, it just directly says violate,
advance permission to violate standards or limitations during startup.

		And then a companion provision says if the Agency grants permission to
operate during malfunction or breakdown or to violate limitations, that
then constitutes a prima facie defense to an enforcement action.

		So it's a pretty nice setup if you're the facility.  In your permit
application, you say we're going to have some trouble at some times.
We're going to do our best, but we'd like advance permission to violate
the limits when we need to.  And in the permit, you have that language.
And here's some language from the U.S. Steel's Title V permit.
"Permittee is authorized to continue operation in excess of applicable
state standards in the event of a malfunction or breakdown."  That's
written into the permit in reliance on those SIP provisions.

		Similarly, "Permittee is authorized to violate the applicable
standards during startup."  We have raised these issues with two
successive Title V petitions asking the EPA Administrator to object to
the permit on various grounds, including but not limited to the SSM.
Both times the EPA Administrator in January 2011 and in December 2012
granted at least in part the petition to object, both times including
the SSM language in there.  And in neither time has the Agency changed
one word of the permit or that language that's printed above there.  The
only thing that's changed is the company gave some more information,
basically saying these are the situations where we might have
malfunctions or breakdowns.

		But you can't know in advance what's going to actually cause it, and
you can't know in advance what you're going to do in response to a
malfunction or a breakdown.  So you can't know that it's going to meet
the strict requirements that EPA has set forth, whether it's going to be
an affirmative defense or this thing called a prima facie defense, which
seems to even go beyond an affirmative defense, or even enforcement
discretion.

		In any event, this is one real-world example where you have a
community that can't move away from this facility, that has to breathe
in these excess emissions on a regular basis, and incredibly weak SIP
provisions.  So we very much support your effort to require the state to
upgrade their SIP to meet the minimum requirements of the Clean Air Act.

		Thank you, and I'm sorry if I exceeded my time.

		MR. DOUGHERTY:  No.  Thank you very much.

		MR. WILCOX:  Thank you for coming in person and testifying.

		MS. LIPELES:  Pardon?

		MR. WILCOX:  Thank you for coming in person.

		MS. LIPELES:  Oh, my pleasure.  And I'll try to remove this without
interfering with the next people.

		MR. DOUGHERTY:  Sparsh Khandeshi.

		MR. KHANDESHI:  Good afternoon.  My name is Sparsh Khandeshi, and I'm
an attorney with the Environmental Integrity Project.  Our organization
believes that enforcement of environmental laws is an essential and
often neglected component within the framework we set up for protecting
the environment.  It is from this point of view that I'm providing
comments today.

		First, I'd like to start by thanking the EPA for providing this public
hearing and affording us the opportunity to enter this testimony.  EPA's
proposal to prohibit the startup, shutdown and maintenance exemption
from state implementation plans is a welcome step forward.  Furthermore,
EPA's commitment to ensuring that the affirmative defense is not an
exemption from federally approved emission limits but instead a narrowly
tailored shield for situations where there are excess emissions that are
wholly outside the facility's control -- and the shield only protects
the facility from monetary liabilities -- is a welcome and much needed
clarification.

		EPA's response to the Sierra Club's petition correctly concluded that
exemptions from startup, shutdown, and maintenance violate the Clean Air
Act.  In evaluating state responses to EPA's SIP call, any changes that
seek to weaken a federally approved SIP limit must comply with the Clean
Air Act SIP provision requirements, which include an opportunity for
notice and comment.

		We are especially concerned about this because of our experience with
Clean Air Act permitting in Texas where the state has incorporated
startup, shutdown, and malfunction emission limits into permits that are
weaker than the federally approved SIP emissions limits without going
through an adequate notice and comment process.

		Also, EPA must devise a strategy to ensure that SIP emission limits
that are expressed in terms of throughput are enforceable during periods
of maintenance or other inactivity.  For example, many boilers can have
significant PM emissions during maintenance activities, but because
these boilers have emission limits that are conveyed in terms of a
firing rate, for example, pounds per MMBTU, enforcement becomes
difficult.

		Nevertheless, emissions during these periods in many cases are many
times greater than the emissions during normal operation in terms of
pounds released per hour.  Unchecked, these emissions threaten the
achievement of ambient air quality standards.

		With regards to the affirmative defense for malfunctions, EPA must
ensure that it is the narrow exception that EPA asserts.  In part, this
will require thorough documentation of malfunction events that is
submitted to state agencies and made publicly available on the internet.
 Without this, vigilant state and federal oversight would be impossible.

		Last year's June 14 accident at the Exxon-Mobil Baton Rouge facility
is a prime example of this.  While Exxon-Mobil eventually disclosed that
this spill released 20,000 pounds of benzene, this information only came
to light after the community and the Louisiana Bucket Brigade repeatedly
requested LDQ and EPA conduct a full investigation.

		Communities shouldn't bear this responsibility.  Instead, state
implementation plans must require a full and accurate disclosure that
can be reviewed by the state, federal agencies as well as the public.
In addition to accurate reporting, state and federal agencies need to
take enforcement seriously.  Data from Texas illustrates the pitfalls of
combining an affirmative defense and weak enforcement.

		For example, over the past four years, four facilities, the Keystone
Gas Plant, the Mallet CO2 Recovery Plant, Exxon-Mobil's Beaumont
refinery, and the Goldsmith Plant have consistently been among the top
10 sources of excess emissions.  Together, these four facilities release
nearly 7,000 tons of emissions per year on average, which in sum total
accounts for nearly 25 percent of all reported excess emissions in Texas
between 2009 and 2012.

		So there are a few very bad actors, and we shouldn't allow them to
hide behind the affirmative defense just using it as a veil to disguise
inadequate maintenance and poor operating practices.  Thank you.

		MR. DOUGHERTY:  Thank you.

		MR. WILCOX:  Will you be submitting more written comments?

		MR. KHANDESHI:  Yes.

		MR. WILCOX:  Okay.  Thank you.

		MR. DOUGHERTY:  Tamara Evans.

		MS. EVANS:  My name is Tamara Evans.  I'm here on behalf of the
environmental law program at Sierra Club.  I'm here to express strong
support for EPA's proposed rule.  This rule will help achieve the clear
intent of Congress and the Clean Air Act.

		The central purpose of the Clean Air Act is to protect human health.
Ambient air quality standards are the heart of the Clean Air Act.  Air
quality standards are set at levels to protect public health and
welfare, including protection of the most sensitive populations, such as
asthmatics, children, and the elderly.  State plans must include
emissions limitations to ensure attainment of the ambient air quality
standards.  Illegal loopholes in state plans allow facilities to emit
pollution at levels that cause the pollution in the air to far exceed
ambient air quality standards.  This is contrary to the fundamental
purpose of the Clean Air Act.

		To help encourage industry to comply with air quality standards, the
Act allows EPA as well as citizens to bring enforcement actions against
facilities that violate emissions limitations.  EPA and citizen
enforcement actions have always been an important part of achieving the
goals of the Clean Air Act.

		However, many states give polluters a free pass from these enforcement
actions in the form of automatic exemptions as well as affirmative
defenses for violations.  For example, the Florida State Implementation
Plan contains automatic exemptions for excess emissions from startup,
shutdown, and malfunction events.

		The state rules actually permit excess emissions.  This is contrary to
the fundamental requirement that all excess emissions be considered
violations.  Many states have affirmative defense provisions that allow
facilities to avoid any penalties for violation of their permit limits.
These provisions are inconsistent with the Clean Air Act because they
limit a court's ability to assess penalties for violations of the Act
under section 113(e)(1).

		EPA's proposed rule will help close these loopholes that interfere
with the enforcement mechanisms of the Clean Air Act.  If EPA does not
act to close these loopholes, the objectives of the Clean Air Act will
not be achieved.  Minimum ambient air quality standards will never
reliably be met, and people will continue to be subjected to unsafe
levels of air pollution.  Thank you.

		MR. DOUGHERTY:  Thank you very much.

		Terry McGuire.

		MR. MCGUIRE:  Good afternoon.  My name is Terry McGuire, and I'm a
Washington representative with the Sierra Club.  And I want to thank you
for the opportunity to provide comment on this action, which I'm here to
strongly support.  Upsets are a serious problem at many facilities
around the country, including large refineries, chemical plants, and
coal-fired power plants.  These events result in an exceptional burst of
pollution over a short period of time that is often many times above the
legal limits.

		Because these facilities are frequently located in low-income
communities of color, this action by EPA will improve the lives of
people that live in some of the most disadvantaged neighborhoods in our
country.  So today I want to add a human face to this issue and share
with you a few stories from people that Sierra Club has been in touch
with that will benefit from this rule.  While they could not be here in
person, they wanted their stories heard, and they have given us
permission to relay their experiences.

		Sherry Griswold lives in Detroit, Michigan, near the Marathon
Petroleum Corporation complex.  In fact, her home is only 700 feet away
from this enormous facility.  For the last five years, Sherry tells us
that she has been tormented by relentless flaring from this facility,
usually about three times a night.  When these events occur, 20-foot
flames erupt from the flares and are accompanied by a loud howling
noise.

		Sherry says these events happen with such force that they have shaken
loose her ceiling tiles, and once, while she was in her backyard, a
flaring literally knocked her to the ground.  Perhaps most disturbingly,
Sherry tells us that when she is outside for an extended period of time,
her skin sometimes becomes coated with a fine layer of soot.

		Sadly, because of the frightening nature of these events and a concern
for her family's health, Sherry no longer has her children or
grandchildren over to stay the night.

		Halfway across the country, in Birmingham, Alabama, Charlie Powell and
his neighbors have been plagued by a long history of excessive pollution
events from the Walter Coke facility, a plant that has been spewing
toxic pollution into the neighboring community for over 100 years.

		For more than 40 years, Charlie and his wife lived close to Walter
Coke.  During this time, Charlie saw firsthand the damaging effects of
air pollution on his family and neighbors and as a result was compelled
to organize with a local community group called PANIC, People Against
Neighborhood Industrial Contamination, where he is now the president of
that group.

		PANIC aims to raise public awareness about the health impacts of air
pollution from the Walter Coke facility on the neighboring communities,
and unfortunately there is no shortage of examples.  While living in the
area, Charlie developed sleep apnea and respiratory problems that led to
a need for a respirator by his bed when he slept.  His wife has battled
cancer, and his aunt, Eunice Webb, also in the neighborhood, has
developed asthma since moving to the area about 20 years ago.

		Of Eunice's family that lives in the area, one grandchild that lives
with her has developed asthma, one sister has battled cancer, another
sister and her mother have suffered heart attacks, and sadly Eunice lost
her husband to cancer.  Eunice tells us that she knows of others in the
neighborhood also suffering from ailments like cancer.  She says that in
the summer months the air is so bad that she cannot even go outside
because the pollution exacerbates her asthma and it can be hard for her
to breathe.

		Eunice told us that she would like to follow the lead of many of her
neighbors and move away when she is able to do so.  Another neighbor to
the Walter Coke facility is Bobby Hogan, who has lived in the area for
more than 60 years.  Bobby constantly suffers from respiratory ailments
and has had varying diagnoses from his doctor, ranging from bronchitis
to asthma to a chronic cough.  Bobby's parents also live nearby and were
lost to lung cancer despite neither being smokers.

		Bobby tells us that he knows of too many in his community that are
sick and dying.  A property owner with four additional properties near
his home, Bobby has been unable to rent these out because, in his words,
no one wants to move into his community.  He said the air pollution can
be so bad that he literally has to spray the soot off his back porch
sometimes as much as twice a week.  He worries about going outside to
perform everyday tasks like mowing his lawn for fear of exacerbating his
asthma.

		Bobby also hopes to move one day further away from this facility but
right now simply cannot afford to do so.

		These stories are just a few examples of the hardships that so many
who live beside industrial facilities are experiencing.  We plan to
submit additional written comments from some of these people and others
from around the country by the comment deadline.

		In closing, I would like to thank you for the opportunity to share
these stories and submit documents in support of this rule.  We know,
because doctors, scientists, and nurses tell us that many common air
pollutants like smog and soot are a pervasive public health problem that
disproportionately affects the most vulnerable members of society:
young children, the elderly, those with pre-existing medical issues, and
lower income communities.

		Air pollution can exacerbate asthma and cause respiratory ailments,
increase the risk of heart attacks and harm to in utero babies, and even
lead to cancer and premature death.  Fortunately, reductions in air
pollution can result in immediate and measurable public health benefits,
and EPA has the power and authority to act.

		Polluters may claim that malfunction events are unavoidable, yet
companies who care about how their plants are impacting their neighbors
have shown that industry can do better.  Many upset emissions are in
fact avoidable with better management practices and improved
technologies.

		We commend the EPA for acting because this rule will help curb harmful
pollution from planned startup and shutdown events by closing state
loopholes on affirmative defenses to enforcement actions.  While we
would still urge EPA to go further with the rule, as we requested in our
petition, this action will go a long way toward addressing this
longstanding problem and will make a real difference for families living
near these facilities, like I shared with you today.  Thank you.

		MR. DOUGHERTY:  Thank you very much.

		Alex Bond.

		MR. BOND:  Good afternoon.  I'm Alex Bond.  I'm the Director of Air
Quality at the National Mining Association.  NMA represents the
producers of most of America's coal, metals, industrial, and
agricultural minerals, as well as all of the companies that happen to
support those activities.

		EPA's proposed SIP call revising the state standards during SSM --
thank you for letting me comment on the SSM SIP call.  While NMA is
still reviewing the rule to try to correctly gauge its potential
impacts, my comments today highlight not only impacts on mining
operations from EPA's proposal but also the need for EPA to extend the
comment period in this instance to ensure robust public comment and
truly understand the national impacts of the proposed rule.

		Further, EPA should realize that its proposal seems to ignore the
significant difficulties in running pollution equipment during SSM
periods, unnecessarily limits or eliminates using an affirmative
defense, and should thus grant great deference to states upon submittal
of SIP provisions should EPA move forward.

		NMA would further like to note that EPA's proposed rule marks a
significant re-interpretation of longstanding policy, and it is our
belief that such a sudden change of the status quo will have significant
operational impacts on a wide variety of sources both within and without
the mining industry.

		I have provided a set of draft testimony for you or paper testimony.
I'd like to sort of deviate from that in these comments and focus just
on five main points.  First, we would really appreciate more time to
comment on the proposed rule.  We think the 30-day and with this -- I
guess it's around a 42-day comment window -- is a little bit short.
We're trying to grasp exactly what the impacts are going to be across
our operations.

		We have operations in the East Coast, which mainly mine coal and some
uranium.  There is also a significant Western Coast, West Coast, and
mountain area portion of NMA's membership, and we're trying to get our
hands around not only the coal utilization aspect of the rule but also
how it will impact mining operations across the spectrum, so more time
to comment so we can get feedback from our members to see exactly how
the proposal will impact operations would be greatly appreciated.  And
we think it's necessary for such a -- for a SIP call for 36 states,
having such a short comment window is a little brief, and we would
appreciate if EPA would act on our letter asking for a 60-day comment
window extension or at least a 60-day comment period in total.  So we
would appreciate that.

		Second, we also believe that this SIP call comes at a time that it
will have a -- it's a huge effort by the Agency and also by the states,
and it comes at a time that there will be large impacts on sources that
are trying to comply with other rules.  And on top of that, it comes at
a time of budgetary uncertainty where having states go through and
commit to a long form rulemaking, which might end up revising, and we're
not sure yet -- which might end up revising so many standards and
emissions limits for so many sources is a giant undertaking, and we'd
ask the Agency to at least sort of step back if possible and reevaluate
exactly what those impacts will be on a large variety of sources both
within and without the mining industry.

		Third, I think I mentioned this already, but running pollution
controls during startup, shutdown, and malfunction periods is very
difficult.  I mean, first of all, a malfunction is by definition not
expected, and it's very difficult to run pollution controls.  That's why
it's called a malfunction.  But during startup and shutdown, if you, for
instance, are running a baghouse on an EGU and you -- during startup
periods, you'll shred the baghouse so it won't really be useful for the
rest of the time, thus defeating the purpose of having a pollution
control device on an EGU.

		That's just one example.  We'd like to have more time to be able to
evaluate what the other real-world implications of having emission
limits during SSM periods might be.

		Further, we support having an affirmative defense in the rule.  We
know that EPA has asked for -- is proposing only a limited affirmative
defense for periods of malfunction.  However, we think that might not be
appropriate for all 36 states.  Should those states want to keep them,
especially if they are in attainment of the standards or in attainment
areas, having or eliminating an affirmative defense seems to be somewhat
duplicative in the sense that if a SSM event or an upset emission event
happens to occur but does not cause nonattainment, we don't really see
the point of limiting an affirmative defense in that regard.  And
further, if it does cause nonattainment, a state is already obligated to
submit a SIP revision to correct the problem.

		And finally, if EPA does go forward, we would urge -- you know, under
the bedrock of how the Clean Air Act has operated for so long, seeing as
states and EPA are coregulators under the Act, that bedrock of
cooperative federalism will be absolutely essential should EPA try to
move forward.  And we would urge you to provide great deference to
states, knowing that EPA does a phenomenal job with a lot of its rules.

		We would just like to stress that when you come down to it, certain
states are better at understanding the sources within those states, and
if they feel that things are appropriate in their SIP provisions, we'd
ask you to provide great deference to those states.

		So we will be submitting extensive comments, I'm sure, and we look
forward to working with the Agency on this one.  Thank you.

		MR. DOUGHERTY:  Thank you very much.  Mr. Bond was our last registered
speaker, so we'll be taking a 20-minute break.

		(Whereupon, at 2:41 p.m., the hearing in the above-entitled matter was
concluded.)

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	CERTIFICATE

DOCKET NO.:     EPA-HQ-OAR-2012-0322

CASE TITLE:     Hearing to take comment on EPA's

		      proposed rulemaking entitled, "State

		      Implementation Plans:  Response to

		      Petition for Rulemaking; Findings of

		      Substantial Inadequacy; and SIP Calls

		      to Amend Provisions Applying to Excess

		      Emissions During Periods of Startup,

		      Shutdown, and Malfunction."

HEARING DATE:   March 12, 2013

LOCATION:       Washington, D.C.

		I certify that the foregoing is a true and correct transcript made to
the best of our ability from a copy of the official electronic digital
recording provided by the United States Environmental Protection Agency
in the above-entitled matter.

				Date:  March 12, 2013

Gabriel Gheorghiu

Heritage Reporting Corporation

Suite 600

1220 L Street, N.W.

Washington, D.C.  20005-4018

TRANSCRIPT OF PROCEEDINGS

HERITAGE REPORTING CORPORATION

Official Reporters

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(202) 628-4888

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