[Federal Register Volume 77, Number 140 (Friday, July 20, 2012)]
[Proposed Rules]
[Pages 42833-42871]
[FR Doc No: 2012-17659]

Vol. 77

Friday,

No. 140

July 20, 2012

Part II

Environmental Protection Agency

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40 CFR Part 51

 Approval, Disapproval and Promulgation of Air Quality Implementation
Plans; Arizona; Regional Haze State and Federal Implementation Plans;
Proposed Rule

Federal Register / Vol. 77 , No. 140 / Friday, July 20, 2012 /
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 51

[EPA-R09-OAR-2012-0021, FRL-9700-1]

Approval, Disapproval and Promulgation of Air Quality
Implementation Plans; Arizona; Regional Haze State and Federal
Implementation Plans

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve partially and disapprove partially
a revision to Arizona's State Implementation Plan (SIP) to implement
the regional haze program for the first planning period through July
31, 2018. This proposed action addresses only the portion of the SIP
related to Arizona's determination of Best Available Retrofit
Technology (BART) to control emissions from eight units at three
electric generating stations: Apache Generating Station, Cholla Power
Plant and Coronado Generating Station. EPA proposes to approve the
State's determination that these sources are subject to BART, and to
approve the emissions limits for sulfur dioxide (SO2) and
particulate matter (PM10) at all the units. EPA proposes to
disapprove the BART emissions limits for nitrogen oxides
(NOX) at most of the units. EPA also proposes to promulgate
a Federal Implementation Plan (FIP) containing new emissions limits for
NOX as well as BART compliance requirements for the three
facilities. We encourage the State to submit a revised SIP to replace
all portions of our FIP, and we stand ready to work with the State to
develop a revised plan. The Clean Air Act (CAA) requires states to
prevent any future and remedy any existing man-made impairment of
visibility in 156 national parks and wilderness areas designated as
Class I areas. Arizona has a wealth of such areas. The three power
plants affect visibility at 18 national parks and wilderness areas,
including the Grand Canyon, Mesa Verde and the Petrified Forest. The
State and EPA must work together to ensure that plans are in place to
make progress toward natural visibility conditions at these national
treasures.

DATES: Written comments must be received by the designated contact at
the address below on or before August 31, 2012.

ADDRESSES: See the SUPPLEMENTARY INFORMATION section for further
instructions on where and how to learn more about this proposal, attend
a public hearing, or submit comments.

FOR FURTHER INFORMATION CONTACT: Thomas Webb, U.S. EPA, Region 9,
Planning Office, Air Division, Air-2, 75 Hawthorne Street, San
Francisco, CA 94105. Thomas Webb can be reached at telephone number
(415) 947-4139 and via electronic mail at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Table of Contents

I. General Information
    A. Definitions
    B. Docket
    C. Instructions for Submitting Comments to EPA
    D. Submitting Confidential Business Information
    E. Tips for Preparing Your Comments
    F. Public Hearings
II. Overview of Proposed Actions
III. Regional Haze Background
    A. Description of Regional Haze
    B. History of Regional Haze Regulations
    C. Roles of Agencies in Addressing Regional Haze
IV. Requirements for Regional Haze Implementation Plans
    A. Regional Haze Rule
    B. The Deciview
    C. Best Available Retrofit Technology
    D. The Grand Canyon Visibility Transport Commission and Section
309
V. SIP and FIP Background
    A. History of State Submittals and EPA Actions
    B. EPA's Authority To Promulgate a FIP
VI. EPA's Evaluation of Arizona's BART Analyses and Determinations
    A. Arizona's Identification of BART Sources
    B. Arizona's BART Control Analysis
    1. Cost of Compliance
    2. Energy and Non-Air Quality Environmental Impacts
    3. Existing Pollution Control Technology
    4. Remaining Useful Life of the Source
    5. Degree of Visibility Improvement
    C. Arizona's BART Determinations
    1. Apache Unit 1
    a. BART for NOX
    b. BART for PM10
    c. BART for SO2
    2. Apache Units 2 and 3
    a. BART for NOX
    b. BART for PM10
    c. BART for SO2
    3. Cholla Units 2, 3 and 4
    a. BART for NOX
    b. BART for PM10
    c. BART for SO2
    4. Coronado Units 1 and 2
    a. BART for NOX
    b. BART for PM10
    c. BART for SO2
    D. Enforceability of BART Limits
VII. EPA's Proposed FIP Actions
    A. EPA's BART Analyses and Determinations
    1. Costs of Compliance
    2. Energy and Non-Air Environmental Impacts
    3. Pollution Control Equipment in Use at the Source
    4. Remaining Useful Life of the Source
    5. Degree of Improvement in Visibility
    a. Modeling Protocol
    b. Baseline Emissions
    c. Emission Reductions for Alternative Controls
    d. Visibility Impacts
    B. EPA's FIP BART Determinations
    1. Apache Units 2 and 3
    a. Costs of Compliance
    b. Visibility Improvement
    c. EPA's BART Determinations
    2. Cholla Units 2, 3 and 4
    a. Costs of Compliance
    b. Visibility Improvement
    c. EPA's BART Determinations
    3. Coronado Units 1 and 2
    a. Costs of Compliance
    b. Visibility Improvement
    c. EPA's BART Determinations
    C. Enforceability Requirements
VIII. Summary of EPA's Proposed Action
IX. Statutory and Executive Order Reviews

I. General Information

 A. Definitions

    For the purpose of this document, we are giving meaning to certain
words or initials as follows:
    (1) The words or initials Act or CAA mean or refer to the Clean Air
Act, unless the context indicates otherwise.
    (2) The initials ADEQ mean or refer to the Arizona Department of
Environmental Quality.
    (3) The initials AEPCO mean or refer to Arizona Electric Power
Cooperative.
    (4) The initials AFUDC mean or refer to allowance for funds used
during construction.
    (5) The initials APS mean or refer Arizona Public Service Company.
    (6) The words Arizona and State mean the State of Arizona.
    (7) The initials BART mean or refer to Best Available Retrofit
Technology.
    (8) The term Class I area refers to a mandatory Class I Federal
area.\1\
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    \1\ Although states and tribes may designate as Class I
additional areas which they consider to have visibility as an
important value, the requirements of the visibility program set
forth in section 169A of the CAA apply only to ``mandatory Class I
Federal areas.''
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    (9) The initials CBI mean or refer to Confidential Business
Information.
    (10) The initials CEMS mean or refer to continuous emission
monitoring system.
    (11) The initials COFA mean or refer to close-coupled overfire air.
    (12) The initials CY mean or refer to Calendar Year
    (13) The initials EGU mean or refer to Electric Generating Unit.
    (14) The initials ESPs mean or refer to electrostatic
precipitators.
    (15) The words EPA, we, us or our mean or refer to the United
States Environmental Protection Agency.

    (16) The initials FGD mean or refer to flue gas desulfurization.
    (17) The initials FGR mean or refer to flue gas recirculation.
    (18) The initials FIP mean or refer to Federal Implementation Plan.
    (19) The initials FLMs mean or refer to Federal Land Managers.
    (20) The initials IMPROVE mean or refer to Interagency Monitoring
of Protected Visual Environments monitoring network.
    (21) The initials IPM mean or refer to Integrated Planning Model.
    (22) The initials LNB mean or refer to low-NOX burners.
    (23) The initials LTS mean or refer to Long-Term Strategy.
    (24) The initials MW mean or refer to megawatts.
    (25) The initials NEI mean or refer to National Emission Inventory.
    (26) The initials NH3 mean or refer to ammonia.
    (27) The initials NOX mean or refer to nitrogen oxides.
    (28) The initials NP mean or refer to National Park.
    (29) The initials OC mean or refer to organic carbon.
    (30) The initials OFA mean or refer to over fire air.
    (31) The initials PM mean or refer to particulate matter.
    (32) The initials PM2.5 mean or refer to fine particulate matter
with an aerodynamic diameter of less than 2.5 micrometers.
    (33) The initials PM10 mean or refer to particulate matter with an
aerodynamic diameter of less than 10 micrometers (coarse particulate
matter).
    (34) The initials PNG mean or refer to pipeline natural gas.
    (35) The initials ppm mean or refer to parts per million.
    (36) The initials PSD mean or refer to Prevention of Significant
Deterioration.
    (37) The initials RAVI mean or refer to Reasonably Attributable
Visibility Impairment.
    (38) The initials RMC mean or refer to Regional Modeling Center.
    (39) The initials RP mean or refer to Reasonable Progress.
    (40) The initials RPG or RPGs mean or refer to Reasonable Progress
Goal(s).
    (41) The initials RPOs mean or refer to regional planning
organizations.
    (42) The initials SCR mean or refer to Selective Catalytic
Reduction.
    (43) The initials SIP mean or refer to State Implementation Plan.
    (44) The initials SNCR mean or refer to Selective Non-catalytic
Reduction.
    (45) The initials SO2 mean or refer to sulfur dioxide.
    (46) The initials SOFA mean or refer to separated over fire air.
    (47) The initials SRP mean or refer to Salt River Project
Agricultural Improvement and Power District.
    (48) The initials tpy mean tons per year.
    (49) The initials TSD mean or refer to Technical Support Document.
    (50) The initials VOC mean or refer to volatile organic compounds.
    (51) The initials WA mean or refer to Wilderness Area.
    (52) The initials WEP mean or refer to Weighted Emissions
Potential.
    (53) The initials WFGD mean or refer to wet flue gas
desulfurization.
    (54) The initials WRAP mean or refer to the Western Regional Air
Partnership.

B. Docket

    The proposed action relies on documents, information and data that
are listed in the index on http://www.regulations.gov under docket
number EPA-R09-OAR-2012-0021. Although listed in the index, some
information is not publicly available (e.g., Confidential Business
Information (CBI)). Certain other material, such as copyrighted
material, is publicly available only in hard copy form. Publicly
available docket materials are available either electronically at
http://www.regulations.gov or in hard copy at the Planning Office of
the Air Division, AIR-2, EPA Region 9, 75 Hawthorne Street, San
Francisco, CA 94105. EPA requests that you contact the individual
listed in the FOR FURTHER INFORMATION CONTACT section to view the hard
copy of the docket. You may view the hard copy of the docket Monday
through Friday, 9-5:00 PDT, excluding Federal holidays.

 C. Instructions for Submitting Comments to EPA

    Written comments must be received at the address below on or before
August 31, 2012. Submit your comments, identified by Docket ID No. EPA-
R09-OAR-2011-0021, by one of the following methods:
     Federal Rulemaking portal: http://www.regulations.gov.
Follow the on-line instructions for submitting comments.
     Email<EMAIL_ADDRESS>     Fax:<PHONE_NUMBER> (Attention: Thomas Webb).
     Mail, Hand Delivery or Courier: Thomas Webb, EPA Region 9,
Air Division (AIR-2), 75 Hawthorne Street, San Francisco, California
94105. Hand and courier deliveries are only accepted Monday through
Friday, 8:30 a.m.-4:30 p.m., excluding Federal holidays. Special
arrangements should be made for deliveries of boxed information.
    EPA's policy is to include all comments received in the public
docket without change. We may make comments available online at http://www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be CBI or other
information for which disclosure is restricted by statute. Do not
submit information that you consider to be CBI or that is otherwise
protected through http://www.regulations.gov or email. The http://www.regulations.gov Web site is an ``anonymous access'' system, which
means EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an email comment
directly to EPA, without going through http://www.regulations.gov, we
will include your email address as part of the comment that is placed
in the public docket and made available on the Internet. If you submit
an electronic comment, EPA recommends that you include your name and
other contact information in the body of your comment and with any disk
or CD-ROM you submit. If EPA cannot read your comment due to technical
difficulties and cannot contact you for clarification, EPA may not be
able to consider your comment. Electronic files should not include
special characters or any form of encryption, and be free of any
defects or viruses.

D. Submitting Confidential Business Information

    Do not submit CBI to EPA through http://www.regulations.gov or
email. Clearly mark the part or all of the information that you claim
as CBI. For CBI information in a disk or CD-ROM that you mail to EPA,
mark the outside of the disk or CD-ROM as CBI and identify
electronically within the disk or CD-ROM the specific information that
is claimed as CBI. In addition to one complete version of the comment
that includes information claimed as CBI, you must submit a copy of the
comment that does not contain the information claimed as CBI for
inclusion in the public docket. We will not disclose information so
marked except in accordance with procedures set forth in 40 CFR part 2.

E. Tips for Preparing Your Comments

    When submitting comments, remember to:
     Identify the rulemaking by docket number and other
identifying information (e.g., subject heading, Federal Register date
and page number).
     Explain why you agree or disagree; suggest alternatives
and substitute language for your requested changes.

     Describe any assumptions and provide any technical
information and/or data that you used.
     If you estimate potential costs or burdens, explain how
you arrived at your estimate in sufficient detail to allow for it to be
reproduced.
     Provide specific examples to illustrate your concerns, and
suggest alternatives.
     Explain your views as clearly as possible, avoiding the
use of profanity or personal threats.
     Make sure to submit your comments by the identified
comment period deadline.

F. Public Hearings

    EPA will hold a public hearing at the date, time and location
stated below to accept oral and written comments into the record.
    Date: July 31, 2012.
    Open House: 4:00-5:00 p.m.
    Public Hearing: 6:00-8:00 p.m.
    Location: Sandra Day O'Connor Federal Courthouse (atrium and juror
room), 401 W. Washington Street, Phoenix, AZ 85003-2118.
    To provide opportunities for questions and discussion, EPA will
hold an open house prior to the public hearing. During the open house,
EPA staff will be available informally to answer questions on our
proposed rule. Any comments made to EPA staff during the open house
must still be provided formally in writing or orally during a public
hearing in order to be considered in the record.
    The public hearing will provide the public with an opportunity to
present views or information concerning the proposed Regional Haze FIP
for Arizona. EPA may ask clarifying questions during the oral
presentations, but will not respond to the presentations at that time.
Simultaneous translation in Spanish will be available during the public
hearing. We will consider written statements and supporting information
submitted during the comment period with the same weight as any oral
comments and supporting information presented at the public hearing.
Please consult section I.C, I.D. and I.E of this preamble for guidance
on how to submit written comments to EPA. We will include verbatim
transcripts of the hearing in the docket for this action. The EPA
Region 9 Web site for the rulemaking, which includes the proposal and
information about the public hearing, is at http://www.epa.gov/region9/air/actions.

II. Overview of Proposed Actions

    EPA proposes to partially approve and partially disapprove a
portion of Arizona's SIP for Regional Haze submitted to EPA Region 9 on
February 28, 2011, to meet the requirements of Section 308 of the
Regional Haze Rule. EPA is proposing to take action only on the BART
requirements for the three electric generating stations and units
listed in Table 1. At this time, EPA is not proposing to take action on
the State's other BART determinations or any other parts of the SIP
regarding the remaining requirements of the Regional Haze Rule. EPA
takes very seriously a decision to disapprove a state plan, as we
believe that it is preferable, and preferred in the provisions of the
Clean Air Act, that these requirements be implemented through state
plans. A state plan need not contain exactly the same provisions that
EPA might require, but EPA must be able to find that the state plan is
consistent with the requirements of the Act. Further, EPA's oversight
role requires that it assure fair implementation of Clean Air Act
requirements by states across the country, even while acknowledging
that individual decisions from source to source or state to state may
not have identical outcomes. In this instance, we believe that
Arizona's SIP generally meets those requirements with respect to its
SO2 and PM10 limits, but as we describe in more
detail below, the SIP does not include several specifically required
elements. The NOX BART determinations for the coal-fired
units are neither consistent with the requirements of the Act nor with
BART decisions that other states have made. As a result, EPA believes
this proposed disapproval is the only path that is consistent with the
Act at this time. Specifically, we propose the following:
     Proposed Approval: EPA proposes to approve Arizona's
determination that the following sources and units are subject to BART:
Arizona Electric Power Company's (AEPCO) Apache Generating Station
(Apache) Units 1, 2 and 3; Arizona Public Service's (APS) Cholla Power
Plant (Cholla) Units 2, 3 and 4; and Salt River Project's (SRP)
Coronado Generating Station (Coronado) Units 1 and 2. We are proposing
to approve the State's emissions limits for SO2 and
PM10 at all of these units, but are seeking comment on
whether lower emissions limits may be warranted for any of these units,
and whether an alternative test method should be accepted for
measurement of PM10. Finally, we are proposing to approve
the emissions limits for NOX, SO2 and
PM10 at Apache Unit 1.
     Proposed Disapproval: Based on our evaluation described in
this notice, we propose to disapprove the State's BART emissions limits
for NOX at all three sources and units except for Coronado
Unit 2 and Apache Unit 1. We also propose to disapprove the compliance
and equipment maintenance requirements for BART at all three sources,
since these were not included in the revised SIP.\2\
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    \2\ For each BART source, the SIP must include a requirement to
install and operate control equipment as expeditiously as
practicable (40 CFR 51.308(e)(1)(iv)); a requirement to maintain
control equipment (40 CFR 51.308(e)(1)(v)); and procedures to ensure
control equipment is properly operated and maintained, including
requirements for monitoring, recordkeeping and reporting (40 CFR
51.308(e)(1)(v)).
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     Proposed FIP: We propose to promulgate a Federal
Implementation Plan (FIP) that includes emissions limitations
representing BART for NOX at all units except for Apache
Unit 1. The proposed FIP also includes compliance schedules and
requirements for equipment maintenance, monitoring, testing,
recordkeeping and reporting for all the sources and units. The
regulatory language for the FIP requirements is listed under PART 52 at
the end of this notice.

                                        Table 1--Scope of Proposed Action
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            Source name                       Owner                   Units                   Pollutants
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Apache Generating Station..........  AEPCO.................  Steam Units 1, 2 and 3  NOX, SO2, PM10
Cholla Power Plant.................  APS...................  Steam Units 2, 3 and 4  NOX, SO2, PM10
Coronado Generating Station........  SRP...................  Units 1 and 2.........  NOX, SO2, PM10
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III. Regional Haze Background

A. Description of Regional Haze

    Regional haze is visibility impairment that is produced by a
multitude of sources and activities that are located across a broad
geographic area and emit fine particulates (e.g., sulfates, nitrates,
organic carbon (OC), elemental carbon (EC), and soil dust), and their
precursors (e.g., sulfur dioxide, nitrogen oxides, and in some cases,
ammonia (NH3) and volatile organic compounds (VOC)). Fine
particle precursors react in the atmosphere to form PM2.5,
which impairs visibility by scattering and absorbing light. Visibility
impairment reduces the clarity, color, and visible distance that one
can see. PM2.5 can also cause serious health effects and
mortality in humans and contributes to environmental effects such as
acid deposition and eutrophication.
    Data from the existing visibility monitoring network, the
``Interagency Monitoring of Protected Visual Environments'' (IMPROVE)
monitoring network, show that visibility impairment caused by air
pollution occurs virtually all the time at most national parks (NPs)
and wilderness areas (WAs). The average visual range \3\ in many Class
I areas (i.e., NPs and memorial parks, WAs, and international parks
meeting certain size criteria) in the western United States is 100-150
kilometers, or about one-half to two-thirds of the visual range that
would exist without anthropogenic air pollution. In most of the eastern
Class I areas of the United States, the average visual range is less
than 30 kilometers, or about one-fifth of the visual range that would
exist under estimated natural conditions (64 FR 35715, July 1, 1999).
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    \3\ Visual range is the greatest distance, in kilometers or
miles, at which a dark object can be viewed against the sky.
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B. History of Regional Haze Regulations

    In section 169A of the 1977 Amendments to the CAA, Congress created
a program for protecting visibility in the nation's national parks and
wilderness areas. This section of the CAA establishes as a national
goal the ``prevention of any future, and the remedying of any existing,
impairment of visibility in mandatory Class I Federal areas \4\ which
impairment results from manmade air pollution.'' EPA promulgated
regulations on December 2, 1980, to address visibility impairment in
Class I areas that is ``reasonably attributable'' to a single source or
small group of sources, i.e., ``reasonably attributable visibility
impairment.'' (45 FR 80084, December 2, 1980). These regulations
represented the first phase in addressing visibility impairment. EPA
deferred action on regional haze that emanates from a variety of
sources until monitoring, modeling and scientific knowledge about the
relationships between pollutants and visibility impairment were
improved.
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    \4\ Areas designated as mandatory Class I Federal areas consist
of national parks exceeding 6000 acres, wilderness areas and
national memorial parks exceeding 5000 acres, and all international
parks that were in existence on August 7, 1977. 42 U.S.C. 7472(a).
In accordance with section 169A of the CAA, EPA, in consultation
with the Department of Interior, promulgated a list of 156 areas
where visibility is identified as an important value (44 FR 69122,
November 30, 1979). The extent of a mandatory Class I area includes
subsequent changes in boundaries, such as park expansions. 42 U.S.C.
7472(a). Although states and tribes may designate as Class I
additional areas which they consider to have visibility as an
important value, the requirements of the visibility program set
forth in section 169A of the CAA apply only to ``mandatory Class I
Federal areas.'' Each mandatory Class I Federal area is the
responsibility of a ``Federal Land Manager.'' 42 U.S.C. 7602(i).
When we use the term ``Class I area'' in this action, we mean a
``mandatory Class I Federal area.''
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    As part of the 1990 Amendments to the CAA, Congress added section
169B to focus attention on regional haze issues. EPA promulgated a rule
to address regional haze on July 1, 1999 (64 FR 35714, July 1, 1999)
codified at 40 CFR part 51, subpart P (Regional Haze Rule). The primary
regulatory requirements that address regional haze are found at 40 CFR
51.308 and 51.309 and are summarized below. Under 40 CFR 51.308(b), all
states, the District of Columbia and the Virgin Islands are required to
submit an initial state implementation plan (SIP) addressing regional
haze visibility impairment no later than December 17, 2007.\5\
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    \5\ EPA's regional haze regulations require subsequent updates
to the regional haze SIPs. 40 CFR 51.308(g)-(i).
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C. Roles of Agencies in Addressing Regional Haze

    Successful implementation of the regional haze program will require
long-term regional coordination among states, tribal governments and
various federal agencies. As noted above, pollution affecting the air
quality in Class I areas can be transported over long distances, even
hundreds of kilometers. Therefore, to effectively address the problem
of visibility impairment in Class I areas, states, or the EPA when
implementing a FIP, need to develop strategies in coordination with one
another, taking into account the effect of emissions from one
jurisdiction on the air quality in another.
    Because the pollutants that lead to regional haze can originate
from sources located across broad geographic areas, EPA has encouraged
the states and tribes across the United States to address visibility
impairment from a regional perspective. Five regional planning
organizations (RPOs) were developed to address regional haze and
related issues. The RPOs first evaluated technical information to
better understand how their states and tribes impact Class I areas
across the country, and then pursued the development of regional
strategies to reduce emissions of particulate matter and other
pollutants leading to regional haze.
    The Western Regional Air Partnership (WRAP) RPO is a collaborative
effort of state governments, tribal governments, and various federal
agencies established to initiate and coordinate activities associated
with the management of regional haze, visibility and other air quality
issues in the western United States. WRAP member State governments
include: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana,
New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and
Wyoming. Tribal members include Campo Band of Kumeyaay Indians,
Confederated Salish and Kootenai Tribes, Cortina Indian Rancheria, Hopi
Tribe, Hualapai Nation of the Grand Canyon, Native Village of Shungnak,
Nez Perce Tribe, Northern Cheyenne Tribe, Pueblo of Acoma, Pueblo of
San Felipe, and Shoshone-Bannock Tribes of Fort Hall.

IV. Requirements for Regional Haze Implementation Plans

A. Regional Haze Rule

    The Regional Haze Rule (RHR) sets out specific requirements for
states' initial regional haze implementation plans.\6\ In particular,
each state's plan must establish a long-term strategy that ensures
reasonable progress toward achieving natural visibility conditions in
each Class I area affected by the emissions from sources within the
state. In addition, for each Class I area within the state's
boundaries, the plan must establish a reasonable progress goal (RPG)
for the first planning period that ends on July 31, 2018. The long-term
strategy must include enforceable emission limits and other measures as
necessary to achieve the RPG. Regional haze plans must also give
specific

attention to certain stationary sources that were in existence on
August 7, 1977, but were not in operation before August 7, 1962. These
sources, where appropriate, are required to install BART controls to
eliminate or reduce visibility impairment. Although such BART
determinations can be a part of a reasonable progress strategy, BART is
also an independent requirement that can be assessed separately from
the other requirements of the RHR. Because this proposal only pertains
to BART at three specific sources, we do not discuss other requirements
of the RHR below.
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    \6\ Pursuant to 40 CFR 51.301, ``implementation plan'' is
defined as ``any State Implementation Plan, Federal Implementation
Plan, or Tribal Implementation Plan.'' Therefore, although the
requirements of the RHR are generally described in relation to SIPs,
they are also relevant where EPA is promulgating a regional haze
plan.
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B. The Deciview

    The RHR establishes the deciview (dv) as the principal metric for
measuring visibility. This visibility metric expresses uniform changes
in haziness in terms of common increments across the entire range of
visibility conditions, from pristine to extremely hazy conditions.
Visibility expressed in deciviews is determined by using air quality
measurements to estimate light extinction and then transforming the
value of light extinction to deciviews using a logarithmic function.
The deciview is a more useful measure for tracking progress in
improving visibility than light extinction because each deciview change
is an equal incremental change in visibility as perceived by the human
eye.\7\
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    \7\ The preamble to the RHR provides additional details about
the deciview (64 FR 35714, 35725 July 1, 1999).
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C. Best Available Retrofit Technology

    Section 169A of the CAA directs states to evaluate the use of
retrofit controls at certain larger, often uncontrolled, older
stationary sources in order to address visibility impacts from these
sources. Specifically, section 169A(b)(2)(A) of the CAA requires states
to revise their SIPs to contain such measures as may be necessary to
make reasonable progress towards the natural visibility goal, including
a requirement that certain categories of existing major stationary
sources \8\ built between 1962 and 1977 procure, install, and operate
the ``Best Available Retrofit Technology'' as determined by the state.
Under the RHR, states are directed to conduct BART determinations for
such ``BART-eligible'' sources that may be anticipated to cause or
contribute to any visibility impairment in a Class I area. Rather than
requiring source-specific BART controls, states also have the
flexibility to adopt an emissions trading program or other alternative
program as long as the alternative provides greater reasonable progress
towards improving visibility than BART.
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    \8\ The set of ``major stationary sources'' potentially subject
to BART is listed in CAA section 169A(g)(7).
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    EPA published the Guidelines for BART Determinations under the
Regional Haze Rule at Appendix Y to 40 CFR part 51 (hereinafter
referred to as the ``BART Guidelines'') on July 6, 2005. The Guidelines
are to assist states in determining which of their sources should be
subject to the BART requirements and in determining appropriate
emission limits for each such ``subject-to-BART'' source. In making
BART determinations for fossil fuel-fired electric generating plants
with a total generating capacity in excess of 750 megawatts, states
must use the approach set forth in the BART Guidelines. States are
encouraged, but not required, to follow the BART Guidelines in making
BART determinations for other types of sources. States must address all
visibility-impairing pollutants emitted by a source in the BART
determination process. The most significant visibility impairing
pollutants are SO2, NOX and PM. EPA has indicated
that states should use their best judgment in determining whether VOC
or NH3 compounds impair visibility in Class I areas.
    Under the BART Guidelines, states may select an exemption threshold
value for their BART modeling, below which a BART-eligible source would
not be expected to cause or contribute to visibility impairment in any
Class I area. The state must document this exemption threshold value in
the SIP and must state the basis for its selection of that value. Any
source with emissions that model above the threshold value would be
subject to a BART determination review. The BART Guidelines acknowledge
varying circumstances affecting different Class I areas. In setting
their exemption threshold values, states should consider the number of
emission sources affecting the Class I areas at issue and the magnitude
of the individual sources' impacts. An exemption threshold set by the
state should not be higher than 0.5 deciview.
    In their SIPs, states must identify potential BART sources,
described in the RHR as ``BART-eligible sources,'' and document their
BART control determination analyses. In making BART determinations,
section 169A(g)(2) of the CAA requires that states consider the
following factors: (1) The costs of compliance; (2) the energy and non-
air quality environmental impacts of compliance; (3) any existing
pollution control technology in use at the source; (4) the remaining
useful life of the source; and (5) the degree of improvement in
visibility which may reasonably be anticipated to result from the use
of such technology. States are free to determine the weight and
significance assigned to each factor, but must consider all five
factors and provide a reasoned explanation for adopting the technology
selected as BART, based on the five factors.
    A regional haze SIP must include source-specific BART emission
limits and compliance schedules for each source subject to BART, unless
the SIP includes an alternative program that provides greater
reasonable progress towards improving visibility than BART and meets
the other requirements of 40 CFR 51.308(e)(2). Once a state has made
its BART determination, the BART controls must be installed and in
operation as expeditiously as practicable, but no later than five years
after the date EPA approves the regional haze SIP.\9\ The Regional Haze
SIP must also contain a requirement for each BART source to maintain
the relevant control equipment, as well as procedures to ensure control
equipment is properly operated and maintained.\10\ In addition to what
is required by the RHR, general SIP requirements mandate that the SIP
must also include all regulatory requirements related to monitoring,
recordkeeping and reporting for the BART emissions limitations.\11\
---------------------------------------------------------------------------

    \9\ CAA section 169(g)(4); 40 CFR 51.308(e)(1)(iv).
    \10\ 40 CFR 51.308(e)(1)(v). See also CAA section 302(k)
(defining ``emission limitation'' as ``a requirement established by
the State or the Administrator which limits the quantity, rate, or
concentration of emissions of air pollutants on a continuous basis,
including any requirement relating to the operation or maintenance
of a source to assure continuous emission reduction * * *'')
(emphasis added).
    \11\ See CAA section 110(a)(2) (requirements for SIPs).
---------------------------------------------------------------------------

D. The Grand Canyon Visibility Transport Commission and Section 309

    In addition to the general requirements of the regional haze
program, the RHR also includes 40 CFR 51.309, which contains the
strategies developed by the Grand Canyon Visibility Transport
Commission (GCVTC), established under Section 169B(f) of CAA, 42 U.S.C.
7492(f). Certain western States and Tribes were eligible to submit
implementation plans under section 309 as an alternative method of
achieving reasonable progress for Class I areas that were covered by
the GCVTC's analysis--i.e., the 16 Class I areas on the Colorado
Plateau. In order for States and Tribes to be able to utilize this
section, however, the rule provided that EPA must receive an ``Annex''
to

the GCVTC's final recommendations. The purpose of the Annex was to
provide the specific provisions needed to translate the GCVTC's general
recommendations for stationary source SO2 reductions into an
enforceable regulatory program. The rule provided that such an Annex,
meeting certain requirements, be submitted to EPA no later than October
1, 2000, see 40 CFR 51.309(d)(4) and 51.309(f). The Annex was submitted
in 2000, and EPA revised 40 CFR 51.309 in 2003. See 68 FR 33764, June
5, 2003.

V. SIP and FIP Background

A. History of State Submittals and EPA Actions

    Since four of its twelve mandatory Class I Federal areas are on the
Colorado Plateau, Arizona had the option of submitting a Regional Haze
SIP under section 309 of the Regional Haze Rule. A SIP that is approved
by EPA as meeting all of the requirements of section 309 is ``deemed to
comply with the requirements for reasonable progress with respect to
the 16 Class I areas [on the Colorado Plateau] for the period from
approval of the plan through 2018.'' 40 CFR 51.309(a). When these
regulations were first promulgated, 309 submissions were due no later
than December 31, 2003. Accordingly, the Arizona Department of
Environmental Quality (ADEQ) submitted to EPA on December 23, 2003, a
309 SIP for Arizona's four Class I Areas on the Colorado Plateau. ADEQ
submitted a revision to its 309 SIP, consisting of rules on emissions
trading and smoke management, and a correction to the state's regional
haze statutes, on December 31, 2004. EPA approved the smoke management
rules submitted as part of the 2004 revisions, see 71 FR 28270 and 72
FR 25973, but did not propose or take final action on any other portion
of the 309 SIP.
    In response to an adverse court decision,\12\ EPA revised 40 CFR
51.309 on October 13, 2006, making a number of substantive changes and
requiring states to submit revised 309 SIPs by December 17, 2007. See
71 FR 60612. Subsequently, ADEQ sent a letter to EPA dated December 14,
2008, acknowledging that it had not submitted a SIP revision to address
the requirements of 309(d)(4) related to stationary sources and 309(g),
which governs reasonable progress requirements for Arizona's eight
mandatory Class I areas outside of the Colorado Plateau.\13\
---------------------------------------------------------------------------

    \12\ Center for Energy and Economic Development v. EPA, 398 F.3d
653 (D.C. Circuit 2005).
    \13\ Letter from Stephen A. Owens, ADEQ, to Wayne Nastri, EPA
(December 14, 2008).
---------------------------------------------------------------------------

    EPA made a finding on January 15, 2009, that 37 states, including
Arizona, had failed to make all or part of the required SIP submissions
to address regional haze. See 74 FR 2392. Specifically, EPA found that
Arizona failed to submit the plan elements required by 40 CFR 309(d)(4)
and (g). EPA sent a letter to ADEQ on January 14, 2009, notifying the
state of this failure to submit a complete SIP. ADEQ later decided to
submit a SIP under section 308, instead of section 309.
    ADEQ adopted and transmitted its Regional Haze SIP under Section
308 of the Regional Haze Rule (``Arizona Regional Haze SIP'') to EPA
Region 9 in a letter dated February 28, 2011. The plan was determined
complete by operation of law on August 28, 2011.\14\ The SIP was
properly noticed by the State and available for public comment for 30
days prior to a public hearing held in Phoenix, Arizona, on December 2,
2010. Arizona included in its SIP responses to written comments from
EPA Region 9, the National Park Service, the U.S. Forest Service, and
other stakeholders including regulated industries and environmental
organizations. The Arizona Regional Haze SIP is available to review in
the docket for the proposed rule.
---------------------------------------------------------------------------

    \14\ See CAA section 110(k)(1)(B).
---------------------------------------------------------------------------

B. EPA's Authority To Promulgate a FIP

    Under CAA section 110(c), EPA is required to promulgate a Federal
Implementation Plan within two years of the effective date of a finding
that a state has failed to make a required SIP submission. The FIP
requirement is void if a state submits a regional haze SIP, and EPA
approves that SIP within the two-year period. See 74 FR 2392, January
15, 2009. Specifically, CAA section 110(c) provides:
    (1) The Administrator shall promulgate a Federal implementation
plan at any time within 2 years after the Administrator--
    (A) finds that a State has failed to make a required submission or
finds that the plan or plan revision submitted by the State does not
satisfy the minimum criteria established under [CAA section
110(k)(1)(A)], or
    (B) disapproves a State implementation plan submission in whole or
in part, unless the State corrects the deficiency, and the
Administrator approves the plan or plan revision, before the
Administrator promulgates such Federal implementation plan.
    Section 302(y) defines the term ``Federal implementation plan'' in
pertinent part, as:

    [A] plan (or portion thereof) promulgated by the Administrator
to fill all or a portion of a gap or otherwise correct all or a
portion of an inadequacy in a State implementation plan, and which
includes enforceable emission limitations or other control measures,
means or techniques (including economic incentives, such as
marketable permits or auctions or emissions allowances).

    Thus, because we determined that Arizona failed to timely submit a
Regional Haze SIP, we are required to promulgate a Regional Haze FIP
for Arizona, unless we first approve a SIP that corrects the non-
submittal deficiencies identified in our finding of January 15, 2009.
For the reasons explained below, we are proposing to partially approve
and partially disapprove the Arizona Regional Haze SIP. Therefore, we
are proposing a FIP to address those portions of the SIP that we are
proposing to disapprove. If Arizona submits a SIP revision that
addresses the deficiencies in sufficient time for EPA to review the
submission, then we would prefer to act on that submittal, if such
action is consistent with our obligations under the CAA and applicable
court orders.

VI. EPA's Evaluation of Arizona's BART Analyses and Determinations

 A. Arizona's Identification of BART Sources

    ADEQ's Analysis: In the first step of the BART process, ADEQ
identified all the BART-eligible sources within the jurisdiction of the
State and local agencies, and applied the three eligibility criteria in
the RHR (40 CFR 51.301) to these facilities. The criteria are: (1) One
or more emission units at the facility are classified in one of the 26
industrial source categories listed in the BART Guidelines; (2) the
emission unit(s) did not operate before August 7, 1962, but was in
existence on August 7, 1977; and (3) the total potential to emit of any
visibility impairing pollutant from the subject emission units is
greater or equal to 250 tons per year. ADEQ determined that Apache,
Cholla and Coronado have emissions units that meet these criteria.
    In a second step, ADEQ identified those BART-eligible sources that
may reasonably be anticipated to cause or contribute to visibility
impairment at any Class I area. The BART Guidelines allow states to
consider exempting some BART-eligible sources from BART review in the
event that they may not

reasonably be anticipated to cause or contribute to any visibility
impairment in a Class I area. For states using modeling to determine
the applicability of BART to single sources, the BART Guidelines note
that the first step is to set a contribution threshold to assess
whether the impact of a single source is sufficient to cause or
contribute to visibility impairment at a Class I area. Further, the
BART Guidelines state that, ``[a] single source that is responsible for
a 1.0 deciview change or more should be considered to `cause'
visibility impairment.'' \15\ The BART Guidelines also state that ``the
appropriate threshold for determining whether a source contributes to
visibility impairment' may reasonably differ across states,'' but,
``[a]s 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.'' For determining whether a source is
subject to BART, ADEQ used a contribution threshold of 0.50 dv.
---------------------------------------------------------------------------

    \15\ 70 FR 39104, 39161, July 6, 2005.
---------------------------------------------------------------------------

    The WRAP's Regional Modeling Center (RMC) developed a modeling
protocol, entitled ``CALMET/CALPUFF Protocol for BART Exemption
Screening Analysis for Class I Areas in the Western United States.''
\16\ The protocol specified the use of CALPUFF version 6.112 and CALMET
version 6.211, which were the accepted model versions at the time.\17\
The WRAP RMC used this protocol to perform CALPUFF modeling for each of
the western states. ADEQ then relied on the RMC's modeling to assess
the potential of BART-eligible sources to cause or contribute to Class
I visibility impairment. The visibility impacts of AEPCO Apache
Generating Station, APS Cholla Power Plant, and SRP Coronado Generating
Station are each well above the 0.5 dv ``contribution'' threshold as
well as the 1.0 dv ``causation'' threshold.\18\ As a result, ADEQ
determined that emissions units at the Apache, Cholla, and Coronado
facilities are subject to BART as listed in Table 2.
---------------------------------------------------------------------------

    \16\ See Docket Item B-15.
    \17\ EPA subsequently required the uses of CALPUFF and CALMET
version 5.8 for new modeling applications. However, EPA is accepting
BART modeling performed according to a previously approved protocol,
as was the case for the WRAP protocol.
    \18\ See Docket Item No. B-12. Visibility impacts as listed in
``Summary of WRAP RMC BART Modeling for Arizona'' Draft No. 5, May
7, 2005. Initial draft released on April 4, 2005.

                                        Table 2--Sources Subject to BART
----------------------------------------------------------------------------------------------------------------
                                                                                WRAP
            Facility                BART emission        Source category       Pollutants  evaluated    modeled
                                        units                                                         impact \a\
----------------------------------------------------------------------------------------------------------------
AEPCO Apache Generating Station  Units 1, 2, and 3.  Fossil-fuel fired steam  NOX, SO2, PM10........     1.95 dv
                                                      electric plants of
                                                      more than 250 million
                                                      British thermal units
                                                      per hour heat input.
APS Cholla Power Plant.........  Units 2, 3, and 4.  .......................  NOX, SO2, PM10........     2.88 dv
SRP Coronado Generating Station  Units 1 and 2.....  .......................  NOX, SO2, PM10........     3.32 dv
----------------------------------------------------------------------------------------------------------------
\a\ Average of the 98th percentile across 2001, 2002 and 2003 for the most affected Class I Area.

    EPA's Evaluation: We are proposing to approve ADEQ's determination
that Apache, Cholla, and Coronado are eligible for and subject to a
BART control analysis. Each of the three facilities addressed in this
notice (Apache, Cholla and Coronado) agreed with ADEQ's determination
that they are subject to BART. While we do not agree with all aspects
of the process by which ADEQ identified its eligible-for-BART and
subject-to-BART sources, we do agree with ADEQ that the three
facilities in this notice are eligible for and subject to BART. Since
our action today focuses on only the three facilities, we will address
ADEQ's other subject-to-BART determinations in a separate action at a
later date.

B. Arizona's BART Control Analysis

    The third step of the BART evaluation is to perform a five-factor
BART analysis as the basis for making a BART control determination. In
performing this analysis, 40 CFR 51.308(e)(1)(ii)(A) requires that
states consider the following factors on a pollutant-by-pollutant
basis: (1) The costs of compliance of each technically feasible control
technology, (2) the energy and non-air quality environmental impacts of
compliance of the control technologies, (3) any existing pollution
control technology in use at the source, (4) the remaining useful life
of the source, and (5) the degree of improvement in visibility which
may reasonably be anticipated to result from the use of such
technology. These factors are frequently referred to as the ``five-
factor analysis'' for the RHR BART determination.
    The BART Guidelines recommend that a BART analysis include the
following five steps. The Guidelines provide detailed instructions on
how to perform each of these steps.\19\
---------------------------------------------------------------------------

    \19\ 40 CFR part 51, appendix Y, Sec.  IV.D.

 Step 1--Identify All Available Retrofit Control Technologies,
 Step 2--Eliminate Technically Infeasible Options,
 Step 3--Evaluate Control Effectiveness of Remaining Control
Technologies,
 Step 4--Evaluate Impacts and Document the Results,\20\ and
---------------------------------------------------------------------------

    \20\ Step 4 includes evaluating the cost of compliance, energy
impacts, non-air quality environmental impacts, and remaining useful
life.
---------------------------------------------------------------------------

 Step 5--Evaluate Visibility Impacts.

    ADEQ's Analysis: ADEQ's BART analyses mostly followed this
approach, with the addition of a step to identify existing control
technologies and a step concluding ``selection of BART.'' \21\ Thus,
ADEQ's analyses included the following seven steps:
---------------------------------------------------------------------------

    \21\ Arizona Regional Haze SIP, pp. 138-143.

 Step 1: Identify the Existing Control Technologies in Use at
the Source
 Step 2: Identify All Available Retrofit Control Options
 Step 3: Eliminate All Technically Infeasible Control Options
 Step 4: Evaluate Control Effectiveness of Remaining
Technologies
 Step 5: Evaluate the Energy and Non-Air Quality Environmental
Impacts and Document Results \22\
---------------------------------------------------------------------------

    \22\ We note that, while ADEQ refers to its Step 5 as an
evaluation of energy and non-air quality environmental impacts, this
step also includes consideration of the costs of compliance and the
remaining useful life of the source, consistent with the BART
Guidelines, 40 CFR part 51, appendix Y, Sec.  IV.D.4.
---------------------------------------------------------------------------

 Step 6: Evaluate Visibility Impacts
 Step 7: Select BART

    EPA's Evaluation: We find that this overall approach to the five-
factor analysis is generally reasonable and consistent with the RHR and
the BART Guidelines. With respect to the three

sources covered by this action, we find that ADEQ's implementation of
the first four steps of its approach is generally reasonable and
consistent with the RHR and the BART Guidelines. However, we do not
agree with ADEQ's analysis in steps 5 through 7.\23\ In particular,
under step 5, we find that the costs of control were not calculated in
accordance with the BART Guidelines; under step 6, we find that the
visibility impacts were not appropriately evaluated and considered; and
under step 7, we find that ADEQ did not provide a sufficient
explanation and rationale for its determinations. While we find these
problems in all of ADEQ's BART analyses for the three sources, they do
not appear to have had a substantive impact on ADEQ's selection of
controls for SO2 and PM10. With respect to ADEQ's
NOX BART determinations, however, we find that these
problems resulted in control determinations that are inconsistent with
the RHR and the BART Guidelines. We summarize below how ADEQ applied
the five factors and identify a number of issues common to the three
relevant sources.
---------------------------------------------------------------------------

    \23\ We do not believe that ADEQ appropriately used ``the most
stringent emission control level that the technology is capable of
achieving'' for SCR per the BART Guidelines at 40 CFR part 51,
appendix Y, Sec.  IV.D.3. This issue is addressed on a source-by-
source basis under the cost and visibility factors of our evaluation
in section VI.C.
---------------------------------------------------------------------------

1. Cost of Compliance
    ADEQ included information relating to costs of compliance in its RH
SIP, including information on total annualized costs, cost per ton of
pollutant removed, and incremental cost per ton of pollutant removed
for the various control options considered. Cost calculations were
prepared by consulting firms on behalf of the facilities as part of
their BART analyses that relied on a combination of vendor quotes,
facility data, and internal cost calculation methodology. These BART
analyses were subsequently submitted to ADEQ. Upon review, ADEQ
requested certain clarifying information from the facilities regarding
these cost calculations, including greater detail on the underlying
assumptions and additional supporting documentation. ADEQ received
responses of varying detail to these requests, and included this
information as part of its RH SIP. As described in further detail in
the discussion of each facility, there are certain aspects of these
cost calculations that we find inconsistent with the BART Guidelines
and EPA's Control Cost Manual. We also disagree with the manner in
which ADEQ interpreted the cost-related information included in its RH
SIP.
2. Energy and Non-Air Quality Environmental Impacts
    In its BART analyses, ADEQ identified only minor energy and non-air
quality impacts for SO2 or PM10 control
strategies. Regarding NOX emissions, ADEQ's BART analyses
point out that the various control options will incur increased energy
usage by any electric generating unit (EGU) where they are installed.
In particular, Selective Catalytic Reduction (SCR) retrofit will cause
an additional pressure drop in the flue gas system due to the catalyst,
increasing power requirements. Additionally, ADEQ's SIP submission
asserts that ammonia levels in fly ash due to Selective Non-catalytic
Reduction (SNCR) and SCR installations could affect the decision of
facility managers to sell or dispose of fly ash.\24\ Finally, the
Arizona SIP notes that SNCR and SCR may involve potential safety
hazards associated with the transportation and handling of anhydrous
ammonia.\25\ However, ADEQ did not cite any of these potential energy
and non-air impacts as the basis for eliminating any otherwise feasible
control strategies for NOX. EPA concurs that these impacts
do not warrant elimination of any of the control options.
---------------------------------------------------------------------------

    \24\ Arizona Regional Haze SIP, Appendix D, p. 63.
    \25\ See, e.g. id. p. 53.
---------------------------------------------------------------------------

3. Existing Pollution Control Technology
    The presence of existing pollution control technology is reflected
in the BART analysis in two ways: First, in the consideration of
available control technologies (step 1 of ADEQ's analysis), and second,
in the development of baseline emission rates for use in cost
calculations and visibility modeling (steps 5 and 6 of ADEQ's
analysis). As described in greater detail in the discussion for each
facility, AEPCO, APS, and SRP used baseline time periods that varied
from 2001 to 2007. The respective baseline emissions and existing
pollution control technology used in the BART analyses reflect the
levels of control in place at the time. EPA considers ADEQ's approach
to be reasonable and generally consistent with the RHR and the BART
Guidelines.
4. Remaining Useful Life of the Source
    The remaining useful life of the source is usually considered as a
quantitative factor in estimating the cost of compliance. With the
exception of Apache Generating Station Unit 1, ADEQ used the default
20-year amortization period in the EPA Cost Control Manual as the
remaining useful life of the facilities in its RH SIP. Without
commitments for an early shut down of an EGU, it is not appropriate to
consider a shorter amortization period in a BART analysis.
5. Degree of Visibility Improvement
    ADEQ assessed the degree of improvement in visibility from
candidate BART technologies using models and procedures generally in
accord with EPA guidance. ADEQ relied on visibility analysis performed
by the facilities, which used the WRAP RMC's modeling protocol.
However, ADEQ's use of the modeling results in making BART decisions is
problematic in several respects. First, ADEQ appears to have considered
the visibility benefit of controls at only a single Class I area for
each facility, even though there are nine to seventeen Class I areas
nearby, depending on the facility. Since the facilities' modeling
results indicated that controls would contribute to visibility
improvement in multiple Class I areas, consideration of the benefits in
additional areas is warranted. Although the RHR and the BART Guidelines
do not prescribe a particular approach to calculating or considering
visibility benefits across multiple Class I areas, overlooking
significant visibility benefits at additional areas considerably
understates the overall benefit of controls to improve visibility. A
more complete assessment of the degree of visibility improvement for
candidate BART controls would include consideration of the number of
areas affected and the degree of visibility improvement expected in all
areas. One could conduct this type of analysis by summing the benefits
over the areas, or by some other quantitative or qualitative
procedure.\26\ The procedure followed by ADEQ is not a sufficient basis
for making BART determinations for sources with substantial benefits
across many Class I areas.
---------------------------------------------------------------------------

    \26\ Note that the issue here is not whether an individual in a
given time and place would perceive the deciview benefits occurring
at different Class I areas and under possibly different
meteorological conditions. Rather, the issue is accounting in some
way for the full set of expected visibility benefits. A national
program for addressing regional haze must inherently address the
multiple areas that occur in a region.
---------------------------------------------------------------------------

    Second, ADEQ appears to have considered benefits from controls on
only one emitting unit at a time. However, because the plumes from
individual units overlap more or less completely by the time they reach
a

Class I area, the visibility benefits from controls on multiple units
would be approximately additive. This issue of additive unit benefits
could be addressed in some way without modeling all the units together,
but ADEQ does not appear to have done this, and therefore
underestimated the degree of visibility improvement from controls.
    Finally, the ammonia background concentration assumed for Cholla
and Coronado may be too low, ranging from 1 ppb to as low as 0.2 ppb.
Nitrogen oxides and SO2 emissions affect visibility after
chemically transforming into particulate ammonium nitrate and ammonium
sulfate, respectively. This process is limited by the amount of ammonia
present, so modeling with a low assumed ammonia background may
underestimate visibility impacts and thus the visibility benefit of
controls. Ambient ammonia measurements for use as input to modeling are
scarce, and measurements that include it in the form of ammonium even
scarcer. In the absence of compelling ammonia background estimates, EPA
guidance recommends the use of a 1 ppb ammonia background for areas in
the west.\27\
---------------------------------------------------------------------------

    \27\ Interagency Workgroup on Air Quality Modeling (IWAQM) Phase
2 Summary Report and Recommendations for Modeling Long Range
Transport Impacts (EPA-454/R-98-019), EPA OAQPS, December 1998,
http://www.epa.gov/scram001/7thconf/calpuff/phase2.pdf.
---------------------------------------------------------------------------

 C. Arizona's BART Determinations

    Our evaluation of ADEQ's BART determinations is organized by
source, unit and pollutant with a focus on the cost and visibility
factors of the BART analysis. A summary of the State's BART
determinations for the three sources is in Table 3. ADEQ's BART
determinations for NOX consist of combustion controls,
either in the form of low-NOX burners (LNB) with flue gas
recirculation (FGR), or LNB with overfire air (OFA) or separated
overfire air (SOFA). For PM10, ADEQ's BART determinations
consist of fuel switching to pipeline natural gas (PNG) for Apache Unit
1, and add-on particulate controls such as electrostatic precipitators
(ESPs) or fabric filters for the remaining units. For SO2,
ADEQ's BART determinations consist of fuel-switching to PNG for Apache
Unit 1, and wet flue gas desulfurization (FGD) systems that are either
already in place or planned for the remaining units.

                                                    Table 3--Summary of Arizona's Bart Determinations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           NOX                            PM10                           SO2
                                   Size                      -------------------------------------------------------------------------------------------
              Unit                 (MW)          Fuel               Control        Emission        Control        Emission       Control        Emission
                                                                  technology       limit *       technology       limit *       technology      limit *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Apache 1.......................       75  Natural Gas.......  LNB w/FGR, PNG use      0.056  PNG use...........     0.0075  PNG use..........    0.00064
Apache 2.......................      195  Coal..............  LNB w/OFA.........       0.31  ESP (upgraded)....       0.03  Wet FGD                 0.15
                                                                                (existing).
Apache 3.......................      195  Coal..............  LNB w/OFA.........       0.31  ESP (upgraded)....       0.03  Wet FGD                 0.15
                                                                                (existing).
Cholla 2.......................      305  Coal..............  LNB w/SOFA........       0.22  Fabric filter.....      0.015  Wet FGD                 0.15
                                                                                (existing).
Cholla 3.......................      305  Coal..............  LNB w/SOFA........       0.22  Fabric filter           0.015  Wet FGD                 0.15
                                                                                (existing).                    (existing).
Cholla 4.......................      425  Coal..............  LNB w/SOFA........       0.22  Fabric filter           0.015  Wet FGD                 0.15
                                                                                (existing).                    (existing).
Coronado 1.....................      411  Coal..............  LNB w/OFA.........       0.32  Hot-side ESP......       0.03  Wet FGD (per            0.08
                                                                                Consent Decree).
Coronado 2.....................      411  Coal..............  LNB w/OFA.........       0.32  Hot-side ESP......       0.03  Wet FGD (per            0.08
                                                                                Consent Decree).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Emission limits are in lb/MMBtu.

 1. Apache Unit 1
    Apache Generating Station (Apache) consists of seven EGUs with a
total plant-wide generating capacity of 560 megawatts. Unit 1 is a
wall-fired boiler with a net unit output of 85 MW that burns pipeline-
quality natural gas as its primary fuel, but also has the capability to
use No. 2 through No. 6 fuel oils. At present, no emissions control
equipment is installed on Unit 1. ADEQ's BART analyses for Apache Unit
1 relied largely on data and analyses provided by AEPCO and its
contractor. These data and analyses are summarized below, along with
ADEQ's determinations for each pollutant and EPA's evaluations of these
analyses and determinations.
a. BART for NOX
    ADEQ's Analysis: Unit 1 currently operates with no NOX
controls. In its BART analysis submitted to ADEQ, AEPCO developed
baseline emissions for multiple fuel-use scenarios including natural
gas, and No. 2 and No. 6 fuel oil usage. Baseline natural gas emissions
were based on the highest 75 percent load 24-hour NOX
emission levels reported in EPA's Acid Rain Database for 2006. Since
the only fuel burned in 2006 was natural gas, baseline emissions for
No. 2 or No. 6 fuel oil usage could not be developed based on data from
2006. As a simplifying assumption, baseline No. 2 fuel oil
NOX emissions were assumed to be equal to natural gas usage.
Baseline emissions for No. 6 fuel oil usage were estimated using AP-42
emission factors.\28\ A summary of baseline emissions for various fuels
is provided in Table 4.
---------------------------------------------------------------------------

    \28\ See Docket Item B-2. Page 2-1 of AEPCO Apache 1 BART
Analysis.

      Table 4--Apache Unit 1: Arizona's Baseline Emission Factors a
------------------------------------------------------------------------
                                Natural  Gas   No. 2  Fuel   No. 6  fuel
          Pollutant              (lb/MMBtu)        oil           oil
------------------------------------------------------------------------
NOX..........................         0.147          0.147        0.301
PM10.........................         0.0075         0.014        0.0737
SO2..........................         0.00064        0.051        0.906
------------------------------------------------------------------------
a See Docket Item B-02 (Table 3-1 of AEPCO Apache 1 BART Analysis).

    AEPCO examined multiple control technologies and options for Apache
Unit 1, including combustion controls, post combustion add-on controls,
and fuel-switching. A summary of cost of compliance and degree of
visibility improvement for these options is in Table 5. These cost and
visibility improvement values are based on baseline and control case
emissions corresponding to No. 6 fuel oil usage, which of the three
fuels considered is the fuel type that generates the greatest
NOX emissions.

                                         Table 5--Apache Unit 1: Arizona's Cost and Visibility Analysis for NOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Cost- effectiveness d ($/ton)  Visibility Improvement c (dv)
                                                       Emission    Emissions    Annualized -------------------------------------------------------------
                  Control option b                    rate (lb/     removed      cost ($/                   Incremental    Total (from     Incremental
                                                        MMBtu)     (tons/yr)      year)       Average    (from  previous)   base case)  (from  previous)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...........................................        0.301  ...........  ...........  ...........  ................  ...........  ................
LNB + FGR..........................................         0.15          297      551,982        1,859  ................        0.194  ................
ROFA...............................................         0.16          278      939,093        3,378           -20,374        0.256             0.062
SNCR with LNB + FGR................................         0.11          376    1,079,389        2,871             1,432         0.24            -0.016
ROFA w/Rotamix.....................................         0.11          376    1,505,825        4,005              a NA         0.24              a NA
SCR with LNB + FGR.................................         0.07          455    5,704,798       12,538            53,152        0.409             0.169
--------------------------------------------------------------------------------------------------------------------------------------------------------
a The previous option, SNCR with LNB + FGR has the same emission rate, making an incremental comparison invalid.
b Per ADEQ's and AEPCO's analyses, control options are ranked here by cost, not by emission rate
c Visibility improvement at Chiricahua Wilderness Area, the Class I area exhibiting the highest impact
d Cost-effectiveness values obtained from Table 10.3, Appendix D (TSD) of Arizona RH SIP. See Docket Item B-01.

    In its cost calculations for Apache Unit 1, AEPCO used a capital
recovery factor based on a 7.10 percent interest rate, and a plant
remaining useful life of eight years.\29\ The plant's remaining useful
life was based upon Apache Unit 1 operating until 2021, and an assumed
BART implementation date of 2013.\30\ AEPCO eliminated many control
options, including SCR, based on high cost-effectiveness ($/ton), and
primarily examined the LNB w/FGR and ROFA control options. AEPCO noted
that LNB with FGR resulted in larger incremental visibility improvement
than ROFA, and proposed LNB with FGR, burning either natural gas or
fuel oil, as BART for NOX at Apache Unit 1.
---------------------------------------------------------------------------

    \29\ See Docket Item B-02. Appendix A (Economic Analysis) of
AEPCO Apache 1 BART Analysis.
    \30\ See Docket Item B-02. Page 2-1 of AEPCO Apache 1 BART
Analysis.
---------------------------------------------------------------------------

    In order to evaluate AEPCO's BART analysis, ADEQ requested
supporting information explaining assumptions used in the economic
analysis, baseline emissions, and control technology options. Based on
this additional information, as well as on AEPCO's original analysis,
ADEQ accepted the company's proposed BART recommendation of LNB with
FGR for Unit 1, but added a fuel restriction to allow only the use of
natural gas. This determination corresponds to a BART emission limit
for NOX at Apache Unit 1 of 0.056 lb/MMBtu.\31\
---------------------------------------------------------------------------

    \31\ See Docket Item B-01. Emission rate as specified in Table
10.2, Appendix D (Technical Support Document) of Arizona Regional
Haze SIP.
---------------------------------------------------------------------------

    EPA's Evaluation: We disagree with multiple aspects of the analysis
for Apache Unit 1. We consider the use of eight years for the plant's
remaining useful life in the control cost calculations as unjustified
in the absence of documentation that the unit will shut down in 2021.
We also note that 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. In addition, we do not consider using identical
baseline emissions for No. 2 fuel oil and natural gas appropriate,
although this likely did not affect either AEPCO's or ADEQ's BART
determination, which was informed primarily by emission estimates based
on No. 6 fuel oil, the highest emitting fuel.
    By including a natural gas-only fuel restriction, ADEQ's BART
determination of LNB with FGR results in a NOX emissions
limit of 0.056 lb/MMBtu, which is more stringent than any of the
control options that AEPCO and ADEQ considered in conjunction with No.
6 or No. 2 fuel oil. Neither AEPCO's nor ADEQ's analysis, however,
included visibility modeling for control options on a natural gas-only
basis. The absence of such information does not allow us to fully
evaluate if options more stringent than LNB with FGR are appropriate on
a natural gas-only basis. Nevertheless, we are proposing to approve
ADEQ's NOX BART determination of LNB with FGR (natural gas
usage only) with an emission limit of 0.056 lb/MMBtu for Apache Unit 1.
b. BART for PM10
    ADEQ's Analysis: Apache Unit 1 currently operates with no
PM10 controls. In its BART analysis submitted to ADEQ, AEPCO
developed baseline emissions for multiple fuel use scenarios including
natural gas, and No. 2 and No. 6 fuel oil usage. Baseline
PM10 emissions for all fuels were calculated based on AP-42
emission factors.\32\ A summary of these emissions is in Table 4.
---------------------------------------------------------------------------

    \32\ See Docket Item B-02, Page 2-1 of AEPCO Apache 1 BART
Analysis.
---------------------------------------------------------------------------

    AEPCO examined multiple control options for PM10 at
Apache Unit 1, including add-on controls and fuel switching. A summary
of cost of compliance and degree of visibility improvement for these
options is summarized in Table 6. These cost and visibility improvement
values are based on baseline and control case emissions corresponding
to No. 6 fuel oil usage, which of the three fuels considered generates
the greatest PM10 emissions. In its BART analysis, AEPCO
cited high costs of compliance and minimal visibility improvements for
the PM10 control options, and proposed no PM10
controls as BART for PM10, using either natural gas or No. 2
fuel oil. Based on the data and analysis provided by AEPCO, ADEQ
determined that BART for PM10 at Apache Unit 1 is no
additional controls, but also determined that a fuel restriction to
allow only the use of natural gas was appropriate. This corresponds to
a PM10 BART emission

limit for Apache Unit 1 of 0.0075 lb/MMBtu.\33\
---------------------------------------------------------------------------

    \33\ See Docket Item B-01. Emission rate as specified in Table
10.5, Appendix D (Technical Support Document) of Arizona Regional
Haze SIP.

                                         Table 6--Apache Unit 1: Arizona's Cost and Visibility Analysis for PM10
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Cost-effectiveness \a\    Visibility Improvement
                                                                                ($/ton)                  \b\ (dv)
                                                                 Emission    Emissions    Annualized ---------------------------------------------------
                        Control option                          rate (lb/     removed      cost ($/                Incremental     Total     Incremental
                                                                  MMBtu)     (tons/yr)      year)       Average        (from     (from base      (from
                                                                                previous)      case)      previous)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.....................................................       0.0737  ...........  ...........  ...........  ...........  ...........  ...........
Fabric Filter................................................        0.015          116    3,615,938       31,172  ...........        0.010  ...........
Fuel switch to PNG...........................................       0.0075  ...........            0  ...........  ...........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Cost-effectiveness values as reported in Table 10.6, Appendix D (TSD) of Arizona RH SIP. See Docket Item B-01.
b As summarized in Table 5-12, AEPCO Apache 1 BART Analysis. See Docket Item B-02. Visibility improvement at Chiricahua Wilderness Area, the Class I
  area exhibiting the highest impact.

    EPA's Evaluation: ADEQ's PM10 analysis includes many of
the same issues we noted in its NOX analysis, including the
use of an eight-year plant remaining useful life, and inclusion of
costs that are disallowed by EPA's Control Cost Manual. Although we do
not agree with elements of ADEQ's PM10 BART analysis for
Apache Unit 1, we find that its conclusion is reasonable, given the
small visibility improvement projected to result from PM10
reductions at this Unit. Thus, we are proposing to approve ADEQ's
PM10 BART determination for Apache Unit 1.
c. BART for SO2
    ADEQ's Analysis: Apache Unit 1 currently operates with no
SO2 controls. In its BART analysis submitted to ADEQ, AEPCO
developed baseline emissions for multiple fuel use scenarios including
natural gas, and No. 2 and No. 6 fuel oil. Baseline natural gas
emissions were based upon the highest 75 percent load 24-hour
SO2 emission levels reported in EPA's Acid Rain Database for
2006. Since the only fuel burned in 2006 was natural gas, baseline
emissions for No. 2 or No. 6 fuel oil usage could not be developed
based on data from 2006. Baseline emissions for No. 2 and No. 6 fuel
oil usage were estimated using AP-42 emission factors.\34\ A summary of
these emissions is summarized in Table 4.
---------------------------------------------------------------------------

    \34\ See Docket Item B-02. Page 2-2 of AEPCO Apache 1 BART
Analysis.
---------------------------------------------------------------------------

    AEPCO also examined multiple control options for SO2 on
Apache 1, including add-on controls and fuel-switching. A summary of
cost of compliance and degree of visibility improvement for these
options is summarized in Table 7. These cost and visibility improvement
values are from baseline and control case emissions corresponding to
No. 6 fuel oil usage, which is the fuel type that generates the
greatest SO2 emissions. In its BART analysis, AEPCO cited
high costs of compliance and minimal visibility improvements for the
SO2 control options, and proposed no additional
SO2 controls, using either natural gas or No. 2 fuel oil, as
BART for SO2. ADEQ determined that BART for SO2
is no additional controls, but added a fuel restriction to allow only
the use of natural gas. This corresponds to an SO2 BART
emission limit for Apache Unit 1 of 0.00064 lb/MMBtu.\35\
---------------------------------------------------------------------------

    \35\ See Docket Item B-01. Emission rate as specified in Table
10.7, Appendix D (Technical Support Document) of Arizona Regional
Haze SIP.

                                         Table 7--Apache Unit 1: Arizona's Cost and Visibility Analysis for So2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Cost-effectiveness a ($/    Visibility Improvement b
                                                                                ton)                        (dv)
                                                              Emission    Emissions    Annualized ------------------------------------------------------
                      Control option                         rate (lb/     removed      cost ($/                Incremental     Total       Incremental
                                                               MMBtu)     (tons/yr)      year)       Average        (from     (from base       (from
                                                                                previous)      case)        previous)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..................................................        0.906  ...........  ...........  ...........  ...........  ...........  ..............
Fuel switch to low-sulfur fuel oil........................        0.051  ...........  ...........  ...........  ...........  ...........  ..............
Spray dryer absorber (dry FGD) 1..........................         0.10        1,587    3,881,706        2,446  ...........        0.765  ..............
Fuel switch to PNG........................................      0.00064  ...........            0  ...........  ...........  ...........  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Cost-effectiveness values as reported in Table 10.8, Appendix D (TSD) of Arizona RH SIP. See Docket Item B-01.
b As summarized in Table 5-12, AEPCO Apache 1 BART Analysis. See Docket Item B-02. Visibility improvement at Chiricahua Wilderness Area, the Class I
  area exhibiting the highest impact.

    EPA's Evaluation: The SO2 analysis includes many of the
same issues we noted in the NOX analysis, including the use
of an eight-year plant remaining useful life, and inclusion of costs
that are disallowed by EPA's Control Cost Manual. ADEQ's BART
determination, requiring the use of only natural gas, results in an
SO2 emission limit of 0.00064 lb/MMBtu. This emission rate
is more stringent than any of the control options that ADEQ considered
in conjunction with No. 6 fuel oil. We are proposing to approve ADEQ's
BART determination for SO2 as an emission limit of 0.00064
lb/MMBtu at Apache Unit 1.
2. Apache Units 2 and 3
    Apache Units 2 and 3 are both dry-bottom, Riley Stoker turbo-fired
boilers, each with a gross unit output of 204 MW. Both units are BART-
eligible and are coal-fired boilers operating on sub-bituminous coal.
Although there are physical differences between the two units, ADEQ
found that the overall

differences are minimal and therefore considered both units together in
its BART analysis. As with Apache Unit 1, ADEQ's analysis relied
largely on information provided by AEPCO and its contractor. This
information is summarized below, along with ADEQ's determinations for
each pollutant and EPA's evaluation.
    While the following sections describe both ADEQ's and EPA's
evaluations based on the information in the record, we note that we
received additional information from AEPCO on June 29, 2012, related to
the potential adverse impacts of the affordability of NOX
controls. AEPCO states that affordability is affected by its small
size, the low income profiles of AEPCO's service area, and AEPCO's
ability to access financing. While this information came in too late to
be evaluated as part of this proposed rulemaking, EPA has put the
information in the docket and will evaluate it during the public
comment period.\36\
---------------------------------------------------------------------------

    \36\ See 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.
---------------------------------------------------------------------------

a. BART for NOX
    ADEQ's Analysis: AEPCO developed baseline NOX emissions
by examining the average NOX emissions from 2002 to 2007, a
time period in which both units were equipped with OFA as
NOX emission controls.\37\ AEPCO examined several
NOX control technologies, including combustion controls and
add-on post-combustion controls. A summary of Arizona's costs of
compliance and visibility impacts associated with these options is
presented in Table 8. ADEQ relied on this information from the facility
to develop its RH SIP.\38\ Estimates of control technology emission
rates were developed based on a combination of vendor quotes,
contractor information, and internal AEPCO information regarding
environmental upgrades.\39\ Annual emission reductions were calculated
based on the emission rate estimates combined with annual capacity
factors as specified by AEPCO.\40\ Control costs were developed based
on a combination of vendor quotes and contractor information. These
cost calculations provided line item summaries of capital costs and
annual operating costs, but did not include further supporting
information such as detailed equipment lists, vendor quotes, or the
design basis for line item costs.
---------------------------------------------------------------------------

    \37\ See Docket Item B-03 and B-04, AEPCO Apache BART Analyses,
page 2-2.
    \38\ See Docket Item B-03 and B-04, AEPCO Apache BART Analyses.
This information is also summarized in Docket Item B-01, Arizona
Regional Haze SIP, Appendix D, Tables 10.10 through 10.13.
    \39\ As listed in Table 3-2, Docket Items B-03 and B-04, AEPCO
Apache BART Analyses.
    \40\ As listed in Table 2-1, Docket Items B-03 and B-04. Annual
capacity factors used for each unit are 92% (Apache 2), and 87%
(Apache 3).

                                          Table 8--Apache Units 2 and 3: Arizona's Cost and Visibility Summary
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Cost-effectiveness ($/   Visibility improvement
                                                                                ton)               \a\ (deciviews)        Cost per
                                                     Emission    Emissions   Annualized  --------------------------------------------------     total
                  Control option                     rate (lb/    removed     cost ($/                Incremental     Total    Incremental    deciview
                                                      MMBtu)     (tons/yr)      year)       Average       (from       (from        (from     improvement
                                                                                previous)    baseline)   previous)      ($/dv)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Apache Unit 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
OFA (baseline)....................................        0.47  ..........  ............  ..........  ...........  ..........  ...........  ............
LNB + OFA.........................................        0.31       1,305      $533,000        $408  ...........       0.267  ...........    $1,996,000
ROFA..............................................        0.26       1,710     1,664,000         973          305       0.359        0.092     4,636,000
SNCR + LNB + OFA..................................        0.23       1,953     1,738,000         890        1,860       0.416        0.057     4,532,000
ROFA w/Rotamix....................................        0.18       2,358     2,225,000         944          866       0.491        0.075     4,177,000
SCR + LNB + OFA...................................        0.07       3,250     6,102,000       1,878        4,346       0.676        0.185     9,028,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Apache Unit 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
OFA (baseline)....................................        0.43  ..........  ............  ..........  ...........  ..........  ...........  ............
LNB + OFA.........................................        0.31         926       532,808         575  ...........       0.206  ...........     2,586,000
ROFA..............................................        0.26       1,312     1,643,241       1,252          322       0.298        0.092     5,484,000
SNCR + LNB + OFA..................................        0.23       1,543     1,717,633       1,113        1,920       0.356        0.058     5,004,000
ROFA w/Rotamix....................................        0.18       1,929     2,181,833       1,131          873       0.436        0.080     4,825,000
SCR + LNB + OFA...................................        0.07       2,778     6,062,301       2,182        4,571       0.633        0.197     9,577,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ At the Class I area exhibiting the greatest baseline visibility impact, Chiricahua Wilderness Area.

    Regarding visibility impacts, ADEQ relied on visibility modeling
submitted by AEPCO to evaluate the visibility improvement attributable
to each of the NOX control technologies that it considered.
This visibility modeling was performed using three years of
meteorological data (2001 to 2003), and was generally performed in
accordance with the WRAP modeling protocol. The average of the three
98th percentiles from the modeled years 2001 to 2003 was used as the
visibility metric for each emission scenario and Class I area. For
assessing the degree of visibility improvement, ADEQ considered only
the visibility benefits at the area with the highest base case (pre-
control) impact: Chiricahua National Monument and Chiricahua Wilderness
Area (two nearby Class I areas served by one air monitor). For each
control, ADEQ listed visibility improvement in deciviews, and cost in
millions of dollars per deciview improvement.\41\ Results are
comparable for both units, with Unit 2 showing somewhat higher
visibility benefits and somewhat lower cost per improvement than Unit
3. Unit 2 visibility improvements range from 0.27 dv for LNB to 0.68 dv
for SCR, while the costs per deciview range from $2 million for LNB to
over $9 million for SCR. ADEQ concluded that LNBs with the existing OFA
systems represent BART for Units 2 and 3, though no explicit reasoning
is provided for the selection.
---------------------------------------------------------------------------

    \41\ Arizona SIP submittal, ``Appendix D: Arizona BART--
Supplemental Information'', p. 65.
---------------------------------------------------------------------------

    ADEQ determined that LNB plus OFA constitute BART for
NOX at Apache Units 2 and 3. In making this determination,
ADEQ did not provide adequate information regarding its rationale or
weighing of the five factors. ADEQ stated only that ``(A)fter reviewing
the company's BART analysis, and based upon the information above, ADEQ
has

determined that, for Units 2 and 3 BART for NOX is new LNBs
and the existing OFA system with a NOX emissions limit of
0.31 lb/MMBtu * * *.'' \42\
---------------------------------------------------------------------------

    \42\ Docket Item B-01, Arizona Regional Haze SIP, Appendix D,
Page 65.
---------------------------------------------------------------------------

    EPA's Evaluation: We disagree with several aspects of the
NOX BART analysis for Apache Units 2 and 3. The control cost
calculations included line item costs not allowed by the EPA Control
Cost Manual, such as owner's costs, surcharge, and AFUDC. Inclusion of
these line items has the effect of inflating the total cost of
compliance and the cost per ton of pollutant reduced.
    Regarding visibility improvement as shown in Table 8, ADEQ chose
LNB as BART, which provides the lowest visibility benefit of any of the
controls modeled. By contrast, SCR would provide an improvement of more
than 0.5 dv at a single Class I Area, and a substantial incremental
benefit relative to the next more stringent control, ROFA-Rotamix.
Multiple Class I areas have comparable benefits. The visibility
benefits are larger than those listed, if both Units 2 and 3 are
considered together. (See Table 17 below for EPA's visibility results.)
The SCR cost per deciview of improvement is lower than those for Cholla
and Coronado, as indicated below in their respective sections.
    ADEQ provides little explicit reasoning about the visibility basis
for the BART selection. For example, there is no weighing of visibility
benefits and visibility cost-effectiveness for the various candidate
controls and the various Class I areas. The modeling results show that
controls more stringent than LNB appear to be needed to give
substantial visibility benefits. Visibility impacts at eight nearby
Class I areas were not considered, and the visibility benefits of
simultaneous controls on both units were not considered. For these
reasons, EPA believes that ADEQ gave insufficient consideration to the
visibility benefits of the various NOX control options
available at Apache Units 2 and 3.
    In summary, we find that ADEQ has not provided an adequate
justification for adopting LNB with OFA as the ``best'' level of
control.\43\ Although ADEQ has developed information regarding each of
the five factors, there are problems in both its cost and visibility
analyses as described above. Moreover, ADEQ's BART analysis does not
explain how it weighed these factors. For example, ADEQ did not
indicate whether or not it considered any cost thresholds to be
reasonable or expensive in analyzing the costs of compliance for the
various control options. We note that ADEQ has made similar
NOX BART determinations of LNB with OFA at other facilities,
such as Cholla Power Plant. Although ADEQ's BART determinations for
these other facilities implied that cost of compliance was an important
consideration, it does not provide a rationale for this selection of
NOX BART.\44\ Thus, we are proposing to disapprove ADEQ's
BART determination for NOX at Apache Units 2 and 3, since it
does not comply with 40 CFR 51.308(e)(1)(ii)(A).
---------------------------------------------------------------------------

    \43\ See BART Guidelines, Sec.  IV.E.2.
    \44\ We do note, however, that AEPCO does provide some
additional analysis on this position in the Apache BART analyses it
submitted to ADEQ. Aside from stating that it reviewed AEPCO's
analysis, ADEQ did not specifically reference or include any aspects
of AEPCO's analysis in the RH SIP. As a result, we are not assuming
that ADEQ necessarily agrees with AEPCO's rationale, and have
therefore not provided an evaluation of it.
---------------------------------------------------------------------------

b. BART for PM10
    ADEQ's Analysis: The existing PM10 controls on Apache
Units 2 and 3 are hot-side Electrostatic Precipitators (ESPs).\45\
AEPCO and ADEQ considered three potential retrofit control options for
PM10:
---------------------------------------------------------------------------

    \45\ See Appendix D, pages 65-69 for ADEQ's BART Analysis for
PM10 at Apache Units 2 and 3. See AEPCO Apache Unit 2
BART Analysis.
---------------------------------------------------------------------------

     Performance upgrades to existing hot-side ESP,
     Replacement of current ESP with a fabric filter, and
     Installation of a polishing fabric filter after ESP.

ADEQ found that all of these options are technically feasible and
estimated their associated emission rates as shown in Table 9.

Table 9--Apache Units 2 and 3: Arizona's Controls and Emission Rates for
                                  PM10
------------------------------------------------------------------------
           Control technology              Expected PM10 emission rate
------------------------------------------------------------------------
ESP Upgrades...........................  0.03 lb/MMBtu.
Full Size Fabric Filter................  0.015 lb/MMBtu.
Polishing Fabric Filter................  0.015 lb/MMBtu.
------------------------------------------------------------------------

ADEQ found that a fabric filter, whether in addition to or as
replacement for the ESP, would require additional energy, but did not
identify any non-air environmental impacts from any of the three
options. The cost of compliance and degree of visibility improvement
for each of these options, as analyzed by ADEQ, are summarized in
Tables 10 and 11.

                Table 10--Apache Unit 2: Arizona's Control Cost of Visibility Reduction for PM10
----------------------------------------------------------------------------------------------------------------
                                                                       Total         Cost per
                                                     Deciview       annualized       deciview      Average cost
                     Control                         reduction     cost (million      reduced         ($/ton)
                                                                        $)        (million $/dv)
----------------------------------------------------------------------------------------------------------------
ESP Upgrades....................................      Unknown         Unknown         Unknown         Unknown
Polishing Fabric Filter.........................           0.085          $2.217          $26.09          $9,121
Full Size Fabric Filter.........................           0.085           2.888           33.98          11,880
----------------------------------------------------------------------------------------------------------------

                Table 11--Apache Unit 3: Arizona's Control Cost of Visibility Reduction for PM10
----------------------------------------------------------------------------------------------------------------
                                                                       Total         Cost per
                                                     Deciview       annualized       deciview      Average cost
                     Control                         reduction     cost (million      reduced         ($/ton)
                                                                        $)        (million $/dv)
----------------------------------------------------------------------------------------------------------------
ESP Upgrades....................................      Unknown         Unknown         Unknown         Unknown
Polishing Fabric Filter.........................           0.094          $2.192          $23.32          $9,471
Full Size Fabric Filter.........................           0.094          $2.869          $30.52          12,390
----------------------------------------------------------------------------------------------------------------

     Based on its analysis of the five BART factors, as summarized
above, ADEQ found BART for PM10 is upgrades to the existing
ESP and a PM10 emissions limit of 0.03 lb/MMBtu for Units 2
and 3. In particular, ADEQ referred to installation of a flue gas
conditioning system, improvements to the scrubber bypass damper system,
and implementation of programming optimization measures for ESP
automatic voltage controls as potential upgrades. ADEQ also noted that
``PM10 emissions will be measured by conducting EPA Method
201/202 tests.''
    EPA's Evaluation: As noted above, AEPCO's and ADEQ's control cost
calculations include costs that are disallowed by EPA's Control Cost
Manual, such as owner's costs and AFUDC.\46\ In addition, AEPCO's and
ADEQ's analyses do not demonstrate that all potential upgrades to the
existing ESP were fully evaluated. Nonetheless, based on the small
visibility improvement associated with PM10 reductions from
these units (e.g., less than 0.1 dv improvement from the most stringent
technology), we conclude that additional analyses of control options
would not result in a different BART determination. As a result, we
propose to approve ADEQ's PM10 BART determination at Apache
Units 2 and 3.
---------------------------------------------------------------------------

    \46\ See AEPCO BART Analysis Technical Memorandum dated July 8,
2009, page 12.
---------------------------------------------------------------------------

    Finally, we are seeking comment on whether test methods other than
EPA Method 201 and 202 \47\ (chosen by ADEQ) should be allowed or
required for establishing compliance with the PM10 limits
that we are approving. In particular, as explained below, use of SCR
\48\ at these units is expected to result in increased condensable
particulate matter in the form of sulfuric acid mist
(H2SO4). In effect, the emission limit would be
more stringent than intended by ADEQ and would likely not be achievable
in practice. In order to avoid this result, while still assuring proper
operation of the particulate control devices, we are requesting on
comment on whether to allow compliance with the PM10 limit
to be demonstrated using test methods that do not capture condensable
particulate matter, namely EPA Methods 1 through 4 and Method 5 or
Method 5e.\49\ Method 201 is very rarely used for testing. The typical
method used for filterable PM10 is Method 201A, ``constant
sampling rate procedure,'' which is similar to Method 201, but is much
more practical to perform on a stack.
---------------------------------------------------------------------------

    \47\ See 40 CFR part 51 Appendix M.
    \48\ EPA is proposing SCR as BART for all of the coal-fired
units. See Section VII.
    \49\ See 40 CFR part 60 appendix A.
---------------------------------------------------------------------------

c. BART for SO2
    ADEQ's Analysis: Apache Units 2 and 3 currently have wet limestone
scrubbers installed for SO2 removal.\50\ Under the BART
Guidelines, a state is not required to evaluate the replacement of the
current SO2 controls if their removal efficiency is over 50
percent, but should consider cost-effective scrubber upgrades designed
to improve the system's overall SO2 removal efficiency.
Relying upon the BART analysis submitted by AEPCO,\51\ ADEQ found that
the following potential upgrades to the scrubbers are technically
feasible:
---------------------------------------------------------------------------

    \50\ See Arizona Regional Haze SIP, Appendix D, pages 69-71 for
ADEQ's BART Analysis for SO2 at Apache Units 2 and 3.
    \51\ See AEPCO Apache Unit 2 BART Analysis.
---------------------------------------------------------------------------

     Elimination of bypass reheat,
     Installation of liquid distribution rings,
     Installation of perforated trays,
     Use of organic acid additives,
     Improved or upgraded scrubber auxiliary system equipment,
and
     Redesigned spray header or nozzle.
    ADEQ found that any upgrades likely would not increase power
consumption, but would increase scrubber waste disposal and makeup
water requirements, and would reduce the stack gas temperature. These
three factors are the normal outcome of treating more of the exhaust
gas and removing more of the SO2 (increased scrubber waste
disposal) and should not be given much weight in selecting a BART
emission limit. ADEQ also noted that AEPCO had already made the
following upgrades to the scrubbers: Elimination of flue gas bypass;
splitting the limestone feed to the absorber feed tank and tower sump;
upgrade of the mist eliminator system; installation of suction screens
at pump intakes; automation of pump drain valves, and replacement of
scrubber packing with perforated stainless steel trays. In addition,
AEPCO tried using dibasic acid additive, but found that it did not
result in significantly higher SO2 removal. ADEQ did not
evaluate the cost or visibility impacts of any additional upgrades to
the scrubbers, but determined that BART for SO2 emissions
was no new controls and an emission limit of 0.15 lb/MMBtu on a 30-day
rolling average basis.
    EPA's Evaluation: We are proposing to approve ADEQ's SO2
BART determination for Apache Units 2 and 3. Although ADEQ has not
demonstrated that it fully considered all cost effective scrubber
upgrades, as recommended by the BART Guidelines, ADEQ conducted a five-
factor BART analysis and its final SO2 BART determination
for Apache Units 2 and 3 is consistent with the presumptive BART limit
of 0.15 lb/MMBtu for utility boilers.\52\ We have no evidence that
additional analysis would have resulted in a lower emission limit.
Therefore, we are proposing to approve the SO2 emission
limit of 0.15 lb/MMBtu (30-day rolling average) for Apache Units 2 and
3.
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    \52\ See BART Guidelines Sec.  IV.E.4.
---------------------------------------------------------------------------

    However, we note that Apache can receive coal from a number of
different mines that can have differing sulfur content and potential
for SO2 emissions.\53\ Therefore, we are seeking comment on
whether additional cost-effective scrubber upgrades are available that
would warrant a lower emission limit. We are also requesting comment on
whether requiring 90 percent control efficiency in addition to the lb/
MMBtu limit would better assure proper operation of the upgraded
scrubbers when burning some types of low-sulfur western coal. If we
receive information establishing that a lower limit is achievable or
that a control efficiency requirement is needed, then we may disapprove
the SO2 emissions limit set by ADEQ and promulgate a revised
limit for one or both of these units.
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    \53\ See, e.g. Apache Unit 2 BART Analysis, Table 3-1.
---------------------------------------------------------------------------

3. Cholla Units 2, 3 and 4
    Cholla Power Plant consists of four primarily coal-fired
electricity generating units with a total plant-wide generating
capacity of 1,150 megawatts. Unit 1 is a 125 MW tangentially-fired,
dry-bottom boiler that is not BART-eligible. Units 2, 3 and 4 have
capacities of 300 MW, 300 MW and 425 MW, respectively, and are
tangentially-fired, dry-bottom boilers that are each BART-eligible.
Based on information provided by APS, the Cholla units operate on a
blend of bituminous and sub-bituminous rank coals from the Lee Ranch
and El Segundo mines.\54\
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    \54\ A copy of the coal contract, including obligation amounts
and coal quality, can be found in Docket Item B-09, ``Additional APS
Cholla BART response'', Appendix B.
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a. BART for NOX
    ADEQ's Analysis: APS submitted a BART analysis to ADEQ in January
2008. At the time of submittal, Cholla Units 2, 3 and 4 were equipped
with close-coupled overfire air (COFA) as NOX controls. APS
developed baseline NOX emissions by examining the highest
24-hour average emissions from

2001 to 2003.\55\ APS examined several NOX control
technologies, including combustion controls and add-on post combustion
controls. A summary of the costs of compliance and visibility impacts
associated with these options is presented in Table 12.
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    \55\ See Docket Item B-06 through -08, APS Cholla BART Analyses,
page 2-2.

                                    Table 12--Cholla Units 2, 3, and 4: Arizona's Cost and Visibility Summary for NOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Cost-effectiveness ($/   Visibility improvement
                                                                                ton)               \a\ (deciviews)        Cost per
                                                     Emission    Emissions   Annualized  --------------------------------------------------     total
                  Control option                     rate (lb/    removed     cost ($/                Incremental     Total    Incremental    deciview
                                                      MMBtu)     (tons/yr)      year)       Average      (from        (from       (from      improvement
                                                                                previous)    baseline)   previous)      ($/dv)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Cholla 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
COFA (baseline)...................................        0.50  ..........  ............  ..........  ...........  ..........  ...........  ............
LNB + SOFA........................................        0.22       3,314      $635,000        $192  ...........       0.187  ...........    $3,400,000
SNCR + LNB + SOFA.................................        0.17       3,900     2,175,000         558        2,628       0.218        0.031     9,980,000
ROFA..............................................        0.16       4,017     2,297,000         572        1,043       0.232        0.014     9,900,000
ROFA w/Rotamix....................................        0.12       4,485     3,384,000         755        2,323       0.261        0.029    12,970,000
SCR + LNB + SOFA..................................        0.07       5,071     9,625,000       1,898       10,650       0.287        0.026    33,540,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Cholla 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
COFA (baseline)...................................        0.41  ..........  ............  ..........  ...........  ..........  ...........  ............
LNB + SOFA........................................        0.22       2,096       635,000         303  ...........        0.13  ...........     5,040,000
SNCR + LNB + SOFA.................................        0.17       2,648     2,157,000         815        2,757        0.16        0.038    13,150,000
ROFA..............................................        0.16       2,758     2,243,000         813          782        0.17        0.005    13,270,000
ROFA w/Rotamix....................................        0.12       3,200     3,308,000       1,034        2,410        0.20        0.029    16,710,000
SCR + LNB + SOFA..................................        0.07       3,751     9,569,000       2,551       11,363        0.23        0.032    41,610,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Cholla 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
COFA (baseline)...................................        0.42  ..........  ............  ..........  ...........  ..........  ...........  ............
LNB + SOFA........................................        0.22       3,390       820,000         242  ...........        0.21  ...........     3,960,000
SNCR + LNB + SOFA.................................        0.17       4,259     2,852,000         670        2,338        0.27        0.058    10,760,000
ROFA..............................................        0.16       4,433     3,179,000         717        1,879        0.28        0.016    11,310,000
ROFA w/Rotamix....................................        0.12       5,129     4,537,000         885        1,951        0.34        0.055    13,500,000
SCR + LNB + SOFA..................................        0.07       5,998    13,230,000       2,206       10,003        0.41        0.072    32,430,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ At the Class I area exhibiting the greatest baseline visibility impact, Petrified Forest National Park.

    This information is contained in the Cholla BART analyses for each
unit, and was relied upon by ADEQ in developing its RH SIP.\56\
Estimates of control technology emission rates were developed based on
a combination of vendor quotes, contractor information, and internal
APS information regarding environmental upgrades.\57\ Annual emission
reductions were calculated based upon the emission rate estimates
combined with annual capacity factors as reported in CAMD data from
2001 to 2006.\58\ Control costs were also developed based on a
combination of vendor quotes and contractor information. These cost
calculations provided line item summaries of capital costs and annual
operating costs, but did not provide further supporting information
such as detailed equipment lists, vendor quotes, or the design basis
for line item costs.
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    \56\ See Docket Item B-06 through -08, APS Cholla BART Analyses.
This information is also summarized in Docket Item B-01, Arizona
Regional Haze SIP, Appendix D, Tables 11.3 through 11.5.
    \57\ As described in Table 3-2, Docket Items B-06 through -08,
APS Cholla BART Analyses.
    \58\ As listed in Table 2-1, Docket Items B-06 through -08.
Annual capacity factors used for each unit are 91 percent (Cholla
2), 86 percent (Cholla 3), and 93 percent (Cholla 4).
---------------------------------------------------------------------------

    As part of its BART analysis, APS performed visibility modeling in
order to evaluate the visibility improvement attributable to each of
the NOX control technologies that it considered. This
visibility modeling was performed using three years of meteorological
data (2001 to 2003), and was generally performed in accordance with the
WRAP protocol, with a few exceptions. For example, rather than using a
constant monthly ammonia background concentration of 1.0 ppb as
specified in the WRAP protocol, APS used a variable monthly background
ammonia concentration that varied from 0.2 ppb to 1.0 ppb.
    For assessing the degree of visibility improvement, ADEQ considered
only the visibility benefits at the area with the highest base case
(pre-control) impact, the Petrified Forest National Park. For each
control, ADEQ listed visibility improvement in deciviews, and
visibility cost-effectiveness, (Arizona SIP submittal, ``Appendix D:
Arizona BART--Supplemental Information'', p.77) as in the comparable
section for Apache. For Unit 2, improvements range from 0.19 dv for LNB
with SOFA to 0.29 dv for SCR. Costs per deciview range from $3.4
million for LNB to $33.5 million for SCR. Benefits for Unit 3 are about
20 percent lower (0.13 to 0.23 deciview), and for Unit 4 are about 20
percent higher (0.21 to 0.41 deciview), with percent differences
increasing with more stringent control. For Unit 3, costs per deciview
range from $5 million for LNB with SOFA to $41.6 million for SCR (about
30 percent higher than for Unit 2). For Unit 4, costs range from $4
million for LNB with SOFA to $32.4 million for SCR (about 20 percent
higher except that SCR has a slightly lower cost per deciview).
    ADEQ concluded (ibid., p. 79) that LNBs with new SOFA systems
represent BART for all three units, noting that for all scenarios the
visibility benefits were less than 0.5 dv. ADEQ also stated that SCR,
the most expensive option, provides only about 0.1 dv benefit more than
LNB with SOFA, the least expensive option. This statement appears to
apply only to Units 2 and 3; the comparable benefit for Unit 4 is 0.2
dv.
    In evaluating APS' BART analysis, ADEQ requested supporting
information explaining certain assumptions used in the economic
analysis, baseline emissions, and control technology options. Based on
this additional

information as well as APS' original BART analysis, ADEQ determined
that LNB with SOFA is BART for NOX at Cholla Units 2, 3, and
4. In making this determination, ADEQ relied almost exclusively on the
degree of visibility improvement. ADEQ cited small visibility
improvement on a per-unit basis, stating that ``the change in deciviews
between the least expensive and most expensive NOX control
technologies [..] is only 0.104 deciviews.'' \59\ ADEQ's determination
suggests that total capital costs may have been a consideration,
although it is not clear to what extent this may have informed ADEQ's
decision making, with the RH SIP simply stating, ``[t]he corresponding
capital costs are $5.4 million for LNB/SOFA and $82.8 million for SCR
with LNB/SOFA.'' \60\
---------------------------------------------------------------------------

    \59\ Docket Item B-01, Arizona Regional Haze SIP, Appendix D,
Page 79.
    \60\ Id.
---------------------------------------------------------------------------

    EPA's Evaluation: We disagree with several aspects of the analyses
performed for Cholla Units 2, 3, and 4. Regarding the control cost
calculations, we note that certain line item costs not allowed by the
EPA Control Cost Manual were included, such as owner's costs,
surcharge, and AFUDC. Inclusion of these line items has the effect of
inflating the total cost of compliance and the cost per ton of
pollutant reduced. As a result, we are proposing to find that ADEQ did
not follow the requirements of section 51.308(e)(1)(ii)(A) by not
properly considering the costs of compliance for each control option.
    Regarding ADEQ's analysis of visibility impacts, the modeling
procedures relied on by ADEQ for assessing the visibility impacts from
Cholla were generally in accord with EPA guidance, but the use of the
modeling results in evaluating the BART visibility factor was
problematic. As was the case for Apache, ADEQ appears to have
considered benefits from controls on only one emitting unit at a time.
EPA believes that ADEQ's use of this procedure substantially
underestimates the degree of visibility improvement from controls. ADEQ
also overlooked comparable benefits at seven Class I areas besides
Petrified Forest, thereby understating the full visibility benefits of
the candidate controls. Using the default 1 ppb ammonia background
concentration would also have increased estimated impacts and control
benefits. For these reasons, EPA proposes to find that the ADEQ
selection of LNB for Cholla under the degree of visibility improvement
BART factor is not adequately supported, and that more stringent
control may be warranted.
b. BART for PM10
    ADEQ's Analysis: As of May 2009, Cholla Units 3 and 4 were both
equipped with fabric filters for PM10 control, while Cholla
Unit 2 was equipped with a mechanical dust collector and a venturi
scrubber.\61\ In its BART analysis, ADEQ noted that the facility had
committed to install a fabric filter at Unit 2 by 2015. Because fabric
filters are the most stringent control available for reducing
PM10 emissions, ADEQ did not conduct a full BART analysis,
but concluded that fabric filters and an emission limit of 0.015 lb/
MMBtu are BART for control of PM10 at Units 2, 3, and 4.
ADEQ also noted that ``PM10 emissions will be measured by
conducting EPA Method 201/202 tests.''
---------------------------------------------------------------------------

    \61\ See Arizona Regional Haze SIP, Appendix D, pages 79-81 for
ADEQ's BART Analysis for PM10 at Cholla Units 2, 3, and
4.
---------------------------------------------------------------------------

    EPA's Evaluation: Given that ADEQ has chosen the most stringent
control technology available and set an emissions limit consistent with
other units employing this technology, we are proposing to approve this
BART determination of an emission limit of 0.015 lb/MMBtu for
PM10 at Cholla Units 2, 3, and 4.
c. BART for SO2
    Cholla Units 2, 3, and 4 are all equipped with wet lime scrubbers
for SO2 control.\62\ Specifically, Unit 2 is equipped with
four venturi flooded disc scrubbers/absorber with lime reagent, capable
of achieving 0.14 lb/MMBtu to 0.25 lb/MMBtu of SO2. Units 3
and 4 were retrofitted in 2009 and 2008, respectively, with scrubbers
capable of achieving 0.15 lb/MMBtu of SO2.
---------------------------------------------------------------------------

    \62\ See Arizona Regional Haze SIP, Appendix D, pp. 81-83, for
ADEQ's BART Analysis for SO2 at Cholla Units 2, 3, and 4.
---------------------------------------------------------------------------

    ADEQ's Analysis: Based on a limited five-factor analysis, ADEQ
determined BART for SO2 at Cholla Unit 2 is upgrades to the
existing scrubber that would achieve a limit of 0.15 lb/MMBtu. Because
the BART analysis submitted by APS was conducted prior to installation
of the scrubbers on Units 3 and 4, it included an analysis of other
potential control technologies, namely, dry flue gas desulfurization
and dry sodium sorbent injection. However, APS had already installed
the wet lime scrubbers by the time ADEQ conducted its own BART
analysis. Therefore, ADEQ did not consider SO2 controls
other than wet lime scrubbers for Units 3 and 4, but determined BART as
use of these scrubbers with an associated emission limit of 0.15 lb/
MMBtu of SO2.
    EPA's Evaluation: We are proposing to approve ADEQ's BART
determination for SO2 at Cholla Units 2, 3, and 4. Although
ADEQ did not fully consider all cost-effective scrubber upgrades as
recommended by the BART Guidelines, we have no basis for concluding
that additional analysis would have resulted in a lower emission limit.
Therefore, we are proposing to approve the SO2 emission
limit of 0.15 lb/MMBtu (30-day rolling average) for Cholla Units 2, 3,
and 4. However, we are seeking comment on whether additional cost-
effective scrubber upgrades are available that would warrant a lower
emission limit. If we receive comments establishing that a lower limit
is achievable, then we may disapprove the SO2 emissions
limit set by ADEQ and promulgate a revised limit for one or more of
these units.
 4. Coronado Units 1 and 2