Response: As discussed in the proposal preamble, the MACT floor analysis for mercury was based on a two step process. First the percentage of units with control technologies that could achieve mercury emissions reductions was determined using the boiler population databases. If the control technology analysis indicated that at least 12 percent of sources in the subcategory used a control device that could achieve mercury emissions reductions, then the control technology present at the median ( 6th percentile) was identified as the MACT floor control technology. The MACT floor level of control for mercury was identified as a fabric filter. The control effectiveness of fabric filters was based on emissions information for utility boilers that indicated that mercury emissions reductions were being achieved with this technology. In this case, we could use control efficiency information from another similar source category to supplement the information available in this source category because of the similarity in fuel burned,

combustor type, and control methodology and operation. We 97 maintain that fabric filters are still the appropriate level of control for the MACT floor.

Second, the emission limit associated with the MACT floor control technology was calculated using emissions information for units in the subcategory, whenever possible.

For most of the subcategories developed, emissions information was adequate. Only for the emission limit for new source liquids and the variability factor for new source solids was fuel pollutant content incorporated into the MACT floor analyses. The mercury fuel content of coal from the utility industry was used in developing the variability factors for new solid fired units. This was done because mercury emissions are dependent on the quantity of mercury in the fuel burned. Coal available to utilities and industrial boilers and process heaters is expected to be similar, and coal is the solid fuel that is routinely used in such units that has generally the greatest degree of HAP variability. We maintain that the utility database used at proposal to develop the variability factor for new sources was adequate in establishing the MACT floor emission limit.

The EPA recognizes that the mercury emissions database for industrial boilers is limited. However, EPA is directed by the CAA to develop standards for sources using whatever data is available. Prior to proposal and during the Industrial Combustion Coordinated Rulemaking ( ICCR) process, 98 EPA conducted a thorough search for HAP emission test reports. This search was supported by industry, trade groups, and States. For criteria pollutants, such as PM,

substantial emission information was available and gathered.

For mercury and other HAP, this was not the case.

Industrial boilers have not generally been required to test for HAP emissions. In the proposed rule, EPA requested commenters to provide additional emissions information.

However, only one source provided any additional mercury emissions data. This information ( test results from three additional coal fired industrial boilers) was used to revise the mercury emission limit for existing sources. We also reviewed the mercury emission database used to develop the MACT floor emission limit for existing sources. After review, we determined that a revision to the variability factor was appropriate. The additional data and the revised variability factor was used to re calculate the mercury emission limit to be 0.000009 lb/ MMBtu ( from 0.000007 lb/ MMBtu at proposal). A detailed discussion of the revised MACT floor analysis conducted is provided in the memorandum " Revised MACT Floor Analysis for the Industrial, Commercial,

and Institutional Boilers and Process Heaters National Emission Standards for Hazardous Air Pollutants Based on Public Comments" in the docket.

Variability of the emissions data were incorporated 99 into the final emission limits. The EPA contends that by considering the variability of emissions information, we have indirectly incorporated variability in fuel, operating conditions, and sampling and analytical conditions because these parameters vary from emission tests conducted from one unit to another, and even within one unit. The EPA does not consider it appropriate or feasible to incorporate variability from a multitude of parameters because such information is not available and cannot be correlated to the emissions information in the emissions test database. For the final rule, EPA did conduct a statistical analysis of the data to identify the 97.5th percent confidence interval.

This analysis provided similar results to the variability analysis conducted in the proposed rule. Consequently, EPA decided not to change its variability methodology. A detailed discussion of the statistical analysis conducted is provided in the memorandum " Statistical Analysis of Mercury Test Data Variability in Response to Public Comments on Determination of the MACT Floor for Mercury Emissions" in the docket.

Comment: Several commenters contended that the California standards which the CO requirements are based on do not require CO CEMS, but require initial compliance testing and periodic subsequent performance testing.

Response: The commenters are correct that the 100 California CO regulations do not require CO CEMS. The regulations do provide sources with the option of conducting annual testing or installing CO CEMS to demonstrate compliance with the CO emission limit. Because the regulations that were the basis of the MACT floor do not provide specifics on which boilers should conduct annual testing and which should use CO CEMS, we reviewed the cost information provided by the commenters to make this determination. In considering the additional cost information and reviewing the cost information used in the proposed rule, the EPA decided that changes to the CO compliance requirements were warranted. The final rule requires that new units with heat input capacities less than 100 MMBtu/ hr conduct initial and annual performance tests for CO emissions. New units with heat input capacities greater or equal to 100 MMBtu/ hr are still required to install, operate, and maintain a CO CEM.

Regardless of whether the California regulations do or do not require CO CEMS, we would have reviewed the need for continuous monitoring and operating limits in order to ensure the most accurate indication of proper operation of the control system. The purpose of all of the minimum operating parameter limits in the standard is to ensure continuous compliance by ensuring that the air pollution control equipment is operating as they were during the 101 latest performance test demonstrating compliance with the emission limits. The operating parameters are established as " minimum" to provide enforceable boundaries in their operation. Operating outside the bounds of the minimum parameters may lead to increased air emissions.

The EPA would also like to clarify that operation above the CO limit constitutes a deviation of the work practice standard. However, the determination of what deviations constitute violations of the standard is up to the discretion of the entity responsible for enforcement of the standards.

F. Beyond the MACT Floor Comment: Many commenters contended that carbon injection should have been required as an beyond the floor option. Other commenters supported EPA's decision to not require any controls beyond the floor.

Response: For the final rule, EPA maintains that options beyond the MACT floor are not appropriate for the standard. The EPA is required by the CAA to set the standard at a minimum on the best controlled 12 percent of sources ( for existing units) or best controlled source ( for new units). The CAA also requires EPA to consider costs and non air quality impacts and energy requirements when considering more stringent requirements than the MACT floor.

As documented in the memorandum " Methodology for Estimating 102 Costs and Emissions Impacts for Industrial, Commercial, and Institutional Boilers and Process Heaters National Emission Standards for Hazardous Air Pollutants" in the docket, EPA did consider the cost and emission impacts of a variety of regulatory options more stringent than the MACT floor for each subcategory. The EPA recognizes that for some subcategories, more stringent controls than the MACT floor can be applied and achieve additional emission reductions.

However, EPA also determined that the cost impacts of such controls were very high. Considering both the costs and emission reductions, EPA determined that it would be infeasible to require any options more stringent than the floor level.

For the final rule, EPA maintains that carbon injection should not be required as an above the floor technology. As discussed in the proposal preamble, we identified one existing industrial boiler that was using carbon injection.

The emissions data that we obtained from the boiler indicated that this carbon injection unit was not achieving mercury emissions reductions. This result led us to conclude that it was not the new source floor level of control. However, there may have been other reasons for the ineffectiveness of this system ( e. g., low inlet mercury levels, insufficient carbon injection rate, ESP instead of fabric filter for PM control). Therefore, we considered 103 carbon injection as a beyond the floor option, but decided that while this control technique has been used in other source categories, there is no demonstrated evidence that it would work for industrial boilers and process heaters because the type of mercury emitted and properties of the emission streams are sufficiently different for boilers and process heaters and other source categories. For fabric filters, we had some emissions information for utility boilers that indicated that mercury emissions reductions were being achieved with this technology. In this case, we could confidently use control efficiency information from another similar source category to supplement the information available in this source category. Unlike fabric filters, the available emissions information indicated that carbon injection was not effective for industrial boilers and process heaters.

G. Work Practice Requirements Comment: Many commenters requested EPA consider exceedences of the CO limit to be a trigger for corrective action rather than a violation.

Response: In the final rule, we have clarified that an exceedence of the CO limit constitutes a deviation of the work practice standard. An observed exceedence of a monitoring parameter is not an automatic violation. You are required to report any deviation from an applicable emission 104 limitation ( including operating limit). We will review the information in your report along with other available information to determine if the deviation constitutes a violation. The determination of what emission or operating limit deviation constitutes violations of the standard is up to the discretion of the entity responsible for enforcement of the standard.

H. Compliance Comment: Many commenters requested that EPA simplify and write the fuel monitoring requirements to not require retesting of fuel for changes in fuel supplier.

Response: We agree that the fuel monitoring requirements in the proposal needed to be clarified and explained further. Therefore, we have clarified the fuel analysis options in the final rule. If you elect to demonstrate compliance with the HCl, mercury, or total selected metals limit by using fuel which has a statistically lower pollutant content than the emission limit, then your operating limit is the emission limit of the applicable pollutant. Under this option, you are not required to conduct performance tests ( i. e. stack tests).

If you demonstrate compliance with the HCl, mercury, or total selected metals limit by using fuel with a statistically higher pollutant content than the applicable emission limit, but performance tests demonstrate that you 105 can meet the emission limits, then your operating limits are the operating limits of the control device ( if used) and the fuel pollutant content of the fuel type/ mixture burned.

The final rule specifies the testing methodology and procedures and the initial and continuous compliance requirements to be used when complying with the fuel analysis options. Fuel analysis tests for total chloride,

gross calorific value, mercury, metal analysis, sample collection, and sample preparation are included in the final rule.

If you elect to comply based on fuel analysis, you are required to statistically analyze, using the z test, the data to determine the 90th percentile confidence level. It is the 90th percentile confidence level that is required to be used to determine compliance with the applicable emission limit. The statistical approach is required to assist in ensuring continuous compliance by statistically accounting for the inherent variability in the fuel type.

You are required to recalculate the fuel pollutant content only if you burn a new fuel type or fuel mixture.

You are required to conduct another performance test if you demonstrate compliance through performance testing, you burn a new fuel type or mixture, and the results of recalculating the fuel pollutant content are higher than the level established during the initial performance test 106 Comment: Many commenters requested EPA consider exceedences of parametric limits to be a trigger for corrective action rather than a violation.

Response: In the final rule, we have clarified than an exceedence of the parametric limits constitute a deviation of the operating limits. An observed exceedence of a monitoring parameter is not an automatic violation. You are required to report any deviation from an applicable emission limitation ( including operating limit). We will review the information in your report along with other available information to determine if the deviation constitutes a violation. The determination of what emission or operating limit deviation constitutes violations of the standard is up to the discretion of the entity responsible for enforcement of the standard.

Comment: Many commenters requested EPA revise the opacity requirements. Commenters objected to the provision in the proposed NESHAP that would establish an opacity " operating limit" based on the initial performance test.

Some commenters contended that EPA has provided no data or references demonstrating a relationship between opacity and particulate, total metals, or mercury emissions. Other commenters argued that the proposed opacity limit approach for dry control devices is unworkable due to the inherent inability of continuous opacity monitors ( COMS) to 107 accurately measure opacity at levels less than 10 percent.

Some commenters argued that the performance and opacity achieved during the initial test may not be representative of the unit's performance. Other commenters explained that equipment condition, fuel and operating variations, and other uncontrollable parameters may result in varying emissions and emissions control equipment efficiencies over time. Commenters suggested requiring the NSPS limits for opacity rather than setting opacity based on the initial compliance test.

Response: We have reviewed the information provided by the commenters, and agree that the opacity operating limit requirements in the proposed rule are not appropriate for this source category. Because of the variability in fuels burned, the combination of fuels burned, and the typical operation of boilers and process heaters, we have decided that an opacity limit set based on the initial performance test may not be representative of the units typical performance.

To demonstrate continuous compliance by the opacity operating limit, the final rule provides two options. As the commenters suggested, existing units can maintain opacity to less than or equal to 20 percent ( based on 6

minute averages) except for one 6 minute period per hour of not more than 27 percent. This is the opacity limit 108 contained in the current NSPS for industrial boilers, which has a similar PM emission limit as the final rule.

Therefore, it was determined that it was appropriate to include a similar opacity level as the control device operating limit for existing units. New sources can maintain their opacity operating limit to less than or equal to 10 percent ( based on 1 hour block averages). This level appears to be the lowest opacity level currently applicable to industrial boilers in State regulations.

Comment: Several commenters objected to the requirement to conduct performance testing at worst case conditions. The commenters found this requirement to be unrealistic because stack testing must be scheduled well in advance and worst case conditions depend on fuel, load, and many other variables, making it impossible to assure that the testing will occur during worst case conditions. Two commenters contended there can be no guarantee that mineral properties for a fuel source at the time of the baseline test can be guaranteed beyond the content identified during purchase contract negotiations with a fuel supplier. Two commenters suggested that EPA define what worst case conditions are because sources do not have the experience to determine worst case representative process conditions.

Response: We agree that more direction and clarification is needed regarding testing at worst case 109 conditions. We have modified fuel sampling requirements and performance testing fuel use requirements to simplify compliance. During performance testing, sources are required to burn the type of fuel or mixture of fuel types that have the highest concentration of regulated HAP. This,

in combination with revised fuel sampling requirements ( e. g., based on fuel type and not on supplier, etc), will simplify the determination of the fuel blend during the performance test.

Comment: Several commenters objected to the requirement for annual performance tests because they felt that it is overly burdensome given the ongoing compliance demonstrations required by the boiler NESHAP. Several commenters suggested that initial performance testing should be required with subsequent performance testing occurring every 3 to 5 years. Some commenters stated that 5 year test intervals are consistent with title V permits and have been allowed in other MACT standards ( e. g. Hazardous Waste Combustors).

Response: We have worked to minimize the testing and monitoring requirements of the final rule while retaining the ability to ensure compliance with the emission limits and work practice requirements. We are providing an option for sources to conduct performance testing once every 3 years if they conduct successful performance testing for 3 110 consecutive years. We are also allowing sources to demonstrate compliance with the HCl, mercury, and total selected metals emission limits through fuel testing if they do not need emission control devices to achieve the standard.

I. Emissions Averaging In the proposal preamble, we solicited comments on a bubbling compliance alternative, as part of the EPA's general policy of encouraging the use of flexible compliance approaches where they can be properly monitored and enforced, and whether EPA should include a bubbling compliance alternative in the final rule. Emissions averaging can provide sources the flexibility to comply in the least costly manner while still maintaining regulation that is workable and enforceable. We presented for consideration a bubbling compliance alternative for determining compliance with the non mercury metallic HAP,

HCl, mercury, and/ or PM standards for existing sources. We indicated that the bubbling compliance alternative would allow owners and operators to submit non mercury metals,

mercury, HCl, and/ or PM emissions limits to the Administrator for approval for each existing boiler in the averaging group such that if these emission limits are met,

the total emissions from all existing boilers in the averaging group are less than or equal to emission limits 111 ( for non mercury metals, mercury, HCl, or PM) applicable to units in the particular subcategory. We indicated also that the bubbling compliance alternative would not be applicable to new sources and could only be used between boilers and process heaters in the same subcategory. Also, owners or owners of existing sources subject to the Industrial Boiler New Source Performance Standards ( NSPS) ( 40 CFR 60, subparts Db and Dc) would be required to continue to meet the PM emission standard of that NSPS regardless of whether or not they are complying with the bubbling alternative.

Emissions averaging has been incorporated into the final rule as a means of complying with subpart DDDDD.

Emissions averaging allows an individual source emitting above the allowable emission limit required by subpart DDDDD to comply with that emission limit by averaging its emissions with a second source at the same facility emitting below the allowable emission limit required by subpart DDDDD.

Comment: Many commenters supported including a bubbling compliance alternative in the final rule.

Commenters cited numerous reasons, including cost effectiveness, energy efficiency, greater flexibility in compliance, and greater environmental benefit. Commenters also cited 40 CFR part 63, subpart MM, Pulping Chemical Recovery Combustion MACT as a precedent for including 112 bubbling in MACT standards. Two commenters disagreed with the bubbling compliance alternative, stating that bubbling would complicate compliance determinations, does not fit within the CAA mandate, and is inconsistent with the purpose of CAA section 112. Many of those commenters who supported bubbling recommended additional flexibility, such as including new units, bubbling across subcategories, and employing emissions averaging.

Response: The final rule includes an emissions averaging compliance option because we believe that emissions averaging represents an equivalent, more flexible,

and less costly alternative to controlling certain emission points to MACT levels. We have concluded that a limited form of bubbling could be implemented and not lessen the stringency of the standard. We agree with the commenters that some type of bubbling option would provide flexibility in compliance, cost and energy savings to owners and operators. We also recognize that we must ensure that any bubbling option can be implemented and enforced, will be clear to sources, and most importantly, will achieve no less emissions reductions than unit by unit implementation of the MACT requirements.

The final rule is not the first NESHAP to include provisions permitting emission averaging. The emissions averaging provisions in the final rule are based in part on 113 the emissions averaging provisions in the Hazardous Organic NESHAP ( HON). The legal basis and rationale for the HON emissions averaging provisions were provided in the preamble to the final HON ( 59 FR 19425, April 22, 1994). In general,

EPA has concluded that it is permissible to establish within a NESHAP a unified compliance regimen that permits averaging across affected sources subject to the standard under certain conditions. Averaging across affected sources is permitted only if it can be demonstrated that the total quantity of any particular HAP that may be emitted by that portion of a contiguous major source that is subject to the NESHAP will not be greater under the averaging mechanism than it would be if each individual affected source complied separately with the applicable standard. Under this rigorous test, the practical outcome of averaging is equivalent in every respect to compliance by the discrete sources, and the statutory policy embodied in the MACT floor provisions is, therefore, fully effectuated.

The EPA has generally imposed certain limits on the scope and nature of emissions averaging programs. These limits include: ( 1) no averaging between different types of pollutants, ( 2) no averaging between sources that are not part of the same major source, ( 3) no averaging between sources within the same major source that are not subject to the same NESHAP, and ( 4) no averaging between existing 114 sources and new sources.

The final rule fully satisfies each of these criteria.

Accordingly, EPA has concluded that the averaging of emissions across affected units permitted by the final rule is consistent with the CAA. In addition, EPA notes that the provision in the final rule that requires each facility that intends to utilize emission averaging to submit an emission averaging plan provides additional assurance that the necessary criteria will be adhered to. In this emission averaging plan, the facility must include the identification of ( 1) all sources in the averaging group, ( 2) the control technology installed, ( 3) the process parameter that will be monitored, ( 4) the specific control technology or pollution prevention measure to be used, ( 5) the test plan for the measurement of particulate matter ( or selected total metals), hydrogen chloride, or mercury emissions, ( 6) the operating parameters to be monitored for each control device. Upon receipt, the regulatory authority will not approve an emission averaging plan containing averaging between emissions of different types of pollutants or between sources in different subcategories.

The rationale for including certain limitations and requirements as part of today's emissions averaging provisions generally follows the HON and is summarized below. 115 The final rule excludes new affected sources from the emissions averaging provision. New sources have historically been held to a stricter standard than existing sources because it is most cost effective to integrate state of the art controls into equipment design and to install the technology during construction of new sources.

One reason we allow emissions averaging is to give existing sources flexibility to achieve compliance at diverse points with varying degrees of add on control already in place in the most cost effective and technically reasonable fashion.

This concern does not apply to new sources which can be designed and constructed with compliance in mind.

Only existing large solid fuel units that are part of the affected source ( collection of existing boilers and process heaters), as defined in the final rule, can be included in an emissions average. Of the nine subcategories established for existing sources, existing large solid fuel units is the only subcategory for which multiple HAP emissions limits apply. For the existing small solid fuel subcategory and the six existing gaseous and liquid fuel subcategories, no HAP emissions limits are included in the final rule and, thus, it would not be appropriate to include these units in an emissions average. As for the existing limited use solid fuel subcategory, since these units, as defined in the final rule, operated on a limited basis 116 ( capacity factor of less than 10 percent) and are subject only to a less stringent PM emissions limit ( as a surrogate for non mercury metals), we believe it would be inappropriate to include these units in emissions averaging with units in the existing large solid fuel subcategory.

For purposes of emission averaging, we are allowing a source that elects, after the effective date of the rule, to modify by fuel substitution an existing large solid fuel boiler in the identified averaging group such that its applicable subcategory would change to choose to remain in the original subcategory and continue to meet the applicable emission limits in this subpart for existing large solid fuel units. We believe this provision is appropriate since fuel substitution is, in certain situations, a potential and available pollution prevention control technique for complying with the emission limits. This provision would be an incentive for switching to a less polluting fuel and,

thus, would result in additional benefit to the environment by reducing other pollutants of concerns ( i. e., sulfur dioxide and nitrogen oxide).

In the MACT floor analysis conducted, we considered several possible control techniques including fuel substitution, but, for the reasons summarized below and discussed in detail in the memorandum " MACT Floor Analysis for the Industrial, Commercial, and Institutional Boilers 117 and Process Heaters National Emission Standards for Hazardous Air Pollutants" located in the docket, we decided that fuel substitution is not an appropriate criteria for identifying the MACT floor level of control for the boilers and process heaters category. We first considered whether fuel switching would be an appropriate control option for sources in each subcategory. We considered the feasibility of both fuel switching to other fuels used in the subcategory and to fuels from other subcategories. This consideration included determining whether switching fuels would achieve lower HAP emissions. A second consideration was whether fuel switching could be technically achieved by boilers and process heaters in the subcategory considering the existing design of boilers and process heaters. We also considered the availability of various types of fuel. After considering these factors, we determined that fuel switching, while a potential pollution prevention technique in certain situations, was not an universally appropriate control technology for purposes of determining the MACT floor level of control for any subcategory. This decision was based on the overall effect of fuel switching on HAP emissions, technical and design considerations and concerns about fuel availability.

As for comments regarding the inclusion of new units in the emissions averaging, as stated previously, no averaging 118 can be permitted between existing sources and new sources since new sources have historically been held to a stricter standard than existing sources. However, the final rule takes a different approach regarding new gaseous fuel units that are replacements for existing large solid fuel units.

We believe it is appropriate to allow a source, having access to an adequate supply of natural gas, to elects to comply with the emission limits for an existing large solid fuel unit by replacing the unit with a new gaseous fuel unit. In this case, the source would be allowed to continue to include, in effect, the permanently shutdown solid fuel unit in the emission averaging, based on the fuel usage of the new gaseous unit. The new gaseous fuel unit would be subject to the emission limits and associated monitoring,

testing, and reporting and recordkeeping requirements for new gaseous fuel units. This provision would be an incentive for replacing existing more polluting units and,

thus, would result in additional benefit to the environment by reducing other pollutants of concerns ( i. e., sulfur dioxide and nitrogen oxide).

The final rule also takes a different approach to averaging from the HON approach regarding the exclusion from emissions averaging any units equipped with emission control systems that were installed prior to the passage of the 1990 Amendments to the Act on November 15, 1990. to comply with a 119 State or Federal rule or statute ( other than today's final rule). In the final rule, we do not include this restriction. In this standard, owners and operators are permitted to average across all existing large solid fuel units regardless of preexisting controls in determining overall compliance with the standard. In the HON rulemaking, EPA had concerns that credits for controls applied to comply with another rule increase the source ability to generate credits, but do not generate any new emissions reductions, thus creating more emissions. For this rulemaking, we believe it would be inappropriate to disallow a facility from including in the emission average a low emitting source just because it has a preexisting control device. Most, if not all, existing large solid fuel boilers are equipped with some type of control device to reduce flyash. Most of these control devices are low efficiency mechanical collectors ( e. g., cyclones or multiclones) for collecting large particles but are ineffective in reducing HAP emissions. In the HON, the preexisting controls were installed to comply with a State,

Federal, or tribal rule covering the HAP being regulated by the HON. This is not the case for industrial boilers and process heaters. Current Federal ( such as, NSPS), State,

and tribal rules covering industrial boilers and process heaters do not regulate HAP ( metals, mercury, and HCl) 120 emissions. The existing rules regulate criteria pollutants ( SO2, NOx, PM, and opacity). Thus, if existing units with control devices were disallowed to be used in emission averaging, there would be no existing units eligible for emission averaging. We believe that taking a different approach regarding previous actions is appropriate since,

unlike in the case of the HON, the existing controls on large solid fuel boilers were not installed to control HAP emissions and are ineffective in controlling one or more of the HAP being regulated. Therefore, for the HAP regulated ( mainly HCl and mercury), it would be unreasonable and inappropriate to disallow credit for sources equipped with control devices due to previous actions.

The HON requires a hazard and risk study for emission points included in an emissions average largely because the HON emission averaging provisions allowed averaging across all HAP ( interpollutant trading) covered by the HON. The concern with the HON approach was that such a provisions would allow emissions of a more hazardous pollutant to be increased for corresponding decreases in a less hazardous pollutant. Unlike the HON, in the final rule, emission averaging is allowed only on a single pollutant ( mercury,

HCl, or PM) basis and not across all pollutants. Since we are only allowing the averaging on a single pollutant basis,

we believe that emission averaging will achieve a comparable 121 hazard/ risk benefit as point by point compliance. Thus, the final rule does not require a hazard or risk study.

The HON requires a discount factor of 10 percent in credit calculations to share with the environment some portion of the cost savings due to emissions averaging and to account for uncertainty in emissions estimation. Due to differences ( discussed below) between large solid fuel boilers and HON sources, we do not believe it is necessary for the final rule to include a discount factor.

The HON proposal preamble ( 57 FR 62652, December 31,

1992) and the HON final preamble discuss how cost savings due to emissions averaging should be shared between industry and the environment. For the HON, we decided that it was appropriate that industry share any cost savings realized from emissions averaging and included a discount factor because the costs of controlling different emission points could vary significantly. The HON proposal preamble also discussed the level of uncertainty in estimating emissions reductions that may result from facilities using emissions averaging. For the HON, the uncertainty arose from differing accuracies available for estimating emissions from the number of emission points at a HON facility, the number of HAP emitted from HON facilities, and the different types of emission points.

Large solid fuel boiler facilities differs in almost 122 every relevant factor from the HON. First, as discussed previously, the number of large solid fuel boilers that might be included in an emissions average is fewer than could be included in a HON average and, therefore, less of a concern. Second, the magnitude of emissions from HON emission points is typically much greater than the emissions from large solid fuel boilers. Third, emission averaging for large solid fuel boilers is on a single HAP basis compared to averaging over 140 HAP emitted from HON facilities. Fourth, large solid fuel boilers are much more similar emission points than those regulated by the HON and,

therefore, unlikely to introduce additional uncertainty.

With concern about the equivalency of emissions reductions from averaging and non averaging in mind, the Administrator is also imposing under the emission averaging provision caps on the current emissions from each of the sources in the averaging group. The emissions for each unit in the averaging group would be capped at the emission level being achieved on the effective date of the final rule.

These caps would ensure that emissions do not increase above the emission levels that sources currently are designed,

operated, and maintained to achieve. In the absence of performance tests, in documenting these caps, these sources will documented the type, design, and operating specification of control devices installed on the effective 123 date of the final rule to ensure that existing controls are not removed or lessen. By including this provision in the final rule, the Administrator has taken yet another step to assist in ensuring that emission averaging results in environmental benefits equivalent or better over what would have happened without emission averaging.

We believe the inclusion of emissions averaging into rules and the decision on how to design an emission averaging approach for a particular source category must be evaluated for each source category. Although the HON and the final rule share the same legal basis for including emission averaging as a compliance option and the same basic system of credits and debits, some of the restrictions reasonable for the HON emissions averaging provisions are unnecessary for the final rule. Emission averaging would not be allowed in any State that selects to exclude this option from its approved permitting program.

Comment: Many commenters supported including a bubbling compliance alternative in the final rule.

Commenters cited numerous reasons, including cost effectiveness, energy efficiency, greater flexibility in compliance, and greater environmental benefit. Commenters also cited 40 CFR part 63, subpart MM, Pulping Chemical Recovery Combustion MACT as a precedent for including bubbling in MACT standards. Other commenters disagreed with 124 the bubbling compliance alternative, stating that bubbling would complicate compliance determinations, does not fit within the CAA mandate, and is inconsistent with the purpose of CAA section 112. Many of those commenters who supported bubbling recommended additional flexibility, such as including new units, bubbling across subcategories, and employing emissions averaging.

Response: For the final rule, we have concluded that a limited form of bubbling could be implemented and not lessen the stringency of the standard. We agree with the commenters that some type of bubbling option would provide flexibility in compliance, cost and energy savings to owners and operators. We also recognize that any bubbling option would need to ensure that it could be implemented and regulated by permitting authority, be clear to sources, and most importantly, achieve no less emissions reductions than the MACT requirements. Consequently, we have decided that the most appropriate method to allow a bubbling option yet address the various concerns would be to allow emission averaging limited to large existing solid fuel fired units.

The final standard contains provisions allowing the owner or operator to demonstrate compliance through averaging emissions from all existing large solid fuel fired boilers ( i. e., averaging is not allowed for new sources).

Averaging between pollutants is not allowed. The final 125 standard also limits averaging to like sources ( i. e.,

emissions from an existing large solid fuel boiler can be averaged only with emissions from another existing large solid fuel boiler at the same plant site). Emission averaging would not be allowed in any State that selects to exclude this option from its approved permitting program.

The final rule is not the first NESHAP to include provisions permitting emission averaging. In general, EPA has concluded that it is permissible to establish within a NESHAP a unified compliance regimen that permits averaging across affected sources subject to the standard under certain conditions. Averaging across affected sources is permitted only if it can be demonstrated that the total quantity of any particular HAP that may be emitted by that portion of a contiguous major source that is subject to the NESHAP will not be greater under the averaging mechanism than it would be if each individual affected source complied separately with the applicable standard. Under this rigorous test, the practical outcome of averaging is equivalent in every respect to compliance by the discrete sources, and the statutory policy embodied in the MACT floor provisions is, therefore, fully effectuated. A construction of the CAA which permits EPA to establish a unified compliance regimen in these limited circumstances promotes economic efficiency and has no adverse environmental 126 consequences. In a NESHAP incorporating such a unified compliance regimen, EPA would construe compliance with the overall regimen to constitute compliance for each of the affected units.

Strict limits on the scope and nature of averaging across sources are necessary to ensure that no HAP is emitted by that portion of a major source subject to a NESHAP in quantities that are greater than those that would result from compliance by each discrete affected unit within the facility. These limits include: ( 1) no averaging can be permitted between differing pollutants, ( 2) no averaging can be permitted between sources that are not part of the same major source, ( 3) no averaging can be permitted between sources within the same major source that are not subject to the same NESHAP, and ( 4) no averaging can be permitted between existing sources and new sources.

The final NESHAP fully satisfies each of these criteria. Accordingly, EPA has concluded that the averaging of emissions across affected units permitted by the final NESHAP is consistent with the CAA. In addition, EPA notes that the provision in the final NESHAP that requires each facility that intends to utilize emission averaging to submit an emission averaging plan provides additional assurance that the necessary criteria will be adhered to.

J. Risk based Approach 127 Comment: Several commenters supported EPA's incorporation of risk based concepts into the MACT Program.

One commenter believed that providing risk based applicability criteria for sources whose HAP emissions do not pose a significant risk is appropriate. Several commenters believed that there is clear legal authority in the CAA to construct NESHAP based on risk, and such an approach is very appropriate in the case of the Industrial Boiler MACT. The commenter also noted that the regulatory framework exists within their State to implement such an approach. Several commenters added that risk based alternatives will function as indirect emission limits that must be maintained by the facilities to assure that the criteria are met, and, thus, such alternatives for low risk facilities are supportable by EPA's authority under section 112( d)( 4) and 112( c)( 9) of the CAA and EPA's inherent de minimis authority. Another commenter asserted that there are ways to structure the rule to focus on facilities that pose significant risks and avoid imposition of high costs on facilities that pose little risk. An appropriate approach would be to allow individual facilities to conduct a risk assessment to show that it poses insignificant risks to the public. However, one commenter does not believe that it is appropriate for State and local programs to determine which facilities should be exempted from MACT. Several commenters 128 supported a risk based off ramp for HCl.

Response: Due to the relatively high costs associated with complying with the final Boiler rule, we have included an option in the final Boiler rule that would allow individual facilities to demonstrate that they meet the health based threshold emission limits and do not pose a significant risk to human health or the environment. We are using section 112( d)( 4) authority to establish health based threshold emission levels for acid gases and Mn for the Industrial, Commercial, and Institutional Boilers and Process Heaters ( Boilers) source category. HCl and Mn are two pollutants for which health thresholds have been established. Acid gases includes HCl and chlorine. Our authority and legal issues associated with the health threshold limits under § 112( d)( 4) are discussed below.

We are not using section 112( c)( 9) for the Boiler MACT rule, and there are no additional subcategories and no delisting of subcategories, as would be consistent with section 112( c)( 9).

The criteria defining how Boiler facilities demonstrate that the source meets the threshold emissions levels is included in Appendix A to subpart DDDDD ( the final Boiler rule). The criteria in Appendix A to subpart DDDDD were developed for and apply only to the Boiler industry and are not applicable to other industries. The final Boiler rule 129 provides two ways that a facility may demonstrate that the source meets the health based threshold emission limits.

First, lookup tables allow facilities to determine, using a limited number of site specific input parameters, whether emissions from boilers or process heaters might cause a hazard index ( HI) limit for non carcinogens to be exceeded.

Second, a tiered modeling approach ( each tier less conservative and more complex than the previous) allows those facilities that cannot demonstrate that source meets the health thresholds using the lookup tables to demonstrate by modeling using site specific information.

Facilities will have to demonstrate that the source meets the criteria established by today's final rule and then assume Federally enforceable limitations that ensure their HAP emissions do not subsequently increase to exceed levels reflected in their demonstrations.

Comment: Multiple commenters are opposed to the riskbased exemptions. Some noted that the proposal to include risk based exemptions is critically flawed and opposes adoption of the risk based exemptions into MACT.

One commenter stated that the inclusion of case by case risk based exemptions into the first phase of the MACT program will negate the legislative mandate and jeopardize the effectiveness of the national air toxics program to adequately protect public health and the environment and to 130 establish a level playing field. Therefore, the commenter strongly disagrees with inclusion of risk based exemptions in the MACT standard process. The commenter was very concerned that EPA referenced a fundamentally flawed interpretation of § 112( d)( 4) written by an industry ( AF& PA)

subject to regulation. Of particular concern was AF& PA's unprecedented proposal to include " de minimis exemptions"

and " cost" in the MACT standard process.

One commenter stated the belief that the use of riskbased concepts to evade MACT applicability is contrary to the intent of the CAA and is based on a flawed interpretation of Section 112( d)( 4) of the CAA. The commenter added that the CAA requires a technology based floor level of control and does not provide exclusions for risk or secondary impacts from applying the MACT floor.

One commenter stated that in separate rulemakings and lawsuits, EPA has adopted legal positions and policies that refute and contradict the very risk based and cost based approaches contained in the proposals. In these other arena, the commenter contended that EPA has properly rejected risk assessment to alter the establishment of MACT standards. EPA also has properly rejected cost in determining MACT floors and in denying a basis for avoiding the MACT floor. The commenter attached passages from several EPA briefs: Brief for Respondent Environmental 131 Protection Agency, Sierra Club v. EPA; Brief for Respondent Environmental Protection Agency, Cement Kiln Recycling Coalition v. EPA, No. 99 1457 and consolidated cases, D. C.

Cir.) ( Jan. 18, 2001) ( Attachment 1); Brief for Respondent Environmental Protection Agency, National Lime Ass'n v. EPA,

233 F. 3D 625 ( D. C. Cir. 2000) ( July 14, 2000) ( Attachment 3).

Several commenters stated that the preamble discussion of the risk based approaches is not sufficient to allow for complete public comment and, therefore, it would not be appropriate for EPA to go directly to a final rule ( without reproposal) with any of the approaches outlined in the proposal. The commenter recommended that the risk based exemption proposal be dropped because it is unacceptable.

Response: For many of the reasons provided by the commenters, we are not pursuing risk based exemptions based on CAA section 112( c)( 9). We do not believe that a riskbased approach based on section 112( c)( 9) is appropriate for the Boilers industry because .... We also are not relying on de minimus authority. Legal issues associated with the risk based provisions are addressed in sections _ through _

of this document.

We are, however, including in the final Boiler rule a health based threshold emission level based on our authority under CAA section 112( d)( 4). This statute requires that 132 categories or subcategories meet specific risk criteria, and to determine this, risk analyses may be used. We disagree with the commenter that we must wait for implementation of section 112( f) before utilizing risk analysis in this manner. We are not subcategorizing or determining MACT floors based on cost. Further, because facilities will make their low risk demonstrations following promulgation of the final Boiler rule, the MACT level of emissions reduction required by the final Boiler rule is not affected by facilities exempting out of the rule.

Comment: Many commenters stated that the proposal to include risk based exemptions is contrary to the 1990 CAA Amendments ( CAAA) which calls for MACT standards based on technology rather than risk as a first step. They added that congress incorporated the residual risk program under § 112( f) to follow the MACT standards ( not to replace them).

The commenters added that the need for the technology based approach has been recently reinforced by the results of the National Air Toxics Assessment ( NATA), which indicates that exposure to air toxics is very high throughout the country in urban and remote areas. Several commenters added that risk based approaches will be used separately to augment and improve technology based standards that do not adequately provide protection to the public. One commenter added that they have been unable to substantiate the basis for EPA's 133 support of the regulatory relief sought by industry through risk based exemptions. In fact, the use of risk assessment at this stage of the MACT program is directly opposed to Title III of the CAA.

Response: We disagree that inclusion of risk based alternative compliance options in the final Boiler rule is contrary to the 1990 CAAA. The Boiler MACT is a technologybased standard developed using the procedures dictated by section 112 of the CAA. The only difference in the Boiler MACT and other MACT is that we used our discretion under CAA section 112( d)( 4) to ... We believe that the Boiler rulemaking is particularly well suited for a risk based option for specific pollutants. For many facilities, the pollutants are emitted in amounts that do not pose a significant risk to the surrounding population. However,

the cost of controlling these pollutants is high, and may not be justified by environmental benefits for these lowrisk facilities. Those sources that can demonstrate that the emissions of acid gases and Mn meet the threshold emission levels will be in compliance with the MACT. The criteria are based on health protective estimates of risk and the threshold emission levels will provide ample protection of human health and the environment.

Inclusion of a risk based alternative compliance options in the Boiler rule does not alter the MACT program 134 or affect the schedule for promulgation of the remaining MACT standards. We recognize that such provisions are only appropriate for certain source categories, and our decisionmaking process required source category specific input from stakeholders. The 10 year MACT standards, which are now being completed, are the last group of MACT standards currently planned for development, and for any risk provisions to be useful, the provisions must be finalized in a timely manner ( i. e., not later than the promulgation of the MACT standards). These final MACT source categories were included in the " 10 year bin" because they were considered to be the lowest risk source categories.

Although NATA may show measurable concentrations of toxic air pollution across the country, these data do not suggest that facilities that do not contribute to the high exposures and risk should be included in regulations.

Section _ of this document discusses how background concentrations are accounted for by Boiler facilities in demonstrating that they meet the threshold emission levels.

Comment: Many commenters stated that the proposal to allow risk based exemptions would divert back to the timeconsuming NESHAP development process that existed prior to the CAAA. The commenters asserted that under this process,

which began with a risk assessment step, only eight NESHAP were promulgated during a 20 year period. The commenters 135 continued that if the proposed approaches are inserted into upcoming standards, the commenters fear the MACT program ( which is already far behind schedule) would be further delayed. One commenter supported EPA efforts to determine alternative MACT setting methodologies but strongly recommended that these be pursued separately from this rulemaking. The commenter contended that this will provide for timely issuance of final RICE and Boiler/ Process Heater MACT standards relative to the settlement deadline. Two commenters stated that delays could be exacerbated by litigation following legal challenges to the rules, and such delays would trigger the MACT hammer, which would unnecessarily burden the State and local agencies and the industries. The commenters concluded that further delay is unacceptable. The commenters did not want to be in a position of implementing the 112( j) program and urged EPA to not delay the issuance of any MACT standard. The commenters noted that according to a recently proposed EPA rule regarding section 112( j), the regulated community and State and local agencies would have to proceed with Part 2 permit applications, followed by case by case MACT, if EPA misses the newly agreed upon MACT deadlines by as little as two months. This would be time consuming, costly, and burdensome for both regulators and the regulated community.

Response: We disagree that allowing risk based 136 altnative compliance options in the Boiler rulemaking will alter the MACT program or affect the schedule for promulgation of the remaining MACT standards. We do not anticipate any further delays in completing the remaining MACT standards. The setting of health based threshold emission levels in the Boiler rulemaking affects only the Boiler NESHAP, and not all other MACT standards that have yet to be promulgated.

We believe that the approach taken in the Boiler rulemaking is particularly well suited to acid gases and Mn,

which are the only pollutants included in the risk based alternative compliance options. For many facilities, the pollutants are emitted in amounts that do not pose a significant risk to the surrounding population. However,

the cost of controlling these pollutants is high, and may not be justified by environmental benefits for these lowrisk facilities. Only those Boiler facilities that demonstrate that their emissions are below the threshold emission limits are eligible for the alternative compliance options. The criteria defining the _ is based on health protective estimates of risk and will provide ample protection of human health and the environment.

Including risk based alternative compliance options for boiler sources does not mean that EPA will provide riskbased options for other industries. Furthermore, EPA has no 137 intentions of re opening previously promulgated NESHAP in light of decisions made specific to the Boilers source category. The Boilers NESHAP is being promulgated by the February 2004 court ordered deadline. Any delays in implementation of the Boilers NESHAP caused by legal challenges are beyond our control.

Comment: Many commenters stated that the risk based proposal removes the " level playing field" that would result from the proper implementation of technology based MACT standards. The commenters added that establishing a baseline level of control is essential to prevent industry from moving to areas of the country that have the least stringent air toxics programs, which was one of the primary goals of developing a uniform national air toxics program under section 112 of the 1990 CAA amendments. The riskbased approaches would jeopardize future reductions of HAPs in a uniform and consistent manner across the nation.

Response: We agree that one of the primary goals of developing a uniform national air toxics program under section 112 of the 1990 CAA amendments was to establish a level playing field. We do not believe that providing alternative compliance options for sources that meet the threshold emission levels in the final Boiler rule does anything to remove the level playing field for Boiler facilities. The final Boiler rule and its criteria for 138 demonstrating eligibility for the risk based alternative compliance options apply uniformly to boilers across the nation in the large solid fuel fired subcategories. The Boiler NESHAP establishes a baseline level of emission reduction or a baseline level of risk. All Boiler facilities are subject to these same baseline levels, and all facilities with boilers in the subcategories have the same opportunity to demonstrate that they can meet the threshold emission levels. The criteria for meeting the threshold emission levels are not dependent on local air toxics programs. Therefore, concerns regarding facilities moving to areas of the country with less stringent air toxics programs should be alleviated.

Comment: Multiple commenters believed that Section 112( d)( 4) provides EPA with authority to exclude sources that emit threshold pollutants from regulation. The commenters indicated that Section 112( d)( 4) allows for discretion in developing MACT standards for HAP with health thresholds. The commenters added that the use of section 112( d)( 4) authority also is supported by CAA's legislative history, which emphasizes that Congress included § 112( d)( 4)

in the CAA to prevent unnecessary regulation of source categories.

One commenter pointed out that Congress does not differentiate between technology based " emission standards" 139 set under section 112( d)( 3) versus " health threshold" based " emission standards" set under section 112( d)( 4). Instead,

the statute explicitly treats emission standards promulgated under section 112( d)( 3) and 112( d)( 4) as equivalent by not distinguishing between those emission standards under the residual risk provisions of section 112( f). One commenter added that EPA is permitted to establish alternative standards as long as it ensures that ambient concentrations are less than the health thresholds plus a margin of safety and the emissions do not cause adverse environmental effects. Multiple commenters pointed out that EPA has exercised such authority and cited the Pulp and Paper MACT.

In addition, the commenters added that in the Pulp and Paper MACT, EPA identified circumstances in which they would decline to exercise 112( d)( 4) authority   where significant or widespread environmental harm would occur as a result of emissions from the category and the estimated health thresholds are subject to substantial scientific uncertainty. The comenters concluded that EPA determined that these considerations were not relevant to emissions from the pulp and paper source category, and the commenters believe that the same is true for their source categories and that the same treatment is warranted for many facilities within the source categories. The commenters noted that facilities that cannot meet the risk criteria would remain 140 subject to the MACT requirements.

One commenter added that the risk based approaches are squarely in line with the plain meaning of section 112( d)( 4). The commenters cited the Senate report ( Sen Rep.

No. 228, 101st Congress, 1st Sess 175 6 ( 1990)) showed that Congress contemplated that sources within the same category or subcategory would be subject to varied regulatory requirements, depending on the risk they pose to public health. The commenters added that nothing in the statutory definition of " emission standard" suggests that the term is limited to a requirement for the installation of control technology. The commenters added that the risk based compliance options would meet this requirement because they would apply to an entire source category or subcategory.

EPA could create a subcategory for low risk sources and tailor an emission standard to this subcategory, or apply to all sources in the category a NESHAP containing multiple compliance options, one or more being risk based.

Multiple commenters stated that the plain meaning of § 112( d)( 4) does not allow EPA to make MACT standard s for individual sources. Two commenters noted that section 112( d)( 4) states that " with respect to pollutants for which a health threshold has been established, the Administrator may consider such threshold level, with ample margin of safety, when establishing emission standards under this 141 subsection."

Several commenters contended that EPA has misinterpreted the provision in 112( d)( 4) in that Section 112( d)( 4) does not state that EPA can use applicability thresholds " in lieu of" the Section 112( d)( 3) MACT floor requirements. The commenter interpreted Section 112( d)( 4)

to state that health based thresholds can be considered when establishing the degree of the MACT floor requirements, but it should not be used to supplant the requirements established pursuant to Section 112( d)( 3).

Many commenters stated that the legislative history of § 112( d)( 4) clearly rejects EPA's proposed facility

byfacility MACT exemptions. The commenters noted that Congress considered and rejected the applicability cutoffs upon which EPA now solicits comment. The commenters noted that the House version of the 1990 Amendments allowed States to issue permits that exempted a source from compliance with MACT rules if the source presented sufficient evidence to demonstrate negligible risk, and the Senate version of the 1990 Amendments contained no such provision. In conference,

Congress considered both the House and Senate versions and rejected the House bill's exemption for specific facilities in favor of the Senate bill's language.

Response: .

The Act includes certain exceptions to the general 142 statutory requirement to establish emission standards based on the performance of MACT. Of relevance here, section 112( d)( 4) provides EPA with authority, at its discretion, to develop risk based standards for HAP's " for which a health threshold has been established", provided that the standard achieves an " ample margin of safety." ( The full text of the section 112( d)( 4): "[ w] ith respect to pollutants for which a health threshold has been established, the Administrator may consider such threshold level, within an ample margin of safety, when establishing emission standards under this subsection.")

The EPA presumptively applies section 112( d)( 4) only to HAP's that are not carcinogens because Congress clearly intended that carcinogens be considered nonthreshold pollutants. ( Staff of the Senate Committee on Environment and Public Works, A Legislative History of the Clean Air Act Amendments of 1990, Vol. 1 at 876, statement of Senator Durenberger during Senate Debate of October 27, 1990: " With respect to the pollutants for which a safe threshold can be set, the authority to set a standard less stringent than maximum achievable control technology is contained in subsection ( d)( 4). With respect to carcinogens and other non threshold pollutants, no such authority exists in subsection ( d) or in any other provision of the Act.") The legislative history further indicates that if EPA invokes 143 this provision, it must assure that any emission standard results in ambient concentrations less than the health threshold, with an ample margin of safety, and that the standards must also be sufficient to protect against adverse environmental effects ( S. Rep. No. 228, 101st Cong. at 171).

Costs are not to be considered in establishing a standard pursuant to section 112( d)( 4) ( Ibid.).

Therefore, EPA believes it has the discretion under section 112( d)( 4) to develop risk based standards for some categories emitting threshold pollutants, which may be less stringent than the corresponding " floor" based MACT standard would be. If EPA decided to develop standards under this provision, it would seek to assure that emissions from every source in the category or subcategory are less than the threshold level to an individual exposed at the upper end of the exposure distribution. The upper end of the exposure distribution is calculated is calculated using the " high end exposure estimate," defined as " a plausible estimate of individual exposure for those persons at the upper end of the exposure distribution, conceptually above the 90th percentile, but not higher than the individual in the population who has the highest exposure" ( EPA Exposure Assessment Guidelines, 57 FR 22888, May 29, 1992). The EPA believes that assuring protection to persons at the upper end of the exposure distribution is consistent with the 144 " ample margin of safety" requirement in section 112( d)( 4).

The EPA emphasizes that use of section 112( d)( 4)

authority is wholly discretionary. As the legislative history described above indicates, cases may arise in which other considerations dictate that the Agency should not invoke this authority to establish less stringent standards,

despite the existence of a health effects threshold that is not jeopardized. For instance, EPA does not anticipate that it would set less stringent standards where the estimated health threshold for a contaminant is subject to large uncertainty. Thus, in considering appropriate uses of its discretionary authority under section 112( d)( 4), EPA intends to consider other factors in addition to health thresholds,

including uncertainty and potential " adverse environmental effects," as that phrase is defined in section 112( a)( 7).

We agree that § 112( d)( 4) is appropriate for boiler HCl and Mn, and therefore we are allowing § 112( d)( 4) for boiler HCl and Mn.

Because of the large number and variety of facilities with boilers and process heaters subject to the rule, a risk assessment cannot be done by EPA for every facility. The final rule contains criteria that define a low risk facility.

Comment: Many commenters contended that the proposal will place a very intensive resource demand on state and 145 local agencies to review source's risk assessments, and state/ local agencies may not have expertise in risk assessment methodology or the resources needed to verify information ( e. g., emissions data and stack parameters)

submitted with each risk assessment.

Other commenters believe that a risk based program can be structured and implemented in a manner that does not adversely impact limited State resources. One commenter asserted that EPA should work closely with States and industry to implement the risk based approach in a nonburdensome manner. Another commenter stated that the risk based approaches, like other MACT standards, would simply be incorporated into each state's existing Title V program. The commenter concluded that because the Title V framework already exists, the addition of a risk based MACT standard would not require States to overhaul existing permitting programs. Another commenter contended that the final MACT rule itself should set forth the applicability criteria  including the threshold levels of exposure  that sources must meet to qualify for a risk based determination.

Each source would have the burden of demonstrating that its exposures are below this limit, and therefore the states would not be required to develop their own risk assessment guidance or to conduct source specific risk assessments.

Response: We acknowledge that review of the 146 eligibility demonstrations for the alternative compliance options will require resources for verification of information and may require expertise in risk assessment methodology that is lacking in some States. We have considered the commenters' concerns in developing the criteria defining eligibility for thes alternative compliance options, and we believe that the approach that is included in the final rule provides clear, flexible requirements and enforceable compliance parameters. The final rule provides two ways that a facility may demonstrate eligibility. First, look up tables, which are included as Tables 2 ( HCl) and 3 ( Mn) in Appendix A of subpart DDDDD,

allow facilities to determine, using a limited number of site specific input parameters, whether emissions from their sources might cause a hazard index limit ( hazard quotient in the case of Mn) to be exceeded. If a facility cannot demonstrate eligibility using a look up table, a threetiered modeling approach ( each tier less conservative and more complex than the previous) can be followed. Appendix A to the final rule presents the methodology and criteria for performing the site specific risk assessment.

Regarding commenters' concerns with looking for a threshold level for carcinogens, the alternative compliance options only applies to acid gases and manganese, which are not carcinogens. Also, regarding the concern expressed by a 147 commenter about exempting a facility based on limited emission data if EPA established a subcategory listing lowrisk sources, we have not used section 112( c)( 9) authority to establish a low risk subcategory for the Industrial/ Commercial/ Institutional Boilers and Process Heaters source category. With respect to guidance for performing site specific risk assessments, all of the procedures for performing the risk assessments are provided in EPA's " Air Toxics Risk Assessment Reference Library,"

which is referenced from Appendix A, and therefore, no additional guidance needs to be developed.

Only a portion of the major facilities in the large solid fuel fired boilers and process heaters subcategory will submit eligibility demonstrations for the alternative compliance options. Of this portion of major sources, we believe that most will be able to demonstrate eligibility based on screening analyses ( e. g., using a look up table or performing a Tier 1 site specific risk assessment).

However, it is likely that some facilities will submit detailed Tier 2 or 3 risk modeling results. The criteria for demonstrating eligibility for the alternative compliance options are clearly spelled out in the final rule. Because these requirements are clearly spelled out and because any standards or requirements created under section 112 are considered applicable requirements under part 70, the 148 alternative compliance options would be incorporated into Title V programs, and States would not have to overhaul existing permitting programs.

Finally, with respect to the burden associated with ongoing assurance that facilities remain low risk, the burden to States will be minimal. Rather than developing detailed recordkeeping and reporting requirements for facilities that initially qualify for the alternative compliance options, we are requiring periodic review and certification every five years to ensure continuing compliance. Additionally, before changing key parameters that may result in lower allowable risk based emission limits or changing the affected sources, the facility is required to recalculate the emission limits under the riskbased provisions of the final rule and submit documentation to the permitting authority supporting continued eligibility for the alternative compliance option.

With respect to our consideration of the public process required in reviewing/ approving the proposed approaches and making substantial changes to existing regulations, our inclusion of the risk based alternative compliance options in the Industrial/ Commercial/ Institutional Boilers and Process Heaters MACT standard applies only to that specific standard and does not directly impact other regulations.

Furthermore, the Industrial/ Commercial/ Institutional Boilers 149 and Process Heaters proposal provided the public with the opportunity to comment on the consideration of risk in the final rule.

Regarding the costs and resources associated with assuring adequate public participation in the process of reviewing the risk analyses, draft permits and permit applications must be made available from the state or local agency responsible for issuing the permit, or in the case where EPA is issuing the permit, from the EPA regional office. Members of the public may request that the state or local agency include them on their public notice mailing list, thus providing the public the opportunity to review the risk analysis. Therefore, most of the burden of assuring public participation falls on the public to notify the permitting authority of their interest in the permitting process. Regarding the opportunity for public participation, every proposed Title V permit has a 30 day public comment period and a 45 day EPA review period. If EPA does not object to the permit, any member of the public may petition EPA to object to the permit within 60 days of the end of the EPA review period.

We acknowledge the comments regarding comments submitted by others. However, we will respond to those specific comments submitted by others rather than agreeing or disagreeing with one commenter's assessment of another's 150 comments.

V. Impacts of the Final Rule A. What are the air impacts?

Table 2 of this preamble illustrates, for each subcategory, the emissions reductions achieved by the final rule ( i. e., the difference in emissions between a boiler or process heater controlled to the floor level of control and boilers or process heaters at the current baseline) for new and existing sources. Nationwide emissions of selected HAP ( i. e., HCl, hydrogen fluoride, lead, and nickel) will be reduced by 58,500 tpy for existing units and 73 tpy for new units. Emissions of HCl will be reduced by 42,000 tpy for existing units and 72 tpy for new units. Emissions of mercury will be reduced by 1.9 tpy for existing units and 0.006 tpy for new units. Emissions of PM will be reduced by 565,000 tpy for existing units and 480 tpy for new units.

Emissions of total selected nonmercury metals ( i. e.,

arsenic, beryllium, cadmium, chromium, lead, manganese,

nickel, and selenium) will be reduced by 1,100 tpy for existing units and will be reduced by 1.4 tpy for new units.

In addition, emissions of sulfur dioxide are established to be reduced by 113,000 tpy for existing sources and 110 tpy for new sources. A discussion of the methodology used to estimate emissions and emissions reductions is presented in " Estimation of Baseline Emissions and Emissions Reductions 151 for Industrial, Commercial, and Institutional Boilers and Process Heaters" in the docket.

TABLE 2. SUMMARY OF EMISSIONS REDUCTIONS FOR EXISTING AND NEW SOURCES ( TPY)

Source Subcategory HCl PM Non Mercury Metalsa Mercury Existing Units Large solid units 42,100 560,000 1,100 2 Small solid units 0 0 0 0 Limited use solid units 0 2,800 8 0.002 Liquid units 0 0 0 0 Gaseous units 0 0 0 0 New Units Large solid units 70 31 0.01 0.006 Small solid units 2.4 440 1.4 0.0006 Limited use solid units 0.2 11 0.02 0.00002 Liquid units 0 0 0 0 Gaseous units 0 0 0 0 a Includes arsenic, beryllium, cadmium, chromium, lead, manganese, nickel, and selenium.

Our estimates regarding reductions in HAP and criteria pollutant emissions will necessarily be affected by the extent to which sources demonstrate eligibility for the risk based provisions.

B. What are the water and solid waste impacts?

The EPA estimates the additional water usage that would 152 result from the MACT floor level of control to be 110 million gallons per year for existing sources and 0.6 million gallons per year for new sources. In addition to the increased water usage, an additional 3.7 million gallons per year of wastewater will be produced for existing sources and 0.6 million gallons per year for new sources. The costs of treating the additional wastewater are $ 18,000 for existing sources and $ 2,300 for new sources, in advance of any facility demonstrating eligibility for the risk based provisions. These costs are accounted for in the control costs estimates.

The EPA estimates the additional solid waste that would result from the MACT floor level of control to be 102,000 tpy for existing sources and 1 tpy for new sources. The estimated costs of handling the additional solid waste generated are $ 1.5 million for existing sources and $ 17,000 for new sources, in advance of any facility demonstrating eligibility for the risk based provisions. These costs are also accounted for in the control costs estimates.

A discussion of the methodology used to estimate impacts is presented in " Estimation of Impacts for Industrial, Commercial, and Institutional Boilers and Process Heaters NESHAP" in the docket.

C. What are the energy impacts?

The EPA expects an increase of approximately 1,130 153 million kilowatt hours ( kWh) in national annual energy usage as a result of the final rule, in advance of any facility demonstrating eligibility for the risk based provisions. Of this amount, 1,120 million kWh is estimated from existing sources and 13 million kWh is estimated from new sources.

The increase results from the electricity required to operate control devices installed to meet the final rule,

such as wet scrubbers and fabric filters.

D. What are the control costs?

To estimate the national cost impacts of the final rule for existing sources, EPA developed several model boilers and process heaters and determined the cost of control equipment for these model boilers. The EPA assigned a model boiler or heater to each existing unit in the database based on the fuel, size, design, and current controls. The analysis considered all air pollution control equipment currently in operation at existing boilers and process heaters. Model costs were then assigned to all existing units that could not otherwise meet the proposed emission limits. The resulting total national cost impact of the final rule is $ 1,790 million in capital expenditures and $ 860 million per year in total annual costs, in advance of any facility demonstrating eligibility for the risk based provisions.. The total capital and annual costs include costs for testing, monitoring, and recordkeeping and 154 reporting. Table 3 of this preamble shows the capital and annual cost impacts for each subcategory. Costs include testing and monitoring costs, but not recordkeeping and reporting costs.

TABLE 3. SUMMARY OF CAPITAL AND ANNUAL COSTS FOR NEW AND EXISTING SOURCES Source Subcategory Estimated/ Projected No. of Affected Units Annualized Cost ( 106$/ yr) Capital Costs ( 106$)

Existing Units Large solid units 3,481 814 1,605 Small solid units 327 0 0 Limited use solid units 249 23 105 Liquid units 7,251 0 0 Gaseous units 46,892 0 0 New Units Large solid units 211 10 21 Small solid units 25 3 3 Limited use solid units 11 1 1 Large liquid units 90 1 3 Small liquid units 164 0 0 Limited use liquid units 51 0.3 2 155 Gaseous units 3,463 11 51 Using Department of Energy projections on fuel expenditures, EPA estimated the number of additional boilers that could be potentially constructed. The resulting total national cost impact of the final rule in the 5th year is $ 58 million in capital expenditures and $ 18.6 million per year in total annual costs, in advance of any facility demonstrating eligibility for the risk based provisions..

Costs are mainly for testing and monitoring.

A discussion of the methodology used to estimate cost impacts is presented in " Methodology and Results of Estimating the Cost of Complying with the Industrial,

Commercial, and Institutional Boiler and Process Heater NESHAP" in the docket.

E. What are the economic impacts?

The economic impact analysis shows that the expected price increase for output in the 40 affected industries would be no more than 0.04 percent as a result of the final rule for industrial boilers and process heaters. The expected change in production of affected output is a reduction of only 0.03 percent or less in the same industries. In addition, impacts to affected energy markets show that prices of petroleum, natural gas, electricity and coal should increase by no more than 0.05 percent as a 156 result of implementation of the final rule, and output of these types of energy should decrease by no more than 0.01 percent. Therefore, it is likely that there is no adverse impact expected to occur for those industries that produce output affected by the final rule, such as lumber and wood products, chemical manufacturers, petroleum refining, and furniture manufacturing.

F. What are the social costs and benefits of the final rule?

Our assessment of costs and benefits of the final rule is detailed in the " Regulatory Impact Analysis for the Proposed Industrial, Commercial, and Institutional Boilers and Process Heaters MACT." The Regulatory Impact Analysis ( RIA) is located in the Docket.

It is estimated that 3 years after implementation of the final rule, HAP will be reduced by 58,500 tpy ( 53,200 megagrams per year ( Mg/ yr)) due to reductions in arsenic,

beryllium, HCl, and several other HAP from existing affected emission sources. Of these reductions, 42,000 tpy ( 38,200 Mg/ yr) are of HCl. In addition to these reductions, there are 73 tpy ( 66 Mg/ yr) of HAP reductions expected from new sources. Of these reductions, virtually all of them are of HCl. The health effects associated with these HAP are discussed earlier in this preamble. While it is beneficial to society to reduce these HAP, we are unable to quantify 157 and provide a monetized estimate of the benefits at this time.

Despite our inability to quantify and provide monetized benefit estimates from HAP reductions, it is possible to derive rough estimates for one of the more important benefit categories, i. e., the potential number of cancer cases avoided and cancer risk reduced as a result of the imposition of the MACT level of control on this source category. Our analysis suggests that imposition of the MACT level of control would reduce cancer cases by possibly tens of cases per year, on average, starting some years after implementation of the final rule. This risk reduction estimate is uncertain and should be regarded as an extremely rough estimate, and should be viewed in the context of the full spectrum of unquantified noncancer effects associated with the HAP reductions. Noncancer effects associated with the HAP are presented earlier in this preamble.

The control technologies used to reduce the level of HAP emitted from affected sources are also expected to reduce emissions of PM ( PM10, PM2.5), and sulfur dioxide ( SO2). It is estimated that PM10 emissions reductions total approximately 562,000 tpy ( 510,000 Mg/ yr), PM2.5 emissions reductions total approximately 159,000 tpy ( 145,000 Mg/ yr),

and SO2 emissions reductions total approximately 113,000 tpy ( 102,670 Mg/ yr). These estimated reductions occur from 158 existing sources in operation 3 years after the implementation of the requirements of the final rule and are expected to continue throughout the life of the sources.

Human health effects associated with exposure to PM10 and PM2.5 include premature mortality ( short term exposure to PM10 and long term exposure to PM2.5), chronic bronchitis, additional hospital admissions from respiratory and cardiovascular causes, acute respiratory symptoms, and other effects. Welfare effects associated with PM10 and PM2.5 emissions include impaired recreational and residential visibility, household soiling, and materials damage. As SO2 emissions transform into PM, they can lead to the same health and welfare effects listed above.

For PM10 and PM2.5, we provide a monetary estimate for the benefits associated with the reduction of the emissions,

and we conducted several analyses recently that estimate the monetized benefits of PM reductions, including: the RIA of the PM/ Ozone national ambient air quality standards ( NAAQS)

( 1997), the Nitrogen Oxide ( NOx) State Implementation Plan ( SIP) Call ( 1998), the CAA section 126 RIA ( 1999), a study conducted for section 812( b) of the CAA ( 1999), the Tier 2/ Gasoline Sulfur Standards ( 1999), and the Heavy Duty Engine/ Diesel Fuel Standards ( 2000).

On September 26, 2002, the National Academy of Sciences ( NAS) released a report on its review of the Agency's 159 methodology for analyzing the health benefits of measures taken to reduce air pollution. The report focused on EPA's approach for estimating the health benefits of regulations designed to reduce concentrations of airborne PM.

In its report, the NAS said that EPA has generally used a reasonable framework for analyzing the health benefits of PM control measures. It recommended, however, that the Agency take a number of steps to improve its benefits analysis. In particular, the NAS stated that the Agency should:

( 1) Include benefits estimates for a range of regulatory options;

( 2) Estimate benefits for intervals, such as every 5 years, rather than a single year;

( 3) Clearly state the projected baseline statistics used in estimating health benefits, including those for air emissions, air quality, and health outcomes;

( 4) Examine whether implementation of proposed regulations might cause unintended impacts on human health or the environment;

( 5) When appropriate, use data from non U. S. studies to broaden age ranges to which current estimates apply and to include more types of relevant health outcomes; and 160 ( 6) Begin to move the assessment of uncertainties from its ancillary analyses into its primary analyses by conducting probabilistic, multiplesource uncertainty analyses. This assessment should be based on available data and expert judgment.

Although the NAS made a number of recommendations for improvement in EPA's approach, it found that the studies selected by EPA for use in its benefits analysis were generally reasonable choices. In particular, the NAS agreed with EPA's decision to use cohort studies to derive benefits estimates. It also concluded that the Agency's selection of the American Cancer Society ( ACS) study for the evaluation of PM related premature mortality was reasonable, although it noted the publication of new cohort studies that should be evaluated by the Agency.

Several of the NAS recommendations addressed the issue of uncertainty and how the Agency can better analyze and communicate the uncertainties associated with its benefits assessments. In particular, the Committee expressed concern about the Agency's reliance on a single value from its analysis and suggested that EPA develop a probabilistic approach for analyzing the health benefits of proposed regulatory actions. The Agency agrees with this suggestion and is working to develop such an approach for use in future rulemakings. 161 In the benefits analysis for the rule, the Agency has used an interim approach that shows the impact of several important alternative assumptions about the estimation and valuation of reductions in premature mortality and chronic bronchitis. This approach, which was developed in the context of the Agency's Clear Skies analysis, provides an alternative estimate of health benefits using the time series studies in place of cohort studies, as well as alternative valuation methods for mortality and chronic bronchitis risk reductions.

For the final rule, we conducted an air quality assessment to determine the change in ambient concentrations of PM10 and PM2.5 that result from reductions of PM and SO2 at existing affected facilities. Our air quality analysis was conducted using the source receptor ( S R) matrix model,

a model that provides changes in PM10 and PM2.5 concentrations based on changes in PM and/ or PM precursor emissions. Unfortunately, our data is not able to define the exact location of the reductions for every affected boiler and process heater. The air quality analysis was conducted for emissions reductions from those emissions sources that have an known link to a specific control device, which represents approximately 50 percent of the total emissions reductions mentioned above. Using this subset of information, we utilized the S R matrix to 162 determined the air quality change nationwide. The results of the air quality assessment served as input to a model that estimates the total monetary value of benefits of the health effects listed above. Total benefits associated with this portion of the analysis are $ 8.2 billion in the year 2005 ( presented in 1998 dollars).

For those emissions reductions from affected sources that do not have a known link to a specific control device,

the results of the air quality analysis serve as a reasonable approximation of air quality changes to transfer to the remaining emissions reductions of the final rule.

Because there is not a reasonable way to apportion the total benefits of the combined impact of the PM and SO2 reductions from the air quality and benefit analyses completed above,

we performed two additional S R matrix analyses. One analysis was performed to evaluate the impact on air quality of the PM reductions alone ( holding SO2 unchanged), and one to evaluate the impact on air quality from the SO2 reductions alone ( holding PM unchanged). With independent PM and SO2 air quality assessments, we can determine the total benefit associated with each component of total pollutant reductions. The total benefit associated with the PM and SO2 reductions with unspecified location are $ 7.9 billion.

Every benefit cost analysis examining the potential 163 effects of a change in environmental protection requirements is limited to some extent by data gaps, limitations in model capabilities ( such as geographic coverage), and uncertainties in the underlying scientific and economic studies used to configure the benefit and cost models.

Deficiencies in the scientific literature often result in the inability to estimate changes in health and environmental effects, such as potential increases in premature mortality associated with increased exposure to carbon monoxide. Deficiencies in the economics literature often result in the inability to assign economic values even to those health and environmental outcomes which can be quantified. While these general uncertainties in the underlying scientific and economics literatures are discussed in detail in the RIA and its supporting documents and references, the key uncertainties which have a bearing on the results of the benefit cost analysis of the final rule are the following:

( 1) The exclusion of potentially significant benefit categories ( e. g., health and ecological benefits of reduction in hazardous air pollutants emissions);

( 2) Errors in measurement and projection for variables such as population growth;

( 3) Uncertainties in the estimation of future year emissions inventories and air quality; 164 ( 4) Uncertainties associated with the extrapolation of air quality monitoring data to some unmonitored areas required to better capture the effects of the standards on the affected population;

( 5) Variability in the estimated relationships of health and welfare effects to changes in pollutant concentrations; and ( 6) Uncertainties associated with the benefit transfer approach.

Despite these uncertainties, we feel the benefit cost analysis provides a reasonable indication of the expected economic benefits of the industrial boilers and process heaters MACT under two sets of assumptions.

We have used two approaches ( primary and alternative estimates) to provide benefits in health effects and in monetary terms. They differ in the method used to estimate and value reduce incidences of mortality and chronic bronchitis, which is explained in detail in the RIA. While there is a substantial difference in the specific estimates,

both approaches show that the industrial boilers and process heaters MACT may provide benefits to public health, whether expressed as health improvements or as economic benefits.

These include prolonging lives, reducing cases of chronic bronchitis and hospital admissions, and reducing thousands of cases in other indicators of adverse health effects, such 165 as work loss days, restricted activity days, and days with asthma attacks. In addition, there are a number of health and environmental effects which we were unable to quantify or monetize. These effects, denoted by " B" are additive to the both the primary and alternative estimates of benefits.

Results also reflect the use of two different discount rates for the valuation of reduced incidences of mortality; a 3 percent rate which is recommended by EPA's Guidelines for Preparing Economic Analysis ( U. S. EPA, 2000a), and 7 percent which is recommended by the Office of Management and Budget ( OMB) Circular A   94 ( OMB, 1992).

More specifically, the base estimate of benefits reflects the use of peer reviewed methodologies developed for earlier risk and benefit cost assessments related to the CAA, such as the regulatory assessments of the Heavy Duty Diesel and Tier II Rules and the Section 812 Report to Congress. The alternative estimate explores important aspects of the key elements underlying estimates of the benefits of reducing PM and SO2 emissions, specifically focusing on estimation and valuation of mortality risk reduction and valuation of chronic bronchitis. The alternative estimate of mortality reduction relies on recent scientific studies finding an association between increased mortality and short term exposure to particulate matter over days to weeks, while the base estimate relies on a recent 166 reanalysis of earlier studies that associate long term exposure to fine particles with increased mortality. The alternative estimate differs in the following ways: it explicitly omits any impact of long term exposure on premature mortality, it uses different data on valuation and makes adjustments relating to the health status and potential longevity of the populations most likely affected by PM, it also uses a cost of illness method to value reductions in cases of chronic bronchitis while the base estimate is based on individual's willingness to pay to avoid a case of chronic bronchitis.

In addition, one key area of uncertainty is the value of a statistical life ( VSL) for risk reductions in mortality, which is also the category of benefits that accounts for a large portion of the total benefit estimate.

The adoption of a value for the projected reduction in the risk of premature mortality is the subject of continuing discussion within the economic and public policy analysis community. There is general agreement that the value to an individual of a reduction in mortality risk can vary based on several factors, including the age of the individual, the type of risk, the level of control the individual has over the risk, the individual's attitude toward risk, and the health status of the individual.

The Environmental Economics Advisory Committee ( EEAC) 167 of the EPA Science Advisory Board ( SAB) recently issued an advisory report that states that " the theoretically appropriate method is to calculate willingness to pay for individuals whose ages correspond to those of the affected population, and that it is preferable to base these calculations on empirical estimates of willing to pay by age." ( EPA SAB EEAC 00 013). In developing our base estimate of the benefits of premature mortality reductions,

we have appropriately discounted over the lag period between exposure and premature mortality. However, the empirical basis for adjusting the current $ 6 million VSL for other factors does not yet justify including these in our base estimate. A discussion of these factors is contained in the RIA and supporting documents. The EPA recognizes the need for additional research by the scientific community to develop additional empirical support for adjustments to VSL for the factors mentioned above. Furthermore, EPA prefers not to draw distinctions in the monetary value assigned to the lives saved even if they differ in age, health status,

socioeconomic status, gender or other characteristic of the adult population.

Given the advice from the SAB, we employed the suggested approach for the benefit analysis of the Heavy Duty Engine/ Diesel Fuel standard conducted in 2000, and for the Industrial, Commercial, and Institutional Boiler and 168 Process Heater NESHAP discussed in this preamble. A full discussion of considerations made in our presentation of benefits is summarized in the preamble of the Final Heavy Duty Diesel Program issued in December 2000, and in all supporting documentation and analyses of the Heavy Duty Diesel Program, and in the RIA for the final rule.

In addition to the presentation of mortality valuation,

our estimate also includes a " B" to represent those additional health and environmental benefits which could not be expressed in quantitative incidence and/ or economic value terms. A full listing of the benefit categories that could not be quantified or monetized in our estimate are provided in the RIA for the final rule. A full appreciation of the overall economic consequences of the industrial boiler and process heater standards requires consideration of all benefits and costs expected to result from the final rule,

not just those benefits and costs that could be expressed here in dollar terms. A full listing of the benefit categories that could not be quantified or monetized in our base estimate, and hence in total represent what we defined as " B" above, are provided in Table 5 of this preamble.

TABLE 5.   UNQUANTIFIED BENEFIT CATEGORIES Unquantified benefit categories associated with HAP Unquantified benefit categories associated with PM 169 Health Categorie s   Airway responsiveness   Pulmonary inflammation   Increases susceptibility to respiratory infection   Acute inflammation and respiratory cell damage   Chronic respiratory damage/ Premature aging of lungs   Emergency room visits for asthma   Changes in pulmonary function.   Morphological changes. Altered host defense mechanisms   Cancer   Other chronic respiratory disease   Emergency room visits for asthma   Emergency visits for non asthma respiratory and cardiovascular causes   Lower and upper respiratory systems   Acute bronchitis   Shortness of breath   Increased school absence rates   Materials damage   Damage to ecosystems ( e. g., acid sulfate deposition).   Nitrates in drinking water   Visibility in recreational and residential areas Welfare Categorie s   Ecosystem and vegetation effects   Damage to urban ornamentals ( e. g. grass, flowers, shrubs, and trees in urban areas)   Commercial field crops   Fruit and vegetable crops   Reduced yields of tree seedlings, commercial and noncommercial forests   Damage to ecosystems   Materials damage In summary, the base estimate using the VSL approach yields a total monetized benefit estimate of $ 16.1 billion +

B ( 1999 dollars) in 2005 when using a 3 percent interest rate ( or approximately $ 15.4 billion + B when using a 7 percent interest rate.) The alternative estimate totals approximately $ 2.4 billion + B when using a 3 percent interest rate ( or approximately $ 2.6 billion + B when using a 7 percent interest rate). 170 Using the results of the benefit analysis, we can use benefit cost comparison ( or net benefits) as another tool to evaluate the reallocation of society's resources needed to address the pollution externality created by the operation of industrial boilers and process heaters. The additional costs of internalizing the pollution produced at major sources of emissions from industrial boilers and process heaters are compared to the improvement in society's wellbeing from a cleaner and healthier environment. Comparing benefits of the final rule to the costs imposed by alternative ways to control emissions optimally identifies a strategy that results in the highest net benefit to society.

In the final rule, we include only one option, the minimal level of control mandated by the CAA, or the MACT floor.

Other alternatives that lead to higher levels of control ( or beyond the floor alternatives) lead to higher estimates of benefits net of costs, but also lead to additional economic impacts, including more substantial impacts to small entities. For more details, please refer to the RIA for the final rule.

Table 6 of this preamble presents a summary of costs,

benefits, and net benefits ( i. e., benefits minus costs).

Based on estimated compliance costs associated with the final rule and the predicted change in prices and production in the affected industries, the estimated social costs of 171 the final rule are $ 780 million ( 1999 dollars). Social costs are different from compliance costs in that social costs take into account the interactions consumers of affected products in response to the imposition of the compliance costs.

Therefore, the Agency's base estimate of monetized benefits net of costs is $ 15.2 billion + B ( 1999 dollars) in 2005 when using a 3 percent discount rate ( or approximately $ 15 billion + B when using a 7 percent discount rate).

However, using the more conservative alternative estimate of benefits, net benefits are $ 1.5 billion + B ( 1999 dollars)

under a 3 percent discount rate ( or approximately $ 1.7 billion + B when using a 7 percent discount rate).

In both cases, net benefits would be greater if all the benefits of the HAP and other pollutant reductions could be quantified. Notable omissions to the net benefits include all benefits of HAP reductions, including reduced cancer incidences, toxic morbidity effects, and cardiovascular and CNS effects. It is also important to note that not all benefits of SO2 and PM reductions have been monetized.

TABLE 6.   ANNUAL NET BENEFITS OF THE INDUSTRIAL BOILERS AND PROCESS HEATERS NESHAP IN 2005a MACT floor ( million 1999$) Beyond the MACT floor ( million 1999$)

Social Costsb $ 837 $ 1,923 172 Social Benefits: b, c, d HAP related health and welfare benefits Not monetized Not monetized PM related welfare benefits Not monetized Not monetized SO2 and PM related health benefits: Primary Estimate   Using 3% Discount Rate $ 16,300 + B $ 17,230 + B   Using 7% Discount Rate $ 15,430 + B $ 16,310 + B Alternative Estimate   Using 3% Discount Rate $ 2,350 + B $ 2,380 + B   Using 7% Discount Rate $ 2,585 + B $ 2,620 + B Net Benefits ( Benefits  Costs): c, d Primary Estimate   Using 3% Discount Rate $ 15,465 $ 15,305 + B   Using 7% Discount Rate $ 14,595 + B $ 14,385 + B Alternative Estimate   Using 3% Discount Rate $ 1,515 $ 455 + B   Using 7% Discount Rate $ 1,750 + B $ 700 + B a All costs and benefits are rounded to the nearest $ 5 million. Thus, figures presented in this table may not exactly equal benefit and cost numbers presented in earlier sections of the chapter. b Note that costs are the total costs of reducing all pollutants, including HAP as well as SO2 and PM10. Benefits in this table are associated only with PM and SO2 reductions. c Not all possible benefits or disbenefits are quantified and monetized in this analysis. Potential benefit categories that have not been quantified and monetized are listed in Table 8   13 of the RIA. B is the sum of all unquantified benefits and disbenefits ( i. e, the potential benefits categories listed in Table 5 above and also in Table 8 13 of the RIA). d Monetized benefits are presented using two different discount rates. Results calculated using 3 percent discount rate are recommended by EPA's Guidelines for Preparing Economic Analyses ( U. S. EPA, 2000a). Results calculated using 7 percent discount rate are recommended by OMB Circular A   94 ( OMB, 1992). 173 G. How will the risk based provisions reduce impacts?

Today's final rule contains risk based provisions establishing eligibility criteria for an exemption from the HCl emission limit and an exclusion from including manganese in the total selected metals emission rate. Therefore, the impacts of today's final rule will be reduced. The reduction in costs, environmental, and economic impacts associated with inclusion of the risk based provisions in the final rule are summarized in this section.

1. Estimated Number of Eligible Facilities To estimate the potential impact of the risk based provisions, EPA performed a preliminary " rough" assessment of the large solid fuel subcategory. Based on the results of this rough assessment, 448 coal fired boilers could potentially be eligible for the HCl exemption and 386 biomass fired boilers could be potentially eligible for the manganese exclusion, provided these assessments are confirmed by source specific demonstrations. The difference in regulatory impacts due to inclusion of the risk based provisions in the final rule are summarized in the following paragraphs.

Based on the HCl lookup table, facilities with less than 587 million Btu per hour heat input of coal capacity would be exempt from complying with the HCl emission limit.

Assuming 2 boilers per facility and the uncontrolled HCl 174 emission factor, this would indicate coal fired boilers below 250 million Btu per hour would not incur any control costs. Based on the manganese lookup table, facilities with less than 84 million Btu per hour heat input of wood capacity would be able to exclude manganese from the total selected metals emission rate. Assuming 2 boilers per facility and controlled with cyclones, this would indicate wood fired boilers below 45 million Btu per hour would not incur any control costs.

2. Air quality impacts We estimate that the total HAP emissions reductions estimate provided in section III. B will decrease by 5600 tons/ yr) due to facilities becoming eligible for the riskbased provisions. Therefore, considering the impact of facilities becoming eligible for the risk based provisions,

we estimate that today's final rule will result in a total reduction in HAP emissions of 52,400 tons/ yr.

Including the risk based provisions will affect the estimates of criteria pollutant reductions as well. We estimate that PM and SO2 emissions reductions estimates will decrease by 17,100 and 64,000 tons/ yr, respectively. As a result, we estimate that the total reduction in PM and SO2 emissions will be approximately 549,000 and 49,000 tons/ yr,

respectively.

3. Cost impacts 175 Facilities that become eligible for the risk based provisions will not need to install APCD to comply with the final rule. Therefore, the high end estimated costs of today's final rule will be less than the estimates presented in section V. D We estimate that the total annualized costs,

which include annualized capital costs for control and monitoring equipment, operation and maintenance expenses,

and recordkeeping and reporting costs, will decrease by $ 145 million. Therefore, we estimate that the total annualized costs of the final rule are $ 690 million.

Economic impacts.

Social costs and benefits.

IV. Summary of Responses VI. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review Under Executive Order 12866 ( 58 FR 51735, October 4,

1993), the EPA must determine whether a regulatory action is " significant" and, therefore, subject to review by the OMB and the requirements of the Executive Order. The Executive Order defines " significant regulatory action" as one that is likely to result in a rule that may:

( 1) Have an annual effect on the economy of $ 100 million or more or adversely affect in a material way the 176 economy, a sector of the economy, productivity, competition,

jobs, the environment, public health or safety, or State,

local, or tribal governments or communities;

( 2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

( 3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligation of recipients thereof; or ( 4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

Pursuant to the terms of Executive Order 12866, the EPA has determined that the final rule is a " significant regulatory action" because it has an annual effect on the economy of over $ 100 million. As such, the final rule was submitted to OMB for review.

B. Paperwork Reduction Act The information collection requirements in this rule have been submitted for approval to the Office of Management and Budget ( OMB) under the Paperwork Reduction Act, 44 U. S. C. 3501 et seq. The information collection requirements are not enforceable until OMB approves them.

The information requirements are based on notification,

recordkeeping, and reporting requirements in the NESHAP General Provisions ( 40 CFR part 63, subpart A), which are 177 mandatory for all operators subject to national emission standards. These recordkeeping and reporting requirements are specifically authorized by section 114 of the CAA ( 42 U. S. C. 7414). All information submitted to EPA pursuant to the recordkeeping and reporting requirements for which a claim of confidentiality is made is safeguarded according to Agency policies set forth in 40 CFR part 2, subpart B.

The final rule requires maintenance inspections of the control devices, but does not require any notifications or reports beyond those required by the General Provisions.

The recordkeeping requirements require only the specific information needed to determine compliance.

The annual monitoring, reporting, and recordkeeping burden for this collection ( averaged over the first 3 years after the effective date of the standards) is estimated to be $ 165 million. This includes 2.7 million labor hours per year at a total labor cost of $ 142 million per year, and total non labor capital costs of $ 24 million per year. This estimate includes a one time performance test, semiannual excess emission reports, maintenance inspections,

notifications, and recordkeeping. The total burden for the Federal government ( averaged over the first 3 years after the effective date of the standard) is estimated to be 346,000 hours per year at a total labor cost of $ 14 million per year. 178 Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain,

or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting,

validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

The OMB control numbers for EPA's regulations are listed in 40 CFR part 9. When this ICR is approved by OMB, the Agency will publish a technical amendment to 40 CFR part 9 in the Federal Register to display the OMB control number for the approved information collection requirements contained in this final rule.

The EPA requested comments on the need for this information, the accuracy of the provided burden estimates, 179 and any suggested methods for minimizing respondent burden,

including through the use of automated collection techniques.

C. Regulatory Flexibility Act The EPA has determined that it is not necessary to prepare a regulatory flexibility analysis in connection with the final rule. We have also determined that the final rule will not have a significant impact on a substantial number of small entities.

For purposes of assessing the impacts of the final rule on small entities, small entity is defined as:

( 1) A small business according to Small Business Administration size standards by the North American Industry Classification System ( NAICS) category of the owning entity.

The range of small business size standards for the 40 affected industries ranges from 500 to 1,000 employees,

except for petroleum refining and electric utilities. In these latter two industries, the size standard is 1,500 employees and a mass throughput of 75,000 barrels/ day or less, and 4 million kilowatt hours of production or less,

respectively;

( 2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and ( 3) a small organization that is any not for profit 180 enterprise that is independently owned and operated and is not dominant in its field.

After considering the economic impact of the final rule on small entities, we have determined that the final rule will not have a significant impact on a substantial number of small entities. Based on SBA size definitions for the affected industries and reported sales and employment data,

EPA identified 185 of the 576 entities, or 32 percent,

owning affected facilities as small entities. Although small entities represent 32 percent of the entities within the source category, they are expected to incur only 4 percent of the total compliance costs of $ 862.7 million ( 1998 dollars). There are only ten small entities with compliance costs equal to or greater than 3 percent of their sales. In addition, there are only 24 small entities with cost to sales ratios between 1 and 3 percent.

An economic impact analysis was performed to estimate the changes in product price and production quantities for the final rule. As mentioned in the summary of economic impacts earlier in this preamble, the estimated changes in prices and output for affected entities is no more than 0.05 percent.

This analysis indicates that the final rule should not generate a significant impact on a substantial number of small entities for following reasons. First, there are only 181 34 small entities ( or 18 percent of all affected small entities) with compliance costs equal to or greater than 1 percent of their sales. Of these, only ten small entities ( or 5 percent of all affected small entities) with compliance costs equal to or greater than 3 percent of their sales. Second, the results of the economic impact analysis show minimal impacts on prices and output from affected firms, including small entities, due to the implementation of the final rule. This analysis, therefore, allows us to certify that there will not be a significant impact on a substantial number of small entities from the implementation of the final rule. For more information, consult the docket for the final rule.

The final rule will not have a significant economic impact on a substantial number of small entities as a result of several decisions EPA made regarding the development of the rule, which resulted in limiting the impact of the rule on small entities. First, as mentioned earlier in this preamble, EPA identified small units ( heat input of 10 MMBtu/ hr or less) and limited use boilers ( operate less than 10 percent of the time) as separate subcategories different from large units. Many small and limited use units are located at small entities. As also discussed earlier, the results of the MACT floor analysis for these subcategories of existing sources was that no MACT floor could be 182 identified except for the limited use solid fuel subcategory, which is less stringent than the MACT floor for large units. Furthermore, the results of the beyond

thefloor analysis for these subcategories indicated that the costs would be too high to consider them feasible options.

Consequently, the final rule contains no emission limitations for any of the existing small and limited use subcategories except the existing limited use solid fuel subcategory. In addition, the alternative metals emission limit resulted in minimizing the impacts on small entities since some of the potential entities burning a fuel containing very little metals are small entities.

D. Unfunded Mandates Reform Act of 1995 Title II of the Unfunded Mandates Reform Act of 1995 ( UMRA), Public Law 104 4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, we generally must prepare a written statement, including a cost benefit analysis, for proposed and final rules with " Federal mandates" that may result in expenditures to State, local,

and tribal governments, in the aggregate, or to the private sector, of $ 100 million or more in any 1 year. Before promulgating a rule for which a written statement is needed,

section 205 of the UMRA generally requires us to identify 183 and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows us to adopt an alternative other than the least costly, most cost effective or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before we establish any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, we must develop a small government agency plan under section 203 of the UMRA. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of regulatory promulgation with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

We determined that the final rule contains a Federal mandate that may result in expenditures of $ 100 million or more for State, local, and Tribal governments, in the aggregate, or the private sector in any 1 year.

Accordingly, we have prepared a written statement ( titled " Unfunded Mandates Reform Act Analysis for the Industrial 184 Boilers and Process Heaters NESHAP)" under section 202 of the UMRA, which is summarized below.

Statutory Authority As discussed in section I of this preamble, the statutory authority for the final rulemaking is section 112 of the CAA. Title III of the CAA Amendments was enacted to reduce nationwide air toxic emissions. Section 112( b) of the CAA lists the 188 chemicals, compounds, or groups of chemicals deemed by Congress to be HAP. These toxic air pollutants are to be regulated by NESHAP.

Section 112( d) of the CAA directs us to develop NESHAP,

which require existing and new major sources to control emissions of HAP using MACT based standards. This NESHAP applies to all industrial, commercial, and institutional boilers and process heaters located at major sources of HAP emissions.

In compliance with section 205( a) of the UMRA, we identified and considered a reasonable number of regulatory alternatives. Additional information on the costs and environmental impacts of these regulatory alternatives is presented in the docket.

The regulatory alternative upon which the final rule is based represents the MACT floor for industrial boilers and process heaters and, as a result, it is the least costly and least burdensome alternative. 185 Social Costs and Benefits The regulatory impact analysis prepared for the final rule including the EPA's assessment of costs and benefits,

is detailed in the " Regulatory Impact Analysis for the Industrial Boilers and Process Heaters MACT" in the docket.

Based on estimated compliance costs associated with the final rule and the predicted change in prices and production in the affected industries, the estimated social costs of the final rule are $ 780 million ( 1998 dollars).

It is estimated that 5 years after implementation of the final rule, HAP will be reduced by 58,500 tpy due to reductions in arsenic, beryllium, dioxin, hydrochloric acid,

and several other HAP from industrial boilers and process heaters. Studies have determined a relationship between exposure to these HAP and the onset of cancer, however,

there are some questions remaining on how cancers that may result from exposure to these HAP can be quantified in terms of dollars. Therefore, the EPA is unable to provide a monetized estimate of the benefits of the HAP reduced by the final rule at this time. However, there are significant reductions in PM and in SO2 that occur. Reductions of 560,000 tons of PM with a diameter of less than or equal to 10 micrometers ( PM10), 159,000 tons of PM with a diameter of less than or equal to 2.5 micrometers ( PM2.5), and 112,000 tons of SO2 are expected to occur. These reductions occur 186 from existing sources in operation 5 years after the implementation of the regulation and are expected to continue throughout the life of the affected sources. The major health effect that results from these PM and SO2 emissions reductions is a reduction in premature mortality.

Other health effects that occur are reductions in chronic bronchitis, asthma attacks, and work lost days ( i. e., days when employees are unable to work).

While we are unable to monetize the benefits associated with the HAP emissions reductions, we are able to monetize the benefits associated with the PM and SO2 emissions reductions. For SO2 and PM, we estimated the benefits associated with health effects of PM, but were unable to quantify all categories of benefits ( particularly those associated with ecosystem and environmental effects).

Unquantified benefits are noted with " B" in the estimates presented below. Our primary estimate of the monetized benefits in 2005 associated with the implementation of the proposed alternative is $ 16.1 billion + B ( 1998 dollars).

This estimate is about $ 15.3 billion + B ( 1998 dollars)

higher than the estimated social costs shown earlier in this section. The Alternative Estimate of benefits is $ 2.7 billion + B ( 1998 dollars), which is about $ 1.7 billion + B higher than the estimated social costs. The general approach to calculating monetized benefits is discussed in 187 more detail earlier in this preamble. For more detailed information on the benefits estimated for the final rule,

refer to the RIA in the docket.

Future and Disproportionate Costs The Unfunded Mandates Act requires that we estimate,

where accurate estimation is reasonably feasible, future compliance costs imposed by the rule and any disproportionate budgetary effects. Our estimates of the future compliance costs of the final rule are discussed previously in this preamble.

We do not feel that there will be any disproportionate budgetary effects of the final rule on any particular areas of the country, State or local governments, types of communities ( e. g., urban, rural), or particular industry segments. This is true for the 257 facilities owned by 54 different government bodies, and this is borne out by the results of the " Economic Impact Analysis of the Industrial Boilers and Process Heaters NESHAP," the results of which are discussed previously in this preamble.

Effects on the National Economy The Unfunded Mandates Act requires that we estimate the effect of the final rule on the national economy. To the extent feasible, we must estimate the effect on productivity, economic growth, full employment, creation of productive jobs, and international competitiveness of the 188 U. S. goods and services, if we determine that accurate estimates are reasonably feasible and that such effect is relevant and material.

The nationwide economic impact of the final rule is presented in the " Economic Impact Analysis for the Industrial Boilers and Process Heaters MACT" in the docket.

This analysis provides estimates of the effect of the final rule on some of the categories mentioned above. The results of the economic impact analysis are summarized previously in this preamble. The results show that there will be little impact on prices and output from the affected industries, and little impact on communities that may be affected by the final rule. In addition, there should be little impact on energy markets ( in this case, coal, natural gas, petroleum products, and electricity). Hence, the potential impacts on the categories mentioned above should be minimal.

Consultation with Government Officials The Unfunded Mandates Act requires that we describe the extent of the EPA's prior consultation with affected State,

local, and tribal officials, summarize the officials'

comments or concerns, and summarize our response to those comments or concerns. In addition, section 203 of the UMRA requires that we develop a plan for informing and advising small governments that may be significantly or uniquely 189 impacted by a rule. Although the final rule does not significantly affect any State, local, or Tribal governments, we have consulted with State and local air pollution control officials. We also have held meetings on the final rule with many of the stakeholders from numerous individual companies, environmental groups, consultants and vendors, labor unions, and other interested parties. We have added materials to the docket to document these meetings.

In addition, we have determined that the final rule contains no regulatory requirements that might significantly or uniquely affect small governments. While some small governments may have some sources affected by the final rule, the impacts are not expected to be significant.

Therefore, the final rule is not subject to the requirements of section 203 of the UMRA.