RACT Update in the Ozone Transport Region



Since 2009, EPA has been grappling with lowering the Ozone NAAQS. Now an April 29, 2014 court ruling is forcing EPA to review the current Ozone National Ambient Air Quality Standard (NAAQS) and finalize a new standard by October 1, 2015. EPA is targeting December 2014 to propose the new 8-hour Ozone NAAQS, which is expected to be reduced from 75 ppb to between 60 ppb and 70 ppb.1 This proposed reduction has the potential to significantly increase the number of Ozone non-attainment areas throughout the country. Ambient monitors in the yellow and green areas in the map below are currently measuring around 0.065 to 0.070 ppm Ozone. These significant portions of the country represent potential new Ozone non-attainment areas should EPA lower the standards as proposed. This change will require all new and existing non-attainment areas to re-evaluate the way their State Implementation Plans (SIPs) demonstrate how the NAAQS will be attained and maintained.

The northeast region of the United State from Maine to Virginia falls into the Ozone Transport Region (OTR), which is essentially a single, 13-state ozone nonattainment area. The Ozone Transport Commission (OTC) is a multi-state organization which advises EPA on transport issues and the implementation of regional solutions to Ozone non-attainment within the OTR. The OTR states are currently in various stages of reviewing and revising their SIPs and Reasonably Available Control Technology (RACT) plans developed under the 1997 Ozone standard to address the 2008 Ozone standard. The new 2015 Ozone standard will need to be considered next. With the new potential Ozone standard in mind, this article will explore how the OTC is driving RACT requirements throughout the northeast, and what the model rules from OTC might imply for future Ozone reductions throughout the country.

RACT_Map

  

Ozone NAAQS – Past, Present, and Future 

The Ozone NAAQS is currently set at 75 ppb (8-hour average). However, the standard has not always been set at this level, and it will very likely be changing again soon. EPA is required to re-evaluate the NAAQS every five years and update the standards if new scientific information indicates that the standard in place is no longer the maximum ambient concentration level above which adverse effects on human health and public welfare can occur. As more scientific data becomes available, the Ozone NAAQS has been gradually decreasing over time. The Ozone NAAQS has been the subject of significant public and stakeholder interest over time. As shown in the Recent and Projected Ozone NAAQS Actions, EPA has been looking to revise the 2008 Ozone NAAQS since 2009/2010. The original deadline for finalizing the 2010 Ozone NAAQS proposal was delayed in light of the presidential election.

RACT_Ozone Chart

Now, EPA is required to review the Ozone NAAQS and propose a new standard by December 2014. EPA staff concluded that it is appropriate to consider revising the Ozone NAAQS to a level within the range of 60 ppb and 70 ppb. This conclusion comes from scientific evidence, risks estimated in a Health Risk and Exposure Assessment, advice from the Clean Air Scientific Advisory Committee (CASAC), and public comments.2 The proposed Ozone NAAQS is expected to be finalized by October 2015.

OTC Initiatives 

Due to the regional nature of Ozone impacts, the OTC has taken a leading role in driving Ozone requirements throughout the northeast. The OTC works to coordinate Ozone reductions regionally and provides member states technical support in identifying and implementing air pollution reduction strategies. Table 1 shows recently developed OTC model rules for RACT compliance which member states can adopt or update.

Note that some of the source categories in the OTC Recent Model Rules table are sources which traditionally have not been extensively regulated in RACT including HEDD turbines, small natural gas boilers, and diesel engine idling. Since the states in the OTR are also re-evaluating RACT to address the 2008 Ozone standard, the OTC adopted a Statement of Reasonably Available Control Technology Principles on June 11, 2014,3 which outlines the following recommendations for RACT consistency:

  1. Consistent with EPA guidance, levels of control, and emissions rates, that are achieved in practice by existing similar sources are technologically and economically feasible, considering capacity, fuel, equipment design, control technology, age and site limitations, and therefore represent RACT. Thus, requirements in place in other states for certain sources provide a benchmark for RACT for that source category.
  2. Sources that have purchased and installed pollution control technology must run those technologies year round and ensure that, during the Ozone season, daily emissions are minimized.
  3. For EGUs:
    • Compliance with the Cross-State Air Pollution Rule or the Clean Air Interstate Rule cannot substitute for RACT.
    • Peaking units need to be assessed with due consideration given to total daily emissions from the category of sources and the economics of meeting peak demands.
  4. The averaging time for a RACT-based emission limitation should be as short as practicably consistent with the Ozone standard and characteristic operation of the source category.

 RACT_Table 1

Based on these recommendations, we believe the current round of RACT updates for the 2008 Ozone NAAQS will focus more on RACT consistency throughout the region. States with less rigorous RACT standards are being encouraged to be more consistent with states with more rigorous standards in place. A more detailed discussion of RACT trends within the region is provided in the following sections.

What is RACT? 

States within the OTR are required to include RACT standards for stationary sources of emissions in their SIPs to demonstrate how they will come into attainment (and maintain attainment) with the Ozone NAAQS. Updated RACT SIPs addressing the 2008 Ozone NAAQS were required to be submitted to EPA by July 2014. Updated RACT regulations are required to be in place by January 1, 2017. In the OTR, states must adopt RACT for:

  • All VOC sources covered by a control technique guideline (CTG)
  • All major non-CTG sources of NOx and VOC

RACT is defined as “the lowest emission limitation that a particular source is capable of meeting by the application of control technology that is reasonably available considering technological and economic feasibility.” Because RACT applies to existing, non-modified sources, the cost thresholds for RACT control are less than those required for Best Available Control Technology (BACT) for new sources. EPA’s March 16, 1994 memorandum entitled Cost-Effective Nitrogen Oxides (NOX) Reasonably Available Control Technology recommends a NOX reduction of 30% to 50%, corresponding to a cost-effectiveness range of $260 to $2,100 per ton of NOX removed, be considered in the setting of NOX RACT standards.4 Recent RACT evaluations in the OTR propose control technologies with calculated cost-effectiveness values up to $2,500 per ton of NOX removed.5  

RACT Trends in the OTR 

States in the OTR are currently in the process of updating the RACT regulations in the SIPs, which were established under the 1997 Ozone NAAQS, to address the current 2008 Ozone RACT. To provide more insight into this process and where it is leading, the status of the RACT programs in four states are reviewed in detail.

New Jersey RACT

The New Jersey Department of Environmental Protection (NJDEP) adopted new rules in March 2009 to meet attainment with the 1997 Ozone standard. These rules also constitute RACT for the 2008 Ozone standard. The RACT regulations in New Jersey meet the principles outlined in the OTC’s June 11, 2014 Statement of Reasonably Available Control Technology Principles. In fact, NJDEP’s RACT rules were considered in the development of these principles. NJDEP plans to adopt the majority of the OTC model rules and has continually updated their RACT rules with recent revisions in 2005 and 2008/2009. Specifically in March 2009, NJDEP updated their RACT rules for the following source categories:

  • External Floating Roof Tanks
  • Offset Lithographic Printing and Letterpress Printing
  • Flexible Package Printing
  • Flat Wood Paneling Coatings
  • Cutback Asphalt
  • Utility Boilers
  • Stationary Gas Turbines
  • ICI Boilers and Process Heaters
  • Glass Manufacturing

NJDEP asserts that many of their 2009 RACT rule updates go beyond EPA’s CTG / Alternative Control Techniques (ACT) documents with NJDEP’s goal being to adopt rules consistent with OTC guidelines. NJDEP proposed a SIP revision in July 2014 certifying that the existing RACT requirements are RACT for the 2008 standard. As a result of multiple recent RACT updates, NJDEP has consistently been on the leading edge of establishing RACT within the region. Now other states in the OTR may be held to the same standards.

Maryland RACT

The Maryland Department of the Environment (MDE) is proposing new NOX RACT requirements under COMAR 26.11.38 - Control of NOX Emissions from Coal-Fired Electric Generating Units.6 Maryland’s current regulations for NOX emissions from power plants under COMAR 26.11.27, generated under Maryland’s Healthy Air Act of 2005, implemented annual and ozone season NOX emissions caps for each of the coal burning EGUs in the state. The design of the regulation enabled emission reductions necessary to help the state meet the 8-hour ozone standard while providing owners of multiple coal-fired power plants the flexibility to choose when and how to apply emission controls to meet NOX limits in a cost-effective manner. However, upon reevaluation of the regulatory effectiveness, MDE has determined that the emissions caps did not effectively limit daily NOX emissions to eliminate “peak” ozone days.

Based on the analyses completed by the state, MDE has concluded that further regulation of NOX emissions controls were needed to meet the current ozone standard, especially on these peak days. As a result, MDE has proposed a new rule that provides three “steps” for achieving their attainment goals:

  1. Optimized NOx Emissions Controls: MDE requires owners of EGUs equipped with NOX emissions control technology (e.g. SCR) to operate this equipment to its maximum control effectiveness during the ozone season. As a compliance demonstration for this requirement, MDE has developed 24-hour block emissions levels for each coal burning EGU based on historical emissions data reported by the EGU owners. During the ozone season, EGU owners will have to report when these emissions levels are exceeded. The report will need to include specific operating data and an explanation of the exceedance. Based on this information, MDE will determine whether a violation has occurred by assessing the level of control at the time of the reported exceedance.
  2. System-wide Emissions Caps: MDE has proposed a 0.15 lbs/MM BTU (30-day rolling average) system-wide emissions cap for the coal-burning EGUs during the ozone season. System-wide emissions will be calculated based on the aggregation of all coal-fired EGUs owned/operated by a given company. Using CEMs to directly measure NOX emissions, owners will track system-wide emissions and submit monthly reports demonstrating compliance with that the 30-day emissions limit.
  3. Additional Future Controls: For coal-fired EGUs that do not have emission controls installed already, the proposed regulation will require owners to implement one of the following:
    • Install and operate SCR and meet a unit specific emissions limit of 0.09 lbs/mmBTU (30-day rolling average) by June 1, 2020
    • Switch from coal to natural gas by June 1, 2020
    • Permanently retire the unit

OTC’s Statement of Reasonably Available Control Technology Principles directly relates to MDE’s proposed RACT requirements for coal-fired EGUs in that MDE is proposing to maximize the emissions reductions gained from pollution control equipment and reduce the averaging period for which the RACT standard is assessed. MDE has taken the additional step of controlling or eliminating high emitting units that could operate during the peak ozone days. The rule is currently scheduled to be published draft by the end of 2014 and finalized in early 2015. The new control technology “screening” emission rates and system-wide caps will be effective for the 2015 ozone season.

Connecticut RACT

The Connecticut Department of Energy and Environmental Protection (CTDEEP) submitted their RACT Analysis SIP Update to EPA on July 17, 2014 and has formed a workgroup to begin revising the state’s RACT rules.7 In addition to updating their RACT rules to address the 2008 Ozone NAAQS, CTDEEP also plans to include a second phase in their proposed rules to address RACT under the expected 2015 Ozone NAAQS. CTDEEP is reviewing other state’s RACT requirements in detail (specifically New York, New Jersey, and Delaware) to assist them in establishing RACT limits. As part of the rule revision, CTDEEP expects to eliminate their state RACT trading program and also their in-state NOX trading program for Clean Air Interstate Rule (CAIR) sources. CTDEEP will also focus on establishing short-term RACT limits especially for HEDD units.

CTDEEP is not as far along in the process of proposing RACT regulations for the 2008 Ozone NAAQS as the other states reviewed. However, CTDEEP is planning to follow many of the OTC’s Statement of Reasonably Available Control Technology Principles including using other states’ RACT reforms as benchmarks and establishing short-term RACT limits.

Pennsylvania RACT

The Pennsylvania Department of Environmental Protection (PaDEP) submitted a SIP revision in September 2006 certifying that RACT determinations made for the 1-hour Ozone standard in 1994 were RACT for the 1997 8-hour standard. PaDEP’s RACT rules for major sources in §129.91 – 95 were unchanged from the original 1994 rules. EPA informally indicated that a reanalysis was necessary for sources where “no controls” represents RACT. In the meantime, the 2008 Ozone standard was issued. As a result, PaDEP issued proposed “RACT II” on April 19, 2014. The proposed regulations would apply to all existing major facilities of NOX and/or VOC. Facilities would have the option of complying with presumptive RACT limits (if available), utilizing a system-wide averaging approach for compliance, or establishing a case-by-case RACT determination. New numerical presumptive RACT limits are proposed for new source types, including combustion units, stationary internal combustion engines, turbines, Portland cement kilns, municipal solid waste landfills, and municipal waste combustors. The proposed regulation includes an averaging time of a 30-day rolling average for NOX emissions from every type of regulated unit.

Comments on PaDEP’s RACT II proposal were received from the EPA and four OTC states (NJ, MD, DE, and CT) in addition to the general public, environmental groups, and industry. Some of the comments from nearby states include concerns that PaDEP’s proposed emission limits are not as low as those adopted elsewhere in the OTC, particularly those proposed limits for coal-fired electricity generating units and municipal waste combustors. Neighboring states and the EPA expressed concern with the 30-day rolling averaging time and suggested shorter averaging times of 24-hours or less. Also, these commenters included requests that PaDEP require the operation of existing NOX control equipment throughout the ozone season. A final, revised RACT rule may be issued as early as February 2015. It is expected that PaDEP will accept many of the states’ requests, and the emission limits in the final rule will be lowered as a result.

Conclusions 

As the Ozone NAAQS is continually reduced, more and more areas of the country will need to deal with the implications of Ozone non-attainment including RACT. Throughout the northeast, RACT standards are currently being tightened and the state agencies are in a variety of stages and taking different approaches to address the 2008 Ozone standard. However, there are some common themes between the RACT proposals in different states which are being driven by the OTC’s Statement of Reasonably Available Control Technology Principles including the following:

  • RACT consistency throughout the region. States with less rigorous RACT standards are encouraged to be consistent with the more rigorous standards of neighboring states.
  • Increased focus on utilizing control technology which is already installed to achieve lower RACT emission rates including operating control technology year round and optimizing control technology operations to justify lower emission limits.
  • Reducing the averaging periods for RACT limits to daily or even hourly depending on the source category.
  • Eliminating capping and trading programs which provided operational flexibility in favor of limits that ensure emissions reductions on high Ozone days.

With a revision to the Ozone NAAQS expected in the next year, it is likely that further Ozone reductions will follow. To add to the difficulty, in many northeastern states, the vast majority of NOX and VOC emissions originate from mobile sources, area sources, and pollution transported from other states, and not from in-state stationary sources. As stationary sources become better controlled, the challenges with establishing RACT limits for lower and lower NAAQS standards increase.

The northeast will not be alone in dealing with new challenges caused by a lower Ozone NAAQS. The expected lowering of the standard in 2015 will pull new areas of the country into Ozone nonattainment and will require other, existing nonattainment areas to re-evaluate RACT. The RACT trends currently being established in the OTR may offer some clues as to what the future of RACT in other areas of the country could look like.

1 Policy Assessment for the Review of the Ozone National Ambient Air Quality Standards – Second External Review Draft, US EPA, January 2014, EPA–452/P–14–002.
2 NAAQS and Other CAA Implementation Updates, Anna Marie Wood – Director, Air Quality Policy Division, AAPCA Annual Meeting, September 11, 2014.2
3 http://www.otcair.org/upload/Documents/Formal%20Actions/Statement%20of%2RACT%20
Principles.pdf.
4 Converted $160 to $1,300 (1994 dollars) to 2014 dollars using the United States Department of Labor Bureau of Labor Statistics’ CPI Inflation Calculator, http://www.blsgov/data/inflation_calculator.htm
5 Pennsylvania Regulatory Analysis Form for April 2014 proposed RACT regulations,
http://www.depweb.state.pa.us/portal/server.pt/community/environmental_quality_board/21511/
eqb_meeting_schedule_2013/1615627. 6 MDE Air Quality Control Advisory Council Agenda, October 6, 2014.
7 Plotting a Course to Section 22: The Next Generation, Merrily A. Gere, Stationary Source Control Group, August 28, 2014.