MEMORANDUM

DATE:	May 25, 2018

SUBJECT:	DRAFT Technology Review for Surface Coating Operations in the Metal Furniture Category

FROM:	Eastern Research Group, Inc.

TO:		Kaye Whitfield, OAQPS/SPPD/MMG

1.0	INTRODUCTION

Section 112 of the Clean Air Act (CAA) requires the U.S. Environmental Protection Agency (EPA) to establish technology-based standards for listed source categories of hazardous air pollutants (HAP). These technology-based standards are often referred to as maximum achievable control technology (MACT) standards. The NESHAP for Surface Coating of Metal Furniture (40 CFR part 63, subpart RRRR), hereafter referred to as the Metal Furniture NESHAP, regulates HAP emissions from facilities that are major sources of HAP and are engaged in the surface coating of metal furniture.

Pursuant to 40 CFR 63.4882(b), the rule requires the use of MACT to reduce HAP emissions from the following surface coating operations within the affected source:
 All coating operations;
 All storage containers and mixing vessels in which coatings, thinners, and cleaning materials are stored or mixed;
 All manual and automated equipment and containers and all pumps and piping within the affected source used for conveying coatings, thinners, and cleaning materials; and
 All storage containers, all pumps and piping, and all manual and automated equipment and containers within the affected source used for conveying waste materials generated by a coating operation.

Section 112 also contains provisions requiring the EPA to periodically revisit these standards. Specifically, section 112(d)(6) states:

      (6) REVIEW AND REVISION.  -  The Administrator shall review, and revise as necessary (taking into account developments in practices, processes, and control technologies), emissions standards promulgated under this section no less often than every 8 years.

To comply with these CAA requirements, the EPA conducted a technology review for the Metal Furniture NESHAP for major sources. This memorandum addresses the technology review for all metal furniture surface coating.

For this analysis, we considered any of the following to be a "development":

 Any add-on control technology or other equipment that was not identified and considered during development of the original MACT standard;
 Any improvements in add-on control technology or other equipment (that were identified and considered during development of the original MACT standard) that could result in additional emission reduction;
 Any work practice or operational procedure that was not identified or considered during development of the original MACT standard;
 Any process change or pollution prevention alternative that could be broadly applied to the industry and that was not identified or considered during development of the original MACT standard; and
 Any significant changes in the cost (including cost effectiveness) of applying controls (including controls the EPA considered during the development of the original MACT standards).

In addition to reviewing the practices, processes, and control technologies that were considered at the time we originally developed (or last updated) the NESHAP, we reviewed a variety of data sources in our investigation of potential practices, processes, or controls to consider. Among the sources we reviewed were the NESHAP for various industries that were promulgated since the MACT standards being reviewed in this memo. We reviewed the regulatory requirements and/or technical analyses associated with these regulatory actions to identify any practices, processes, and control technologies considered in these efforts that could be applied to emission sources in the Metal Furniture Surface Coating source category, as well as the costs, non-air impacts, and energy implications associated with the use of these technologies. Finally, we reviewed information from other sources, such as state and/or local permitting agency databases and industry-supported databases.

Section 2 of this memorandum presents a summary of the sources of data that were used to conduct the technology review, and Section 3 presents the technology review for metal furniture surface coating operations.

2.0	SOURCES OF AVAILABLE CONTROL TECHNOLOGY INFORMATION

To identify developments in practices, processes, or control technologies applicable to surface coating operations in the metal furniture industry, we consulted the following sources of data: the EPA's RACT/BACT/LAER Clearinghouse, regulatory actions promulgated subsequent to the Metal Furniture NESHAP, state regulations and operating permits, site visits, and industry information.

2.1	RACT/BACT/LAER Clearinghouse Database

Under the EPA's New Source Review (NSR) program, if a company is planning to build a new plant or modify an existing plant such that criteria air pollution emissions will increase by a certain amount, then the company must obtain an NSR permit. The NSR permit is a construction permit which generally requires the company to minimize air pollution emissions by changing the process to prevent air pollution and/or installing air pollution control equipment.

The terms "RACT," "BACT," and "LAER" are acronyms for different program requirements relevant to the NSR program.  RACT, or Reasonably Available Control Technology, is required on existing sources in areas that are not meeting national ambient air quality standards (non-attainment areas). BACT, or Best Available Control Technology, is required on new or modified major sources in clean areas (attainment areas). LAER, or Lowest Achievable Emission Rate, is required on new or modified major sources in non-attainment areas.

BACT and LAER (and sometimes RACT) are determined on a case-by-case basis, usually by state or local permitting agencies. The EPA established the RACT/BACT/LAER Clearinghouse, or RBLC, to provide a central database of air pollution technology information (including past BACT and LAER decisions contained in NSR permits) to promote the sharing of information among permitting agencies and to aid in future case-by-case determinations. However, data in the RBLC are not limited to sources subject to RACT, BACT, and LAER requirements. Noteworthy prevention and control technology decisions and information may be included even if they are not related to past RACT, BACT, or LAER decisions.

The RBLC contains over 5,000 air pollution control permit determinations that can help identify appropriate technologies to mitigate most air pollutant emission streams. It was designed to help permit applicants and reviewers make pollution prevention and control technology decisions for stationary air pollution sources and includes data submitted by several U.S. territories and all 50 states on over 200 different air pollutants and 1,000 industrial processes.

The RBLC provides several options for searching the permit database on-line to locate applicable control technologies. We conducted a search of RBLC processes specific to the metal furniture surface coating source category permits dating back to 1990. The search results included the following data fields:

       RBLC ID;
       Facility Name, and State;
       Permit Date;
       Process name;
       Pollutant;
       Control technology; and
       Percent efficiency of control.

      We identified RBLC entries representing only two metal furniture facilities.

One BACT determination, for CTL Lighting (permit issued: 05/20/1992), requires the use of dry filters for particulate matter (PM) emission control from a spray coating operation and limits PM10 emissions to no more than 0.15 lb/day.

The second RBLC entry is for the Shaw Walker Company in Muskegon, MI, for a permit issued in 1991. News reports indicate the Shaw Walker facility closed in 2000 or earlier. The entry indicates the facility's permit limits the metal furniture coating operation to VOC emissions of 5.44 lb/gallon applied coating solids (ACS) [The basis for the 5.44 limit is unclear.] The 1977 Control Techniques Guidelines (CTG) for metal furniture coating recommended 3.0 lb/gallon coating less water; this would convert to 5.06 lb/gallon solids, assuming the VOC density is 7.36 lb/gallon.

These two determinations in the RBLC database pre-dated the original promulgation of the Metal Furniture NESHAP. The specified controls (dry filters for PM control and low-VOC coatings) were in use during development of the original NESHAP and were considered in the development of MACT. Therefore, they are not considered developments for the purposes of this technology review.

The results of the RBLC search for CTL Lighting and Shaw-Walker Company are presented in Appendix A.
2.2	Subsequent Regulatory Actions

Regulatory actions promulgated subsequent to the May 23, 2003, NESHAP have been identified for similar surface coating operations. The regulatory actions listed in Table 1 were reviewed for developments in practices, processes and control technologies.

Table 1. Subsequent Regulatory Actions for Source Categories Similar to Metal Furniture Coating Operations

                                MACT Standards
                                    Subpart
                               Date Promulgated
           Practices, Processes, and Control Technologies Evaluated
           Surface Coating of Miscellaneous Metal Parts and Products
                                     MMMM
                                  01/02/2004
Emission limit as mass HAP per volume solids used, add-on control devices, low-HAP coatings (Ultraviolet (UV) curable, electron beam-curable), powder coatings
                 Surface Coating of Plastic Parts and Products
                                     PPPP
                                  04/19/2004
Emission limit as mass HAP per mass solids used, add-on control devices, low-HAP coatings (Ultraviolet (UV) curable, electron beam-curable)
             Surface Coating of Automobiles and Light-Duty Trucks
                                     IIII
                                  04/26/2004
Emission limit as mass HAP per volume solids used. Develop and implement a work practice plan to minimize organic HAP.
                            Residual Risk Standards
                                    Subpart
                               Date Promulgated
   Practices, Processes, and Control Technologies Identified as Developments
                         Shipbuilding and Ship Repair
                                      II
                                  11/21/2011
Concentrator/RTO installed on spray booths to achieve 95% control efficiency; lower VOC coating limits based on California regional rules.

Emission limit as-applied volatile organic hazardous air pollutants (VOHAP); where VOC is a surrogate.
                         Wood Furniture Manufacturing
                                      JJ
                                  11/21/2011
RTO; Lower VOC coating limits based on California regional rules; more efficient spray guns.

Bans conventional spray guns except when the overspray is routed to a control device.
                 Aerospace Manufacturing and Rework Facilities
                                      GG
                                   12/7/2015
                                No developments

Developments identified in the regulatory actions listed in Table 1 will be discussed in Section 3 (Technology Review for Surface Coating Operations).

2.3	State Rules and State Operating Permits

State Rules

The following is a summary of findings of subsequent regulatory actions from state rules, including EPA's Control Technique Guidelines (CTG) and two California air quality management districts: Bay Area Air Quality Management District (BAAQMD) and South Coast Air Quality Management District (SCAQMD).

CTG are intended to provide State and local air pollution control authorities information to assist them in determining RACT. In 1977, EPA published a CTG for VOC emissions from metal furniture coating. In 2007, EPA issued a second CTG indicating that most states (i.e., 32) had incorporated the 1977 limit of 3.0 lb VOC/gal of coating applied (minus water).

The 2007 CTG recommends emission limits for general purpose one-component and multicomponent coatings and for several types of specialty coatings (extreme high gloss, extreme performance, heat resistant, metallic, pretreatment coatings, and solar absorbent coatings). For each coating type, the CTG also recommends separate emission limits for baked and air-dried coatings. These recommendations are based on BAAQMD Regulation 8, Rule 14, which covers surface coating of large appliances and metal furniture. The rule establishes VOC emission limits of 2.3 lbs/gal (less water and exempt compounds) for baked coatings and 2.8 lbs/gal for air-dried coatings; however, it does not establish separate limits for specialty coating categories. In addition, the 2007 CTG recommends allowing facilities to use add-on controls as an alternative to VOC content limits, work practices to reduce emissions from cleaning materials, and the use of high-efficiency coating application methods.

The SCAQMD Rule 1107 for Surface Coating of Metal Parts and Products does not specifically mention metal furniture, but does not specifically exempt metal furniture from the rule. SCAQMD Rule 1107 establishes a limit of 2.3 lbs/gal (less water and exempt compounds) for baked and air-dried general one-component coatings and baked general multi-component coatings, and a limit of 2.8 lbs/gal for air-dried multi-component coatings. SCAQMD Rule 1107 also establishes VOC limits for the categories of specialty coatings adopted in the 2007 CTG for metal furniture coatings.

The EPA has collected information from major source metal furniture facilities subject to subpart RRRR located in 11 states. We have identified five facilities in four states subject to limits within the 2007 CTG.

State Operating Permits

The National Emissions Inventory (NEI) presents comprehensive and detailed estimates of air emissions based on data provided by state, local, and tribal (SLT) air agencies. NEI point sources include large industrial facilities who submit their own inventories to SLT air agencies. State operating permits for 16 out of 17 facilities reporting metal furniture surface coating emissions to the NEI and subject to subpart RRRR were collected. No permit has an organic HAP limit lower than the Metal Furniture NESHAP, and no permit includes a limit on an individual HAP. No facilities are subject to VOC limits more stringent that the 2007 CTG. No facilities are using add-on controls to comply with the existing source emission limit in subpart RRRR nor with any VOC emission limits. The relevant details from the permits are summarized in Appendix B.

2.4	Site Visits [RESERVED]

The EPA has not visited any metal furniture surface coating facilities for this technology review.

2.5	Industry Information

The American Coatings Association's Industry Market Analysis (9[th] edition) chapter on non-wood furniture, fixture, and business equipment finishes (in which metal is the predominant substrate) was reviewed to identify new technologies. The market analysis states that the technology employed for non-wood furniture finishes has remained much the same over the past 10-year period. However, there is a slow and steady migration towards powder and high-solids coatings. The workforce (e.g., line operators) responsible for the coatings application finds powder coatings have several advantages compared to solvent-borne spray coatings. These include ease of application and the lower need for personal protective equipment. The use of coil coated metal in furniture assembled with adhesives and fasteners was formerly considered an upcoming technology, but manufacturers have preferred to continue to weld the parts together and then paint them, instead of retooling to form and fasten coil coated metal.

According to the market analysis, liquid coatings account for about 75 percent of the coatings used on non-wood furniture and fixtures, and greater than 80 percent of the liquid coatings are high-solids coatings. The market analysis reported that 70 percent of the liquid coatings are polyester resin based, 15 percent are alkyd resin based, and the remainder are acrylics, polyurethanes, and epoxies. The market analysis concluded that the coating technology for this industry is relatively stable with a shift toward high solids and powder coatings and a slower shift toward waterborne coatings.

The market analysis noted that, in addition to pressure to reduce VOC emissions from coating operations, this industry is under pressure to reduce emissions from furniture in order to meet indoor air quality standards (e.g., LEED(R) gives one point for products that meet indoor air quality guidelines).

The cost to coat a square foot of a piece of metal office furniture using powder coating is estimated at 4 to 6 cents/square foot, whereas the cost for a liquid high solids coating is only 1.5 cents/square foot. Passing these additional costs on to the consumer may be difficult, as the metal office furniture market sector has become extremely price-conscious, and this cost difference could discourage manufacturers from switching to powder coatings.

Four companies (i.e., AkzoNobel, IVC, Sherwin-Williams and Valspar) share approximately 81 percent of the non-wood furniture coating market. Their collective market-share is expected to increase as smaller suppliers have difficulty meeting customers' quality expectations and requirements (e.g., ISO and ASTM standards).

3.0	TECHNOLOGY REVIEW FOR SURFACE COATING OPERATIONS

As defined in the Metal Furniture NESHAP, a coating is a material that is applied to a substrate for decorative, protective or functional purposes. Such materials include, but are not limited to, paints, sealants, caulks, inks, adhesives, and maskants. Emissions from coating operations occur when solvent evaporates as it is being applied. The amount of HAP and VOC emitted during coating operations is a function of the HAP content of the coatings and the amount of coating used in the operation.

The amount of coating used in the operation is affected by the application method's transfer efficiency. The more efficient a coating application method is in transferring coatings to the metal furniture component or product, the lower the volume of coatings (and therefore solvents) needed per given amount of production and the lower the HAP and VOC emissions. The Metal Furniture NESHAP does not require operators to account for application method transfer efficiency in the compliance calculations or to use high-efficiency coating application methods.

The primary organic HAP emitted from the surface coating of metal furniture, based on the 2011 NEI, include xylene, glycol ethers, ethylbenzene, toluene, cumene, and methanol, in order of decreasing importance.

3.1	Summary of Existing MACT Level of Control

The Metal Furniture NESHAP promulgated in 2003 provides existing sources three compliance options:
 Use all compliant coatings, i.e., all coatings have less than or equal to 0.10 kg of organic HAP per liter of coating solids used (kg/liter),
 Collectively manage the coatings such that the monthly emission rate of organic HAP is less than or equal to 0.10 kg/liter; or
 Use emission capture systems and control devices to achieve an organic HAP emission rate of less than or equal to 0.10 kg/liter.

The new source emissions limit is the emission of no organic HAP from metal furniture surface coating operations. The original proposed existing source emission limit was 0.094 kg/liter. The final rule preamble and the NESHAP response to comment (RTC) document justified the final new source emission limit by arguing that it is possible for a new source to design a metal furniture manufacturing operation that takes advantage of new non-HAP coating technologies (i.e., powder coatings, electrocoating, liquid coatings that contain no organic HAP).

A new facility has the option to demonstrate, on a case-by-case basis, that organic HAP-free coating technologies cannot be used for specific applications. If approved, the facility is then allowed to meet an alternative emission limit of 0.094 kg/liter for only those components subject to the alternative.

Air permits were collected for 15 of the 17 major source facilities who reported metal furniture surface coating emissions to the NEI and were subject to subpart RRRR. None have received approval to comply with an alternative emission limit.

Facilities using emission capture systems and add-on controls are required to meet operating limits, which are summarized in Table 2. None of the permits collected and reviewed indicated that any facilities were using an emission capture system and add-on control device to comply with the emission limits in subpart RRRR.

Table 2. Subpart RRRR Operating Limits for Capture Systems and Add-On Control Devices

Control Device
                                Operating Limit
1. Thermal oxidizer
a. The average combustion temperature in any 3-hour period must not fall below the combustion temperature limit established according to §63.4966(a).
2. Catalytic oxidizer
a. The average temperature measured just before the catalyst bed in any 3-hour period must not fall below the limit established according to §63.4966(b); and either

b. Ensure that the average temperature difference across the catalyst bed in any 3-hour period does not fall below the temperature difference limit established according to §63.4966(b)(2); or

c. Develop and implement an inspection and maintenance plan according to §63.4966(b)(3) and (4).
3. Carbon adsorber
a. The total regeneration desorbing gas (e.g., steam or nitrogen) mass flow for each carbon bed regeneration cycle must not fall below the total regeneration desorbing gas mass flow limit established according to §63.4966(c).

b. The temperature of the carbon bed after completing each regeneration and any cooling cycle must not exceed the carbon bed temperature limit established according to §63.4966(c).
4. Condenser
a. The average condenser outlet (product side) gas temperature in any 3-hour period must not exceed the temperature limit established according to §63.4966(d).
5. Emission capture system that is a permanent total enclosure (PTE) according to §63.4964(a)
a. The direction of the air flow at all times must be into the enclosure; and either

b. The average facial velocity of air through all natural draft openings in the enclosure must be at least 200 feet per minute; or

c. The pressure drop across the enclosure must be at least 0.007-inch water, as established in Method 204 of appendix M to 40 CFR part 51
6. Emission capture system that is not a PTE according to §63.4964(a)
a. The average gas volumetric flow rate or duct static pressure in each duct between a capture device and add-on control device inlet in any 3-hour period must not fall below the average volumetric flow rate or duct static pressure limit established for that capture device according to §63.4966(e).

This applies only to capture devices that are not part of a PTE that meets the criteria of §63.3165(a) and that are not capturing emissions from a downdraft spray booth or from a flash-off area or bake oven associated with a downdraft spray booth.
7. Concentrators, including zeolite wheels and rotary carbon adsorbers
a. The average gas temperature of the desorption concentrate stream in any 3-hour period must not fall below the limit established according to §63.4966(f)

b. The average pressure drop of the dilute stream across the concentrator in any 3-hour period must not fall below the limit established according to §63.4966(f)
8. Bioreactor systems
a. The use of an alternative monitoring method as set forth in §63.8(f)

Additionally, the rule sets work practice standards for any coating operation or group of coating operations for which you use the emission rate with add-on controls option to demonstrate compliance.

From the preamble to the proposed rule, (67 FR 20215, April 24, 2002), the technical basis for the MACT determination for the metal furniture industry was the use of lower-HAP coatings, thinners, and cleaning materials to control organic HAP emission. Add-on capture and control systems for organic HAP were rarely used by the industry, according to the proposal preamble. The preamble also reported that, while lower organic HAP materials are broadly used throughout the industry, each particular coating technology is not used at every facility and facilities use various combinations of low-HAP coatings, thinners, and cleaning materials. Thus, the MACT determination was based on an evaluation of each facility's organic HAP emissions from all coating-related operations. In the final rule, the EPA revised the MACT floor calculation, and it was still based on low-HAP liquid coatings for existing sources, but it was revised to be based on powder coatings for new sources.

3.2	Identified Control Measures for Surface Coating Operations

3.2.1	Add-On Control Technology or Other Measures Not Identified and Considered During MACT Development

Subsequent RTR NESHAPs have identified the following as developments in add-on control technology:

Shipbuilding and Ship Repair (subpart II): The EPA identified an add-on control device, a concentrator/RTO, installed in 2009 at one shipbuilding and ship repair facility in California. The control device consisted of rotary concentrators followed by RTOs on five large, custom-built spray booths to control volatile organic emissions from some of the coating operations. The system is capable of achieving 95 percent control efficiency for the VOHAP emissions captured by the spray booths (which are estimated to capture 90 percent of the VOHAP emissions). However, the EPA found that the use of this technology would only be practical and affordable at certain facilities building new ships and would not be affordable for facilities performing ship repair. The EPA estimated the cost-effectiveness of the concentrator/RTO system to be $305,000 per ton of VOHAP when used in ship building and repair.

Wood Furniture Manufacturing (subpart JJ): The technology review identified the use of a RTO on a spray booth as a development for the coating of flat panels using an automated high-speed coating process. The technology review identified one facility using this control and fewer than five facilities that could install this technology. The technology review determined that this technology was not affordable for the facilities that were not currently using it.

The use of permanent total enclosures and an oxidizer (including an RTO) was considered in the development of the Metal Furniture NESHAP. The background information document for the proposed NESHAP identified the use of carbon adsorption and also thermal oxidation with regenerative energy (heat) recovery as control options. In addition, one metal furniture facility that used this configuration was identified and included in the MACT floor, although it was not the lowest emitting facility. In addition, the Metal Furniture NESHAP already includes a compliance option involving the use of a PTE and add-on control device, and these were considered in the development of the Metal Furniture NESHAP, so they do not represent a development under CAA section 112(d)(6).

3.2.2	Improvements in Add-On Control Technology or Other Equipment for Organic HAP Emissions That Was Identified and Considered During MACT Development

In this technology review we have not identified any improvements in the add-on controls that would be applicable to metal furniture surface coating that would support revising the MACT emission limits for existing and new sources after a thorough review of: 1) regulatory actions promulgated subsequent to the Metal Furniture NESHAP; 2) other data sources, including the RBLC, state regulations and operating permits, and industry information. The add-on controls that are now available have essentially the same emission reduction performance as those that were available when the NESHAP was proposed and promulgated.

3.2.3	Work Practices and Procedures Not Identified and Considered During MACT Development

No additional work practices or procedures were identified that were not already identified and considered during MACT development. The current Metal Furniture NESHAP requires an owner or operator to develop and implement a work practice plan to minimize organic HAP emissions for coating operations which use add-on controls to comply with the organic HAP emission limits. (Facilities without add-on controls would need to account for the emissions that are reduced through these work practices in their compliance emission calculations. Although these facilities are not required to complete a work practice plan, they would still need to adopt these practices to achieve the MACT emission rate.)

The work practice plan must specify practices and procedures to ensure the following:
 All organic-HAP-containing coatings, thinners, cleaning materials, and waste materials must be stored in closed containers. Ensure that these containers are kept closed at all times except when depositing or removing these materials from the container.
 Spills of organic-HAP-containing coatings, thinners, cleaning materials, and waste materials must be minimized.
 Organic-HAP-containing coatings, thinners, cleaning materials, and waste materials must be conveyed from one location to another in closed containers or pipes.
 Mixing vessels which contain organic-HAP-containing coatings and other materials must be closed except when adding to, removing, or mixing the contents.
 Emissions of organic HAP must be minimized during cleaning of storage, mixing, and conveying equipment.

3.2.4	Any process change or pollution prevention alternative that could be broadly applied that was not identified and considered during MACT development.

Pollution prevention measures, specifically coating product reformulations and alternatives to liquid coatings, are currently used by the metal furniture industry and were considered during the MACT floor development. These include high-solids low-HAP, waterborne, and powder coatings. In the MACT floor development, emissions from cleaning were included in the overall emission rate calculations for each facility and reflected the use of low-HAP solvent blends for cleaning. In the final rule, emissions from cleaning are also included in each facility's compliance calculations. As described in the review of the ACA Market Analysis, the non-wood (predominantly metal) furniture industry has largely adopted the use of powder coating and high-solids low-HAP and waterborne coatings in the past decade.

One alternative that was not considered in the development of the Metal Furniture NESHAP was the use of high efficiency coating application methods. This includes high-volume low-pressure (HVLP) spray guns, air-assisted airless spray, and electrostatic spray. The technology review conducted for the Wood Furniture Manufacturing NESHAP identified the use of more efficient spray guns as a development and adopted regulations preventing the use of conventional spray guns. The Wood Furniture Manufacturing NESHAP identified the use of air-assisted airless spraying as a more efficient coating application technology.

HVLP spray guns use high volumes (10 to 25 standard cubic feet per minute (scfm)) of low pressure (2 to 10 pounds per square inch gauge (psig)) air to deliver the coating. The lower air pressure creates a lower particle speed, resulting in a more controlled spray pattern with less overspray and bounce-back from the substrate. With electrostatic spray systems, atomized particles of coating acquire an electric charge as they pass through a high voltage field at the end of the spray nozzle. This electric charge causes the particles to be attracted to the parts being coated, which are electrically grounded.

Because the EPA did not consider the use of high-efficiency coating application methods in the development of the Metal Furniture NESHAP, this could be considered to be a development in equipment applicable to this NESHAP.

High-efficiency coating spray systems, such as HVLP and electrostatic spraying systems, are already required by the Aerospace Manufacturing Rework Facilities NESHAP (40 CFR 63 subpart GG) and the Automobile and Light Duty Truck Surface Coating NESHAP (40 CFR 63, subpart IIII). Non-spray methods (e.g., flow coat, roll coat, brush coat, dip coat) or electrostatic attraction, airless spray, air-assisted airless spray, and HVLP spray guns for coating application are all generally considered to be high-efficiency forms of coating application.

The efficiency of alternative coating application methods can be demonstrated by comparing the emissions generated by the alternative application method to the emissions generated by HVLP or electrostatic application methods according to the California South Coast Air Quality Management District's "Spray Equipment Transfer Efficiency Test Procedure for Equipment User, May 24, 1989" and "Guidelines for Demonstrating Equivalency with District Approved Transfer Efficient Spray Guns, September 26, 2002."

The majority of metal furniture surface coating facilities subject to subpart RRRR are already required to use HVLP or equivalent application technology by state rules in Indiana, Ohio, and Wisconsin to limit VOC emissions. It is likely that most other metal furniture surface coating facilities are also using high-efficiency application equipment for spray applied coatings as a cost-saving measure to reduce coating and spray booth filter consumption and to reduce the amount of solid waste generated in the form is used spray booth filters.

If a metal furniture surface coating facility were required to replace any of their conventional coating spray guns with higher efficiency spray guns, such as an HVLP spray gun, an earlier EPA analysis estimated that the cost to do so would be a capital cost of approximately $700 per gun. The earlier analysis estimated these costs for an industrial-quality HVLP spray gun and accessories (e.g., larger diameter hose, gauges, extra air caps), based on vendor information. Assuming a 10-year life and a 7 percent discount rate, the annualized capital cost per HVLP gun would be about $100. However, these potential costs would be offset by savings in coating costs, filter costs, and the cost of solid waste disposal for used paint booth filters that would result from increased coating transfer efficiency and the reduced generation of coating overspray, compared to conventional spray guns.

3.2.5 Significant changes in the cost (including cost effectiveness) of applying controls (including controls the EPA considered during the development of the original MACT standards).

In a 2000 memorandum, the cost effectiveness of an enclosure (e.g., spray booth) and thermal oxidizer on a typical metal furniture coating source was estimated at approximately $44,000 to remove each ton of organic HAP. The control costs estimated during the Metal Furniture NESHAP development have not been revisited or updated, but it is expected that the prevalence of low VOC and low HAP coatings, and the availability of powder coating, have reduced the incremental cost effectiveness of enclosures and add-on controls. Therefore, the cost to remove each ton of organic HAP over and above the emission reductions under the current level of control would be substantially higher than the cost of $44,000 per ton estimated when the NESHAP was developed. As noted earlier, none of the major source facilities that are subject to subpart RRRR are using add-on controls to comply with either the NESHAP or with national, state, or local VOC emission limits.

Appendix A. Practices, Processes and Control Technologies Identified for Metal Furniture Coating Operations in the November 1, 2016, Query of the RBLC Database

                                    RBLCID
                                   Facility
                                     State
                                  Permit Date
                                 Process Name
                                   Pollutant
                      Emission Limitation/Control method
                                   Eff. (%)
CA-0506
CTL Lighting
CA

05/20/1992
Spray Operation, Paint (Metal Table Lamp)
                                      PM
0.15 lb/day; dry filter
90
MI-0190
Shaw Walker Co.
MI
04/10/1991
Metal Coating
                                      VOC
5.44 lb/gallon ACS. The identified control methods are high solids paint, electrostatic bells, and hand applicators.
N/A

Appendix B. Emission Limits from Active Permits; Organized by Permit Issuance Date.

                                   Facility
                                     State
                                  Permit Date
                                   Pollutant
                                     Limit
                                Control method
                                   Eff. (%)
HNI Corporation (North Campus)
                                      IA
                                   6/26/2017
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: emission rate without add-on controls
N/A
Streater Inc.
                                      MN
                                  04/27/2016
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: emission rate without add-on controls)
N/A

VOC
                   7.51 lb/gallon of coating solids applied
                                (0.90 kg/liter)
NSPS subpart EE
(and Minn. R. 7011.2550; 7017.2020 subp.1)
N/A
Hirsh Industries
                                      DE
                                  02/22/2016
organic HAP
                       0.83 lb/gallon of coating solids
NESHAP subpart RRRR compliance option: emission rate without add-on controls
N/A

VOC
                     2.3 lb/gallon of coating less water
                               (0.275 kg/liter)
State Reg: DE Admin. Code 1124  <IP_ADDRESS>
N/A
Kimball International
(15th. St. Complex) (a)
                                      IN
                                  12/31/2015
organic HAP
                       0.83 lb/gallon of coating solids
NESHAP subpart RRRR compliance option: emission rate without add-on controls
N/A
Steelcase Inc., Kentwood Complex
                                      MI
                                  12/16/2014
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: compliant materials option or the emission rate without add-on controls option.
N/A
Haworth Inc
                                      MI
                                  11/12/2014
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: emission rate without add-on controls
N/A

VOC
                      3.0 lb/gallon of coating less water
...from the six electrostatic spray booths
State Reg: R 336.1702(a) and R 336.1201(3)
N/A

VOC
                      3.0 lb/gallon of coating less water
...from the E-coat dip tank
State Reg: R 336.1702(a) and R 336.1201(3)
N/A
N. Wasserstrom & Sons/ Amtekco Industries Inc.
                                      OH
                                  10/13/2014
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: compliant material option.
N/A

VOC
6.72 lbs VOC per gallon of coating;
7.09 lbs VOC per gallon of cleanup solvent.
State Reg: OAC rule 3745-31-05(A)(3) [BAT] [Not clear that the coating limit is less water and exempt solvents.]

N/A
The HON Company
                                      GA
                                  05/20/2014
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: emission rate without add-on controls
N/A

VOC
                   7.5 lb/gallon of coating solids applied
                                (0.90 kg/liter)
NSPS subpart EE
N/A

VOC
3.0 lb/gallon of coating, excluding water, delivered to the coating applicator from prime and topcoat or single coat operations
State Reg: 391-3-1-.02(6)(b)1, 391-3-1-.02(2)(y)(1)(i),  391-3-1-.02(2)(y)(2)(ii)

If any coating delivered to the coating applicator contains more than 3.0 lb/gallon, the 24-hour volume-weighted solids equivalent limit shall not exceed 5.06 pounds VOC per gallon of coating solids delivered to the coating applicator.
N/A
Blumberg Industries
d/b/a Fine Art Lamps
                                      FL
                                  03/10/2014
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: emission rate without add-on controls
N/A

VOC
                        4.3 lb/gallon of clear coating
                                (0.42 kg/liter)
State Reg: 62-296.513(2)(a) F.A.C.
N/A

VOC
                   3.5 lb/gallon of coating (0.42 kg/liter)
delivered in a system that is air dried or forced warm air dried at temps above 194F
                                      OR
  delivered to a coating applicator that applies extreme performance coatings
State Reg: 62-296.513(2)(a) F.A.C.
N/A

VOC
3.0 lb/gallon of coating (0.36 kg/liter) delivered to a coating applicator for all other coatings and coating application systems
State Reg: 62-296.513(2)(a) F.A.C.
N/A
Edsal Mfg Co Inc. (a)
                                      IL
                                  06/01/2013
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: emission rate without add-on controls
N/A

Volatile Organic Material (VOM)
                2.30 lb/gallon of any coating (0.275 kg/liter)
         3.30 lb/gallon of any coating, solids applied (0.40 kg/liter)
State Reg: 35 IAC 218.204(g)(2)(B)(ii)

Modernfold, Inc. (a)
                                      IA
                                  03/07/2013
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: emission rate without add-on controls.
State Reg: 567 IAC 23.1(4)
N/A

VOC
                                       -
Permit includes this statement "This emission unit is not subject to the New Source Performance Standards (NSPS) at this time." It is assumed it is because it's constriction prior to the applicability date.
-
Correll Incorporated (a)
                                      AR
                                  01/10/2013
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: emission rate without add-on controls.
State Reg: Regulation 19, §19.304
N/A

VOC
                                       -
Permit includes this statement "Correll is not subject to the Standards of Performance for Surface Coating of Metal Furniture as found in NSPS 40 CFR Part 60, Subpart EE, since the fixed capital expense of the painting equipment which was replaced in 1989 is less than 50% of the fixed capital expense of an entirely new metal furniture coating line."
N/A
Republic Storage Systems LLC (a)
                                      OH
                                  06/26/2012
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: emission rate without add-on controls
N/A

VOC
        3.00 lb/gallon of coating, excluding solids and exempt solvents
State Reg: OAC rule 3745-21-09(I)
N/A
McDowell & Craig Mfg. Co.
                                      CA
                                  07/17/2011
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: emission rate without add-on controls
N/A

VOC
                           Limits equal to 2007 CTG.
SCAQMD Rule 1107 for Metal Parts and Products Coating
N/A
The HON Company
                                      AL
                                  08/08/2010
organic HAP
                       0.83 lb/gallon of coating solids
                                (0.10 kg/liter)
NESHAP subpart RRRR compliance option: emission rate without add-on controls
N/A

VOC
                   7.5 lb/gallon of coating solids applied
                                (0.90 kg/liter)
NSPS subpart EE
N/A
HNI Corporation (Central Campus)
                                      IA
                                  02/01/2004
organic HAP
                      (None included in the 2004 permit.)
(The 2004 permit indicates that the facility may be subject to RRRR when it is final. A more recent permit could not be found. The 2008 NEI indicates that HAP emissions were above the major source threshold.)
-

VOC
                   7.5 lb/gallon of coating solids applied
                                (0.90 kg/liter)
NSPS subpart EE
N/A
 Five permits had organic coating operations that were constructed prior to the NSPS applicability date (November 28, 1980) and modifications did not trigger the rule.


[Federal Register: March 29, 2010 (Volume 75, Number 59)]
[Proposed Rules]
[Page 15371-15376]
[DOCID:fr29mr10-16]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM09-13-000]

Time Error Correction Reliability Standard

March 18, 2010.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of Proposed Rulemaking.

-----------------------------------------------------------------------

SUMMARY: Pursuant to section 215 of the Federal Power Act, the
Commission proposes to remand the proposed revised Time Error
Correction Reliability Standard developed by the North American
Electric Reliability Corporation (NERC) in order for NERC to develop
several modifications to the proposed Reliability Standard. The
proposed action ensures that any modifications to Reliability Standards
will be just, reasonable, not unduly discriminatory or preferential,
and in the public interest.

DATES: Comments are due April 28, 2010.

ADDRESSES: Interested persons may submit comments, identified by Docket
No. RM09-13-000, by any of the following methods:
     eFiling: Comments may be filed electronically via the
eFiling link on the Commission's Web site at http://www.ferc.gov.
Documents created electronically using word processing software should
be filed in the native application or print-to-PDF format and not in a
scanned format. The Commission accepts most standard word processing
formats and commenters may attach additional files with supporting
information in certain other file formats. Attachments that exist only
in paper form may be scanned. Commenters filing electronically should
not make a paper filing. Service of rulemaking comments is not
required.
     Mail/Hand Delivery: Commenters that are not able to file
comments electronically must mail or hand deliver an original and 14
copies of their comments to: Federal Energy Regulatory Commission,
Secretary of the Commission, 888 First Street, NE., Washington, DC
20426.

FOR FURTHER INFORMATION CONTACT: Mindi Sauter (Legal Information),
Office of the General Counsel, Federal Energy Regulatory Commission,
888 First Street, NE., Washington, DC 20426,<PHONE_NUMBER>.
    Scott Sells (Technical Information), Office of Electric
Reliability, Division of Reliability Standards, Federal Energy
Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
(202) 502-6664.

SUPPLEMENTARY INFORMATION:

Notice of Proposed Rulemaking

March 18, 2010

    1. Pursuant to section 215 of the Federal Power Act (FPA),\1\ the
Commission proposes to remand the Time Error Correction Reliability
Standard (BAL-004-1) developed by the North American Electric
Reliability Corporation (NERC) in order for NERC to develop several
modifications to the proposed Reliability Standard, as discussed
below.\2\
---------------------------------------------------------------------------

    \1\ 16 U.S.C. 824o.
    \2\ The Commission is not proposing any new or modified text to
its regulations. Rather, as provided in 18 CFR part 40, a proposed
Reliability Standard will not become effective until approved by the
Commission, and the Electric Reliability Organization must post on
its website each effective Reliability Standard.
---------------------------------------------------------------------------

I. Background

A. EPAct 2005 and Mandatory Reliability Standards

    2. Section 215 of the FPA requires a Commission-certified Electric
Reliability Organization (ERO) to develop mandatory and enforceable
Reliability Standards, which are subject to Commission review and
approval. Specifically, the Commission may approve, by rule or order, a
proposed Reliability Standard or modification to a Reliability Standard
if it determines that the Standard is just, reasonable, not unduly
discriminatory or preferential, and in the public interest.\3\ Once
approved, the Reliability Standards may be enforced by the ERO, subject
to Commission oversight, or by the Commission independently.\4\
---------------------------------------------------------------------------

    \3\ 18 U.S.C. 824o(d)(2).
    \4\ Id. 824o(e)(3).
---------------------------------------------------------------------------

    3. Pursuant to section 215 of the FPA, the Commission established a
process to select and certify an ERO \5\ and, subsequently, certified
NERC as the ERO.\6\ On April 4, 2006, NERC submitted a petition seeking
approval of 107 proposed Reliability Standards, including BAL-004-0.\7\
On March 16, 2007, the Commission issued Order No. 693 approving 83 of
these 107 Reliability Standards, including BAL-004-0, and directing
other actions related to 56 of the approved Reliability Standards.
---------------------------------------------------------------------------

    \5\ Rules Concerning Certification of the Electric Reliability
Organization; and Procedures for the Establishment, Approval, and
Enforcement of Electric Reliability Standards, Order No. 672, FERC
Stats. & Regs. ] 31,204, order on reh'g, Order No. 672-A, FERC
Stats. & Regs. ] 31,212 (2006).
    \6\ North American Electric Reliability Corp., 116 FERC ] 61,062
(ERO Certification Order), order on reh'g & compliance, 117 FERC ]
61,126 (2006), aff'd sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342
(D.C. Cir. 2009).
    \7\ See Petition of the North American Electric Reliability
Council and North American Electric Reliability Corporation for
Approval of Reliability Standards, April 4, 2006 at 28-29, Docket
No. RM06-16-000.
---------------------------------------------------------------------------

1. Time Error Correction Generally
    4. Time Error occurs when a synchronous Interconnection operates at
a frequency (number of cycles per second) that is different from the
Interconnection's Scheduled Frequency. Interconnections control to 60
Hz (60 cycles per second), however, the control is imperfect and over
time will result in the average frequency being either above 60 Hz or
below 60 Hz. This discrepancy between actual frequency and Scheduled
Frequency results from an imbalance between generation and interchange
and load and losses, which also results in Inadvertent Interchange.\8\
Time Error Correction is the procedure Reliability Coordinators and
Balancing Authorities follow to reduce Time Error and regulate the
average frequency closer to 60 Hz. The Time Error Correction
Reliability Standard sets forth the process that Reliability
Coordinators and Balancing Authorities follow to offset their Scheduled

Frequency to reliably correct for the accumulated Time Error. The
efficiency of Time Error Corrections is determined by the participation
of all Balancing Authorities within the Interconnection. Coordination
and oversight by all Balancing Authorities and Reliability Coordinators
is necessary to ensure that Time Error Corrections are performed
reliably.
---------------------------------------------------------------------------

    \8\ Inadvertent Interchange occurs when unplanned energy
transfers cross Balancing Authority boundaries, typically where a
Balancing Authority experiences an operational problem that prevents
its net actual interchange of energy from matching its net scheduled
interchange with other Balancing Authorities within the
Interconnection.
---------------------------------------------------------------------------

2. NERC's Proposed Time Error Correction Reliability Standard Revisions
    5. On March 16, 2007, the Commission issued Order No. 693, which,
among other things, approved the currently effective Time Error
Correction Reliability Standard, BAL-004-0.\9\ On March 11, 2009, NERC
filed a petition for Commission approval of the revised Time Error
Correction Reliability Standard, designated BAL-004-1. The petition
states that the proposed Reliability Standard would supersede the
existing Reliability Standard, and is intended to ensure that
Interconnection Time Monitors will continue to volunteer for that role
during an interim time period during which NERC and the industry will
consider significant changes in how to manage Time Error Correction.
NERC states that a potential more permanent solution already is
incorporated in the scope of its ongoing Project 2007-05--Balancing
Authority Controls.
---------------------------------------------------------------------------

    \9\ Mandatory Reliability Standards for the Bulk-Power System,
Order No. 693, FERC Stats. & Regs. ] 31,242, order on reh'g, Order
No. 693-A, 120 FERC ] 61,053 (2007).
---------------------------------------------------------------------------

    6. The Time Error Correction Reliability Standard applies to
Reliability Coordinators and Balancing Authorities. NERC states that,
while in NERC's view Time Error itself is not a reliability issue,
correcting for Time Error can affect reliability, and therefore the
methods used for Time Error Correction must be carried out by the
Balancing Authorities and Reliability Coordinators within each
Interconnection in accordance with NERC Reliability Standards.
    7. NERC indicates that designating an Interconnection Time Monitor
is primarily an issue for the Eastern Interconnection. The Midwest ISO
currently performs this function for the Eastern Interconnection. In
the Western Interconnection, the Western Electricity Coordinating
Council (WECC) uses automatic Time Error Correction, although periodic
manual corrections still are required and are coordinated by WECC.\10\
The Electric Reliability Council of Texas performs Time Error
Correction functions for the Texas Interconnection.
---------------------------------------------------------------------------

    \10\ Under Regional Reliability Standard BAL-004-WECC-01
(Automatic Time Error Correction), Balancing Authorities within WECC
generally are required to continuously automatically correct for
their contribution to Time Error using automatic generation control
systems. However, certain operational events may lead to suspension
of automatic Time Error Correction, requiring manual Time Error
Corrections to be completed at another time, under WECC's direction.
See, Western Electricity Coordinating Council Regional Reliability
Standard Regarding Automatic Time Error Correction, Order No. 723,
127 FERC ] 61,176 (2009) (approving WECC Automatic Time Error
Correction regional Reliability Standard).
---------------------------------------------------------------------------

    8. NERC states that BAL-004-1 ensures that Time Error Corrections
are conducted in a manner that does not adversely affect the
reliability of the Interconnection.
3. Time Error Correction Reliability Standard Requirements
    9. NERC's petition summarizes the proposed changes to the Time
Error Correction Reliability Standard's compliance Requirements, as
described below.\11\
---------------------------------------------------------------------------

    \11\ Appendix A to this order, showing in redline the changes
NERC proposed to the Time Error Correction Reliability Standard, is
available for viewing at http://www.ferc.gov in the eLibrary version
of this document.
---------------------------------------------------------------------------

    10. Requirement R1: Requirement R1 currently states that only a
Reliability Coordinator is eligible to serve as an Interconnection Time
Monitor, and that the NERC Operating Committee shall designate a single
Reliability Coordinator in each Interconnection to serve as
Interconnection Time Monitor. The proposed changes would remove the
requirement that the NERC Operating Committee designate Interconnection
Time Monitors. NERC indicates that the change would vest authority for
designating Interconnection Time Monitors with the NERC Board of
Trustees, based on NERC Operating Committee review and recommendation.
NERC states that, once the proposed standard is approved, the NERC
Board of Trustees will formally designate Interconnection Time
Monitors.
    11. Requirement R2: NERC proposes to remove the current Requirement
R2 in its entirety; the current Requirement R2 states that the
Interconnection Time Monitor will monitor Time Error and shall initiate
or terminate corrective action orders in accordance with the North
American Energy Standards Board (NAESB) Time Error Correction
Procedure. NERC asserts that NERC Reliability Standards should not
compel an entity to comply with NAESB business practices.
    12. Requirement R3: \12\ Requirement R3 instructs Balancing
Authorities to participate in a Time Error Correction when directed by
the Reliability Coordinator serving as the Interconnection Time
Monitor. The text of that Requirement would remain the same.
---------------------------------------------------------------------------

    \12\ With the elimination of current Requirement R2, the current
Requirement R3 would become Requirement R2.
---------------------------------------------------------------------------

    13. Requirement R4: \13\ Requirement R4 states that any Reliability
Coordinator, either on its own accord or at the request of a Balancing
Authority within its footprint, may request that the Interconnection
Time Monitor terminate a Time Error Correction for reliability reasons.
The text of that Requirement also would remain the same.
---------------------------------------------------------------------------

    \13\ Similarly, the current Requirement R4 would become
Requirement R3.
---------------------------------------------------------------------------

    14. Reference Document: NERC states that its Operating Committee
has approved a ``Time Monitoring Reference Document,'' which details a
process for identifying the Reliability Coordinator that will serve as
the Interconnection Time Monitor for each Interconnection and outlines
the responsibilities of Reliability Coordinators serving as
Interconnection Time Monitors. NERC included the Reference Document in
its filing; however, NERC indicates that the document is presented for
informational purposes only, and that NERC is not requesting Commission
approval of the Reference Document.
4. Time Error Correction Reliability Standard Development
    15. The NERC Operating Committee submitted a Standard Authorization
Request (SAR) to the NERC Standards Committee on July 11, 2007,
proposing changes to BAL-004-0. The Operating Committee requested that
the Standards Committee use the ``Urgent Action'' process in addressing
the proposed revisions. At its September 11, 2007 meeting, the
Standards Committee determined to post the SAR and proposed standard
changes using the Urgent Action process, stating that the potential
loss of a willing Reliability Coordinator to serve as the
Interconnection Time Monitor justified use of the Urgent Access
process.
    16. NERC conducted an initial ballot in October 2007, the results
of which included ten negative ballots, including seven with comments.
All seven commenters were concerned that the proposed revisions left
unclear what entity will assume the responsibility for serving as the
Time Monitor for each Interconnection. Three commenters also indicated
that the revisions did not state responsibility for directing

implementation of a Time Error Correction. Two commenters suggested
that the Reliability Standards should include a requirement to comply
with NAESB business practices because those practices also are FERC-
approved. One commenter suggested revising Requirement R2 to omit the
reference to the NAESB business practice, and one commenter objected to
use of the Urgent Action process.
    17. In response to these comments, the NERC Operating Committee
indicated that it was working on a documented process for identifying
the entity that would serve as the Interconnection Time Monitor for
each Interconnection and for reviewing the Interconnection Time
Monitors' performance on a forward-going basis, as it has done for many
years.
    18. NERC posted its response to the comments on November 8, 2007,
and subsequently conducted a recirculation ballot, as required under
NERC's Rules of Procedure. The revised standard passed with 97.45
percent of the 157 ballot pool participants voting, resulting in a
weighted segment approval of 94.10 percent.
    19. The NERC Board of Trustees approved the revised Reliability
Standard on March 26, 2008, and NERC filed its petition on March 11,
2009. NERC requests that BAL-004-1 become effective on the first day of
the first quarter after applicable regulatory approval or, in those
jurisdictions where regulatory approval is not required, upon Board of
Trustees approval.

II. Discussion

    20. The Commission proposes to remand the proposed Reliability
Standard, BAL-004-1, in order for NERC to develop several
modifications, as discussed below.

A. Requirement R1

    21. NERC proposes to revise Requirement R1 to remove from the
Reliability Standard the requirement that the NERC Operating Committee
designate one Reliability Coordinator as the Interconnection Time
Monitor in each Interconnection, arguing that the NERC Operating
Committee is not a user, owner or operator of the Bulk-Power System and
it is not appropriate for that Committee alone to assign requirements
to users, owners or operators of the Bulk-Power System without NERC
Board of Trustees' approval. NERC further argues that it is not
appropriate for a stakeholder-based committee to designate a particular
entity for a position that will be accountable for complying with a
Reliability Standard Requirement.
    Commission Analysis:
    22. With regard to Requirement R1, the Commission is concerned that
the Time Monitor selection process is contained in a guidance document
that is not subject to Commission review and may be changed without
notice. Commission review of proposed changes, and appropriate notice
of such proposed changes, is necessary to ensure that the changes are
just, reasonable, not unduly discriminatory or preferential, and in the
public interest. Thus, the Commission proposes, on remand, to direct
NERC to describe the Interconnection Time Monitor designation process
within a Commission-approved document, such as NERC's Rules of
Procedure or within the Reliability Standard itself.

B. Requirement R2

    23. The revised Reliability Standard also proposes to delete
Requirement R2 in its entirety. Requirement R2 includes the requirement
that Interconnection Time Monitors monitor Time Error and initiate or
terminate corrective action in accordance with the NAESB Time Error
Correction Procedure. NERC states that now that the ``Version 0
Reliability Standards'' are mandatory and enforceable, much of the
process to implement Time Error Corrections has become a NAESB
procedure, because Time Error Correction itself is not a reliability
issue. NERC explains that the fact that an Interconnection Time Monitor
chooses to act and initiate a Time Error Correction based on the NAESB
procedure has no reliability relevance and that NERC Reliability
Standards should not compel an entity to comply with NAESB business
practices, and that eliminating Requirement R2 accomplishes this. NERC
adds that there are no current concerns with the performance of the
volunteer Interconnection Time Monitors, and that the NERC Operating
Committee will continue to address Interconnection Time Monitor
performance in the future should the Commission approve the proposed
Reliability Standard. NERC concludes that approving the proposed
Reliability Standard would maintain the status quo and serve the best
interests of reliability.
    Commission Analysis:
    24. In Order No. 672, the Commission identified a number of
criteria it will use in determining whether a proposed Reliability
Standard or a proposed revision to a Reliability Standard is just,
reasonable, not unduly discriminatory or preferential, and in the
public interest.\14\ One of these criteria is that a proposed
Reliability Standard must be clear and unambiguous as to what is
required and who is required to comply.\15\ The Commission believes the
proposal to remove Requirement R2 in its entirety does not satisfy this
criterion, and therefore proposes to remand the proposed Reliability
Standard. Removing Requirement R2 makes the Reliability Standard
incomplete and ambiguous, since it would not explain the circumstances
under which a Time Error Correction needs to be initiated or ended,
indicate that Time Error Correction must be performed, or identify the
entity that has the obligation and authority to initiate a Time Error
Correction.
---------------------------------------------------------------------------

    \14\ Rules Concerning Certification of the Electric Reliability
Organization; and Procedures for the Establishment, Approval, and
Enforcement of Electric Reliability Standards, Order No. 672, FERC
Stats. & Regs. ] 31,204, order on reh'g, Order No. 672-A, FERC
Stats. & Regs. ] 31,212 (2006).
    \15\ Id. P 325.
---------------------------------------------------------------------------

    25. The Commission therefore proposes to remand the proposed
Reliability Standard and, further proposes that, on remand, NERC should
modify its proposed changes to Requirement R2 to (1) indicate that the
Time Monitor, designated according to a process described in a
Commission-approved document as discussed above, is responsible for
initiating or terminating a Time Error Correction in a reliable manner;
and (2) explain the circumstances under which the Time Monitor should
start or end a Time Error Correction. The Commission is not persuaded
by NERC's argument that much of the process to implement Time Error
Corrections is now just a voluntary NAESB procedure, because Time Error
Correction itself is not a reliability issue. In Order No. 693, we
disagreed with arguments that Time Error Correction is really more a
NAESB business practice. Rather, we stated that the Time Error
Correction Reliability Standard is intended to ensure that Time Error
Corrections are performed in a manner that does not adversely affect
reliability, and the technical details, including the means to carry
out the procedure, are a reliability issue.\16\
---------------------------------------------------------------------------

    \16\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 383.
---------------------------------------------------------------------------

    26. We also are not persuaded by NERC's argument that, because the
Interconnection Time Monitors are performing well, we should approve
removal of technical details from the Reliability Standard. The
Reliability Standard should include technical details regarding what is
required from all participants involved with Time Error Corrections to
avoid confusion

regarding each participant's expectations and obligations. While the
Commission does not oppose NERC's proposal to remove the clause in
Requirement R2 directing the Time Monitor to proceed in accordance with
the NAESB Time Error Correction Procedure, as noted above, the proposed
Reliability Standard is incomplete and ambiguous as it does not include
pertinent technical details regarding the Time Error Correction
process. Additionally, when an issue has both reliability and business
aspects, the Commission has directed NERC and NAESB to work together to
coordinate their efforts in order to provide a workable Reliability
Standard that addresses the reliability issue.\17\ The Commission
expects that to occur here.
---------------------------------------------------------------------------

    \17\ See, e.g., Modification of Interchange and Transmission
Loading Relief Reliability Standards and Electric Reliability
Organization Interpretation of Specific Requirements of Four
Reliability Standards, 123 FERC ] 61,064, at P 49 (2008) (``The
Commission has long supported the coordination of business practices
and Reliability Standards. As early as May 2002, the Commission
urged the industry expeditiously to establish the procedures for
ensuring coordination between NAESB and NERC.''); Preventing Undue
Discrimination and Preference in Transmission Service, Order No.
890-A, FERC Stats. & Regs. ] 31,261, at P 56 (2007), order on reh'g,
Order No. 890-B, 123 FERC ] 61,299 (2008) (``The Commission affirms
the decision in Order No. 890 to rely on the NERC reliability
standards development process, and the NAESB business practices
development process, to achieve a more coherent and uniform
determination of ATC. We disagree that this conflicts with the
Commission's obligations under section 215 of the FPA.'');
Electricity Market Design and Structure, 99 FERC ] 61,171, at P 22
(2002), order on reh'g, 101 FERC ] 61,297 (2002) (``We also consider
coordination between business practice standards and reliability
standards to be critical to the efficient operation of the market.).
---------------------------------------------------------------------------

    27. NERC has stated that in its view Time Error itself is not a
reliability risk, and the purpose of the Time Error Correction
Reliability Standard is not to account for Time Error, but to ensure
Time Error Corrections are implemented in a reliable manner. Any time
the Balancing Authorities within an Interconnection undertake an actual
modification to their generation dispatch to correct for Time Error, it
must be coordinated and monitored by a Reliability Coordinator to
ensure that each Balancing Authority schedules the same frequency and
preclude negative impacts on reliable operation, allowing the
Reliability Coordinator to maintain a wide area view of other
activities, planned or unplanned, occurring on the system at the time.
Any Reliability Coordinator can qualify to perform the Interconnection
Time Monitor function, and each Interconnection requires one Time
Monitor, which is responsible for determining when to implement Time
Error Corrections, and for coordinating their execution. The
requirement to appoint a single Time Monitor for each Interconnection
ensures that a Time Error Correction is well coordinated and
communication runs smoothly. If more than one Time Monitor were
assigned to each Interconnection, there would be a risk of
uncoordinated Time Error Corrections, resulting in inefficient Time
Error Corrections and inadvertent power flows (which could lead to
congestion issues on the Bulk-Power System (potentially reaching or
exceeding System Operating Limits or Interconnection reliability
Operating Limits)) or failure to terminate a Time Error Correction
quickly (due to unclear lines of authority, communication issues, or
confusion when requested by a Reliability Coordinator or Balancing
Authority) if necessary to preserve system reliability.
    28. The current, previously-approved Reliability Standard ensures
that Time Error Corrections are implemented in a reliable manner by
requiring one designated Reliability Coordinator to serve as Time
Monitor for each Interconnection and to perform the function of calling
for Time Error Corrections, taking into account system conditions, and
to halt Time Error Corrections if system conditions warrant, as well as
requiring Balancing Authorities to participate and follow the specified
procedures. The current Reliability Standard also allows any
Reliability Coordinator or Balancing Authority to call for termination
of a Time Error Correction for reliability considerations.
    29. The greater reliability risk associated with Time Error
Correction appears to lie in executing a Time Error Correction rather
than in monitoring for Time Error. Accordingly, any penalties arising
from the Time Error Correction Reliability Standard should
appropriately consider and differentiate between the differing levels
of reliability risk arising from differing actions required from
Interconnection Time Monitors and should shield the Interconnection
Time Monitors from liability beyond their control such as when a
Balancing Authority fails to respond appropriately to directives from
the Interconnection Time Monitors.
    30. Thus, NERC should consider developing compliance evaluation
measures that assess the reliability risk associated with each action,
and tie any penalty to each action. Requirement R2 might be divided
into sub-requirements in order to facilitate development of such
compliance evaluation measures.
    31. The Commission further reminds NERC that, in Order No. 693, we
directed the Electric Reliability Organization to develop additional
Measures and add Levels of Non-Compliance to assure that the
requirements in the current Requirement R3 are achieved.\18\
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    \18\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 384.
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    32. The Commission seeks comments on the proposals discussed above.

III. Information Collection Statement

    33. The Office of Management and Budget (OMB) regulations require
that OMB approve certain reporting and recordkeeping (collections of
information) imposed by an agency.\19\ The information contained here
is also subject to review under section 3507(d) of the Paperwork
Reduction Act of 1995.\20\ As stated above, the Commission previously
approved, in Order No. 693, the Reliability Standard that is the
subject of the current rulemaking. In the first instance, the
Commission is proposing to remand the proposed revisions to BAL-004-1,
thus the reporting burden would not change. In the event that the
Commission, after receiving comments, determines to adopt the proposed
revisions to the Reliability Standard, they are minor; therefore, they
would not add to or increase entities' current reporting burden. Thus,
the current proposal would not materially affect the burden estimates
relating to the currently effective version of the Reliability Standard
presented in Order No. 693.\21\
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    \19\ 5 CFR 1320.11.
    \20\ 44 U.S.C. 3507(d).
    \21\ See Order No. 693, FERC Stats. & Regs. ] 31,242 at P 1905-
07.
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    34. For example, the proposed modifications to BAL-004-1 do not
modify or otherwise affect the collection of information already in
place. Moreover, the proposed removal of business practice-related
requirements from Reliability Standard BAL-004-1 likely will decrease,
not increase, the reporting burden associated with the current,
Commission-approved version of the Reliability Standard.
    35. Thus, the proposed modifications to the current Reliability
Standard effected by this proposed rule will not increase the reporting
burden nor impose any additional information collection requirements.
    36. The Commission does not foresee any additional impact on the
reporting burden for small businesses, because the proposed
modifications are minor and do not increase the existing burden.
However, we will submit this proposed rule to OMB for informational
purposes.
    Title: Modification of Time Error Correction Reliability Standard.
    Action: Proposed Collection.

    OMB Control No.: 1902-0244.
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: On Occasion.
    Necessity of the Information: This proposed rule proposes to remand
modifications to a Reliability Standard pertaining to Time Error
Corrections.
    Internal Review: The Commission has reviewed the proposed
Reliability Standard and made a determination that its action is
necessary to implement section 215 of the FPA. These requirements, if
modified as discussed above should conform to the Commission's
expectation for Time Error Correction as well as procedures within the
energy industry.
    37. Interested persons may obtain information on the reporting
requirements by contacting the following: Federal Energy Regulatory
Commission, 888 First Street, NE. Washington, DC 20426 [Attention:
Michael Miller, Office of the Executive Director, Phone: (202) 502-
8415, fax:<PHONE_NUMBER>, e-mail<EMAIL_ADDRESS>    38. For submitting comments concerning the collection(s) of
information and the associated burden estimate(s), please send your
comments to the contact listed above and to the Office of Information
and Regulatory Affairs, Office of Information and Regulatory Affairs,
Washington, DC 20503 [Attention: Desk Officer for the Federal Energy
Regulatory Commission, phone<PHONE_NUMBER>, fax:<PHONE_NUMBER>, e-
mail<EMAIL_ADDRESS>
IV. Environmental Analysis

    39. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\22\ The
Commission has categorically excluded certain actions from this
requirement as not having a significant effect on the human
environment. Included in the exclusion are rules that are clarifying,
corrective, or procedural or that do not substantially change the
effect of the regulations being amended.\23\ The actions proposed
herein fall within this categorical exclusion in the Commission's
regulations.
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    \22\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
    \23\ 18 CFR 380.4(a)(2)(ii).
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V. Regulatory Flexibility Act Analysis

    40. The Regulatory Flexibility Act of 1980 (RFA) \24\ generally
requires a description and analysis of final rules that will have
significant economic impact on a substantial number of small entities.
Agencies are not required to provide such an analysis if a rule would
not have such an effect. The RFA mandates consideration of regulatory
alternatives that accomplish the stated objectives of a proposed rule
and that minimize any significant economic impact on a substantial
number of small entities. The Small Business Administration's Office of
Size Standards develops the numerical definition of a small business.
(See 13 CFR 121.201.) For electric utilities, a firm is small if,
including its affiliates, it is primarily engaged in the transmission,
generation and/or distribution of electric energy for sale and its
total electric output for the preceding twelve months did not exceed
four million megawatt hours.
---------------------------------------------------------------------------

    \24\ 5 U.S.C. 601-12.
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    41. NERC and the entities that act as Interconnection Time
Monitors, and thus would be affected by the proposed Reliability
Standard, do not fall within the RFA's definition of small entity. NERC
is the Commission-certified Electric Reliability Organization for the
continental United States, and is responsible for developing and
enforcing mandatory Reliability Standards for the United States. NERC
enforces compliance with NERC Reliability Standards through a rigorous
program of monitoring, audits and investigations, and the imposition of
financial penalties and other enforcement actions for non-compliance.
    42. The Midwest Independent Transmission System Operator, Inc.
(Midwest ISO) is a non-profit organization with over 131,000 megawatts
of installed generation. Midwest ISO has 93,600 miles of transmission
lines and serves 15 states and one Canadian province.
    43. The Electric Reliability Council of Texas (ERCOT) manages the
flow of electric power to 22 million Texas customers. As the
independent system operator for the region, ERCOT schedules power on an
electric grid that connects 40,000 miles of transmission lines and more
than 550 generation units.
    44. The Western Electricity Coordinating Council (WECC) is
responsible for coordinating and promoting bulk electric system
reliability in the Western Interconnection. WECC's service territory
extends from Canada to Mexico. It includes the provinces of Alberta and
British Columbia, the northern portion of Baja California, Mexico, and
all or portions of the 14 Western states between.
    45. In any event, the RFA is not implicated by this proposed rule
because by remanding the proposed Reliability Standard the Commission
is maintaining the status quo until future revisions to the Reliability
Standard are filed with and approved by the Commission.

VI. Comment Procedures

    46. The Commission invites interested persons to submit comments on
the matters and issues proposed in this notice to be remanded,
including any related matters or alternative proposals that commenters
may wish to discuss. Comments are due April 28, 2010. Comments must
refer to Docket No. RM09-13-000, and must include the commenter's name,
the organization they represent, if applicable, and their address in
their comments.
    47. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's Web site at http://
www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software should be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
    48. Commenters that are not able to file comments electronically
must send an original and 14 copies of their comments to: Federal
Energy Regulatory Commission, Secretary of the Commission, 888 First
Street NE., Washington, DC 20426.
    49. All comments will be placed in the Commission's public files
and may be viewed, printed, or downloaded remotely as described in the
Document Availability section below. Commenters on this proposal are
not required to serve copies of their comments on other commenters.

VII. Document Availability

    50. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through the Commission's Home Page (http://www.ferc.gov) and
in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5 p.m.

Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.
    51. From the Commission's Home Page on the Internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits of this document in
the docket number field.
    52. User assistance is available for eLibrary and the Commission's
web site during normal business hours from FERC Online Support at (202)
502-6652 (toll free at<PHONE_NUMBER>) or email at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. E-mail the Public Reference Room at
<EMAIL_ADDRESS>
    By direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2010-6481 Filed 3-26-10; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: June 11, 2010 (Volume 75, Number 112)]
[Notices]
[Page 33290-33291]
[DOCID:fr11jn10-50]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 12470-001]

City of Broken Bow, OK; Notice of Availability of Environmental
Assessment

June 3, 2010.
    In accordance with the National Environmental Policy Act of 1969
and the Federal Energy Regulatory Commission's (Commission)
regulations, 18 CFR part 380 (Order No. 486, 52 FR 47897), the Office
of Energy Projects has reviewed the application for an Original Major
License for the Broken Bow Re-Regulation Dam Hydropower Project.
    The project would be located at the United States Army Corps of
Engineers' (Corps) Broken Bow Re-Regulation Dam on the Mountain Fork
River in McCurtain County, Oklahoma, and would occupy federal lands
administered by the Corps. Staff has prepared an environmental
assessment (EA) for the project.
    The EA contains staff's analysis of the potential environmental
effects of the project and concludes that licensing the project, with
appropriate environmental protective measures, would not constitute a
major federal action that would significantly affect the quality of the
human environment.
    A copy of the EA is available for review at the Commission in the
Public Reference Room or may be viewed on the Commission's Web site at
http://www.ferc.gov, using the ``eLibrary'' link. Enter the docket
number excluding the last three digits in the docket number field to
access the document. For assistance, contact FERC Online Support at
<EMAIL_ADDRESS>or toll-free at 1-866-208-3676, or for TTY,
202-502-8659. You may also register online at http://www.ferc.gov/docs-
filing/esubscription.asp to be notified via e-mail of new filings and
issuances related to this or other pending projects. For assistance,
contact FERC Online Support.
    Any comments should be filed within 30 days from the date of this
notice. Comments may be filed electronically via the Internet. See 18
CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web
site (http://www.ferc.gov/docs-filing/ferconline.asp) under the
``eFiling'' link. For a simpler method of submitting text only
comments, click on ``Quick Comment.'' For assistance, please contact
FERC Online Support. Although the

Commission strongly encourages electronic filing, documents may also be
paper-filed. To paper-file, mail an original and eight copies to:
Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426. Please affix Project No.
12470-001 to all comments.
    For further information, please contact Sean Murphy at 202-502-
6145, or at<EMAIL_ADDRESS>
Kimberly D. Bose,
Secretary.
[FR Doc. 2010-14027 Filed 6-10-10; 8:45 am]
BILLING CODE 6717-01-P