that SCR technology has the potential to achieve 90 percent and greater
rates of removal, as well as achieve emission rates of less than 0.05
lb/MMBtu. However, we disagree with the commenter's assertion that
emission limits associated with BART must meet the lowest emission rate
achieved with

that technology at any coal-fired power plant. The RHR provides that:

    The determination of BART must be based on an analysis of the
best system of continuous emission control technology available and
associated emission reductions achievable for each BART-eligible
source that is subject to BART * * * \74\
---------------------------------------------------------------------------

    \74\ 40 CFR 51.308(e)(1)(ii)(A).

Additionally, the BART Guidelines state that: ``[i]n assessing the
capability of the control alternative, latitude exists to consider
special circumstances pertinent to the specific source under review, or
regarding the prior application of the control alternative'' \75\ and
that ``[t]o complete the BART process, you must establish enforceable
emission limits that reflect the BART requirements * * *''.\76\ The
five-factor BART analysis described in the Guidelines is a case-by-case
analysis that considers site-specific factors in assessing the best
technology for continuous emission controls. After a technology is
determined as BART, the BART Guidelines require establishment of an
emission limit that reflects the BART requirements, but does not
specify that the emission limit must represent the maximum level of
control achieved by the technology selected as BART. While the BART
Guidelines and the RHR do not preclude selection of the maximum level
of control achieved by a given technology as BART, the emission limit
set to reflect BART must be determined based on a consideration and
weighting of the five statutory BART factors. Therefore, limits set as
BACT during PSD review (e.g., Desert Rock), or emission rates achieved
from the operation of individual facilities under an emissions trading
program (e.g., Clean Air Act Interstate Rule (CAIR)) may provide
important information, but should not be construed to automatically
represent the most appropriate BART limit for a given technology.
---------------------------------------------------------------------------

    \75\ BART Guidelines, 40 CFR Part 51, Appendix Y, section
IV.D.3.
    \76\ Id. section V.
---------------------------------------------------------------------------

    Comment: Several commenters (APS, AEPCO, SRP, AUG, Pacificorp) note
that the proposed NOX emission rate, as based on SCR
technology, is more stringent than many other EPA actions. In its
comments, SRP provided a contractor's report that found that the
proposed limit is inconsistent with BACT determinations that EPA has
approved for new coal-fired units in the following ways:
     Although there have been several units permitted with
similar emissions limits, none of these limits are directly equivalent
(same numeric limit and averaging time, including startup and shutdown
periods).
     These units are based on new construction, which can be
designed to optimize NOX reduction in other aspects of
combustion (i.e., pulverizer design, boiler height, etc.).
     There is inadequate data available to confirm the long-
term achievability of the limits because the units have not begun
operation or only recently became operational.
    Other commenters note that, as part of the Cross State Air
Pollution Rule (CSAPR), EPA concluded that a NOX limit below
0.06 lb/MMBtu is not achievable through retrofit of SCR on coal-fired
electric generating units.\77\ AEPCO and APS also note that based on
data from the RACT/BACT/LAER Clearinghouse, new coal-fired EGUs with
SCR are only required to achieve 0.05 lb/MMBtu averaged over 12 months,
and it is not appropriate to assume that a retrofit coal-fired unit can
achieve this limit averaged over 30 days. SRP notes that the proposed
limit for Coronado Unit 1 is more stringent than the recently
promulgated NSPS for electric utility steam generating units
constructed after May 3, 2011 (40 CFR part 60, subpart Da), which
establishes a limit of 0.70 lb/MWh (0.077 lb/MMBtu) for new units, and
1.1 lb/MWh (0.11 lb/MMbtu) for modified units. APS also provided a
report, originally prepared by RMB Consulting & Research, Inc. (RMB)
for comment on the Regional Haze FIP for San Juan Generating Station,
suggesting that the Subpart Da limits represent the most stringent
level of available control. The RMB report states that EPA's Guidelines
indicate that state regulatory agencies should consider NSPS limits in
the BART evaluation except in cases where the NSPS might be considered
outdated (e.g., ``technology determinations from the 1970s or early
1980s''), which is not the case for the recently promulgated NSPS
Subpart Da.
---------------------------------------------------------------------------

    \77\ Citing 76 FR 1109, 1115, January 7, 2011; EPA, Transport
Rule Engineering Feasibility Response to Comments, Docket ID No.
EPA-HQ-OAR-2009-0491-4529, at 13, July 6, 2011.
---------------------------------------------------------------------------

    Response: We do not agree that our consideration of a
NOX emission limit of 0.050 lb/MMBtu was inappropriate. We
note that, in its submitted comments, Earthjustice identified several
recently issued permits that establish emission limits for SCR that are
more stringent than our proposal. While limits set as BACT during PSD
review may provide important information about the capabilities of
various control technologies, they should not be construed to
automatically represent (or in this context, constrain) the
determination of what the most appropriate BART limit representative of
a given technology is for a given facility. The emission limit set to
reflect BART must be determined based on a consideration and weighing
of the statutory BART factors. Although there are some similarities
between the top-down BACT determination process and the five-step BART
determination process, we note that a BACT determination is based
almost exclusively on cost-effectiveness, and does not, for example,
take visibility improvement at Class I areas into account.\78\
---------------------------------------------------------------------------

    \78\ We note that a Class I area impact analysis must be
performed by certain PSD projects as part of the permit application
process. However, the visibility results are not used in the BACT
determination, which is typically determined prior to performing the
visibility modeling, and are not used to determine the appropriate
level of control except in those cases where the visibility impact
is sufficiently high to warrant mitigation measures that end up
involving additional emission reductions.
---------------------------------------------------------------------------

    One of the commenters noted that in IPM modeling performed in
support of the CSAPR rulemaking, we used an SCR emission rate of 0.06
lb/MMBtu for certain retrofit coal-fired EGUs, stating that this was
the most stringent emission rate assumed achievable for retrofit units.
It is important to note that IPM is a tool that operates using a large
number of variables with values determined based upon a wide variety of
assumptions. These assumptions, and the values upon which they are
based, will necessarily change based upon the needs and context of the
project or rulemaking for which IPM is used. It is therefore not
appropriate to automatically consider a particular assumption or
variable value (in this case, SCR emission rate) used in one
application of IPM to represent a uniform standard or constraint
against which all other uses of IPM should be compared.
    In the case of the CSAPR rulemaking cited by the commenter, IPM was
used to set state-wide budgets for NOX based on assumptions
that would be minimally achievable to a broad array of covered sources.
The emission data and constraints fed into IPM therefore represented
sector-wide modeling assumptions, which is a much different use and
context than a BART determination, which must ``take into account the
most stringent emission control level'' in order to establish a source-
specific emission limit. As a result, we disagree that the 0.06 lb/
MMBtu assumption used in the CSAPR rulemaking should be construed to

represent the most stringent emission control level for SCR.
    Similarly, we also disagree that the recently promulgated NSPS
Subpart Da represents the most stringent emission control level for
SCR. First, we acknowledge that while the BART Guidelines state that
``EPA no longer concludes that the NSPS level of controls automatically
represents `the best these sources can install' '' \79\ this was
written in the context of older NSPS subparts with technology
evaluations that could potentially be outdated and not representative
of current pollution control technology performance. We also
acknowledge that, while the BART Guidelines provide for ``situations
where NSPS standards do not require the most stringent level of
available control for all sources within a category'' and cite NSPS
Subpart GG (stationary gas turbines) as a subpart that does not
consider post-combustion controls,\80\ the recently promulgated NSPS
Subpart Da does consider post-combustion controls such as SCR.\81\
---------------------------------------------------------------------------

    \79\ BART Guidelines, 40 CFR Part 51, Appendix Y, section
IV.D.1, n. 13.
    \80\ Id. section IV.D.1.
    \81\ 40 CFR Part 60, Subpart Da.
---------------------------------------------------------------------------

    Despite this language, however, we disagree with the commenter's
assertion that NSPS Subpart Da represents the most stringent emission
control level for SCR, or that an NSPS Subpart, even a recently
promulgated one, should be treated as a ``floor'' for establishing BART
emission limits. While the BART Guidelines provide that, ``you may rely
on MACT standards for purposes of BART,'' \82\ they do not indicate
that the same is true for the NSPS standards. An NSPS standard must
establish an emission rate that is appropriate for all the units within
its category,\83\ which in the case of Subpart Da includes a variety of
boiler types, coal types, and baseline emission rates that may not be
representative of the Apache, Cholla, and Coronado units. Specifically
in the case of the RMB report, which was prepared for the San Juan
Generating Station, the assertion that the Subpart Da standards
represent the most stringent level of available control is undermined
by the report's findings that emission modeling indicates that the San
Juan units could achieve NOX emission rates in the range of
0.047 to 0.068 lb/MMBtu, which are emission rates lower than the
Subpart Da standards.
---------------------------------------------------------------------------

    \82\ Id. section IV.C.
    \83\ Or subcategories, which Subpart Da does not establish
except for ``new'' and ``modified'' units.
---------------------------------------------------------------------------

    Comment: Multiple commenters (AUG, APS, SRP) stated that EPA must
consider presumptive BART limits. The commenters asserted that EPA
cannot ignore presumptive BART limits because, as part of the BART
Guidelines, they are binding regulatory presumptions that should only
be deviated from based on a careful consideration of the BART factors
(70 FR 39171).
    EPA's Proposed Rule, however, does not reflect any such
consideration. Indeed, EPA's Proposed Rule never even mentions the
presumptive limits except to note that Arizona considered them. (77 FR
42847). The nature of and basis for EPA-established presumptive
NOX BART limits for the relevant units at Apache, Cholla,
and Coronado show that EPA's determination in its proposed FIP that
SCR--a much more costly, post-combustion technology--represents BART at
these facilities is, at least, presumptively incorrect. Because EPA
failed to consider the presumptive limits in developing its proposed
FIP's BART limits for NOX, the Proposed Rule is flawed and
must be withdrawn.
    The commenters also note that the RHR also established presumptive
BART emission limits for NOX emissions from fossil fuel-
fired units through notice-and-comment rulemaking. The presumptive
NOX emissions limits for coal-fired EGUs vary according to
individual source characteristics, including fuel firing configuration
(tangential/wall-fired, opposed wall-fired, cyclone) and type of fuel
burned (bituminous, sub-bituminous, lignite, etc.). Commenters also
argued that, because EPA shifted the baseline for BART, it did not
include combustion controls, such as LNB, in its analysis, and only
considered higher cost post-combustion controls (SNCR and SCR).
    Response: We disagree with the commenters' assertions that we
ignored the presumptive BART NOX limits. Because Apache,
Cholla and Coronado all have access to and have historically burned
both bituminous and sub-bituminous coal,\84\ there is no single
presumptive NOX limit that applies to any of these
units.\85\ Therefore, rather than rely upon the numerical values of the
presumptive NOX limits listed in the BART Guidelines, we
have considered the technological basis for presumptive NOX
BART limits, such as the use of combustion control technology, boiler
type, and coal type, as part of the five-factor analysis we performed
for each facility. For each source, we considered combustion controls
as a potential option for BART.\86\
---------------------------------------------------------------------------

    \84\ See, e.g., Final Report, Apache Unit 2 BART Analysis, Table
3-1 (December 2007); Cholla Unit 2 BART Report, page ES-2; SRP
Comments on Proposed Rule (September 2012), RMB Technical
Memorandum, page 3.
    \85\ See BART Guidelines, 40 CFR Part 51, Appendix Y, Table 1.
    \86\ At Apache Units 2 and 3, we considered combustion controls
(LNB plus OFA) as one of the control scenarios. At Cholla and
Coronado, combustion controls were considered as part of the
baseline emission rate and were a potential BART option in the event
that the five-factor analysis indicated that no additional controls
beyond the baseline were justified.
---------------------------------------------------------------------------

    We also disagree with commenters' assertions that our selection of
non-presumptive BART technology as BART is flawed or presumptively
incorrect. In the BART Guidelines EPA explained that:

    For coal-fired EGUs greater than 200 MW located at greater than
750 MW power plants and operating without post-combustion controls
(i.e. SCR or SNCR), we have provided presumptive NOX
limits, differentiated by boiler design and type of coal burned. You
may determine that an alternative control level is appropriate based
on a careful consideration of the statutory factors. For coal-fired
EGUs greater than 200 MW located at power plants 750 MW or less in
size and operating without post-combustion controls, you should
likewise presume that these same levels are cost-effective. You
should require such utility boilers to meet the following
NOX emission limits, unless you determine that an
alternative control level is justified based on consideration of the
statutory factors.\87\
---------------------------------------------------------------------------

    \87\ BART Guidelines, 40 CFR Part 51, Appendix Y, section
IV.E.5.

Therefore, the presumptive emission limits in the BART Guidelines are
rebuttable, and the five statutory factors enumerated in the BART
Guidelines provide the mechanism for establishing different
requirements. Specifically, as explained in the preamble to the BART
---------------------------------------------------------------------------
Guidelines:

    If, upon examination of an individual EGU, a State determines
that a different emission limit is appropriate based upon its
analysis of the five factors, then the State may apply a more or
less stringent limit.\88\
---------------------------------------------------------------------------

    \88\ 70 FR 39132.

Thus, the establishment of presumptive BART limits, and the
corresponding technology upon which those limits are based, does not
preclude states or EPA from setting limits that differ from those
presumptions. The five-factor analysis we performed for these
facilities demonstrates that, taking into consideration the expected
remaining useful life and the existing controls present at the
facilities, SCR is cost-effective, results in the most visibility
improvement of all feasible control technologies, and that these
factors are not outweighed by SCR's potential energy and non-air
quality environmental impacts. As a result, regardless of the
appropriateness of SCR

as a control technology for most units on a national scale, our five-
factor analyses establish that NOX BART limits more
stringent than the presumptive limits are appropriate for these units.
 3. Costs of Compliance
    Comment: Several commenters stated that EPA inappropriately
conducted its cost analysis using generalized data and a regional
model, whereas the CAA requires a BART determination to be based, in
part, on a site-specific cost evaluation. One commenter (Navajo Nation)
stated that EPA should justify its use of the IPM and explain why it
did not use or request line item costs from the facilities to make its
analysis more site-specific. This commenter also stated that EPA's
reliance on the IPM is misplaced because the model integrates health-
based regulations and not the RHR.
    Another commenter (SRP) added that the proposed rule and the TSD
say almost nothing about how IPM was used to calculate costs, instead
directing the public to an EPA contractor report for more information.
The commenter asserted that no contractor report in the docket for the
rulemaking supplies additional detail on precisely how IPM was used.
The commenter believes that this failing renders EPA's proposed rule
inconsistent with the CAA's public notice requirements.
    Response: As described in our proposal, the IPM is a multi-regional
linear programming model of the U.S. electric power sector. IPM relies
upon a very large number of data inputs and provides forecasts of
least-cost capacity expansion, electricity dispatch, and emission
control strategies for meeting energy demand and environmental,
transmission, dispatch, and reliability constraints. EPA has used IPM
to evaluate the cost and emissions impacts of proposed policies, such
as the recent Mercury and Air Toxics Standard (MATS) to limit pollutant
emissions from the electric power sector.
    We wish to clarify that, for our proposed action on Arizona's
Regional Haze SIP, we did not actually run IPM. Rather, we used one
component of IPM, specifically, the component that develops the costs
of air pollution control technologies. Broadly speaking, IPM relies
upon numerous components and sub-components to specify constraints and
variable values that feed into the model algorithms used during an
actual IPM model run. The air pollution control cost development
component is just one of these numerous components. We relied upon the
cost information and equations contained in this component by manually
placing them into a spreadsheet that calculated the capital and O&M
costs associated with pollution control options. While we relied upon
the results of these spreadsheet calculations, we did not then use
those results to run IPM, as the type of information generated by an
actual IPM model run (e.g., generation dispatch decisions, capacity
decisions) is not relevant to our action. We documented our use of the
equations from IPM's air pollution control technology cost component by
placing the raw cost calculation spreadsheet in the docket for our
proposal.\89\ This spreadsheet contained the IPM equations,
corresponding variable values, selected notes regarding assumptions and
variable ranges as well as selected tables from IPM Base Case v4.10
documentation. Since we did not perform an actual IPM model run, the
spreadsheet and contractor's report in the docket for our proposal
sufficiently document our use of the cost methodologies from the IPM
air pollution control cost component.
---------------------------------------------------------------------------

    \89\ Document ID: EPA-R09-OAR-2012-0021-0008, File name: G-15--
MODELING--FILES--EGU--BART--Costs--Apache--Cholla--Coronado--FINAL2.
---------------------------------------------------------------------------

    We disagree with commenters' characterization of the cost
development methodology contained in IPM as generalized or outdated. As
noted in the documentation for IPM's cost development methodology for
SCR, the cost estimate methodology is based upon two databases of
actual SCR projects.\90\ These databases include 2004 and 2006 industry
cost estimates prepared for the Midwestern Ozone Group (MOG), and a
proprietary in-house database maintained by engineering firm Sargent &
Lundy (S&L). The MOG information was cross-referenced with actual 2009
projects, and escalated accordingly. S&L then used the information in
these databases to develop the equations described in the cost
component taking into account the pre-control NOX emission
level, degree of reduction, coal type, facility size, and numerous
other unit-specific factors. While a costly engineering evaluation that
included site visits would potentially produce a more refined cost
estimate that could be considered more site-specific than our own, we
disagree that our approach has produced cost estimates that are either
``generic'' or ``generalized.''
---------------------------------------------------------------------------

    \90\ http://www.epa.gov/airmarkets/progsregs/epa-ipm/docs/v410/Appendix52A.pdf.
---------------------------------------------------------------------------

    Comment: Several commenters contended that where specific knowledge
is available, the CCM is oriented to allow and provide for the use of
such information. The commenters also note that the RHR explicitly
provides that the cost analysis should take into account any site-
specific information that affect the costs of a particular BART
technology option, and the Corn Growers court explained that BART
determinations must be made on a source-specific basis.
    Response: While we agree that BART determinations must be made on a
source-specific basis, we do not agree that site-specific information
is required for all aspects of a BART analysis. Nonetheless, in order
to address commenters' concerns that our proposal was based on cost
information that was insufficiently site-specific and that the costs of
the SCR with LNB and OFA control option, in particular, are not
representative of actual installation costs at these facilities, we
have performed a supplemental cost analysis. The supplemental cost
analyses for each facility are described in Section IV.D of this
document, and incorporate much of the cost information provided by the
facilities in their comments. In performing this supplemental cost
analysis, we have adopted a ``hybrid'' approach that relies on cost
estimates provided by the facilities for certain line items, but still
retains the use of the CCM methodology as described in the following
response.
    Comment: Several commenters stated that EPA's cost estimating
techniques are flawed and its reliance on the outdated EPA CCM led to
underestimates of costs. Several of these commenters noted that EPA
claimed that owner's costs, surcharges and Allowance for Funds Used
During Construction (AFUDC) are not allowed by EPA's CCM and refute
that these costs are not allowed by the Manual. The commenters state
that while the Manual does not have specific line items for owner's
costs and surcharges, it discusses some of the items that roll up into
these categories. APS, for example, states that:

    Owner's costs are home office and plant support costs that are
charged directly to specific projects. These would include costs
related to project management, engineering, construction support,
start-up, training, etc. Surcharges are home office costs associated
with a project that may not be charged directly to that project.
These costs would be related to overhead loads, procurement,
accounting, finance, etc.\91\
---------------------------------------------------------------------------

    \91\ APS comments, page 12.

APS also notes that there is a line item for AFUDC in the Manual but
provides that it is assumed to be zero percent, but that in its
experience AFUDC is a real cost and is never zero percent. In

addition, the commenters state neither the CAA nor the BART Guidelines
---------------------------------------------------------------------------
require the Manual to be used to determine the costs of compliance.

    Response: With regard to owner's costs and surcharges, we agree
with commenters' assertions that the CCM does discuss some of the items
that roll up into these line items as they have described in comments.
For the control option of SCR with LNB and OFA, for example, the CCM
does provide for ``Engineering and Home Office Fees'' \92\ that could
potentially include some of the home office and plant support costs
described in comments. These types of costs are often included in
estimates under some type of engineering/procurement/project services
line item. In the case of the cost estimates provided by the utilities
(both those submitted to ADEQ as part of the original BART analysis,
and those submitted to us in comments on our proposal), we note that
their cost estimates are not organized to list line item(s) that
clearly correspond to ``Engineering and Home Office Fees,'' and do not
provide information indicating where these costs may be included. As a
result, while owner's costs and surcharge are not line items included
in the CCM, in this instance, as a conservative assumption, we have
included the portion of owner's costs/surcharge in the total cost, up
to the value specified for ``Engineering and Home Office Fees''
indicated by the CCM.
---------------------------------------------------------------------------

    \92\ As described in Table 2-5 of the CCM, Engineering and Home
Office Fees represent 10 percent of purchased equipment costs.
---------------------------------------------------------------------------

    We disagree with commenters' assertions that AFUDC is a cost that
should be incorporated into our cost analysis, as it is inconsistent
with CCM methodology. The utility industry uses a method known as
``levelized costing'' to conduct its internal comparisons, which is
different from the methods specified by the CCM. Utilities use
``levelized costing'' to allow them to recover project costs over a
period of several years and, as a result, realize a reasonable return
on their investment. The CCM uses an approach sometimes referred to as
overnight costing, which treats the costs of a project as if the
project were completed ``overnight'', with no construction period and
no interest accrual. Since assets under construction do not provide
service to current customers, utilities cannot charge the interest and
allowed return on equity associated with these assets to customers
while under construction. Under the ``levelized costing'' methodology,
AFUDC capitalizes the interest and return on equity that would accrue
over the construction period and adds them to the rate base when
construction is completed and the assets are used. Although it is
included in capital costs, AFUDC primarily represents a tool for
utilities to capture their cost of borrowing and return on equity
during construction periods. AFUDC is not allowed as a capitalized cost
associated with a pollution control device under CCM's overnight
costing methodology, and is specifically disallowed for SCRs (i.e., set
to zero) in the CCM.\93\ Therefore, in reviewing other BART
determinations, EPA has consistently excluded AFUDC.\94\
---------------------------------------------------------------------------

    \93\ CCM (Tables 1.4 and 2.5 show AFUDC value as zero).
    \94\ See, e.g., 77 FR 20894, 20916-17 (Apr. 6, 2012) (explaining
in support of the North Dakota Regional Haze FIP, ``we maintain that
following the overnight method ensures equitable BART determinations
* * *.''); 76 FR 52388, 52399-400 (August 22, 2011) (explaining in
the New Mexico Regional Haze FIP that the Manual does not allow
AFUDC).
---------------------------------------------------------------------------

    Comment: The ACCCE notes that the Manual specifically states that
it does not directly address the controls needed to control air
pollution at EGUs, citing the following quote from the Control Cost
Manual:

    * * * this Manual does not directly address the controls needed
to control air pollution at electrical generating units (EGUs)
because of the differences in accounting for utility sources.
Electrical utilities generally employ the EPRI Technical Assistance
Guidance (TAG) as the basis for their cost estimation processes.

    Response: We disagree with the commenter's assertion that the CCM
does not address control costs needed to control air pollution at EGUs.
The quote cited by the commenter contains a footnote that reads as
follows:

    This does not mean that this Manual is an inappropriate resource
for utilities. In fact, many power plant permit applications use the
Manual to develop their costs. However, comparisons between
utilities and across the industry generally employ a process called
``levelized costing'' that is different from the methodology used
here.\95\
---------------------------------------------------------------------------

    \95\ EPA Air Pollution Cost Control Manual, Sixth Edition page
1-3.

The quote is merely a factual observation that electric utilities, in
their planning and cost estimating for their own purposes, use a
different accounting method than required by the CCM. The footnote
clarifies that the CCM is appropriate for utilities for regulatory
purposes.
4. Energy and Non-Air Environmental Impacts
    Comment: One commenter (ADEQ) stated that EPA should consider the
costs associated with fly ash ammonia removal in selecting BART.
Further, additional problems during disposal of fly ash may cause
environmental damage and should not be discounted.
    Response: EPA disagrees with this comment. First, we note that
ammonia adsorption in the fly ash is expected to be minimal from SCR
because excess ammonia would likely react with sulfuric acid to form
particulate ammonium sulfate or ammonium bisulfate, which would not
pose the same odor problem in fly ash reuse as adsorbed ammonia.
Second, the facilities' own BART analyses did not include costs of fly
ash disposal or ammonia removal in the cost estimates for SCR, which
indicates that they do not consider these potential costs to be
significant. Finally, we note that the Arizona Department of
Transportation has designated fly ash from each of the three sources as
approved material.\96\ As explained in our proposed rulemaking and the
accompanying TSD, the presence of ammonia does not impact the integrity
of the use of fly ash in concrete.\97\ Therefore, we have no
information that suggests that installation of SCR would result in a
change to the facilities' current fly ash disposal and re-use
practices.
---------------------------------------------------------------------------

    \96\ Approved Materials Source List, Fly Ash, Natural Pozzolan,
and Lime, Revised July 10, 2012, available at http://www.azdot.gov/Highways/Materials/.
    \97\ See 77 FR 42853-4284, TSD at 38.
---------------------------------------------------------------------------

    Comment: One commenter (SRP) stated that EPA downplayed the energy
and non-air quality factor its revised BART determination in the
proposed FIP, presenting the narrow conclusion that potential energy
and non[hyphen]air quality impacts do not warrant elimination of any of
the otherwise feasible control options for NOX at any of the
sources. The commenter asserted that this narrow consideration of this
factor is not tenable because this factor must be weighed and
considered in conjunction with the other BART factors in the overall
assessment of what control option constitutes BART for a particular
source. The commenter believes that EPA's approach minimizes the role
of this factor in a BART analysis, which is beyond EPA's authority.\98\
---------------------------------------------------------------------------

    \98\ Citing Corn Growers, 291 F.3d at 6-7 (finding that EPA's
original 1999 regional haze rules had improperly divorced
consideration of the BART visibility benefits factor from the other
BART factors).
---------------------------------------------------------------------------

    Response: EPA does not agree with this comment. The RHR and the
BART Guidelines allow the reviewing authority (State, Tribe, or EPA)
the discretion to determine how to weigh and in what order to evaluate
the

statutory factors (cost of compliance, the energy and non-air quality
environmental impacts of compliance, any existing pollution control
technology in use at the source, the remaining useful life of the
source, and the degree of improvement in visibility which may
reasonably be anticipated to result from the use of such technology),
as long as the reviewing authority justifies its selection of the
``best'' level of control and explains the CAA factors that led the
reviewing authority to choose that option over other control
levels.\99\ In this case, having disapproved the state's BART
determinations for NOX at several units, ``all of the rights
and duties that would otherwise fall to the State accrue instead to
EPA.'' \100\ This includes a significant degree of discretion in
deciding how to weigh the five factors, so long as that weighing is
accompanied by reasoned explanation for adopting the technology
selected as BART, based on the five factors, and in accordance with the
BART Guidelines. EPA has provided a detailed explanation of our BART
evaluation process and five-factor analyses in our proposal, TSD and
elsewhere in this document. We have weighed the potential energy and
non[hyphen]air environmental quality impacts of the various control
options along with the other statutory factors in our BART analyses and
have concluded that impacts do not warrant elimination of any of the
otherwise feasible control options for NOX at any of the
sources.\101\
---------------------------------------------------------------------------

    \99\ See BART Guidelines, 40 CFR Part 51, appendix Y, section
IV.E.2.
    \100\ Central Arizona Water Conservation Dist. v. EPA, 990 F.2d
1531, 1541 (9th Cir. 1993).
    \101\ See 77 FR 42853-4284, TSD at 38.
---------------------------------------------------------------------------

5. Remaining Useful Life of the Source
    Comment: One commenter (APS) did not dispute EPA's assumption of a
twenty-year useful life of the emission control equipment in its
annualized cost calculations.
    Response: EPA agrees with the commenter that this is an appropriate
assumption for these sources.
6. Degree of Improvement in Visibility
    Comment: One commenter (NPS) agreed with EPA that a more complete
assessment of visibility improvement for candidate BART controls would
include consideration of the number of areas affected and the degree of
improvement expected at all Class I areas rather than focusing on a
single area. The commenter commended EPA for its reliance on deciview
improvement and the number of areas showing improvement, plus its
consideration of cumulative improvement, which provides a supplemental
measure that combines information on the number of areas and on
individual area improvement.
    In contrast, several commenters (ADEQ, AEPCO, APS and AUG)
disagreed that EPA's new visibility metric, ``cumulative visibility
improvement,'' is an appropriate metric, asserting that this metric
incorrectly inflates the estimated visibility improvements of various
control options and should not be used. The commenters further stated
that this metric does not appear anywhere in the CAA, RHR or BART
Guidelines, and that these rules and guidelines specifically give
discretion to states to determine how to take into account visibility
impacts in a BART evaluation. In addition, the RHR (at 70 CFR 39170)
supports identifying the single Class I area that would have the
greatest visibility effects from emission controls and does not support
adding improvements from multiple Class I areas in determining
visibility effects. The commenters affirmed that EPA should use a
change in deciview at the Class I area with the highest impact as its
visibility metric, consistent with EPA's RHR and the method used by
other EPA regions and states.
    The commenters further stated that to be relevant to the
environmental effect that the regional haze program addresses, the
metric by which visibility improvement is determined for purposes of
assessing BART for a particular facility must reflect actual human
perception of visibility. The commenters added that the cumulative
impact approach used by EPA has no tie to human perception and can only
distort a BART analysis. The commenters believe that this approach
arbitrarily magnifies the benefit that might be associated with
emission limitations at a single source.
    Response: EPA agrees with NPS on the need to consider visibility
improvements at all the nearby Class I areas as part of a comprehensive
assessment of the degree of visibility improvement due to BART
controls. EPA disagrees with some other commenters that cumulative
improvement over multiple areas is an inappropriate metric, or that
examining a single Class I area is sufficient. The cumulative
improvement metric (i.e., the simple sum of impacts or improvements
over all the Class I areas) is not intended to correspond to a single
human's perception at a given time and place. The approach is simply
one way of assessing improvements at multiple areas, for consideration
along with other visibility metrics. Another approach would be to
simply list visibility improvements at the various areas, and
qualitatively weigh the number of areas and the magnitudes of the
improvements. The cumulative sum is simply an easily understood and
objective way of weighing cumulative visibility improvement, as part of
the overall BART decision.
    Comment: One commenter performed NO2 modeling by scaling
tropospheric column NO2 derived from satellite measurements,
as portrayed in imagery from the Institute of Environmental Physics,
University of Bremen, Germany. The commenter states that SCR would
reduce NO2 closer to background levels.
    Response: While the facilities considered for BART control are not
the only NOX sources in the area, the commenter's scaling of
the concentrations in the satellite images according to the reductions
expected from SCR can give a rough idea of its NO2 benefit.
However, to assess visibility impacts, the model used must account for
the formation of visibility-impairing ammonium nitrate particles. Under
the BART Guidelines, CALPUFF is the recommended model that incorporates
this nitrate chemistry. Alternative models could potentially be used if
they had the ability to handle this and other chemical transformations
and had undergone a rigorous performance evaluation.
    Comment: One commenter (NPS) commended EPA for the thoroughness of
its visibility modeling analyses and the methodologies used. The
commenter noted that EPA used CALPUFF methods 6 and 8 and modeled
against annual average and 20 percent best natural background
conditions. The commenter also pointed out that EPA modeled all
pollutants while varying NOX emissions to evaluate the
effects of changing this one pollutant.
    Response: EPA acknowledges the comment. It was our intention to
estimate visibility impacts accurately and transparently so that one
could more easily compare results to earlier applications of CALPUFF
and clearly understand the effect of old versus revised IMROVE
equations (methods 6 and 8) as well as alternative natural background
conditions. We modeled all pollutants together in order to account for
chemical interactions among the various pollutants and also the
nonlinear dependence of deciviews upon extinction.
    Comment: One commenter (APS) stated that EPA's proposal noted that
it is appropriate to use Method 6a, 6b, 8a or 8b in CALPOST within the
CALPUFF model, yet EPA inappropriately rejected

ADEQ's use of Method 6a in its own analysis and instead used Method 8b,
which yielded higher predicted visibility improvements in Class I
areas.
    Response: EPA did not reject ADEQ's use of visibility method 6a,
which remains a viable method for past visibility modeling work under
an agreed upon protocol. Method 6a comprises CALPOST Method 6, the old
IMPROVE equation for translating pollutant concentration into
visibility impacts, and annual average (the ``a'') natural background
concentrations. However, for new visibility modeling, such as EPA
performed for the FIP, method 8b is preferable. Method 8b comprises
CALPOST Method 8, the revised IMPROVE equation, and best 20 percent of
days (the ``b'') natural backgrounds. The revised IMPROVE equation has
superior performance for assessing visibility, and is recommended by
the Federal Land Managers for regional haze assessments performed for
New Source Review permitting.\102\ EPA believes that using the best 20
percent of days as a basis for background concentrations is desirable
since visibility impacts due to emissions from facilities are most
noticeable on the best days, that is, most visible to visitors of Class
I areas. EPA assessed the results of both methods (and also the ``6b''
and ``8a'' combinations), but primarily relied on 8b as the most
appropriate method in the BART context.
---------------------------------------------------------------------------

    \102\ Federal Land Managers' Air Quality Related Values Work
Group (FLAG) Phase I Report--Revised (2010), U.S. Forest Service,
National Park Service, U.S. Fish and Wildlife Service, October 2010.
http://www.nature.nps.gov/air/Pubs/pdf/flag/FLAG_2010.pdf.
---------------------------------------------------------------------------

    Comment: One commenter (APS) objected to EPA shifting the CAA's
mandate to compare costs and benefits under the BART program to an
assessment of ``cost-effectiveness'' ($/ton) without specifying the
threshold level of what is cost-effective. APS also noted that in the
absence of a specific threshold for cost-effectiveness, the FLMs have
referred to a benchmark of $20 million per deciview as the upper limit.
The commenter also presented data showing the incremental costs of
going from LNB/OFA to SNCR or SCR to be over $20 million per deciview
for Cholla.
    Response: The commenter is correct that the BART Guidelines list
the $/deciview ratio as an additional cost-effectiveness metric that
can be employed along with $/ton for use in a BART evaluation, and we
have included this information in our proposal. While the FLMs have
indicated that they consider $20 million/dv to be a benchmark for
average cost-effectiveness, we note that the BART Guidelines do not
require the development of a specific threshold. The BART Guidelines,
however, require that cost-effectiveness be calculated in terms of
annualized dollars per ton of pollutant removed, or $/ton.\103\ We
considered cost of controls by discussing the total capital costs,
annual costs, $/ton, and incremental $/ton, and considered the degree
of visibility improvement by discussing the individual and cumulative
deciview improvement resulting from the various control technology
options, as well as the percent change in improvement. Our
consideration of other metrics in addition to $/dv in no way relegates
visibility improvement to a secondary role. Finally, we note that the
FLMs' recommended ``benchmarks'' for dollars per deciview are for
average dollars per deciview not incremental dollars per deciview.\104\
Neither the BART Guidelines nor the FLMs recommend consideration of
incremental dollars per deciview.
---------------------------------------------------------------------------

    \103\ BART Guidelines section IV.D.4.c.
    \104\ See, e.g. National Park Service Comments on Best Available
Retrofit Technology for Apache, Cholla, and Coronado Power Plants in
Arizona (September 17, 2012) at 6.
---------------------------------------------------------------------------

    Comment: One commenter (NPS) cautioned against any implication in
EPA's analyses that visibility improvement must exceed 0.5 dv to be
significant. The commenter believes that such an approach would be
contrary to the BART Guidelines.
    Response: EPA agrees that the 0.5 dv threshold for ``contribute to
visibility impairment'' is only for the initial Subject-to-BART
screening test and it is a maximum even for that purpose, according to
the BART Guidelines.\105\ Smaller improvements from controls should be
considered in BART determinations, since they can be beneficial in
considering effects from controls on multiple sources.\106\ We have
used the 0.5 dv level simply as one point of comparison, a
``benchmark'' or ``yardstick,'' to gauge the magnitude of impacts under
various control scenarios.
---------------------------------------------------------------------------

    \105\ BART Guidelines, 40 CFR Part 51, Appendix Y, section
III.A.1 (``As a general matter, any threshold that you use for
determining whether a source ``contributes'' to visibility
impairment should not be higher than 0.5 deciviews.'')
    \106\ See, e.g. 70 FR 39129 (``Even though the visibility
improvement from an individual source may not be perceptible, it
should still be considered in setting BART because the contribution
to haze may be significant relative to other source contributions in
the Class I area.'')
---------------------------------------------------------------------------

    Comment: Several commenters (APS, AUG, Navajo Nation, PacifiCorp
and SRP) asserted that EPA's proposed NOX BART determination
rests on a flawed assessment of visibility impacts. The commenters made
the following arguments to support their contention that EPA's modeling
overestimates the visibility benefits associated with BART control
options. First, EPA used an outdated version of the CALPUFF model
(version 5.8) that over-predicts visibility benefits. Based on
citations provided by the commenters, CALPUFF version 6.42 has been
shown to provide better agreement with observed levels of nitrates. The
commenters provided modeling results using CALPUFF version 6.42 for
EPA's consideration. Second, EPA's outdated use of constant ammonia
background concentration of 1.0 ppb over-predicts visibility benefits
and fails to account for known monthly or seasonal variations. EPA
inappropriately rejected ADEQ's use of variable background
concentrations, which was well within the state's discretion. Several
of these commenters also noted that a case study \107\ by Terhorst and
Berkman based on the 2005 closure of the Mohave Generating Station
found virtually no evidence that closure resulted in improved
visibility at the Grand Canyon. In addition, SRP stated that EPA must
consider visibility benefits from NOX controls within the
context of nitrate contributions to regional haze. Studies of
visibility impairment on the Colorado plateau show that nitrate
aerosols contribute only two to five percent to haze.
---------------------------------------------------------------------------

    \107\ Terhorst, Jonathan and Berkman, Mark, ``Effect of Coal-
fired Power Generation on Visibility in a Nearby National Park'',
Atmospheric Environment 44, 2524, 2530 (Apr. 2010).
---------------------------------------------------------------------------

    Response: EPA disagrees with the commenters that any new CALPUFF
version should be used for the BART determination. EPA relied on
version 5.8 of CALPUFF because it is EPA-approved version in accordance
with the Guideline on Air Quality Models (``GAQM'', 40 CFR 51, Appendix
W, section 6.2.1.e). EPA updated the specific version to be used for
regulatory purposes on June 29, 2007, including minor revisions as of
that date. The approved CALPUFF modeling system includes CALPUFF
version 5.8, level 070623, and CALMET version 5.8 level 070623. CALPUFF
version 5.8 has been thoroughly tested and evaluated, and has been
shown to perform consistently with the initial 2003 version in the
analytical situations for which CALPUFF has been approved. Any other
version, and especially one with such fundamental differences in its
handling of chemistry, would be considered an ``alternative model'',
subject to the provisions of GAQM section 3.2.2(b), requiring full
model

documentation, peer-review, and performance evaluation. No such
information for the later CALPUFF versions that meet the requirements
of section 3.2.2(b) has been submitted to or approved by EPA.
Experience has shown that when the full evaluation procedure is not
followed, errors that are not immediately apparent can be introduced
along with new model features. For example, changes introduced to
CALMET to improve simulation of over-water convective mixing heights
caused their periodic collapse to zero, even over land, so that CALPUFF
concentration estimates were no longer reliable.\108\
---------------------------------------------------------------------------

    \108\ ``CALPUFF Regulatory Update'', Roger W. Brode,
Presentation at Regional/State/Local Modelers Workshop, June 10-12,
2008; http://www.cleanairinfo.com/regionalstatelocalmodelingworkshop/archive/2008/agenda.htm.
---------------------------------------------------------------------------

    The change from CALPUFF version 5.8 to CALPUFF 6.4 is not a simple
model update to address minor issues, but a significant change in the
model science that requires its own rulemaking with public notice and
comment before it can be relied on for regulatory purposes.
    Furthermore, it should be noted that the US Forest Service and EPA
review of CALPUFF version 6.4 results for a limited set of BART
applications showed that differences in its results from those of
version 5.8 are driven by two input assumptions not associated with the
chemistry changes in 6.4. Use of the so-called ``full'' ammonia
limiting method and finer horizontal grid resolution are the primary
drivers in the predicted differences in modeled visibility impacts
between the model versions. These input assumptions have been
previously reviewed by EPA and the FLMs and have been rejected based on
lack of documentation, inadequate peer review, and lack of technical
justification and validation.
    Introducing a new regulatory model is a long process. EPA intends
to conduct a comprehensive evaluation of the latest CALPUFF version
along with other ``chemistry'' air quality models, including a full
statistical performance evaluation, verification of its scientific
basis, and determination of whether the underlying science has been
incorporated into the modeling system correctly. To accommodate such a
model, there would have to be an evaluation of the effect on the
regulatory framework for its use, including in New Source Review
permitting, and also changes to the Guideline on Air Quality Models and
other modeling guidance, in consultation with the FLMs. CALPUFF version
5.8 has already gone through this comprehensive evaluation process and
remains EPA-approved version, and is thus the appropriate version for
EPA's BART determinations of these facilities.
    The ammonia issue has already been addressed above. EPA believes
that there is no compelling alternative to the use of the default 1 ppb
background concentration.
    The Terhorst & Berkman study cited by the commenter is worthy of
consideration as the Regional Haze program evolves, but one study does
not invalidate CALPUFF, which has had multiple performance evaluations
and has gone through public comment and rulemaking. It also does not
remove the legal requirement to perform BART determinations for
eligible facilities.
    While nitrate appears to be a smaller contributor to visibility
impairment than some other compounds, section 169A of the Clean Air Act
requires BART determinations on BART-eligible EGUs regardless of
ambient visibility conditions. Application of BART is one means by
which we can ensure the continuation of downward emission and
visibility impairment trends. Modeling shows maximum visibility impacts
of 1.2 to 4.5 deciviews depending on the facility, which are not
negligible contributions to visibility impairment. Even if an
individual pollutant or source category appears small to some
commenters, the many segments of the emissions inventory taken together
do cause visibility impairment, and each must be addressed in order to
make progress towards the national goal of remedying visibility
impairment from man-made pollution. EPA identifies stationary sources
as an important category to evaluate under the Regional Haze program,
including a BART analysis.
    Comment: Several commenters argued that the proposed FIP is
inconsistent with the goal of the RHR, which is to make progress toward
natural visibility conditions by the year 2064. Another commenter added
that Arizona's energy providers have already invested time and money
(hundreds of millions of dollars) in order to reach the long-term goal
of achieving natural background visibility by 2064, and that the
accelerated timeline proposed by the rule would result in astronomical
costs. Another commenter stated that EPA is front-loading as many
emission reductions as possible in the first five years of this
program, while ignoring other causes of visibility impairment, such as
fires, in its FIP. Other commenters suggested that Arizona's haze is
produced by a number of environmental factors, like pollution from
wildfires, garbage burning along the Mexico/US border, and dust storms.
    Response: We do not agree that we are front-loading emission
reductions or that we have lost sight of the ``end goal.'' While the
goal of the regional haze program is to achieve natural visibility
conditions in all mandatory Class I Federal areas by 2064, the
requirement for states to implement BART applies only during the first
planning period ending in 2018.\109\ Where a State has not met the RHR
requirements related to BART, EPA is obligated to disapprove that
portion of the State's submittal. And, as explained elsewhere in this
document, because the FIP clock has already expired for the Arizona
Regional Haze plan, we are required to promulgate a FIP for any
disapproved portion of the SIP. Our action fulfills part of this duty.
---------------------------------------------------------------------------

    \109\ See 40 CFR 51.308(f) (future Regional Haze plans must
address reasonable progress and long-term strategy, but not BART).
---------------------------------------------------------------------------

    We agree that there are various other factors that contribute to
haze at Arizona's Class I areas. However, these other factors are not
relevant to the BART requirements, which govern today's action. Under
the RHR, causes of haze other than BART sources are addressed under
separate requirements for reasonable progress and a long-term strategy.
We will address the remaining requirements of the RHR for the first
implementation period in Arizona, including requirements for reasonable
progress toward the 2064 goal, in a separate rulemaking action.

D. Source-Specific Comments on EPA's BART Analyses and Determinations

1. EPA's BART Analysis and Determination for NOX at Apache
Units 2 and 3
a. Control Efficiencies
    Comment: Various commenters (ADEQ, AEPCO and AUG) asserted that
EPA's proposed BART determination for Apache Units 2 and 3 was premised
on the assumption that SCR can achieve an emission limit of 0.050 lb/
MMBtu continuously on a 30[hyphen]day rolling average, including
periods of startup, shutdown and equipment malfunctions, but that this
limit has not been shown to be feasible. They argued that EPA had
failed to support either its proposed BART determination or its
reliance on this limit in its BART analysis. In addition, AEPCO and AUG
stated that EPA inappropriately relied on vendor information to support
an emission rate of 0.050 lb/MMBtu using SCR. AEPCO also noted that it
considered this support anecdotal and stated that it

cannot form the basis for a BART determination, as BACT rules expressly
provide that EPA does ``not consider a vendor guarantee alone to be
sufficient justification that a control option will work.'' AEPCO
requested that if EPA retains the SCR limits, that they be set at 0.07
lb/MMBtu due to the infeasibility of complying with a lower limit at
the Apache station. Also, due to the load-following and cycling nature
of the units and the need to accommodate startups and shutdowns, AEPCO
requested that any lower limits be set as an annual average limit.
    Response: We partially agree with this comment. In our proposal,
our analysis was based on an SCR annual average design value of 0.050
lb/MMBtu, which was subsequently proposed as a rolling 30-day average
emission limit. We disagree that our use of 0.050 lb/MMBtu as an annual
average design value is merely anecdotally supported or based on vendor
literature/guarantees alone. As discussed in our proposal, the ability
of SCR to achieve control efficiencies in the range of 80 to 90 percent
is well established. Although the information included in our proposal
did include vendor estimates, it also included summaries of SCR control
efficiencies that were achieved in practice. We have further
supplemented the record to include more recent examples illustrating
that SCR, as a technology, is capable of achieving control efficiencies
in the range of 80 to 90 percent. For the Apache units, an annual
average emission rate of 0.050 lb/MMBtu represents 87 to 89 percent
control. While these values represent the upper range of SCR control
and are more stringent than the control efficiencies used in the BART
analyses prepared by AEPCO,\110\ we reaffirm that these values are
appropriate, given that they are still within the range of what is
achievable with SCR and that the Apache units are among the highest
baseline NOX emission rate units considered in our proposal.
We agree with the commenter that, when establishing a 30-day rolling
average BART emission limit that would apply at all times, it is
appropriate to accommodate emissions associated with startup and
shutdown events in developing the emission limit. SRP raised similar
concerns in comments on Coronado 1 and 2. As discussed in more detail
in our responses on Coronado, SRP submitted information suggesting that
the Coronado units cannot achieve an SCR emission rate of 0.050 lb/
MMBtu on a rolling 30-day average and could only achieve in the range
of 0.053 to 0.072 lb/MMBtu.\111\ We have reviewed the analyses provided
by SRP and note that while the results of SRP's analysis indicate that
Coronado could meet a 0.050 lb/MMBtu limit on an annual average
basis,\112\ we agree that the Coronado units cannot achieve an SCR
emission rate of 0.050 lb/MMBtu on rolling 30-day average. As a result,
we conclude that 0.050 lb/MMBtu is appropriate as annual average design
value, but not as 30-day rolling average emission limit at the Coronado
units. While we acknowledge that Apache 2 and 3 are not identical to
the Coronado units, we do note the following similarities:
---------------------------------------------------------------------------

    \110\ See Docket Items B-03 and B-04, Appendix A. AEPCO's
calculations are based on 83-85 percent SCR control efficiency, and
24-hour average emission rates of 0.07 lb/MMBtu.
    \111\ As discussed in further detail in the responses on
Coronado, this range of values corresponds to an SCR unit designed
to operate during all periods of normal operation and loading
conditions.
    \112\ As discussed in further detail in the responses on
Coronado, this is specifically in regards to Coronado Unit 1.
---------------------------------------------------------------------------

     Both the Apache and Coronado units are of the same boiler
type (Riley turbo).
     Both the Apache and Coronado units were constructed and
placed into operation at approximately the same time. Construction
commenced on the Apache units in 1976, and they were placed into
operation in 1979. The Coronado units were placed into operation in
1979 and 1980.
     Both the Apache and Coronado units have access to, and
could potentially use, a bituminous and sub-bituminous coal blend.\113\
---------------------------------------------------------------------------

    \113\ The Apache units have access to a number of bituminous and
sub-bituminous coal blends. See, e.g., Final Report, Apache Unit 2
BART Analysis, Table 3-1 (December 2007). While the Coronado units
currently burn 100 percent sub-bituminous Powder River Basin coal,
they have historically burned a mixture of PRB with bituminous coal.
See SRP Comments on Proposed Rule (September 2012), RMB Technical
Memorandum, page 3.
---------------------------------------------------------------------------

     Although the historical operating profiles of the Apache
and Coronado units are not identical, both the Apache and Coronado
units are cycling units that exhibit a greater number of startup and
shutdown events than baseload units.
    Based on these similarities, we similarly conclude that the Apache
units cannot achieve an SCR emission rate of 0.050 lb/MMBtu on a
rolling 30-day average, but that use of 0.050 lb/MMBtu as an annual
average design value is appropriate. We agree that when establishing a
rolling 30-day BART emission limit that is based upon an annual average
design value, it is appropriate to provide a compliance margin for
periods of startup and shutdown. In addition to considering the boiler
type, age of the units, and coal type to which Apache has access, we
also note that AEPCO meets the definition of ``small entity'' as
established for electric utility companies by the U.S. Small Business
Administration.\114\ We considered AEPCO's small entity status \115\
and how to provide AEPCO with operational flexibility consistent with
application of the five-factor BART analysis. Based on these
considerations, we have decided to raise the rolling 30-day average
emission limit from the proposed level of 0.050 lb/MMBtu to 0.070 lb/
MMBtu. A rolling 30-day average of 0.070 lb/MMBtu represents an upward
revision of 40 percent from an annual average design value of 0.050 lb/
MMBtu and corresponds to the upper end of the range of lb/MMBtu values
considered achievable by SRP's analysis. We consider this magnitude of
upward revision appropriate to accommodate emissions from startup and
shutdown events, as well to provide AEPCO a sufficient measure of
operational flexibility as a small entity. In addition, in response to
comments requesting that emission limits be established across
units,\116\ consistent with the BART Guidelines,\117\ we have decided
to set the emission limit as a ``bubble'' limit across Apache Units 2
and 3. We are therefore finalizing a 30-day rolling average BART
emission limit of 0.070 lb/MMBtu for Apache Units 2 and 3 as a
``bubble'' across these two units.
---------------------------------------------------------------------------

    \114\ As noted in our NPRM (77 FR 42867).
    \115\ See EPA's Action Development Process, Final Guidance for
EPA Rulewriters: Regulatory Flexibility Act as amended by the Small
Business Regulatory Enforcement Fairness Act, November 2006, at 3.
This EPA guidance document states that prior to the enactment of the
Small Business Regulatory Enforcement Fairness Act, EPA exceeded the
requirements of the Regulatory Flexibility Act (RFA) by preparing a
regulatory flexibility analysis for every rule that would have any
impact on any number of small entities. In view of the changes made
by SBREFA, however, EPA decided to implement the RFA as written--a
regulatory flexibility analysis as specified by the RFA is not
required simply because the rule has some impact on some number of
small entities: ``Instead, such analysis will be required only in
cases where we will not certify that the rule will not have
significant economic impact on a substantial number of small
entities'', but ``It remains EPA policy that program offices should
assess the direct adverse impact of every rule on small entities and
minimize any adverse impact to the extent feasible, regardless of
the magnitude of the impact or the number of small entities
affected.''
    \116\ Although AEPCO did not specifically request this, this
comment was made in comments submitted by Arizona Utility Group on
behalf of all of the utilities. As a result, we are also
establishing bubble limits for the Apache units.
    \117\ BART Guidelines, 40 CFR Part 51, Appendix Y, section V
(``You should consider allowing sources to ``average'' emissions
across any set of BART-eligible emission units within a fenceline *
* *).
---------------------------------------------------------------------------

    Comment: One commenter (AEPCO) requested that if EPA establishes an

SNCR limit, that the limits for Apache Units 2 and 3 be set at 0.23 lb/
MMBtu. The commenter notes that while there are some differences in
past utilization, the units are functionally identical and that, based
on the best information available, a limit of 0.23 lb/MMBtu is likely
the best consistently achievable limit given the load-following, unit-
cycling and startup and shutdown issues that must be addressed as part
of unit operation.
    Response: Although AEPCO stated in comments that ``based on the
best information available, a limit of 0.23 lb/MMBtu is likely the best
achievable limit'' and cited unit cycling and startup/shutdown issues,
AEPCO did not provide any information in its comments documenting how
or to what extent these issues justify a 0.23 lb/MMBtu emission limit
(rolling 30-day average). We note that AEPCO's original BART analysis
also identified an SNCR emission estimate of 0.23 lb/MMBtu, but did not
discuss the extent to which startup, shutdown, and malfunction events
are accounted for in this emission rate.
    We note, however, that SRP also provided information in its
comments regarding SNCR performance at Coronado Unit 1. Again, because
of the similarities between the Apache units and the Coronado units, we
consider it useful to examine information provided for the Coronado
units in evaluating SNCR performance and an appropriate SNCR emission
limit for the Apache units. As noted in our responses to comments on
Coronado, SRP submitted a conceptual design estimate for SNCR for
Coronado 1 that included a vendor estimate of 25 percent control
efficiency from LNB emission rates. As noted in our responses for
Coronado, while this is less stringent than the 30 percent SNCR control
efficiency used by our contractor, we consider it a reasonable
estimate. Based upon 25 percent control efficiency, annual average
emission rates for the SNCR with LNB and OFA option are presented in
Table 2.

                                  Table 2--Apache: SNCR Emission Rate Estimate
                                                [Annual average]
----------------------------------------------------------------------------------------------------------------
                                                      Control                                     Average across
               Control technology                   efficiency    Apache 2  (lb/  Apache 3  (lb/    units  (lb/
                                                   (percent) \1\      MMBtu)          MMBtu)          MMBtu)
----------------------------------------------------------------------------------------------------------------
OFA.............................................  ..............            0.37            0.44            0.40
LNB+OFA.........................................              30            0.26            0.31            0.28
SNCR+LNB+OFA....................................              25            0.19            0.23            0.21
----------------------------------------------------------------------------------------------------------------
\1\ This represents the incremental control efficiency from the previous control option, not the overall control
  efficiency from the baseline case of OFA.

    If we were to establish a BART emission limit corresponding to the
use of SNCR technology, we would use the annual average SNCR emission
rates presented in Table 2 as our basis, rather than our original
estimates based on 30 percent SNCR control efficiency. As noted in a
separate response, when using an annual average design emission rate to
establish a rolling 30-day limit that will apply during periods of
startup, shutdown, and malfunction, we consider it appropriate to
provide some type of measure that provides a compliance margin for such
events. First, we would set the SNCR emission limit as a ``bubble''
limit across Apache 2 and 3. As seen in Table 2, the annual average
SNCR emission rate, averaged across both units, is 0.21 lb/MMBtu. A
0.23 lb/MMBtu emission limit, as requested by AEPCO, established on a
rolling 30-day average represents an approximate 10 percent increase
from the 0.21 lb/MMBtu annual average emission rate. We would consider
this magnitude of upward revision appropriate to accommodate startup,
shutdown, and malfunction events as well as the unit cycling nature of
the Apache units. As a result, if established, we would consider the
BART emission limit corresponding to the SNCR with LNB and OFA option
to be 0.23 lb/MMBtu, established as a bubble across both units.
    For the purposes of our cost calculations or visibility modeling,
however, we have retained the use of our original SNCR emission rates.
A less stringent SNCR emission rate would, by itself, primarily serve
to make the next most stringent control option, SCR, appear to remove a
greater amount of emissions. This in turn would make the SCR control
option appear more incrementally cost-effective (i.e., by removing a
greater amount of emissions, relative to SNCR, for the same cost). As
discussed in our proposal and in other responses to comments, we
already consider SCR to be cost-effective, and it is not determinative
to our decision to find that SCR is ``even more'' incrementally cost-
effective.
b. Costs of Compliance
    Comment: Two commenters (NPS and Earthjustice) conducted their own
analyses of the cost and cost-effectiveness of SCR with LNB and OFA for
reducing emissions of NOX at Apache Units 2 and 3. NPS used
the cost methodologies of the CCM, relied on the IPM to reflect the
most recent SCR cost levels, and submitted the detailed calculations as
Appendix B to its comments. The commenter's analysis yielded cost-
effectiveness values of $2,392/ton to $3,144/ton. The commenter noted
that EPA's analysis yielded cost-effectiveness values of $2,275/ton to
$2,908/ton, which EPA considers cost-effective. According to
Earthjustice, when the cost-effectiveness of SCR is calculated using
more accurate costs and proper baselines, the result is a cost-
effective SCR investment that reduces NOX at a cost of
$2,640/ton at Unit 2 and $2,275/ton at Unit 3.
    Response: Based upon a review of the commenters' calculations, we
recognize that there are certain aspects of cost calculations that
would result in lower $/ton values under different assumptions. As
noted in our proposal, we already consider the SCR with LNB and OFA
control option to be cost-effective at $/ton values that are somewhat
higher than those calculated by the commenters. As a result, we decline
to modify our estimates of cost-effectiveness to reflect these
comments, as it is not in any way determinative to our decision to find
that SCR is ``even more'' cost-effective or that the incremental cost-
effectiveness value between SCR and SNCR is ``even more'' incrementally
cost-effective.
    Comment: One commenter (AEPCO) stated EPA underestimated the site-
specific costs for installing SCR at Apache, due principally to EPA's
substitution of general data used in the IPM model for the site-
specific data used by ADEQ. The commenter stated that EPA needs to
reevaluate its numbers in light of AEPCO's site-

specific analysis. For operation and maintenance costs, AEPCO estimates
total costs of $1,760,000, which is slightly lower than EPA's estimate
of $1,822,463, with the main difference due to EPA's higher allowance
for maintenance. For the base unit costs, EPA used a 25 percent
reduction factor for ``low dust'' for Unit 3. AEPCO's vendors do not
believe there will be any substantial reduction in cost based on ``low
dust,'' and estimates that installed costs will be approximately
$39,094,000 compared to EPA's estimate of $33,279,000 for this unit.
AEPCO estimates that the bare module cost will be near $48,119,000,
rather than the $25,599,000 that EPA estimates, because EPA only
included costs for induced draft (ID) fan upgrades and did not account
for the additional costs of upgrading existing or running new
electrical service to support the additional electrical loads required
by SCR. The commenter also stated that EPA did not include contractor
indirect costs and contingency with the capital, engineering and
construction costs, nor did EPA include any owner's costs or allowance
for funds during construction, including interest during construction.
AEPCO does not believe EPA should disallow these costs. AEPCO's
estimates with these costs are $85,666,000, compared with EPA's
estimate of $33,279,000.
    The commenter stated that based on AEPCO's estimated installed
costs of SCR, the cost burden is disproportional to the benefits.
Adding the costs of SCR to EPA's estimate for LNB and OFA, the
annualized cost is $3,508 per ton and $13.9 million per deciview.
    Another commenter (ACCCE) stated that EPA's proposal to require SCR
at Apache Units 2 and 3 must be abandoned due to the high costs of SCR.
The commenter notes that according to EPA's estimates, costs of SCR
with LNB and OFA would be about $6 million for each unit, while the
annualized costs of LNB and OFA estimated by ADEQ are only about
$533,000 per unit. In addition, the commenter notes that the marginal
improvement in visibility with SCR over LNB and OFA would be less than
1 deciview.
    Response: We disagree with commenters' assertions that we
underestimated the costs of SCR, or that the cost of SCR is
disproportional to its benefits. In developing our proposed action for
Apache Units 2 and 3, we examined the cost estimates for the SCR with
LNB and OFA control option contained in AEPCO's original BART
analysis.\118\ By comparison, the SCR with LNB and OFA cost estimates
we developed for our proposed action \119\ do not differ significantly.
A comparison of capital cost, total annual cost, and cost-effectiveness
for these two estimates are summarized in Tables 3 and 4.

                         Table 3--Apache Unit 2: Cost Comparison of SCR With LNB and OFA
----------------------------------------------------------------------------------------------------------------
                                                                                Average cost-
                                                   Capital cost    Total annual      Emissions     effectiveness
                                                        ($)        cost  ($/yr)   removed  (tpy)      ($/ton)
----------------------------------------------------------------------------------------------------------------
EPA estimate....................................     $44,779,657      $5,869,299           2,019          $2,908
AEPCO original estimate.........................      48,740,300       6,102,740           3,250           1,878
----------------------------------------------------------------------------------------------------------------

                         Table 4--Apache Unit 3: Cost Comparison of SCR With LNB and OFA
----------------------------------------------------------------------------------------------------------------
                                                                                Average cost-
                                                   Capital cost    Total annual      Emissions     effectiveness
                                                        ($)        cost  ($/yr)   removed  (tpy)      ($/ton)
----------------------------------------------------------------------------------------------------------------
EPA estimate....................................     $43,812,028      $6,103,078           2,683          $2,275
AEPCO original estimate.........................      48,740,300       6,062,302           2,778           2,182
----------------------------------------------------------------------------------------------------------------

We note that while we used a different cost estimation methodology than
AEPCO, our estimates of capital cost and total annual cost are very
similar to the company's original estimates and differ, for example, by
only 8 percent and 4 percent (respectively) at Apache Unit 2. More
importantly, we note that AEPCO's original estimates for Apache Units 2
and 3 actually show lower $/ton values than our own, meaning that
AEPCO's original estimate indicates that SCR with LNB and OFA is cost-
effective.
    In submitted comments, AEPCO provided multiple analyses comparing
our SCR (stand alone) cost estimate with revised estimates prepared by
engineering firm Burns and McDonnell.\120\ AEPCO provided two sets of
revisions: one in which it retained our assumptions regarding costs not
included in the CCM, such as AFUDC and owner's costs, and another set
in which it included those costs. In both cases, these analyses also
contained revisions in order to reflect capital costs and O&M costs
that AEPCO considered more representative and appropriate for the
Apache units. These revisions included the following:
---------------------------------------------------------------------------

    \118\ Docket Item No. B-01, Arizona Regional Haze SIP, Appendix
D, page 49.
    \119\ See 77 FR 42856, Table 16.
    \120\ The analysis was included in Attachment 1 to AEPCO's
Comments on the page titled ``SCR Capital Cost Comparison.''
---------------------------------------------------------------------------

     Higher bare module SCR costs, involving the inclusion and
upward revision of specific constituent cost items (e.g., concrete and
piling, ductwork);
     Use of lower cost reduction for the low-dust SCR design as
reflected in bare module cost (10 percent cost reduction, compared to a
25 percent cost reduction used in our estimate);
     Use of higher capacity factor (0.85 for both units,
compared to 0.62 and 0.71);
     Lower SCR NOX removal efficiency (based on an
SCR emission rate of 0.07 lb/MMBtu, compared to 0.05 lb/MMBtu);
     Inclusion of an additional 15 percent engineering,
procurement, contracting fee (not included in our cost estimate); and
     And certain other different assumptions regarding O&M
costs that result in similar total O&M costs.

AEPCO then included our estimate of LNB and OFA costs with its SCR
(standalone) costs to arrive at its overall cost estimate for the SCR
with LNB and OFA control option. As discussed elsewhere in this
preamble, we have decided to finalize a 30-day rolling average BART
emission limit of 0.070

lb/MMBtu for Apache Units 2 and 3, and a ``bubble'' across these two
units to provide AEPCO an adequate margin for compliance. Although this
30-day limit accommodates the possibility of multiple startups in a
given 30-day period, we expect such spikes to be smoothed out over the
course of a year, so that the annual average remains closer to 0.05 lb/
MMBtu. For the other items noted above, such as bare module SCR costs,
we are willing to defer to AEPCO's judgment on these issues in order to
address AEPCO's concerns that our cost estimate was insufficiently
site-specific. As a supplemental cost estimate, we have used the
version of AEPCO's cost estimate that adheres to our assumptions
regarding costs that are allowed by the CCM. As shown in Table 5, this
results in revised SCR with LNB and OFA cost-effectiveness values of
$3,450/ton and $2,973/ton for Apache 2 and 3, respectively, that are
still within a range that we consider cost-effective when considered in
conjunction with the visibility improvement associated with SCR.

                   Table 5--Apache 2 and 3: Cost Estimate of Supplemental SCR With LNB and OFA
----------------------------------------------------------------------------------------------------------------
                            Parameter                                Apache 2        Apache 3          Notes
----------------------------------------------------------------------------------------------------------------
SCR Capital Cost ($)............................................      71,938,250      71,938,250               1
LNB+OFA Capital Cost ($)........................................      10,543,189      10,543,189               2
SCR+LNB+OFA Capital Cost ($)....................................      82,481,439      82,481,439  ..............
Interest Rate (percent).........................................             7.0             7.0  ..............
Equipment Lifetime (years)......................................              20              20  ..............
Capital Recovery Factor.........................................           0.094           0.094               2
Annualized Capital Cost ($/yr)..................................       7,785,664       7,785,664  ..............
Fixed O&M ($/yr)................................................         466,000         466,000               1
Variable O&M ($/yr).............................................       1,294,600       1,294,600               1
Total Annual O&M ($/yr).........................................       1,760,600       1,760,600  ..............
                                                                 -----------------------------------------------
    Total Annual Cost ($/yr)....................................       9,546,264       9,546,264  ..............
Heat Rate (MMBtu/hr)............................................           2,316           2,223               2
Baseline Emission Rate (annual average lb/MMBtu)................           0.371           0.438  ..............
SCR Emission Rate (annual average lb/MMBtu))....................           0.050           0.050               2
SCR Control Efficiency (percent)................................              87              89  ..............
Annual Capacity Factor..........................................            0.85            0.85               1
Baseline Emissions (tpy)........................................           3,198           3,625  ..............
SCR Emissions (tpy).............................................             431             414  ..............
    Emissions Removed (tpy).....................................           2,767           3,211  ..............
Annual Cost ($/yr)..............................................       9,546,264       9,546,264  ..............
Emissions Removed (tpy).........................................           2,767           3,211  ..............
                                                                 -----------------------------------------------
    Average Cost-Effectiveness ($/ton)..........................           3,450           2,973  ..............
----------------------------------------------------------------------------------------------------------------

    Comment: One commenter (AEPCO) stated that according to EPA's
estimates of SNCR costs, the incremental costs of SNCR with LNB and OFA
compared to LNB and OFA are $3.3 million with a maximum incremental
improvement of 0.47 dv at Chiricahua Wilderness Area. The commenter
stated that this improvement in deciviews is insignificant compared
with cost.
    Response: As described above, EPA is not limited to considering
incremental costs and benefits in comparing BART alternatives. The
visibility benefits of SNCR at Chiricahua are a full 1 deciview with an
annual cost of $6.6 million and a cost-effectiveness of $2,056 $/ton
averaged over the two emitting units. In this case, even the
incremental cost-effectiveness of $2,837 $/ton is well within the range
that we consider cost-effective. The incremental visibility benefit of
0.47 dv is also substantial, and additional benefits would occur at
multiple Class I areas. Considered as a contribution to visibility
impairment, EPA disagrees that this improvement from SNCR is
insignificant.
    Comment: One commenter (AEPCO) stated that the Appendix Y BART
Guidelines (40 CFR 51, App. Y, section IV.E.3.2) provide that the State
and EPA must consider the economic effects of BART determinations.
AEPCO estimates that to install and operate SCR with LNB and OFA, rates
would need to rise by more than 17.5 percent. Further, the units could
have to shut down if the cost of power from those units is out of line
with the cost of power in the open market. Moreover, due to contract
expirations, AEPCO has no certainty that even its existing 147,643
meters will be available to defray costs. AEPCO asserted that these
factors are exactly the types of circumstances that were designed to be
acknowledged in the BART Guidelines.
    One commenter (AEPCO) stated that EPA failed to follow the
requirements of CAA section 51.308 and Appendix Y in its cost analysis
by failing to review the affordability of the final cost on AEPCO as a
single facility cooperative, but rather examined only the cost per ton
and the cost per deciview. EPA should also consider the implications of
AEPCO's cooperative status and its limitations in obtaining funding for
capital improvements. As a single generating station, with multiple
units subject to BART requirements, the cooperative is unable to spread
costs over unaffected units, other facilities or a large system of
units and ratepayers. Also, as a cooperative, AEPCO is owned by its
members and cannot sell stock or other equities to raise funding, and
must seek long-term financing from the Rural Utilities Service, which
has a limited budget and is being asked to fund efforts for other
cooperatives and rural utilities to meet CAIR, CSAPR, other SIP
initiatives, and the upcoming EGU MACT. In addition, the terms of
AEPCO's mortgage agreement would necessitate a rate increase of more
than 16 percent to accommodate SCR, and it is not certain whether the
Arizona Corporation Commission (ACC) would grant such a rate increase
or what the long term impact would be on AEPCO's working and patronage
capital.
    AEPCO also stated that the operating and financing costs are
unreasonable for the Apache plant. EPA estimates the SCR system alone
will have operating and maintenance costs of $3.3 million,

which is 35 percent of AEPCO's total net revenue of $9.5 million for
2010 and more than the net revenue of $1.9 million for 2011. AEPCO
estimates that it will need to increase rates by $22.5 million a year
over the O&M costs just to finance SCR with LNB and OFA on Units 2 and
3. This combined cost is 14 times AEPCO's net revenues in 2011 and 2.8
times 2010 net revenues. This cost does not include other expenditures
that will be required for Units 1, 2 and 3 for BART. With only 147,643
metered customers and with many of these customers in low income areas,
rate increases for these customers are not trivial. The commenter also
stated that SNCR also is not affordable due to the operating costs.
AEPCO estimates SNCR with LNB and OFA operating costs to be $6.8
million, which is three times AEPCO's net revenue 2011 and over two-
thirds of net revenues in 2010.
    Another commenter (Earthjustice) stated that SCR costs will not
threaten AEPCO's continued viability or have a severe impact on its
operations, which are the only two affordability conditions allowed to
be considered under the BART Guidelines (Appendix Y, Section IV.E.3.).
The commenter noted that guidance and case law on Reasonably Available
Control Technology (RACT) and BACT determinations, which make clear
that affordability issues are given relatively little weight, are
instructive for BART determinations due to the similar analysis. For
RACT and BACT, the commenter explained that Congress intended that all
sources in a source category bear similar costs for pollution reduction
and that sources should not be able to avoid cost-effective controls
due to poor financial position, as this would reward inefficient or
poorly-managed sources. The commenter cited two cases regarding RACT
and BACT economic feasibility (Michigan v. Thomas, 805 F.2d 176, 180
(6th Cir. 1986), Nat'l Steel Corp., Great Lakes Steel Div. v. Gorsuch,
700 F.2d 314, 324 (6th Cir. 1983)). The commenter also noted that
detailed economic data is required for sources to raise affordability
issues under RACT and BACT, and the detailed economic analysis called
for in the BART Guidelines should be similarly robust where EPA
considers affordability issues for ``unusual circumstances.'' The
commenter also stated that Apache's continued viability is not
threatened, based on a report by Paul Chernick at Resource Insight
Inc., which shows that AEPCO's average operating margin over the last
four years would cover 185 percent of the annual debt repayment for the
SCR system, and the current equity capital of $94 million in 2011 would
cover the entire cost of installation. The report also shows that AEPCO
will receive refunds from a settlement with two railroads totaling $63
million. The commenter further refuted that AEPCO may not be able to
borrow sufficient funds for SCR. The commenter stated that RUS loan
funds are not raised or subsidized by taxpayers, and the RUS does not
anticipate any shortage in funding. In addition, the commenter claimed
that the National Rural Utility Cooperative Finance Corporation
(NRUCFC) is financed by private investors, and AEPCO should not have
any difficulty borrowing from the NRUCFC, if necessary.
    Another commenter (ACCCE) stated that the large costs of SCR may
adversely impact AEPCO and its customers due to AEPCO's small size, the
low income profiles of AEPCO's service area, and AEPCO's ability to
obtain financing. The commenter urges EPA to give full consideration to
AEPCO's comments submitted June 29, 2012, on these issues.
    Commenters from AEPCO's member cooperatives stressed the unique
economic and engineering challenges they face--low population density,
the demands of servicing vast remote areas with rugged topography, and
transmission grid capacity limitations that make it difficult to import
power. They noted that the majority of their power comes from the
Apache Generating Station, so the cost impact of SCR installation would
be especially acute, resulting in rate increases ranging from an
estimated 15 percent to 30 percent. The commenters pointed out that
their customer base has average incomes well below the national and
Arizona averages, and would be especially hard hit by large rate
increases; many customers struggle to pay their power bills as it is.
The commenters stated that AEPCO and the associated cooperatives cannot
finance or absorb the costs of SCR at the Apache Generating Station.
The commenters indicated that closure of the large, load-following
coal-fired units would threaten the reliability of the electrical
system, particularly with the limited capacity of the local grid to
import power from other areas.
    Another commenter (Earthjustice) cited a report by Paul Chernick at
Resource Insight Inc., which estimates that any rate increases at
Apache would be limited to a 2 percent to 5 percent increase at most,
resulting in an average extra cost of $3.28 per month on customer
bills. The commenter stated that this is reasonable, as average annual
increases have been up to 3 times as high as this increase, and this
rate will likely be offset by a settlement award of $63 million. The
commenter also noted that while the incomes of its customer base are
relatively low, the cost of living in the area is also lower than the
national average. The commenter further noted that utilities in
similarly economically disadvantaged areas have successfully installed
modern pollution controls costing significantly more than the cost of
SCR at Apache.
    Response: It is not EPA's intention to endanger the economic
viability of Apache Generating Station or to place an undue burden on
AEPCO's customers. EPA has considered the comments on these issues very
carefully. Regarding the legal basis for our decision, neither the CAA
nor the RHR requires states or EPA to consider the affordability of
controls or ratepayer impacts as part of a BART analysis. Rather, the
CAA and RHR require consideration of ``the costs of compliance, the
energy and non-air quality environmental impacts of compliance, any
existing pollution control technology in use at the source, the
remaining useful life of the source, and the degree of improvement in
visibility which may reasonably be anticipated to result from the use
of such technology.'' \121\
---------------------------------------------------------------------------

    \121\ CAA section 169A(g)(2), 42 U.S.C. 7491(g)(2); 40 CFR
51.308(e)(1)(ii)(A).
---------------------------------------------------------------------------

    The BART Guidelines do allow for (but do not require) the
consideration of ``affordability'' as part of the ``costs of
compliance'' under certain circumstances, noting that:

    1. Even if the control technology is cost effective, there may
be cases where the installation of controls would affect the
viability of continued plant operations.
    2. There may be unusual circumstances that justify taking into
consideration the conditions of the plant and the economic effects
of requiring the use of a given control technology. These effects
would include effects on product prices, the market share, and
profitability of the source. Where there are such unusual
circumstances that are judged to affect plant operations, you may
take into consideration the conditions of the plant and the economic
effects of requiring the use of a control technology. Where these
effects are judged to have a severe impact on plant operations you
may consider them in the selection process, but you may wish to
provide an economic analysis that demonstrates, in sufficient detail
for public review, the specific economic effects, parameters, and
reasoning * * * Any analysis may also consider whether other
competing plants in the same industry have

been required to install BART controls if this information is
available.\122\
---------------------------------------------------------------------------

    \122\ BART Guidelines, 40 CFR Part 51, Appendix Y, section
IV.E.3.

    We interpret the question of affordability as a specific question
of whether the viability of continued plant operations will be affected
by the pollution control technology in question. Although one commenter
asserted that the costs of SCR with LNB and OFA could cause a shutdown
of Apache Units 2 and 3 if it causes power costs from those units to be
out of line with the cost of power on the open market, the commenter
did not provide evidence or analysis that supports this assertion. We
agree that the terms of AEPCO's mortgage require AEPCO to have
sufficient revenue to meet the financial metrics of Times Interest
Earned Ratio and Debt Service Coverage ratio. But AEPCO is eligible to
finance additional debt related to air pollution controls, and it has
not shown that such financing is unavailable to it. Securing a rate
increase from ACC may be time consuming, and thus supports our decision
to grant AEPCO five years for installation of such controls. However,
the information provided to us does not show that installation of SCR
would affect the viability of continued plant operations. AEPCO is not
being treated differently from other competing plants in its industry:
many other electric utilities, including other rural electric
cooperatives, are also being required to install BART controls.
    Nonetheless, we performed additional analysis to understand better
the impacts of the proposed pollution controls on AEPCO as a small
entity. As we explained in our proposal, the U.S. Small Business
Administration (SBA) defines an electric utility company as small if,
including its affiliates, it is primarily engaged in the generation,
transmission and/or distribution of electric energy for sale and its
total electric output for the preceding fiscal year did not exceed 4
million megawatt hours (MWh).\123\ In 2011, AEPCO member cooperatives
sold 2,453,272 MWh of electricity.\124\ As explained in the proposal,
we conducted an initial assessment of the potential adverse impacts on
AEPCO of requiring SCR with LNB and OFA. Using publicly available
information, EPA estimated that the annualized cost of requiring SCR in
Units 1 and 2 would likely be in the range of 3 percent of AEPCO's
assets and between 6 and 7 percent of AEPCO's annual sales. We noted in
the NPRM that the projected costs of SCR with LNB and OFA are
approximately $12 million per year, and that this exceeds AEPCO's net
margins of $9.5 million in 2010 and $1.9 million in 2011,\125\ although
the report by Paul Chernick at Resource Insight Inc., submitted by
Earthjustice, notes that AEPCO's margin in 2008 was $17.4 million.
---------------------------------------------------------------------------

    \123\ 77 FR 42866-42867; see also 13 CFR 121.201, footnote 1.
    \124\ Annual Report for year ending December 31, 2011, from
AEPCO to Arizona Corporation Commission.
    \125\ See Docket Item H-1 Arizona Electric Power Cooperative,
Inc. Annual Report Electric for Year Ending December 31, 2011
submitted to Arizona Corporation Commission Utilities Division,
available at http://www.azcc.gov/Divisions/Utilities/Annualpercent20Reports/2011/Electric/Arizona_Electric_Power_Cooperative_Inc.pdf.
---------------------------------------------------------------------------

    In addition to conducting this initial economic impact assessment,
we requested information from AEPCO on the economics of operating
Apache Generating Station and what impact the installation of SCR may
have on the economics of operating Apache Generating Station. We
received a description of plant conditions and potential economic
effects before the NPRM was published,\126\ and received additional
information during the comment period. We noted in the NPRM that if our
analysis of this information indicated that installation of SCR would
have a severe impact on the economics of operating Apache Generating
Station, we would incorporate such considerations in our selection of
BART.
---------------------------------------------------------------------------

    \126\ Docket Item C-16, Letter from Michelle Freeark (AEPCO) to
Deborah Jordan (EPA), AEPCO's Comments on BART for Apache Generating
Station, June 29, 2012.
---------------------------------------------------------------------------

    The BART cost figures provided in this final action do not include
other expenditures that will be required for Apache Units 1, 2 and 3 to
meet the BART emission limits included in Arizona's Regional Haze SIP.
Under the CAA, EPA is not permitted to consider economic feasibility
when taking action on a SIP.\127\ To the extent these costs are
relevant to our FIP action, we note that AEPCO did not provide any cost
estimates for the required upgrades to the existing ESPs and scrubbers
at Apache Units 2 and 3 and estimated that the total first year
annualized cost of the required controls at Apache Unit 1 (LNB and FGR)
would be $0.552 million.\128\ These costs are two orders of magnitude
lower than the SCR costs described elsewhere in this document.
Therefore, even if we were to take them into account, they would not
substantially affect our analyses.
---------------------------------------------------------------------------

    \127\ Union Electric Co., v. EPA, 427 U.S. 246, 255-66 (1976);
42 U.S.C. 7410(a) (2).
    \128\ Arizona Regional Haze SIP, Appendix D, Table 10.3; see
also Comments of Arizona Electric Power Cooperative, Inc., Proposed
Disapproval of AZ RH SIP and EPA's Proposed RH BART FIP (September
18, 2012) page 9. In our proposal, we noted that these control cost
calculations include costs that are disallowed by EPA's Control Cost
Manual, such as owner's costs and AFUDC. Both of these elements have
the effect of inflating cost calculations and thus the cost-
effectiveness of the various control options considered. See 77 FR
4284.
---------------------------------------------------------------------------

    Regarding the comment that the cost of SCR with LNB and OFA at
Apache could be covered with funds from AEPCO's operating margins or
legal settlements, while Apache Generating Station does have annual
operating margins that vary according to various conditions, it is not
necessarily true that AEPCO can cover the costs of pollution control
equipment exclusively from these funds, or from the settlement
agreement mentioned in the comment. Because AEPCO is a member-owned
utility, operating margins and other surplus funds may be earmarked to
be returned to its member cooperatives on a rotating basis. While some
of these funds may be available for capital expenditures such as
pollution controls, we have assumed for the purpose of our analysis
that financing will be necessary to achieve the pollution reductions
required by our action.
    For electric utilities, EPA has not customarily analyzed or
considered ratepayer impacts in BART determinations.\129\ Nevertheless,
we also analyzed ratepayer impacts in an effort to assess the potential
effects of our action on AEPCO as a small entity. EPA requested an
electricity rate analysis through our contractor, EC/R Inc., to assist
us in evaluating the possible electricity rate increases discussed in
the comments above. Our contractor noted that AEPCO's analysis appears
to place the entire burden of the incremental capital and O&M costs on
its Member Co-ops and their retail customers. However, the analysis
should account for a share of the SCR cost going to off-system sales
volumes and not only allocated to member rates. The contractor's
Incremental Cost Model calculated an increment in revenue requirements
for AEPCO's member cooperatives of 12.7 percent under the scenario that
spreads the incremental SCR cost across all kWh produced at Apache,
both Member Co-ops and off-system or non-Member sales. Under the
alternative scenario that the incremental cost for SCR is covered
exclusively by member cooperatives, the incremental revenue

requirement was 15.4 percent.\130\ As explained in the preceding
responses, this analysis is based on a capital cost for the
installation of SCR with LNB and OFA of $164.9 million, which matches
the costs claimed by AEPCO in their comment letter minus certain
charges excluded by EPA CCM. This difference in the estimated capital
cost for SCR also accounts for much of the discrepancy between AEPCO's
and Earthjustice's estimates of electricity rate increases, since
Earthjustice's estimate was based on the capital cost estimates
originally published in our NPRM.
---------------------------------------------------------------------------

    \129\ Exceptions include EPA's Regional Haze FIP for Hawaii,
where we analyzed potential rate impacts due to the unique energy
situation in Hawaii, 77 FR 61478, 61488, and EPA's BART FIP for Four
Corners Power Plant, where we examined potential rate impacts as
part of tribal consultation, 77 FR 51620, 51625-51626.
    \130\ Apache Plant: Report on SCR Incremental Cost Assessment.
Prepared by Energy Strategies, LLC for EC/R, Inc. (November 2012).
---------------------------------------------------------------------------

    AEPCO sells electricity through its member cooperatives, and not
directly to residential and business customers, but EC/R also analyzed
the impact of an increase in the cost of electricity generation on the
monthly bills of electricity users serviced by AEPCO's Member Co-ops.
Table 6 indicates the incremental retail costs of electricity to end
users under the two scenarios mentioned above. The potential rate
increases for residential users in 2019, the first full year of
incremental capital expenditures for pollution controls installed in
2017 (and the year with the largest incremental cost impact), range
from 4.5 percent, or $5.75 per month over 2011 rates, to 10.6 percent,
or $10.75 per month over 2011 rates.\131\ EC/R noted that the
assumptions it made in constructing its model may cause the impact to
rates to be conservatively overstated.
---------------------------------------------------------------------------

    \131\ Id.

                                                      Table 6--Incremental Retail Costs Due to SCR
                                                     [As 2019 costs would impact 2011 retail rates]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Residential class only               Combined residential, commercial & industrial
                                                         -----------------------------------------------------------------------------------------------
             Scenario                Range of  outcomes       Percent      Average $ per   Average $ per      Percent      Average $ per   Average $ per
                                                             Increase        year per        month per       Increase        year per        month per
                                                             (percent)       customer        customer        (percent)       customer        customer
--------------------------------------------------------------------------------------------------------------------------------------------------------
A: Members Pay all SCR Costs.....  Low..................             5.4             $83           $6.92             5.8            $125          $10.42
                                   High.................            10.6             129           10.75            12.0             220           18.33
B: Members Pay Portion of SCR      Low..................             4.5              69            5.75             4.8             103            8.58
 Costs.
                                   High.................             8.8             107            8.92             9.9             182           15.17
--------------------------------------------------------------------------------------------------------------------------------------------------------

    While these projected rate increases are not trivial, they are
comparable to average historical rate increases for AEPCO, Arizona, and
U.S. ratepayers.\132\ They are also projected to occur seven years in
the future. Again, in discussing the limitations of this retail rate
analysis, EC/R noted that the results of the retail rate assessment
should be considered conservative by design.
---------------------------------------------------------------------------

    \132\ Energy Information Administration (EIA) State Historical
Tables for 2011, Released: October 1, 2012. Average Price by State
by Provider, 1990-2011. http://www.eia.gov/electricity/data/state/avgprice_annual.xls, last accessed November 5, 2012.
---------------------------------------------------------------------------

    Regarding the comment that utilities in similarly economically
disadvantaged areas have successfully installed modern pollution
controls costing significantly more than the cost of SCR at Apache, we
note that none of the installed controls listed in Earthjustice's
comment letter were installed under the RHR. Accordingly, EPA cannot
rely on them as precedents for the Apache Generating Station BART
analysis.
    Regarding the comment on the economic vulnerability of AEPCO's
ratepayer population, EPA reviewed the supplemental information on per
capita and median household incomes. Because electric utility bills are
likely paid at the household and not individual, or per capita, level,
we believe that median household income is an appropriate metric for
assessment. We used census data to compare household income levels in
the areas served by AEPCO's Class A member cooperatives to average
household incomes in the United States. In 2011 the median income for
U.S. households was $50,502. Using the supplemental information
provided by AEPCO, we calculated that the median income for AEPCO's
Member Co-ops' ratepayers was $49,303. In addition, we aggregated the
data on median household income by zip code into four incomes ranges.
Seventy-one percent of the median household incomes by zip code were in
the $40,000 and above income ranges and twenty-nine percent were in the
median household income range of $20,000 to $39,999. We found that the
household incomes in AEPCO's Member Co-ops' service area are in the
same range as average U.S. household income, so an increase in AEPCO's
electricity rates should not cause greater hardship than a similar
increase elsewhere in the country.\133\ EPA's responsibility under the
CAA and the RHR is to implement BART at Apache Generating Station. As
discussed elsewhere in this document, the five-factor analysis
indicates SCR with LNB and OFA represents BART for NOX at
Apache Units 2 and 3. While the analyses conducted by EPA and the
commenters attempted to project the revenue requirements and possible
rate increases that would be required if SCR with LNB and OFA are
required at Apache, BART and other environmental regulatory
requirements form only one part of the complex business conditions
under which utility rate decisions take place, especially over extended
time periods. It is the responsibility of utility companies to work
with the appropriate regulatory agencies to implement any necessary
rate changes in a manageable fashion.
---------------------------------------------------------------------------

    \133\ Arizona Regional Haze SIP, BART Determination for Apache
Generating Station, Supplemental Economic Analysis. Memorandum from
Larry Sorrels and Robin Langdon, EPA Office of Air Quality Planning
and Standards (November 5, 2012).
---------------------------------------------------------------------------

    Accordingly, because neither these projected rate increases nor any
submitted information or analysis indicate that a requirement to
install SCR with LNB and OFA will affect the viability of Apache
Generating Station, EPA is finalizing its determination that this level
of control represents BART. However, we are also taking into account
AEPCO's status as a small entity as part of our determination. In
particular, in its comments on our proposal, AEPCO requested that ``EPA
set the final BART limits in terms of lb/MMBtu only and not as a
specified technology'' to provide AEPCO with

``maximum flexibility.'' \134\ AEPCO also requested that if EPA decided
to finalize emission limits consistent with SCR that the limits be set
at 0.07 lb/MMBtu.\135\ Given the unusual status of AEPCO as a small
entity and a rural electric cooperative, we believe that it is
consistent with EPA policy to minimize adverse impact to this small
entity to the extent that such action is feasible and consistent with
our BART analysis. To allow this small entity the maximum flexibility
that is consistent with our analysis of the five factors, we have
determined that it is appropriate to set the BART limit as a 30-day
rolling average 0.070 lb/MMBtu limit, with a five year compliance
deadline. As AEPCO noted, this approach may allow minor changes in
configuration of the optimal system to allow AEPCO's compliance at
somewhat lower cost. This 30-day rolling average 0.070 lb/MMBtu limit
is also applied as a ``bubble'' across Units 2 and 3. This approach
allows for short term emission spikes from startups and provides this
small entity with additional operational flexibility within the
constraints of the BART emissions limit.
---------------------------------------------------------------------------

    \134\ AEPCO Comments page 18.
    \135\ Id.
---------------------------------------------------------------------------

    Comment: One commenter (AEPCO) stated that EPA should not consider
fuel switching from the current mix to all natural gas at Apache Unit 1
to be costless. AEPCO states that if it loses the ability to use
multiple fuels, its negotiating leverage with natural gas suppliers
will be greatly reduced, and it will not be able to obtain gas at
reasonably competitive rates. AEPCO argued that this cost at Apache
Unit 1 should be considered by EPA in its overall evaluation of the
affordability of controls at Apache.
    Response: EPA is approving ADEQ's emissions limit for Apache Unit
1. As noted by the commenter, Tables 6 and 7 of our proposed action (77
FR 42844) listed ``fuel switch to PNG'' as a control option in the
context of the PM10 and SO2 BART analyses, in
addition to ``fuel switch to low-sulfur fuel oil.'' The annualized
costs for both options were listed as zero in both analyses. The
information contained in Tables 6 and 7 does not represent our analysis
for Apache Unit 1, but reflects the information contained in ADEQ's
PM10 and SO2 BART analyses. ADEQ's BART analyses
for Apache 1 eliminated more stringent control technologies such as
fabric filters and wet FGD, and determined that a fuel switch to
natural gas was BART. Natural gas is a commodity, and its price
fluctuates due to factors beyond the constraints on AEPCO's ability to
use multiple fuels. However, the BART emissions limit we are
establishing for Apache Units 2 and 3 will still allow AEPCO a choice
of using multiple fuels across the units at the Apache facility.
b. Visibility Improvement
    Comment: One commenter (NPS) agreed with EPA's analysis of the
visibility impacts of the alternative NOX control options
for Apache Units 2 and 3 at the various impacted Class I areas, as
presented in EPA's TSD, including EPA's conclusions that ``the
improvements from SCR are substantially greater than for the other
candidate controls'' and that ``the modeled degree of visibility
improvement supports SCR as BART for Apache.'' The commenter also
indicated that it compiled BART analyses data from across the United
States, which revealed that the average cost per deciview proposed by
either a state or a BART source is $14 to $18 million. The commenter
pointed out that for all of the NOX control options at the
Apache plant, including SCR, both the $/max deciview and the $/
cumulative deciview are well below this range.
    Response: We acknowledge the commenter's agreement with our
analysis. Our supplemental analysis, discussed in more detail above,
was conducted using a capital cost for the installation of SCR with LNB
and OFA of $164.9 million. For the 0.070 limit on Apache Units 2 and 3
that we are finalizing in this action, this supplemental analysis found
an average cost per deciview ($/max deciview) of $12.7 million and a
cumulative average cost per deciview ($/cumulative deciview) of $3.1
million.
c. Other Comments
    Comment: One commenter noted that EPA is required by the Executive
Order on Environmental Justice to consider all potential economic and
environmental impacts on minorities and low-income populations that its
decisions on BART, in this case, will have on AEPCO and its customers.
The commenter stated that over four in ten of AEPCO's customers are
minorities. In similar remarks, another commenter cautioned EPA that
such increases would impact at-risk populations.
    Response: In establishing BART requirements for the facilities in
this final rulemaking, EPA is increasing the level of environmental
protection for all affected populations by requiring substantial
NOX emission reductions. Thus, EPA does not expect any
disproportionately high and adverse human health or environmental
effects on any population, including any minority or low-income
population from our final action. Disadvantaged populations also will
be able to enjoy the visibility improvements in Class I areas
anticipated from the emissions reductions required by this final
rulemaking.
    EPA took several steps to ensure transparency and meaningful
participation in the rule development process for this BART FIP. In
response to numerous requests, we extended the public comment period on
our proposal and increased the number of public hearings in Arizona
from one to three. In addition, all three hearings had Spanish language
interpretation services and the hearing on August 14 in Holbrook,
Arizona, also offered interpretation in Din[eacute].
    We disagree that Executive Order 12898 requires EPA to consider the
economic effects of our proposed action on disadvantaged populations.
As EPA's Environmental Appeals Board (EAB) has explained:

    Executive Order 12898 instructs federal agencies to address, as
appropriate, ``disproportionately high and adverse human health or
environmental effects of [their] programs, policies, and activities
on minority and low-income populations * * *.'' The Executive Order,
thus, speaks to human health and environmental effects; it does not
require federal agencies to consider issues regarding cost or rate
changes.\136\
---------------------------------------------------------------------------

    \136\ In re: Upper Blackstone Water Pollution Abatement
District, Order Denying Review In Part and Remanding In Part, NPDES
Appeal Nos. 08-11 to 08-18 & 09-06. (May 28, 2010) slip op at 105.
(internal citation omitted).

Therefore, Executive Order 12898 does not require us to consider
potential economic effects. Nonetheless, as explained elsewhere in this
document, in consideration of AEPCO's status as a small entity and
consistent with EPA policy encouraging consideration of the potential
social and economic impacts of EPA actions,\137\ we have conducted an
analysis of the affordability of installing SCR at Apache Units 2 and
3. This analysis indicates that installation of SCR would not affect
the viability of continued plant operations at Apache and would result
in an average rate increase for residential member utility customers of
(at most) $11 per month in 2019 compared to 2011 rates.
---------------------------------------------------------------------------

    \137\ See, e.g., Interim Guidance on Considering Environmental
Justice During the Development of an Action page 4, footnote 4.
---------------------------------------------------------------------------

    Comment: One commenter indicated that because AEPCO is a small
electric cooperative, EPA is required by the Regulatory Flexibility Act
to prepare a regulatory flexibility analysis for this rulemaking.

    Response: We agree that AEPCO is considered small entity for
purposes of the Regulatory Flexibility Act (RFA). However, the RFA does
not require a regulatory flexibility analysis when a rule has an impact
on only one small entity (as opposed to a significant impact on a
substantial number of small entities). Nonetheless, EPA policy is to
assess the direct adverse impact of every rule on small entities and
minimize any adverse impact to the extent feasible, regardless of the
magnitude of the impact or number of small entities affected.
Therefore, we gave AEPCO additional opportunities to participate in the
rulemaking process. Specifically, prior to issuing our proposed rule,
we informed AEPCO that our proposed action would address BART
requirements for units at AEPCO's Apache facility. We also requested
information from AEPCO on the economics of operating Apache Generating
Station and what impact the installation of SCR may have on the
economics of operating Apache Generating Station. We have considered
the comments we received concerning AEPCO's status as a small entity
and the potential economic impact of our proposed action on AEPCO. Our
discussion of affordability above includes our response to these
comments and delineates the changes we made from our initial proposal
in order to give AEPCO flexibility as a small entity. We have also
taken into consideration the potential impact of the reporting,
recordkeeping, and other compliance requirements of this rule, as set
forth in the regulatory text. Because AEPCO is an electric utility that
is already subject to reporting, recordkeeping and other compliance
requirements under the CAA, AEPCO already has access to the
professional skills necessary for the preparation of the reports and
records necessary for compliance with the FIP.
2. Cholla Units 2, 3 and 4
a. Selection of Baseline Period
    Comment: Several commenters asserted that EPA incorrectly and
inappropriately changed the control baseline period in its
NOX BART analysis for Cholla. APS and PacifiCorp contend
that the 2011 NOX emissions were already controlled by LNB
and OFA at Cholla Units 2, 3 and 4, which penalized APS and PacifiCorp
for their voluntary use of these controls. In addition, since LNB and
OFA were already in use, EPA inappropriately only considered higher
cost post-combustion controls (SCR and SNCR) in its BART analysis. If
the baseline remained 2001-2006, LNB and OFA would also have been
considered in the analysis. APS noted that EPA concurred with ADEQ's
BART determination for SO2 and PM10 emissions for
these same units using a baseline of 2001-2006. In addition, one
commenter (Earthjustice) asserted the baseline period (2008-2011)
understates NOX emissions reductions compared to the
baseline period of 2001-2004.
    In contrast, one commenter (NPS) concurred with EPA's use of 2011
as the baseline period for Cholla units 2, 3 and 4 since it represents
the first complete calendar year at which it is certain that the Cholla
plant operated using the full quantity of a higher NOX-
emitting coal that the plant is committed to purchase under its current
coal contract. The commenter submitted a graph of annual NOX
emission rates for the units at the Cholla plant, which the commenter
believes to show the impact of recently added combustion controls and
higher-NOX coal.
    Response: As explained in a previous response, we do not agree that
use of the updated baseline for Cholla was incorrect or inappropriate.
Moreover, updating the baseline did not eliminate LNB and OFA from
consideration as BART, since existing controls can constitute BART if
additional controls are not warranted based on the five-factor
analysis. For example, EPA recently approved a determination by
Colorado that existing LNB at Comanche Units 1 and 2 constituted BART
where ``the State determined that the added expense of achieving lower
limits through different controls was not reasonable based on the high
cost-effectiveness [$9,900/ton] coupled with the low visibility
improvement (under 0.2 dv) afforded.'' \138\ In this case, by contrast,
the cost-effectiveness of post combustion controls is reasonable and
the expected visibility improvements are substantial, as explained
below. Nonetheless, in order to address the commenter's concerns that
we did not properly consider LNB and OFA as a potential control option
and therefore precluded a BART determination of LNB and OFA, we have
used a baseline period of 2001-2003, which corresponds to the period
used in APS's original BART analysis. Our supplemental cost analysis
for Cholla is summarized in Table 10.\139\
---------------------------------------------------------------------------

    \138\ 77 FR 18052, 18066 (March 15, 2012) (Proposed Rule); pre-
publication version of Final Rule, signed September 10, 2012,
available at: http://www.epa.gov/region8/air/FinalActionOnColoradoRegionalHazePlanSep2012.pdf.
    \139\ A spreadsheet titled ``Supplemental Cost Analysis 2012-11-
15.xls'' is in the docket.
---------------------------------------------------------------------------

b. Control Efficiencies
    Comment: In arguing against the achievability of EPA's proposed
limit, one commenter (APS) noted that according to the study that EPA
placed in the docket (IPM Model--Revisions to Cost and Performance for
APC Technologies, 2010, Sargent & Lundy), the Agency's minimum
emissions limit of 0.05 lb/MMBtu is specific to Powder River Basin coal
and the minimum level for bituminous coal is 0.07 lb/MMBtu. The
commenter also stated that because this is a minimum emissions level,
it is probably too aggressive even for a BART determination based on
bituminous coal. The commenter also stated that these rates may be
appropriate for new units under ideal conditions as BACT are not
appropriate for BART.
    Another commenter (AUG) stated that EPA's record in support of the
putative achievability of a 0.050 lb/MMBtu emission limit at Apache,
Cholla, and Coronado is extremely thin and unpersuasive. AUG states
that EPA has not, for instance, demonstrated through the development of
an SCR conceptual design or some other, similar site specific analysis
that SCR can achieve this emission rate at any of these particular
facilities, and that EPA must affirmatively establish that its selected
BART rate is in fact achievable at these facilities.
    In addition, AUG asserted that EPA's proposed limit of 0.050 lb/
MMBtu is inconsistent with the following EPA actions:
     As part of CSAPR, EPA concluded that a NOX