
[Federal Register Volume 81, Number 138 (Tuesday, July 19, 2016)]
[Proposed Rules]
[Pages 46852-46865]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16959]



[[Page 46852]]

=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2016-0292; FRL-9949-06-Region 9]


Approval and Revision of Air Plans; Arizona; Regional Haze State 
and Federal Implementation Plans; Reconsideration

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve a source-specific revision to the Arizona State Implementation 
Plan (SIP) that addresses requirements for best available retrofit 
technology (BART) at Cholla Generating Station (Cholla). The EPA 
proposes to find that the SIP revision fulfills the requirements of the 
Clean Air Act (CAA) and the EPA's Regional Haze Rule (RHR) for BART at 
Cholla. In conjunction with this proposed approval, we propose to 
withdraw those portions of the federal implementation plan (FIP) that 
address BART for Cholla. We previously partially granted petitions for 
reconsideration of that FIP from Cholla's owners, Arizona Public 
Service Company (APS) and PacifiCorp. We are now proposing to find that 
final withdrawal of the FIP, as it applies to Cholla, would constitute 
our action on APS's and PacifiCorp's petitions for reconsideration of 
the FIP.

DATES: Written comments must be received on or before September 2, 
2016. Requests for public hearing must be received on or before August 
3, 2016.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R09-
OAR-2016-0292 at http://www.regulations.gov, or via email to 
limaye.vijay@epa.gov. For comments submitted at Regulations.gov, follow 
the online instructions for submitting comments. Once submitted, 
comments cannot be edited or removed from Regulations.gov. For either 
manner of submission, the EPA may publish any comment received to its 
public docket. Do not submit electronically any information you 
consider to be Confidential Business Information (CBI) or other 
information whose disclosure is restricted by statute. Multimedia 
submissions (audio, video, etc.) must be accompanied by a written 
comment. The written comment is considered the official comment and 
should include discussion of all points you wish to make. The EPA will 
generally not consider comments or comment contents located outside of 
the primary submission (i.e. on the web, cloud, or other file sharing 
system). For additional submission methods, please contact the person 
identified in the For Further Information Contact section. For the full 
EPA public comment policy, information about CBI or multimedia 
submissions, and general guidance on making effective comments, please 
visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Vijay Limaye, U.S. EPA, Region 9, 
Planning Office, Air Division, Air-2, 75 Hawthorne Street, San 
Francisco, CA 94105. Vijay Limaye can be reached at telephone number 
(415) 972-3086 and via electronic mail at limaye.vijay@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and 
``our'' refer to the EPA.

Table of Contents

I. General Information
II. Background
III. Summary of the Cholla SIP Revision
IV. The EPA's Evaluation of the Cholla SIP Revision
V. Proposed Action
VI. Environmental Justice Considerations
VII. Incorporation by Reference
VIII. 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:
     The words or initials Act or CAA mean or refer to the 
Clean Air Act, unless the context indicates otherwise.
     The initials ADEQ mean or refer to the Arizona Department 
of Environmental Quality.
     The initials AFUDC mean or refer to Allowance for Funds 
Used During Construction.
     The initials APS mean or refer to Arizona Public Service 
Company.
     The words Arizona and State mean the State of Arizona.
     The initials BART mean or refer to Best Available Retrofit 
Technology.
     The term Class I area refers to a mandatory Class I 
Federal area.\1\
---------------------------------------------------------------------------

    \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.''
---------------------------------------------------------------------------

     The initials CBI mean or refer to Confidential Business 
Information.
     The initials CCM mean or refer to the EPA's Control Cost 
Manual.
     The words EPA, we, us or our mean or refer to the United 
States Environmental Protection Agency.
     The initials FIP mean or refer to Federal Implementation 
Plan.
     The initials LNB mean or refer to low-NOX 
burners.
     The initials MMBtu mean or refer to million British 
thermal units
     The initials NOX mean or refer to nitrogen oxides.
     The initials OFA mean or refer to over fire air.
     The initials PM10 mean or refer to particulate matter with 
an aerodynamic diameter of less than 10 micrometers.
     The initials RHR mean or refer to the EPA's Regional Haze 
Rule.
     The initials RP mean or refer to Reasonable Progress.
     The initials RPG or RPGs mean or refer to Reasonable 
Progress Goal(s).
     The initials SCR mean or refer to Selective Catalytic 
Reduction.
     The initials SIP mean or refer to State Implementation 
Plan.
     The initials SNCR mean or refer to Selective Non-catalytic 
Reduction
     The initials SOFA mean or refer to separated over fire 
air.
     The initials SO2 mean or refer to sulfur dioxide.

B. Docket

    The EPA has established docket number EPA-R09-OAR-2016-0292 for 
this action. Generally, documents in the docket for this action are 
available electronically at http://www.regulations.gov or in hard copy 
at EPA Region IX, 75 Hawthorne Street, San Francisco, California 94105-
3901. While all documents in the docket are listed at http://www.regulations.gov, some information may be publicly available only at 
the hard copy location (e.g., copyrighted material, large maps, multi-
volume reports), and some may not be available in either location 
(e.g., confidential business information (CBI)). To inspect the hard 
copy materials, please schedule an appointment during normal business 
hours with the contact listed in the FOR FURTHER INFORMATION CONTACT 
section.

C. Public Hearings

    If anyone contacts the EPA by August 3, 2016 requesting to speak at 
a public hearing, the EPA will schedule a public hearing and announce 
the hearing in the Federal Register. Contact Vijay Limaye at (415) 972-
3086 or at limaye.vijay@epa.gov to request a hearing or to determine if 
a hearing will be held.

[[Page 46853]]

II. Background

A. Statutory and Regulatory Background

    This section provides a brief overview of the requirements of the 
CAA and RHR, as they apply to this particular action. Please refer to 
our previous rulemakings on the Arizona Regional Haze SIP for 
additional background regarding the visibility protection provisions of 
the CAA and the RHR.\2\
---------------------------------------------------------------------------

    \2\ 77 FR 42834, 42837-42839 (July 20, 2012), (Arizona Regional 
Haze ``Phase 1'' Rule) 77 FR 75704, 75709-75712 (December 21, 2012), 
(Arizona Regional Haze ``Phase 2'' Rule).
---------------------------------------------------------------------------

    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 which 
impairment results from manmade air pollution.'' \3\ It also 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 built between 
1962 and 1977 (known as ``BART-eligible'' sources) procure, install, 
and operate BART. In the 1990 CAA Amendments, Congress amended the 
visibility provisions in the CAA to focus attention on the problem of 
regional haze, which is visibility impairment produced by a multitude 
of sources and activities located across a broad geographic area.\4\
---------------------------------------------------------------------------

    \3\ 42 U.S.C. 7491(a)(1).
    \4\ See CAA section 169B, 42 U.S.C. 7492.
---------------------------------------------------------------------------

    In 1999, we promulgated the RHR, which requires states to develop 
and implement SIPs to ensure reasonable progress toward improving 
visibility in mandatory Class I Federal areas (Class I areas) \5\ by 
reducing emissions that cause or contribute to regional haze.\6\ Under 
the RHR, states are directed to conduct an analysis and make a BART 
determination for each BART-eligible source that may be anticipated to 
cause or contribute to any visibility impairment in a Class I area.\7\ 
In particular, under CAA section 169A(g)(2) and 40 CFR 
51.308(e)(1)(ii)(A), states must analyze and consider the following 
five factors as part of each source-specific BART analysis: (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 
(collectively known as the ``five-factor BART analysis'').
---------------------------------------------------------------------------

    \5\ 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). 
When we use the term ``Class I area'' in this action, we mean a 
``mandatory Class I Federal area.''
    \6\ See generally 40 CFR 51.308.
    \7\ 40 CFR 51.308(e).
---------------------------------------------------------------------------

    In 2005, the EPA published the Guidelines for BART Determinations 
under the Regional Haze Rule at Appendix Y to 40 CFR part 51 (``BART 
Guidelines'') on July 6, 2005. The BART Guidelines 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 approaches 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. In lieu of requiring source-specific BART controls, 
states also have the flexibility to adopt an alternative measure as 
long as the alternative provides greater reasonable progress towards 
natural visibility conditions than BART (i.e., the alternative must be 
``better than BART'').\8\
---------------------------------------------------------------------------

    \8\ 40 CFR 51.308(e)(2).
---------------------------------------------------------------------------

    In addition to the visibility protection requirements of the CAA 
and the RHR, SIP revisions concerning regional haze are also subject to 
the general requirements of CAA section 110. In particular, they are 
subject to the requirement in CAA section 110(l) that SIP revisions 
must not ``interfere with any applicable requirement concerning 
attainment and reasonable further progress (as defined in [CAA section 
171]), or any other applicable requirement of [the CAA],'' as well as 
the requirement in CAA section 110(a)(2)(A) that SIPs must include 
enforceable emission limits.

B. Cholla Generating Station

    Cholla Generating Station consists of four primarily coal-fired 
electricity generating units with a total plant-wide generating 
capacity of 1,150 megawatts. Unit 1 is a 126 MW tangentially-fired, 
dry-bottom boiler that is not BART-eligible. Units 2, 3 and 4 have 
capacities of 272 MW, 272 MW and 410 MW, respectively, and are 
tangentially-fired, dry-bottom boilers that are each BART-eligible. 
Units 1, 2, and 3 are owned and operated by APS and Unit 4 is owned by 
PacifiCorp and operated by APS.

C. Summary of State Submittals and EPA Actions

1. 2011 Arizona Regional Haze SIP
    On February 28, 2011, the Arizona Department of Environmental 
Quality (ADEQ) submitted a Regional Haze SIP under Section 308 of the 
RHR (``Arizona Regional Haze SIP'') to EPA. This submittal included 
BART analyses and determinations for nitrogen oxides (NOX), 
particulate matter with an aerodynamic diameter of less than 10 
micrometers (PM10), and sulfur dioxide (SO2) at 
Cholla Units 2, 3, and 4. ADEQ's BART analyses for Cholla included the 
following seven steps:
     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,\9\
---------------------------------------------------------------------------

    \9\ We note that, while ADEQ referred 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, section IV.D.4.
---------------------------------------------------------------------------

     Step 6: Evaluate Visibility Impacts, and
     Step 7: Select BART.\10\
---------------------------------------------------------------------------

    \10\ Arizona Regional Haze SIP Revision, Appendix D, section XI.
---------------------------------------------------------------------------

2. 2012 EPA Action on Arizona Regional Haze SIP and FIP
    On December 5, 2012, we issued a final rule approving in part and 
disapproving in part ADEQ's BART determinations for three sources, 
including Cholla.\11\ We found that ADEQ's overall approach to 
conducting BART analyses and its implementation of the first four steps 
of its approach were generally reasonable and consistent with the RHR 
and the BART Guidelines. However, we found significant flaws in ADEQ's 
implementation of the last three steps.

[[Page 46854]]

In particular, under step 5, we found that the costs of compliance were 
not calculated in accordance with the BART Guidelines; under step 6, we 
found that the visibility benefits were not appropriately evaluated and 
considered; and under step 7, we found that ADEQ did not provide a 
sufficient explanation and rationale for its determinations.\12\ As a 
result of these flaws, we disapproved ADEQ's BART determinations for 
NOX at Cholla Units 2, 3, and 4. We also found that the SIP 
lacked enforceable emission limits for all units and pollutants. In the 
same action, we promulgated a FIP for the disapproved portions of the 
SIP, including NOX BART determinations for Units 2, 3, and 
4. We determined that BART for NOX at Units 2, 3, and 4 was 
an emission limit of 0.055 pounds per million British thermal units 
(lb/MMBtu) determined as an average across the three units, based on a 
rolling 30-boiler-operating-day average, which is achievable with the 
use of low-NOX burners (LNB), overfire air (OFA) and 
selective catalytic reduction (SCR). The compliance date for the 
NOX BART emission limit is December 5, 2017. In addition, we 
established an SO2 removal efficiency requirement of 95 
percent for the scrubbers on Cholla Units 2, 3 and 4. Cholla Units 3 
and 4 were required to achieve this removal efficiency by December 5, 
2013, and Cholla Unit 2 was required to comply by April 1, 2016. We 
also established requirements for equipment maintenance, monitoring, 
recordkeeping, and reporting for all units and all pollutants.
---------------------------------------------------------------------------

    \11\ 77 FR 72511.
    \12\ See 77 FR 42834, 42840-42941.
---------------------------------------------------------------------------

3. 2015 APS Application for Significant Permit Revision for Cholla 
Generating Station
    On January 15, 2015, APS and PacifiCorp submitted an ``Application 
for Significant Permit Revision and Five-Factor BART Reassessment for 
Cholla'' to ADEQ. APS and PacifiCorp requested that ADEQ conduct a 
revised BART analysis and determination based on new facts (``BART 
Reassessment'') and submit this BART Reassessment to the EPA as a 
revision to the Arizona Regional Haze SIP. Under the Cholla BART 
Reassessment, APS and PacifiCorp would commit to the following measures 
in lieu of implementing the FIP requirements for the Cholla Generating 
Station:
     Unit 2 would be permanently shut down by April 1, 2016;
     Unit 3 and Unit 4 would continue to operate with currently 
installed LNB and separated over fire air (SOFA). In addition, by April 
30, 2025, APS and PacifiCorp would permanently cease burning coal at 
both units with the option to convert to pipeline-quality natural gas 
by July 31, 2025, with a <=20 percent annual average capacity factor.
4. 2015 Arizona Regional Haze SIP Revision for Cholla Generating 
Station
    On October 22, 2015, ADEQ submitted a revision to the Arizona 
Regional Haze SIP that incorporates the Cholla BART Reassessment 
(``Cholla SIP Revision''). The Cholla SIP Revision is the subject of 
this proposal.

III. Summary of the Cholla SIP Revision

    The Cholla SIP Revision consists of a revised BART analysis and 
determination for NOX at Cholla, an analysis under CAA 
section 110(l), and a revision to Cholla's operating permit (``Cholla 
Permit Revision'') \13\ to implement both the revised BART 
determination for NOX and ADEQ's prior BART determinations 
for SO2 and PM10 at Cholla. If fully approved by 
the EPA, the Cholla SIP Revision would fill the gap in the Arizona 
Regional Haze SIP that resulted from the EPA's disapproval of ADEQ's 
BART determinations for NOX at Cholla Units 2, 3, and 4 and 
the lack of enforceable emission limits for all units and pollutants. 
Accordingly, full approval of the Cholla SIP Revision would enable the 
EPA to withdraw the provisions of the Arizona Regional Haze FIP that 
apply to Cholla.
---------------------------------------------------------------------------

    \13\ Cholla BART SIP Revision, Appendix A Significant Permit 
Revision No. 61713 to Operating Permit No. 53399 for Arizona Public 
Service Company Cholla Generating Station (October 16, 2015).
---------------------------------------------------------------------------

    In the Cholla SIP Revision, ADEQ determined that, if Unit 2 were 
shut down by April 1, 2016, no BART determination for Unit 2 would be 
necessary ``because the enforceable shutdown date is within the five-
year BART window.'' \14\ For Units 3 and 4, ADEQ performed a revised 
BART analysis, taking into account the new requirements that would be 
imposed as part of the Cholla BART Reassessment. This re-analysis and 
the resulting BART determinations are summarized in the following 
sections.
---------------------------------------------------------------------------

    \14\ Cholla SIP Revision, section 2.2, page 4.
---------------------------------------------------------------------------

A. BART Re-Analysis for Cholla Units 3 and 4

    ADEQ's BART re-analysis for Units 3 and 4 consists of an evaluation 
of each of the five BART factors, effectively replacing step 5 
(evaluation of costs of compliance, energy and non-air quality 
environmental impacts, and remaining useful life) and step 6 
(evaluation of visibility benefits) of ADEQ's prior BART analysis for 
Cholla in the Arizona Regional Haze SIP.
1. Cost of Compliance
    ADEQ evaluated the costs of compliance for three control options: 
(1) LNB and SOFA, (2) SNCR with LNB and SOFA, and (3) SCR with LNB and 
SOFA. Two fuel-use scenarios were used as a comparison: (1) Twenty 
years of operation on coal and (2) eight years of operation on coal 
followed by twelve years of operation on natural gas (as provided for 
under the BART Reassessment). The cost-effectiveness values for each 
control option under each of these scenarios are shown in Tables 1 and 
2. For all options, the costs associated with the BART Reassessment are 
due to lower utilization periods (coal firing until 2025 instead of for 
20 years) as well as significantly lower NOX emissions after 
conversion to natural gas.

                           Table 1--Cost-Effectiveness of NOX Control Options at Cholla Assuming 20 Years of Operation on Coal
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Average                                     Incremental \a\
                                                         -----------------------------------------------------------------------------------------------
                                                                             Emission
          Unit                    Control option                             reduction     Average cost-    Incremental     Incremental     Incremental
                                                            Annual cost     relative to    effectiveness    annual cost      emission          cost-
                                                             ($/year)     baseline  (ton/     ($/ton)        ($/year)        reduction     effectiveness
                                                                               year)                                        (ton/year)        ($/ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3.......................  LNB and SOFA..................        $483,300           1,219            $396  ..............  ..............  ..............
                          SNCR with LNB and SOFA........       3,070,443           1,911           1,607       2,587,143             691           3,742
                          SCR with LNB and SOFA.........       9,448,912           3,300           2,838       8,965,612           2,110           4,248
4.......................  LNB and SOFA..................         673,550           1,756             384  ..............  ..............  ..............

[[Page 46855]]

 
                          SNCR with LNB and SOFA........       4,086,366           2,643           1,546       3,412,816             887           3,848
                          SCR with LNB and SOFA.........      13,590,853           4,408           3,083      12,917,303           2,652           4,871
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The incremental cost effectiveness results for SNCR and SCR are based on the emission and cost differences between these technologies and the
  proposed LNB + SOFA option.


       Table 2--Cost-Effectiveness of NOX Control Options at Cholla Assuming 8 Years of Operation on Coal and 12 years of Operation on Natural Gas
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Average                                       Incremental
                                                         -----------------------------------------------------------------------------------------------
                                                                             Emission
          Unit                    Control option                             reduction     Average cost-    Incremental     Incremental     Incremental
                                                            Annual cost     relative to    effectiveness    annual cost      emission          cost-
                                                             ($/year)     baseline  (ton/     ($/ton)        ($/year)        reduction     effectiveness
                                                                               year)                                        (ton/year)        ($/ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3.......................  LNB and SOFA..................        $411,300             488            $843  ..............  ..............  ..............
                          SNCR with LNB and SOFA........       2,497,743             786           3,177       2,086,443             299           6,989
                          SCR with LNB and SOFA.........       8,716,452           1,387           6,286       8,305,152             899           9,237
4.......................  LNB and SOFA..................         571,550             702             814  ..............  ..............  ..............
                          SNCR with LNB and SOFA........       3,283,930           1,085           3,027       2,712,380             383           7,091
                          SCR with LNB and SOFA.........      12,480,744           1,833           6,810      11,909,194           1,130          10,539
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Energy and Non-Air Environmental Impacts
    ADEQ indicated that the energy impacts of LNB, SOFA, and SNCR are 
minimal and that there are no non-air quality environmental impacts 
associated with LNB and SOFA. ADEQ also noted that SNCR and SCR would 
result in ammonia slip and that the transport and handling of anhydrous 
ammonia presents potential safety hazards.
3. Existing Air Pollution Controls
    ADEQ noted that, under the Cholla BART Reassessment, use of the 
existing LNB and SOFA would be continued at Units 3 and 4. ADEQ 
proposed no additional controls for these two units. Unit 2 would be 
shut down in April 2016, while Unit 1 (the non-BART unit) would cease 
burning coal in 2025.
4. Remaining Useful Life
    ADEQ used a 20-year amortization period in order to calculate the 
costs of compliance for Units 3 and 4 because neither unit is subject 
to an enforceable shutdown date.
5. Degree of Visibility Improvement
    ADEQ included the results of modeling conducted by APS and 
PacifiCorp to predict the degree of visibility improvement associated 
with the three BART scenarios. This modeling predicted visibility 
impacts at the thirteen Class I areas within 300 km of the Cholla 
facility under a baseline scenario (based on 2001-2003 emissions with 
all four units operating), as well as the three BART control scenarios:
     BART Option 1: Unit 1 with 2001-2003 baseline controls 
(pre-LNB), Unit 2 shut down, LNB/SOFA on Units 3 and 4;
     BART Option 2: Unit 1 with 2001-2003 baseline controls 
(pre-LNB), Unit 2 shut down, LNB/SOFA and SNCR on Units 3 and 4; and
     BART Option 3: Unit 1 with 2001-2003 baseline controls 
(pre-LNB), Unit 2 shut down, LNB/SOFA and SCR on Units 3 and 4.

APS and PacifiCorp used CALPUFF version 5.8 and incorporated 
meteorological data for 2001-2003, an assumption of 1.0 part per 
billion background concentration for ammonia, and ``Method 8b'' 20 
percent best days background conditions for all cases. The results of 
this modeling are shown in Tables 3 and 4.

                                      Table 3--Predicted Visibility Impacts
                                   [22nd highest delta-dv over 3-year period]
----------------------------------------------------------------------------------------------------------------
                                                              BART Option 1     BART Option 2     BART Option 3
              Class I area                    Baseline         (LNB/SOFA)      (LNB/SOFA/SNCR)   (LNB/SOFA/SCR)
----------------------------------------------------------------------------------------------------------------
Petrified Forest NP.....................              5.31              4.33              4.05              3.55
Grand Canyon NP.........................              3.40              1.79              1.62              1.20
Capitol Reef NP.........................              2.19              1.04              0.91              0.62
Mazatzal WA.............................              2.23              0.96              0.87              0.69
Sycamore Canyon WA......................              2.27              1.00              0.88              0.67
Mount Baldy WA..........................              2.10              0.97              0.85              0.62
Gila WA.................................              1.53              0.53              0.47              0.39
Sierra Ancha WA.........................              2.28              1.05              0.97              0.81

[[Page 46856]]

 
Mesa Verde NP...........................              2.08              0.88              0.78              0.60
Galiuro WA..............................              0.96              0.34              0.31              0.27
Superstition WA.........................              2.00              1.00              0.93              0.73
Saguaro NP..............................              0.70              0.22              0.22              0.20
Pine Mountain WA........................              1.64              0.67              0.59              0.48
----------------------------------------------------------------------------------------------------------------


                                     Table 4--Predicted Visibility Improvement over the Baseline Visibility Impacts
                                                       [22nd highest delta-dv over 3-year period]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  BART Option 1     BART Option 2     BART Option 3     Option 2 over     Option 3 over
                         Class I area                              (LNB/SOFA)     (LNB/SOFA /SNCR)   (LNB/SOFA /SCR)      Option 1          Option 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Petrified Forest NP...........................................              0.98              1.26              1.77              0.28              0.79
Grand Canyon NP...............................................              1.61              1.78              2.20              0.17              0.59
Capitol Reef NP...............................................              1.15              1.28              1.57              0.13              0.42
Mazatzal WA...................................................              1.27              1.36              1.54              0.09              0.27
Sycamore Canyon WA............................................              1.27              1.39              1.60              0.12              0.33
Mount Baldy WA................................................              1.14              1.26              1.48              0.12              0.34
Gila WA.......................................................              1.00              1.06              1.14              0.06              0.14
Sierra Ancha WA...............................................              1.22              1.30              1.47              0.08              0.25
Mesa Verde NP.................................................              1.21              1.30              1.49              0.09              0.28
Galiuro WA....................................................              0.62              0.65              0.69              0.03              0.07
Superstition WA...............................................              1.00              1.07              1.28              0.07              0.28
Saguaro NP....................................................              0.48              0.49              0.50              0.01              0.02
Pine Mountain WA..............................................              0.97              1.04              1.16              0.07              0.19
Cumulative....................................................             13.92             15.24             17.89              1.32              3.97
Average.......................................................              1.07              1.17              1.38              0.10              0.31
--------------------------------------------------------------------------------------------------------------------------------------------------------

B. BART Determination for Cholla Units 3 and 4

    ADEQ's BART determination for Cholla Units 3 and 4 in the Cholla 
SIP Revision effectively replaces step 7 (select BART) of its prior 
BART analysis for NOX BART for Cholla in the Arizona 
Regional Haze SIP. In making this determination, ADEQ compared the 
three emission control options (LNB and SOFA, SNCR with LNB and SOFA, 
SCR with LNB and SOFA). For Option 1, it found that the LNB and SOFA 
controls could be installed at reasonable cost-effectiveness and would 
deliver visibility improvements ranging from 0.48 to 1.61 dv over 
baseline conditions across thirteen Class I areas. For Option 2, it 
found the SNCR control option to be too costly in comparison to the 
small additional visibility benefits it would be expected to deliver. 
For Option 3, ADEQ noted that the visibility benefits of SCR (3.97 dv 
cumulative incremental visibility improvement) would only last until 
2025 when coal firing would cease, after which the incremental benefits 
of SCR would be ``negligible.'' Based on its analysis, ADEQ found 
Option 1 (LNB with SOFA) to be BART for NOX at Cholla Units 
3 and 4. The rolling 30-boiler-operating-day NOX emission 
limits associated with this BART determination are 0.22 lb/MMbtu 
(effective until April 30, 2025), which reflects the use of coal, and 
0.080 lb/MMbtu (effective May 1, 2025), which reflects the use of 
natural gas.

C. 110(l) Analysis

    In addition to the BART re-analysis and determinations, the Cholla 
SIP Revision also includes a demonstration of ``noninterference'' under 
CAA section 110(l). In particular, ADEQ considered whether the Cholla 
SIP Revision would interfere with (1) any applicable requirement 
concerning attainment of any National Ambient Air Quality Standards 
(NAAQS) or (2) any other applicable requirement of the CAA.
1. Demonstration of Noninterference With NAAQS Attainment
    ADEQ noted that Cholla is located in Navajo County, Arizona, which 
is currently designated as attainment or unclassifiable for the 
following NAAQS: Carbon monoxide (CO), lead (Pb), nitrogen dioxide 
(NO2), ozone (O3) (2008 NAAQS), PM2.5 
(1997 and 2006 NAAQS), PM10, and SO2 (1971 
NAAQS). ADEQ also noted that it has recommended an attainment/
unclassifiable designation for this area for the 2012 PM2.5 
and 2010 SO2 standards.
    ADEQ's demonstration of noninterference with attainment focused on 
the NAAQS for PM10, SO2, NO2, and 
O3 because ambient levels of these pollutants are affected 
by emissions of PM10, SO2, and/or NOX. 
Specifically, ADEQ analyzed emissions of PM10, 
SO2, and NOX under the control strategies in the 
Cholla BART Reassessment, as compared with the existing control 
requirements in the applicable SIP and FIP. This assessment was 
conducted by considering revised emissions limits included in the 
Cholla SIP Revision, summarized in Table 5.

[[Page 46857]]



                              Table 5--Emission Limits for Cholla BART Reassessment
----------------------------------------------------------------------------------------------------------------
                                                                        Emission limit  (lb/MMbtu)
              Unit                        Dates         --------------------------------------------------------
                                                                NOX                PM10               SO2
----------------------------------------------------------------------------------------------------------------
Unit 2.........................                          Unit shut down on April 1, 2016
                                --------------------------------------------------------------------------------
Unit 3.........................  until April 30, 2025..               0.22              0.015               0.15
                                 after April 30, 2025..               0.08               0.01             0.0006
Unit 4.........................  until April 30, 2025..               0.22              0.015               0.15
                                 after April 30, 2025..               0.08               0.01             0.0006
----------------------------------------------------------------------------------------------------------------

    For its PM10 analysis, ADEQ found that the emission 
control strategies in the Cholla BART Reassessment will result in 
greater PM10 reductions than those in the Arizona Regional 
Haze SIP beginning in 2016 and continuing into the future, as shown in 
Table 6. Beginning in 2026, PM10 emissions will be further 
reduced under the Cholla BART Reassessment, due to the 20 percent 
capacity factor limit and the more stringent emission limits (0.01 lb/
MMBtu rather than 0.015 lb/MMBtu) that will apply after the switch to 
natural gas at Units 3 and 4. Therefore, ADEQ found that the Cholla SIP 
Revision will not interfere with attainment and maintenance of the 
PM10 NAAQS.

         Table 6--Comparison of Annual PM10 Emissions for 2011 Arizona SIP vs. Cholla BART Reassessment
----------------------------------------------------------------------------------------------------------------
                                                                              Annual PM10 (tons per year (tpy))
                                                                           -------------------------------------
                Time period                             Unit No.                                   Cholla SIP
                                                                               2011 AZ SIP          revision
----------------------------------------------------------------------------------------------------------------
2016.......................................  Unit 1.......................                 84                 84
                                             Unit 2.......................            \a\ 214             \b\ 78
                                             Unit 3.......................                197                197
                                             Unit 4.......................                269                269
                                            --------------------------------------------------------------------
                                                Total.....................                764                628
----------------------------------------------------------------------------------------------------------------
2017-2025..................................  Unit 1.......................                 84                 84
                                             Unit 2.......................                181                  0
                                             Unit 3.......................                197                197
                                             Unit 4.......................                269                269
                                            --------------------------------------------------------------------
                                                Total.....................                731                550
----------------------------------------------------------------------------------------------------------------
2026 forward...............................  Unit 1.......................                 84                 13
                                             Unit 2.......................                181                  0
                                             Unit 3.......................                197                 30
                                             Unit 4.......................                269                 39
                                            --------------------------------------------------------------------
                                                Total.....................                731                 82
----------------------------------------------------------------------------------------------------------------
\a\ Based on compliance date of April 1, 2016 for emissions limit of 0.015 lb/MMBtu.
\b\ Based on operation of Unit 2 until April 1, 2016.

    ADEQ also compared SO2 emission control strategies in 
the 2011 SIP with those in the Cholla BART Reassessment. As shown in 
Table 7, the control strategies in the Cholla BART Reassessment will 
result in greater SO2 reductions than those in the 2011 SIP 
beginning in 2016 and continuing into the future. Therefore, ADEQ found 
that the emissions reductions achieved by the control strategy outlined 
in the Cholla SIP Revision will not interfere with attainment and 
maintenance of the SO2 NAAQS.

          Table 7--Comparison of Annual SO2 Emissions for 2011 Arizona SIP vs. Cholla BART Reassessment
----------------------------------------------------------------------------------------------------------------
                                                                                         Annual SO2  (tpy)
                                                                                 -------------------------------
                  Time period                               Unit No.                                Cholla SIP
                                                                                    2011 AZ SIP      revision
----------------------------------------------------------------------------------------------------------------
2016..........................................  Unit 1..........................             844             844
                                                Unit 2..........................           1,614         \a\ 452
                                                Unit 3..........................           1,966           1,966
                                                Unit 4..........................           2,688           2,688
                                               -----------------------------------------------------------------

[[Page 46858]]

 
                                                   Total........................           7,112           5,950
----------------------------------------------------------------------------------------------------------------
2017-2025.....................................  Unit 1..........................             844             844
                                                Unit 2..........................           1,614               0
                                                Unit 3..........................           1,966           1,966
                                                Unit 4..........................           2,688           2,688
                                               -----------------------------------------------------------------
                                                   Total........................           7,112           5,498
----------------------------------------------------------------------------------------------------------------
2026 forward..................................  Unit 1..........................             844               1
                                                Unit 2..........................           1,614               0
                                                Unit 3..........................           1,966               2
                                                Unit 4..........................           2,688               2
                                               -----------------------------------------------------------------
                                                   Total........................           7,112               5
----------------------------------------------------------------------------------------------------------------
\a\ Based on operation of Unit 2 until April 1, 2016.

    ADEQ also analyzed the emission control strategies for 
NOX in the Cholla BART Reassessment (Unit 2 shutdown and 
LNB/SOFA controls at Units 3 and 4 until conversion to natural gas by 
2025 with a <=20 percent annual average capacity factor) in comparison 
to the FIP, which requires the installation of SCR with LNB and SOFA at 
all units by December 5, 2017. As shown in Table 8, while the shutdown 
of Unit 2 results in lower NOX emissions than the FIP for 
2016, the Reassessment will allow for 4,161 tpy more NOX 
emissions than the FIP between 2018 and 2025. However, after 2025, due 
to the conversion to natural gas, the Cholla BART Reassessment will 
result in greater annual NOX emission reductions than the 
FIP. ADEQ found that, because there are no nonattainment or maintenance 
SIPs that rely on emission reductions at Cholla to ensure continued 
attainment of the NO2 NAAQS and the Cholla BART Reassessment 
will result in NOX emission reductions relative to the 
existing operating conditions of the facility, it will not interfere 
with attainment or maintenance of the current NO2 NAAQS.

                Table 8--Comparison of NOX Annual Emissions for FIP vs. Cholla BART Reassessment
----------------------------------------------------------------------------------------------------------------
                                                                            Annual NOX  (tpy)
                                                        --------------------------------------------------------
                                                                                                Annual emission
           Time period                   Unit No.                                                change (Cholla
                                                              EPA FIP          Cholla BART            BART
                                                                               reassessment     reassessment  to
                                                                                                    EPA FIP)
----------------------------------------------------------------------------------------------------------------
2016.............................  Unit 1..............              1,131              1,131                  0
                                   Unit 2..............              3,601            \a\ 900             -2,701
                                   Unit 3..............              2,766              2,766                  0
                                   Unit 4..............              3,548              3,548                  0
                                  ------------------------------------------------------------------------------
                                      Total............             11,046              8,345             -2,701
----------------------------------------------------------------------------------------------------------------
2017.............................  Unit 1..............              1,131              1,131                  0
                                   Unit 2..............              3,601                  0             -3,601
                                   Unit 3..............              2,766              2,766                  0
                                   Unit 4..............              3,548              3,548                  0
                                  ------------------------------------------------------------------------------
                                      Total............             11,046              7,445             -3,601
----------------------------------------------------------------------------------------------------------------
2018-2025........................  Unit 1..............              1,131              1,131                  0
                                   Unit 2..............                602                  0               -602
                                   Unit 3..............                655              2,766              2,111
                                   Unit 4..............                896              3,548              2,652
                                  ------------------------------------------------------------------------------
                                      Total............              3,284              7,445              4,161
----------------------------------------------------------------------------------------------------------------
2026 forward.....................  Unit 1..............              1,131                105             -1,026
                                   Unit 2..............                602                  0               -602
                                   Unit 3..............                655                244               -411
                                   Unit 4..............                896                308               -588
                                  ------------------------------------------------------------------------------

[[Page 46859]]

 
                                      Total............              3,284                657             -2,627
----------------------------------------------------------------------------------------------------------------
\a\ Based on operation of Unit 2 until April 1, 2016.

    Similarly, with regard to ozone, for which NOX emissions 
are a precursor, ADEQ noted that there are no nonattainment or 
maintenance SIPs that rely on emission reductions at Cholla to ensure 
continued attainment of the NAAQS and that the Cholla BART Reassessment 
will result in greater long-term NOX emission reductions 
than the existing FIP. Accordingly, ADEQ concluded that the Cholla BART 
Reassessment will not interfere with the attainment or maintenance of 
the 2008 ozone NAAQS.
2. Demonstration of Noninterference With Other CAA Requirements
    With regards to the other applicable CAA requirements, ADEQ 
considered whether the Cholla BART Reassessment would interfere with 
(1) the requirements of the Regional Haze program or (2) the CAA's air 
toxics requirements.
    In evaluating potential interference with the RHR, ADEQ relied 
primarily on the results of air quality modeling (using CALPUFF) 
performed by APS and PacifiCorp to assess the visibility impacts of 
Cholla under the Cholla SIP Revision compared to the existing SIP and 
FIP requirements.\15\ These results, summarized in Table 9, show that, 
compared with the existing SIP and FIP requirements, the Cholla SIP 
Revision would result in less visibility improvement at all affected 
Class I areas between 2018 and 2025, but would result in greater 
improvement starting in 2026. Based on these results and taking into 
consideration the long-term goal of the Regional Haze Rule to achieve 
natural visibility conditions, ADEQ found that the BART Reassessment 
will not interfere with the requirements of the regional haze program.
---------------------------------------------------------------------------

    \15\ Id.

                                  Table 9--Modeled Visibility Impacts of Cholla
----------------------------------------------------------------------------------------------------------------
                                                            EPA FIP and     SIP Revision BART  SIP Revision BART
                                                            existing SIP       (2018-2025)       (2026 forward)
                      Class I Area                      --------------------------------------------------------
                                                             Visibility         Visibility         Visibility
                                                            impacts (dv)       impacts (dv)       impacts (dv)
----------------------------------------------------------------------------------------------------------------
Petrified Forest NP....................................               2.64               3.75               1.45
Grand Canyon NP........................................               1.11               1.48               0.45
Capitol Reef NP........................................               0.62               0.92               0.29
Mazatzal WA............................................               0.75               0.83               0.30
Sycamore Canyon WA.....................................               0.73               0.94               0.29
Mount Baldy WA.........................................               0.69               0.87               0.28
Gila WA................................................               0.46               0.47               0.17
Sierra Ancha WA........................................               0.82               0.94               0.36
Mesa Verde NP..........................................               0.63               0.84               0.30
Galiuro WA.............................................               0.29               0.30               0.09
Superstition WA........................................               0.73               0.88               0.30
Saguaro NP.............................................               0.20               0.19               0.05
Pine Mountain WA.......................................               0.51               0.58               0.17
Cumulative impacts.....................................              10.18              12.99               4.50
----------------------------------------------------------------------------------------------------------------

    Concerning air toxics, ADEQ noted that in addition to ceasing 
operation of Unit 2, the Cholla facility proposes to implement sorbent 
injection at Units 1, 3, and 4 by March 2016 to reduce air toxics and 
achieve compliance with the EPA's Mercury and Air Toxics (MATS) rule. 
Therefore, ADEQ concluded that the Cholla BART Reassessment will not 
interfere with any air toxics requirements of the CAA.

D. Cholla Permit Revision

    The Cholla Permit Revision, which is incorporated as Appendix A to 
the Cholla SIP Revision, was issued by ADEQ on October 16, 2015. The 
Permit Revision incorporates emission limits and compliance dates as 
well as monitoring, recordkeeping, and reporting requirements to 
implement both the Cholla BART Reassessment and ADEQ's prior BART 
determinations for SO2 and PM10 at Cholla.

IV. The EPA's Evaluation of the Cholla SIP Revision

    We have evaluated the Cholla SIP Revision for compliance with the 
requirements of the CAA, the RHR, and the BART Guidelines.\16\ Our 
evaluation of each of the major components of the

[[Page 46860]]

Cholla SIP Revision is summarized in the following sections.
---------------------------------------------------------------------------

    \16\ CAA section 169A(b)(2) and 40 CFR 51.308(e)(1)(ii)(B) 
require that BART for each fossil-fuel fired generating power plant 
having a total generating capacity in excess of 750 megawatts be 
determined pursuant to the BART Guidelines. Cholla has a total 
generating capacity in excess of 750 megawatts, so the BART 
Guidelines are mandatory for the Cholla BART analysis and 
determination.
---------------------------------------------------------------------------

A. The EPA's Evaluation of the Enforceable Retirement Provision for 
Cholla Unit 2

    The Cholla Permit Revision requires Unit 2 to be permanently 
retired by no later than April 1, 2016.\17\ This date coincides with 
the compliance deadlines for SO2 and PM10 in the 
Arizona Regional Haze FIP and precedes the deadline for NOX 
by over a year.\18\ In fact, the unit was shut down on October 1, 
2015.\19\ If Unit 2 were not retired, APS would have been required to 
install additional controls to meet the SO2 and 
PM10 limits in the SIP, as well as the NOX limit 
in the FIP, which is achievable with SCR. The requirement for permanent 
retirement will become effective and federally enforceable when the 
Cholla SIP Revision is approved into the SIP and the FIP provisions 
applicable to Cholla are withdrawn.\20\ Accordingly, we agree with ADEQ 
that no further analysis is required for Cholla Unit 2, and we propose 
to approve the requirement for permanent retirement as satisfying the 
requirements of the CAA and RHR for Cholla Unit 2.
---------------------------------------------------------------------------

    \17\ Cholla Permit Revision section I.C.1.
    \18\ See 40 CFR 51.145(f)(4).
    \19\ Letter from Edward Seal, APS, to Kathleen Johnson, EPA, and 
Eric Massey, ADEQ (October 28, 2015).
    \20\ Cholla Permit Revision section I.A.
---------------------------------------------------------------------------

B. The EPA's Evaluation of ADEQ's BART Analysis for Cholla Units 3 and 
4

    We find that ADEQ's BART analysis for Cholla Units 3 and 4 is 
consistent with the requirements of the CAA, RHR, and the BART 
Guidelines. In particular, we find that ADEQ's BART re-analysis 
addresses the flaws that were the basis for our disapproval of ADEQ's 
prior BART analysis for Cholla.\21\
---------------------------------------------------------------------------

    \21\ See 77 FR 42840-42941 and 42849, 77 FR 72565-72566.
---------------------------------------------------------------------------

    With regard to the cost of compliance, in its previous BART 
analysis for Cholla, ADEQ included certain line item costs not allowed 
by the EPA Control Cost Manual (CCM),\22\ such as owner's costs, 
surcharge, and Allowance for Funds Used During Construction 
(AFUDC).\23\ This approach did not comply with BART Guidelines' 
direction that cost estimates should be based on the CCM. In the Cholla 
SIP revision, by contrast, ADEQ used the cost estimates that the EPA 
developed as part of the Regional Haze FIP,\24\ which were calculated 
using the CCM methodology.\25\
---------------------------------------------------------------------------

    \22\ EPA Air Pollution Control Cost Manual, available at https://www3.epa.gov/ttn/ecas/cost_manual.html.
    \23\ See 77 FR 42849.
    \24\ See, e.g., Cholla SIP Revision, Appendix B, Table B-1, 
footnote (a).
    \25\ See 77 FR 42852.
---------------------------------------------------------------------------

    We note that in May 2016, EPA revised the CCM chapter that concerns 
SCR systems.\26\ The revised CCM recommends use of a 30-year equipment 
life for SCR systems,\27\ whereas the previous version recommended a 
20-year life.\28\ As noted above, ADEQ used a 20-year remaining useful 
life in its cost calculations in the Cholla SIP Revision, which was 
consistent with the current CCM recommendation at the time of SIP 
submittal in October 2015. Given that the majority of other BART 
analyses, including the EPA's analysis for Cholla in the Arizona 
Regional Haze FIP,\29\ have used a 20-year remaining useful life for 
SCR, we believe that this remains an appropriate assumption in this 
instance in order to ensure a consistent comparison with the cost 
estimates for SCR in other BART determinations. Nonetheless, we have 
also conducted an additional analysis to evaluate how use of a 30-year 
remaining useful life would affect the cost-effectiveness values for 
SCR at Cholla Units 3 and 4. We found that use of a 30-year remaining 
useful life would increase the average cost-effectiveness of SCR at 
Unit 3 from $6,286/ton to $7,864/ton and the ``incremental'' cost-
effectiveness (as compared with LNB+SOFA) from $9,237/ton to $11,295/
ton.\30\ The average and ``incremental'' (as compared with LNB+SOFA) 
cost-effectiveness of SCR at Unit 4 would be increased from $6,810/ton 
to $8,401/ton and from $10,539 to $12,674, respectively.\31\ Thus, if 
ADEQ had calculated the average and incremental cost-effectiveness of 
SCR based on a 30-year remaining useful life, it would have provided 
further support for ADEQ's determination that the incremental costs of 
compliance for SCR are not warranted by the incremental benefits.
---------------------------------------------------------------------------

    \26\ CCM (7th Edition), Section 4, Chapter 2--Selective 
Catalytic Reduction (May 2016), available at https://www3.epa.gov/ttn/ecas/docs/SCRCostManualchapter7thEdition_2016.pdf.
    \27\ See id. at 2-78 (``broadly speaking, a representative value 
of the equipment life for SCR at power plants can be considered as 
30 years.'')
    \28\ CCM (6th edition), Section 4.2, Chapter 2--Selective 
Catalytic Reduction (October 2000), available at https://www3.epa.gov/ttn/ecas/docs/cs4-2ch2.pdf, at 2-48 (``An economic 
lifetime of 20 years is assumed for the SCR system.'')
    \29\ See 77 FR 42854.
    \30\ See Cholla_SCR_costs (30 yr life).xlsx.
    \31\ Id.
---------------------------------------------------------------------------

    With regard to visibility modeling, in its previous BART analysis 
for Cholla, ADEQ considered the benefits from controls on only one 
emitting unit at a time and overlooked significant benefits at multiple 
Class I areas, thereby understating the full visibility benefits of the 
candidate controls.\32\ By contrast, in the Cholla SIP revision, ADEQ 
looked at the visibility impacts and potential improvements from all 
three BART-eligible units together and also considered impacts and 
potential improvements at all 13 Class I areas within 300 km of Cholla, 
based on modeling performed by APS and PacifiCorp.\33\
---------------------------------------------------------------------------

    \32\ See 77 FR 42849.
    \33\ See, e.g., Cholla SIP Revision, Table 4 and 5.
---------------------------------------------------------------------------

    In considering the results of this modeling, it should be noted 
that the baseline scenario included emissions from Unit 2, but the 
control scenarios did not include any emissions from Unit 2. As a 
result, the total visibility improvement anticipated under each of the 
control scenarios represents not only the visibility benefits of 
controls on Units 3 and 4, but also the visibility benefits of the 
closure of Unit 2. We consider this to be a reasonable approach because 
it is consistent with the requirement of the BART Guidelines for states 
to consider the visibility improvement from controls applied to the 
entire BART-eligible source.\34\ However, given that ADEQ is not making 
a BART determination for Unit 2 in this instance, we believe it is 
appropriate to also consider the visibility improvement expected to 
result from controls on Units 3 and 4 only. ADEQ's evaluation of the 
``incremental'' visibility benefits of SNCR (``Option 2 over Option 1'' 
in Table 4) and SCR (``Option 3 over Option 1'' in Table 4) effectively 
excludes the benefits of the Unit 2 shutdown because Options 1, 2, and 
3 all exclude emissions from Unit 2. Given that ADEQ relied heavily on 
these ``incremental'' visibility benefits in reaching its ultimate BART 
determination,\35\ we find that ADEQ appropriately considered the 
visibility

[[Page 46861]]

benefits of controls on Units 3 and 4 only, as well as the benefits of 
the Cholla BART Reassessment as a whole.
---------------------------------------------------------------------------

    \34\ In particular, the BART Guidelines explain that, ``[i]f the 
emissions from the list of emissions units at a stationary source 
exceed a potential to emit of 250 tons per year for any visibility-
impairing pollutant, then that collection of emissions units is a 
BART-eligible source.'' 40 CFR part 51, appendix Y, section II.A.4. 
In other words, the BART-eligible source (the list of BART emissions 
units at a source) is the collection of units for which one must 
make a BART determination. The BART Guidelines also state ``you must 
conduct a visibility improvement determination for the source(s) as 
part of the BART determination.'' Id, section IV.D.5. This requires 
consideration of the visibility improvement from BART applied to the 
BART-eligible source as a whole.
    \35\ See Cholla SIP Revision section 2.3.
---------------------------------------------------------------------------

    We also note that ADEQ did not quantify the expected visibility 
benefits of SCR and SNCR on Units 3 and 4 after these units are 
converted to gas in 2025, but characterized these benefits as 
``negligible.'' In order to evaluate ADEQ's characterization, we scaled 
the modeled visibility benefits of SCR under the coal-fired scenario to 
roughly estimate what the benefits would be under the gas-fired 
scenario. The results of this scaling indicate that, under the gas-
fired scenario, the approximate benefits of SNCR would be 0.07 dv at 
the most-improved Class I area and 0.31 dv cumulatively over all 
affected Class I areas, while the approximate benefits of SCR would be 
0.15 dv at the most-improved Class I area and 0.77 dv cumulatively over 
all affected Class I areas.\36\ Thus, the benefits of SNCR or SCR under 
the gas-fired scenario would be significantly less than under the coal-
fired scenario, for which the expected ``incremental'' benefits over 
LNB+SOFA are 0.28 dv at the most-improved area and 1.32 dv cumulative 
for SNCR and 0.79 dv at the most-improved Class I area and 3.97 dv 
cumulative for SCR.
---------------------------------------------------------------------------

    \36\ See Cholla_SCR_vs_NG rev2.xlsx.
---------------------------------------------------------------------------

    In the Cholla SIP Revision, ADEQ also appropriately accounted for 
the requirements that will apply to Units 3 and 4 as of 2025, i.e., the 
permanent cessation of coal burning by April 30, 2025, with the option 
to convert to pipeline-quality natural gas and comply with a 20 percent 
annual average capacity factor limit by July 31, 2025. These new 
requirements significantly decrease the emission reductions achievable 
by SCR or SNCR beginning in 2025 and thus increase the average $/ton of 
both SCR and SNCR over the remaining useful life of the units, as shown 
in Tables 1 and 2 above. Similarly, these requirements limit the 
timeframe in which significant visibility benefits would result from 
either SCR or SNCR to less than eight years.
    We note that ADEQ did diverge slightly from the BART Guidelines in 
its calculation of the incremental cost-effectiveness of SCR. In 
particular, ADEQ calculated the incremental cost, as well as 
incremental visibility benefits, based on a comparison between SCR with 
LNB+SOFA and LNB+SOFA only. This differs from the approach to 
calculating incremental cost-effectiveness that is set forth in the 
BART Guidelines, under which incremental cost-effectiveness is 
calculated by comparing ``the costs and performance level of a control 
option to those of the next most stringent option . . . .'' \37\ In 
this case, SNCR with LNB+SOFA is the next most stringent option 
compared to SCR with LNB+SOFA. Had ADEQ compared SCR with LNB+SOFA to 
SNCR with LNB+SOFA, the incremental cost-effectiveness using a 20-year 
remaining useful life would have been $10,347/ton for Unit 3 and 
$12,295/ton for Unit 4,\38\ rather than $9,237/ton for Unit 3 and 
$10,539/ton for Unit 4. Similarly, had ADEQ calculated the incremental 
visibility benefits of SCR with LNB+SOFA based on a comparison to SNCR 
with LNB+SOFA, the per area incremental benefits would have ranged from 
0.01 dv to 0.51 dv, rather than 0.07 dv to 0.79 dv, and the cumulative 
incremental benefit would have been 2.65 dv rather than 3.97 dv.\39\ 
Thus, if ADEQ had calculated the incremental costs and benefits of SCR 
in accordance with the BART Guidelines, it would have resulted in 
higher incremental cost-effectiveness values and lower incremental 
visibility benefits compared with the figures provided in the Cholla 
SIP Revision, which would provide further support for ADEQ's 
determination that the incremental costs of compliance for SCR are not 
warranted by the incremental benefits. Accordingly, in reviewing the 
reasonableness of ADEQ's re-analysis of BART for these units, we find 
that ADEQ's diversion from the BART Guidelines in this regard was of no 
consequence.
---------------------------------------------------------------------------

    \37\ 40 CFR part 51 appendix Y, section IV.D.4.e (emphasis 
added). The BART Guidelines do not specify a method for calculating 
incremental visibility benefits. We consider it appropriate to 
calculate these benefits in the same manner as incremental costs, 
i.e. by comparing the expected benefits of a control option to those 
of the next most stringent option.
    \38\ Cholla Units 3 and 4 Incremental Costs and Benefits.xlsx.
    \39\ Id.
---------------------------------------------------------------------------

    Based on our findings that the Cholla SIP Revision addresses the 
flaws that were the basis for our disapproval of ADEQ's prior BART 
analysis for Cholla and otherwise meets the requirements of the CAA, 
RHR, and the BART Guidelines, we propose to approve ADEQ's BART re-
analysis for Cholla Units 3 and 4.

C. The EPA's Evaluation of ADEQ's BART Determination for Cholla Units 3 
and 4

    We also find that ADEQ's BART determination for NOX at 
Cholla Units 3 and 4 is consistent with the requirements of the CAA, 
RHR, and the BART Guidelines. In particular, we find that ADEQ 
appropriately considered and weighed the five BART factors in relation 
to the available control options and reached a reasonable BART 
determination based on its consideration of the factors.
    With regard to SCR, we find that it was reasonable for ADEQ to 
conclude that the costs of SCR were not warranted by the visibility 
benefits in this instance. In particular, with regard to costs, we are 
not aware of any instance in which the EPA has determined SCR to be 
BART where the average cost-effectiveness of SCR was greater than 
$6,000/ton and the incremental cost-effectiveness (calculated in 
accordance with the BART Guidelines) was greater than $10,000/ton, as 
is the case with Cholla Units 3 and 4. Similarly, we are not aware of 
any instance in which the EPA has disapproved a state's BART 
determination that rejected SCR as BART based on similar cost-
effectiveness values. Furthermore, while the total visibility benefits 
of the SCR-based control scenario (``BART Option 3'') are large (2.20 
dv at the most improved area and 17.89 dv cumulative across all 
affected areas), as noted in the previous section, these benefits 
include not only the effect of SCR installation on Units 3 and 4, but 
also the retirement of Unit 2. Thus, we believe it was appropriate for 
ADEQ to focus primarily on what it characterized as the ``incremental'' 
visibility benefits, i.e., the relative degree of visibility 
improvement expected under Option 3 (Unit 2 retired and SCR with 
LNB+SOFA on Units 3 and 4) compared with Option 1 (Unit 2 retired and 
LNB+SOFA on Units 3 and 4), which were 0.07 dv to 0.79 dv per area and 
3.97 dv cumulative.\40\ While these benefits are significant, we 
believe it was reasonable for ADEQ to determine that the benefits were 
not warranted in light of the high costs of SCR and the fact that 
benefits of this magnitude would only last for approximately eight 
years, after which the benefits of SCR would be far less (roughly 0.15 
dv at the most-improved Class I area and 0.77 dv cumulatively over all 
affected Class I areas).
---------------------------------------------------------------------------

    \40\ As described in the previous section, if ADEQ had 
calculated the incremental benefits of SCR in accordance with the 
BART Guidelines, the per area incremental benefits would have ranged 
from 0.01 dv to 0.51 dv, and the cumulative incremental benefit 
would have been 2.65 dv.
---------------------------------------------------------------------------

    With regard to SNCR, we find that it was reasonable for ADEQ to 
conclude that the costs of SNCR were not warranted by the visibility 
benefits. In particular, with regard to costs, we are not aware of any 
instance in which the EPA has determined SNCR to be BART where the 
average cost-effectiveness of SNCR was greater than $3,000/ton and

[[Page 46862]]

the incremental cost-effectiveness was roughly $7,000/ton, as is the 
case with Cholla Units 3 and 4. Similarly, we are not aware of any 
instance in which the EPA has disapproved a state's BART determination 
that rejected SNCR as BART based on similar cost-effectiveness values. 
Furthermore, while the total visibility benefits of the SNCR-based 
control scenario (``BART Option 2'') are large (1.78 dv at the most 
improved area and 15.24 dv cumulative across all affected areas), as 
noted above, these benefits include not only the effect of SNCR 
installation on Units 3 and 4, but also the retirement of Unit 2. Thus, 
we believe it was appropriate for ADEQ to focus primarily on 
incremental visibility benefits, i.e., the relative degree of 
visibility improvement expected under Option 2 (Unit 2 retired and SNCR 
with LNB+SOFA on Units 3 and 4) compared with Option 1 (Unit 2 retired 
and LNB+SOFA on Units 3 and 4), which were 0.01 dv to 0.28 dv per area 
and 1.32 dv cumulative. While these benefits are not insignificant, we 
believe it was reasonable for ADEQ to determine that the benefits were 
not warranted in light of the relatively high costs of SNCR and the 
fact that benefits of this magnitude would only last for approximately 
eight years, after which the benefits of SNCR would be far less 
(roughly 0.07 dv at the most-improved Class I area and 0.31 dv 
cumulatively over all affected Class I areas).
    Therefore, we propose to approve ADEQ's determination that BART for 
NOX at Cholla Units 3 and 4 consists of LNB+SOFA with 
associated emission limits of 0.22 lb/MMbtu (rolling 30-boiler-
operating-day average) for each unit. As explained above, these 
emission limits will remain in effect until April 30, 2025, at which 
point both units will be permanently retired or converted to natural 
gas with NOX emission limits of 0.08 lb/MMBtu (rolling 30-
boiler-operating-day average).

D. The EPA's Evaluation Under CAA Section 110(l)

    CAA section 110(l) requires that any revision to an implementation 
plan shall not be approved by the EPA Administrator if the revision 
would interfere with any applicable requirement concerning attainment 
and reasonable further progress (RFP) or any other applicable 
requirement of the Act.\41\ In evaluating whether the Cholla SIP 
Revision would interfere with any CAA requirements, we note that 
overall, the Cholla SIP Revision will result in reduced emissions of 
both SO2 and PM10 compared to the existing SIP 
and FIP requirements beginning in 2016 (see Tables 6 and 7 above) due 
to the retirement of Unit 2. While the Cholla SIP Revision will require 
fewer NOX reductions than the FIP between 2018 and 2025, it 
will ensure that NOX emissions remain at or below current 
levels (i.e., levels consistent with non-operation of Unit 2 \42\ and 
operation of LNB and SOFA on Units 1, 3 and 4) until 2025, after which 
it will require a substantial reduction in NOX emissions 
compared to both current levels and the FIP (see Table 8 above).
---------------------------------------------------------------------------

    \41\ CAA Section 110(l), 42 U.S.C. 7410(l).
    \42\ As shown in Table 8, ADEQ projected that total 
NOX emissions at Cholla Unit 2 would be 900 tpy in 2016, 
based on a Unit 2 shutdown date of April 1, 2016. Because Unit 2 was 
retired in October 2015, 2016 emissions from Unit 2 will actually be 
zero, so we anticipate the total NOX emissions from the 
facility will be roughly 7,445 tpy for all years between 2016 and 
2025.
---------------------------------------------------------------------------

    With regard to applicable requirements concerning attainment and 
RFP, as explained by ADEQ, Cholla is located in north central Navajo 
County, Arizona, which is designated as unclassifiable/attainment for 
all of the NAAQS for which the EPA has issued designations.\43\ ADEQ 
also indicated that it has recommended an attainment/unclassifiable 
designation for this area for the 2012 PM2.5 and 2010 
SO2 standards. With regard to the 2012 PM2.5 
standard, the EPA has finalized a designation of unclassifiable/
attainment for Navajo County.\44\ With regard to the 2010 
SO2 standard, we note that, under the EPA's Data 
Requirements Rule,\45\ ADEQ is required to develop and submit air 
quality data characterizing ambient concentrations of SO2 in 
the area around Cholla.\46\ The EPA will take these data into 
consideration in finalizing a designation for the area. Finally, we 
note that, on October 1, 2015, the EPA promulgated revised primary and 
secondary ozone NAAQS.\47\ State designation recommendations for the 
2015 ozone NAAQS are due to the EPA by October 1, 2016.\48\
---------------------------------------------------------------------------

    \43\ Cholla SIP Revision, pages 12-13, Table 7.
    \44\ See 40 CFR 81.303.
    \45\ 40 CFR part 51, subpart BB.
    \46\ See Letter from Eric Massey, ADEQ, to Doris Lo, EPA 
(January 13, 2016).
    \47\ 80 FR 65292 (October 26, 2015).
    \48\ Id. at 65438.
---------------------------------------------------------------------------

    In summary, Cholla is located in area that is designated 
unclassifiable/attainment or has not yet been designated for each of 
the current NAAQS. Thus, the Arizona SIP does not currently rely on 
emission limitations at Cholla to satisfy any attainment or RFP 
requirements. Given that the Cholla SIP Revision will result in 
equivalent or lower emissions of NOX, PM10 and 
SO2 for all future years, compared to current emission 
levels, in an area that is designated unclassifiable/attainment or has 
not yet been designated for all NAAQS, we propose to find that the 
Cholla SIP Revision would not interfere with any applicable 
requirements concerning attainment or RFP.
    The other requirements of the CAA that apply to Cholla are:
     Standards of Performance for New Stationary Sources 
(NSPS), 40 CFR part 60, subpart D;
     National Emission Standards for Hazardous Air Pollutants 
(NESHAP), 40 CFR part 63, subpart UUUUU (also known as MATS);
     Compliance Assurance Monitoring (CAM), 40 CFR part 64; and
     BART and other visibility protection requirements under 
CAA section 169A and the RHR.
    The Cholla SIP Revision would not affect the applicable NESHAP, 
NSPS and CAM requirements. Therefore, we propose to find that the 
Cholla SIP Revision would not interfere with the applicable NESHAP, 
NSPS and CAM requirements.
    We also propose to find that Cholla SIP Revision would not 
interfere with the visibility protection requirements of the CAA and 
the RHR. Our proposed approval of the BART Reassessment is based on our 
determination that, taking into consideration the differences in the 
facts underlying the EPA's prior BART analysis for NOX in 
Arizona Regional Haze FIP and the Cholla BART Reassessment, ADEQ's 
revised BART analysis and determination for Cholla meet the BART 
requirements of the CAA and RHR. Furthermore, the Cholla SIP Revision 
would result in greater visibility improvement than the existing SIP 
and FIP requirements beginning in 2026, which is consistent with the 
long-term national goal of restoring natural visibility conditions at 
Class I areas. Thus, we propose to find that the Cholla SIP Revision 
would not interfere with the visibility protection requirements of the 
CAA.

E. The EPA's Evaluation of Enforceable Emission Limits

    CAA section 110(a)(2)(A) requires SIPs to include enforceable 
emission limitations as necessary or appropriate to meet the applicable 
requirements of the Act. In addition, SIPs must contain regulatory 
requirements related to monitoring, recordkeeping, and reporting for 
applicable emission limitations.\49\ The Cholla Permit Revision 
includes such enforceable

[[Page 46863]]

emission limits, as well as associated monitoring, recordkeeping, and 
reporting requirements, for all units and pollutants. These 
requirements will become effective and federally enforceable when the 
Cholla SIP Revision is approved into the SIP and the FIP provisions 
applicable to Cholla are withdrawn.\50\ Therefore, we propose to find 
that the Cholla SIP Revision meets the requirements of the CAA and the 
EPA's implementing regulations for enforceable emission limitations.
---------------------------------------------------------------------------

    \49\ See, e.g., CAA section 110(a)(2)(F) and 40 CFR 51.212(c).
    \50\ Cholla Permit Revision section I.A.
---------------------------------------------------------------------------

V. Proposed Action

    For the reasons described above, the EPA proposes to approve the 
Cholla SIP Revision. Because this approval would fill the gap in the 
Arizona Regional Haze SIP left by the EPA's prior partial disapproval 
with respect to Cholla, we propose to withdraw the provisions of the 
Arizona Regional Haze FIP that apply to Cholla. We also propose to find 
that withdrawal of the FIP would constitute our action on APS's and 
PacifiCorp's petitions for reconsideration of the Arizona Regional Haze 
FIP.

VI. Environmental Justice Considerations

    As shown in Tables 6 and 7, the Cholla SIP Revision will result in 
reduced emissions of both SO2 and PM10 compared 
to the existing SIP and FIP requirements beginning in 2016. As shown in 
Table 8, while the Cholla SIP Revision will result in fewer 
NOX reductions than the FIP between 2018 and 2025, it will 
ensure that NOX emissions remain at or below current levels 
until 2025, after which it will require a substantial reduction in 
NOX emissions compared to both current levels and to the 
existing Arizona Regional Haze FIP. Therefore, the EPA believes that 
this action will not have potential disproportionately high and adverse 
human health or environmental effects on minority, low-income, or 
indigenous populations.

VII. Incorporation by Reference

    In this rule, the EPA is proposing to include in a final EPA rule, 
regulatory text that includes incorporation by reference. In accordance 
with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by 
reference ``Significant Permit Revision No. 61713 to Operating Permit 
No. 53399'' issued by ADEQ on October 16, 2015. The EPA has made, and 
will continue to make, this document available electronically through 
www.regulations.gov and in hard copy at U.S. Environmental Protection 
Agency Region IX, Air-2, 75 Hawthorne Street, San Francisco, CA, 94105-
3901.

VIII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and was 
therefore not submitted to the Office of Management and Budget (OMB) 
for review. This rule applies to only one facility and is therefore not 
a rule of general applicability.

B. Paperwork Reduction Act (PRA)

    This action does not impose an information collection burden under 
the PRA. This rule applies to only one facility. Therefore, its 
recordkeeping and reporting provisions do not constitute a ``collection 
of information'' as defined under 44 U.S.C. 3502(3) and 5 CFR 
1320.3(c).

 C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities. This action will not 
impose any requirements on small entities. Firms primarily engaged in 
the generation, transmission, and/or distribution of electric energy 
for sale are small if, including affiliates, the total electric output 
for the preceding fiscal year did not exceed 4 million megawatt hours. 
Both owners of Cholla, APS and PacifiCorp, exceed this threshold.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain an unfunded mandate of $100 million or 
more as described in UMRA, 2 U.S.C. 1531-1538, and does not 
significantly or uniquely affect small governments.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175. It will not have substantial direct effects on 
any Indian tribes, on the relationship between the Federal Government 
and Indian tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes. Thus, Executive Order 
13175 does not apply to this action.

G. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    The EPA interprets EO 13045 as applying only to those regulatory 
actions that concern health or safety risks that the EPA has reason to 
believe may disproportionately affect children, per the definition of 
``covered regulatory action'' in section 2-202 of the Executive Order. 
This action is not subject to Executive Order 13045 because it does not 
concern an environmental health risk or safety risk.

H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not subject to Executive Order 13211 because it is 
not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    This rulemaking does not involve technical standards. The EPA is 
not revising any technical standards or imposing any new technical 
standards in this action.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    The EPA believes the human health or environmental risk addressed 
by this action will not have potential disproportionately high and 
adverse human health or environmental effects on minority, low-income, 
or indigenous populations. The results of this evaluation are contained 
in section VI above.

K. Determination Under Section 307(d)

    Pursuant to CAA section 307(d)(1)(B), the EPA proposes to determine 
that this action is subject to the provisions of section 307(d). 
Section 307(d) establishes procedural requirements specific to certain 
rulemaking actions under the CAA. Pursuant to CAA section 307(d)(1)(B), 
the withdrawal of the provisions of the Arizona Regional Haze FIP that 
apply to Cholla is subject to the requirements of CAA section 307(d), 
as it constitutes a revision to a FIP under CAA section 110(c). 
Furthermore, CAA section 307(d)(1)(V) provides that the provisions of 
section

[[Page 46864]]

307(d) apply to ``such other actions as the Administrator may 
determine.'' The EPA proposes that the provisions of 307(d) apply to 
the EPA's action on the Cholla SIP revision.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Particulate 
matter, Reporting and recordkeeping requirements, Sulfur dioxide, 
Visibility.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: June 30, 2016.
Deborah Jordan,
Acting Regional Administrator, EPA Region IX.

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart D--Arizona

0
2. In Sec.  52.145, revise paragraphs (f)(1), (2), (3), (4), (5), and 
(10) to read as follows:


Sec.  52.145  Visibility protection.

* * * * *
    (f) * * *
    (1) Applicability. This paragraph (f) applies to each owner/
operator of the following coal-fired electricity generating units 
(EGUs) in the state of Arizona: Coronado Generating Station, Units 1 
and 2. The provisions of this paragraph (f) are severable, and if any 
provision of this paragraph (f), or the application of any provision of 
this paragraph (f) to any owner/operator or circumstance, is held 
invalid, the application of such provision to other owner/operators and 
other circumstances, and the remainder of this paragraph (f), shall not 
be affected thereby.
    (2) Definitions. Terms not defined below shall have the meaning 
given to them in the Clean Air Act or EPA's regulations implementing 
the Clean Air Act. For purposes of this paragraph (f):
    ADEQ means the Arizona Department of Environmental Quality.
    Boiler-operating day means a 24-hour period between 12 midnight and 
the following midnight during which any fuel is combusted at any time 
in the unit.
    Coal-fired unit means any of the EGUs identified in paragraph 
(f)(1) of this section.
    Continuous emission monitoring system or CEMS means the equipment 
required by 40 CFR part 75 and this paragraph (f).
    Emissions limitation or emissions limit means any of the Federal 
Emission Limitations required by this paragraph (f) or any of the 
applicable PM10 and SO2 emissions limits for 
Coronado Generating Station submitted to EPA as part of the Arizona 
Regional Haze SIP in a letter dated February 28, 2011, and approved 
into the Arizona State Implementation Plan on December 5, 2012.
    Flue Gas Desulfurization System or FGD means a pollution control 
device that employs flue gas desulfurization technology, including an 
absorber utilizing lime, fly ash, or limestone slurry, for the 
reduction of sulfur dioxide emissions.
    lb means pound(s).
    NOX means nitrogen oxides expressed as nitrogen dioxide 
(NO2).
    Owner(s)/operator(s) means any person(s) who own(s) or who 
operate(s), control(s), or supervise(s) one or more of the units 
identified in paragraph (f)(1) of this section.
    MMBtu means million British thermal unit(s).
    Operating hour means any hour that fossil fuel is fired in the 
unit.
    PM10 means filterable total particulate matter less than 
10 microns and the condensable material in the impingers as measured by 
Methods 201A and 202 in 40 CFR part 51, appendix M.
    Regional Administrator means the Regional Administrator of EPA 
Region IX or his/her authorized representative.
    SO2 means sulfur dioxide.
    SO2 removal efficiency means the quantity of 
SO2 removed as calculated by the procedure in paragraph 
(f)(5)(iii)(B) of this section.
    Unit means any of the EGUs identified in paragraph (f)(1) of this 
section.
    Valid data means data recorded when the CEMS is not out-of-control 
as defined by 40 CFR part 75.
    (3) Federal emission limitations--(i) NOX emission 
limitations. The owner/operator of each coal-fired unit subject to this 
paragraph (f) shall not emit or cause to be emitted NOX in 
excess of the following limitations, in pounds per million British 
thermal units (lb/MMBtu) from any coal-fired unit or group of coal-
fired units. Each emission limit shall be based on a rolling 30-boiler-
operating-day average, unless otherwise indicated in specific 
paragraphs.

------------------------------------------------------------------------
                                                               Federal
        Coal fired unit or group of coal-fired units           emission
                                                              limitation
------------------------------------------------------------------------
Coronado Generating Station Unit 1.........................        0.065
Coronado Generating Station Unit 2.........................        0.080
------------------------------------------------------------------------

    (ii) [Reserved]
    (4) Compliance dates. (i) The owners/operators of each unit subject 
to this paragraph (f) shall comply with the NOX emissions 
limitations and other NOX-related requirements of this 
paragraph (f) no later than December 5, 2017.
    (ii) The owners/operators of each unit subject to this paragraph 
(f) shall comply with the applicable PM10 and SO2 
emissions limits submitted to EPA as part of the Arizona Regional Haze 
SIP in a letter dated February 28, 2011, and approved into the Arizona 
State Implementation Plan on December 5, 2012, as well as the related 
compliance, recordkeeping and reporting of this paragraph (f) no later 
than June 3, 2013.
    (5) Compliance determinations for NOX and SO2--(i) Continuous 
emission monitoring system.
    (A) At all times after the compliance date specified in paragraph 
(f)(4) of this section, the owner/operator of each coal-fired unit 
shall maintain, calibrate, and operate a CEMS, in full compliance with 
the requirements found at 40 CFR part 75, to accurately measure 
SO2, NOX, diluent, and stack gas volumetric flow 
rate from each unit. In addition, the owner/operator of Cholla Units 2, 
3, and 4 shall calibrate, maintain, and operate a CEMS, in full 
compliance with the requirements found at 40 CFR part 75, to accurately 
measure SO2 emissions and diluent at the inlet of the sulfur 
dioxide control device. All valid CEMS hourly data shall be used to 
determine compliance with the emission limitations for NOX 
and SO2 in paragraph (f)(3) of this section for each unit. 
When the CEMS is out-of-control as defined by 40 CFR part 75, that CEMs 
data shall be treated as missing data, and not used to calculate the 
emission average. Each required CEMS must obtain valid data for at 
least 90 percent of the unit operating hours, on an annual basis.
    (B) The owner/operator of each unit shall comply with the quality 
assurance procedures for CEMS found in 40 CFR part 75. In addition to 
these 40 CFR part 75 requirements, relative accuracy test audits shall 
be calculated for both the NOX and SO2 pounds per 
hour measurement and the heat input measurement. The CEMs monitoring 
data shall not be bias adjusted. The inlet SO2 and diluent 
monitors required by this rule shall also meet the Quality Assurance/
Quality Control (QA/QC)

[[Page 46865]]

requirements of 40 CFR part 75. The testing and evaluation of the inlet 
monitors and the calculations of relative accuracy for lb/hr of 
NOX, SO2 and heat input shall be performed each 
time the 40 CFR part 75 CEMS undergo relative accuracy testing.
    (ii) Compliance determinations for NOX.
    (A) [Reserved]
    (B) Coronado Generating Station. Compliance with the NOX 
emission limits for Coronado Unit 1 and Coronado Unit 2 in paragraph 
(f)(3)(i) of this section shall be determined on a rolling 30 boiler-
operating-day basis. The 30-boiler-operating-day rolling NOX 
emission rate for each unit shall be calculated in accordance with the 
following procedure: Step one, sum the total pounds of NOX 
emitted from the unit during the current boiler operating day and the 
previous twenty-nine (29) boiler operating days; Step two, sum the 
total heat input to the unit in MMBtu during the current boiler 
operating day and the previous twenty-nine (29) boiler operating days; 
Step three, divide the total number of pounds of NOX emitted 
from that unit during the thirty (30) boiler operating days by the 
total heat input to the unit during the thirty (30) boiler operating 
days. A new 30-boiler-operating-day rolling average NOX 
emission rate shall be calculated for each new boiler operating day. 
Each 30-boiler-operating-day average NOX emission rate shall 
include all emissions that occur during all periods within any boiler 
operating day, including emissions from startup, shutdown, and 
malfunction.
    (C) If a valid NOX pounds per hour or heat input is not 
available for any hour for a unit, that heat input and NOX 
pounds per hour shall not be used in the calculation of the 30-day 
rolling average.
    (iii) Compliance determinations for SO2. (A) The 30-day rolling 
average SO2 emission rate for each coal-fired unit shall be 
calculated in accordance with the following procedure: Step one, sum 
the total pounds of SO2 emitted from the unit during the 
current boiler-operating day and the previous twenty-nine (29) boiler-
operating days; step two, sum the total heat input to the unit in MMBtu 
during the current boiler-operating day and the previous twenty-nine 
(29) boiler-operating day; and step three, divide the total number of 
pounds of SO2 emitted during the thirty (30) boiler-
operating days by the total heat input during the thirty (30) boiler-
operating days. A new 30-day rolling average SO2 emission 
rate shall be calculated for each new boiler-operating day. Each 30-day 
rolling average SO2 emission rate shall include all 
emissions and all heat input that occur during all periods within any 
boiler-operating day, including emissions from startup, shutdown, and 
malfunction.
    (B) [Reserved]
    (C) If a valid SO2 pounds per hour at the outlet of the 
FGD system or heat input is not available for any hour for a unit, that 
heat input and SO2 pounds per hour shall not be used in the 
calculation of the 30-day rolling average.
    (D) If both a valid inlet and outlet SO2 lb/MMBtu and an 
outlet value of lb/hr of SO2 are not available for any hour, 
that hour shall not be included in the efficiency calculation.
* * * * *
    (10) Equipment operations.
    (i) [Reserved]
    (ii) Coronado Generating Station. At all times, including periods 
of startup, shutdown, and malfunction, the owner or operator of 
Coronado Generating Station Unit 1 and Unit 2 shall, to the extent 
practicable, maintain and operate each unit in a manner consistent with 
good air pollution control practices for minimizing emissions. The 
owner or operator shall continuously operate pollution control 
equipment at all times the unit it serves is in operation, and operate 
pollution control equipment in a manner consistent with technological 
limitations, manufacturer's specifications, and good engineering and 
good air pollution control practices for minimizing emissions. 
Determination of whether acceptable operating and maintenance 
procedures are being used will be based on information available to the 
Regional Administrator which may include, but is not limited to, 
monitoring results, review of operating and maintenance procedures, and 
inspection of each unit.
* * * * *
[FR Doc. 2016-16959 Filed 7-18-16; 8:45 am]
 BILLING CODE 6560-50-P


