UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION III

1650 Arch Street

Philadelphia, Pennsylvania 19103-2029



DATE: 	

September 25, 2007



 ADVANCE \x15 SUBJECT:

	NOx and SO2 Emissions Limitations for Power Plants (15 Coal-fired
Electric Generating Units) in Maryland

              /s/



 ADVANCE \x15 FROM:

	Irene Shandruk, Environmental Scientist

 ADVANCE \x15 TO:

	Maryland; Docket No. EPA-R03-OAR-2007-1001

 ADVANCE \x15 THRU:

	Marilyn Powers, Acting Branch Chief      /s/

Air Quality Planning Branch



BACKGROUND

Transported emissions from upwind States significantly contribute to the
8-hour ozone and PM2.5 nonattainment problem in downwind states in the
eastern part of the U.S. So, on March 12, 2005, EPA published the Clean
Air Interstate Rule (CAIR) with the goal of attaining the national
ambient air quality standard (NAAQS) for PM2.5 and/or 8-hour ozone in
downwind States in the eastern United States.  It required that 28
upwind States and the District of Columbia (D.C.) revise their SIPs to
include control measures that reduce emissions of SO2, a precursor of
PM2.5 formation, and/or NOx, a precursor of both PM2.5 and ozone
formation.  CAIR additionally permanently caps power plant emissions of
sulfur dioxide (SO2) and nitrogen oxides (NOx) in the eastern U.S. by
establishing a “cap-and-trade” system for SO2 and NOx.  Under this
approach, EPA distributes emission “allowances” for SO2 and NOx to
each State, and the States can then distribute those allowances to
sources of emissions, which in turn may trade the allowances according
to their needs.  So, this allows sources to choose from many compliance
alternatives, including the purchase of excess allowances, instead of
installing direct emission controls.

On July 13, 2007, the EPA received a request from the Maryland
Department of the Environment (MDE) for the approval of the State
Implementation Plan (SIP) revision concerning emission limitations and
related requirements for NOx and SO2 at 15 coal-fired electric
generating units (EGUs) in Maryland.  The proposed regulations
complement the CAIR program by ensuring that the local reductions
necessary for Maryland to meet ozone and PM2.5 NAAQS actually occur
under the “cap-and-trade” system.  That is, they are stricter than
CAIR in that they establish specific emission limitations for Maryland
sources, and do not allow surrender of allowances to achieve compliance,
consequently requiring installation of on-site pollution controls at
Maryland power plants.  Therefore, these regulations will provide larger
reductions in NOx and SO2 than CAIR alone could achieve and more quickly
allow the State to meet the ozone and PM2.5 NAAQS.

EPA REQUIREMENTS

CAIR establishes State-wide emission budgets for NOx and SO2 and is to
be implemented in two phases.  The first phase of NOx reductions starts
in 2009 and continues through 2014, while the first phase of SO2
reductions starts in 2010 and continues through 2014.  The second phase
of reductions for both NOx and SO2 starts in 2015 and continues
thereafter.  CAIR requires States to implement the budgets by either:
(1) requiring EGUs to participate in the EPA-administered
“cap-and-trade” programs; or (2) adopting other control measures of
the State’s choosing and demonstrating that such control measures will
result in compliance with the applicable State SO2 and NOx budgets.

Additionally, the Healthy Air Act (Ch. 23, Acts of 2006), which was
signed into law on April 6, 2006, specifically vests the MDE with the
regulatory authority to allocate the State-wide SO2 and NOx tonnage caps
amongst the affected units and implement its provisions through the
adoption of regulations.

EVALUATION OF STATE SUBMITTAL

Maryland adopted the regulations for power plant emission limitations on
June 17, 2007 with an effective date of July 16, 2007.  The SIP revision
request was submitted by MDE on July 12, 2007 and received by EPA on
July 13, 2007.  The State requested that regulations (under COMAR
26.11.27) establishing statewide tonnage caps for emissions of NOx and
SO2 from 15 coal-fired electric generating units in Maryland effective
2009 and 2012, and 2010 and 2013, respectively, be approved.  These
regulations also establish monitoring and reporting requirements, and
authorize the MDE to reduce or waive penalties for non-compliance under
certain conditions and provide for judicial review of decisions by the
MDE to grant a reduction or waiver of penalties.

Maryland’s proposed regulations establish specific emission
limitations for NOx and SO2 for Maryland sources, which are stricter
than the federal CAIR rules, and thereby ensure the installation of
on-site controls at Maryland power plants and will enable the State to
attain the ozone and PM2.5 NAAQS by the 2010 attainment deadline. 

RECOMMENDATION  

The State has met the requirements for submitting a SIP revision for
limiting NOx and SO2 emissions from Maryland power plants.  Therefore,
approval of Maryland’s SIP revision for for emission limitations for
power plants is recommended.

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