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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 69

[FRL-5850-5]

Special Exemptions From Requirements of the Clean Air Act for the

Territory of Guam

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: On February 11, 1997, the Governor of Guam submitted a

petition (``Petition'') to the Administrator of EPA seeking a waiver of

certain Clean Air Act (``CAA'') requirements which apply to two

baseload diesel electric generators to be located at the Piti Power

Plant on Guam. The Petition was submitted pursuant to section 325(a) of

the CAA. The waiver will help to ease a serious and ongoing energy

emergency on Guam. Based upon the information in the Petition, EPA is

proposing to grant the waiver requested.

The waiver allows two 45 megawatt baseload slow speed diesel

electric generators and associated waste heat recovery boilers with a

steam generator to be constructed, but not operated, at the Piti Power

Plant prior to the receipt of a final Prevention of Significant

Deterioration permit. Comments on this proposed rulemaking action may

be made to the EPA as described below.

DATES: Comments on this proposed rulemaking action must be received on

or before July 30, 1997.

ADDRESSES: Comments may be mailed to: Norman Lovelace, Chief, Insular

Area Program, Cross Media Division (CMD-5), U.S. Environmental

Protection Agency, Region IX 75 Hawthorne Street, San Francisco, CA

94105.

FOR FURTHER INFORMATION CONTACT: Norman Lovelace, Chief, Insular Area

Program, Cross Media Division (CMD-5), U.S. Environmental Protection

Agency, Region IX, 75 Hawthorne Street, San Francisco, California

94105. Telephone: (415) 744-1599.

SUPPLEMENTARY INFORMATION:

Background

Via a letter dated February 11, 1997, Governor Gutierrez of Guam

submitted a petition (``Petition'') to the Administrator of EPA. The

Petition seeks a waiver of certain Clean Air Act (``CAA'') requirements

for the construction of two 45 megawatt baseload slow speed diesel

electric generators and associated waste heat recovery boilers with a

steam generator. These units will be part of the Piti Power Plant. The

units will be designated as Piti Units No. 8 and No. 9.

The waiver application seeks to allow construction of Piti Units

No. 8 and No. 9 prior to receipt of a Prevention of Significant

Deterioration (``PSD'') permit. Neither of these Piti Units will

operate prior to receipt of a final PSD permit.

Guam has experienced a longstanding shortage of electrical energy,

repeatedly leading to rotating blackouts in areas of the Island. The

background to this energy shortage is described in a previous waiver

proceeding before EPA in 1993. 50 FR 15579, 15580. The Petition

describes how the 1993 energy shortage has continued despite a

substantial capital development program by the Guam Power Authority

(``GPA''). 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 and a continued growth in demand.

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

island. 58 FR 13580. GPA currently generates all commercial electric

power used on the Island. Unlike power authorities on the mainland

United States, GPA does not have the option of purchasing power from

outside the Island. Guam is, and must remain, self sufficient with

regard to electric power generation.

The Petition states that Guam's electric power shortfall has

continued because of facility outages caused by

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planned and unplanned maintenance requirements. The longstanding nature

of the electric power 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 also describes how Guam's Legislature and Guam's

Governor have actively become involved to find a solution to the

continued energy crisis. In June 1996, the Legislature enacted special

procurement legislation to allow the rapid purchase of new generating

equipment. In response to the recommendation of a blue ribbon task

force, the Governor issued an executive order in August 1996, directing

GPA to oversee the repair of existing units, the construction of new

units, and the operation of electric generating facilities by

independent power producers. Piti Units No. 8 and No. 9 are a part of

this effort, and will provide electricity to be distributed by GPA.

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, unplanned blackouts on

the Island will be ended. Piti Units No. 8 and No. 9, which are to

provide electric power under contract to GPA, are such baseload units.

Construction of the units prior to the issuance of PSD permits will

allow the units to become available in a much more expeditious time

frame. It is anticipated that final PSD permits can and will be issued

prior to completion of construction of Piti Units No. 8 and No. 9.

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 any primary national ambient air quality standard

(``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 1993 waiver proceeding and a subsequent

1995 waiver proceeding included air quality analyses, utilizing

computer modeling, which demonstrated that all NAAQS would be

protected. Data submitted to the EPA pursuant to the prior waiver

proceedings indicates that all NAAQS continue to be adequately

protected.

The Petition currently before the EPA is limited to the

construction of Piti Units No. 8 and No. 9 prior to the issuance of PSD

permits, and hence will not result in the increase of any air

contaminant. Prior to the issuance of any PSD permit, the PSD

permitting process will require, among other things, assurances that

operation of Piti Units No. 8 and No. 9 will not lead to exceedences of

any NAAQS.

The Cabras and Piti Power Plants operate 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, which was modified pursuant to the 1995

waiver proceeding, 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 2.00 percent

when winds blow in an offshore direction. If EPA issues the waiver

requested in the Petition in a final rulemaking action, the Cabras Area

ICS will be modified to require fuel switching at Piti Units No. 8 and

No. 9 when operation of those units is commenced.

Guam Environmental Protection Agency has received and reviewed a

copy of the Petition. It supports this proposed rulemaking and the

issuance of a 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 proposed rule applies only to two large sources of air

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

electrical power will be constructed by an independent power producer

which is not a small entity. Therefore, EPA certifies that this

rulemaking will not have an impact on 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

Environmental protection, Air pollution control.

Dated: June 24, 1997.

Carol Browner,

Administrator.

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

is proposed to be amended 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 (d) to read as

follows:

Sec. 69.11 New exemptions.

* * * * *

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

by the Governor of Guam on February 11, 1997 (``1997 Petition''), the

Administrator of EPA conditionally exempts Piti Power Plant Units No. 8

and No. 9 from certain CAA requirements.

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

construction is granted for the electric generating units identified in

the 1997 Petition as Piti Units No. 8 and No. 9 (two 45 megawatt

baseload diesel electric generators and associated waste heat recovery

boilers with a steam generator), with the following conditions:

(i) Piti Units No. 8 and No. 9 shall not operate until final PSD

permits are received for these units;

(ii) Piti Units No. 8 and No. 9 shall not operate until they comply

with all requirements of their PSD permits, including, if necessary,

retrofitting with BACT;

(iii) If either Piti Units No. 8 or No. 9 operate either prior to

the issuance of a final PSD permit or without BACT equipment, the Piti

Unit(s) shall be deemed in violation of this waiver and the CAA

beginning on the date of commencement of construction of the unit(s).

[FR Doc. 97-17031 Filed 6-27-97; 8:45 am]

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