Special Exemptions From Requirements of the Clean Air Act for the Territory of Guam

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 69

[FRL-5296-9]

Special Exemptions From Requirements of the Clean Air Act for the

Territory of Guam

AGENCY: Environmental Protection Agency (``EPA'').

ACTION: Direct final rulemaking.

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SUMMARY: On July 14, 1995, the Governor of Guam filed a petition

(``Petition'') with the Administrator seeking a waiver of certain Clean

Air Act (``CAA'') requirements which apply to Guam Power Authority

(``GPA''). The Petition was filed under Section 325(a) of the CAA. The

waiver will help to ease a severe energy emergency on Guam. Based upon

the information in the Petition and supplementary information from GPA

and the Guam Environmental Protection Agency (``GEPA''), EPA is

granting the waiver requested. EPA finds that there is good cause for a

direct final rulemaking and that notice and public procedures are

impracticable, unnecessary, and contrary to the public interest.

The waiver allows, with certain conditions, one baseload diesel

electric generating facility to operate at the Cabras Power Plant prior

to the receipt of a final Prevention of Significant Deterioration

(``PSD'') permit by GPA. The waiver also allows the construction, but

not operation, of a second baseload diesel unit at the Cabras Power

Plant prior to GPA's receipt of a final PSD permit.

EFFECTIVE DATE: This direct final rule is effective September 18, 1995.

FOR FURTHER INFORMATION CONTACT: Norman Lovelace, Chief, Office of

Pacific Islands and Native American Programs (E-4), Office of External

Affairs, U.S. Environmental Protection Agency, Region IX, 75 Hawthorne

Street, San Francisco, California 94105. Telephone: (415) 744-1599.

SUPPLEMENTARY INFORMATION:

Background

The Petition was submitted by Governor Gutierrez of Guam to the

Administrator of EPA in a letter dated July 14, 1995. It is accompanied

by supporting documentation, including newspaper accounts describing

traffic safety, water supply, and political problems caused by the

significant electrical energy shortage on Guam. The Petition

incorporates an air quality analysis, based upon computer modeling,

which demonstrates the effects of the waiver upon air quality,

particularly in the offshore direction, from the generating facilities

involved.

The Petition seeks a waiver of certain CAA requirements for the

operation and construction by GPA of two baseload diesel electric

generators. Both units are part of the Cabras Power Plant. The first

facility involved is designated as Cabras Unit No. 3. This forty

megawatt diesel generator was constructed, pursuant to 40 CFR

69.11(a)(1), prior to GPA's receipt of a final PSD permit. (This unit

is designated Cabras Diesel No. 1 in 40 CFR 69.11(a)(1). Its

designation has been changed since the 1993 promulgation of that rule.)

The Petition asks EPA to waive CAA requirements as necessary to allow

operation of Cabras Unit No. 3, subject to conditions, prior to receipt

of a final PSD permit by GPA.

The waiver describes two conditions accompanying the operation of

Cabras Unit No. 3. First, during operations under the waiver a lower

sulfur fuel oil will be fired in the Cabras Power Plant and in the

adjacent Piti Power Plant during certain periods. These power plants

operate under a fuel switching intermittent control strategy, and the

sulfur-in-fuel reduction in the waiver application applies to

operations under offshore wind conditions. Second, the waiver will last

only until August 15, 1996, or until issuance of a final PSD permit to

GPA for this unit, whichever occurs first.

The Petition also seeks a waiver of CAA requirements as necessary

to allow GPA to construct a second forty megawatt baseload unit at the

Cabras Power Plant. This facility is designated as Cabras Unit No. 4.

The waiver application seeks to allow construction of Cabras Unit No. 4

prior to a receipt by GPA of a PSD permit. Cabras Unit No. 4 will not

operate prior to receipt of final PSD permit.

Guam has experienced a longstanding shortage of electrical energy,

repeatedly leading to rotating blackouts of areas of the island. The

background to this energy shortage is described in the 1993 waiver

proceeding before EPA. 50 FR 15579, 15580. The Petition describes how

the 1993 energy shortage has continued despite a substantial capital

development program by GPA, and in some respects has grown worse. The

energy shortage was created originally because of very rapid growth in

energy demand due to increased residential electrical consumption and a

boom in tourism. The Petition describes how energy shortfalls are now

exacerbated as a result of substantial facility outages caused by

equipment failures.

As EPA noted in the 1993 waiver proceeding, Guam is an isolated

island. 58 FR 13580. GPA generates almost all electric power used on

the island (other than power generated by the United States Navy).

Unlike power authorities on the mainland United States, GPA does not

have the option of purchasing power from other sources. Guam is, and

must remain, self sufficient with regard to energy generation.

The Petition states that Guam's energy shortfall has worsened in

recent months because of facility outages caused by planned and

unplanned maintenance requirements. The longstanding nature of the

energy shortage has required GPA to use its existing facilities at peak

capacity for several years. GPA has also deferred planned maintenance,

when safety considerations have allowed, to permit units to remain in

service. Because of the length of time which has elapsed since the

beginning of the emergency, the result is now substantially reduced

reliability of GPA's electric generating units. The Petition describes

several significant and unplanned recent maintenance outages.

The construction and operation of additional, reliable baseload

generating units will enable GPA to satisfy electrical demand with an

appropriate margin of safety, while at the same time allowing for

planned maintenance outages of generating units. Once sufficient

baseload capacity exists and can be operated, routine, as well as

unplanned blackouts on the island will be ended. Cabras Units Nos. 3

and 4 are such baseload units.

The Petition states that Cabras Unit No. 3 will be ready to begin

operation and electrical generation on approximately August 15, 1995.

The building which houses Cabras Unit No.

[[Page 48038]]

3 and will house Cabras Unit No. 4 has already been constructed under

40 CFR 69.11. The remaining construction of Cabras Unit No. 4 can be

carried out immediately pursuant to this rulemaking.

The Petition describes a second potential difficulty with PSD

permitting for the operation of Cabras Unit No. 3 and the construction

of Cabras Unit No. 4. Absent changes in the current operations of the

Cabras and Piti Power Plants, GPA's computer modeling suggests that the

operation of the new units, combined with existing facilities, may

cause exceedences of sulfur dioxide National Ambient Air Quality

Standards (``NAAQS'') on Orote Point, a peninsula of elevated terrain

located in the offshore direction from the power plants.

GPA is re-evaluating its computer modeling results using state of

the art wind tunnel modeling. Preliminary results of wind tunnel

modeling seem to confirm the possibility of the exceedences projected

by computer models. If a final analysis upholds that result,

significant changes to power plant operations likely will be necessary

in order for PSD permits to be issued for Cabras Units Nos. 3 and 4.

Section 325(a) of the CAA allows a waiver of certain CAA

requirements, based upon local factors, only if the waiver will not

cause exceedences of the primary NAAQS or violations of the hazardous

air pollutant provisions of the CAA. The hazardous air pollutant

provisions of the CAA are not affected by the Petition. The Petition is

accompanied by an air quality analysis, utilizing computer modeling,

which demonstrates that all NAAQS will be protected if the requested

waivers are granted and incorporate the operating conditions described

below.

GPA operates the Cabras and Piti Power Plants under an intermittent

control strategy which utilizes fuel switching. This intermittent

control strategy is described in an EPA document entitled the ``Cabras

Area ICS.'' This strategy has required the use of fuel oil with a

maximum sulfur content of 1.19 percent when winds blow in an onshore

direction, and the use of fuel oil with a maximum sulfur content of

2.84 percent when winds blow in an offshore direction.

As a condition of the waiver sought, GPA is to reduce the sulfur

content in the fuel oil fired in the Cabras Power Plant and the Piti

Power Plant when winds blow in an offshore direction. The sulfur

content of the fuel used will be reduced to a maximum content of 2.00

percent. The Petition describes how GPA will obtain and assure the use

of such fuel oil prior to beginning the operation of Cabras Unit No. 3.

EPA is granting the Petition, with the conditions contained

therein, and is issuing the requested waiver. Cabras Unit No. 3 will be

allowed to operate prior to receipt of a PSD permit. This operation is

subject to the use of fuel oil with a maximum sulfur content of 2.00

percent at the Cabras and Piti Power Plants during offshore wind

conditions. Moreover, this waiver for Cabras Unit No. 3 is granted only

until August 15, 1996, or until a final PSD permit is secured by GPA,

whichever event occurs sooner. Cabras Unit No. 4 may be constructed,

but not operated, prior to receipt of a PSD permit. Finally, a report

on the results of GPA's Orote Point evaluation shall be filed with EPA

by October 15, 1995.

Cabras Unit No. 3 is subject to a conditional permit to construct,

issued by GEPA on May 12, 1994. GPA has filed an application to GEPA

for authority to operate this unit. During the period of this waiver,

GPA must comply with the requirements of these GEPA permits.

This rule is promulgated on a direct final basis. EPA is convinced

that the energy emergency on Guam creates significant adverse

consequences which require immediate action. As documented in the

Petition, continuing planned and unplanned power outages on Guam create

substantial public health and safety concerns. EPA has been furnished

with descriptions of traffic intersections at which traffic lights

cannot operate. The water supplies to areas on Guam are serviced by

electric pumps, and EPA has also been furnished with descriptions of

interruptions of water supplies due to power outages. Finally, as would

be expected, significant and sustained citizen displeasure has been

voiced regarding this problem. These factors constitute good cause for

EPA to waive notice requirements. In this instance, a delay in the

effectiveness of this waiver granted would be impracticable and

contrary to the public interest. In addition, based on the lack of

negative comments in the 1993 waiver proceeding, EPA believes that this

is a noncontroversial rulemaking action. Therefore, EPA finds that

there is good cause for a direct final rulemaking, pursuant to 5 U.S.C.

553(d)(3), and that notice and public procedures are impracticable,

unnecessary, and contrary to the public interest.

GEPA has received and reviewed a copy of the Petition. It supports

the issuance of this waiver.

Regulatory Analysis

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA

must prepare a Regulatory Flexibility Analysis assessing the impact of

any proposed or final rule on small entities. 5 U.S.C. 603 and 604.

Alternatively, EPA may certify that the rule will not have a

significant economic impact on a substantial number of small entities.

Small entities include small businesses, small not-for-profit

enterprises, and government entities with jurisdiction over populations

of less than 50,000.

This direct final rule applies only to large sources of air

emissions used to generate electrical power on Guam. These sources of

electrical power will be constructed, owned, and operated by GPA. This

organization is not a small entity. Therefore, this rulemaking will not

impact small entities.

This action has been classified as a Table 3 action for signature

by the Administrator under the procedures published in the Federal

Register on January 19, 1989 (54 FR 2214-2225). The Office of

Management and Budget has exempted this regulatory action from

Executive Order 12866 review.

List of Subjects in 40 CFR Part 69

Air pollution control.

Dated: September 11, 1995.

Carol Browner,

Administrator.

Part 69 of chapter I, title 40 of the Code of Federal Regulations

is amended to read as follows:

PART 69--[AMENDED]

1. The authority citation for part 69 continues to read as follows:

Authority: Section 325, Clean Air Act, as amended (42 U.S.C.

7625-1).

2. Section 69.11 is amended by adding paragraph (c) to read as

follows:

Sec. 69.11 New exemptions.

* * * * *

(c) Pursuant to Section 325(a) of the CAA and a petition submitted

by the Governor of Guam on July 14, 1995 (``1995 Petition''), the

Administrator of EPA conditionally exempts Guam Power Authority

(``GPA'') from certain CAA requirements.

(1) A waiver of the requirement to obtain a PSD permit prior to

construction is granted for the electric generating unit identified in

the 1995 Petition as Cabras Unit No. 4, with the following conditions:

(i) Cabras Unit No. 4 shall not operate until a final PSD permit is

received by GPA for this unit;

(ii) Cabras Unit No. 4 shall not operate until it complies with all

requirements

[[Page 48039]]

of its PSD permit, including, if necessary, retrofitting with BACT;

(iii) If Cabras Unit No. 4 operates either prior to the issuance of

a final PSD permit or without BACT equipment, Cabras Unit No. 4 shall

be deemed in violation of this waiver and the CAA beginning on the date

of commencement of construction of the unit.

(2) A waiver of the requirement to obtain a PSD permit prior to the

operation of the unit identified in the 1995 Petition as Cabras Unit

No. 3 is granted subject to the following conditions:

(i) The protocol to be followed for the ICS of fuel switching for

electric generating units shall be modified to require the use of fuel

oil with a sulfur content of 2.00 percent or less during offshore wind

conditions. This fuel shall be fired in Cabras Power Plant Units Nos. 1

through 3 and in Piti Power Plant Units Nos. 4 and 5.

(ii) Cabras Unit No. 3 shall operate in compliance with all

applicable requirements in its permits to construct and to operate as

issued by Guam Environmental Protection Agency.

(iii) The waiver provisions allowing Cabras Unit No. 3 to operate

prior to issuance of a PSD permit shall expire on August 15, 1996, or

upon the receipt by GPA of a PSD permit for Cabras Unit No. 3,

whichever event occurs first.

(3) On or before October 15, 1995, GPA shall submit to EPA, Region

IX, a report concerning the operation of Cabras Unit No. 3 and the

construction of Cabras Unit No. 4. The report shall contain:

(i) A summary of GPA's conclusions from its wind tunnel study;

(ii) A description of the alternatives available to assure

compliance with all air quality requirements, including PSD

requirements, during the operation of Cabras Units Nos. 3 and 4;

(iii) A description of the alternative GPA chooses to assure

compliance with all air quality requirements, including PSD

requirements, during the operation of Cabras Units Nos. 3 and 4; and

(iv) A plan of implementation by GPA.

[FR Doc. 95-23107 Filed 9-15-95; 8:45 am]

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